Did you know that the world’s most widely used business software, Microsoft Excel, is 30 years old? Though Excel is a relatively old dog in this digital world, it is still very popular in the construction industry for estimating, scheduling, and other project management activities.
Spreadsheet pros and cons.
Excel spreadsheets are familiar, easy to use and may already be included in the office suite you’re using, but the truth is, most spreadsheets contain errors. Excel has evolved along the way, most recently with the integration of new AI enhancements designed to help users identify patterns in their data, but it still has some significant shortcomings. This is especially important to consider if you use Excel for tracking finances, such as cost-to-completion estimates.
Jobsite reported in 2016 that spreadsheets larger than 150 rows have a more than 90% likelihood of containing errors. If, as they say, a user could have a 1.79% chance of making an error per cell, it stands to reason that the larger the spreadsheet is, the more inaccurate it will be. Take into account that a spreadsheet shared with other users can be edited by them, resulting in multiple versions. Imagine what happens when multiple errors go unnoticed.
Back in 2013, a series of spreadsheet errors resulted in nearly 6 billion dollars worth of losses to JP Morgan’s Chase Banking system. Known today as The Case of the London Whale, the culprit was likely Excel’s manual data entry format with a copy and paste interface that allowed users to transfer inaccurate figures to new data sets. Those errors, coupled with poor risk management proved to be disastrous. Even though you’re not trading billions in derivatives, you still can’t afford to make risky, uninformed decisions about your finances.
Integrating front-office and back-office operations.
Front office operations are those that deal directly with your clients, from securing and negotiating contracts, to completing the work that takes place on the job. Back office operations include the necessary accounting and HR functions, everything from managing accounts payable and receivable, to payroll and employee scheduling.
Say you have a relatively small construction company that hasn’t quite outgrown Microsoft Excel for front-office operations and you’re using basic business accounting software like QuickBooks. While Excel may work well for activities on the job site, its data probably doesn’t integrate with the other business software systems you may be using for back-office operations. This is why you should consider switching to an integrated software solution that includes data transfer capabilities like Sage 100 Contractor.
Sage combines an accrual-based accounting system with complete project management functions that are specific to the construction industry. Unlike business accounting software suites like QuickBooks, you can import your existing Excel data into Sage for more accurate planning.
No matter what your construction specialty, Sage software streamlines your operations by organizing them into 4 categories.
- Estimating Choose from the Basic, Standard or Extended versions to help you generate accurate, detailed estimates so you can win more contracts. Standardize the bidding process, eliminate spreadsheet errors and duplicate entries.
- Production Create and manage your budget and job costs with existing reports or those you can create yourself. Easily update contracts and make change orders. Create purchase orders from estimates, update schedules, allocate labor resources and organize all your important documents so you can find them when you need them.
- Accounting The integrated general ledger system allows you to quickly and accurately manage accounts receivable, payable and payroll. You can also customize your billing based on percentage-of-completion or time-and-materials methods, and manage inventory and purchasing, and pay invoices by the job instead of one at a time.
- Analysis Generate detailed reports and create your own as needed for a clear and up-to-date picture of company finances, job costs, and labor productivity.
Managing your construction company doesn’t have to be complicated or expensive. Sage Contactor 100, as a monthly subscription service, starts at $115.58 for the first user. Add additional users, 2-5 for $97.75 each and 6-10 for $87.67 each. Equipment Management, Document Control, Inventory, Work Order Management and Estimating modules can be added to your subscription for an additional fee not based on the number of users. Request a demo today.