The Future of Construction Accounting: 10% Improvement on Profitability is Possible!
A Tale of Two Departments
Construction accounting is a bit of a tale of two cities, namely between Accounting and Operations. On the one hand you've got the business people who do the numbers, and on the other you have the operations people who don't always understand how helpful the accounting can be for them. There is a level of difficulty in making accounting meaningful for the field, which can manifest in miscommunication and missed opportunities.
“In the construction industry we live and die by our accounting. Accounting is absolutely mission critical in our industry, but not always appreciated as such.” – Bryce Wisan, Partner, Eide Bailly LLP
Twenty years ago, ten years ago, even five years ago, contractors were just trying to get all the data they could in from the field. Now, there is a wide variety of incredibly exciting tools that deliver data almost in real time; everything from wearables, lasers, 360-degree cameras, robotics drones, virtual reality tools, the list goes on. Now that all of this data is available, though, there are still bottlenecks. Projects still lose money. Contractors are still delayed and can't figure out how. Leveraging this data is the key to solving those issues. How do we make use of it and put it all together so it isn’t just some virtual paperweight? Making data a key strategic asset is what will set contractors apart in the near future.
In this episode of The Download Bryce Wisan, Partner at Eide Bailly LLP, and Ellis Talton, Briq Head of Growth, synched up to discuss the future of data analytics in the construction industry and how he thinks it will help construction financial operations for every type of contractor.
“I'm an accountant, but I'm actually in the information business, and the conversations that I was having with my clients weren't necessarily about accounting per se, they were about information, they were about decision making, and data analytics is a natural extension of that.” - Bryce Wisan, Partner, Eide Bailly LLP.
Information is often siloed and not as not as well appreciated as it could be. So how does that relate to analytics? Well, if we can help the operations side of the business understand how valuable this data is, how significant it can be to them, and how accessible it can be to them (often through the use of forecasting tools) then we can really change the dynamic between the operations and the financial side of the business. Now that's a bigger answer than just accounting.
Never Before Seen
Some of the most interesting things happening in data analytics right now with contractors is they're using it to measure their operations in ways that they haven't ever been able to do so before. If you're able to look at the productivity of an individual superintendent and look at their productivity over time then you start seeing some pretty interesting things. Or, what about the combination of estimators and superintendents, or what about the combinations of estimators and superintendents and inspectors? The possibilities are virtually endless with this smart technology. Correlations start to come up that we couldn't see before that can instruct us within the operations sector in ways that we just hadn't been able to see with the naked eye.
Analytics directly helps contractors understand the productivity impact of team members in different roles by modeling performance in the past and then projecting it into the future. Using this information, decision makers can address problems and, in many cases, address them before they occur. PM’s can easily gain a summary of QA, safety, workforce and equipment data, streamlining the task of recognizing risk and assessing performance. This leads to time saved and fees eroded.
To see how Briq's products are eliminating double data entry, preventing fee erosion, and revolutionizing the way construction companies across the U.S. enhance their Fees, book your complimentary demo HERE.
