Few contractors know how to track job costs effectively. Very few.

The reasons for their struggle are plentiful, but they start with a simple misunderstanding. The term job costing implies the goal is to track dollars, but what you really need to track is man-hours. As long as a contractor focuses on tracking dollars, he will never collect the type of information he needs to:

Predict the cost of large projects accurately.

Achieve consistent on-time completion.

Persuade crews to work hard.

Accurately account for the impact of rapidly changing material costs.

Small pavement maintenance contractors’ job costing systems should be built to track labor productivity – the time it takes field workers to perform their construction tasks. Few pieces of information have greater value to you than knowing the speed at which your crews work. Having that knowledge is like money in the bank. And the only way you get that knowledge is by installing an effective job costing system.

KISS It

You need to use an easy-to-grasp approach . In other words, KISS it – Keep It Short and Simple.

Short means that you track the absolute minimum amount of information you need to make profitable decisions. Simple means that your employees must be able to learn how to collect the data. You need to install a job costing system that delivers the goods without being overbearing to your people. It’s difficult…but not impossible.

Cost Codes

When it comes to data collection, more is not better. More is destructive. Ask your field workers to track too much data and they will revolt against your request by recording useless data.

To keep the data collection manageable, go after the tasks that account for 80% or more of the crew’s time. You will discover that roughly 20% of the tasks account for 80% of the labor time. Those are the only tasks yours crews should be coding their time to. All time not associated with the 80% codes should be allocated to “Other”.

Rule of thumb: an employee should be able to record all of one day’s time on to no more than six codes.

Consider the tasks a patching crew performs.

Traffic control

Saw cutting or grinding

Removal

Placement

Rolling

Clean up

Mobilization

If your crew repairs three or four lots per day, then the workers should probably track their time by three tasks: cutting and removing, filling and rolling, and mobilization. If your crew tends to spend a day on one lot, then the workers should probably track their time by all of the tasks listed above. The right answer will differ by crew and project.

Once you’ve figured out which labor tasks to track, create a numbered list of the codes allowed for the job. Give the foremen a list of the codes complete with clear descriptions of what task are to be assigned to each code.

Tracking Work Output

In order to calculate labor productivity (i.e. the speed at which your crews work) you must know how much work the crew performed. Examples are:

Square feet of pavement sealed.

Pounds of crack filler used (or lineal feet of cracks filled).

Number of stalls marked.

Square feet of pavement patched.

Number of patches patched.

Tons of asphalt used.

Square feet of parking lot swept.

No of parking lots swept.

Much of this data will come from the original takeoff. Quantities such as pounds of crack filler will need to be recorded in the field. Do not have the field workers record data that can be captured in the office from existing documents.

Time Card Design

Redo your timesheets to make them user-friendly. The less writing the foremen need to do, the better. Consider printing out custom timesheets for each job that contain the project information and the material quantities required for the job. You will quickly discover that the easier the data recording, the better quality the data.

Critical Note: time cards must be turned filled out daily!

Data quality drops off rapidly when crews are allowed to fill out their cards a few days down the road. Give each worker a pocket sized spiral notebook to jot down their coded time throughout the day. Then they, or the foreman, can transfer their notes to the timesheet at the end of the day.

Crew Training

The final data collection step is teaching the field crews and foremen how to fill out the paperwork correctly. Give them examples. Have them fill out a couple of time cards together in your office. Provoke questions and answer them.

We all know how much the field workers HATE paperwork. If they liked paper work, they would have become desk jockeys. They didn’t and they don’t. You need to sell your employees on the value of the sending in accurate data.

Explain that the data is essential for setting realistic budgets and schedules. Explain that their personal financial security is tied to you knowing your costs. After you’ve answered the “What’s In It For Me?” question, hold your foremen accountable for submitting complete and accurate timesheets. Job costing is not as important as safety, but it runs a pretty close second.

Data Storage & Analysis

You will find that storing your labor productivity job cost data in a spreadsheet is by far the easiest way to analyze it. Accounting packages are not designed to let you analyze data across multiple projects. Export the data to Microsoft excel or enter it directly into Excel from the start. Group and sort the data. Throw it into charts and tables (have someone set up Pivot Tables for you, they’re the greatest for this task). Look for trends and averages. Update your estimating and schedule based on the conclusions the information reveals.

