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Process Improvement

Why You Should Use Construction Cost Tracking Software

Written By: Joe Demski
July 20, 2022
7 min read

One of the backbones of construction management is efficiently tracking costs throughout the process from project estimates to final figures. Factor in delays, supply chain disruptions, severe weather damage, and contract disputes, and tracking project costs becomes an overwhelming undertaking.

But, with construction cost tracking software at your disposal, you have centralized access to all the data you need to anticipate extra costs, pencil in delays, and oversee budgets. It may seem a straightforward tool—and it is—but its impact on you and your team’s efficiency is nothing short of transformative.

By entrusting your financial affairs to a trustworthy construction cost management software, you’re poised to tackle the role of construction project management with the right support and with higher confidence.

What is a Construction Cost Tracking Software?

Cost tracking software is a digital tool that allows you to create a project budget, identify project expenses, and track project expenses in real-time. This powerful construction cost tracking software hub allows your team to minimize cost while helping increase profits.

A construction cost management software is often a cloud based software that may be available on a smart tablet, laptop, computer device, or even a smartphone, depending on the specific program. A cost tracking software might have some or all of the following features for a seamless customer experience:

  • Contract management

  • Payments and invoices/Document management

  • Purchase orders/Material costs

  • Budget overviews and asset inspections

  • Insurance costs

  • Transportation costs

  • Profit and overhead expenses/Project costs

Benefits of Using a Construction Cost Tracking Software

When using construction management software such as cost tracking software, you might find that gaining access to most finance-related documents and functions speeds up your management methodologies.

Quicker service billing, cutting down on time spent entering hours worked

Some cost tracking software allows contractors to track their time on their phones with convenient features like integrated timesheet programs. A representative from each team can also be responsible for clocking in entire teams to cut down on individual time spent tracking hours.

Track changes in purchase orders

With construction projects, keeping a careful inventory of purchase orders may not be feasible without the help of cost tracking software. For complex projects, especially, this type of software can ease the burden of performing cost control and relying on manual methods.

Other benefits

  • Keep track of details that may be inaccurate if input into different construction management software

  • Combine project management and cost tracking tasks for the entire project team

  • Streamline contracts by creating templates and speed up bid management

  • Standardize common cost documents such as specific materials, insurance policies, or contractor wages

  • View construction risks alongside your project budget

  • Save time and improve workflow and communication with task management

  • Secure storage of sensitive data and documents such as committed costs

  • Mitigate delays by improving cost tracking

  • Bird’s eye view of profits vs. expenses

FAQs

How do you keep track of construction expenses?

There are different ways to implement cost tracking procedures within a construction project or company. In general, budgeting follows three main phases: preconstruction, construction, and post-construction.

In the preconstruction phase, stakeholders meet to define the project and design. This meeting might also establish the project timeline to create a blueprint for the entire team to follow, delineating key deliverables. Additionally, potential delays may be identified which can prevent the project from moving forward.

During the construction phase, construction managers might keep track of important expenses such as labor costs, materials costs, insurance costs, and delay expenditures. For each major category, subcategories provide even more customization and tracking efficiency such as specialty contractors, property insurance, or failure to secure funding, relatively.

Most construction cost tracking software allows you to examine projected costs and actual costs, giving you a detailed report of whether or not you are over or under budget, and by how much. Deviation from the original budget can result in positive results such as a bonus, or in negative consequences such as negotiations, disputes, or even lawsuits, depending on the gravity of the delay/cost.

This accounting tool at the tip of your fingertips is advantageous for construction professionals who want to save time and implement streamlined collaboration across the project team.

After construction, a punch list may be created and completed. Stakeholders will meet and discuss any outstanding issues or concerns, and the owner will take over relevant documents and processes if all goes smoothly, including the cost tracking documents.

Which software is best for construction management?

There are different types of construction management software that may serve your objectives. Analytics software allows construction managers to supervise current projects and create new project estimates based on previous ones in the software.

Drawing software is one of the most different types from construction cost tracking software. It is utilized for visual documents such as plans and designs. Documents in this type of software are shared across stakeholders during the beginning stages of a construction project. This type of software is often referred to as building information modeling in the construction industry.

On the other hand, a job costing software is similar to construction cost tracking software. It is useful in estimating project costs and supporting the proposal process. This tool is beneficial for companies that provide a comprehensive services catalog. Job costing software may also provide support during construction such as keeping track of overtime, taxable payments, and employee information.

Risk and safety management software may be used to support construction cost tracking software. It allows stakeholders, particularly the construction manager, to record any risks prior to jumpstarting construction projects. This information helps the team remain safe and compliant, and it supports seamless communication between field workers and the central office to speed up field service safely.

Construction enterprise resource planning is the nerve center of a construction project where multiple teams work across different sites. They allow these separate groups to communicate smoothly, and they hold vast amounts of data such as purchase orders and invoices that can be accessed by anyone in the team regardless of location. Departments across the company such as HR and sales marketing may have access to this type of construction software.

Lastly, project management software is intended for the minutiae of daily construction management for the project manager. It contains detailed information such as which contractor is doing what, where, and when to help the team and project manager meet cost estimates and projected timetables.

What software do construction project managers use?

Construction project managers may use a centralized software such as a construction enterprise resourcing planning software in addition to a project management software and cost management software. Either one or both must have access to cost tracking documentation and functions to allow the main contractor to meet the project objectives within a reasonable period and budget.

What software do most construction companies use?

Construction companies may use a construction management platform such as Quickbase, CoConstruct, Fieldwire, and Premier, depending on their specialty and projects.

Most construction companies use project management software that allows customization to accommodate different projects and industries. Other features besides cost tracking might include a customer relationship management (CRM) feature, work field-to-office communication, and a PDF management tool.

There is no one-size-fits-all for all construction companies and project planning, as the scope of work determines the best software for the job. Perhaps the best project management software is one that combines cost tracking with other key metric management tools like order management and employee management.

Ideally, it may be used for multiple projects and used by general contractors, field workers, and other stakeholders.

Additionally, the software may have added advantages like being user friendly and cloud based, having a simple setup, allowing for unlimited users, and being available on a mobile device. When general contractors gain access to a centralized repository where they can track purchase orders and have a real time overview of the budget, cost management may be more feasible for the specific project.

Another hallmark of a great project management software or business software in general is one that doesn’t require coding. Main contractors and construction companies need to be able to perform what they do best without learning how to code, too. In this case, low-code or no-code cost management software may be the best choice.

Written By: Joe Demski

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