Job Cost Tracking

Job Cost Tracking for commercial construction contractors

Who needs Job Cost Tracking?

You do.

That is, you do if you’re a commercial construction subcontractor, and you are determined to manage a profitable, sustainable, and worthwhile enterprise.

Successful construction contracting business owners know the part they play. They do the analytical work, and they make the decisions. Consequently,  the financial reports they receive and review regularly enhance their ability to accomplish these tasks.  For example, one of those important reports is known as Job Cost Tracking or Job Costing.

 

Proper project costing produces preferred profitability.

 

Plus, it leads to better future project estimating, contributes to enhanced management decision making, and supports timely financial reporting.

Job Cost Tracking enhances project control

To clarify, resources are limited and must be utilized as efficiently as possible.

Therefore, a few of the ways you can leverage job cost tracking are:

  • avoid risky assumptions and stay in control of profitability
  • know where projects are going right and where they’re going wrong
  • make adjustments as you go
  • be alerted to find more cost-efficient ways to handle issues
  • gain the advantage in the estimating process going forward
  • see a true reflection of gross profit

3 Components of job cost tracking

Measure

Defining and measuring your resources is the basis for creating a job costing system. For example, a few of the steps involved in setting up, maintaining, and using a job costing system are:

  • Gather the information from past and present projects
  • Categorize and store the information
  • Assure the information is accessible to those who need it
  • Input information as projects progress
  • Analyze information regularly
  • Adjust actions and expenditures as necessary

Control

Managing the resources at hand means maintaining control of the project as it progresses. Consequently, through the proper use of the information garnered through job costing, you can:

  • Track any deviations from the original estimate
  • Find and analyze possible solutions
  • Support those who will need to make adjustments

Improve

Whether taking small steps as the job progresses or finding major process strategies that must be enhanced, job cost tracking gives you footing for company improvement. For instance, you can:

  • Determine to include those things which went right in future projects
  • Learn from mistakes which were made and change the necessary factors
  • Communicate the findings to employees and subs

Answering questions through job cost tracking

Likewise, proper job costing analysis aids you in answering critical questions such as:

 

  • Which jobs are running within budget?

 

  • Which are not?

 

  • Are we within our target margins?

 

  • Who are the most profitable and least profitable general contractors we work with?

 

  • Do we have operational inefficiencies?

 

  • Who are our most productive employees, subs, teams, or departments?

 

  • When is the right time to hire? Or fire?

 

  • Where should I invest my marketing dollars?

 

To sum up, producing an accurate and useful job costing report is not just an accounting exercise. A job cost tracking report is an excellent tool used by savvy construction contractors to enhance their ability to lead and manage well.

The Job Cost Tracking Tool!

The Job Costing tool our office knows, uses, and highly recommends is Knowify. Knowify is a (cloud-based) easy to use software that (among other functions) provides a system for Job Costing from start to finish.

 

We desire to familiarize you with business concepts, which will make it easier for you to be a better commercial construction subcontractor through our blog posts. Some are new ways of looking at things, and others are refreshers. 

Schulte and Schulte Provides Accounting, Contract Document Management, and Advisory Board Level counsel for small to medium commercial construction subcontractors.

So you can Run With the Big Dogs! Call us 866-629-7735

Leadership — Develop an eye for the big picture

Leadership through developing an eye for the big picture

How neglecting some things in your business pays off

Here’s the deal; big picture thinking is a core leadership competency. Yes, as a leader, you must see the forest and let others be concerned about the trees.

Savvy construction leaders focus more on steering long-range objectives, providing inspiration, and motivating others. They are likely to:

  • Anticipate opportunities, contingencies, and potential problems
  • See idea, theory, and concept connections
  • Understand people networks and relationships
  • Discern and make use of data
  • Avoid or (at least) reduce discord
  • Recognize associates, collaborators, and competitors
  • Develop the skill of situational awareness

Therefore, all the minor things, the “details,” are left to others. Experienced leaders know how to delegate, designate, automate, or eliminate.

By giving your team the opportunity to take care of the details you gain more time for effectively leading.

