2021-FEB-NL-HERO

Snowed in? Catch up on our February 2021 Newsletter! Click links to jump to articles.

 


Top Strategies for Avoiding Construction Contract Disputes

 BY  | Reprinted with permission from Procore Jobsite | Original post here.Avoiding-Construction-Contract-Disputes

Contracts pose a major source of conflicts and disputes. Often, the reason is that construction companies don’t administer and manage their contracts. If you adopt some proactive habits regarding your contracts, you can nip a lot of the problems in the bud.

Decide What Success Is

Each project involves multiple contracts. If you are a GC, you’ve got contracts with owners and subcontractors, potentially with others as well. If you are a specialty contractor, you have contracts with GCs, specialty subs, and maybe even suppliers.

A major consideration in contract administration is knowing when a contract is right for you. A contract should support your business and project goals. A poor quality contract, on the other hand, is rife with risks for conflicts and disputes. To get more control over contract quality, you need to know what partners and contract wording work best for you.

First, get picky about choosing your partners. It costs you to sign contracts with parties who don’t deliver on quality. It costs you even more to sign contracts with partners who can’t meet the schedule or require a boatload of changes. Third parties, such as unresponsive designers and engineers, come along with owner contracts. When owners don’t make your needs important, it also costs you. Wisely choosing the parties to your contracts is a smart step in successful contract administration.

Then get aggressive about contract negotiations. Some contract wording isn’t fair to you and increases your risks. Your legal counsel can help you restructure contracts during contract negotiations so you get treated fairly.

Thoroughly Review the Contract

It’s easy to fall into the trap of assuming you know what’s in the contract simply by skimming the section heads. You might be very familiar with the standard clauses used in construction contracts. However, each of those clauses is custom-tailored to each project, and so there is a lot of variation between contracts. Some more onerous clauses include indemnification and dispute resolution, but every clause holds some risk.

Do a contract review with all the key people working on the project. These are the people who would likely decide on factors directly affecting the contract. They need to understand their portions of contract management, especially when it comes to the processes required to comply with the contract. This is a good time to mark up your calendars showing key dates related to your obligations or rights. Filing change order paperwork too late or failing to substantiate a claim within the specified time will likely cost you in more ways than one.

Manage the Contract

If you want to manage a contract, you need to know where your risks lie. You also need to have a contract management system that addresses the concerns, needs, and goals of everyone involved in contract management. For instance, a project manager might deal with the change order clause at a top level, while the superintendent must deal with all the details. The contract management system must respond to both of their needs and goals.

Alerts, notifications, and reports make up the backbone of a contract management system. Using Procore, you can quickly and easily set up reminders on contract deliverables and deadlines. You can also build out lists for notifications to make sure everyone gets the reminders on time. By using custom reports, you can create records of activities related to each contract. These reports can help fill in end-of-project reports on contract performance.

Do A Post Project Contract Assessment

If you do a thorough assessment of each contract at project closeout, you can find all the instances where the contract fell short and where it met or exceeded your expectations. Whenever you renegotiate or renew a contract, you can modify it to improve outcomes. A GC doesn’t have to use the same contract repeatedly with the same subcontractor. The same goes for the specialty contractor working with a single or multiple GCs. When you evaluate contracts, you find instances where you might tweak them so you get better performance.

Was the deadline for mockups unrealistic? Did the plumbing specialty contractor always meet contract deliverables deadlines? Was there too much time allotted for discovery? Did some parties take advantage of soft claims procedures? Wherever the contract terms didn’t fully support the project or business goals, you might improve the contact wording or requirements. Do that enough, and you’ll start having fewer contract headaches.

Many contractors make the mistake of signing contracts and filing them. But if you treat them as living documents with terms and conditions modifiable from one contract to the next, you can reduce potential disputes and conflicts. More importantly, though, they will fit your business and project goals more closely as a result.

 


How to Stay Ahead in Today’s Changing Construction Industry

Reprinted with permission of Hyphen HomeFront | Original article here.

