IN THE KNOW —
Always be on the money with tech With the price of building materials rising, it’s more important than ever to manage your project budgets as well as keeping on top of costs. Put simply: if prices go up during a job, you could lose control of the budget and have your profits wiped out. The good news is, tech can help you avoid this.
Being able to see what is being charged by the supplier makes it easy to identify and deal with unexpected variations.
There’s a range of apps available, designed especially for builders – including NextMinute, Buildxact CoConstruct and Builda Price – which will put you back in control of your projects.
Tech gives you total visibility and better control The key to successfully managing your budgets and keeping on top of costs is having all the information visible and easily accessible. Here’s how tech helps: • Real-time numbers at your fingertips – get accurate up-to-date information on figures such as estimated cost, actual current costs and gross profit % – so you always know exactly where you are with each job. • Complete project overview – quickly access your original estimate; see what have you ordered; how costs are tracking; and how much budget do you have left. • Keeping you on top of costs – easily identify and track cost variations, so you can adapt planning and anticipate problems. This is important for fixed price projects, where your margin can be squeezed. • Communication with clients – keeping your client in the loop with better financial visibility will help you avoid difficult conversations about money as well as build trust. • Better systems and delegation – your back office will run more smoothly with clear processes for your staff and bookkeeper, plus improved communication on-site means everyone knows what they’re doing.
Real-life examples using tech How to track costs with Buildxact: 1. Create a quote using take-offs, measurements and estimated costs for the project. 2. Order the construction materials and subcontractor services. 3. Your bookkeeper (or you) allocates the supplier’s invoice against the Purchase Order when it comes in. Progress
Variance
Invoiced
Gross Profit
88%
99%
100%
24%
Result: as the business owner, you’ll have easy, clear visibility of how much you estimated, how the costs are tracking and whether you have a budget surplus.
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How to track profitability with NextMinute or Builda Price: 1. Create your estimate including all of your labour, materials, subcontractor costs, P & G items, overheads and your margin. 2. Track all your costs in one app against your expected costs from your estimate. 3. Analyse your back-costing reports to track your job profitability.
Image: example NextMinute Back-Costing report
Result: seeing all the costs together makes it easier to judge whether the job is on budget. You can track profitability at any stage of the project, from beginning to end, which enables you to pay special attention to any areas which are going over budget.
Take the next step All of the best project management apps for builders have the above features and much more. However, they do vary, and it’s important to choose a system which will suit your business best. Many apps offer free trials, and there’s plenty of information online if you have time to do the research. Alternatively, you could seek advice from an independent tech advisor. This could save you time – as well as the potential cost of choosing the wrong system and having to start again. So, whether you’re looking to bring tech into your business, or want help to get better with a system you’re already using, NZCB National Partner Free Up could help you with the process. Give Anna at Free Up a call on: 021 0839 6910. Anna Brooks, Free Up. Free Up is an NZCB National Partner and tech advisor for builders – making the process quick and easy, from selecting the right software to setting up the system to training staff. Anna also operates our Technology and Software helpline for members. For more information visit www.freeup.co.nz
