Construction industry professionals, project managers, administrators, and coordinators face daily challenges when managing multiple contracts. Billing requirements, vendor compliance, payroll approval, and accounts receivable must all be arranged, and organized to generate positive cash flow procedures, however, the successful accomplishment of these tasks generally requires hours of data entry and processing to transfer the correct information to the proper authority for approval.
In today’s world, cost-cutting measures and making the most of existing resources have become the order of the day. It’s often difficult to find the resources to dedicate to comprehensive planning, budgeting and forecasting.
If you’re like most construction businesses, you rely heavily on the familiar spreadsheet for just about all of your performance management needs (strategic planning, financial reporting and even, project management).
However, this exposes many organizations to significant levels of risk. Spreadsheets require labor-intensive manual processes, are highly error-prone, are difficult to consolidate, exhibit poor or invalid data integration and lack access and version control.
Auditing your planning and forecasting processes can help you evaluate whether your systems are keeping up with your business needs. Take a step back and consider the following questions:
How do you build plans, budgets and forecasts? You will probably find a multitude of spreadsheets designed by a handful of “power users” all across your functional units.
Where is this data stored? Do you have confidence in your data? If key financial data and budgets are stored in a variety of two-dimensional spreadsheet files using unreliable links and complicated macros, your financial data is at risk.
How do you update plans, budgets, forecasts, reports and analyses? As any of your business users will tell you, revisions can be even more complex than doing things the first time. It’s often difficult to understand or re-create the logic of the spreadsheet’s creator.
How timely and useful are your spreadsheet-based plans, budgets, forecasts, reports and analyses? They’re probably out of date by the time the “final” version is approved, printed and distributed.
Often, managing spreadsheet risk need not be an “either/or” proposition—an impossible choice between high-risk spreadsheets and the perceived high-cost of new planning, budgeting and forecasting applications. Especially at a time of budget belt-tightening, flexible and cost-efficient performance management can be achieved by leveraging the best of your existing spreadsheet investment with an integrated, full featured planning, budgeting and forecasting solution. Interested in more Construction Industry tips and tricks? View our free 30-minute On-Demand Webinar on Financial Forecasting, here.