Work smarter to protect profitabilityroofer-framing

The business of managing residential construction is not standing still and neither can you. As technological advances and competition accelerate, construction companies must work smarter to protect profitability.

Raw materials are becoming scarcer, and costs and delivery times are rising, putting pressure on construction companies to make efficient business and financial decisions. An industry that has historically relied on experience-based guesstimates is now facing a growing need to harness real-time, detailed, and actionable data. Having access to data on past job costs, trends in materials costs, delivery options and ways to cut other project expenses can be the difference between making and losing money.

Data is one piece of the solution and efficient management is another. Project management software is already a mainstay in many industries but has been slower to impact the unique and complex residential construction industry. However, the development of software designed specifically for residential home builders, contractors, and subcontractors of all sizes is changing that. An integrated cloud-based system that combines project management and financial management solutions can enable you to effectively manage residential projects from estimates and purchase orders through scheduling and crew dispatch, all the way through progress tracking, job costing, payments, and invoicing.

Fully integrated residential construction ERP — integrates with Sage Intacct

Hyphen_Homefront_Big-Product

Now you can combine Sage Intacct Construction with Hyphen HomeFront — a fully integrated residential construction ERP software — for the capability to:

  • Customize reporting and insights through customizable, real-time dashboards
  • Make continuous consolidations and hone in on specific entities, job sites, properties, etc.
  • Streamline processes across all projects to meet your specific requirements, provide insight and comply with regulations
  • Access reports and data anytime, anywhere

Interested in learning more? View the recorded webinar or schedule a demo to talk to a Hyphen Solutions expert about how adopting Hyphen HomeFront gives you all the tools you need to build homes efficiently, sell homes quickly and enable your business to excel.

 


New Home PSI: New home sales continue to outperform, up 44.9% year-over-year!

Reprinted with permission from Zonda and Meyers Research. | Original article here. | SHARE

The New Home Pending Sales Index grew 0.7% month-over-month and 44.9% year-over-year. Work-from-home, low interest rates, healthy home equity, a robust stock market, and favorable demographics are the primary drivers of today’s housing strength.

zonda-sales-index-4

 

New Home Pending Sales Index for select markets

The universal housing strength continues.

  • The best new home markets in November were Jacksonville, Raleigh, and Atlanta. The top three markets provide great relative value.
  • Of the top 10 markets in the country, six are in the Southeast. The region was a migration magnet pre-pandemic and the trend has only grown.
  • New home sales have surprised to the positive in Los Angeles, Orlando, San Francisco, Washington, DC, and Houston, some of the metros that are the least recovered in terms of employment.

new-home-index-selected-markets

“Builders in some markets are starting to see modest signs of a seasonal slowdown from decade-highs, but demand is still far stronger than the levels seen last year. Looking ahead, 2021 is expected to be another good year for housing with supply as the limiting factor.” — Ali Wolf, Chief Economist at Zonda Economics

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Editorial note

We at ETHOSystems, attend the National Housing Outlook and the COVID-19 Housing Outlook webinars — faithfully! Chief Economist, Ali Wolf, and Senior Managing Principal, Tim Sullivan are extremely professional and knowledgeable as presenters. The data is always relevant and presented in a friendly and consumable manner.

Sign up for their newsletter to get housing market updates, new blog posts, and event alerts.

 


 

 


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CAN’T MAKE AN EVENT? SIGN UP ANYWAY, AND WE’LL SEND YOU A LINK TO THE RECORDING!

 


Virtual Roadshow and Free Lunch with GCPay!

February 18th, 9 am MST | 10 am CT

See how GCPay can eliminate the below issues and seamlessly integrate with your Sage CRE and Sage 100 Contractor software.

GCPay Roadshow Agenda
  • What is GCPay?
  • Common Pay App Issues
  • GCPay Solving Pay App Issues
  • Live Demo
  • Q&A
  • Free lunch!

Any Sage 300 CRE/Sage 100 Contractor customers who attend will be sent a digital $15 GrubHub gift card after the webinar ends – good up to a week after!

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Can’t attend? Register anyway, and we will send you a link to the recording! 


