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Your Holistic Workflow for Capturing and Recouping Payment for Out-of-Scope Work

Over the past decade, construction’s digital transformation has focused on digitizing drawings and documentation. Now, artificial intelligence (AI) is helping us identify risk across images. Our most experienced foreman are navigating models in the field and productivity is tracked efficiently with 360 cameras. Despite these advances, a 2017 McKinsey report indicates that 70% of projects still experience cost overruns, suggesting that visibility into the financial side of the business is still lacking. Given our current, unpredictable global economy, that percentage has likely increased significantly over the past year.

Heading into the second quarter of 2021, we must control what we can by actively improving cost controls. It is in everyone’s best interest to ride the second wave of construction’s digital transformation with an emphasis on collaborative, real-time cost management.

Within this cost management revolution, self-performing contractors can benefit from controlling the change management process required for recouping payment for out-of-scope work. It’s an area of their business that has a lot of profit opportunities but carries a tremendous amount of risk. For example, on a $1M project, a contractor that’s unable to recoup payment for 10%-15% of the extra work they performed is losing out on anywhere from $5K - $15K, conservatively. Across a portfolio of 50 similar jobs, that’s anywhere from $250K-$750K in unrecoverable, out-of-pocket expenses. On the opposite side of that conservative spectrum, the numbers can be devastating. Some key areas contributing to their inability to recoup payment are:

  1. Lack of formal Field or Extra Work Authorization (FWA/EWA) confirmation
  2. Illegible or incomplete T&M Ticket details
  3. T&M Ticket submission delays
  4. Exceeded contractual time limits

Procore is excited to release a fully integrated, holistic workflow for flagging, managing, and recouping payment for out-of-scope work. This new feature, T&M to Change Management, is one of the first in construction tech that offers this level of financial control, furthering the growing differentiation that Procore’s connected platform brings to today’s market.

"Procore has significantly improved our close-out and billing process by providing our field team with the tools necessary to capture all relevant information and backup documents for changes. We are saving days of investigation as we receive legible and instant notification on the status of work completed. Everything is clear, the work is verified, and it is submitted in a timely manner." - Sussan Jarvis / Project Manager / A-1 Modular Inc

Procore is empowering field users to initiate out-of-scope work opportunities that command attention and loop in the necessary stakeholders to move forward with FWAs/EWAs before or while proceeding with work. Office and client stakeholders can follow the status of T&M Tickets and, once verified, can seamlessly pull in one or more tickets outlining labor, equipment, and material units needed to perform the work. With FWA/EWA and T&M Ticket details clearly laid out with supporting signatures and timestamps, they can quickly add cost codes and markups, and submit the formal change order within minutes.

Say goodbye to week-long information delays and lost or illegible tickets that require lengthy investigation—now everything connects. With Procore, managing extra work performed on a T&M basis is simple, so specialty contractors can get paid for all the work they perform.

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