There’s no shortage of paperwork and documentation in the construction industry. From contracts and change orders to lien waivers, each of these documents has a purpose. Besides the paperwork that documents the requirements of a project, there are also financial statements and progress reports that keep up with the progress and cash flow for a job. These construction reports can track the funds used for a project. But they can also improve productivity and determine the reasons for delays within a project. While different contractors may use various methods to track and improve productivity, these three financial statements are reports that improve construction productivity.
1. Cost Reports
These vital documents assist in every construction project. Typically prepared by the general contractor, they are used as early as the bidding process to offer an accurate cost estimation based on the design provided by the client. The initial report estimates the cost of materials and labor for the project. Also, they can help secure a loan for the project. As the project progresses, contractors generate cost reports to track actual costs and projected income for the project.
While cost reports usually keep a project on budget, they can also provide a wealth of information about other properties of the job. For instance, tracking job costs and projecting costs into the future can prevent overspending and help contractors recognize errors. Additionally, since the report includes labor costs, you can use them to track inefficiencies.
The ability to look at projected costs for labor hours alongside actual costs as a job moves forward can help you see where productivity is lagging. For example, suppose a specific task requires considerably more time than anticipated. In that case, the cost report will clarify exactly how much money people lose due to the slowed processes. It can also track the extra time taken for completion. With this knowledge, a general contractor can determine if the estimation has errors or the team isn’t carrying out the work in a reasonable time frame. When the reason for the time difference is clear, a contractor can take action. For example, they can make more accurate estimations or hire a different subcontractor in the future.
2. Daily Progress Report — Percent Completion Guide
The next reports that improve construction productivity are daily progress reports. A construction project begins with an estimation of how much it will cost to purchase materials and complete the work on a job. The ability to provide an accurate estimate and keep the project from going significantly over budget is essential to keep the client happy and to ensure every contractor and subcontractor working on the job gets paid their worth.
Additionally, progress reports are utilized in the percentage of completion process to report income during the course of an incomplete project. To maintain an accurate cost to estimate ratio, it’s essential to pinpoint any issues that lead to lagging productivity or unexpected costs that stray from the initial estimate.
A daily progress report is a document that reports the daily activities of a project. While it’s not required on all projects, it can be utilized in every job as an indicator of events that slow progress on a project. Daily reports provide an update of the actions taking place on a project and the daily details of a site. These reports act as a record that keeps subcontractors and stakeholders informed. When completing progress reports, providing significant details in a clear manner is essential. A standardized checklist can help contractors and subs provide clear details without wasting time.
While you can have additional details, a daily progress report should include:
- The date
- Timestamps to accommodate specific information
- Weather and site conditions
- Material and labor logs
- Potential risks
- Additional comments (such as notes on any unexpected activity that caused delays that might impact the project)
Daily progress reports provide clear insight into the activities actually occurring during a project. They can help solve disputes and clarify why a certain team or task experienced unexpected delays.
3. Key Performance Indicators (KPIs)
Key performance indicators (KPIs) are measurements that indicate how a company is doing in relation to its goals. In an atmosphere where cost and labor estimates are an essential part of winning jobs and getting paid, KPIs are a useful metric to keep projects on track. Organizations use some financial KPIs like gross and net profit margins and net cash flow to assess a company’s credit risk. Project KPIs can help assess bid accuracy and productivity on a job, so they can be essential elements in reports that improve construction productivity.
Reports that improve construction productivity might have project KPIs such as:
The variance in cost is the difference between the planned budget of a project and the actual cost. It can be determined by subtracting the actual cost of a project from the planned budget. To determine the reasons for cost variance, you can break a project down into scopes.
Estimated Labor vs. Actual Labor
A project estimate includes materials and estimated labor hours. A simple comparison of planned hours to actual hours can provide a clear picture of lost productivity. Utilizing daily reports alongside these comparisons can clarify any issues that led to lost production.
Percentage of Labor Downtime
For a successful project, you want to keep the percentage of downtime as close to zero as possible. To calculate a downtime percentage, simply divide downtime hours by the total hours spent on a project. In order to correctly calculate downtime hours, it’s essential to ensure workers report downtime and the related causes on daily reports.
For contractors and subcontractors working on a construction project, the idea of increased paperwork isn’t appealing. Time spent on paperwork in the field is time lost on active production. Luckily, you can improve construction productivity and eliminate cumbersome paper processes for your reports with cloud-based billing solutions from Flashtract.
Construction billing software can help contractors streamline the documents used in the billing and payment process, providing more time for active work. A robust program can also generate reports that improve construction productivity. These improved processes can also make using a variety of documents to help track and improve productivity easier. With more documentation, contractors can easily track lost production and improve processes in the future.