By: Greg Norris, B2W Software
Labor is at or near the top of the list of costs for most utility construction projects. That makes accurate, timely data on employee hours essential for contractors trying to keep work on schedule and budget. Software technology helps, and the best systems check three boxes: they accommodate crew-based and individual employees; make it easy to track labor in the context of other productivity variables; and deliver actual-versus-plan reporting in a format that is easy to interpret and use in the field.
Getting Payroll Right
Specialized software has big advantages over the paper- or spreadsheet-based processes many contractors continue to rely on for tracking time. Electronic logs make it faster and easier to capture hours in the field. They also have built-in capabilities and checks that make it easy to ensure that hours are assigned to the proper jobs and cost codes.
Once hours are recorded electronically, they can be transferred directly to the accounting and payroll system. This eliminates the extra steps and manual, redundant data entry that increase staffing requirements and introduce opportunities for errors. Finally, with electronic information from a specialized system, contractors can generate comprehensive reporting and dashboards necessary for timely, data-driven decisions automatically, without extensive, manual number crunching.
Getting Data Right Away
Waiting for a report from an accounting or ERP solution in order to review the status of a current project versus plan is also common. The obvious drawback is lag time. Accounting reports are typically run monthly. That means managers and executives may not find out about cost overruns until it’s too late to make changes on the job site to correct them or recover.
Dedicated field tracking applications complement accounting capabilities. They make it easy to record and approve labor hours where and when they happen on electronic field logs or work logs. Importantly, these applications also provide daily reporting, often in a more streamlined, field-centric format than accounting systems. Simple bar graphs may alert a foremen or project manager when certain aspects of a job are over or under budget, without forcing them to decipher a detailed, number-heavy accounting report.
Daily reporting from the performance tracking system won’t be 100-percent accurate. Final invoices from materials suppliers or subcontractors received later, for example, could vary slightly from the numbers entered in the field and require reconciliation in the accounting system. Still, what reporting based on the field logs lacks in to-the-penny accuracy is more than made up for in immediacy.
Advantages of One System
A comprehensive system that allows contractors to track individual and crew-based employees and to track labor together with production quantities and material and equipment utilization gives contractors two important advantages.
First, having crews as well as independent employees, such as truck drivers or equipment operators, work on and have their hours accounted for within the same job is not an uncommon scenario. While crew activities are typically captured on field logs, hours and production quantities for independent employees can present a challenge.
When contractors use separate systems for crew-based and individual employees, data from those two systems must be combined to get a full picture of where a project stands. This adds extra data entry and analysis steps to the reporting process, delaying reporting and introducing opportunities for errors.
Second, niche applications or accounting modules that record labor only will show a contractor whether those costs are running higher or lower than expected. That data, however, is usually only relevant in the context of production quantities accomplished and the costs incurred for other aspects such as materials and equipment.
Labor costs could be low because there are not enough people on the job and productivity is way behind schedule. Conversely, being over budget on labor might be acceptable if a project is ahead of schedule or the added labor has reduced other expected costs.
Don’t Overlook Ease of Use
Tracking labor hours is imperative to effective operational and financial management. Advanced performance tracking software brings improved accuracy, timeliness and automation to the process, but it’s important to make sure the technology is also advanced in terms of ease of use.
The best performance tracking solutions are designed specifically for use in a construction environment. They strike the important balance of delivering the reporting that managers and executives need while also making life easier – not harder – for end users responsible for capturing that data in the field.