30 November, 2023

NetSuite for Construction: The Blueprint for Success

Introduction

The construction industry faces a variety of challenges while dealing with multiple projects. Consequently, each project, with its own set of intricacies, demands meticulous planning and risk management. However, the absence of a unified platform and the reliance on many tools can create a precarious situation, jeopardizing project delivery timelines and profitability. Lack of structure and using several tools for planning and risk management can make projects crumble, compromising delivery and profitability. The NetSuite ERP platform, however, emerges as a savior for the industry. In this article, we will explore how NetSuite for construction can streamline your business processes, offering a unified solution that enhances project delivery timelines and profitability, thus setting a new standard in construction project management.

NetSuite For Construction: Job Breakdown and Project Overview

Large construction projects present unique challenges, often spanning multiple accounting periods or even years. This extended timeframe is not limited to large projects; even smaller projects can face delays due to unforeseen issues like raw material shortages or adverse weather conditions. These delays and extended periods pose significant challenges in financial management for contractors.

However, the use of NetSuite for construction projects offers a robust job breakdown capability. This is crucial for better planning, forecasting, documenting cash flow, etc. It can help account for all known and even uncertain elements involved in a project by basing the planning process on the smallest building block, i.e., the project task. This makes planning and cost estimation more reliable. When projects are planned to use this bottom-up approach, it becomes easier to implement budgetary controls and avoid scope creep. 

This makes planning and cost estimation more reliable. When projects are planned using this bottom-up approach, it becomes easier to implement budgetary controls and avoid scope creep. 

Infographics show the NetSuite Feature Spotlight

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Here’s how users can achieve a 360 project overview in real-time.

Infographics show the 360 project overview
Infographics show the 360 project overview in real-time

Cost Estimation and Change Orders:

For construction projects, cost estimation is a complex process. NetSuite for Construction is specifically structured to ensure that all cost components are meticulously accounted for in such projects. Based on nature of the contract, these components may include but are not limited to:

  • Materials- based on Internal or external cost
  • Labor- Based on different rates for different resources
  • Assets- Depreciation for assets deployed on site
  • Expenses- Employee and other expenses
  • Sub-contractors’ costs

Cost estimation based on individual activities or work packages will bring maximum accuracy.

Moreover, this works seamlessly with change orders too. You can easily create estimates for Change Orders track and report on them. Tracking changes is very easy as you can access all the changes orders from a single

NetSuite for Construction - Cost Estimation and Change Orders

For more insights, read Engineering Change Order in NetSuite.

Project Management:

Project management can become easier if managers can access all required tools on a single platform. This helps avoid dealing with multiple worksheets and different management and reporting tools. NetSuite for construction offers the following features, which are completely integrated for reporting:

  • Pre-configured project templates to automate project creation
  • Work Break-down Structures
  • Gantt Charts
  • Timesheet tracking and approvals
  • Project-related operating expenses and approvals
  • Communication and collaboration: All documents and team communications are linked with projects
  • Plan, request, and assign resources
  • Task, milestone statuses, and reminders for due or overdue tasks
  • Time and Cost controls

This will get you a powerful and interactive dashboard with real-time data to demonstrate the project’s performance on a single screen.

Infographics show the NetSuite for Construction -Project Managment

Budgeting and Financials:

You can leverage multiple budgets to control costs and report on different forecasting levels against actuals. Budgets can be created up to an elementary level of project tasks. This can help provide in-depth insight into project performance in terms of finance. These financials (costs and revenues) can be reported and compared at activity and job levels.

Isn’t it great that you can see profitability for each project at any point in time without running complex reports? We can provide this and many other dashboards and reports.

Infographics show the Budgeting and Financials

A lot of key configurable metrics, including but not limited to the following, can be used for financial and non-financial reporting and analytics:

  • Budget vs. Actuals
  • Contracted value vs actuals
  • Earned Value
  • Cost overruns
  • WIP
  • Over/underbilling
  • Activity and cost-based completion
Infographics show the Budgeting and Financials

A lot of key configurable metrics, including but not limited to the following, can be used for financial and non-financial reporting and analytics:

  • Budget vs. Actuals
  • Contracted value vs actuals
  • Earned Value
  • Cost overruns
  • WIP
  • Over/underbilling
  • Activity and cost-based completion

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Revenue and Billing:

NetSuite offers very comprehensive and flexible revenue management for construction projects. It can help you define different revenue policies for different types of projects. You can automate revenue and billing as per your requirements. It offers billing and revenue management policies based on the following:

  • Job completion percentage
  • Periodic, i.e., fixed time-based recurring
  • Time and material
Infographics show the NetSuite for Construction - Client Invoice Details

Furthermore, you can also group multiple invoices into one invoice while retaining details for individual invoices. This can help clear backlogs and avoid sending multiple invoices to your clients, which can sometimes be confusing.

Learn more about Managing Your Financial Segments in NetSuite here!

Conclusion: NetSuite for Construction - The Way Forward

In conclusion, NetSuite offers all the features and tools to help you better plan, execute and manage construction jobs. Its reporting capabilities proved all the visibility required to steer resources on a job to reduce cost overrun and avoid scope creep.

Do not leave your ERP implementation to chance. Get in touch with AlphaBOLD’s Oracle NetSuite certified experts and propel your businesses towards success. 

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