A few examples of big picture thinkers

According to Rowan Bayne, author of “Psychological Types At Work,” about twenty-five percent of the population are big picture thinkers.

Wow, not a huge group. Here are a few examples you’ll recognize.

  • George Washington
  • Winston Churchill
  • Steve Jobs
  • Sandra Day O’Connor
  • Aristotle
  • Jeff Bezos
  • Warren Buffett
  • Mark Cuban
  • Elon Musk

Big pictures and details

While some have a natural tendency to see the big picture others are more likely to focus on the details.

For years I believed you had to be one or the other. You had to be someone who could see the big picture or someone who thrived on dealing with the details. Then, I discovered the concept isn’t that simple. Or that hard.

Rather, there seems to be a continuum or scale on which we all fall. At one end are the folks who find it difficult to notice details because they’re so focused on the big picture. And vice versa, at the other end, people who are so close to the details they don’t seem to notice there is a big picture.

And then, there are those who fall in between.

Big picture and detail in the Schulte and Schulte office

We were interested where the folks in our office were located on that scale. So, we took a little test.

Tonya came in at 60

This is what she learned, “You scored as more of a ‘big picture’ thinker. This means that you often zoom out and try to understand a situation from a broader perspective, but you sometimes miss out on the finer details. You likely consider yourself more of an ‘artistic’ or ‘creative’ person rather than a ‘scientific’ or ‘rational’ person. You aren’t as interested in the small nuts and bolts of how things work, but how things fit together in a larger context. The closer your score is to “100” the more of a ‘big picture’ thinker you are.”

Alicia scored 34

She was told, “You scored as more of a ‘detail oriented’ thinker. This means that you often zoom in and breakdown a situation based on its individual parts, but you sometimes miss out on the bigger picture. You likely consider yourself more of an ‘scientific’ or ‘rational’ person rather than an ‘artistic’ or ‘creative’ person. You are often interested in the small nuts and bolts of how things work but find it difficult to see things fit together in a larger context. The closer your score is to ‘0’ the more of a ‘detail oriented’ thinker you are.”

Joe showed up at 49

His results were, “You scored as equal parts ‘big picture’ thinker and ‘detail oriented’ thinker. This means that you are capable of zooming out and trying to understand a situation from a broader perspective, but you’re also good at zooming in and seeing the finer details of how things work. You likely consider yourself both an ‘artistic’ and ‘creative’ person, as well as a ‘scientific’ and ‘rational’ person, depending on the situation.”

Take the quiz

You may already have an idea where you fall on the continuum. Or you may be surprised. So, go ahead and take the quiz. It is free and you don’t have to give your email to get the results. It is twenty-five questions long and takes only minutes to complete.

Not only will you have a better idea of which traits you already possess, but you’ll also be able to note in which areas you may need to improve. And yes, it is interesting to get others in the office to take the quiz also. It may be eye-opening for you and your staff or coworkers.

In case you were wondering, I received the same response as Joe although my score was 54.

Unexpected ways to improve your big picture eye

Stay informed. Think about what is happening beyond your business or community. Think about trends in demographic, economic, social, and technological ways.

Be sociable – in person. Connect with a variety of people. Spend time talking with people from different areas of life. More important than talking to them is listening to them. Consider other’s opinions and views.

Read or listen to books. Not just construction or business-related books. Read about the “things of interest” in your mind. Science, music, history, people, or ideas you wish to explore. Whatever. Have fun. And learn some stuff along the way.

Volunteer. Of course, there is always value in the act of helping others. But you may not have thought of the value you can receive from seeing the world from a different perspective. Plus, typically when you volunteer you can interact with like-minded people who show up where you show up.

Chase rabbits. OK, there is a different term for this activity. Some call it “surfing the web.” Go with no purpose in mind. Travel to places you’ve never gone before. See something that interests you? Chase it down. Share what you learned with others. (In the past, this category would have been called, Go to the library.)

Play games. From getting involved with an amateur sports team to playing board or card games there are many ways to play games. And oh, what you can learn! Leadership skills, teamwork, staying on track, focus, determination, and sportsmanship are just a few of the lessons learned from playing games. Perhaps the most important lesson to be learned is to not take yourself too seriously – have fun along the way.

