SME managing projects, materials and stock? Cloud technology can boost your profitability.
By Michelle Nicol
31 July 2017
When it comes to winning and managing profitable work, small and medium enterprises have the same challenges as the largest enterprises. Quoting, pricing, costing and managing time and money on projects and products in the construction, technology and industrial environment is often detailed and complex.
Three SMEs and two business consulting professionals share their insights into how they solve these challenges:
Aden Larsen Construction, New Zealand
Aden Larsen are an award-winning construction company in New Zealand. Keeping track of each build and managing the materials required for each project helps ensure they remain profitable.
Aden Larsen use TidyBuild to enter invoices for supplies and labour as they occur, rather than adding up costs at the end of a build. This removes the need for back costing, the old “too late” method of determining profitability prior to cloud technology. This real time financial data helps Director Kelly Larsen drive the direction of the business: "It gives us focus. We're flat out at the moment, so it helps us decide which jobs we want because we know from TidyBuild those jobs with a better margin."
Kelly says that many others in this industry are still relying on old technology: "I was at a builder’s conference sitting in a tech workshop and the guy was saying if you're still using spreadsheets you've got a problem. I gave up spreadsheets two years ago when I got this sorted with TidyBuild. I know exactly where a job is at, at any point in time.”
Using TidyBuild together with Xero to keep track of materials and costs for their home building business, helps Aden Larsen stay ahead of the game, Kelly explains: "They were also saying there's not one app that will do everything. I was thinking I know TidyBuild communicates with Xero nicely because that was the problem a lot of them were having."
Profabrication Services Ltd (PFS Ltd), Wales
Profabrication Services Ltd (PFS Ltd) is an engineering, welding and fabrication business that grew out Rio Tinto’s decision to close their aluminium smelting plant in Holyhead, North Wales. After introducing Xero to manage their finances, PFS added TidyEnterprise in 2016 to help manage projects and costs.
Managing Director, Martin Davies says it helps him focus on profitable projects: “I can print out a monthly report to show the productivity of my company, which breaks down into my fixed price, time and materials and my overhead type working. It clearly shows me graphically, with clear data where I’m being productive and where I’m not being productive.”
TidyEnterprise helps PFS Ltd manage quotations, materials, stock and pricing for fixed-price projects, helping the business to save costs.
“We run each job as a project in TidyEnterprise - any materials, equipment or items that we need for that project have to be raised through a purchase order through Tidy,” says Martin. “Before, people were ordering materials with no enquiries about cost. We’d have stuff turning up, and be getting invoices thinking did you realise how much it was going to be?”
“Since we introduced Tidy, our costs have become more stable. There’s not so much of the spurious spending as we’d seen previously.”
Autoline, New Zealand
Autoline are New Zealand's leading conveyor specialists, providing automation, productivity and materials handling solutions direct to the food, plastics and industrial sector. They use TidyEnterprise to manage project costs.
Managing Director Matthew Fisher explains: “TidyEnterprise is an integrated system in our company. It enables us to have transparency on the costs for any project. We can easily assess the hours and components that make up a project. We use TidyEnterprise to create every invoice and purchase and this is sent seamlessly into Xero.”
Being able to integrate Tidy’s cloud-based software with other tools has been a real benefit to Autoline says Matthew: “We have recently purchased another company and it has been simple to integrate this new entity into our system.”
“TidyEnterprise is an essential part of the day to day management in our company. We would be lost without the level of transparency that TidyEnterprise provides.”
Principality Consulting, UK
David Lloyd Williams of Principality Consulting advises small and medium sized enterprises on processes and software that will help them manage their work efficiently and profitably.
“There are two scenarios in the businesses I speak to,” he explains. “In the first they need help to create order out of chaos – they’re not managing well using spreadsheets and paper-based systems. In the second, they have some electronic systems and software in place, but they’re looking for the next step up, to integrate different systems. Tidy can help in both of those scenarios, especially where you integrate it with Xero.”
David recommended Tidy’s cloud-based software to Welsh-based manufacturing and engineering company PFS Ltd. David explains: “They’re already seeing a number of improvements. They can see what projects are making a profit, what projects are not. They’re starting to make business decisions on projects that they know they shouldn’t be doing because they won’t make money.”
Edward Fyvie, Australia
Edward Fyvie, SME business consultant and lean manufacturing expert, is based in Sydney, Australia where he advises companies on systems and software that will help them run more efficiently. He recently helped implement TidyWork for a client company that engineers and manufactures large customised pressure vessels and heat exchangers for primary resource and infrastructure industries. They were looking to streamline and standardise their work to reduce waste and improve profitability.
Edward says not all job costing and project management software can deal with the specific needs of manufacturing and engineering industries: "Similar software that says it does job costing is usually designed for professional practices and service businesses. It's fine for billing hours and simple jobs, but it just doesn't cut it for manufacturing and industry.”
“TidyWork allows a great deal of flexibility. You can invoice clients in lots of different ways, not just based on time and materials. In these kind of manufacturing and engineering industries you need to be able to allow for milestone payments, for example a 20% payment when the first batch of materials arrive. With TidyWork that's simple. With other systems, it takes a great deal of work around.”
Edward also says that using Tidy's cloud based system offers SMEs significant cost savings: “Tidy + Xero is around 20% of the cost of a mid-tier server based system that can properly do project and job costing, so my clients are making savings in terms of software, not to mention the further savings in hardware to run that kind of system.”
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