Building a Better Construction Business with Key Performance Indicators

Construction companies, such as general contractors, subcontractors, home builders, land developers, and others always rely on certain measurements to track business activities, general performance, document successes and help direct management decision-making.

These measurements, commonly called Key Performance Indicators (KPI), can assist with running the business and enhance performance in new construction and tenant improvement, real estate development, custom and production home, multi-family and mixed-use, or commercial projects. Key Performance Indicators are often located on an executive dashboard display with graphics providing an at-a-glance picture to assist SEOs and controllers in quickly focusing on opportunities or challenges.

KPIs can be divided into the following types:

👉 Financial

Since finance is the language of business, financial KPIs monitor sales, costs, margins, cash flow, and asset utilization.

👉 Historical

Historical KPIs focus on the analysis of data from activities that have already happened, such as certain activities relative to schedules, resources, completion status, backlog, change orders, and more.

👉 Predictive

This type of KPIs uses your predictions as leading indicators to project performance expectations into the future.

Which KPIs are particularly important in the construction industry?

✅ Cash Management

In order for you to manage your business, meet payroll and make contractual commitments, key performance indicators bring together bank balances, billings, and invoices into a comprehensive view of cash flow. Ujimatec construction management software powered by Acumatica acts in real-time as business conditions change, while also updating your cash position and providing instant access to the details behind it.

✅ Project Management

Using expenses against budget, KPIs monitor projects, time by employee, in-progress & completed tasks, and overall project profitability. KPIs in construction project management allows you to thoroughly examine the budget against actuals, subcontractor commitments, compliance issues, payroll details, and change orders.

✅ Project Tracking

Key performance indicators track billing and revenue recognition by cost code, contract line item, and other details. A budget status of project cost compares actual and committed costs by task and sub-job. In order to reflect your company’s primary objectives, challenges, and priorities, the KPI system should be flexible and dynamic to enable the organization to define the right KPIs and change or replace them as business needs change.

✅ Profit Analysis

While using profit analysis KPIs, you will gain real-time access to job costs & profitability. It will also be possible for you to track project profit with drill-down capabilities in order to review line items by cost, revenue, and profit. KPIs track original and revised margin/markup and estimates, change orders, and revised amounts. Drill down to analyze variances by line item, cost code, subcontractor, and material. Catch deviations sooner and take preventive action to bring projects back in line.

Scroll to Top