Author: Gerri Nielson

See the latest updates to Autodesk Build

As Autodesk Build continues to support the successful management of projects around the world, we’ve been working behind the scenes to make it more powerful, more useful, and more valuable in its ability to connect teams to the data they need, when they need it.

In the last few months, our team has been preparing to release over 25 new updates, features, and enhancements this month—all geared towards helping you better connect your teams, data and processes. Check out the latest Autodesk Build releases below.

Jump to release details by type:

Highlighted Releases>Assets | NFC SupportCost Management | Home Page**Cost Management | Expense Photo ReferencesRFIs | Step Back from Manager to SubSchedule | Suggestions [coming soon]Submittals | Review and Annotate AttachmentsDocument Management Releases>Desktop Connector>Right Click to Rename FilesNon-conforming File ValidationFiles>Import/Export Naming Standard*Improvements to ISO File and Folder Operations*Open and Edit DWG with AutoCADReviews | Add Custom Attributes to WorkflowsCost Releases>Cost Management>Enhanced Document Review Functionality**Issue to Potential Change Order (PCO)Project Management Releases>Submittals>Import EnhancementProject Home Support on MobileUpload Attachments from Files or from ComputerRFIs>Roles and Companies as UsersShort RFI Creation on the mobileMeetings | Upload AttachmentsSchedule>Add Cost referenceEnhanced iOS supportQuality & Safety Management Releases>Issues | Add Reference to Submittals, Forms, PCOsStandardization Releases>Bridge>Automatic Sheet SharingImport FunctionalityLibrary | Search & SortData and Intelligence Releases>Dashboards>Additional Partner Cards*Send Dashboard as Reports*Unified Account Level UI Enhancements*Data Connector>PhotosProgress Tracking DataReports>Issue Summary and Issue Detail Filtering by Custom AttributeLogo ManagementSubmittals | Report EnhancementsProject Closeout and Handover Releases>Assets>Bulk Edits on Web & MobileRFI ReferencesSchedule ReferencesHandover | Files & Issues in As Built Export

* = features on both Autodesk Construction Cloud unified platform & BIM 360

** = features in both Autodesk Build & BIM 360

*** = features in both Autodesk Build & PlanGrid

**** = Autodesk Docs feature (available across all unified products)

***** = features in both Autodesk Build and Autodesk BIM Collaborate

Highlighted Releases

Assets | NFC Support

In addition to using barcode / QR code scanning within the Assets tool of Autodesk Build, users can now use Near Field Communication technology to pull up detailed asset information. This saves teams time since they can simply set a device within range of the asset, and all asset related information stored within the PlanGrid Build mobile app will instantly appear.

Cost Management | Home Page**

Autodesk Build and BIM 360 Cost Management users now have access to a new Home Page within Cost Management, displaying an aggregated calendar view of important dates across the system for increased visibility.

Cost Management | Expense Photo References

Autodesk Build Cost Management users can now add photo references (e.g., delivery tickets, receipts, etc.) to expenses, ensuring accounting has what they need to process payments.

RFIs | Step Back From Manager to Subcontractor

This feature allows RFI managers to request additional information from subcontractors by sending the RFI back to the sub. This release helps to speed up the RFI workflow by making sure necessary changes are made in a timely manner.

Schedule | Suggestions [coming soon]

Users with the right permissions can now submit update suggestions on an activity to the schedule manager, improving communication across stakeholders. The schedule managers can review, approve or reject the suggestions. The schedule manager must update the master schedule in the schedule authoring tool to ensure the latest schedule is imported into Autodesk Build.

Submittals | Review & Annotate PDF Attachments

Autodesk Build users now can view and annotate submittals, such as adding an approval stamp (image stamp), text, arrow, cloud, highlighter and various shapes directly in Autodesk Build. This enables a faster and more efficient review process.

Document Management Releases

Desktop Connector | Non-Conforming File Validation*

Autodesk Construction Cloud unified platform and BIM 360 users now have the ability to select specific files, and put them through the naming validation tool to rename them in order to meet the project’s naming standard in Docs.

Desktop Connector | Right-click to Rename Files*

For any file, a user be able to right click and rename a file from Desktop Connector without needing to navigate to Docs in the web browser.

Files | Import/Export of Naming Standard*

As a project admin setting up the naming standard on a project, the admin now have the option to export a .xlsx template. They can also make adjustments to the naming standard attributes in MS Excel for ease of use and import to a single project or multiple projects.

Files | Improvements to ISE File & Folder Operations*

Autodesk Construction Cloud unified platform or BIM 360 users can now take advantage of ISO naming standards validation when moving or copying files from enforced to enforced folders​ and when making a file “current”​. Additionally, users can now have their search results be a method to organize files for selection to move or copy to an enforced folder.

