"Once contractors have multiple, long-term jobs in play, tracking retainage and making sure they get paid what they are owed becomes very difficult. In fact, this is where a lot of construction businesses end up losing money or running into cash flow issues."
-Chris Lee, founder and CEO of CrewCost
IRONPROS:What challenges are construction businesses facing these days when it comes to keeping their projects profitable? What factors make profitability difficult in construction projects?
Lee: Construction is a cash-intensive, high-risk business and factors like rising material costs, project delays and inaccurate cost estimates can quickly put a contractor out of business. The lack of construction-specific financial tools that cater to small and mid-sized contractors' unique needs makes it even more difficult to track costs and manage finances effectively.
CrewCost addresses these challenges by providing an affordable, modern accounting solution designed to meet those challenges head-on, helping contractors take control of their cash flow and improve their profitability.
IRONPROS: How can businesses use CrewCost construction accounting software to protect or boost project profitability?
Lee: CrewCost is project-centric, just like construction, so it makes it easy to manage and track project budgets, work-in-progress reports, change orders, retainage, and progress billings. Then, it rolls all that project information up into reporting on the overall company so that contractors can understand their profitability at a high level all the way down to the tasks within a project.
Ultimately, we built CrewCost to help construction businesses make informed financial decisions and reduce cost overruns by providing real-time insights into how each job impacts overall profits. This enables contractors to identify and address potential issues early, safeguarding and boosting project profitability.
IRONPROS: Can CrewCost accounting software protect businesses from the hidden risks of carrying out projects in an inflationary environment? Explain.
Lee: Yes, one of the big risks in construction is how much costs can fluctuate. By providing integrated job costing and time-tracking features within the accounting software, CrewCost enables contractors to closely monitor and manage committed costs, track price fluctuations in materials and labor and adjust budgets accordingly. The software's real-time insights into project profitability helps businesses stay informed about cost changes and mitigate the risks associated with inflation.
This proactive approach allows contractors to make timely adjustments, manage budgets more effectively and protect their profitability despite the challenges of an inflationary market.
IRONPROS: What are the benefits of retainage tracking?
Lee: A large portion of a construction company's profit margin is normally tied up in retainage. Once contractors have multiple, long-term jobs in play, tracking retainage and making sure they get paid what they are owed becomes very difficult. In fact, this is where a lot of construction businesses end up losing money or running into cash flow issues. In CrewCost, we automated a lot of the tracking with retainage, so all a contractor has to do is look at a job and see how much retainage is outstanding.
This rolls up into the company balance sheet so they can see how much retainage is unbilled across all their jobs and makes it easy to create a retainage invoice to bill for what they are owed.
IRONPROS: What should businesses know about adopting and implementing accounting software in their operations?
Lee: Construction is complex and most construction-specific software is also complex and difficult to adopt. On the other hand, the generic software solutions seem simple but end up needing a bunch of spreadsheets and workarounds to make them work for construction. I recommend that business owners make sure they understand the following:
- How much does a company charge to implement their software upfront?
- How much training is required for your team to learn how to use the software?
- Is it cloud-based so that your team can access the tool from anywhere?
CrewCost is designed to work out of the box and is affordable for emerging contractors without weeks of implementation or hefty fees.
IRONPROS: Please provide an overview of CrewCost and its mission.
Lee: CrewCost is a cloud-based, modern accounting software specifically designed for small and medium-sized construction contractors. Launched in July, CrewCost integrates accounting, job costing,and time tracking into one affordable tool.
As a former construction business owner, I experienced firsthand the operational and financial challenges of running a contracting business. On the financial side, I tried integrating point solutions, using spreadsheets and hiring costly external help–a frustrating process that took valuable attention away from other parts of the business.
We built CrewCost to offer a solution to this common problem and level the financial playing field for small and medium-sized contractors. Our mission is to provide modern and affordable accounting products that help contractors build profitably.
IRONPROS: What can customers expect from CrewCost in 2024 and beyond?
Lee: We are working on a feature that leverages AI to read receipts and vendor bills and then automatically create the accounts payables, which will massively reduce the amount of data entry in the back office. After that, we're building integrations with construction management platforms that provide contractors with estimating and project management capabilities.
