How ERP for Project-based Businesses helps manage costs in the construction industry?
While there are software and dedicated apps to manage finance for your organisation, a centralised ERP for project-based businesses can integrate your business functions. From basic calculations to sales forecasts, every financial function can be taken care of effectively using the single dashboard of an ERP.
Let’s take a look at some of the key areas in the construction industry where an ERP can support businesses with visible cost optimisation.
- Basic Finance functions
Automation through ERP assists your business to manage income and expenses, credit and debit, payrolls, loans, sales and purchases, etc. You can tailor the ERP platform to include specific taxes, duties and other data points that are relevant to your business.
- Manage quotes and bids
Project Management ERP such as OMNI provides the Detailed Resource Level Costing capability which gives your business a clear picture of bids and quotes. Here, understanding the cost structure is essential for determining the right cost of a job.
- Dynamic planning
Every plan in the construction business keeps getting updated due to external and internal factors. Monitoring through phone calls, emails or excel sheets requires an enormous time of your team members. Also, managing so much data through project reports leads to inefficiencies.
Important details may get overlooked in the enormous pool of data. An ERP solution enables dynamic planning by minimising the time and effort required for updating plans. Better planning eliminates cost overruns and delays in completion of tasks.
- Solve problems on time
Everyone cannot be present at all places all the time. So, when problems show up on your construction site, it requires immediate attention. Incidents can be immediately logged on an ERP platform and the status of resolution can be tracked by project managers easily.
For example, OMNI ERP has an Issue Tracker module which allows users to report, monitor as well as resolve problems that are affecting work. The ERP module gives the user every detail related to the problem such as who reported about the issue, who needs a solution and how much time has passed since the issue has been reported etc.
This problem-solving approach saves cost and mitigates risks in many ways. Idle resources that are impacted by the problem can resume working as soon as the problem is resolved. When work is affected, there can be a delay that affects timelines. This, in turn, leads to costs incurred due to delays and also disturbs the reputation of the business of not being able to complete scheduled tasks on time.
- Handling Cashflow
Working capital is extremely important for stakeholders in the construction business. Earlier, cashflow tracking took place through excel sheets and apps.
By utilising the best software for contractors, you’ll be able to monitor your cashflows with the help of predictive analytics. The system integrates your resources and the flow of your finance to ensure maximum optimisation of your working capital.
- Keep track of resources
You save costs when you are able to keep track of activity level cost and the way it varies from the planned budget. By having access to the work breakdown structure, your teams can ensure that resources are being utilised effectively thereby keeping your profit margins on track.
- Clearing Retention Amount
In the construction industry, retention amounts are part of invoices. An ERP system gives you clarity on the amount that is to be released as part of retention. By clearing the retention payments on time, your business won’t have to hold back excess retention amounts that can impact your cash flow.
- Maintenance costs
Resource management features of an ERP platform can assist you to fully utilise your resources that require regular maintenance. Delayed maintenance can lead to unfortunate accidents and damaged equipment. Handle contracts related to maintenance upgrades and repairs easily using a seamless cloud-based ERP software.
To conclude, an ERP platform makes managing financial functions effortless and also empowers an organisation with capabilities to optimise processes and enjoy cost savings. If your teams are comfortable with a specific app or popular software, you can continue using them in an ERP system through third-party integrations.
If you are considering an ERP implementation for your construction business, note that ERP software comes with standard modules as well as flexible modules. You can get anywhere, anytime access to data and manage business functions smoothly with a Cloud-based Project Management Software such as OMNI ERP.
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