Files | Open and Edit DWG with AutoCAD (web app)

From within Files, users can now right click on a .dwg file type to open the drawing within the AutoCAD web app, exposing the use of native AutoCAD tools (viewing and editing). NOTE: Once the file is clicked, a new tab is opened, exposing the AutoCAD web interface.

Reviews | Add Custom Attributes to Workflows*

The project admin can now add custom attributes to a workflow so that each review initiated has the custom attribute columns for the approve to complete as needed. Note: For BIM 360 users, only projects created after Mar 23, 2021 will have this feature.

Cost Releases

Cost Management | Enhanced Document Review Functionality**

Autodesk Build and BIM 360 Cost Management users can open and edit Microsoft Word documents online directly from the document package section within the items details flyout panel, enhancing and accelerating the document review processes.

Cost Management | Issue to Potential Change Order

Expanding on the ability to create a Potential Change Order (PCO) from an RFI or Submittal Item, Autodesk Build Cost Management users can generate a PCO directly from Issue. Continuing to help teams capture the origin of change orders.

Project Management Releases

Submittals | Import Enhancements

During the upload process, Autodesk Build users get a new processing loader which can be referred to as a progress bar. This release supports a friendlier and more transparent import process.

Submittals | Project Home Support on Mobile

Users can now view a submittals work status card on iOS & Android. This allows access to critical and actionable information faster from any device at any time.

Submittals | Upload Attachments from Files or from Computer

Autodesk Build users can select up to 10 existing files from Autodesk Docs and attach it to the specific submittal item. Now, Document Management and Project Management workflows are even more connected.

RFIs | Roles and Companies as Users

Within each RFI, all roles and companies can now be specified as a watcher or co-reviewer. This release improves ease of use when creating, editing, or assigning RFIs.

RFIs | Short RFI Creation on Mobile

Users have the option to create an RFI by simply filling out the information for three fields: RFI title, question, and photos. This feature allows users to save time on RFI creation in the field.

Meetings | Upload Attachments Directly from Computer*****

Users can upload and remove attachments directly from their PC. Attachments can be added at a meeting or at an item level. This ensures up-to-date information is shared and reviewed during the meeting.

Schedule | Add Cost reference

Users can reference cost items from the cost management tool to an activity in schedule.

Schedule | Enhanced iOS support

iOS users can filter schedule information by Activity codes/ Outline codes imported from the schedule authoring tools. Allowing teams to find the right information, faster.

Quality & Safety Management Releases

Issues | Add reference to submittals, forms, PCOs

In addition to the existing ability to link photos, files, RFIs and assets, user can now also add a reference to submittals, forms and PCOs, directly from the issue. This way, teams ensure even more of the issue’s context gets captured.

Standardization Releases

Bridge | Automatic Sheet Sharing

As a follow up to the ability to share sheets across accounts (released in July 2021), team members can now specify certain sheets that they are sharing to automatically update when a new version is published. This ensures teams, even if they are from different companies or using different accounts, are always looking at the most up to date sheet information. NOTE: We are currently working on building up the feature functionality of the Bridge tool. Please watch for more enhancements to Bridge in future releases.

Bridge | Import Functionality

Within the ‘Incoming’ tab of Bridge, Autodesk Build users see a new option to ‘Import’ and select sheets from other projects, in which they are also a member, to add to their current project. This improves cross-team and cross-project collaboration, and gives users the ability to surface relevant information to their teams. NOTE: We are currently working on building up the feature functionality of the Bridge tool. Please watch for more enhancements to Bridge in future releases.

Library | Search & Sort

There is a new search bar as well as the option to sort within the account level library in the Autodesk Construction Cloud unified platform. This makes it easier to find library components so that teams can use consistent practices and drive standardization across all projects.

Data and Intelligence Releases

Dashboards | Additional Partner Cards*

Both Autodesk Construction Cloud Unified Platform and BIM 360 users now see new partner cards for Aespada, DAQS.io, Embneusys, Geometrid, Oculo, Pronovos, Safe Site Check In, Structshare, Viact.ai, and WakeCap.

Dashboards | Send Dashboard as Reports*

Both Autodesk Construction Cloud unified platform and BIM 360 users can now share data from a dashboard within Insight as a PDF report to any external team members. A great example of this is if a general contractor wanted to share a dashboard view with an owner who did not have an account. This broadens visibility into project data and allows teams to create custom dashboards and easily share relevant views. Note: PDF reports of dashboards do not include partner cards in this initial release.

Dashboards | Unified Account Level UI Enhancements*

From within the Executive Overview dashboards within Insight, both Autodesk Construction Cloud unified platform and BIM 360 users now see a consistent UI to help indicate that all projects shown on this overview list are pulled from projects across both BIM 360 and ACC. This ensures that executives see a holistic view of all projects, regardless of the product used, and help improve the migration experience.

Data Connector | Photos Data

Autodesk Build users can now extract Photos data using the Data Connector. This is especially important to teams tracking quality and safety and wanting to see details around things like how many photos have been captured.

