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‘The Next Normal in Construction’ was a report published by Mckinsey in 2020 and it states that 71% of construction companies believe that digital skills and making decisions based on comprehensive data reports will be the norm for their businesses and the industry, as a whole.
Forward-thinking leaders in the industry have recognized the importance of project decisions that are supported by data. One of the most irksome issues faced by the industry is the rate of project failures, which can be eliminated through the use of intelligence and analytics.
As an example, if the productivity of key resources like labor and equipment is directly tied to the success of the project, analytical comprehensive reports can help provide an estimate of potential delays, fatigue, and any overrunning of cost and time that can happen during the process.
Embracing digitization in the construction industry will also help companies to reduce labor costs through a more streamlined budgeting system, mitigating risk by simplifying legal and internal policy compliance and enhanced scheduling optimization of employee shifts.
Some typical challenges faced by every average construction project are cost overruns and delays, usually impacting the project delivery. In many cases, these issues can be caused due to a lack of communication and transparency between the parties involved in the project during various stages of its development.
Project reports help companies to steer clear of many of the above issues by the sheer value of their contents. Typically, project reports are referred to as a set of tools that aim to gather information, compile and integrate information and distribute it to the people in charge to get a clear picture of the project. A well-done project report streamlines information flow resulting in highly effective planning and problem resolution for the project.
The following is a list of benefits gained from an effective project reports
Construction projects are a massive undertaking at any scale as they require multiple different participants and moving parts to fulfill the end goal. Managing the supply of raw materials and the availability of construction equipment is paramount for any company’s success in the current market. This is where material and inventory reports come in, as they allow you to know what level of inventory you will require to file the next order as well as provide you with the supplies that guarantee the lowest carrying costs.
Some of the benefits of utilizing inventory reporting software like TallyPrime are:
These are reports that are a key factor in understanding the overall profitability of any project that you are willing to undertake. A cash flow report allows you to more effectively manage relevant project costs like revenue, risk, and cash flow forecasting with features that enable you to compare and contrast the project’s performance over a set period of time.
There are 3 types of financial activities on a cash flow report:
Operating refers to the normal everyday financial activity that occurs during the course of your business activity like sales income, cost of goods sold, taxes, etc. Investing refers to fixed asset purchase and sales. Financing activities include the sale of stock and debt options.
TallyPrime provides you with a financial analysis report throughout the entire existence of all your projects, from the signing of the tender to its completion.
The report also indicates the net gain or loss in each of the above-mentioned categories of financial activity and analyzing these reports from previous periods is a good way for you to create an impression of what the future will look like.
TallyPrime is also capable of generating cash flow projections which work towards helping analyze cash flow trends to increase the benefits for the company.
At the most basic level an accounting report provides a business with information regarding the following accounting functions:
Although construction accounting involves the same basic principles as accounting in other industries, it does have certain concepts and challenges that are unique to the construction industry.
For example, construction firms usually try to aim for individually profitable projects that are often large and one-time deals only. This means that leaders of construction companies need accurate job costing and cost projections. In addition, many projects require accounting for revenue recognition and billing for projects that may last through multiple financial years and change over the course of their existence.
Thus, a system like TallyPrime which provides you integrated contract valuation capabilities and that can also generate work-in-progress accounting entries automatically is highly recommended for any builder or construction business looking to make their mark in a highly competitive field.
These basic reports are critical to profit and loss and TallyPrime software can ensure you have the data you require available at the tips of your fingers.
Although many successful construction companies have been doing things the traditional way for decades, the pandemic has shown the world that standard business practices mean nothing in a highly unstable environment. Construction accounting has a steep learning curve, but due to the modern software solutions available to the general public, there has been a change in the status quo of the industry.
Tally Prime enables industry leaders who are willing to adapt data analytics, business intelligence software, and smart accounting tools to lead the industry in a new direction where human insight will be utilized with data to provide maximum results and . You can also get a 7-day free trial of TallyPrime to experience the product.
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