Sound Financial Hygiene: The Engine That Drives Operations
To a specialty contractor, perpetual change comes with the territory. Throughout that change, specialty contractors share successful project outcomes through the projection and forecasting process. In order to forecast the total project cost and expected margins accordingly, everyone must be able to accurately monitor trends and deviations.
With Procore’s Project Financials, users can take measures to provide clear, auditable and visible data at every level of the company. From the budget adjustments at the individual cost code level to individual change orders (pending and approved) that caused those budget updates, users can align on critical information to create predictable forecast targets. When cost projections are based on sound project hygiene, users can leverage the expertise of everyone in their organization, from superintendents to purchasing agents and controllers, during forecast reviews.
As part of Procore’s vision to improve the lives of everyone in construction, we are continually releasing major product enhancements based on direct engagement with our customers.
Now Procore users can:
- See impacts to cost, revenue, and profit budgets from an individual change order
- Track change orders’ status and whether they are included in your projected budgets and costs at completion
- Leverage new, multi-tiered approval workflows to help ensure accuracy
The ability to show a cost budget and a revenue budget enables users to have more impactful conversations with the relevant respective parties. Users can now take a unified report view, inclusive of changes and their values, to the operations team for increased labor demand justification and then to the accounting team for their buy-in. By leveraging real-time insights about the financial status of a project, users can ultimately drive more reliable forecasts. When the plan to profit is clearly laid out and visible to all, users can put the total experience of their organization to work and pivot quickly if and when unforeseen events occur.
“With a rolling forecast, we can make better decisions about billing and cash flow, so we can go out and get more work at the margins we need.” - Wes Simpson, Chief Executive Officer, Green Mechanical
It's Not Just About Profit - Sound Financial Insight Leads to a Healthy Balance Sheet
In 2021, slow payments to general contractors and specialty contracts cost the industry $136 billion 2021, a 36% increase from the previous year. Procore’s Project Financials can help specialty contractors ensure billings are inclusive of all current and projected costs. Accounts payables are more timely by ensuring their monthly draws costs are accurate and up to date. With closer monitoring and access to real-time cost data, specialty contractors can expect a healthier cash flow and balance sheet as a result of not missing any current or projected costs in each billing term.
"Procore helps prevent change orders—and hard-earned money— from slipping through the cracks." - Jacob Miller, VP of Operations / Masonry PM
By tracking entitlements to change orders, users can avoid finger pointing with clients and instead get right to approvals and billings. Procore helps users map the initiating documentation of a change, RFI, submittal markup, or formal RFP to the line item change in Project Financials, including all cost codes affected by that item. Users can quickly audit the status of a change, what caused the change, who gave the direction to proceed and when, and how it's affecting the overall profit of the project at the forecasting level.
Having real-time labor costing, accurate PO, and invoice data syncing from their ERP system helps users ensure that their billings are representative of the costs they have already incurred. This can help result in fewer omissions in a billing period, faster dispute resolution over charges, and ultimately timelier payments, which can help provide cash flow for critical business needs like payroll, taking advantage of vendor discounts, or expanding the business into new markets.
Empirical Data is More Than Just a Database: Identify Trends and Leverage Insights
When users combine Project Financials and Procore Analytics, they can see exactly what their key influencers and risks are at the company or regional level. Drill down to the exact areas of risk and correct them before they become empirical performance results that affect a bid on another project. Imagine being able to glean insights about a single cost code or scope that’s being performed drastically different from customer to customer, or in different markets. Now users can highlight that delta and make sure they’re addressing it in bid and projection reviews. The level of access to empirical data that Procore provides helps users ensure that they have a source of truth that informs estimators, project managers and accountants now and in the future.
To learn more about how Procore’s solution for Specialty Contractors can help you improve your financial health and improve business outcomes, request a demo now.
