Managing a construction project’s finances is not easy. Managers have to account for labor, materials, equipment, and additional costs when creating financial plans. However, with the recent advancements in technology, managers now have access to construction asset tracking software which allows them to access their assets’ data in real-time.
Equipment tracking in construction refers to using GPS and telematics to monitor construction equipment’s location, usage, and maintenance needs. This system allows project managers to know about every aspect of the equipment and use the information for more efficient resource management. Construction equipment tracking also plays a vital role as it helps managers identify areas where finances are required and where they are overdrawn. This knowledge allows managers to create more cohesive financial plans.
Let’s see how equipment tracking can play a role in helping you plan your construction project finances.
How Equipment Tracking Helps Financial Planning?
Equipment tracking enhances financial planning in construction by providing valuable data and insights. These insights can be used to accurately estimate costs, allocate resources, and control finances.
Here are a few ways equipment tracking contributes to better financial planning.
1. Real-Time Monitoring of Equipment Usage
Equipment tracking provides construction firms with details on equipment wear and tear, fuel usage, and operating costs. It also assists in estimating the probable future expenditures for equipment and in providing correct estimates of the amounts for equipment in future projects.
2. Accurate Cost Forecasting
Equipment tracking through this software helps to monitor asset usage in real-time. Since most equipment at a construction site is rented, managers face the problem of determining which to rent again and which to leave off. Equipment tracking allows managers to identify equipment usage and, based on that, make acquisition decisions. Efficient management of assets minimizes wasteful expenses, meaning project costs are efficient and cater to the project requirements.
3. Reduction in Overtime and Fuel Costs
One of the primary benefits of equipment tracking is that it can help the organization in predictive maintenance. In this case, the software provides performance data indicating when a particular piece of machinery is likely to break down. This proactive approach reduces the chances of having to make costly repairs, thus avoiding project delays and other additional expenses.
4. Enhanced Resource Planning
Construction equipment tracking solutions assist construction companies in managing the fuel consumption and idling time of equipment. Savings made on fuel and its utilization influence direct costs. These savings can help introduce more cash flow into the construction project.
5. Reduced Theft and Loss
Equipment tracking helps project managers get real-time data on the location of equipment. Equipment tracking can also help prevent theft, as the sensors on the equipment can help managers determine where it is currently located. Vandalism of company-owned equipment results in huge losses.
Companies use real-time GPS tracking and geofencing to track the location data of valuable assets and gain notifications if equipment is removed from specific areas. Reduction of theft and recovery of stolen items cuts the expense of replacing them and impacts insurance rates.
6. Data-Driven Financial Decisions
Through an efficient tracking system, managers can monitor the status of equipment, its productivity, and the costs associated with a project. These insights include determining whether or not to lease or buy new equipment by comparing them to maintenance and repair costs. The system allows project managers to make necessary adjustments to future budgets based on past data and find opportunities for expense reduction. All these things help them to take data-driven decisions for construction projects.
7. Improved Cash Flow Management
Ensuring the equipment is available when required makes it easier to avoid downtime. Equipment tracking supports smoother operations, which helps project managers manage timely deliveries and reduce the risk of delays. This results in the project being completed on time. On-time project completion is the main goal of any construction project. By completing the project on time, companies can better plan revenues and keep the saved cash for future projects.
8. Long-Term Asset Management
Companies can plan long-term replacements or upgrades of machinery with the insights gained through equipment tracking. Knowing when assets must be retired helps companies allocate funds for future capital expenditures without disrupting ongoing projects or causing budget overruns.
By incorporating equipment tracking into their systems, construction companies can avoid overspending, reduce unexpected costs, and ensure that projects stay within budgets. This helps construction companies achieve financial and project success.
Conclusion
Equipment tracking is an essential tool for enhancing financial planning in construction projects. How? We have seen that equipment tracking helps project managers keep an eye on their equipment. The system of sensors and trackers helps managers gain real-time insights into equipment and its usage.
These insights help site managers to plan for financial resources such as maintenance needs, replacements, need for new resources, and more. Proving that equipment tracking is an invaluable tool for the long-term financial success of construction projects.