Data Connector | Progress Tracking Data

Autodesk Build users can now extract Progress Tracking data using the Data Connector. This gives teams the ability to create custom dashboards around the use of Progress Tracking and further analyze installation progress of objects on a project using other BI tools.

Reports | Issue Summary & Issue Detail Filter by Custom Attribute

Autodesk Construction Cloud unified platform users can now filter both the Issue Summary and Issue Detail reports by any custom attribute. This allows teams to run more specific reports that are catered to the way individual companies track issues.

Reports | Logo Management

Project Admins can now customize the logo that shows up on reports by either selecting the account logo or adding in a net new logo. This allows teams to improve the branding of their reports and provide clarity of ownership when sharing reports externally.

Submittals | Report Enhancements

From the Submittal tool, users will be able to generate both the detail and summary reports, and have the option to include specific submittal items when exporting the report. Report enhancements now also include a single item report that can be generated from the action menu. Users can also copy a public link to share the report from the panel once the report has been generated. These enhancements allow customers to have more flexibility when exporting submittal reports.

Project Closeout and Handover Releases

Assets | Bulk Edits on Web & Mobile

Within Autodesk Build or the PlanGrid Build mobile app, teams can now make bulk edits to a selected group of assets by simply scanning barcodes, QR codes, or NFC tags in sequence. This allows teams to better standardize information and make updates faster.

Assets | RFI References

Within the Assets tool flyout panel, teams now see an added reference option for RFI’s. This means that users can link a specific asset to an RFI, connecting information and making it more accessible throughout both the assets and RFI workflow. Note: Mobile functionality will come by the end of the month.

Assets | Schedule References

Within the Assets tool flyout panel, teams now see an added reference option for Schedule. This means that users can link a specific asset to schedule item which gives visibility into where an asset status is in relation to the broader project schedule. Having this level of visibility helps teams better plan and forecast dates. Note: Mobile functionality will come by the end of the month.

Handover | Files & Issues in As Built Export

Autodesk Build users can now export Files and Issues data as a part of the As Built Export tool. This adds to the RFI, Submittals, and Sheets download that was currently available and further improves the handover process by saving time, enhancing documentation accuracy, and improving owner satisfaction. Note: Files data will not be available until the end of November.

To see the full list of our latest updates across all Autodesk Construction Cloud, please check out this blog post.

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The post Autodesk Build Gets 25+ Product Updates, Features, and Enhancements appeared first on Digital Builder.

Gerri Nielson

www.dennis-construction.com

In a perfect world, a contract should include a clear set of instructions that conveys well-defined expectations to all parties concerned. In reality, it’s often a monster document packed full of legalese that can be difficult to understand. This episode of Autodesk’s Digital Builder podcast addresses the most common challenges with contracts and how simple adjustments can ensure you fully understand what you’re signing. And of course, we cover steps to make sure you’re getting paid on time.

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On this podcast episode

Today’s guest, Karalynn Cromeens, Owner & Managing Partner at The Cromeens Law Firm, joins the show to share the steps everyone can take to make contracts more straightforward and less contentious.

We discuss:

The current state of construction contractsThe difference between secured and unsecured debtsHow to protect yourself when it comes to contracting and payment termsBest practices for handling change ordersConstruction technology and the future of contracting and payments

A contract should really be a tool to help everyone in the construction industry; it doesn’t have to be this monster document that you just hold your nose, sign, and hope for the best.” —Karalynn Cromeens, Owner & Managing Partner, The Cromeens Law Firm

4 tips for navigating contracts and getting paid on time

1. Understand the state of contracts and payment terms in construction

The current state of contracts and payment terms in construction leaves a lot to be desired, says Karalynn.

For starters, construction contracts have become increasingly complex, making it hard for all parties to get on the same page.

“The contract is supposed to be a clear set of instructions just like plans and specs, but it becomes this monster document that nobody understands and it’s not conveying expectations clearly.”

—Karalynn Cromeens, The Cromeens Law Firm

Karalynn also brought up the tendency of the industry to pass liability down the chain when drawing up contracts. Owners pass on certain risks (contractually) to general contractors, who may do the same thing when hiring specialty contractors.

These things are common in the AEC industry, particularly since construction professionals want to protect themselves when possible. However, these practices can create rifts in relationships and result in contentious situations.

For this reason, construction professionals must find better ways to craft and negotiate agreements. This starts with using contracts that people can easily comprehend.

“Let’s have a contract and ensure that everybody knows what it says,” says Karalynn.

She recalls her experience speaking with a fellow attorney who had to go through a 129-page subcontract that could have been cut down to ten pages.

“It’s all repetitive, it’s all legalese and there’s no reason for it. The contract should be a tool to help everyone in the construction industry understand the project’s requirements, deadlines, and terms. It doesn’t have to be this monster document that you just have to hold your nose and sign, then hope for the best.”

