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 can get overwhelming.
But, with the right construction cost tracking software in place, 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.
Let’s dive into why construction cost tracking software is essential for your business and some of the ways you can track your project costs.
Why Track Construction Costs?
When you know exactly what you’re spending, you’re in control—it’s as simple as that. However, implementing the right strategy to track costs is important so that you can monitor your end-to-end spending, catch any issues early, and adjust before things get out of hand.
Here are some of the reasons why you need to prioritize this crucial aspect of construction management:
- Budget management
The first line of defense against financial chaos? Creating an accurate budget and sticking to it. Construction tracking software enables project managers to establish a clear budget upfront. This sets the stage for the entire project. In a way, the tool helps you understand the resources you’d need to bring your vision to life.
- Preventing cost overruns
You know that sinking feeling when you realize your expenses have gone over budget? With proper vigilance and cost tracking, you can detect potential overruns before they get out of control. It’s about catching the little leaks before they turn into a flood.
- Improved decision making
Accessing accurate data in real-time helps you to make informed decisions, taking the guess work out of it. With a clear view of your finances, you can quickly and confidently make the adjustments needed to make sure your project stays on track.
- Increased profitability
A precise approach to cost tracking helps you maximize your profits by identifying inefficiencies and areas for improvement. It pays to know where every dollar goes! With better tracking, you can streamline processes and boost your revenue potential.
- Accountability
Make it a point for everyone in your team to know what they are responsible for financially. This fosters a culture of accountability. With a construction management tool, you can easily assign specific job roles to each team member. This way, they know what they would be accountable for if something didn’t go to plan.
Now that we know why tracking costs is necessary, let’s talk about the tools that make it easier for you—construction cost tracking software.
What is Construction Cost Tracking Software?
Cost tracking software is a digital tool that allows you to create a project budget, identify project expenses, and track them in real-time. This powerful software hub allows your team to minimize cost while helping increase profits.
It’s 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
With so many tasks on your plate, having a tool to streamline cost management is a game-changer. Let’s explore some of the benefits.
Benefits of Using a Construction Cost Tracking Software
When using construction management software such as cost tracking software, you might find that getting access 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
Now that you know how cost tracking software can help, check out some practical ways to track construction project costs and stay within budget.
Related: Construction invoice management to improve cash flow
Ways to Track Construction Project Costs
Here’s how project managers can track construction project costs and manage their expenses using cost tracking software.
- Establish an accurate budget
At the outset, create a detailed and realistic budget using the software. It should include every aspect of your project, from labor and materials to unforeseen conditions. This is a comprehensive approach to keep your finances in check. It also serves as a roadmap for the entire team. When every member has a proper understanding of the budget, they work toward a common goal.
- Segment the budget to curtail costs
Now, divide your budget into manageable segments. This strategy lets you pinpoint specific areas where you can make savings without compromising on quality.
For instance, you might notice that your material costs are higher than what you expected. In these situations, you can explore alternatives or negotiate better rates with suppliers.
- Assign cost monitoring responsibilities
Assign cost-tracking responsibilities to your team members. When you delegate specific budget areas to them, you encourage ownership and keep everyone engaged in the financial success of the project. This approach also distributes the workload, making it easier to remain organized.
- Use real-time data for adjustments
The construction industry is dynamic and makes the most of real-time data. It allows you to make adjustments instantly based on current spending trends and emerging needs.
This agile approach goes a long way in saving you from costly surprises down the line. It keeps your project on schedule and within budget.
- Incorporate old data for future projects
As a project manager, you know that learning from past projects is invaluable. Analyze cost data from your previous project to refine your current budgeting process. This approach saves you from repeating costly mistakes. This historical insight helps you address potential challenges proactively and ensure accurate cost estimates.
- Fix Communication gap between team members
For any successful project, effective communication is the key. When tracking costs is a collaborative effort, everyone in your team gets access to the same information. This keeps all of them on the same page, and transparency fosters better collaboration.
- Identify trends and patterns
When you review your cost data regularly, you can detect trends that help you make informed decisions. The software helps you understand how costs fluctuate throughout the project lifecycle. You can be better prepared for potential changes in budget and adjust your strategy accordingly. It’s about being one step ahead!
Related: AI in construction
How Quickbase Can Help
Ready to simplify construction cost tracking with one powerful platform? Leading construction companies trust Quickbase to keep their budgets on track. Designed for both office and field teams, it’s easy to use and helps you stay organized while preventing costly overruns. With Quickbase’s construction management software, you can manage budgets, track expenses, and ensure full transparency—all in one place.