Check this out also

This article is the third in a four-part series concerning leadership in the construction world. The first was, Leadership – Keep learning. The Next was Leadership — Practice Composure.  And the fourth is Leadership — Inspire others

 

We desire to familiarize you with business concepts, which will make it easier for you to be a better commercial construction subcontractor through our blog posts. Some are new ways of looking at things, and others are refreshers. 

Schulte and Schulte Provides Accounting, Contract Document Management, and Advisory Board Level counsel for small to medium commercial construction subcontractors.

So you can Run With the Big Dogs! Call us 866-629-7735

Subcontractors – What’s Your Story?

Subcontractors tell your story to grow your business

Subcontractors – What’s Your Story?

Subcontractors create

The culture you create within the confines of your construction subcontracting business radiates. That culture becomes the story your construction company is known for. What story is your subcontracting business telling?

Are your crews known for showing up on time prepared to give it their all? Or do they have the reputation for being late and leaving the site frequently to retrieve forgotten tools?

Are your people the ones who will go the extra mile to help out the GC? Or are they the ones who fail to clean their own mess because they “don’t want to be taken advantage of?”

Can you be sure your phones answered by people who either know the answers or know how to get them?

Is all the paperwork your general contractor asks for submitted in a timely manner? Or is it only taken care of when someone in the office or the field gets nagged enough to get it done?

Creating a culture which stresses “customer service” allows you to tell a better story.

The first two questions you need to ask are:

  1. How do the GCs in my area perceive my company?
  2. What do I want it to be known for?

Subcontractors develop

The culture you develop in your construction business has the power to attract the right employees. I’ve heard Tonya express it this way many times – your vibe attracts your tribe.

When your employees and subs know you care about them as human beings, not just a tool you use to get a task done they’re more attuned to supporting your efforts. Giving bonuses and raises whenever possible is only part of the picture. Giving praise and supporting their efforts for personal as well as professional growth helps your team see you as someone who cares.

With that being said, let’s move to ways to help your team understand your stance.

Want your team to lie to you? Teach them that lying to the GC is acceptable. Or would you prefer your employees tell the truth about errors and omissions? Be sure to model that behavior.

Do you want your team to steal from you? Show them that cutting corners is the only way to get ahead. Or, does it make more sense to teach them that your expectation is for excellence and “good enough” is never good enough.

Do you prefer your team members show up on time? Then of course, you must be their example. When you call for a meeting, you must show up before the meeting starts, not a few minutes later.

Subcontractors lead

If you don’t already have the skills of a leader you need to develop them. Here is a great graphic which depicts the difference between a boss and a leader. You can check the graphic to see which skills you need to improve or strengthen.

Want your folks to feel all they do is work hard for a paycheck? Neglect to let them know what it is they really do. Want them to get the vision? Show them the vision.

And the way to frame that is often with the end game in mind. Are they laying brick or helping build a medical facility which will save lives? Do your hands think they’re painting walls or do they believe they’re putting the finishing touches on a space which will provide jobs for the community? Are they laying wire or pipe or rebar which will not be seen when the building is complete, yet will bring integrity and ultimately usability to the shopping district?

The next questions you should ask yourself are:

  1. How do my employees feel about their jobs?
  2. What do I want our team members to feel about their jobs?

Subcontractors improve

When it comes to company culture and telling your story there are likely areas in which you can improve. Because, as you know, if you’re not getting better . . .

The purpose of your business (why your company exists) is where your story begins. How do you fit into the big picture in the construction industry? How well do you pass on your vision?

Look at your mission statement, values, and long and short-term goals to get a handle on your culture. The next step is to observe how your employees reflect the statement, values, and goals. Be sure your mission statement isn’t just a bunch of words, rather that it captures the essence of how your team operates. Know what values are important to you. Devise a way to pass on those values to those in your employ. Be sure everyone is on the same page concerning long and short-term goals.

See to it your team has a clarity of purpose. Work to be sure your employees are engaged, not just getting by. Trust your team and do all in your power to let them know they can trust you. Always be learning. See to it you’re providing opportunities for your team to learn and improve. Finally, make sure your company policies align with your company culture.

