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1. Give PMs budget and job cost control
To know if they’re going over or under budget, project managers need to know how much they’re actually spending. That means good, regular, real-time communication with your accounting/back office team for project costs. Financial data is also very helpful historical information when making cash flow forecasts for construction projects to create a more accurate budget for the next project.
Track labor, materials, equipment, and consumables that contribute to your project’s labor costs. When you connect project management to accounting, you can ensure the cost of promised jobs doesn’t skyrocket due to wasted materials, misuse of equipment, or poor planning by onsite contractors.
Your financial data is only as good as it is current. Project managers who have insight into the financial health of their project have the benefit of a forward-looking view of potential problems, allowing them to plan strategically.
With accurate, up-to-date financial data, a successful project manager can orchestrate payments to balance bills and costs, and manage the S curve.
2. Process change orders as they happen
Many an over-budget project could have been saved if only all change orders had been accounted for. (Looks at you, Batman.)
With change orders, you can recoup 10% to 20% of the additional contract value, which is often the difference between a profitable project and being in the red.
Owner-driven changes are easier to track, but projects present many, many change order opportunities that are often overlooked. Whether it’s inspectors adding additional requirements after an on-site visit, oversights in the construction drawings, or damage and rework by other subcontractors, what you don’t charge for, you pay for.
A big part of lowering the cost of construction jobs means passing on additional costs you didn’t incur. But there are other benefits to closely monitoring change orders: With good, holistic construction project documentation, you can ensure that change orders are more than pocket money.
Change orders can be part of a build growth strategy if you are able to scale the process. Good change management workflows provide clarity as to why the changes were required or requested, and even help build trust with your customers.
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Original Source: https://www.viewpoint.com/blog/cut-costs-connected-construction-project-management
Category – Construction