Karalynn also emphasizes the importance of negotiating who takes on certain risks and liabilities. “I’m not saying that the subs don’t take any liability or the general contractor doesn’t take any liability from the owner; I’m saying let’s negotiate. Let’s meet in the middle. Which is what it’s supposed to be.”

Taking these steps, states Karalynn, helps parties negotiate more equitable contracts and forge better relationships—something that’s crucial, especially since construction is such a relationship-centric industry.

2. Make sense of your contracts

The shifting of risk and liabilities is a very common practice when drafting contracts. After all, everyone is trying to protect themselves. That said, contracting can be done fairly so that relationships aren’t taken advantage of, and risk isn’t pushed downstream.

As the host of “Quit Getting Screwed,” a podcast that focuses on helping contractors build better businesses, Karalynn is well-versed in construction contracts and she offers valuable advice to help contractors understand the agreements that they’re signing.

Know the different types of contracts

There are different types of contracts drawn up between owners, general contractors, and specialty contractors. According to Karalynn, contractors must understand these various documents and how they relate to each party.

First, there’s the prime contract, which is the agreement that sets the terms between the owner and GC. The GC then hires contractors, which is where the subcontractor agreement comes into play.

This subcontractor agreement often “relegates the terms of the prime contract,” says Karalynn.

“What has happened and what has been happening as long as I’ve been reading subcontracts is on the first page of the subcontract, there’s a line that incorporates the terms of the prime contract. So these subcontractors, specialty contractors, or trade contractors are going to be held responsible and liable to the terms of the prime contract.”

The issue, she says, is that subcontractors often don’t see the prime contract so they don’t know what the document says and they’re unable to negotiate its terms.

Karalynn says it’s important for subcontractors to get ahold of the prime contract so they can understand exactly what they’re agreeing to.

Another common type of agreement is the Guaranteed Maximum Price (GMP) contract.

“What this tries to do is shift the risk of material price increases to the general contractor, and then from the general to the subs.”

The GMP contract can cause challenges if it doesn’t allow contractors to increase what they’re charging when material costs rise. For this reason, contractors need to be careful with the GMP agreement and negotiate terms to protect themselves.

Be aware of the “pay when paid” clause

Karalynn recommends being mindful of the “pay when paid” clause, which essentially means subcontractors won’t get paid until the GC is paid by the owner.

“So if you’re a subcontractor and you do the best outstanding job in the whole world and the GC tells you what a great job you did… That by itself is not enough to get paid if you have a ‘pay when paid clause’. You are relying on something to happen that you have no control over.”

She continues, “the owners [have] to pay the general contractor before the general [contractors have] the obligation to pay you, the sub. So really, if you sign a subcontract with a ‘pay when paid’ clause and you don’t negotiate, you should really have enough cash on hand to float that whole contract amount just in case.”

In these instances, you should negotiate and try to split the risk, says Karalynn.

“You can say, ‘If the GC is not paid by the owner within 30 days and it’s not my fault, you’ll pay me 50% of the payout. At least I can pay for my guys and I can make it a little longer without getting paid.’”

—Karalynn Cromeens, The Cromeens Law Firm

3. Learn how credit works in construction

The construction industry runs on credit. Owners often take out loans to fund projects, and they are extended credit to be able to do that. A similar thing happens with subcontractors, especially those working with a “pay when paid” clause.

As Karalynn puts it, “subcontractors and material suppliers supply the labor, supply the material and wait to get paid. And that is credit. You are owed a debt. So, if you work and wait to get paid you have extended credit.”

To ensure that you get paid, you need to understand the difference between unsecured and secured credit. Unsecured credit means the debt is not tied to any collateral. You can collect on the debt by taking things to court, obtaining a judgment, and finding assets to collect the amount owed.

Secured credit, on the other hand, is backed by collateral. A home mortgage is a common example of secured debt. Mortgage companies let buyers obtain a loan to purchase a house, and they hold the property as collateral.

“A mechanic’s lien works the same way,” says Karalynn. “If you do it right in your state and you file it on a project, you are now a secured creditor. The amount that you’re owed for labor and materials is secured by the property that you supplied them to.”

She adds, “You still have your unsecured debt claim against the GC or whoever hired you, but now you have a security interest in the property to the extent that you’re owed money for labor and materials supplied.”

4. Ensure you’ll be paid on time

While laws vary from one state to the next, there are a number of universal tips that you can implement to negotiate contracts and ensure you get paid on time. Here are Karalynn’s top recommendations.

Don’t just sign a contract—make sure you understand it

Even if you don’t want to negotiate, Karalynn says it’s worth having an attorney or legal professional break down what the contract means. “That way, you know what you’re agreeing to and you know what’s expected.”

At the very least, you must “understand what you’re agreeing to, and then you can go from there,” says Karalynn.

