Cost Management Techniques & Segregation Analysis

Cost management techniques for the construction industry

To be successful, contractors, need to fully understand where they are making money and where they are losing money. With strong competition, you can’t afford mistakes.

Plante Moran has a cost management consulting team that specializes in middle-market construction companies. The professionals on the team come from a range of disciplines providing a comprehensive approach to your challenges with the efficiency of “one-stop” shopping at a competitive cost. Below are just a few of the services our construction team can offer to help you thrive, during these tough economic times.

Cost estimating models

Correctly estimating and reporting costs has always been important to the success of a construction company, but you are competing with companies who, too often, are willing to accept razor-thin margins..Effective bidding is critically important.

Our consultants can help you better understand the factors that drive cost, how to manage them, and determine just how low you can go on your next bid. You also can rely on them to help you identify and mitigate risk as well as apply contingencies.

Unfortunately, many contractors are finding out the hard way that at today's margins you have to sell an awful lot of work to offset a loss incurred on a job, whether due to poor bidding practices or poor execution.

Field data collection and project performance reporting

We like to quote a very successful contractor client who says: “It is essential that you know what you did yesterday, what you are doing today, and what you plan to do tomorrow — every day.”

To be in that position means having effective data collection. But how do you get your employees on board with the concept? Our consultants recently helped a client implement a field data collection system involving more than 40 foremen, many of whom were non-English speaking.

You will find that a field data collection system is worth the investment and the effort. It will give you the ability to evaluate interim project performance, detect and correct problems early, and estimate end-of-job performance with a high degree of accuracy.

Job Costing

To be an effective management tool, you job costing system needs to accurately reflect the cost of materials, subs, labor and equipment every day, not just at the end of the month. Our consultants can help you fully leverage your job costing system’s capabilities to give you timely, accurate information regarding job performance.