If asked to name the biggest hurdle facing the construction industry today, construction professionals likely will say there is more than just one, but the challenge that is currently on everyone’s minds is certainly inflation.
A ConstructionDive article refers to a “trifecta of pricing woes.” Author Chris Barnett writes, “Odds are steep that no bid will hold up in the face of 40-year inflation peaks, labor shortages exacerbated by COVID-19 and retiring workers and delivery delays of up to two years.”
Barnett also listed a few eye-opening statistics (as of March 2022):
- The Producer Price Index (PPI) rose 22% last year.
- Fabricated structural metal products climbed 42%.
- Iron and steel increased by 87%.
- Steel mill products rocketed to 127%.
- And softwood lumber saw a spike of 24% in December alone.
With soaring prices, how are construction businesses expected to make a profit? The answer is by utilizing modern technology—but not just any technology.
They should consider industry-specific cloud construction management software, such as an award-winning Cloud ERP solution, like Acumatica.
3 Ways to Fight Inflation with Acumatica
Understanding how Acumatica construction software can help construction businesses overcome incredible obstacles—both current and future—begins with understanding what construction ERP software is and what it does.
Construction ERP software is software that is purpose-built for construction professionals. It empowers businesses to manage major aspects of their business from financials, sales, and inventory to subcontractor and customer relationship management. Since construction ERP is cloud-based and acts as a single-source-of-truth, data is available in real time and accessible by employees in the office and out in the field.
So how does Acumatica Construction ERP help construction companies fight inflation? Read on to find out.
1. Financials and Reporting
With Acumatica Construction ERP , construction professionals have standard financial processes and reporting capabilities available out-of-the-box as well as the option to customize reports to suit their unique needs and challenges. Having the ability to effectively manage financials with standard as well as customizable reports keeps accounting data front and center and fully accessible in real-time.
Construction professionals no longer need to estimate a picture of their financial health. Instead, their financial data is readily available and easily accessible, which makes it easier for business leaders to make strategic decisions that can affect their company’s financial health. And with inflation causing increases to material costs and with margins shrinking, business decision makers need financial tools they can rely on.
2. Job Costing
Job costing is a time-intensive task encompassing the tracking of material, labor, and overhead costs of every project. Many construction companies have often relied on outdated or siloed systems resulting in inefficient manual processes or outright data inconsistencies and errors. Implementing Acumatica’s cloud construction management software helps construction companies eliminate costly accounting errors and allows construction accounting professionals to effectively track costs and keep projects in the green.
With inflation at a record high, accurately managing job costs is more important than ever. Being able to track costs in real-time provides project managers with the insights they need to make business decisions that have the potential to impact profits, profits that are already reduced by inflation.
3. Inventory Management
Managing inventory is one of the most complicated aspects of any business and becomes even more so when companies rely on disconnected solutions, manual processes and error-prone spreadsheets. The resulting inefficiencies and inconsistencies negatively impact employee productivity and can affect profitability.
As with job costing, implementing Acumatica’s construction business management software eliminates ineffective inventory strategies and enables construction professionals to automate their inventory management needs, including replenishment, location management, inventory valuation and more. Further, Acumatica’s mobile app provides construction businesses with 24/7 access to their inventory data, giving them full visibility into their inventory and the ability to update and monitor their inventory whether they’re in the office or out in the field.
As inflation continues to raise the stakes for the construction industry, effectively manage inventory—thus, reducing waste, improving accuracy and increasing customer satisfaction—is a critical component to succeeding in today’s unpredictable economy.
Succeeding with Cloud Construction Management Software
Ultimately, Acumatica’s cloud construction management software’s financial/reporting, job cost accounting and inventory management capabilities are exactly what construction businesses operating in today’s economy need to succeed.
Acumatica’s Senior Director of Product Marketing Divya Ganesh addresses the benefits of cloud-based ERP solutions noting that organizations will have:
- Planning and forecasting capabilities for managing inventories/resources, supplier deliveries, and production schedules.
- The information and flexibility necessary to adjust to changing circumstances.
- The ability to analyze data, assess operational constraints, and determine alternative solutions.
NexTec Group can confirm these benefits. With over 28 years in ERP consulting and as a gold-certified Acumatica Cloud ERP implementation partner, we know Acumatica can help construction businesses jump over the ongoing economic hurdles. Efficient and effective management, automated processes, a single source of truth via a fully integrated solution all add up to critical cost savings, which will hold them in good stead as inflation woes continue for the foreseeable future.
To learn more about NexTec and Acumatica, contact our experts with any questions or to schedule a demonstration. We’d love to chat.