She continues, “Please, don’t just sign the contract. From my experience, the subcontract that comes over is the first offer. It is like paying the sticker price for a car. No one does that. And I think part of why subcontracts are in the state that they are in now, is that attorneys draft things that are the best for their client thinking that there’s going to be a negotiation. But subs were so afraid of not getting the work that they just signed the contracts, and now there’s a standard out there that’s one-sided.”

Get your change order costs covered

Karalynn says subcontractors must understand the change order provision in their contract and then negotiate before signing.

“What I like to do in my contracts is, if we can’t agree on a price, we’ll do costs plus a percentage—e.g., 15%, 10%, or whatever is agreed upon. That way, we don’t have this long, drawn-out negotiation.”

—Karalynn Cromeens, The Cromeens Law Firm

“What I like to do in my contracts is, if we can’t agree on a price, we’ll do costs plus a percentage—e.g., 15%, 10%, or whatever is agreed upon. That way, we don’t have this long, drawn-out negotiation. We just build in, ‘Okay. I’m going to give you a price. If you don’t like it, here’s the alternative.’”

Another tip? Before doing the work, have the actual change order form drafted and ensure that the costs for the work are outlined clearly. You also need to assure that all parties have signed it before working on the changes.

“Where most people get into trouble is that they don’t get it signed or they submit it after they do the work. When that happens, you’re just in somebody’s good graces to sign it for you because you’re really not going to get paid for that extra work if it’s not on a written change order,” says Karalynn.

ccount for market volatility

With material prices being so volatile right now, Karalynn says contractors and subcontractors need to account for increases in material and labor costs.

According to her, “you need to put on there that if the material prices escalate more than 2% or 3%, you’re going to be able to change your bid for that.”

“I also have guys that are putting shorter timelines on their bid—like 30 or 60 days—and if it’s not accepted by then, the bid is withdrawn. That’s just because the market is so volatile right now.”

Do an itemized bid

Always do an itemized bid, advises Karalynn. “You don’t want to just bid the whole scope and miss something and then you’re on the hook to do it. Because once you put a bid out there into the world, it is an offer that can be accepted. And once it’s accepted, you’re held liable to those terms.”

Another thing to keep in mind is that your bid can be different from the actual scope of the project. You need to remember that you’re not hired to do your bid, you’re hired to do the scope.

As Karalynn points out, “your bid no longer describes the work you were hired to do. The scope attached to the contract does. If those two things are different, you’re still held to the scope. So one of the things I tell my contractors is to read the scope as if it were a new project and make sure you get the same price.”

Utilize technology to save on attorney fees

Karalynn is all for using technology to help contractors put together contracts and make sure they get paid.

“There are so many great platforms out there that allow you to do everything electronically. A lot of times, you don’t get paid on time because not everything is in there or it’s not submitted correctly so that pushes you back another month. Technology helps eliminate all that. It has everything all in one place.”

Karalynn adds that technology not only helps attorneys do their jobs more efficiently, it could even lower your legal bills.

“I appreciate it so much as a lawyer that I don’t have to go through banker boxes looking for all the paper documents that go with a particular job. If I’m looking for something, I can search by keyword. It saves you so much in attorneys fees too, because I don’t have to spend time searching.”

Final words on contracts and timely payments

Navigating the realm of construction contracts, costs, and risks can be tricky, but understanding these things is key to getting paid on time. Before entering into an agreement, be sure to read and fully understand the terms of the contract, so you can negotiate accordingly.

Doing that is no easy task, which is why Karalynn says it’s extremely helpful to have “an attorney that’s a phone call away.”

“I don’t think people realize how much legal crosses over into the construction world. And often, you need somebody that’s going to answer the phone right away. You can’t wait two days, you can’t wait a week to get an answer. I think an attorney on call that is familiar with construction is a priceless tool in your toolbox.”

New podcast episode every two weeks

Autodesk’s Digital Builder podcast is hosted by me, Eric Thomas. New episodes go live every two weeks.

If you need to learn additional contracting and negotiation tactics, catch the full podcast episode of Digital Builder to hear more from Karalynn.

Listen to the Digital Builder Podcast on:

Apple PodcastsSpotifyStitcherGoogle Podcastsor wherever you listen to podcasts

The post Digital Builder Podcast Ep 22: How Specialty Contractors Can Navigate Contracts & Get Paid On Time appeared first on Digital Builder.

Did you miss our previous article…
https://www.dennis-construction.com/?p=1133

Gerri Nielson

www.dennis-construction.com

Construction accounting software is a must-have, but may seem daunting to implement new solutions if your accounting technology hasn’t kept up with the complexities of your growing business. Managing the myriad of accounting activities across an entire construction business, or at any phase of an individual project, you’re going to want access to the most accurate, real-time numbers possible.

No stranger to disruption, the construction industry is experiencing higher levels of digitization than ever before. The pandemic has accelerated digital transformation by as much as seven years according to some experts. Technical tools and solutions are making some of the most complicated and manual practices in construction a concern of the past. 

