Construction projects are famously complex, which makes accurate tracking incredibly difficult. One of the best ways contractors manage their projects is through the work-in-progress (WIP) schedule. They track project progress, modify costs and resources, and secure profitability with an accurate WIP.
However, many companies have trouble getting accurate and up-to-date data, which leads to outdated and wrong WIP reports. It is hard for construction companies to make money or even know if they are making money.
That is where a best-in-class construction bookkeeping firm can help. These firms have expertise in accounting. They also know the ins and outs of the construction industry. You may trust their expertise and procedures to handle your WIP.
In this blog, we will talk about:
Top Challenges in Construction WIP Schedules
1. Tracking Costs and Revenue
Cost and revenue in a WIP report are perhaps the trickiest to measure. Since no two projects are the same and each has its own different scope, moving parts, and costs. Even though it's tough, costs and revenues must be tracked correctly to ensure the business is profitable.
To address this challenge, contractors must have robust record-keeping systems in place. All job-related costs, like labor, materials, etc., must be recorded and reconciled accurately and in real time.
2. Dealing With Change Orders
Construction change orders are common. They impact project budgets and timelines, making it hard to keep the WIP report up to date. Contractors must handle change orders well to succeed.
If change orders aren't tracked nicely, they can lead to inaccurate WIP schedules. Results can cause project delays, cost overruns, and disputes with clients.
The processes should be standardized. Change orders must be written down, approved, and processed, and the WIP adjusted accordingly.
3. Managing Subcontractors
Subcontractors are a crucial part of many construction projects, and managing them can be challenging. Subcontractors often have their own schedules and costs. This can impact the consistency of the project's WIP schedule. So, it's essential to manage them efficiently to ensure project success.
How can you do this? Start by having clear contracts in place that specify the scope of work, the timeframe, and payment terms. Regular communication with subcontractors is also key to keeping them on schedule and within budget.
Say Goodbye to WIP Headaches:
How Bookkeeping Services Can Help
Contractors can find it hard to make an accurate WIP schedule, especially in the industry, where there are many things to think about.
The good news is, bookkeeping service providers like CCA are well-trained to help you handle the WIP schedules effectively.
Overview of the specific services offered by CCA to help improve the construction WIP schedule, including:
Accurate tracking of costs and revenue
Management of change orders
Job cost analysis and reporting
Excellent WIP accounting using POC and the cost-to-cost method.
The Benefits of Accurate WIP From a Bookkeeping Pro
With a bookkeeping service firm helping you with the WIP schedule, you can certainly:
1. Utilizing Real-Time Data
One of the main advantages of partnering with a bookkeeping firm is access to real-time data. A bookkeeping firm can help you upgrade your construction technology to work with real-time data.
Dropping your outdated spreadsheets can lead to poor data entry and fading profits.
2. Collaborating With Team Members Effectively
WIP reporting is not the sole responsibility of the accounting department. The leading construction companies make WIP a group effort.
As accurate WIP data is updated by the bookkeeping firm, you can share it in a timely fashion, with the project manager, field teams, and more.
The more accurate and relevant the data, the more effective the collaboration will be.
3. Focusing on What Really Matters
Labor hours alone can skew construction progress tracking. That's why many industry leaders have turned to WIP schedules to get a more accurate picture of actual work completed. WIP schedules reveal how your products and materials compared to the costs.
With a clear view of the completed project, you can easily spot potential weaknesses early on and take corrective action before it's too late.
4. Getting Ahead With Realistic Insight
Accurate WIP reports empower contractors to identify project cost-to-completion and potential gaps.
This information can be used to answer crucial questions, such as:
What percentage of the work has been completed to this point?
How does the work complete align with where the project was expected to be by this time?
Are the costs spent so far aligned with the current project status?
Are there any significant gaps that require re-evaluation?
Does the company have enough cash on hand to cover upcoming expenses?
Have any new issues occurred that may lead to increased material costs or other unexpected expenses?
Realistic insights lead to realistic expectations and wise actions. Bookkeeping services provide insights, not just reports, enabling informed and effective decision-making.
What to Look For in CCA Firm for Your WIP Schedule
As a construction business owner, you have enough on your plate without worrying about financial accuracy. That's where CCA comes in. We know the ins and outs of the construction industry, from tracking job costs to preparing WIP schedules.
We also stay updated with the latest trends and best practices in the industry through our membership with CFMA. With our help, you can streamline your finances and focus on building your projects bigger and better.
Don't let accounting complexities slow down your construction projects. CCA's bookkeeping services can help streamline your WIP schedule and save you time and money. There is no need to invest in expensive software or hire more staff. Focus on what matters while we take care of your financial data.
Keep your construction projects on track with CCA's accurate financial data. Our bookkeeping services use Sage 100 Contractor to track costs and revenue and ensure your WIP schedule reflects the most up-to-date financial information.
With our help, you can make wise decisions, manage a healthy cash flow, and avoid costly errors. Trust us to handle the numbers, so you can focus on building success.
Partnering with a construction bookkeeping firm can be a game-changer. Their expertise in accounting and construction can help you maintain accurate and up-to-date data which results in a more reliable work-in-progress (WIP) schedule.
Getting better project management, cost control, and profitability is crucial. So why wait? Consider working with a construction bookkeeping firm today and see how they can help you.
Contact CCA now and achieve greater success in your business.