The article was written by Herb Brownett. Herb is a nationally recognized author and speaker on construction finance and operations topics and the president of Brownett & Associates, LLC, a construction financial management consulting firm in Philadelphia, PA. He held CFO and controller positions with regional and national contractors for more than three decades and retired in 2017 as CFO of Brubacher Excavating. A Certified Public Accountant (CPA) and Certified Construction Industry Financial Professional (CCIFP), he was the past national chairman of the Construction Financial Management Association (CFMA) and the Institute of Certified Construction Industry Financial Professionals (ICCIFP).
Electronic field logs help contractors achieve valid, error-free reporting
Accurate job cost reporting is essential for successful financial management. In my experience, many companies not using electronic field logs in construction are plagued by their inability to capture two essential data points from the field.
Labour hours and equipment hours, the key building blocks of what are typically the two highest job cost items, are frequently inaccurate. This is because many contractors still rely on paper for construction time tracking and to record equipment hours. The paper must then be transported to the office, where someone enters the information into the payroll and job cost accounting systems. The manual data entry and handoffs introduce multiple opportunities for input errors and time delays.
Automation and an electronic process can eliminate input errors by cutting out the middleman, so to speak. Hours recorded in the field can post directly to job cost in the construction accounting system without redundant data entry. This is also more timely, as the delay in sending in paper timesheets and manually entering the data is eliminated.
This process ensures that the hours intended to be entered by managers in the field are in fact, entered, but it does not necessarily guarantee the hours are valid. Many systems for construction field tracking do not include built-in checks to validate the hours have been entered correctly, but there are solutions on the market that do and can activate these checks of the original hours as they deem appropriate.
For example, the software can alert users automatically about potential errors in labour time when:
- An employee’s total hours are not equal to the number of work hours based on start and stop times.
- Employee start or stop times are outside the time frame for the field log
- An Employee is already associated with another field log for the same date and time
- Employees have overlapping start/stop times on the field log
Similar examples of this error-check capability for equipment hours include:
- Equipment already associated with another field log for the same date and time
- Equipment with meter has no reading entered on the field log
- The equipment meter reading entered on the field log is less than the previous reading.
- Equipment meter hours do not match equipment operating hours reported on the field log
- Equipment meter reading hours entered on the field log are more than the hours elapsed since the previous reading.
By replacing a paper-based process with a specialized, electronic field tracking solution, contractors can ensure that labour and equipment hours intended to be entered into their accounting systems are in fact entered and that those hours are valid. As a result, the accuracy of these key job costs is greatly enhanced.
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