If you are doing end of month expense reports... you are wasting man-hoursFebruary 01, 2021
By: David Stewart, P.E. (6 min read)
So real quick… a little history on the image and title above. This was one of my last projects to run as a project manager before leaving to start Vendrix. Vail Daily did an excellent write up on the project, it is linked here. This biggest challenge with Sylvan was the remoteness of the project, we were 45 minutes down a dirt road at 8,500 feet in elevation. No cell phone service, and limited internet via satellite.
The big, tall white structure in the background is a Roller Compacted Concrete (RCC) batch plant, we produced roughly 5500 Cubic yards of RCC for the earthen dam in which we were armoring. Think about it as a Dairy Queen chocolate dipped ice cream cone. The hard chocolate on the outside is the RCC protecting the soft ice cream on the inside (soil of the dam). Batching our own RCC on the jobsite was a logistical challenge, we received over two dozen semi deliveries of cement, fly ash and aggregate a day. Coordinating this on a normal jobsite would be a challenge, now imagine you have no cell phone service.
In the photo above RCC is being placed by a telebelt, which is fed by a series of loaders and haul trucks not shown. RCC is placed then spread with the dozer, after grade is checked it gets rolled and compacted by the double drum roller… Hence the name “Roller Compacted Concrete or RCC”
So how does Vendrix come into play? Well as a project manager I am ultimately responsible for the job cost. When making large purchases, they are done through an account with the vendor & purchase order process. The idea of a purchase order sounds good in theory, but no vendor is going to hold it as a “not to exceed price”. Frankly we are lucky to just get the job number on the invoice. If someone from the project walks into the supply house asking for something, they will sell it to them. What company would not?
Ok so lets say I generated a PO for $20K in rebar and some other miscellaneous jobsite items. Materials get delivered, and an invoice gets sent back to the home office. Assuming they put the job number on the invoice, someone in the home office scans in the invoice and uploads it to the accounting system (Sage, Viewpoint, or Spectrum for example). Eventually that scanned invoice makes its way to the jobsite where someone checks it, codes it and either approves it or rejects it. This work flow is fine for a $20,000 bulk purchase, what about when the superintendent runs out to get a box of duplex nails or some joint sealer?
It takes the same amount of time to code and pay an invoice for $100 as it does for a $20,000 purchase.
Ok then, let’s put it on a charge card (pcard or purchase card) we get through our bank. On this project card holders included the Project Engineer, Project SuperIntendent, a Forman and the Project Manager (me). So I now have four people including myself running around town charging small amounts to the company credit card. As the project manager have no idea what is getting purchased or where it should be coded. A week into the next month, the company controller would email out a spreadsheet with all the expenses from the company that month. I had to find my name, and manually enter the cost codes for each charge. I then had to nag the folks on my project to do the same. We are talking about charges that happened up to 5 weeks ago, by that point most had forgotten what they had purchased and were it should be coded to. Luckily we were all assigned to this one project full time, imagine if we were on multiple… Good Luck with that.
The problem is most corporate charge cards are issued by the bank used by the contractor. These charge cards have little to no control, Vendrix through our partner ComData underwrites the contractor and there are no personal guarantees.
Sad thing is, I hear this from companies every week who have a very similar process. So what about receipts? Well those got emailed to a dedicated credit card email by each card holder. I as the project manager would have to request a receipt from the controller if I wanted to check something. I never did because I was busy and frankly it would take too much time to deal with both my time and the controller who had to dig through 100 of emails.
Vendrix sends an sms text to the user seconds after the card is swiped requesting they respond to the text with picture of the receipt, that image gets automatically paired to the transaction so there is no digging or looking up receipts weeks later
So finally, after all of this about 2 weeks into the next month cost would hit my job. I could see the the “credit card” charge from all the team members coded to each line item. Still have no idea what got purchased…
From market research the average contractor with 30-75 million in yearly revenue charges between $50K and $120K per month on their company credit card. Thats 600K to 1.44M in yearly spend that is not being checked, or adequately managed.
While it is likely little of those charges are fraud, it is very likely some of those charges could be considered “wasteful.”
Meaning, tools were purchased that the company already owned or other people on the project were not engaged to see if the purchase was really needed. Let use a conservative figure say 10%… thats a $60K on the low end and 144K on the high end in savings per year.
Depending on spend thats a couple yearly salaries… We are not talking small dollars here…
Vendrix is built for the contractor so they can maximize the time savings that come with a credit card, eliminating countless small tools invoices while giving front line supervisors the tools they need to do their job, efficiently and with logical oversight.
So what is the solution to the monthly spreadsheet? Budgets… Check it out below
So budgets, are a great way to apply that spend velocity to your projects. What about seeing transactions in real time? Well, keep watching!
Tons of powerful tools here to save crews time and get control of those credit card charges. If I had Vendrix while on Sylvan Lake my time, well the project engineers time… would be spent on more important things than tracking down miscellaneous card receipts of everyone on the job. Our project super would spend more time out in the field running work instead of pushing paper, paper that no one was looking at. The time and spend savings spread across the whole company is substantial. Ignoring and not properly managing 600K to 1.44M in yearly spend by employees is not something to brush under the rug.