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In the words of Benjamin Franklin: “An investment in knowledge pays the best interest.”
Hard work, opportunity, and good luck are great, but success in construction is predicated on knowledge, and an understanding of the company, the market, and its opportunities. This means having knowledge of the health of projects, knowledge of your team and its capabilities, knowledge — and understanding — of your financial current state, and more.
Unfortunately, construction is an industry rife with things that muddy the big picture views of finance that you need to perform best. Construction is unlike any industry when it comes to finances, how revenue is accrued and what you need to know, from a financial perspective, to succeed.
Maybe that’s why it’s not so surprising that so many companies in our industry struggle to attain clarity around their finance. With so many moving pieces and elements, countless variables, and so much to be overlooked, lost, or forgotten over the lifecycle of a project — let alone dozens of projects — it can be too much for human minds to keep track of. Still, that’s how many organizations do it, with unhappy results.
40 percent of CFOs say their financial forecasts aren’t “particularly accurate.”
McKinsey & Company
The answer then is fairly straightforward: don’t depend exclusively on human minds to know everything. Gaining transparency into (and a deeper understanding of) the organization’s finances requires the best of people, processes, and technology — all working together.
Here are three things you can easily do to gain a greater understanding of your finances.
1. Get on the cloud
Take advantage of technology — not just Excel sheets and ERP — by connecting systems and replacing old paper-based processes. Many construction companies are figuratively buried in paper, unable to make full use of what’s in those little spreadsheet cells in a timely and relevant way. A cloud-based solution, like Briq, can connect all your different software tools, allowing vital information to be shared in real-time, not just whenever that report finally crosses your desk.
2. Learn from the past...
Construction companies today collect almost ridiculous amounts of data, but it tends to go off into one of those paper-based reports where it spends the rest of its years unused. Instead, look at every piece of project data as an opportunity to improve future projects. Take advantage of data science to turn all that historical information you’ve already gathered in your project management solutions, ERP systems, CRM, and accounting tools into insights.
3. ...to predict the future!
Armed with both real-time current data and historical data you can use analytics to start to see patterns. What worked? What didn’t? What locations, or types of projects, or which clients are prone to dragging out payment cycles. All of this in turn allows you to make better forecasts and predictions that decision-makers can turn into actionable insights — making the choices that lead towards success.
These capabilities grow as the organization gains greater clarity into finance and skill at using data science. Initially, you’ll uncover patterns that explain what is going on, over time as you become more literate in data science, your analytics will become more predictive and prescriptive, answering why and what to do to avoid (or achieve) things.
Want to learn more about how Briq and cloud-based financial automation can lead you on the path to greater financial clarity? Check out our recent eBook.
Or to try Briq out, schedule a demo with one of our specialists at briq.com/demo.