The final set of questions to ask and act upon are:

  1. What is right about our company culture?
  2. How can it be improved?

Develop an excellent company culture and tell your story so you’re able to:

 

  • Capture General Contractors’ Attention

 

  • Enhance Recruiting and Retention Efforts

 

  • Improve Your Business

 

Control your story both internally and externally.

 

It is our desire this article (among our growing library of construction-centric informational articles) is helpful in assisting commercial construction contractors build better building businesses. 

Providing Accounting and Advisory Board Level counsel for small to medium commercial construction subcontractors.

So you can Run With the Big Dogs. 866-629-7735

Promoting Your Commercial Construction Business

Promoting Your Commercial Construction Business

Promoting Your Commercial Construction Business

Promoting your construction business

While promoting your commercial construction business falls under the umbrella of marketing, don’t get it confused with your other marketing strategies and tactics.

Briefly, a few things your marketing can include are paid ads, social media, blogging, sponsoring, and promoting.

Plus, while we’re removing some confusion, I hasten to add that promoting is NOT the same as having a promotion.

Think of it like this – promoting is long-term and relational, while a promotion is short-term and impersonal. Going to participate in a promotion? Get out the coupons. Going to promote your business? Get out your best behavior.

There are 3 phases when you can promote your subcontracting business and they all involve dealing directly with your potential and present clients. But before we dive into them let’s look at why you need an excellent website.

Promoting your construction business on your website

Remember, good GCs are going to do their due diligence before considering your bid. Therefore, a basic starting point is to maintain your website with your target audience in mind. What do they want to know about you? What will help them see you as a responsible addition to their team? How will they quickly gain insight into what you do and how well you do it?

  • A portfolio of your past jobs
  • Testimonials from former clients
  • Photos of your team in action
  • Pictures of your company vehicles
  • Easy to find contact information – with phone numbers and email address taking front stage
  • Links to your social media channels (which should also be well maintained)

Include on the first page, in an easy to spot space, this type of sentence, “If you would like to find out more about our company or to request that we bid on your projects, please contact us.” (Be sure to make the contact easy by providing the proper link.)

Promoting your construction business before getting the job

In the before phase take time to do your own bit of due diligence. Determine if the GC is someone you want to work with. Do they have values which align with your own? Is it apparent they pay on time? Is it their practice to deliver excellent work?

We all know there are some GCs who are simply not worth the trouble. Skip them. In construction as in life, there are plenty of fish in the sea.

Because promoting your construction business is about relationship there isn’t likely to be a list you can check off and call each step done. Yet, there are a few things to keep in mind as you enhance your promoting skills.

  • Attend GC sponsored meet and greets
  • Peruse all building plans
  • Visit the job site
  • Ask questions
  • Get bids in on time and present them in a professional manner
  • Provide all necessary documents with bid
  • Maintain your integrity

Also, be quick with compliments, congratulations, and thanks. Keep complaints and criticism to a minimum.

Promoting your construction business after getting the job

The most important ingredient to include in your mix of promoting your construction company to the GC is to treat everyone as you want to be treated. That simple. Here are a few things to keep in mind.

  • Do what you said you would do
  • Realize that helping your GC make a profit is the bottom line – for both of you
  • Be sure to answer or return their phone calls quickly
  • Keep all your appointments – on time
  • Be certain your employees understand what is expected of them – written standards must be in place
  • Maintain written standards for your subs – great contracts support great relationships
  • Communicate with your suppliers, vendors, employees, and subs, just as you expect your GC to communicate with you
  • Pay your suppliers, vendors, employees, and subs on time and as agreed
  • Be of good character

Dwight Moody said, “Character is what you are in the dark.”

Promoting your construction business when the job is complete

Stay in touch with the GCs you want to work with. Here are a few ways you can do it:

  • Send a thank-you note
  • Give referrals
  • Ask what you can do to improve
  • Give leads
  • Attend mutually beneficial conventions or events
  • Suggest suppliers or vendors

You promote your business by performing to the best of your ability and getting the word out to those who matter. You must be conscious concerning your efforts. And, don’t think others will do it for you.

