Published November 22, 2022 . 4 mins read

Referred to as either work-in-process or work-in-progress, the WIP report is essential for contractors because it helps them get a sense of where they stand on their projects and as a company, Orr told the podcast host.

In their engagements with construction clients, CPA firms often find that contractors are wasting time and money by sticking with the old-school, manual approach.

This process involves pulling data out of the accounting system, combining it into the WIP report spreadsheet, and setting up a meeting to discuss this snapshot in time with project managers, often on a monthly basis.

It’s a backward-looking approach that, in addition, tends to be error-prone due to the manual entry of information.

By contrast, cloud-based data-warehouses like ProNovos give contractors the ability to combine live, continually updated data into an automated WIP report that is always available to users in the office and the field.

This gives CPA firms’ construction clients a more accurate picture. Having this feedback allows execs and PMs to make adjustments in real time. It’s a bit like those radar-based road signs that tell you right now if you’re going too fast.

Toward the end of the podcast, Ray asked Orr for an example of a situation in which a CPA firm came back to ProNovos and said, “You helped us knock it out of the park.”

The data scientist recounted the example of a West Coast contractor with $800 million in annual revenues and a self-performing concrete division. The company had been having some trouble maintaining the profitability of some of its projects.

“They identified that they were losing money after the fact, most often,” Orr told Ray. “It was not until they sat down and they did the review with their CPA firm that the executives said, ‘Hey, we thought on this job we were going to have 7% profit.'”

Bringing its decades of financial experience to the table, the CPA firm stepped in to start analyzing the client’s project data in ProNovos prior to running the WIP report.

“They got the projected final cost beforehand,” Orr explained. “They were able to go into these meetings and be more prepared to identify any jobs that might have the potential of running over … Now this contractor is doing about $1.5 billion, and they are profitable.”

The anecdote highlights how collaboration between analytics companies, contractors, CPA firms and sureties can be a powerful way to maximize the accuracy and utility of construction data, Orr said.

As Orr noted during the interview, opportunities abound in the construction industry. But today’s challenges, which include the labor shortage, rising interest rates, higher inflation and softening backlogs, mean that getting the numbers right is more important than ever.

“Risks are everywhere,” Orr said.  “Margins are slim … You could be on a project, lose money early and you must stay on that project knowing that every day you go into this construction site, you are losing money. But you have to do that or you go out of business.”

Budget issues, in addition to macroeconomic trends, tend to dominate listicles about why construction companies fail, Orr noted.

As expert communicators, when CPA firms are armed with the right visual tools and construction analytics, they can help both office and field personnel get a better sense of where the company stands.

With thousands of hours in Microsoft Excel, the typical CPA can spot trends in a spreadsheet right away, but that’s not always the case with PMs and superintendents; and even busy executives with high financial literacy may be too time-pressed to stare at dense and complex spreadsheets.

“If you’re familiar with Excel, you’ve got rows and columns of just data. There’s no real visual component, no narrative that the data is going to tell you,” Orr explained. “CPA firms can create the narrative for their clients using our information.” Construction advisors, he added, also bring an in-depth understanding of their clients’ businesses to the process.

ProNovos is a full-service data company for the construction industry. On the project-management end, our cloud-connected Operations Manager tools make it easy to manage bids, crews, equipment, punch lists, blueprints, drawings, RFIs, photos and more.

Meanwhile, our Analytics Marketplace is essentially a one-stop-shop packed with off-the-shelf dashboards designed to hit the ground running with data from Foundation and other leading construction software providers. In addition to the automated WIP and executive dashboards, the list includes reporting tools for job costs, project billings, labor hours, sales, company monthly billings, customer analysis, change orders, projected final costs and accounts receivable.

As Orr noted on the podcast, ProNovos continues to work directly with a wide array of contractors and subcontractors from all over the country and with existing tech stacks that vary tremendously from company to company.

That focus will continue even as ProNovos explores the exciting potential of partnering with expert CPA firms and sureties to encourage wider adoption of analytical solutions in the industry.

“We feel as though we are educators first and a technology company second,” Orr told Ray. “This opportunity is so big, we can’t talk to every contractor. And that is why we felt that if we were going to evangelize our message, well, let’s partner with an industry that is already doing that. Let’s arm them with leading-edge technology that is going to help their clients and also is going to help them be differentiators.”