BUSINESS COUNCIL
Expand Your Financial Toolbox
How outsourcing builds more robust financial capabilities
In construction, project work is completed on-site, but money is often made in the back office. That’s why it’s so important that construction firms and contractors have the modern finance tools and services they need to build sophisticated administrative functions. Just as work can’t be completed without skilled craftspeople, no amount of experience or skill can negate the need to protect margins, estimate accurately and act with agility in the face of emerging project disruptions and changing markets. Thankfully, outsourcing makes qualified accounting, technology, administrative and leadership-level professionals available as needed.
In the current construction environment, strong financial practices often underwrite an organization’s competitive profile. For those looking to strengthen their financial capabilities, here are a few key areas where outsourcing can help you add valuable tools to your finance tool kit.
Improving Estimates & Bidding
According to the latest CBIZ Construction Survey, large organizations reported bidding more frequently on projects they would previously overlook for being too small in scale or budget. As a result, boutique firms and specialized providers may find themselves competing against entities with vastly larger resources and cost advantages in areas like material sourcing. One way to level the playing field may be to refine bidding practices to produce a quote that’s more likely to win the work and estimates that are more accurate.
How Outsourcing Helps With Improving Estimates & Bidding
Knowledge comes at a premium but often pays for itself, particularly when it’s short-term or project-based. With so many moving parts, each construction project is full of opportunities to improve processes and practices. Even incremental efficiency improvements add up to stronger margins thanks to work that remains on schedule and projects that finish within budget.
Outsourced professionals can get involved in your projects, ideally as early as the bidding and estimation stage, to guide your efforts and yield benefits. Seeking out the right professional resources with applicable experience can help construction businesses implement building, fabrication and material management practices (among others) that improve their bottom line. That translates into bids that are more competitive and estimates that are more accurate.
As a result, organizations can win more work, incorporate advice that produces more reliable estimates and optimize profit margins.
Scaling & Special Projects
Increasingly, specialist insight can be sourced on an ad hoc basis as roles at virtually every level of seniority can be brought in to advise or contribute on priority projects. Even leadership-level technology, marketing and compliance professionals can be hired for short-term or project-based work. If your business is undertaking major initiatives of any kind, it’s a great option to know that short-term help is available as an alternative to permanently increasing the wage bill.
How Outsourcing Helps With Scaling & Special Projects
Among outsourcing’s most powerful benefits may be the ability to scale rapidly while controlling costs, particularly on a temporary basis or short notice. In construction, opportunities often arise suddenly. Outsourcing assistance can help businesses respond without being caught flat-footed. For example, a project may require compliance expertise and oversight a business does not have in-house. The input of a specialized professional can be arranged on an outsourced basis to satisfy compliance requirements and establish ongoing internal controls.
Similarly, internal initiatives like technology modernization efforts require experienced guidance to succeed. Hiring a qualified technologist on a permanent basis may be prohibitively expensive. Outsourcing that same expertise can secure equally or more qualified candidates to design and implement new systems, lead organizationwide training, and maintain the degree of involvement necessary to help ensure the modernization effort’s long-term success.
For organizations with relatively static technology ecosystems, outsourcing may be the difference between successful modernization programs and ambitions that remain too costly or out of reach.
Technology
Artificial intelligence is the phrase on everyone’s lips, but there are many opportunities to apply various forms of technology within the construction industry. For 42% of CBIZ Construction Survey respondents who have made identifying and implementing new technologies a top strategic priority for the year ahead, there are a lot of great options to discover, AI included.
How Outsourcing Helps With Technology
For businesses starting at square one, it’s important to build the foundation for a strong technology ecosystem before chasing breakthrough technologies like AI. For better or worse, construction has a reputation as an “old school” industry in which many organizations remain behind the curve. Those just getting up to speed on the business benefits of technology can use outsourced expertise to guide the design of tech stacks that reflect how their businesses operate and have the capabilities to best support them without disrupting how work currently gets done.
Fortunately, some of the technologies that can most efficiently move the needle are low-cost. Enterprise resource planning (ERP) systems are a great place to start. ERP systems centralize data for easier management of reconciliations, transaction analysis and reporting, and journal entries. They can also help organizations automate certain mundane tasks, saving employees time for higher-value pursuits, and are the ideal springboard for implementing other, more sophisticated tech features in the future.
Virtually every construction business routinely encounters both challenges and opportunities that call for specialized expertise. Some take pride in their ability to leverage internal resources to find clever solutions. Others may find that it’s more cost-effective and efficient to call on experienced professionals to lend an outside perspective.
Ultimately, when competition increases, cost pressures mount and the maintenance of schedules becomes more important, the reliable guidance of those with firsthand experience proves its worth. For that reason, outsourcing is positioned to play an important role in construction companies for years to come, and the examples above are just a narrow snapshot of the practice’s broad potential benefits.
Stephanie Knowles is a managing director in the outsourced accounting solutions practice at CBIZ. With significant experience advising businesses on financial management, process improvement and operational efficiency, her collaborative approach, combined with deep accounting and advisory expertise, has made her a trusted resource for organizations navigating growth and change. She can be reached at stephanie.knowles@cbiz.com. Visit cbiz.com.
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