Best-in-class heavy construction contractors accurately cost their equipment. Doing this requires two things: an efficient method for tracking equipment utilization time on the job and an accurate calculation of what it costs to operate that equipment. The B2W Software ONE Platform can help with both.
In my consulting practice, I have been amazed to learn how many contractors operating heavy equipment do not cost it to jobs. This is a key element of job cost. Without it, determining accurate profitability by job is just not possible. When I ask why companies do not do this, the primary reason given is not having an efficient tool to gather the time and post it to their construction accounting systems.
This is easily solved with the B2W Track element for field tracking and analysis. In B2W Track, jobsite foremen or superintendents can easily enter construction equipment usage time daily into the electronic field log. This can be done with either a laptop or an iPad, and the information interfaces directly into most of the major industry accounting systems.
Even companies that do cost equipment to their jobs sometimes do not have accurate cost rates. The biggest culprit here is not knowing the cost of maintaining equipment by each individual piece. Without a specialized technology tool, this is difficult to do.
Some companies pool all the maintenance costs and allocate this out across all the pieces of equipment by some general formula. This is far from accurate. More critically, it will mask the fact that some individual pieces of equipment might be much more expensive to maintain than other pieces.
Utilizing the B2W Maintain element provides the ability to accurately determine the maintenance costs of each individual piece of equipment. Companies that have this information typically develop their equipment cost rates based on the average of equipment groupings. As an example, they may group excavators by large, midsize and small.
The single most important piece of information a contractor needs to know is how much money they are making on each job. For those operating heavy equipment, without job costing equipment and utilizing accurate equipment job cost rates, this will never be known.