5 Areas Of The Construction Industry To Improve

The construction industry is one of the most well-established and growing sectors on earth, with employment rising 2.6% per year on average between 2015 and 2020. With the pandemic forcing the public indoors, millions of people chose to prioritise their investments into home renovations, leading to huge boosts for SMEs and independent processionals as demand rose.

Investments in transport, renewable energy, residential and commercial infrastructure projects are all expected to spike in the coming years, however despite economy’s undoubted dependability on the construction industry, digitalisation within the sector will remain a huge stumbling block to overcome. One could argue that construction is perhaps one of the only sectors where digitalisation and a reliance on technology isn’t needed, however with Making Tax Digital on the horizon as well as the increase in online payments and client correspondence, it’s something which construction companies need to tackle.

Nordens’ Cloud Division Manager, Hollie Watson, says, “It is so important for construction to manage themselves digitally, to ensure they are constantly monitoring themselves in real time. Without being digital, the reports the industry receive may be outdated, meaning decision making is not made with the most up to date information. By keeping up to date, businesses can see how they did yesterday, today, as well as plan for the future based on this. The most important thing is to make sure directors are making the right decisions for their business, and without the knowledge behind them this is near impossible.”

We look at five areas of the construction industry which companies should turn their focus to improving, which in turn will provide a more efficient system as well as hopefully more business in general…

Tracking Logistics

Often construction workers, for example builders or labourers, have multiple jobs running at the same time. This is part and parcel of being an in-demand worker, however keeping on top of all those jobs from a financial point of view can be incredibly difficult.

By using an accounting software such as Xero, you can track and monitor all your financials on a job-by-job basis, pulling off reports effortlessly including cashflow and profitability. This naturally leads to a more cohesive and streamlined process, saving time and headaches for businesses in the long run.

Purchase Orders

Raising purchase orders (POs) and matching to the supplier’s bills can be a tricky task, constantly checking to see everything is matched up which takes a fair bit of time and not to mention a lot of patience. You want to see that prices haven’t altered, or that extra contents haven’t been added to ensure all proceeds are verified and regulated.

By going through a PO software such as Approval Max, users are able to log spending and resources with ease, delivering regular compliance for accounts payable and accounts receivable. What’s more it also grants designated individuals control to approve bills and purchasing orders. Platforms such as Approval Max are also easily integrated into apps like Xero, so you will have all the information consolidated into one place, making it so much simpler to audit and keep on top of outgoings appropriately.

Having A CRM System

Most people will remember the majority of builders keeping an address book of clients and other tradesmen which is referred to when needed. Unfortunately, the days of manual logging are all but limited, as having an efficient Customer Relationship Management (CRM) system in place is paramount for virtually all businesses nowadays. This allows companies to manage jobs astutely, including sending out quotes, invoices and payment reminders to clients through a digital format as opposed to scribbling a receipt on the back of a notepad.

As a result, it eliminates the possibility of vital bits of information being misplaced, or payments becoming overdue, whilst allowing everyone to have access to improve transparency and accessibility. Most CRM systems, such as ServiceM8 and Simpro, also integrate seamlessly with accounting software such as Xero. This makes customer relations so much easier to navigate and stay on top of, leading to clients feeling involved, trusted and notified which increases the chances of repeat custom.


Construction workers are often contracted, or even subcontracted, to carry out a particular job. For businesses monitoring their workload, time and rate it can get very tricky, especially if you have a big project with a lot of contractors working on. By having a practical time-tracking software which everyone adheres to, contractors are paid correctly for their respective hours worked whilst you can also calculate the performance of a particular job or project to analyse if it needs more or less hands.

Software such as WorkflowMax allows businesses to sufficiently track what has been done and what needs paying. Once again, it integrates so well with accounting platforms such as Xero so everything is centralised for ultimate convenience.

Construction Industry Scheme (CIS)

If you ask anyone in construction about CIS, you’ll probably get a lot of negativity hurled your way. Under the CIS, contractors deduct money from a subcontractor’s payments and pass it to HMRC. The deductions count as advance payments towards the subcontractor’s tax and National Insurance. Contractors must ensure that they are verifying their subcontractors deduction rate, and paying the subcontractor and HMRC accordingly.

Fortunately, all of this is calculated, filed and submitted within your accounting software such as Xero, taking away hours of admin work whilst making sure everything is correct and compliant with HMRC.

We hope this has outlined to you the ways in which the construction industry can improve their business through digital transformation and efficiencies. If you require any further information on digital transformation, cloud accounting, or anything accounting related for that matter, please don’t hesitate to get in contact with us at Nordens where one of our trusted advisors would be happy talking you through your query.