Securing your revenue with Rachel Wieser

In this episode, Zach talks about how to protect your revenue. Rachel Wieser, an onsite consultant at Buildertrend, will be joining him to share her insights on this very important topic.

Listen to the full episode to hear about Rachel’s experience as an onsite consultant and what she’s learned while working with customers and helping them succeed.

WHAT FEATURE SHOULD BUILDERTREND USERS START WITH TO PROTECT THEIR REVENUE?

“Honestly, there’s two different locations or two different features in Buildertrend that I’ll actually start with. It really depends on what the client’s top priorities are though. Those two are generally going to be Change Orders, if the clients are looking more for a homeowner interaction or to improve their communication with their homeowners, or if they’re looking to more improve their communication with their subs. I’ll end up starting actually with the purchase order system.”

WHY IS IT SO IMPORTANT TO UNLOCK TOOLS SUCH AS PURCHASE ORDERS AND CHANGE ORDERS?

“So, I know a couple episodes ago, you and Reece were talking about cost codes, and your estimate in your cost codes is going to be so insanely important to help identify where you are exceeding your costs versus where you might be saving money on your costs. The more you can narrow down how effectively you’re estimating, just based off of those cost codes, even those different categories that you are grouping all of your costs into … it’s going to allow you to be that much more accurate for future jobs. And the more accurate you can be, obviously the more money that you’re going to end up making on that project.”

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rachel wieser

Rachael Wieser | Buildertrend

Intro:

Welcome to “The Better Way,” a podcast by Buildertrend. Here you’ll learn to simplify and establish processes that will make meaningful changes to your company and help you achieve your goals. There’s a better way to run your construction business, the Buildertrend way. Tune in this season as Pro Services education coordinator, Zach Wojtowicz, chats with several experts about risk management.

In this episode, Zach’s talking about how to protect your revenue. Rachel Wieser, an onsite consultant at Buildertrend, will be joining him to share her insights on this very important topic.

Zach Wojtowicz:

Welcome everybody to “The Better Way,” a podcast by Buildertrend. What we’re discussing today, how to manage risk in the construction industry. I’m really excited to welcome our guest today. Her name is Rachel Wieser. Rachel, how are you doing today?

Rachel Wieser:

Hello, Zach. I’m doing good.

Zach Wojtowicz:

Thanks for coming here. Rachel is an onsite consultant here at Buildertrend, which means she’s traveled all around the country, training people in person about Buildertrend, of course, and other things in the construction business. Rachel, what’s been your favorite place to visit? Putting you on the spot right away. A hard question.

Rachel Wieser:

Oh, that’s a good question. That’s a great question. I generally say, just based on the location, Durango, Colorado is probably the most beautiful place I’ve been.

Zach Wojtowicz:

That’s a fun one.

Rachel Wieser:

Yeah.

Zach Wojtowicz:

Not too bad.

Rachel Wieser:

Yeah. I hadn’t really ever heard of it before.

Zach Wojtowicz:

Really?

Rachel Wieser:

Yeah.

Zach Wojtowicz:

Huh. Well, that’s awesome. I’ll have to put it on my list of … For our listeners out there, I too was an onsite consultant, and my favorite place of all places was Pittsburgh that I visited. I know.

Rachel Wieser:

Oh, okay. Good to know.

Zach Wojtowicz:

It spoke to me, more than I realized.

Rachel Wieser:

Interesting.

Zach Wojtowicz:

Yeah. I would definitely go back. So, for all our steel city folks out there, shout out. You don’t get enough credit for how wonderful your city is. So, Rachel, we’re talking about protecting revenue, which is our theme for this series of episodes. We’ve had several guests here talking about different things in the industry that come with risk. And today we’re talking about protecting revenue and there’s a lot of ways in builder trends that we can look at that. Where do you start when you’re talking to someone in Buildertrend, in their account about that topic? We’re trying to sell them on features to use the program effectively, with us understanding there are things in place that can help you manage risk and protect that revenue. So, where do you start?

Rachel Wieser:

Yeah. Honestly, there’s two different locations or two different features in Buildertrend that I’ll actually start with. It really depends on what the client’s top priorities are though. Those two are generally going to be change orders, if the clients are looking more for a homeowner interaction or to improve their communication with their homeowners, or if they’re looking to more improve their communication with their subs. I’ll end up starting actually with the purchase order system, which not very many clients in Buildertrend will use.

Zach Wojtowicz:

Yeah. That’s a great point. So, let’s start with purchase orders. I think that’s a great path to follow here and get into a deep discussion about the benefits of Buildertrend purchase orders and even any purchase order system that you can put in place. It’s about putting processes, ensuring you’re following the right steps. So, regardless, if you’re using Buildertrend or not, there are tons of other softwares or even consultants who would recommend a purchase order system. So, in Buildertrend, tell me about it. What’s the great thing about our purchase order system? How does it work? What are the things that people should know?