They won’t.

You and your team are the voices which are heard and seen.

Promoting your commercial construction business is pretty easy if you keep the golden rule in mind during all your business interactions.

 

It is our desire this article (among our growing library of construction-centric informational articles) is helpful in assisting commercial construction contractors build better building businesses. 

Because we are a virtual “corporate accounting office” for commercial construction businesses we can assist you no matter in which of the 50 United States your business is located. We invite you to get in touch here

Mistakes are Costly, Coverups are Costlier

Mistakes happen. Own up to them to grow your construction business.

Mistakes are learning tools

Learn. Study. Improve. Grasp. Catch On.

There are numerous ways for us to learn. Making mistakes is one of them. At the bottom rung of the construction contracting mistake ladder we hope to learn to never again do the thing which turned out to be a mistake. Yet, there are more rungs.

 

 

 

 

 

 

Making us think it through.

Training us to not do similar things.

Teaching others to avoid the action.

Enlightening us concerning our skills level.

Revealing something we didn’t understand.

Letting us know some things are a lost cause.

Bringing us to be more compassionate toward others.

Giving us a heads-up concerning other possible actions

Spurring us to want to try new things in this or other areas.

Mistakes – the advantages

Asset. Blessing. Boon. Edge. Distinction.

Making a mistake is not advantageous. Yet, admitting you made a mistake is!

Plus, there are several ways you can use (admitted) mistakes to your advantage.

With your employees, subs, and even your clients you build trust when they see you are human, honest, and gutsy enough to step to the plate.

Certainly, a side effect of the “plate stepping” is you provide the example for risk-taking and open communication in your construction business. Plus, it simply makes you more approachable.

Therefore, admitting mistakes helps offset the negative feelings from those who’ve been affected. Some have had high hopes. Others feel their time has been wasted. Still others may think you’ve purposefully tried to “pull one over” on them. Getting things set straight puts relationships back in order and puts your construction contracting business in a better light.

One of the foremost aspects is it allows for quick correction, which (hello!) saves time and resources. Plus, it allows you the peace to stop defending a difficult or incorrect position.

So, your credibility as a leader is increased. Plus you provide concrete examples which reinforce critical aspects of your company culture: decisiveness, openness, honesty, integrity, and quick correction.

Mistake quotes

“Anyone who has never made a mistake has never tried anything new.” Albert Einstein

“The only man who never makes a mistake is the man who never does anything.” Theodore Roosevelt 

“The proactive approach to a mistake is to acknowledge it instantly, correct and learn from it.” Stephen Covey 

“A man should never be ashamed to own he has been in the wrong, which is but saying… that he is wiser today than he was yesterday.” Alexander Pope

One more mistake quote

“In politics… never retreat, never retract… never admit a mistake.” Napoleon Bonaparte

Oh my! We think Mr. Bonaparte may have given some terrible advice. Furthermore, seems two former American presidents listened to him. Both made mistakes. Similarly, both were impeached for their parts in trying to cover up, not for the original mistake.

Made a Mistake? Say so

Acknowledge. Admit. Confess. Disclose. Make Known. Own up.

A few years back we lived in a house which had a house-long porch which cantilevered over the side of the small hill on which the house was built. If you looked straight down over the edge of the porch you could see the pathway which led to other portions of the property. Sounds pretty good, huh? Well the problem was, getting to that walkway was no easy task. The round about way of accessing the steep stairs which led to the path meant we typically only walked on that path when there was a direct purpose for doing so. Now, you have the setup and I’ll get on with the rest of the story.

Most note worthy, the porch was sound, the railings up to code, the danger-level low. Children (or adults for that matter) weren’t likely to go tumbling off. Yet, items – toys, cups, flatware, you-name-it – were easily tossed through the rails and over the side. Yeah, I know, you can already see where this is going. After many discussions with the small man-child who frequently “accidentally” let drop this and that I decided it was time to take more affirmative action.

Sure enough . . . I looked up from my book to see small man-child with his hand stuck through the rails ready to release the next item to the wilds below.