Conclusion

Job costing is a hot button with contractors – as well it should be. If a contractor can’t tell whether he is making money on his jobs, he is going to get into financial trouble. The risk of job costing is that you can waste a lot of employee time collecting information that turns out to be worthless. If you want to run a business that produces a predictable profit, you must accept the headaches associated with collecting and analyzing job cost data. Job costing systems are very, very difficult to get right. Unfortunately, they are essential to survival in the construction industry!

Time tracking software is an incredible tool for any business. It

serves many purposes for various types of businesses, but I’ve

found that female business owners are active advocates of using

time tracking software because they recognize multiple benefits

from efficiently managing their time, as well as their resources.

Historically, time tracking software has been used by

professionals who bill by the hour and by employers to keep track

of employees’ time on the job. Time tracking software has also

proven useful for project management. Women, however, have

redefined the uses of time tracking software by using it as a

time management tool to keep their busy lives and their

businesses on track.

As a tool for tracking billable hours, time tracking software

simplifies recordkeeping and billing processes making it easy to

bill clients for the time spent on their projects or cases.

Lawyers, accountants, consultants and even handymen (or

handywomen) find time tracking software invaluable for these

purposes. Bookkeepers love it because they don’t have to decipher

each professional’s notes regarding their billable hours. The

information is quick and easy to access, and in most cases (aside

from human error) is pretty accurate.

As a tool for keeping up with employees’ time, time tracking

software eliminates the need for those cumbersome time cards that

have to be hand calculated. Time tracking software that is

specifically programmed to work as a timesheet tool for payroll

purposes will even keep accurate track of regular time and

overtime taking the majority of the manual labor out of

processing payroll. This may not be an issue for a small business

that doesn’t have a lot of employees, but for larger businesses

that are heavily staffed, time tracking software is essential to

timely payroll processing.

Time tracking software is extremely valuable to project

management professionals. In project management, not only do you

have to make sure that the project is completed on time, but you

also have to keep a close watch to ensure it is completed within

budget. On many types of projects, construction projects for

instance, various tasks associated with completing the project

are outsourced or subcontracted. If the outsource or subcontract

providers bill by the hour, time tracking software is vital to

providing up-to-date information on the project and resources

used for budget comparison purposes.

For quite some time, business people have recognized the

advantages of using time tracking software for tracking billable

hours, employee time, and project resources. Then, along came the

innovative women, the home business entrepreneurs, who tout the

value of using time tracking software on a personal level for the

purpose of efficient time management.

For these women, time tracking software is much more than a

business tool, it is truly a life management tool. Customized

time tracking software can be used to track how much time they

spend doing various business activities along with the time spent

on their personal duties and recreational activities.

When a woman’s business gets active and she needs to consider

outsourcing various aspects, if she has tracked and documented

her time using time tracking software, it is easy for her to make

decisions regarding the value of certain activities and to

determine which tasks are best outsourced. This is frequently

necessary for home business owners due to the fact that having

home and business in the same place can result in one overtaking

the other resulting in neglected responsibilities.

One female home business owner told me, “It is so easy to become

a work-a-holic when you have a home business. You really can’t

‘leave your work at the office’ because it is sitting there

staring you in the face all the time. If you end up working all

the time in your home business, then you’ve really defeated the

purpose of having a home business, which is having control of

your time so you can better meet the needs of the home and

family.”

Reports generated from time tracking software, when it is used on a personal level, alerts home business owners right away if they are falling into the trap of letting their home businesses consume their lives. Having easy access to reports that tell you

exactly how you have spent your time makes it easy to readjust

and redefine priorities so you can balance your life and your

responsibilities. Time tracking software makes this possible.

When your business grows, you definitely need to consider buying payroll software for your company. In this article, let me share with you 6 things to consider when choosing payroll software.

1. The cost of using a payroll service. When your business grows, you will have more employees. This will greatly increase the cost of using a payroll service. So when you realize that the cost of using a payroll service starts to outweigh the convenience, then it is time to use payroll software.

2. Online tax filing. Good payroll software will allow you to submit your tax electronically. Although a professional payroll firm can ensure that they will file your taxes on time, payroll software allows you to file tax electronically, which makes the processing easier.

3. You need to assign a staff to handle the payroll processing. Whether you are using a payroll service or software, you need to have someone to collect employee payroll data and information. The staff will be responsible to enter the data manually into the payroll system.

4. Flexibility and control. If you want to have more control, you should consider getting your own payroll software. Some companies have a lot of departments and a payroll service cannot provide the flexibility to track by different departments. Payroll software gives you this flexibility and changes can be made instantly.