That includes accounting. Sure, accounting may have a bit of a reputation for being mundane. But the latest innovations in construction project management software provide an exciting level of financial clarity—especially useful to connect project finances to accounting decision-makers. If you’re exploring options to make construction accounting more efficient and accurate, you’ll find plenty of helpful information on choosing the right software below. 

The Basics of Construction Accounting & What Makes It Different

At its most basic level, accounting helps businesses understand and capture accounting activities. It’s essential to business administration, management and financial reporting. Sometimes referred to as the “language of business,” accounting personnel document an organization’s accounting activities to accurately measure financial performance. This information is then communicated to owners, investors, creditors, and regulators. It will also dictate who you do business with and how.

Construction accounting takes into consideration the challenges that come along with the construction business. This includes tracking revenue, job costing, payroll, and managing several contracts and project risks simultaneously. Because the building process is so uniquely complex, accounting practices must be adapted to the construction industry.

Let’s look at what makes construction accounting different from most other businesses.  

Everything Is Moving All the Time

The nature of construction is quite different from your average business. Outside of a major project roadblock, all aspects of a construction project are moving forward simultaneously. Instead of operating from a fixed location with a fixed set of products or services, construction projects rely on a range of locations, materials, and services. Everyone and everything tends to always be on the go. As a result, accurately managing milestones and finances throughout the life of a project—whether payables or receivables—can be challenging.

Unique Project- and Contract-Based Milestones

Firms typically work on multiple projects at a time. Instead of having one transaction, organizations may have multiple transactions occurring simultaneously across several project partners. Each project partner likely has their own set of timelines and milestones that impact accounting. Furthermore, it can take time to actually receive payment for services rendered. Some firms use project-based accounting. In this practice, each project functions as its own entity with profits and losses. 

Another consideration for construction accounting is long-term contracts. It’s not uncommon for projects to take years to finish. In these scenarios, expenses and revenue may occur at different times than had been originally planned. Knowing the implications of when and how to accrue income and expenses across multi-year projects is an art in itself. 

Tracking Sales

Businesses often create categories and cost codes to track sales. There are often multiple vendors on projects in construction, whether that’s to account for materials or services, there are often tens, if not hundreds, of billable line items on any given job. Traditional accounting practices leave a lot of room for error and confusion. Purpose-built construction accounting software can help to automate this process and meet the need for multiple service or product categories. Smarter categorization enables a much cleaner look at overall business performance. This is made especially easy with dedicated construction accounting software.

Industry-Specific Costs and Expenses

Every construction job involves direct and indirect costs that cross multiple categories. To make things even more complex, items that you might consider overhead expenses are often actually costs of goods sold because they are connected to a client project. Overhead costs can fluctuate month to month based on workers’ compensation, subcontractors, insurance, training, and more.

What to Include in Construction Job Costing

The complexity of construction accounting extends to calculating how much a project will actually cost the firm. That’s where job costing comes into play. This calculation method divides the project into specific tasks. That way, you can track expenses to the various tasks of a project. It provides greater visibility into which projects, activities, and materials are generating the most costs

With job costing, you can separate the project into the main phases and then sort scopes of work into each phase. Organizations can then create unique construction cost codes to track the expenses. You may choose to create a handful of codes or multiple codes for a more granular view. After developing the codes, you can generally divide them into five categories: labor, materials, subcontracts, equipment, and overhead. 

Labor 

How much does your crew cost you? That’s what the labor categories in job costing can help you answer. To find this number for each project, start by calculating how much it costs per day to have your crew. This is likely to be your high level hires like general contractors, who you’ll interface with regularly. Don’t forget to include insurance, worker’s compensation, and taxes into the figure. You can then multiply the number of days you’ll have the crew on the project. 

Be sure to include a buffer for unforeseen labor costs in your estimates. Project progress is rarely linear. You’ll also want to parse out subcontractor costs with the help of your general contractors. More on that below.

Materials

These costs can be both direct and indirect. For example, direct material costs can include items like concrete and steel. It’s often easier to link these items to a specific project. Indirect material costs include things like nails and caulking. You may also apply a margin for delivery and cleanup. It’s important to think of the life of a material, and any complimentary materials, when costing your project.

Subcontracts

General contractors are enlisted to manage construction activities and schedules, but are also instrumental in minimizing risks and issuing subcontracts. Each subcontract encapsulates costs for a general contractor and revenue to a subcontractor for specific scopes of work on a construction project. Managing subcontractor payment applications is fundamental to construction accounting, and also drives the upstream receivables, as subcontractor costs translate into general contractor revenue.

Equipment

Depending on whether or not your contracted labor brings equipment to the table, you may want to cost this out separately. At which point, identify your equipment supplier rates and multiply by the estimated length of the project or time needed with that particular asset. It’s possible that equipment needs will span multiple projects. 