A mistake was about to be made

Therefore, I said his name then said, “If you drop that, I’m going to swat your butt.”

The little fingers let go. The cup plopped to the ground below. The man-child purposely stepped to a space directly in front of me, turned away from me, bent over and in the same motion pulled up his shirt making his tiny behind available for the swat.

Laughter was stifled, and minor swat was given.

So, owning up to your mistakes (and misdeeds) allows you to step forward, often leaving both the mistake and the subsequent consequence behind you.

 

In case you were wondering – yes, we’ve had to make a few mea culpa pleas. And yes, we’ve gotten better at serving our clients because of it. You can get in touch with us here.

Performance-Based Bonus Programs That Don’t Stink – Part 1

bonus programs and incentives that don't stink

bonus programs and incentives that don't stink

Some bonus programs stink

Bonus programs based on the wrong parameters or instituted poorly can be really yucky for everyone. Your team loses, you lose, and you throw your hands up in despair thinking bonus programs are a waste of time and (more importantly) a waste of money.

Yet, if you get it right, the win-win effect takes place bringing everyone (including your clients) into a much better place. Instituting bonus incentives in your construction contracting or service business is worth the time and effort.

A bad example

One of the best companies I ever worked for made a honking mistake when they first instituted a bonus program which offered a rather stunning reward. I mean, who do you know who wouldn’t want to have an all-expense paid, eight-day vacation with the person of his or her choice in a foreign land while the paycheck continued to roll in?

In case you’re wondering if I’m calling sour grapes simply because I never achieved the bonus, think again. I did achieve the bonus. My hubby and I were delighted to be a part of the group which arrived in Thailand ready for an adventure. Yet, we were only able to go because the company realized after the first disastrous year they had made a parameter mistake when instituting the bonus.

There isn’t reason to go into all the details, but you’ll understand what went wrong when I mention that the goal which was set the first year could only be reached by a limited number of employees. It had to do with location. The folks who could reach the particular goal set for that year all lived in metropolitan areas. Those of us who had no hope for reaching the goal lived in rural areas. And yes, you guessed right. When we first learned what the goals were, we looked at each other, smiled, and mentioned that we weren’t possibly going to reach that goal. So, nothing in our behavior changed.

The point is, when setting goals for your team, be sure they are attainable. That doesn’t mean make it easy, it just means the goal should be one everyone in your employ can see hope of achieving. Which brings me to my next point.

Achievement rather than performance

Ah, words. Words can mess with our minds. This report from the University of Michigan will give you more insight into the validity of choosing words which are more in line with what you want to convey.  So, there is every reason to choose the correct word when determining what it really is that you want to accomplish. The word performance tends to remind us of a stage. When a person is asked to perform there is the concept of getting it right for the sake of the audience (in this case the boss.) But, when a person is asked to achieve the idea inherent in the word is that of making ones-self better. You can see how that simple change in words will set the right tone for introducing bonuses to your team. It will also aid you in determining parameters that are highly advantageous for all involved.

Achievement-based bonus program

Perhaps stating what an achievement-based program is NOT will be helpful. It is not:

  • A freewill gift (for instance a Christmas or Chanukah present)
  • Delivered randomly without a plan
  • A tenure bonus (although this is close)
  • An employee referral program (yet it will add juice to your attempts to gain employable referrals)
  • A signing bonus

Now, let’s talk about what a well-executed achievement-based bonus program IS. While you can make a case for “a job well done is its own reward,” you must admit raising the bar with extra incentives is a useful tool in your management toolbelt. When you reward accomplishment, you help people achieve more (sometimes more than they thought themselves capable) and you:

  • Increase teamwork and camaraderie
  • Decrease unsafe practices
  • Escalate productivity
  • Improve customer service
  • See your business improve

Results are what count

After all, incentives are all about achieving specific results rather than simply doing a good job.

In part two of this 3-part post we’ll talk about how to determine which bonus initiatives will be most advantageous for your construction contracting company. There will be information on how to implement the program. And there’ll be the part about “which incentives to give.”

 Contact us here or call 866-629-7735.