5. Sensitivity and security. Payroll data is very sensitive. If you want to keep your payroll data private, you should get payroll software for your company. In house software can ensure that all data are kept confidential and only personnel with permission are allow to view it. Good payroll system has permission settings where employees can see certain screens or data.

6. Good reporting tool. A good payroll system should be able to generate important reports for you. It should have the flexibility to generate reports on different data combination of your choice. A payroll service does not have enough flexibility when it comes to reporting. An in-house program allows you to customize the reporting to your needs.

Payroll system is definitely a great investment and tool for your company. As your company grows, the cost and time you spend on payroll service will increase. So spend some time now to source out a good payroll system and use it in your company. By doing this, you can save money in the long run and have more time to do the things that you do best.

You might have the best and the most detailed business plan but unless you have the right small business software, your business will lack profitability as well as productivity.

Take accounting for example. Try and maintain all your accounts and records by hand and you will know how tedious the job can be. I am not saying that it cannot be done. It’s just that it takes too much time and requires meticulous precision.

Contrary to what most people believe, accounting software is not at all difficult to use. It is inexpensive too. So why shouldn’t your small business have accounting software?

I have heard all kind of answers to this question. Some say that it is too confusing to choose small business software. Others say they do not want to invest in training the staff to use the software.

Choose the very basic

The kind of software that you choose also depends on the size of your business. Most small businesses do not have very significant book keeping needs. Hence very basic small business software is ideal for them.

If you are outsourcing a major chunk of your accounting work, then you might have to choose a slightly advanced book keeping software. Learning to use the software properly is extremely necessary.

But nowadays, most software vendors take this into account and create extremely user friendly software. Even an amateur computer user can start using the software with as less as a few clicks.

If you have had trouble maintaining balance sheets, then consider it to be over. For small business accounting software will create sheets that will balance and highlight the errors.

Uses Galore

You can use the small business accounting software for much more than tracking the expenses and creating annual receipts. Even the most basic accounting software can generate payrolls, manage your taxes, print out various important forms and keep a track of the bills.

Next to breakfast, lunch is another important meal which you shouldn’t skip. Unfortunately, making lunch a priority is not the case in many offices today. Experts say that 45 percent of US workers are taking fewer and shorter lunch breaks than last year. In fact, most are lucky if they get a lunch break at all. Many workers make it a daily practice to eat at their desks and use down time to address e-mails, inter-office meetings, and other tasks that would interrupt the flow of the normal course of the work day.

Lunch breaks differ in various parts of the world. Under the UK Working Time Directive, an employer has to give a break of at least 20 minutes if the working day is longer than six hours. Under these minimum standards, if your lunch break is beyond 20 minutes, it counts as your full entitlement to a break for that day.

In New Zealand, the Breaks and Infant Feeding provisions are found in the Employment Relations (Rest Breaks, Infant Feeding and Other Matters) Amendment Act. It requires employers to provide employees with paid rest breaks and unpaid meal breaks.

Employees are entitled to one paid 10-minute rest break if their work period is between two and four hours; one paid 10-minute rest break and one unpaid 30-minute meal break if their work period is between four and six hours; two paid 10-minute rest breaks and one unpaid 30-minute meal break if their work period is between six and eight hours.

California law states that employees must get a 30-minute meal break if they work more than five hours. At this time, the employee should be relieved of all duties since it can’t be a working lunch. If an employer fails to give a proper meal break, the employee can get one hour of pay at the regular rate of pay for each day he or she is not provided a proper meal break.

Testimonials are very valuable for a business. The number of testimonials one gets as well as the quality of them can go a long way towards gaining new customers or clients. Businesses need a constant entry of new clients so having testimonials is very important if one wished to increase the amount of business they do.

Many people like to part of a crowd. They do not want to standout too much from the others. This may be due to some fear of looking foolish or making a bad decision. So many are afraid to stick their necks out too far. When a person is looking for a service person to hire they will often start with an internet search. For example “Columbus Ohio roofing”. When they put this search term in to a search engine they will see all the results. From these results they will begin checking out at least a few of the websites.

It is at this point of the search for a service or product that testimonials become valuable. When a person is reviewing two wed sites, one with testimonials and the other does not have any they will tend to trust the quality of the product or service when there are testimonials on the site stating that the product or service was good. This helps provide “evidence” that choosing that one will be a good decision.

