The Power of Construction Job Status Reports

by: Smith and Howard

May 27, 2015

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It’s something we ask each other all the time: “What’s goin’ on?” But, on a construction project, this phrase is more than just a friendly greeting. It’s an essential question with implications about what’s happened so far and where the job in question is going.

Naturally, determining what is going on regarding the progress of a project needs to involve more than just a verbal exchange. Every construction company needs to respect the power of construction job status reports. These documents, clearly established and regularly refined, can mean the difference between keeping a good job rolling and letting a bad job happen.

Accuracy and timeliness

Right off the bat, two important criteria for job status reports are accuracy and timeliness. This is because two areas of job reporting that are most susceptible to errors regarding these criteria are costs to date and estimated costs to complete. Your accounting personnel charge costs to specific jobs on the basis of information gathered on-site, so the dependability of cost assessments lies with the project managers responsible for job status reporting.

Your company most likely already has procedures in place to maintain costs-to-date and estimated costs to complete information on a job-by-job basis. But the hectic operations of a work site can inhibit the consistency of these procedures. Inform your project managers that they should consider such procedures mandatory at all times.

Doing so includes ensuring that timesheets accurately identify hours worked on each job and maintaining job-specific purchase orders that identify the job number. Project managers should also update job-specific invoices that are identifiable by job number and don’t depend on purchase orders. 

To minimize errors when this information is recorded in job status reports, review cost reporting procedures regularly — at least monthly. If you find recurring problems or bottlenecks, seek the input of your project management and accounting personnel. The most regular users of this information are the best sources of solutions for its management.

Revised estimates

Estimated costs are subject to change. The original cost estimate isn’t expected to agree exactly with the actual completion costs. But make sure that job status reports reflect these changes in the estimate. Timely and accurate cost reporting enables the project manager, with the assistance of an estimator if necessary, to update estimates regularly to avoid nasty surprises when the final bill comes due.

Because most project managers are rewarded on the basis of profitability, they may be reluctant to reduce gross profit estimates. To avoid this, establish a system that recognizes and rewards project managers for their ability to identify problems and quickly develop new estimates.

Make it clear to your project managers that you understand that unforeseen problems may cause the job to become less profitable, not necessarily as a direct result of poor project management. The earlier these problems are addressed, the sooner solutions can be considered and profitability maintained.

Discussions and deadlines

Accurate information in construction job status reports is useless if they’re not provided to you by your project managers in a timely manner. Furthermore, providing information without taking action is equally useless. Hold weekly project management meetings to discuss the status of contracts in progress. Use job status reports to support these discussions.

In addition, establish deadlines to revise cost estimates, giving in-office personnel time to process pertinent information. A well-established, timely and thorough communications process can enhance the overall accuracy of your costs-to-date information and estimated costs to complete.

Needed improvements

So, with one of your current projects in mind, let’s try this again: What’s goin’ on? If you can answer in great detail with plenty of documentation to back up your thoughts, great. But if you feel that your job status reporting has slipped or could use some technology-related upgrades, now is as good a time as any to start making improvements.

Construction Accounting Services

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