To ensure profitability, contractors must ensure raw material spending is within construction budgets. Yet, budget control is complex. Many stakeholders are involved and collaborative effort is required between construction sites and office. Different contractors have attained different ways to manage material procurement spending. Generally, material spending reports are compiled manually between the purchasing and cost control departments. Spending data is spread and stored in different locations: the contract department, the sites, the purchasing department, the cost control department, and the finance department.

It takes time to collect data from different locations, compile and reconcile what was ordered, delivered, and how much was spent. Most companies rely on data entry onto spreadsheets to churn out accurate spending reports. It’s time-consuming, resulting in many contractors not being aware of their material spending until it is too late. Overspent has occurred.

The benefits of real-time material spending report

Spending visibility allows experienced management to detect any fraud or anomalous in the construction sites. It allows contractors to know how much material is on-site and how to avoid over-purchasing. It gives contractors the ability to control material spending and curb unnecessary spending before it’s too late.

Real-time material spending visibility allows contractors to have a holistic view of how money is being spent. Contractors can have full visibility of the company’s entire purchasing cycle. For example, when the site supervisor has raised a material order, within seconds management is able to get a real-time report of whether the material ordered is within or exceeded budget. Management gets a full picture of how every dollar is spent, curbing overspending at its infant stage.

Construction companies can utilize purchasing software for construction such as Speedbrick COMPOSE to easily monitor material spending with consumption data that is visible and accessible in real-time, via mobile phone.

Contractors can make better decisions with greater material spending visibility

1. Identify spending mistakes

Material spending mistakes are one of the main reasons why contractors exceed project budgets. Construction procurement is complex. It involves at least five different departments in a construction company. Although processes may vary between different companies, they are generally summarized as follows:

The purchasing cycle and the supply chain management for construction are complex. Many stakeholders are involved. Manually managing them means going through a lot of MR, PO, DO, invoicing documents, and manually recording them into spreadsheets to identify if there are any spending mistakes. It’s time-consuming and rarely sustainable in multi-million projects. This results in expensive mistakes. When management is making spending decisions blindly without accurate data from a construction supply chain management software, millions of dollars of potential savings are lost.

It is crucial to have material spending visibility at each step along the procurement cycle, mistakes can quickly be identified and addressed by the different stakeholders who may be making spending decisions without knowing that it affects the project’s bottom line.

The best way to address this is to use a digital procurement platform where all stakeholders perform purchasing tasks on one platform. Contractor’s purchasing system can be utilized to automatically collect, process, and identify spending mistakes, alerting the relevant stakeholders before spending mistakes happen. With the right digital procurement strategy in place, the management can easily access accurate spending reports in real-time, no matter where they are, curbing mistakes when it happens.

2. Identify saving opportunities

Material spending visibility allows contractors to view purchases and the amount spent. By tracking material spending, you will be able to identify if the material ordered is needed and the quantity of material across multiple projects will determine if you can obtain a better price from your suppliers.

When procurement data is stored in multiple systems/tablets, this often leads to misplacement or loss of data resulting in inaccurate reporting. Sometimes the data sets can be incomplete and inaccurate as it relies on manual data entry, and spreadsheet calculation mistakes are likely to happen. Hence, stakeholders will have to spend time identifying the mistakes. It’s inefficient, and windows of saving opportunities are being missed.

By not having a good automated procurement system to store and process data, contractors are often left behind struggling to find and make decisions based on good data.

3. Use digital procurement platform to achieve material spending visibility

When all material spending data is collected, compiled, and consolidated on one construction digital platform, it is beneficial to management as all crucial data is accessible when management needs it.

Speedbrick COMPOSE is a digital procurement platform that is used by all stakeholders involved in the material purchasing cycle. It is easy to use, with multiple permissions control. Stakeholders utilize the platform as a tool to order and approve material. It completely replaces existing manual processes. Speed up the purchasing cycle by 132%.

Speedbrick’s digital procurement software is personalized to ensure data security. Stakeholders can only see information that helps them get work done. It’s personalized according to their job description, helping stakeholders to focus and quickly identify material spending mistakes before mistakes happen.

Using purchasing software for construction like Speedbrick COMPOSE, material spending reports are automatically compiled and available at each step of the purchasing cycle. During order, the site supervisor will be given a status report on the material he is currently ordered, the budgeted quantity, total ordered, and delivered quantity. During digital approval, approvers will be given a real-time report that helps approvers decide with confidence.

Material spending data will be automatically compiled and processed by Speedbrick’s robust backend technology, churning out visual graphic reports on a business intelligence analytic dashboard. This allows management to have a holistic view of cash inflow and spending reports.

Speedbrick simplifies procurement for contractors on a single platform. Speedbrick is the first digital procurement platform for contractors in Malaysia. We simplify the complex procurement cycle and help contractors achieve efficiency by getting all stakeholders onboard on one platform.

By helping contractors get on board with digital procurement, contractors can focus on building while Speedbrick helps to identify mistakes and saving opportunities, helping contractors manage their construction business all via mobile.

In conclusion, using a digital procurement platform like Speedbrick COMPOSE significantly improves material spending visibility for contractors. It streamlines the purchasing cycle, reduces errors, and allows contractors to identify savings opportunities. By adopting digital procurement strategies and utilizing construction procurement software, contractors can make better decisions, achieve efficiency, and enhance their project’s profitability.