Placing trust in the opinion of others is often called social verification. The quality of something and the decision to buy is verified as being a good decision with testimonials as the evidence. This is used frequently in television advertising when crowds of people are seen at a restaurant or event. Seldom will a television commercial show a single kid playing alone with a new toy. The child is surrounded by other kids all wanting a chance to play with the new play thing.

One of the first things a new business should do is begin a process by which the business can collect testimonials about their business. Many think the process is a long process, however it can be very easy to start and to consistently implement. It can be as simple as passing out a survey to clients and asking for feedback. It can also be set up as to be completed online. However a business decides to collect testimonials ti is important that they start doing so. It is a great way to make a business stand out from the others.

In business, it is important that business owners put in place the necessary systems that can help make the company’s operations more efficient. This is especially important for the operations that deal with cash flow, including the way the company collects payment from its customers, the way the payroll is handled, and how purchases are made. With systems that improve the way these aspects are managed, the profitability of a business can be raised. The good news is that business owners can easily gain access to the tools they need for them to be able to install the necessary systems that the company needs. One of these includes timesheet software, which can help companies handle the different aspects of their cash flow in a more efficient manner.

Traditionally, companies use paper timesheets, which they have to fill in manually. Unfortunately, doing so makes the system vulnerable to inefficiencies like late submissions and inaccurate entries, which can lead to a number of negative effects that include delays in collections, payments and inaccuracies in the payroll. To avoid such problems, one of the best options that business owners can take is to use timesheet software. Doing so can provide them with a number of advantages and benefits. One of these is using the kind of software that allows the employees to enter data into timesheets as they work on various projects, which eliminates the need for employees to spend a lot of time manually transcribing the work they had just done. In addition to this, companies would also be able to accurately charge their customers given that the billable hours that employees put in are recorded in the timesheets. Moreover, business owners would also have an easier time in monitoring the operations of the business, given that the information that they need to do so is just a click away.

For businesses to succeed, it is important for business owners to put in place systems that can help improve the efficiency of the company’s operations. The good news is that there are a number of tools that business owners can use to help them do so, one of which includes timesheet software. Timesheet software can provide companies with an efficient and practical way to improve the management of the company’s cash flow, which is essential to success.

Let’s say you have 100 workers – employees or subcontractors being paid an average of EUR25 per hour. And let’s say each one works 48 weeks per year and that each one of them loses a very conservative one hour per week based on a forty hour week.

That would be a loss of EUR120,000 per year, not to mention the opportunity cost of 4,800 billable hours that you could have billed elsewhere. If you then add to this the time taken by the foreman and administrator managing timesheets, it’s hard not to agree that – for every 100 workers – you could be losing more than EUR150,000 through time leakage!. This equates to >2.5% of the annual labour cost. In an industry where there is often a 50/50 split between labour/materials and where net margins average 5%, 2.5% saving on labour would add 1.25% to your nett margin.

I’m not going to tell you that you can save that much or more – only you know how the figures add up for you, but I wonder what happens when you imagine yourself saving a small fortune?

TIME LEAKAGE – MONEY DOWN THE DRAIN

Let’s take a quick look at what time leakage is and how it happens. Time leakage is jargon for ‘time lost’, and there are many factors that contribute to it, including:

o Manually filling out time sheets

o Faulty short-term memory – when filling out a timesheet at the end of the week. People’s memories seem to err on the side of additional time

o Foreman review and sign off of timesheets

o Transport of timesheets to head office from remote sites

o Administrators -

- entering time into payroll systems

- reviewing timesheets

- calling individuals and foreman to validate before finally signing off

o Reconciling timesheets with trips to the dentist, sick time, holidays and other absences

o Time recorded on site but not actually spent on the site

I wonder if you are a main contractor with many sub-contractors on a site and whether some of the causes of time leakage may currently be beyond your control. Or, if you’re a sub-contractor, how some of these problems may be beyond your control as it may be that you don’t always have your own foreman on site or you can’t spend time on the site yourself as you have too many sites.

In either case, considerable amounts of money leak away with lost labour time.

In an environment where people and sites are transient, it’s fair to ask:

o Can this problem be solved?

o How can I solve this problem?

o How do I stop the leakage and save money?

