Construction leaders strive to track cash flow, identify risk, and take actions to achieve profitable growth targets. This is why companies are investing in analytics to generate reports on project and portfolio-level financial performance.
According to the “Construction Cost Management Report” by Dodge Data & Analytics, “Tracking costs for every aspect of the job to determine how they impact overall project cost” ranked at the top of the list of most difficult cost management challenges. Yet, according to Steve Means, Principal at Deloitte, “Our data at Deloitte shows that the companies who have invested in automating, connecting, and digitizing their cost management practices are more competitive, are holding or improving their margins, and are delivering projects on time.”
Procore Analytics users already have a leg up, with access to over 150 report pages, including more than 30 for financials. Users with these modules can generate more accurate job cost reports and forecasts with real-time data analysis, empowering them to make better, data-driven decisions to proactively protect their profit margins.
Procore goes a step further with Work Breakdown Structure (WBS), a significant enhancement to how data is organized and reported (first in Project Financials, then in other parts of the Procore Platform, such as Field Productivity).
We are expanding on the financial data granularity by giving users the ability to create custom segments. These offer better configurability for sorting, grouping, and reporting of financial data.
WBS makes it easier for users outside of the accounting department––whether project managers or pre-construction team members––to access and analyze critical information. Now, they have access to greater levels of historical details in multiple configurations so estimates and capital planning efforts are more accurate. While accountants historically perform trend analysis, now project teams have access to that information in real time. This gives teams new ways to surface action items and resolve them before they become issues.
For Debbie Lesar CIT, Contracting Administrator for Brewer-Garett, “WBS helps us streamline our communication with our accounting team, and increases our capability to manage and report financial data between our field members, vendors, and suppliers.” More efficient communication leads to a shared understanding of project status, which engenders trust and ensures alignment between stakeholders.
Track and Report Progress the Way Stakeholders Need It
Procore developed WBS with construction workflows in mind. According to Tamara Kaye, Application Specialist at Bozzuto Construction, “The custom descriptions feature makes easier for our project management teams to comprehend the definition of the WBS, this combined with the ability to group budgets by WBS segments, allows us to easily aggregate data across multiple projects to see inconsistencies." This increases the likelihood of user adoption and achieving expected business outcomes.
Imagine winning a big project, only to get bogged down tracking costs. Or running a phased project for multiple tenants, but facing challenges with tracking and reporting on progress. These are just two of the challenges WBS in Procore addresses.
Take project owners who develop multi-use facilities. A variety of tenants plan to occupy the property and have facilitated funding to get the job done so they can move in. Their move-in dates are staggered and they all want to know how the project is tracking. Meanwhile, the finance team wants to make sure the project owners can track expenditures in a defined chart of accounts. This way, they can match them to the right tenant and minimize any contingency fund spending.
Project owners can create segments for the project phase, building, funding source, and tenant. Then they can leverage these segments for tracking and reporting on each of the costs. This helps build trust with tenants, while increasing the probability of coming in on-time and on-budget.
For general contractors working on a government contract with heavy reporting requirements, administrative burdens can be significant. They ask for regular updates on cost incurred to date by work type and funding source. A clear cost breakdown structure in financial reports is needed, and with WBS, users can create a segment for each one of these characteristics to easily enable reporting and help position them well for future bids.
Talen Energy, an independent power producer, has leveraged the configurability provided with WBS to organize financial data by year and facility location, allowing them to group and report data in ways they couldn’t do before. "With WBS, it was much easier to achieve alignment between the accounting, finance, and project management teams than it was previously when we were only leveraging Cost Codes and Cost Types in Procore," says Chuck Michalesko, Manager of Project Finance. Custom segments mean each group can organize the information the way they need to see it.
Users can now group or filter financial data anywhere they can do the same with cost codes, cost types, or sub-jobs. Users can also use WBS custom segments in the new Enhanced Report Builder (now in beta) to create flexible reports with all their financial data and WBS segments in one place. WBS segments will also soon be available in Procore Analytics.
WBS has built-in flexibility to meet unique business needs. For self-perform GCs and specialty contractors, WBS provides new ways to budget and track use of materials in different spaces and projects. On projects with a blend of contracted and self-perform work, GCs can use information from WBS to keep their projections separate for use in markups, insurance, and risk calculations.
Expand the Ability to Manage Project Outcomes
WBS in the budget allows Procore users to a greater level of detail in their financial reporting with the ability to create custom segments. In turn, users have greater visibility into costs, expanding their capacity to manage project outcomes and communicate with stakeholders. Increased visibility, coupled with risk mitigation actions, leads to greater profitability.
For more information about how to gain real-time into the financial health of your projects, visit the WBS support page or attend our upcoming Live Demo: Financials + Analytics for General Contractors webinar.