Successful construction project budgeting relies on meticulous planning, conservative cost estimates, and proactive monitoring. While keeping on top of costs has been a challenge for even the most reputable construction firms, emerging digital tools are helping financial leaders in construction overcome hurdles without having to resort to cutting corners.
Data suggests that as many as 69% of construction projects ultimately run over budget by more than 10%, while only 31% come within 10% of their original plan. As a result, more firms struggle to turn a profit on their projects, and costly delays can become more prevalent.
There are effective measures that construction business decision-makers can take to help give their budgets – and projects – the best chance of success. Getting started early and consulting with the entire project team can help provide strong budget insights, while cost control measures help in mitigating the risk of overrunning projects. Emerging technologies are also helping transform the construction budget process.
Here are three effective budgeting tips for improving your construction budgets and avoiding cost overruns:
1. Take Surveying Seriously
Before any construction project, it’s essential for effective budgeting to survey the land it will be built on. This can be a costly expense that could interrupt construction permits and the structural integrity of building work.
More construction companies are turning to drones to survey the land at a lower cost than enlisting humans to physically cover the area. Instead, drones can fly over the area and use imaging technology in a fraction of the time, offering powerful analysis in a budget-friendly and accurate way.
Additionally, these drones can track equipment and act as surveillance to prevent instances of theft or misuse in terms of storage.
Sensor technology is also an excellent cost-saving tool for surveying. By incorporating 3D sensors and lasers, more construction firms can efficiently measure and map sites while monitoring environmental conditions in real-time.
Tracking core factors like humidity, air quality, and vibrations means that sensors can empower more firms to monitor sites remotely, offering early detection for issues and a proactive level of management for resources.
2. Turn to Automation
Construction accountants are tasked with managing dozens of different types of cost associated with any one project, from materials to payroll, delivery of goods, equipment, and a multitude of expenses that can impact budgeting.
Automation software can help construction businesses gain a complete and accurate view of budgets and pave the way for complete project control.
Construction cost management software can empower more construction decision-makers to access a single source of truth for construction financial data, helping to provide real-time visibility of costs for full control over those all-important margins – and spotting overruns early.
By linking the construction site to the office for more intuitive and accurate data – visualized through advanced analytic dashboards – more firms can assess and counter cost-related risks while reporting key financial information to stakeholders with ease.
This automation technology can also be an excellent tool for regulatory oversight, where instances of noncompliance can lead to costly fines.
3. Intuitive Project Planning
Another source of budgeting inefficiencies can stem from stakeholders failing to access the right information in real-time.
It’s for this reason that building information modeling (BIM) has become a particularly popular tool throughout the construction industry. These 3D modeling tools create one single master design for all parties to work from. This master plan can assist stakeholders from the planning stages of the project all the way through to execution, helping to prevent the risk of costly human error or expensive delays.
Even after construction is complete, BIM technology offers building owners valuable insights for prospective maintenance further down the line, improving client satisfaction.
Because all relevant parties have the power to reference BIM models as and when they’re needed, there are fewer instances of confusion, a lower chance of human error, and a minimized risk of missed timeframes.
As a result, BIM serves as an efficient cost-cutting measure for budget-conscious construction firms. This is because the technology can help to streamline projects from top to bottom.
Finding Sustainable Budgeting
The construction sector is plagued by low margins, with unexpected costs emerging from inefficiencies, delays, and instances of human error wreaking havoc with the balance sheets.
While construction budget control is challenging, incorporating the right technology can help firms tighten their purse strings without cutting corners. This can help remove the uncertainty that lurks over project costs.
With the right stack of technology, more construction businesses can benefit from effective cost-cutting, helping to deliver sustainable budgeting that improves operational efficiency at scale.