If your contracted labor does bring equipment to the table, work with them to identify expected costs for a clear picture of how your equipment impacts accounting activities over the life of a project.

Overhead

A lot of work goes on behind the scenes so you can’t forget to include the cost of doing business. That means you’ll need to measure accounting activities that go beyond the above mentioned categories. In other words, don’t forget about overhead when job costing. Some things to consider including would be full-time staff, office rentals, administration, and depreciation of equipment.

5 Steps for Revenue Recognition in Construction

Revenue recognition is the accounting of revenue when certain conditions are met on a project. Certain governing bodies issue revenue recognition standards to disseminate accounting best practices.

The Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) updated reporting standards for revenue recognition from contracts with customers in 2014. This standard is known as Accounting Standards Codification Topic 606 (ASC 606), or more simply, the new standard. Prior to the new standard, many organizations relied on the percentage-of-completion method and completed-contract method.

According to FASB, the intent for the latest guidance is to “report useful information to users of financial statements about the nature, timing, and uncertainty of revenue from contracts with customers.”

FASB has adopted a principle-based revenue recognition approach. With this approach, revenue is recognized according to two key factors. First, the contractor must meet performance obligations. Second, the control of goods or services must be transferred to the customer. This transfer can take place at a particular point in time or over a period of time. 

To comply with revenue recognition standards, or ASC 606, be sure to follow these five steps:

Identify the contract with the customer.Identify the performance obligations in the contract.Determine the transaction price.Allocate the transaction price to the separate performance obligations.Recognize revenue when (or as) the entity satisfies a performance obligation.

Top Construction Accounting Technologies

Dedicated construction accounting software solutions can help to optimize processes and automate manual tasks. As you consider ways to improve your construction accounting processes, keep these leading solutions in mind. 

QuickBooks Online (Intuit)This cloud-based financial management software helps you manage your finances efficiently and gives you time back in your day. Create estimates, build invoices, track sales, monitor cash flow, and manage your customers as well as suppliers from one intuitive platform. Oftentimes, QuickBooks Online will be integrated with a project management platform to track costs and provide an operations team with the tools they need to control documents and manage budgets.

Morpheus Connect any ERP to Autodesk Build’s leading budget and cost management solution for a truly integrated financial environment. No more double entry, manual errors or missed information.  You gain full transparency from the field to the office on job costs.  Trusted for over 20 years by the ENR 400.

DataStreet: DataStreet was built to eliminate time and material tag paperwork and reduce the amount of time spent on change order processing. The cloud-based project management platform increases transparency between your office and field teams. All of the data is stored in the cloud for easy access; use project-specific settings to customize your workflows and experience. 

Rhumbix: Want to streamline your field operations? Rhumbix can do just that by quickly capturing timekeeping data, time and materials changes, and factors impacting construction labor costs. Get all the insights you need to make smart decisions about labor cost management, risk management, and safety while easily connecting to your existing accounting solutions.

SageAutodesk Construction Cloud partners have built dynamic integrations between Sage 300 Construction and Real Estate and Autodesk Build, uniting accounting, project management, and field collaboration. Manage cost-related activities, streamline workflows, and connect data for greater real-time visibility into your project’s financial health.

Wrapping Up

As you can see, there’s a lot of nuances specific to construction accounting. The software solutions that exist are getting better at addressing these complexities every single day. 

With the right construction accounting software, accurately job costing, tracking timelines, and adhering to the revenue recognition standards is much easier. It puts owners and contractors on the same page throughout the life of a project. Plus, the standardized approach makes tracking company-wide finances across all projects a much less daunting task.

The post A Practical Guide to Construction Accounting Software appeared first on Digital Builder.

Gerri Nielson

www.dennis-construction.com

Axalta Coating Systems Ltd are a leading global coatings provider dedicated to the development, manufacturing, delivery, and service of liquid and powder coatings, with their headquarters in Philadelphia, USA. With over 150 years of experience in the coatings industry, they provide their customers with innovative, colourful and sustainable solutions.

Predominantly developing and manufacturing coatings for light and commercial vehicles, industrial and refinish applications; Axalta embraces the latest trends alongside emerging technology and systems to deliver the finest coatings to more than 100,000 customers across the globe. With 46 manufacturing centres across the world, 28 laboratories and a presence in over 130 countries, the team at Axalta are constantly looking at news ways to push boundaries.

Marco Schuh, BIM Manager at Axalta, has worked in the architecture, engineering and construction industry for the last 20 years. In his various roles, Marco has witnessed the vast expansion of computer-aided design first-hand and has seen Business Information Modelling (BIM) use and demand rapidly increase. “For the last five years, I have been focusing on cloud-based project management practices in a BIM environment, so I have seen the application and the technology grow too,” says Marco.

In 2019, Axalta’s plant engineering subsidiary business based in Wuppertal, Germany began exploring how they could move some of their local project data from a local server into the cloud. The team wanted to be able to host and store project documentation centrally in a secure environment but also to learn more about how they could improve, implement, and embed digital workflows for this business unit to aid communication and collaboration.

