RIP Expense Reports: How PMs Can Leverage Tech for Precision Spend Management

Mismanaging money costs money. And across construction, random credit card swipes and stray receipts add to the mystery spending that disrupts budgets — and aggravates project mangers. Replace the randomness with cohesion and every aspect of project operations — including materials management, scheduling and budgeting — proceeds more smoothly.

Today’s tech-enabled, AI-assisted tools for managing spend include credit cards linked to construction management software, providing real-time cost tracking and sophisticated data analysis. When customized for the unique workflows and functions of construction, the right card and tech tools seamlessly synchronize field and finance across multiple projects, remote crews, general and sub-tier contractors and planned and unplanned expenses. 

This article explores what to look for in a tech-foward spending solution — and how to implement it into operations for job-level control, real-time visibility into spending and high-quality data for incisive analysis.

Better Spend, Better Operations

When choosing a new tech solution like an AI-powered credit card, begin with goals to eliminate pain points wherever money touches on operations.

Consider how simplifying the following factors can make the lives of PMs, cardholders and finance office staff easier:

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  Expense Reporting

  Connecting credit card purchases and all their relevant data directly to the finance system will mean the end of expense reports, as the platform's technology collects and automatically codes all the information. With less time devoted to expense reports, field team members can get back to doing what they do best – building. 

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  Cost Tracking

  In construction, unplanned spends are inevitable. Early detection makes it easier for PMs and CFOs to make adjustments in the budget. Integration of every purchase and all of its aspects, including project, buyer and cost codes, into the project management platform drives better performance and prevents the scramble to backfill aging budget holes.

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  Financial Reconciliation

  When monthly reconciliation is chaotic, it saps time, risks errors and elevates tensions as finance teams push their field colleagues to submit receipts. Reliable, organized data takes the teeth-gnashing out of reconciliation, helping the finance team close the books faster and promoting a culture of back office-jobsite camaraderie focused on the shared goal of healthier profit margins.

Small Steps for Big Improvements

In the rush of everyday business, change is hard to adopt, even if it improves processes and lives. 

Tuning the entire team into the same frequency is a matter of simplicity. Small steps to leverage technology demonstrate to stakeholders that they can be more functional with less stress.

A key strategy is to engage the team by focusing on tangible benefits. Instead of just pushing a new tool, demonstrate how it solves a specific, time-consuming problem they face daily, like cost tracking or pesky manual receipt management. This can help build trust and prove the technology's value without overwhelming the team.

For a smooth transition, it's also important to manage expectations from the outset. Be truthful about what the technology can and cannot do, and focus on the power of small, continuous improvements rather than promising an immediate, radical transformation. This helps mitigate pushback that often arises from unrealistic hopes or fears.

How Tech Tools Prove Their Worth

These features in tech-enabled/integrated credit card platforms prove their worth by streamlining the cumbersome aspects of finance.

Data Integration & Analysis

Unlike most commercial sectors, construction breaks down costs by project. Technology that assigns each swipe of the card to a specific project gives PMs a detailed look at daily spending, for more nimble cost controls.

In an age of spiking costs and uncertain supply chains, high-quality, well-organized data can support fact-based spending decisions. Insights supported by actual field trends instead of old myths can promote cost savings.  

As always, data analysis is only as good as the quality and organization of the data that's input. A system that automatically codes spending data — especially the ad hoc spending that is, traditionally, hard to wrangle — reveals patterns and trends that can uncover savings opportunities for current and future projects and bids.

Automating Cost Codes

Requiring people to assign cost codes by spending category or project is time-consuming and error-prone. Tech-enabled predictive coding can assign codes automatically or, when needed, offer drop-down menus for simple selection of the proper code. 

Visibility & Transparency

PMs can't see through glove boxes stuffed with receipts, which hampers their outlook on day-to-day spending.

Technology can deliver transparency by transforming the information from photographed receipts into financial data. Once cardholders learn that snapping photos of receipts is just like snapping pictures of their dogs, submitting receipts becomes automatic and timely, for real-time visibility.

Some employees might think there's no harm in putting a spouse's gas fill-up on the company credit card, but the costs of “maverick spending" add up. Self-policing cards with real-time visibility and transactions tied to individual cardholders provide deterrence.

Honing the Competitive Edge

Organizing spend management with real-time visibility and automatic code allocations also gives owners a stake in financial solutions on their projects.

As customer relationships are deepened and new customers acquired, they become part of growth strategies fueled by cost containment and control. 

For PMs, managing budgets is intricately tied to managing teams and timelines. Construction management tech tools provide real-time feedback on spending, generate benefits in operational efficiencies, risk mitigation, data-driven insights and job satisfaction in the finance office and on the jobsite.

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