Charge cards, also called purchase cards, are a convenient way to pay for costs on a construction project. TheoBuild’s purchase cards come with a proprietary dashboard that allows you to track your budget, set spending limits, and manage costs. We’re going to look at seven ways contractors can use charge cards to improve financial efficiency.
The old way to track a project budget, which many contractors still use, is a spreadsheet showing the budget and costs. This requires the manual transfer data from the accounting software to the spreadsheet, which could lead to number transpositions and data errors. Not only is there a high potential for mistakes, but spreadsheets often aren’t kept up to date. Managers have to wait for card statements and invoices to come in and be entered to update the costs.
The new way to manage a project budget is to use software that automatically pulls costs in from accounts payable and card charges, like TheoBuild. This reduces the chance for errors and ensures that costs are always up to date. Project managers can use the software to actively manage the budget, run reports, and always know what their current costs are.
Having all job costs, including accounts payable and card expenses, in one location makes reviewing the budget simpler and easier.Estimators don’t have to look in three places to get their total costs. They just look at the dashboard and know exactly where they are. This view also allows them to see costs as they come in, in real time, not just at the end of the month.
Having all the information they need in one place allows project managers to manage their budgets proactively, instead of waiting for reports and then reacting when items are over budget. They can work with the field to make budget adjustments or reallocate costs to get a true picture of where the project budget is at.
With Theo Build charge cards, you can assign field and virtual cards to particular budget line items and have all the costs for that item together. Field cards are physical cards issued to workers who often make purchases. Virtual cards are card numbers that are used one time for specific purchases. Each card can be assigned to a specific budget line item with as pending limit equal to the budget
By assigning cards to each budget line item, estimators can track the progress of the project, pay for their materials, monitor the budget,and control spending. Limits provide protection against going over budget.
Our card portal allows project managers to see their expenses versus the budget, so they know immediately when they’re over budget on a line item. Purchases are immediately shown on the dashboard as soon as they are processed. If an item is getting close to its limit, managers can contact the field to see why expenses are up, whether it’s a change in work or unforeseen conditions. The budget for that line item can be quickly and easily changed through the portal.
When a budget line item is nearing its limit, project managers can reallocate costs or increase the budget for that item. Both can be done easily through the charge card portal. This allows project teams to have the flexibility they need to address changes in the work as they occur. As new work is approved, limits can be easily raised to reflect rising costs. Costs can also be allocated to another budget item as needed.
With the Theo Build card portal, you can see all your costs in one location, including subcontractors and suppliers. The portal integrates with many accounting software packages, allowing for direct information exchange without worrying about errors. Billing is easier when all the costs are in one spot and managers can quickly see how much is owing each month.
Both subcontractors and suppliers can be paid from the same dashboard. You don’t have to rely on paper checks getting lost in the mail anymore. The dashboard sends bank transfers to pay for card purchases and pay subcontractors, ensuring payment in 1 to 2 days.
By paying subcontractors through our portal, it’s easy to exchange payment for lien waivers and other documents. The portal facilitates the collection of waivers and makes it easy to track outstanding documents. The waivers are sent to the subcontractor for electronic signature, making document gathering quick and easy. Compliance documents can be collected and attached to invoices within the portal, making finding these documents simple and easy.
Contractors can better manage and limit job costs with field and virtual charge cards. The ability to apply controls as needed to limit spending and keep projects on budget leads to greater profitability. Theo Build’s cardportal allows contractors to manage all their costs and payments, including subcontractors. To schedule a demonstration of our cost portal, contact us today.