Interwest gets Operations and Finance the information they need to increase profits!
Operations, finance get the information they require to run the company profitably
Here's how Jim Martinek, business manager at Interwest Construction & Development, summarizes Spectrum's benefits to his company: integration, easy-to-use and train new employees, consistency and confidence in the numbers.
Plus, Martinek explains, don't forget Spectrum's custom menu system that enables operations and finance to access the information they require to run the company profitably. The administrator can create special menus for any user specific to his or her needs. For example, project managers can have their own menus tailored to give them just the screens and reports they need. Then there's Dexter + Chaney's high-quality customer support. "They listen to customers like us and, on a consistent basis, implement our ideas," he says.
As business manager of Interwest, a heavy-highway/utility contractor in Auburn WA, Martinek relies on Spectrum to yield Job Cost and other numbers that he literally can take to the bank. Interwest employs 85 to 125 people at three locations (the main office, a landscape yard and an aggregate mine).
Confidence
Martinek enjoys "great confidence" in his Job Cost and Work-in-Process (WIP) figures. That's because Spectrum's Equipment Control, Job Cost and other modules integrate consistently and are directly tied to General Ledger.
"From General Ledger having accurate reporting, and getting information for payables, receivables, job cost, equipment control and other items all coming through the system accurately, it makes everything very smooth," Martinek explained. "Spectrum is what I call a 'clean' or 'consistent' system. Each module has a consistency in the menu forms; it's easy for me to go into each of the modules and organize my thoughts about how things are processed."
Martinek adds that having confidence in Spectrum's information is priceless. Company owners, operations and finance all use and trust the information they access in the system.
"You can't really put a price on confidence, when you can say unconditionally—to the company's owners and managers, the bank or anyone else—that the numbers are right," he said. "You don't have to debate the costing structure or the costing system. That's a huge deal. If, for example, a project manager or a stockholder goes into Spectrum and looks at the job overview and says, 'We're making good money on that job,' I can look at it very quickly and confirm that, 'Yes, you're doing really well.'"
An example of how Spectrum serves the needs of operations, ownership and finance: Martinek is able to quickly—and confidently—determine how the landscape yard is performing. (The landscape yard—located 30 miles from the main office—provides materials for its construction customers, professional landscapers and retail consumers.) If, for example, a company owner wants to know if the landscape yard is doing a certain percentage, Martinek can pinpoint that information by looking up the profitability report in Order Processing in Spectrum.
Work-in-Process
Integration of Spectrum's modules is a "huge benefit," Martinek says, particularly with WIP. Because Job Cost ties to General Ledger, the numbers always balance.
"Every controller and CFO will tell you that's a huge benefit," Martinek explained. "If, for example, I'm doing a June 30 statement on July 20, I can look at the system and identify the expenses that I've incurred from July 1 through July 20 and test how much gross profit I have as of June 30. I can actually test the numbers in a current status and say with confidence that the gross margin is right on."
When he starts his WIP schedule, Martinek can look at unapproved invoices in the system and identify those that will apply to jobs—including invoice dates, and why individual invoices haven't been approved. Interwest doesn't need to maintain separate files for "unapproved invoices" or "approved invoices;" Spectrum automatically tracks that information for them.
Project Managers
Spectrum is a key tool for Interwest's project managers, giving them a realistic view of how their jobs are progressing—information they can put to work immediately. Martinek noted that, if costs appear to be high on a job, a project manager's natural tendency is to question the information. But those questions disappear when Martinek demonstrates Spectrum's accuracy and integration—and, as a result, project managers use Spectrum to make job-related decisions with confidence.
Developed Carefully/Tested Thoroughly
Martinek also explains that, based on his experience with the system, Spectrum is "extremely high quality software" that's been carefully developed and thoroughly tested. When he's worked elsewhere, construction management software has lost records when it aborted during an update.
"At other companies, I've had to tell a stockholder or a bank that they can't get a statement because there are problems in the system," said Martinek. "That's a big deal, because you lose your data and you don't know whether your job cost is accurate or whether your job overview is going to report the number accurately. At Interwest, we've had our server go down and never lost any Spectrum data."
Likewise, records don't get partially posted in Spectrum. (For example: a partially posted record might update General Ledger but not update Job Cost.) Accordingly, Martinek is able to avoid a problem familiar to construction company business managers: combing through millions of dollars worth of work—literally thousands of individual transactions in some cases—to identify which record didn't get posted to Job Cost and/or the General Ledger.
Remote Access
Entering and accessing information in Spectrum from the company's landscape yard and aggregate mine ensures that the data in Spectrum is timely, thus reducing costs and enhancing cash flow. It provides another example of how Spectrum helps operations work more effectively and, ultimately, enhances company profits.
Information (about products picked up or delivered to customers) is transferred from Interwest's scale software into Spectrum using Spectrum's extremely flexible Scale Interface module that employs a user-defined import format. Scale Interface integrates with Spectrum's Inventory Control, Job Cost, Order Processing and Accounts Receivable modules and works with Accounts Payable to create invoices for haulers.
Tickets from Scale Interface are sent to Order Processing, where an invoice is created that includes summarized information about the ticket. Order Processing provides a complete operation for order entry, picking, confirmation and invoicing of customer sales.
"Now, at the beginning of the day, the information about what happened yesterday at the landscape yard and aggregate mine is in the system," Martinek said. "I can look up and see what we billed there yesterday, without having to call or ask anyone. Having that link between our satellite profit centers and the main office has also been critical because of the enhanced cash flow. If we had to re-enter all that information into Spectrum, it would be a lot of extra work."
Numbers
Among Spectrum's benefits that Martinek can quantify in dollars and cents:
- He figures he saves the company thousands of dollars annually because he doesn't spend any time reconciling WIP or subsidiary ledgers with General Ledger. At other construction companies where he's worked, he would typically devote six or seven hours monthly to that task. "Some of my construction-industry colleagues devote $15,000 to $20,000 of their time per year to reconciling," said Martinek. "With Spectrum, I don't need to do that."
- Martinek estimates that Interwest saves "about $12,000" annually by transmitting materials, labor and other information electronically from the landscape yard and aggregate mine to company headquarters. Not only does the company eliminate the cost of a courier, but the information is timely (instead of being entered into the system two days after materials had left the landscape yard) and cash flow is enhanced.
More Than the Product
Martinek emphasizes that the people behind Spectrum also are essential to Interwest's success.
"I've done system upgrades and worked with technical people at Dexter + Chaney and found that their advice is right on the mark," said Martinek. "Every time I've had to do an upgrade, it's been very straightforward." Latest example: Cynthia Arbaugh, Spectrum trainer, worked with Martinek and Interwest to ensure that Spectrum's Scale Interface and Order Processing worked seamlessly with Interwest's scale software.
"We come up with some issues once in awhile where we need to call Dexter + Chaney to say, 'Here's what we want to do, how can we do it?,'" Martinek said. "We've exhausted our own resources prior to calling them. So, when we call them, we're ready for someone with some depth of knowledge that's greater than ours to give us some insight into a solution. That's what we get from Dexter + Chaney."
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