Construction tracking targets: How to give your team the foundation for success

Running a construction business comes with its fair share of challenges — meeting project deadlines, managing budgets, and ensuring team efficiency. For construction professionals in Australia and New Zealand, keeping projects on track is critical. Yet, many construction companies are still relying on outdated accounting systems that don’t offer the visibility needed to manage increasingly complex projects.

If you’re a managing director, founder, or CEO in the construction industry, you likely wear many hats — overseeing everything from finances to operations. But how do you ensure your team is hitting targets and your projects are progressing smoothly without the right tools? The answer lies in tracking the right key performance indicators (KPIs).

Why tracking targets matter in construction

In 2023, the construction industry saw a surge in insolvencies, with a 42% increase compared to 2022. Rising costs, supply chain disruptions, and labour shortages have made it increasingly difficult to keep projects on time and within budget. Profit margins have tightened, and delays have become all too common.

To navigate these challenges, businesses need to keep track of more than just profit and loss. Construction projects are dynamic, involving multiple stakeholders, suppliers, and teams. That’s why having a system in place to monitor KPIs like project timelines, labour utilisation, and material costs is essential. Tracking these targets allows you to identify problems before they escalate, helping you keep your team on the right path.

Are you measuring the right metrics?

Many construction businesses are only tracking the basics — financial performance, cashflow, and maybe the project pipeline. While these are important, they don’t give you the full picture. For example, a project might look profitable on paper, but if delays arise or resource mismanagement occurs, the real costs start adding up fast.

Here are some key metrics you should consider tracking to stay ahead of potential issues:

• Project Completion Rates: Tracking how close each project is to completion ensures that you’re meeting deadlines. Regularly monitoring this KPI helps you identify any delays early, giving you a chance to reallocate resources or adjust timelines.
• Cost Variance: Keeping an eye on the difference between the estimated cost and the actual cost of a project is essential. This KPI helps you spot cost overruns and provides insights into how to better manage resources in future projects.
• Labour Productivity: Understanding how effectively your team is working can reveal whether you’re optimising workforce usage. If productivity drops, it could signal an issue with project management or resource allocation.
• Equipment Utilisation: Ensuring that your equipment is being used efficiently can reduce unnecessary costs and improve overall project efficiency. Idle equipment is a wasted resource, and tracking this metric can help you make data-driven decisions about future investments.

By expanding your focus beyond just financial metrics, you can gain a more comprehensive view of your business’s health. For more detailed insights, check out our Construction KPIs Guide, which breaks down these key metrics and how to track them.

The limits of basic accounting software

If you’re using basic accounting software to track your business metrics, you’re likely falling short of what’s needed to manage today’s complex construction projects. Many software solutions aren’t equipped to handle the intricacies of project management, making it difficult to track the KPIs that truly matter.

Common pain points include:

• Lack of Real-Time Data: Many accounting systems don’t provide real-time insights into project performance. By the time you identify an issue, it may already be too late to course-correct.
• Disjointed Systems: When your accounting software doesn’t integrate with other tools—like project management or payroll—you’re left with data silos that make it difficult to get a clear view of your business operations.
• Manual Data Entry: Relying on spreadsheets and manual data entry increases the risk of errors, which can lead to costly mistakes down the line.

These limitations make it difficult to manage the day-to-day operations of a growing construction business effectively. That’s where a more robust solution like an Enterprise Resource Planning (ERP) system comes in.

Why construction businesses need an ERP

An ERP system is designed to integrate all your business processes into one platform, offering real-time visibility and automating time-consuming tasks. This is particularly important for construction businesses, where delays, budget overruns, and inefficiencies can quickly add up.

By implementing an ERP system like MYOB Acumatica, you can track KPIs across your entire organisation, from project management to finance, and ensure your team is always working with the most up-to-date information. Here’s why construction companies are turning to ERP solutions:

• Real-Time Data Access: An ERP system provides real-time insights into every aspect of your business, from equipment usage to project costs. This helps you make proactive decisions based on current data, rather than waiting for end-of-month reports.
• Streamlined Processes: With an ERP, you can automate repetitive tasks like data entry, invoicing, and payroll. This not only saves time but also reduces the risk of human error.
• Improved Collaboration: By integrating all your systems into one platform, an ERP ensures that everyone — from project managers to accountants — has access to the same data. This fosters better communication and collaboration across teams.
• Enhanced Reporting: An ERP system allows you to generate detailed reports on project performance, labour utilisation, and financials, making it easier to track progress towards your targets and KPIs.
• System Integration: Some ERP systems enable you to extend their native functionality with pre-built and integrated software solutions. That means you can adjust the system to meet your evolving needs.

As an example of an integrated approach, MYOB Acumatica Construction provides an out of the box integration with Procore that connects onsite and office teams in real time. This integration streamlines approval processes for subcontractors and purchase orders, provides field teams with immediate access to financial data from the construction site, and enables single login for multi-entity businesses.

Keeping your team on track

The key to keeping your construction business on the right path is tracking the right metrics. By implementing an ERP system, you can gain real-time visibility into your projects, streamline operations, and ensure your team is always working towards your business goals.

Want to learn more about how ERP can help your business? Schedule a consultation and take the first step towards optimising your business performance.

Empower your team with the tools they need to succeed — and keep your projects on track.

Information provided in this article is of a general nature and does not consider your personal situation. It does not constitute legal, financial, or other professional advice and should not be relied upon as a statement of law, policy or advice. You should consider whether this information is appropriate to your needs and, if necessary, seek independent advice. This information is only accurate at the time of publication. Although every effort has been made to verify the accuracy of the information contained on this webpage, MYOB disclaims, to the extent permitted by law, all liability for the information contained on this webpage or any loss or damage suffered by any person directly or indirectly through relying on this information.