Job-Cost Reporting Leads to Profitability
Natural-Gas Pipeline Contractor Gets Handle on Project Expenses
Excerpt from CONSTRUCTECH Jan./Feb. 2000
Effective job-cost reporting is essential to the success of Flint Construction, Lawrenceville, Ga. Flint generated daily and weekly job-cost reports to track main-hours and other vital accounting information.
"Job-cost reporting is probably what drives this company," says Jeff Sheffield, Flint Construction's network administrator. "Some of our jobs are accounts-payable intensive. We weren't getting the proper job-cost reporting information from our old computer system."
Access to job-cost information helps construction companies determine if a project is making or losing money. The information also helps firms make decisions that will affect a project's profitability and it helps them prepare for future bids.
Flint Construction is a natural-gas pipeline contractor that operates in 18 states throughout the South and Midwest. The 175-employee company specializes in all phases of natural-gas pipeline construction as well as petroleum product construction and concrete paving.
The construction firm has several projects ongoing at all times and employs a significant number of subcontractors. To track all of the accounting information associated with the numerous projects, the 42-year-old company uses Dexter + Chaney's Forefront Construction Management Software.
"Forefront's software gives us a handle on our job costs," Sheffield says. "We know at a moment's notice where we stand on a job and whether we're making or losing money. Likewise, when a job is complete, we can tell if we made money or not. If you're doing a job and not making money, then why do it?
Prior to implementing the Forefront system four years ago, Fling Construction used a Unix-based accounting system that did not offer easy access to job-cost information.
"We actually had to crunch numbers by hand," Sheffield recalls.
Sheffield explains that several features distinguish the Forefront software from other job-cost and accounting systems.
"The system is good at handling a lot of input. You can move from screen to screen and do the thinks you need to do quickly," he says.
Dexter + Chaney, Seattle, Wash., released Version 9 of Forefront this past September. The new release includes more than 200 new features, including a redesign of its Work Order module, a new MeagSearch help capability, and the introduction of the Forefront Document Imaging System.
The MeagSearch feature lets users find information on customer, vendors, and jobs by entering a few key words or numbers in the lookup box. A match on any field such as a customer name or a phone number will result in a match for the entire record.
Document imaging lets contractors store the numerous pages of documents that they typically accumulate on a job, including invoices, change orders, work orders, payroll timecards, blueprints, and contracts. The system lets users scan, file, view, and annotate the documents.
Dexter + Chaney also developed some custom features to help Flint Construction meet its specific needs. "We knew how we wanted to crunch our numbers," says Sheffield.
But Flint Construction's satisfaction with Forefront goes beyond the software's performance. Equally important is the support the company ha received from the software vendor.
"Software is only as good as the people who support it," says Sheffield, who explains that Dexter + Chaney's customer-service staff includes accountants who interact with Flint's accountants. "Our accountants like that," he says.
In addition, the company provides solid IT (information technology) support.
"The Forefront system works across many platforms and the technical-support people understand the platforms," Sheffield says. "You can't put a price on that level of experience and support."
Forefront Construction Management Software was designed to meet the specific requirements of contractors. Twenty-six modules provide a broad range of functions enabling contractors to manage their businesses.
The system includes a network option for contractors who use Windows for all of their software applications, including spreadsheets, scheduling, and word processing as well as accounting and project management.
Forefront's accounts payable/subcontract management module provides complete control over cashflow. The wide variety of reports and inquiry screens offers an accurate understanding of the status of each job and subcontract. It also makes scheduling payments fast and easy.
The system also includes complete subcontract control. For example, payments cannot be entered if they exceed the revised subcontract amounts. Retentions are automatically calculated by the percentage setup in each subcontract. Change orders are entered once and automatically update the subcontract amount and the revised estimate or committed cost in the job-cost module.
The subcontract management feature also allows users to track a wide variety of paperwork related to construction projects. Users can keep track of lien releases, releases from vendors and subcontractors, insurance certificates, and other time-critical documents required to remain in compliance.
The system is set up to beep a warning or refuse to release a payment until an item has been signed and cleared in the system.
Checks can be selected by job, vendor, payment date, or vendor type, and retentions are easily selected and paid when a job is completed. If a check is issued in error, when it is corrected, the system will automatically set up all the corresponding invoices and adjust the vendor, subcontractor, and general ledger balances.
Forefront's Job Cost module provides project managers, controllers, and owners with all the information necessary to keep jobs on track, spot potential cost overruns, and monitor the profitability on any job with completely up-to-date information.
Tight integration with other Forefront modules allows updates to the Job Cost module virtually as soon as information is entered into other modules.
For example, daily timecard entry in the payroll module ensures accurate labor costs at all times.
Online analysis of costs and income is easily done at any point during the life of a project. A variety of inquiry screens allow the project manager to view information immediately with out having to print reports.
Reproduced by permission from: Constructech, January/February, 2000.
Back to Headline News