Rachel Wieser:

Yeah. So honestly, the purchase order system in Buildertrend is very seamless, especially if you are getting your budgets into Buildertrend already getting those costs set up, generally through our estimate, maybe a proposal, getting everything transferred from that sales side, getting your budget set up. All of the details that you’ve created, then in your estimate, we’ll be able to easily transfer into your purchase orders. So, you’re not having to manually key in all of the details a second or a third time, just to create a potential contract for a sub. A lot of people don’t truly understand that purchase orders are a way to have process payments with your subs. They’ll be able to track how much they are spending to a particular sub or a trade. And it’s also going to help prevent overspending on specific materials or anything like that. So, if you have a purchase order for, just make math easy, a $1,000, you know that, that was what you estimated your costs for, and we should not be going over that $1,000 for any of those payments for materials.

Zach Wojtowicz:

Yeah, I think that’s super important to reiterate. There’s a very clear picture that was painted almost everywhere I went and certainly where you’ve gone, Rachel, where just the orchestration of getting information from the job site to the office team, to the accounting team, to paying those subs, there’s a conveyor belt of things that occur and I’ve witnessed it on a Thursday. It’s the 15th of the month and the subs are rolling in and people are like, where’s the invoice and how do I get there? And we’ve seen it time and time again. And you can take all that out and really look at it objectively and think there’s got to be a better way to handle all that. And it seems like we’re not necessarily hitting on protecting revenue, but the reality, what Rachel is saying, is you can effectively put a cap on what you should be paying and catching it at the moment that you cut the check because what we’ve seen, people just overpay. They don’t go find the information. The guy’s there to get his check and bookkeeper just assumes that’s the amount you should pay.

Rachel Wieser:

Yeah. Because generally, bookkeepers are just really receiving an invoice from a sub. They don’t really know for sure, if this is work that’s been done. If the sub was just bringing an invoice for the upcoming week, nothing like that. And where I’ve seen a lot of delays in efficiency when meeting with builders is, they end up having their project managers approve all of these invoices. So, subs have to have their invoices in on a Monday. PMs have to have Monday through Thursday to review it. And then it goes to accounting on Thursday for that payment to be cut.

Well, your project managers don’t always have time to be reviewing this, or they’re having to sit down for three or four hours just to review those invoices coming in from subs. The PO system in Buildertrend has a lot of capabilities to help improve that communication. And then like we’ve said, is put a cap on that spending. Your PMs can see where that cap is and know that whether you’re going over it, they need to get it approved by the owner, or if they need to start talking to the client to see if we need to get change orders out.

Zach Wojtowicz:

Yeah. They’re picking a proactive approach rather than the discovery down the line. oh, we’re over budget. What happened? And now you’re panicking.

Rachel Wieser:

Right.

Zach Wojtowicz:

You’re trying to investigate things can get really messy really quickly.

Rachel Wieser:

Exactly.

Zach Wojtowicz:

There’s a lot of other benefits, too. Obviously, to the PO that are just baked into the software. You can outline your scope of work. Do you ever walk the builders through that process and how that could help protect a revenue?

Rachel Wieser:

Right. Yep. Outlining the scope of work, that way it’s very clear cut on what is expected of the subs by being able to detail every single line with the materials that are going to be needed, where they need to be installed. You can definitely help prevent errors from your subs by giving them all of those details on the very front end as well.

Zach Wojtowicz:

Yeah. It’s all about clear communication and it takes a little bit of setup. You may need to talk with your attorney or your legal advisor, whomever, your business consultant about what should be in that PO, but then you get into some other things that will save you time – i.e. help you save money, like templating those options. Building them into your account for reuse, learning how to manipulate it, so that you can reuse and save time by knowing how it can be easily copied in exchange job to job.

Rachel Wieser:

Yes, whether it’s across one job to the next, or even if it is on that same job, where you’re needing to reorder some materials for an error in shipment or something, you don’t have to take the time to rebuild that purchase order. We also have really simple ways that items can be copied, if you have to switch subs in the middle of the project. Again, Zach, like you said, saving time is one of the most important and most crucial ways that we talk about with our clients, especially through onsite. That is going to be a hit on your revenue, if you are spending five hours versus spending an hour and a half going through and reviewing your cost.

Zach Wojtowicz:

And it’s funny how fast that time can add up.

Rachel Wieser:

Yes.

Zach Wojtowicz:

And it’s easy to miss track of it because you don’t really think about it when you’re doing it. This is my job. This is what I do. When you really be objective and you look at what we offer, you can quickly find ways that you’re going to be more efficient, which means your overheads are going to be a lot lower on those particular jobs in the long run.

Rachel Wieser:

For sure. Yeah. And I feel like so many of the clients that I’ve gone to visit when I’m in a discovery phase with them, it seems to be the conversation is, well, we just don’t need a purchase order system. We just don’t … it’s not important to us. And I was like, OK. Well, how are you tracking your costs? Are you just taking an invoice and entering it into QuickBooks and calling that good? That’s generally, the answers. Yep, that’s how we’re doing it.

