Construction Company Gains Project Cost Control
A mid-sized construction firm implemented project-based accounting and job costing for better financial control, dramatically reducing cost overruns and speeding up invoicing.
20%
Cost overrun reduction
Real-time
Project visibility
5 days
Faster invoicing
Client Background
This commercial construction company manages projects ranging from $500K to $10M, including office fit-outs, retail construction, and industrial facilities. With 15-20 active projects at any time, they needed precise job costing and project profitability analysis. Their existing systems couldn't provide the real-time visibility needed to proactively manage project financials.
The Challenges
Before implementing the solution, the client faced several critical business challenges
Project costs tracked manually in spreadsheets
Cost overruns only discovered after project completion
Subcontractor invoices difficult to match to projects
Progress claims prepared manually taking 5+ days
No visibility into committed costs vs budget
Retention management done outside the accounting system
Our Solution
We implemented SAP Business One with project management capabilities specifically configured for construction industry requirements. The solution provides real-time project costing, progress billing automation, and retention tracking.
Key Components
- SAP Business One with project management module
- Job costing with cost code structure
- Committed cost tracking for purchase orders
- Automated progress billing and claim preparation
- Retention management and tracking
- Project profitability dashboards
The Results
The project-based ERP solution delivered significant improvements in cost control, cash flow, and project visibility.
Cost overruns reduced by 20% through early visibility
Real-time view of project costs vs budget
Progress claims prepared in 1 day instead of 6
Committed costs visible before invoices arrive
Retention tracking automated and accurate
Project managers can access financials on mobile
"We used to find out about cost overruns when it was too late to do anything about them. Now we can see issues developing and take action. Our project managers love having real-time financials, and our cash flow has improved significantly."
CFO
Commercial Construction Company
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