12 Essential KPIs for Construction Companies

Staying competitive in the construction industry requires more than just hammers and hard hats. Forward thinking construction companies leverage technology and strategic management practices to enhance efficiency and streamline workflows.

Cloud-based business management software has emerged as a pivotal tool in achieving these goals, enabling construction firms to harness the power of data-driven decision-making. Key Performance Indicators (KPIs) are those that construction companies must monitor to achieve operational excellence. A construction-focused business management system is imperative in collecting and presenting the data for analysis and comparison. A lack of timely construction KPI analysis is a sign it may be time to upgrade your construction software.

Construction Project Tracking

Effective project tracking is the backbone of any successful construction venture. With multiple tasks, stakeholders, and timelines involved, it is essential to have a real-time overview of project progress. Cloud-based business management software provides a centralised platform for project managers to monitor various aspects of a project, from procurement to scheduling, resource allocation, and task completion. Construction KPIs in this category include:

• Project Timeline Adherence: Keep a close eye on project milestones and deadlines to ensure timely completion.
• Resource Utilisation: Optimise resource allocation by tracking labour, equipment, and materials used against the planned allocation.
• Task Completion Rate: Monitor how efficiently tasks are being completed to identify bottlenecks and areas for improvement.

Cashflow Management for the construction industry

Cash flow management is a critical component of sustainable performance in the construction industry. Delays in payments, unexpected expenses, and cost overruns can severely impact a company’s financial health. Business management software facilitates real-time financial monitoring, allowing construction firms to maintain a healthy cash flow. Construction KPIs to focus on include:

• Accounts Receivable Aged Balance: Keep track of outstanding invoices and receivables to ensure timely payments from clients.
• Cost Tracking: Monitor actual expenses against the budget to identify cost overruns and take corrective actions.
• Profit Margin Analysis: Analyse profit margins on projects to make informed decisions about pricing strategies and resource allocation.

Improved Profit Analysis and profitability with a cloud-based system

Construction projects are not just about completing tasks. A project must also be profitable and compliant to ensure the company’s sustainability and growth. The more data you can collect about why and how projects remain consistently profitable, the more accurate you can cost, plan, and forecast for the future. Cloud-based business management software enables detailed profit analysis by aggregating data from various sources. Construction KPIs in this category encompass:

• Gross Profit Margin: Calculate the difference between project revenue and direct costs to gauge the project’s profitability.
• Return on Investment (ROI): Evaluate the profitability of investments in equipment, technology, and staff training.
• Project Profitability Ranking: Compare the profitability of different projects to allocate resources effectively.

Project Management KPIs for Construction

Efficient project management is the cornerstone of construction success. It is important for everyone involved to have the right information at the right time. Cloud-based business management systems streamline communication, collaboration, and task assignment, improving overall project efficiency. Construction project KPIs for effective project management include:

• Change Order Frequency: Track how often change orders are issued, as they can impact project timelines and budgets.
• Issue Resolution Time: Monitor the time taken to resolve project-related issues to ensure smooth progress.
• Safety Incidents: Keep track of safety incidents and their severity to maintain a safe working environment.

The construction industry is in a period of rapid evolution, and companies need to adopt innovative approaches to remain competitive. Cloud-based business management platforms like MYOB Advanced Construction offer an integrated solution to enhance efficiency, streamline workflows, and automate manual processes. By monitoring the right KPIs for construction, such as project tracking, cash management, profit analysis, and project management, firms can make informed decisions, mitigate risks, and drive growth.

What is MYOB Advanced (Acumatica) Construction?

MYOB Advanced (Acumatica) is a cloud-based Business Management Platform developed by MYOB and powered by Acumatica – the world’s fastest-growing ERP system. It provides organisations with a comprehensive set of tools for financial management, supply chain management, project management, and more. The software is designed to streamline business processes, automate tasks and other business events, and provide real-time insights into key performance indicators (KPIs). It is suitable for large, complex organisations and can be customised to suit your specific requirements.

MYOB Advanced Construction – Key Performance Indicators for Construction eBook

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MYOB Advanced Construction is a purpose-built edition of MYOB Advanced. It has the focused functionality to meet the specific needs of the construction industry. It gathers data across your entire operation. Whether it is reduced administration time, greater control of costs, or real-time reporting, MYOB Advanced Construction will improve efficiency in your organisation. Its integrated, modular design means that it can become one advanced platform to manage your entire organisation.

Investing in business management software not only provides a competitive edge but also positions construction companies as leaders in embracing digital transformation. As the industry continues to evolve, leveraging technology and data-driven insights will be instrumental in achieving sustained success.

6 signs its time to upgrade your construction software eBook

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Contact our team to take the next step and discover how MYOB Advanced Construction can improve efficiency in your organisation. Email sales@kilimanjaro-consulting.com or call 1300 857 464 (AU) or 0800 436 774 (NZ).