Standardising ways of working

With many different document management practices happening on the ground for the plant engineering team, ensuring standardised document management processes were implemented smoothly was very important. Alongside this, the team also needed to find a solution that allowed everyone to access the documents they needed wherever, and whenever they needed them.

Working in a plant environment with tight timescales means that the team at Axalta cannot afford to lose project time due to poor communication because of missing project data. The team were already using a server solution for internal documentation, but it limited their ability to successfully access, track and collaborate on documents in a transparent way.  

After a period of exploration, Axalta concluded that Autodesk Construction Cloud’s BIM 360 solution was the right technology for Axalta’s needs with a focus on improving communication. To implement the solution successfully and smoothly, Marco partnered with Autodesk’s customer success team and their local reseller partner, Mensch und Maschine Deutschland. It was crucial that the team at Axalta were able to move their interdisciplinary project data into the cloud environment in a seamless way, minimising any disruption to ongoing live projects.

“Our projects are time-critical, so we need smooth, transparent, clear communication and filing to know where project data was stored as we transitioned from our previous system to BIM 360,” Marco reflects.

Creating a comprehensive transition plan

The team at Axalta were aware of the long-term negative impacts that could arise from disruption to ongoing projects, so they created a comprehensive transition plan. The plan, which spanned a 12-month period, involved an elaborated transition process which included a testing and a migration phase. This happened in parallel with Axalta’s ongoing day-to-day regular processes, so the team were managing two ways of working at once. Working in this way helped to minimise any interruptions or delays to ongoing work and allowed the team plenty of time to understand and prepare employees for new ways of working within the team.

To get started, the team at Axalta began their journey with BIM 360 on a large collaborative project which involved several stakeholders – many of which were not directly located on site at Axalta’s plant facility. To ensure all the external collaborators and partners were safely and comprehensively introduced to the solution and the new ways of working, Marco conducted introductory sessions on site. As well as this, Marco and the team created an internal handbook for project team members to use with a complete overview of the BIM 360 project workflows that would be rolled out.

We worked closely with the team at Autodesk to ensure we transitioned successfully, and this included bi-monthly calls with tech champions, mentorship on workflows for these champions, feedback sessions with Autodesk’s product team as well as ongoing communication on outcome-focused goals,” says Marco.

Internal plant maintenance projects and construction projects for new plants began using BIM 360 for document management and digital workflows. The team began with a focus on document management practices but soon expanded into using other capabilities BIM 360 had to offer. Naming conventions and folder structures were the first areas the team focused on as well as supporting the Computer Aided Design (CAD) teams with how they could digitalise and integrate their processes with BIM 360. This involved training sessions and one-to-one support by Marco as a BIM 360 expert.

We began exploring the functionality that allowed our teams to make notes and annotations onto our models in BIM 360 which increased accountability, transparency and communication immensely,” says Marco. “Annotating directly on the model meant that we minimised the chance of anything being missed when moving between different platforms and systems.” The team have also looked at what other digital workflows they could expand to use such as issues tracking.  

For the team at Axalta, using BIM 360 as their common data environment meant internal communication on projects improved significantly. Marco says: “BIM 360 gives us a single source of truth, transparency between all project stakeholders, and accessibility from anywhere meaning we’re all much better informed during a live project than we were before we started using BIM 360.” For the team, quality has increased dramatically as all project team members can be sure they are accessing one single source of truth. As well as this, standardising the team’s approach to document control and modelling has meant that all project collaborators can be sure they have the most up-to-date and accurate information they need when making important project decisions related to their tasks and activities.

Scaling for success

After a year of testing and using BIM 360 in the plant engineering subsidiary business, the use of BIM 360 is being explored by some of Axalta’s manufacturing, construction, and engineering departments in their locations in Germany.

Looking to the future, we plan on expanding our use of BIM 360 in plant and engineering even more,” affirms Marco. “We’ve also began integrating further technology into BIM 360 such as our laser scanning workflows and we’re looking to use the BIM 360 Coordinate feature to improve our model coordination processes,” remarks Marco.

For the team at Axalta, implementing BIM 360 to create robust document management processes, digitalising workflows and capturing project progress information in a BIM environment has not only improved team collaboration but delivered better project outcomes. “The most popular features in BIM 360 that our teams are using are the, project management, model coordination and issues management workflows as well as the powerful approval workflows for reviews within document management capabilities which reflects how the quality of our projects are improving through the use of BIM 360,” says Marco. Looking to the future, implementing the use of BIM 360 on more and more projects is the focus for the team as well as harnessing data for better project insights to drive decision-making across the business.

The post Scaling for Success in the Plant and Manufacturing Industry Through Standardised Ways of Working appeared first on Digital Builder.

Gerri Nielson

www.dennis-construction.com