Have you ever had a job that would never end?
Back in our construction contractor days, we used to joke that we were the best 98% complete contractors out there. We were great until we got to the final 2% of the job then it seems the job would drag on forever.
And when the job drug on forever, it took our profit with it.
According to KPMG, over 50% of construction business owners experienced one or more underperforming projects in the previous 12 months. While there are many reasons for these failures, lack of proper planning is on the short list.
This month’s mission is to review your job closeout procedures. After our All Access segment, you’ll have the talking points to share with the project team on why project closeout is critical, a job closeout checklist to implement at the beginning of the job and as a trigger to a post-project review.
Why is it important to focus on the closeout of a job? Because if the job isn’t closed you:
- Can’t collect retention
- Can’t final bill
- Can’t get the final payment
- Can’t close out change orders
- Can’t pay vendors and subs
- Can’t recognize 100% of the profit on the job
- Can’t clear old balances off Accounts Receivable
The One Thing
Heck, when you think about the importance of job closeout, it becomes the “one thing,” the “domino,” the “push goal” to making operations flow better. It may be cliché but when you really boil down construction operations, how a job is closed is critical to the success of the company.
Here’s the best way to use this checklist:
- Insert it as part of the job set up and turnover so that project managers and superintendents/foreman see it when they START the job
- When the job hits 50% complete on the job schedule, trigger this checklist to be discussed at the weekly/monthly WIP meeting with operations
- When the job is 98% complete, the checklist should have completion dates scheduled for all items
- Use the completed checklist as part of your post project review to discuss what went right, what needs improved, what to add/change/delete.
After we began using a job closeout checklist at the beginning of the job we outperformed our estimates and increased our profits. It is amazing what one piece of paper can do. 😊
If you would like to learn more about the job closeout process check out our Build Your Own CFO course! It’s got all the training you’ll need to become a construction CFO (or for someone in your company to become a CFO 🙂