Profit leaks are a constant threat for construction and real estate development firms. Leaks can come from multiple sources, including untracked change orders, inaccurate labor hours, material waste, and delays. While strong processes are essential for identifying and controlling these leaks (which we dove into in our other blog on profit leak management), technology has become an indispensable tool in the battle to retain revenue. A recent Deloitte study found that construction businesses that invest in new technologies see higher revenue growth, higher profit growth, and more projects delivered on time and under budget.
Here, we’ll explore how the right tech solutions — like Sage Intacct Construction and supplementary industry tools such as Sage Construction Management — help your construction firm tighten control over its projects and plug costly leaks.
1. Project management software for real-time tracking and collaboration
Real-time project management platforms (such as Sage Construction Management (formerly Corecon) and Procore) provide centralized systems for tracking everything from budget updates to daily labor hours. These platforms allow all stakeholders — project managers, subcontractors, clients, and suppliers — to collaborate on the same system. By offering a single source of truth, project management tools make it easier to spot inconsistencies, missed deadlines, and cost overruns before they become major issues. For instance, teams can see if labor costs exceed budget expectations or if certain tasks lag, giving managers a chance to course-correct quickly.
Sage Intacct Construction also provides powerful project tracking and budgeting capabilities, allowing firms to closely monitor expenditures in real-time. With the ability to track financial and operational data simultaneously, project managers gain a holistic view of the project’s health, spotting profit leaks early and making data-driven decisions to prevent future leaks.
2. Financial management software to automate routine tasks and boost accuracy
Financial management software reduces errors, automates manual processes, and provides accurate cost allocation. Tools like Sage Intacct Construction offer advanced automation features that streamline billing, expense tracking, and revenue recognition. Automation minimizes the risk of human error, a frequent source of leaks, especially on complex projects with multiple phases and budgets.
Another key benefit is management by exception, which Sage Intacct Construction underpins by flagging outliers and deviations from budget expectations. By automating routine tasks and centralizing financial data, your firm can dedicate its focus to high-impact issues, reducing the time spent on menial data entry and report generation.
3. Change order management tools keep track of every adjustment
Untracked or poorly managed change orders are a notorious source of profit leaks in construction. A formal system to document, approve, and monitor change orders is essential for staying on budget. Many project management tools offer built-in change order management features that keep track of all changes, from minor adjustments to major project revisions.
Sage Intacct Construction also provides change order tracking tools, which enable managers to capture each change’s impact on budget and schedule in real-time. With clear documentation of every adjustment, your firm can bill clients accurately and be sure that additional work is factored into the overall project cost, preventing revenue from slipping through the cracks.
4. Labor tracking and scheduling software to maximize workforce efficiency
Labor is one of the largest expenses in any construction project, and inefficiencies here can quickly lead to profit leaks. Modern time tracking applications allow firms to track labor hours accurately, set schedules, and monitor productivity in real-time. By integrating labor tracking into the broader project management platform, you can be sure that you use your workforce efficiently, minimizing overtime and avoiding the costs associated with underutilized labor.
When integrated with time-tracking solutions, Sage Intacct Construction offers a complete view of labor expenses as they occur. This integration lets your managers detect labor inefficiencies immediately and adjust workforce deployment to prevent budget overruns tied to labor costs.
5. Material management systems reduce waste and elevate accountability
Material costs can account for a significant portion of a project’s budget, and waste or over-ordering can lead to substantial losses. Material management systems provide tools for tracking material usage, preventing overstocking, and minimizing waste.
In addition, Sage Intacct Construction’s inventory and material tracking capabilities allow construction firms to monitor material costs across all project sites, enabling them to detect patterns of waste or overuse. Increased visibility means you can allocate materials more accurately, reducing the risk of costly overages or shortages leading to project delays.
6. Data analytics and reporting deliver insights to prevent future leaks
While many construction firms have access to vast amounts of project data, not all are leveraging it to its full potential. Advanced analytics platforms, like Domo or Power BI, can be integrated with Sage Intacct Construction to deliver detailed insights on project costs, timelines, and profitability metrics. By analyzing past projects and identifying trends, firms can learn where leaks are most likely to occur and strategically adjust future projects.
Data-driven insights allow your project managers to evaluate the efficiency of current processes, measure the effectiveness of new strategies, and continuously improve performance. Firms that use data analytics are better positioned to anticipate potential problems, forecast costs accurately, and optimize resource allocation — minimizing profit leaks across all projects.
7. Document management systems boost compliance and transparency
Document management systems like Sage Paperless Construction help construction firms centralize and manage their project documentation, from contracts and permits to change orders and inspection reports. When documentation is scattered across various platforms or stored in physical form, it’s easy to lose track of essential paperwork that could affect project costs and timelines.
With Sage Intacct Construction, your firm can link documents directly to financial transactions and project records, boosting transparency and making it easy to retrieve documents for audits, compliance, or client reviews. Document centralization makes all project information accessible from one place, reducing the risk of costly oversights and keeping every team member on the same page.
Lockdown leaks
Construction and real estate development firms face a range of challenges in keeping projects on budget, but the right technology can help minimize profit leaks and optimize financial health.
Sage Intacct Construction brings these functions together into a unified platform, enhancing firms’ ability to manage by exception and focus on high-impact issues that drive profitability. By combining solid business processes with the best technology solutions, your construction firm can seal those profit leaks and set yourself up for long-term success. Contact us to learn more.
