How Cost Value Reconciliation Software Mitigates the Impact of Materials Shortages | Redsky

How Cost Value Reconciliation Software can Mitigate the Impact of Construction Materials Shortages

Shortage of Building Materials in the Construction Industry

constructioin skyscraperThe UK is experiencing a shortage of building materials, from roof tiles and steel to cement and bricks. The shortage has been blamed on a myriad of issues, including the UK’s exit from the EU, the pandemic and a lack of HGV drivers. 

The effect on the construction industry can be seen in rising prices, limited availability and delayed jobs that ultimately have a negative impact on the bottom line for businesses. 

Construction companies are forced to run on even tighter margins as well as delayed schedules, which may even result in temporary lay-offs. As the prices continue to rise, suppliers are being rotated as construction firms scour the market for the needed supplies. It’s hard enough to manage your construction business without having to contend with material shortages, so what can you do? 

Importance of Cost Value Reconciliation for Construction

The construction industry must rise to the many challenges caused by the building materials shortage and figure out ways to overcome them. This will involve stepping into the digitised world of construction management and enterprise resource planning (ERP) solutions. These typically include cost value reconciliation (CVR) solution capabilities — an often underused project management tool in UK construction. 

CVR software helps construction companies measure costs against budgets on construction projects at different points during the project lifecycle. With CVR software, you can regularly calculate the retained profit of a project based on what’s left after subtracting costs (like subcontractor costs, materials, human resources, labour, plant and other running costs) as well as retentions from the gross certified value. It also helps you create more accurate forecasts for future projects by analysing historical reports and by enabling you to identify and address issues quickly. 

With an accurate budget that’s broken down under cost-centre headings, you’re more able to purchase construction materials and plant, and allocate all costs for a given project, providing easy and accurate cost value reconciliations.

With cost value reconciliation you can:

  • Minimise overspending
  • Control ongoing costs
  • Boost the accuracy of future project pricing
  • Improve cash management.

Digitising Construction Job Costing During Material Shortages

construction laptop and working toolsAccurate job costing is important for the success of a construction project — and even more so when there’s a shortage of building materials. It’s vital that you’re able to control costs throughout your construction projects — having the right construction cost management system that lets you digitise your processes is key to achieving this.

Digitising your job costing streamlines the process enhances accuracy and provides real-time access to data, enabling you to spot potentially problematic issues at an early stage. When you use ERP software to digitise construction project management, you’re better able to handle:

Job costing

Job costing solutions give project managers access to insights regarding the progress of a construction project and allows them to control the actual costs. A cloud-based solution gives you real-time access to that information, enabling you to make better decisions that can improve your profitability.

Cost value reconciliation

Construction ERP software allows organisations to better manage day-to-day business activities. Construction ERP solutions incorporate tools that help you with cost value reconciliation and job costing. 

Supply chain management

Optimising your supply chain is crucial. By using the right cloud-based ERP solutions (with CVR and job costing capabilities), you’ll manage your supply chains more effectively and in real-time,  so will be able to adjust your budgets accordingly.

Related: Using ERP Solutions for Different Business Roles

construction workers shaking handsGet More out of Your Construction CVR Solution

RedSky’s CVR Software for construction management will help you to streamline your CVR and job costing processes. Your data will all be gathered and stored in a central system, preventing siloed information that harbours inefficiencies, errors, duplications and inaccurate data. 

Our CVR solution works seamlessly with our ERP software, enabling you to digitise and streamline all your project management data. From being able to make decisions based on real-time data to future-proofing your business, our construction software solutions improve operational efficiency, productivity and profitability. 

Are you ready to invest in a CVR solution that gives you the power to control your project costs and streamline your processes? Let us help. Learn more about how RedSky’s construction ERP solution can improve your profitability by requesting a demo. You can also get in touch through our contact form or by giving us a call at +44 020 3002 8600.