When you think about it, it becomes clear that a solution would have to include the following capabilities -

o Accurately track people entering and leaving sites

o Cater for sites of all sizes

o Communicate with head office automatically

o Track clock-ins – in real time

o Integrate data to payroll systems

o Be reliable, robust and scalable

Surely, the technology exists… so why is providing this solution still such a challenge in the construction industry? Primarily for this reason: One size does not fit all.

At least, not until now.

Consider this: A business may be characterised by small numbers of people (1 to 5) going to many customer sites or by large numbers of people working on small number of sites. A business may have small sites or large sites. You may be a subcontractor or a main contractor that simply wants to control labour costs, or you could be a project management company tasked with controlling labour costs. You get the picture.

And you may already be aware that, thanks to advances in technology, all these disparate requirements can now be solved with a single solution.

YOU CAN CONTROL LABOUR COSTS ON CONSTRUCTION NOW

Experience shows that the key to how you can accomplish this is the front-end flexibility that allows multiple and differing requirements to be integrated to a single back-end application. And what if it also provided both main contractors and sub-contractors a single solution while still allowing you to be in control of your own labour data?

I’m not going to say that when you have the ability to gather (in multiple ways) accurate data in the field that integrates the information with the head office, you have the problem solved, because you’ll know that when you experience the savings for yourself.

o Large and small sites scan in using biometric devices that return data to the application in real time over the Internet or over the mobile network. No phone lines or broadband required. Such hardware can be easily moved from site to site.

o Individuals travelling to multiple sites can clock-in using IVR (Interactive voice response) or using their mobile device.

Because each method communicates with a central system at head office (ideally a web-based solution that is visible securely anywhere you have internet access), which means that head office gets a complete, real-time, integrated solution that gives you control to end labour leakage, you can start saving a small fortune.

As technology advances you will see the construction industry change, and while some companies will wait until forced to change to stay in the game, others will take advantage of the opportunity to evolve, to get the competitive edge now and put an end to ‘wasted time’.

Because this solution has only recently become possible – with the convergence of improvements in biometric technologies, mobile networks, voice over the internet, functional mobile devices, and the desire to cut costs – you may want to speak with people like you who are already enjoying the savings before you decide to arrange for an audit and discover how much you can save.

I wouldn’t advise you to get in touch and arrange for a ‘time leakage’ cost savings audit until you are ready to start saving a fortune!

In the world of business, there always comes a time when a company would choose to hire a consultant to check on the very operations and everything else that is keeping that particular company afloat. This means that the company hires someone outside of the company to go through their operations, as well as their policies and regulation, just to get an outside and more objective view on how things are going in the organization itself. But when it comes to multibillion-dollar corporations where there are just so many employees in the payroll all over the world, managing all the consultants in tow from one branch to another would virtually be impossible. Consultant time tracking then becomes a must, and this is futile without the use of the consultant timesheet.

In its most basic form, tracking actually refers to the activity of ensuring tasks and jobs are completed over the desired timeframe. More importantly, these jobs and tasks are archived accordingly for future perusal. Tracking is then a very efficient tool that can actually make the work of any employee easier because no longer would employees have to physically dispatch tasks, do inventory checks, and conduct employee performance analysis. The timesheet is a very handy tool when it comes to keeping track of your employees and all the activities they take upon each workday.

In a regular 9-5 job, your employees would not really be productive all throughout. There would be 15-minute breaks and 1-hour lunch breaks. And then, there would be those times when your employees would spend idling, just whiling away. With the enforcement of a timesheet, all these unproductive minutes going to waste just might be minimized.

However, the same thing is not really as easy to implement when it comes to consultants. Simply put, these consultants are not really like your average employee on your payroll. They actually come from third-party services or companies that you hire for whatever purpose that you deem. In the setting of a caf9, for instance, a consultant might be hired to do weekly spot-checks on the overall performance of the caf9 – its operations, its food and beverages, as well as its employees. The consultant might be invited to drop by the caf9 at a stipulated time, say, around 9:00 Monday evenings so that he or she can see how the caf9 works at the given time. Good for you if the consultant is indeed prompt when it comes to the entailed duties and responsibilities.

The problem lies when the consultant himself becomes quite the delinquent, and this happens more often than you think. Naturally, you would expect the consultant to be the professional that he is supposed to be, right? How then would you deal with such delinquency? The consultant timesheet then becomes the handy tool here; after all, even if the he has flexible hours and he only reports once a week for just a few hours, he is still under your employ, so to speak. Thus, you are entitled to come up with ways and means to get your money’s worth. This timesheet is indeed one of the tools you can use to do just that.