Lisa Newbold, CFO and Controller
Leff Construction, Sebastopol, CA
Kind words from Lisa about Syscon’s Cost to Complete Management Program for Sage Master Builder users.
Read the complete letter from Lisa below…
As a former Sage Master Builder Certified Consultant, and now CFO and Controller of a high-end residential general contracting company, I am in a unique position to recommend Syscon’s Cost to Complete program. I’d like to tell you why you should be calculating Cost to Complete, and why the Syscon program is your best choice.
First of all, why calculate cost to complete at all? There are three reasons why I find it useful. One is that it gives your project managers a way to see where they really stand on the job. Overall, will they be over or under budget? Also, by looking at cost to complete by cost code and cost type, they can use it as a tool to predict if they’re headed in the wrong direction in an area and, if so, re-think their plan for that work. As you know, almost the minute you start working on a job things change from the estimate. It’s just not possible to foresee every condition in the field from a set of plans and (maybe) a couple of site visits. How valuable is a tool that lets you look at the real situation on the job site and adjust your strategy to minimize costs?
Second, this is, in my opinion, the best tool for calculating over- and underbillings so you can prepare a work in progress (WIP) report each month. Your WIP adjustment is likely to be the most significant adjustment to your income statement at month end. If you’re not making the WIP entry at all, or you’re using a budget vs. job cost number such as Master Builder’s Work in Progress or Bonding reports, you’re not getting accurate financials, period. Syscon’s Cost to Complete program uses your staff’s knowledge of what’s happening on the job NOW to calculate where you are headed. And it interfaces wonderfully with their Work in Progress program, but that’s a different recommendation!
There’s a third great financial benefit to the Cost to Complete program. It gives company management a tool to predict gain or loss on jobs before the job is complete. This allows more accurate financial predictions, and therefore much better cash flow planning. Maybe I’ve talked you into calculating your cost to complete on jobs, but why buy Syscon’s program?
Initially I helped a commercial contractor client implement Syscon’s Cost to Complete program as part of their conversion to Master Builder. They depended on cost to complete in their old software; in fact, it was their most important financial management tool. Master Builder is a great program, but its cost to complete module does not run by accounting period nor by cost type. The ability to calculate by accounting period is critical, since otherwise you don’t have a clean cut off to create your work in progress schedule (a.k.a. over/underbillings) at month end. The separation by cost type is important because it adds precision and accuracy when reviewing data and entering your predictions, and therefore more accuracy in your results.
Now I’ve taken a job with one of my construction clients. I love being back in the ’real world’ and taking the financials from start to finish. The best things are getting more accuracy into our financial statements, using all the tools I can find to manage our company by the numbers, and helping to predict and plan where we’re going. After my experience with my client, I knew we had to have this program. Now we use it monthly, and it doesn’t just help with our financial statements. The production manager, the estimator, the job’s superintendent and I sit down together each month and go through the job. It helps the superintendent manage the job more effectively, it allows the production manager to see in detail where the job stands and resolve problem areas, it gives the estimator instant feedback, and it gives me the financial accuracy and planning benefits I mentioned earlier.
I highly recommend this program to anyone using Master Builder. It seamlessly pulls in your job data with absolute accuracy. The entry screen itself is very clear and everyone understands it almost instantly. It includes the original budget and current budgets, as well as committed costs like subcontracts. It also remembers your prediction from month to month so you don’t have to re-think the numbers. We’ve found it an incredible tool for many reasons, and I believe you will, too.