Keeping your business financially healthy requires visibility. Why? Because you need to see and understand your latest numbers to be able to make informed decisions and predict future performance.
Both tasks are key in the construction industry, where a single misstep can potentially derail an entire project. And with worker shortages, supply chain issues, and low profit margins, it’s more important than ever for construction businesses to protect their financial health.
This article will help you figure out if you currently have enough visibility of your finances and share some top tips for any process changes you may need to make.
Think you have enough visibility?
Knowing whether you already have enough visibility of your financial information is the first step to making better use of it. The good news is, there’s a strong correlation between how much you can see and how efficiently your business is running.
If everything is going smoothly, you’re probably already using financial information to optimize processes and make accurate decisions. If there’s room for improvement, it could be because you lack a true understanding of your finances.
You can figure out your current level of visibility by assessing how efficient your business is in these key areas:
Reporting: Determine whether your reporting system is helping you run efficiently. If you can synthesize all data into meaningful project summaries, field reports, and financial statements, you’ll be able to identify and solve problems at project and business levels.
Monitoring: Construction companies generate lots of data from documents, emails, plan revisions, and change orders across multiple projects. By tracking and filtering this information, you’ll identify major risk areas, helping you act quickly if an issue arises.
Analyzing: Analyzing data helps you understand why the business is performing the way it is. With context around your numbers, you can discover which areas are ripe for improvement and focus on those.
Predicting: Visibility of fast data allows you to identify performance trends, which can be used in forecasting. You can also combine this with outside factors that may impact your business, helping you plan for best and worst-case scenarios.
Winning work: How efficient you are at creating estimates can be improved with the right solutions. And by creating accurate bids in less time, you’ll often increase the number of bids you’ll win.
Mobilizing: With more back-office staff working remotely and a shortage in qualified workers, adopting mobile technologies can reduce the efficiency impact of gaps in your workforce. Cloud-based solutions and mobile apps help streamline projects, improve collaboration, and keep teams in sync.
4 tips for making visibility improvements
If you’ve reviewed the areas above, you may find there is plenty of work to do. Maybe you need to invest in a solution with better reporting capabilities, need to make the estimate process faster and more accurate, or be better at identifying patterns and trends.
Whether it’s switching up an existing process, or implementing new technology, taking action to improve visibility will help you overcome some of the challenges faced by your business.
Here are four tips to keep in mind as you make any changes:
Get stakeholders on board
Engage with any stakeholders that will be affected by the proposed changes, including management and financial leaders. Encourage them to share their perspectives and make sure they understand the benefits you hope to achieve. If you manage to get them on board, they’ll be more invested in the process and the transition will be much smoother.
Invest the proper time and attention into building a strategic plan. Identify what you hope to accomplish and break this down into clear goals. Then communicate the plan to your team, and factor in time for training and adjustment to any new ways of working.
Select the right tools.
When choosing any new technology solutions, look for those that can meet your current needs, but also be scaled in the future as you grow.
Cloud-based solutions with open APIs are a great long-term investment, as they let you seamlessly integrate with whatever you’re using now and can be adjusted later as your needs change. They also provide anytime, anywhere access to data and everything from updates, maintenance, security, and disaster recovery is managed by the provider.
Even with a solid plan in place, you still need to be flexible so that you can overcome unforeseen obstacles. If things change, adjust course, and keep your plan updated. Also, don’t be afraid to change things up if something’s not working.
By measuring progress regularly, you can make corrections while staying on the path to achieving your goals.
Having clear visibility of your finances from any location and at any time is essential in today’s construction industry.
Taking the time to honestly assess your current visibility by looking at how efficiently your business is running will help you understand if improvements need to be made.
With the right processes and technology, you can turn visibility and understanding of your financial data into powerful insights that guide your decisions and help you prepare for the future.