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Job Costing: Budgets to Actuals

By utilizing CoConstruct's estimating tool, you will have a record of your budgeted costs and be able to enter and compare actual costs to make real-time decisions in the field that can affect your project profitability.

Here's how to leverage the features of CoConstruct effectively to achieve this goal:

  1. Set up Accounting Codes
  2. Build your estimate
  3. Send and receive bids
  4. Issue purchase orders to contract costs with vendors and subs
  5. Use the budget to track your actual costs

 

Accounting Codes

In CoConstruct, your accounting codes will be the basis for budget tracking throughout the project.  If you already have a set of accounting codes that you use for job costing, getting those set up from the beginning allow you to more accurately track your budget costs throughout the job by creating consistency within financial transactions.  

 

Accounting codes carry expected costs from your estimate and selections through your purchase orders, time tracking and project expenses to allow you to easily see where your project financials vary.  This will allow you team to make better real time decisions on purchasing to keep the project on track and perform an effective post-mortem to improve your financial position on future projects.

 

If you don't have accounting codes, get started with the NAHB codes for direct construction costs.

 

 

For more information on setting up your Accounting Codes in CoConstruct, check out our Help Center here.

 

Build Your Estimate

The first step in building out your estimate is to input the items and outlining the relevant costs that make up the project scope.  This will be the basis for the information you're requesting in your bids and eventually building out a proposed price for your clients.

The Specs & Selections will be the basis for representing your project scope for your team, trades and clients.  Lay the foundation of obtaining and contracting accurate project pricing by entering the project scope and outlining related costs.

Keep in mind, that you don't need numbers yet - you'll get these through your bids - but any related quantity data or specifics of what should be included (or not included) in the base proposal price should be set up here.

  • Step #1 - Estimating overview

 

Once you have your project information established, you're ready to start collecting bids from your vendors and subcontractors through CoConstruct.  

 

Send and Receive Bids

Requesting and managing your bids through CoConstruct allows you to leverage the data already built out in your estimate to ensure that the quotes you're getting from your trade partners accurately reflect the proposal you're presenting to your client.

As you receive quotes back from your vendors and subcontractors, remember to update the bid table within each request.  That will enable you to keep track of which bids you've received and streamline the process of awarding your bids.

As you've received bids back from your trade partners, CoConstruct allows you to push the winning bid directly into the estimate lines.  

This eliminates mistakes that can often occur from manually transferring numbers from one page to another - no more missing digits or decimals.  

Push your winning bids to the estimate before you send out the award notice to your trade partners.  After all, you'll want to present and sign the proposal with your clients before they start showing up!

 

Issue Purchase Orders

After you have a signed contract with your client, purchase orders allow you to lock in the pricing you built that proposal price on.

CoConstruct allows you to easily generate your purchase orders directly from the bid requests.  This ensures that the exact same information that your trades saw when populating their quotes for you appears on the PO - eliminating questions, objections or surprises.

 

Tracking Actuals in the Budget

The above steps will populate your project budget with your expected costs and how those vary with selections made by the client or any cost variances contracted with your trades.

The final step to fully utilizing the Budget will be to record your actual costs against these expected numbers.  There are two ways to populate your actuals:

Job Costing through QuickBooks

If you're using QuickBooks for your accounting, you can utilizing job costing to bring your actual costs directly into your CoConstruct budget.  Any bills, expenses, checks or vendor credits will flow into the budget actuals for any projects you have linked.

Manually Entering Budget Actuals

If you aren't using QuickBooks, you can also manually enter your actuals into the budget.  The "Actuals" column on the budget is an open text field for you to record your numbers.

On a weekly basis (or more often), you'll want to pull a report from your accounting software and update the actuals-to-date for each project.  This will populate the information for your team - and clients on Open Book projects* - to understand where the job stands financially and utilize the budget to make decisions on work being done to help stay on track with costs.

By utilizing the budget to track your estimated versus actuals, you can empower your team to make better decisions on labor allocation, material purchases and other factors to help keep preserve your project profitability.  This also allows you to better understand the impact of events on your project profitability and identify mistakes to improve your performance on future jobs.

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