 

Streamline your work order process with Sage Service Operations

February 25th, 9 am MST | 10 am CT

  • Sage’s cloud application for SSO
  • Real-time integration between field and office
  • Get rid of the whiteboard for dispatch management with the dispatching tool
  • Turn quotes into work orders with a click of a button

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Can’t attend? Register anyway, and we will send you a link to the recording! 



New on the ETHOSystems YouTube channel

Access to webinars, demos, and thought leadership topics! View them here, and don’t forget to subscribe while you’re there — we need at least 100 followers to get a ‘vanity’ url with our name in it!

New this month:

 

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accounting-tips-

View your financial statements through the right lens

January 28, 2021 February 2, 2021 Accounting & Assurance Department | Reprinted with permission from BeachFleischmanfinancial-statement-lens

Many business owners generate financial statements, at least in part, because lenders and other stakeholders demand it. You’re likely also aware of how insightful properly prepared financial statements can be — especially when they follow Generally Accepted Accounting Principles.

But how can you best extract these useful insights? One way is to view your financial statements through a wide variety of “lenses” provided by key performance indicators (KPIs). These are calculations or formulas into which you can plug numbers from your financial statements and get results that enable you to make better business decisions.

Learn about liquidity

If you’ve been in business for any amount of time, you know how important it is to be “liquid.” Companies must have sufficient current assets to meet their current obligations. Cash is obviously the most liquid asset, followed by marketable securities, receivables, and inventory.

Working capital — the difference between current assets and current liabilities — is a quick and relatively simple KPI for measuring liquidity. Other KPIs that assess liquidity include working capital as a percentage of total assets and the current ratio (current assets divided by current liabilities). A more rigorous benchmark is the acid (or quick) test, which excludes inventory and prepaid assets from the equation.

Accentuate asset awareness

Businesses are more than just cash; your assets matter too. Turnover ratios, a form of KPI, show how efficiently companies manage their assets. Total asset turnover (sales divided by total assets) estimates how many dollars in revenue a company generates for every dollar invested in assets. In general, the more dollars earned, the more efficiently assets are used.

Turnover ratios also can be measured for each specific category of assets. For example, you can calculate receivables turnover ratios in terms of days. The collection period equals average receivables divided by annual sales multiplied by 365 days. A collection period of 45 days indicates that the company takes an average of one and one-half months to collect invoices.

Promote profitability

Liquidity and asset management are critical, but the bottom line is the bottom line. When it comes to measuring profitability, public companies tend to focus on earnings per share. But private businesses typically look at profit margin (net income divided by revenue) and gross margin (gross profits divided by revenue).

For meaningful comparisons, you’ll need to adjust for nonrecurring items, discretionary spending and related-party transactions. When comparing your business to other companies with different tax strategies, capital structures or depreciation methods, it may be useful to compare earnings before interest, taxes, depreciation and amortization (EBITDA).

Focus in

As your business grows, your financial statements may contain so much information that it’s hard to know what to focus on. Well-chosen and accurately calculated KPIs can reveal important trends and developments. Contact us with any questions you might have about generating sound financial statements and getting the most out of them.

BeachFleischman 2201 E. Camelback Rd. Phoenix, AZ 85016 | 602.265.7011 | http://beachfleischman.com | twitter: @BeachFleischman

 


 


Scheduling reports in Sage 100 Contractor

Use ‘Scheduling’ function for reports efficiencyschedule-reports

Reports are the life-blood for all of us in the construction industry. Sage 100 Contractor provides for detailed accounting and project management reports. But many clients can become bogged down with time constraints needed to run every report for each person in the office.

So what can be done to keep our much needed reports from becoming too much of a good thing? Consider utilizing scheduled reports. By scheduling the reports, accounting and project management information can be available at the drop of a hat. As long as the computer is on, Sage will process the report and either print, e-mail, or fax the report at whatever time you specify.

