Successful Contractors are Technology Driven

April 24th, 2012  |  Published in Uncategorized

Are you slouching or standing tall in this economy?

An article recently published in CFMA’s Building Profits magazine asks construction financial managers to consider the posture of their company in this economy: “Is your company on its toes, or its heels? Is the intense competition making your company stronger, or is it in retreat? Are your top leaders setting the right tone, demonstrating the right behaviors, and driving innovation? Or, are they dazed and confused, reacting slowly – or negatively? And, as the financial manager, what are you doing (or not doing) to help your company succeed?”

The author, Thomas W. Emison, believes that today’s successful contractors are on their toes and leaning forward despite the economy. Plus they all have leaders with a corporate culture that encourages innovation and forward-thinking that enables them to prosper and grow in tough economic times.

Emison previously wrote: “Successful contractors know that to win in this climate, they must outwit, outflank, and outperform the competition at every stage of the work.”

He goes on this current article to explain that unlike traditional differences among construction companies based on what they do (e.g., general, mechanical, electrical, structural, etc.), that there are six unique differentiations based on how and why they do it. Each type of company faces the same economic challenges but responds “on their toes” with different strategies.

Take for example, the Technology Thought Leaders. As Emison explains: “They are technology driven, not just technology oriented. They outsmart their competitors with quick adoption of emerging tech­nologies; they got the jump on facsimile transmission more than 25 years ago, e-mail more than 20 years ago, and BIM more than 10 years ago.”

We encourage you to consider: What type of culture does your construction business have? Are you an innovative team employing the latest in technology to get ahead? Do you utilize construction software to manage finances and reporting? Feel free to download this free whitepaper about choosing the right-fit construction accounting software for your business.

To read the Building Profits article, “On Your Toes or On Your Heals?” authored by Thomas W. Emison of Eide Bailly, LLP, in its entirety at the magazine’s web site, click here.

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Minimizing Risk with Subcontractors

November 22nd, 2011  |  Published in Uncategorized

According to an article recently published in AGC’s Constructor magazine: “Contractors are taking more extensive measures to protect themselves from the risk of subcontractor and supplier defaults. As the construction industry continues to falter in a poor economy, an increasing number of subcontractors and suppliers are merging, defaulting or simply going under. Consequently, contractors are paying much closer attention to—and spending more money on—managing subcontractors.”

As the article explains, in many cases, the subcontractors are not to blame as they face scarce work available and slim profit margins, which cause overly eager subs to accept work that turns out to cost them money. And that’s a slippery slope toward default.

One expert reveals that in the case of subcontractor defaults and failures, the “ripple effect is typically 2.5 times the bond price” and emphasizes how important it is for contractors to have a plan in the case, explaining that “if the general contractor has to come in due to sub failure, there are expenses for things like materials, job scheduling and delays [that can’t be replaced] for as-is cost.”

Concerned general contractors use subcontractor default insurance and are enforcing stringent subcontractor prequalification criteria and a detailed review process, which may include audited financial statements for several years and strong balance sheets. More GCs are also scrutinizing subcontractors’ past performance and financial capacity for job completion. This due diligence often demands more time and overhead expense, but the article shares opinions of some construction executives who feel it’s surely worth the effort.

Value of Software

Of course, many contractors are also investing in software to help ease the burden of managing subcontracts and minimize risk throughout the process. At Maxwell Systems we see contractors using the capabilities in our complete, all-in-one solution to streamline document workflow and more easily ensure subcontractors have liability, workers compensation, and correct bonding in force during jobs, as well as have an easy way to track and hold retainage.

And because the solution can be used to manage the entire project lifecycle, the benefits are experienced by the whole team. For example, the controller is able to ensure that invoices are applied to correct cost codes, that a contractor does not overbill, and that subcontractors are not paid if insurance, license, or bonding information is not up-to-date. Plus the project manager can easily know which subcontractors are assigned to which work, understand what the committed cost is on a phase of work, and efficiently track original contract versus revised scope of work for each subcontractor. Check out Maxwell Systems for construction software.

Download our free article, “All for One and One for All” and read more about how a complete software solution can help with managing subcontractors and minimize risk.

To read the Constructor magazine article, authored by Angelle Bergeron, in its entirety at AGC’s web site, click here.

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Bright Future for Specialty Contractors?

June 20th, 2011  |  Published in Uncategorized

According to AGC (The Associated General Contractors of America), “Emerging changes in construction activity indicate 2011 may be the year of the specialty contractor more than the general. While overall construction spending remains flat, several niches look promising.”

The article by AGC Chief Economist Ken Simonson goes on to explain:

  • The revival of manufacturing employment, shipments, orders and inventories should encourage more contractors to develop specializations to serve manufacturing.
  • The tapping of huge natural gas reserves is good news for specialty contractors that can build, expand and overhaul petrochemical plants.
  • Companies with expertise in building and equipping data centers are in growing demand, as more firms turn to “cloud” computing.
  • Alternative energy and power markets will continue to offer opportunities and there should also be continuing demand for energy conservation retrofits to existing residential and nonresidential buildings.

 To read the article in full, please visit http://news.agc.org/2011/06/15/which-niches-will-offer-riches-in-2011-and-beyond/

Are you tapping into new markets and services to ride the economy wave? How have emerging changes impacted the type of work you do? Look to Maxwell Systems for quality construction software systems.

 

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Plan for Construction Employment Rebound

March 21st, 2011  |  Published in Uncategorized

The Associated General Contractors of America (AGC) released a plan recently detailing measures to stimulate demand for construction in the private and public sectors. AGC explains the plan is necessary to reverse construction employment declines that have taken place in 317 out of 337 metro areas since January 2007, according to new data.

In a press release issued by AGC, Stephen E. Sandherr, the association’s chief executive officer, states: “Our goal is to rebuild a devastated construction market that has left millions jobless, littered cities with incomplete projects and sapped much needed revenue, commerce and customers out of our economy. Considering the scope and impact of construction job losses, the last thing any of us can afford is a repeat of the past four years.”

The plan, called “Building a Stronger Future, A New Blueprint for Economic Growth,” outlines measures to help boost private sector demand for construction, help tackle a growing infrastructure maintenance backlog and reduce needless red tape and regulations.

For additional information or to download the plan, visit http://news.agc.org/2011/03/15/agc-releases-plan-to-revive-construction-industry/.

What do you think it will take to revive the construction industry and rebound employment? Look to Maxwell Systems for quality construction software systems.

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