I was reading through a checklist on a Government Website for budding Domestic Builders when I found their checklist entitled, “Am I Ready to Apply for Registration?”
The 60 something areas of knowledge and experience they listed ranged from Business Management to Building Knowledge but there was no reference to BUILDING SOFTWARE. The closest they came was “Basic Accounting Principles”.
Now you could say I have a vested interest since that’s what my company develops – but actually I started out in life as a Builder. On big projects. Then when I started my own small company I found a desperate need to control the processes and paperwork that was starting to swamp me. So I looked around found nothing suitable and eventually had someone write me a program. The rest is history – in short I stopped building and focussed on developing Building Software.
Now I’ve met a lot of Builders in the 30 years since and none talk to me about Accounting Principles. What they do talk about is how they need some software to help them run their Building Businesses.
When they started out they bought a simple accounting package. It was cheap, popular, easy to use and pretty intuitive. There were plenty of people using it so there was no problem employing staff to operate it.
Problem was it didn’t do everything a Builder needed. I’m not talking about Estimating. There are plenty of good standalone Estimating packages or they could just use a spreadsheet for that matter. It was the peculiarities of the Building Industry that couldn’t be easily accommodated. Things like Subcontractor Retentions. Your average Accounts Payable system just can’t cope with the popular “5% to 10%” retention. So you set up your first of many Spreadsheets where you try to process the things that should be done in a true Building Software package.
Then there’s payroll. Australia has a relatively small population but we spread that across 8 States and Territories and then allow each of these to develop their own benefits for Building Workers. So we have 8 different calendars defining Public Holidays and Rostered Day’s Off. It’s common for Building companies to take on contracts in different States so suddenly their payroll solutions are faced with RDO calculations that the basic payroll was never designed for. Get it wrong and you’re Over paying staff. Under pay staff and you’re in a “world of pain”.
They don’t teach how to use Building Software at College, or TAFE or University but they should so you can engage with it earlier in your business life. Some do – but theses are typically Project Managers who have used true Building Software in a corporation and then hunt down a more economical version when they go our on their own.
But there’e more to be learned that just a few software brand names. The need to understand the choices they have available to them in terms of implementation and use.
They need to have the conversations regarding issues such how to turn that estimate into a useful budget. As well as the categorisation of building allocations and trades. For example “Should Face Bricks, Brick Cleaning and Hardware be shown separate or just lumped together as Bricklaying.
Then there’s the debate on fully loaded cost of staff and how you need to include superannuation and the leave entitlements and set aside funds for them – whether or not these are Tax deductible or not. But just because it’s a good idea for long term liquidity and hence business survival.
For an industry that suffers a high percentage of failures with consequences for employees and subcontractors it’s surprising that the best tool for managing a building project’s profitability, naming Building Software, does not take a more pivotal role in College courses.