5 simple steps for setup:

  1. Select the report that you want printed on a pre-determined schedule
  2. Click File, then Scheduling.
    • Note: Reports that have an option selection are unavailable to be scheduled because there are programming restrictions behind the report. Contact your consultant if you would like to convert a locked report into a version that can be scheduled.
  3. Next, set the output options and determine the schedule for when the report should run.
  4. Identify how often you would like the report to run.
  5. Enter your Windows credentials (how you log into your computer) and click Save Schedule.

Need help with Sage CRE software? Click below.

 


 

Cleaning up open AP and AR aging reports

by Kyle Zeigler, Sage Senior Certified Consultant

As part of their year-end processes, many of our clients are spring cleaning, as in cleaning up open AP and AR aging reports.cleaning-reports

AR aging

Cleaning up the Accounts Receivables aging, in particular, can be confusing and troublesome for Sage 300 CRE users, especially if this hasn’t been done in a while. Do you edit, void, or use an adjustment to make corrections to invoices, retention, or over/underpayments? For outstanding transactions in prior accounting periods, edits or voids are not likely the right choice, but then what adjustment type is going to produce the desired results? The good news is that the best resource available for selecting the proper adjustment type is right at your fingertips.

It’s right in the AR’s Help function

For immediate help with understanding AR adjustment types, go to the AR application and launch Help. On the index tab, enter the word “adjustment” and look for the “adjustment types” topic that will be included in the list of topics. Double-click to open this topic and you’re on your way.

Ask yourself these questions…

The main rule for selecting an adjustment type is to first determine whether you want the adjustment to affect the customer only, accounts receivable only, or billed information in Contracts and Job Cost. That is, do you want the accumulated totals to be increased or decreased on the customer, contract, or job, or do you just want the total accounts receivables to be increased or decreased without changing the total amount billed on the customer, contract, or job? Other questions to ask might center on whether you are adjusting an invoice now on a contract or job that will be invoiced again in the future, or whether the contract or job is completed and you are now correcting overbillings or adjusting negotiated customer discounts or other such scenarios.

By reviewing the information in the “About adjustment types” Help topic prior to making an adjustment and understanding the effect of the adjustment on the customer, accounts receivable, contract and job cost billed totals. You can then select the proper adjustment the first time and avoid the frustration of trial and error and worrying about the results — a much cleaner approach to spring cleaning in Accounts Receivable.

If you need any assistance with cleaning up your old reports in your Sage 300 CRE software, please contact Support@ETHOSystems.com.

Need help with Sage CRE software? Click below.

 


sage-estimating-tips-1500

BIM’s been around the block!bim-axis

Building information modeling (BIM) has been around for about 40 years now. Yes! You read that right – 40 years. Though in the 1970s when the concept was developed, BIM (as we know it today) wasn’t really implemented until the late 1980s. So I guess we can say, it has been a little slow taking hold. However, as time has zipped on and technology has improved, BIM implementation has rapidly increased.

Job cost estimating benefit

Building information modeling started as a production of 3D design models to help catch architectural system variances and clashes. Since then, it has become an effective tool in project management and ever more prominent in job cost estimating.

Traditionally, estimators begin their process by doing manual take-offs or digitizing architectural construction drawings. Or possibly, they may be importing CAD plans into an estimating software package. The thing about these processes is that they all have higher risk of error by way of unknowingly incurring an omission or duplication. This has the potential to logarithmically propagate cost errors throughout the estimating process.

Using a BIM solution can significantly reduce (though not completely deny) human error. As the project experiences changes, as they always do, the model can be updated. If properly configured, the BIM should update the takeoffs, schedule, and costing data for the project as the changes occur.

Integrates to accounting

After the BIM is established, pricing information is the next critical set of data that needs to be considered. Estimators can extract the quantities provided by the building information modeling solution and output the information via linking it to a product such as Sage 300 CRE. From there, an estimator may generate estimates based on historical data.

Some of the most critical tasks in estimating are having accurate and current takeoff information and applying that to accurate pricing and scheduling data. BIM solutions can help to make the quantification tasks easier and more accurate. The integration of this data into an estimating solution can mean that estimators are more accurate and can spend their time and knowledge doing higher-value activities.