Zach Wojtowicz:

How many people have you met where they’ll say something to you? We don’t really job cost, we just look at the profit and loss report and if we made money great.

Rachel Wieser:

Yeah. About 90, 95% of my clients, I’d say that I’ve gone to meet.

Zach Wojtowicz:

The reality of it is that’s kind of a rare thing to find people who are outlining the scope exactly on the front end and then comparing their systems to what they’re trying to accomplish. If you’re making money, you’re doing well but couldn’t we make those margins a little tighter, a little bit better? Couldn’t we save a little bit more by doing a little bit more work to get those things in place? And that’s kind of the beautiful part. Rachel, you outlined the estimate is really the key to this. Let’s talk a little bit about that. You mentioned change orders as well, and we’ll get there. With estimating in Buildertrend. Why is it so important to unlocking even using something like the PO and change order system?

Rachel Wieser:

Yeah. So, I know a couple episodes ago, you and Reece were talking about cost codes and your estimate in your cost codes is going to be so insanely important to help identify where you are exceeding your costs versus where you might be saving money on your costs. The more you can narrow down how effectively you’re estimating, just based off of those costs codes even, those different categories that you are grouping all of your costs into. It’s going to allow you to be that much more accurate for future jobs. And the more accurate you can be, obviously the more money that you’re going to end up making on that project.

Zach Wojtowicz:

Right. Yeah. You know what target you’re trying to hit, and then you can generate your POs right off that estimate. And yet it’s not that … we know things change. It’s not that the estimate won’t adjust over time based on delays or even just requests from your customers. If you’re a spec builder, you get creative, your designers go a little crazy, but at least you know that baseline what you’re trying to hit.

Rachel Wieser:

Yep. If you have that baseline, you’re going to be great. And then by using Buildertrend, you’ll have your continued or your new expected, or your fluctuating estimate based off of those changes that are happening. Like you said, selections, change orders, even being able to track variances off of those POs. You’re going to be able to see all of that compared to your base cost, giving you that baseline and then identifying at the end of the project. Not just, if you made money on that project, but the areas where you were able to save a little bit more than what you expected.

Zach Wojtowicz:

Yeah. And at least you can report on it and track what happened throughout the project. So, let’s talk about when changes do occur a little bit, and we’ve talked around it to some extent, the change order system. And there’s a funny story about a few of our different reps here at Buildertrend when they’re training people. This used to be one of the things that people would start with. They’d sign up. Let’s save you some money. Let’s get those change orders rolling, baby. Let’s track that, track that. What do you think about the change order system? Do you talk about this a lot on your trips? I mean, why is it so valuable to our customers?

Rachel Wieser:

Yeah. So, change orders are discussed on probably 99% of my trips.

Zach Wojtowicz:

Rare.

Rachel Wieser:

Very rare, yes. They are one of the most important ways that our clients save money. The reason for that is, almost every single rep has talked to at Buildertrend has said, at least at some point in their business and their lifetime of their business, they have not tracked change orders. The clients say, yep, we want to upgrade this. Two months later when the builder is trying to invoice them for it. They’re like, well, we didn’t ask for that. Like, well, yes you did. The builders, our clients, they didn’t get a signed contract or any acknowledgement from the homeowners at that point. So, the change order piece in Buildertrend really is one of the biggest areas that you can save the most money, if you don’t have a change order process in place already.

Zach Wojtowicz:

Mm-hmm. So, what does it look like in Buildertrend for people who maybe aren’t using it? How do you use it? What are the places the customer can interact with it? Let’s get into the details a little bit, where you can get this going.

Rachel Wieser:

Yeah, most definitely. So, one of the most important things of using change orders in Buildertrend is to really identify what your cost as a builder is going to be. From there, then you can identify how much you want to charge the clients. Obviously, I’ve had some builders that they’ll look to charge more for their change orders, just because it’s that much extra work that’s needing to be done or needing to be completed on such short notice. So, they’ll ask or they’ll mark up their change orders say to 50% when their estimate was at 30%.

Zach Wojtowicz:

Mm-hmm.

Rachel Wieser:

These change orders then can be reviewed by the clients right through their Buildertrend portal, approved with a signature and an acknowledgement that they have seen this, and they are accepting the additional charges for the work. And then again, it can go … this will update your budget. You can create purchase orders from that. Again, saving time and money. Saving time and making sure that you’re getting paid is the most important part of the change orders through Buildertrend.

Zach Wojtowicz:

Yeah, and it’s a great way to kind of teach people these processes early because you’ve created this change order. You’ve gotten the request and you want to track how much it’s going to cost you, like Rachel said. Well, that means you need to move it into a purchase order, which is what we talked about earlier. So, there’s a lot of logic in the system.

Rachel Wieser:

There is.

Zach Wojtowicz:

If you can paint the picture of continuity, I’ve built my estimate. I’ve created my POs off the estimate. I now have a change order and now I’m POing off that change order and everything’s flowing correctly to the proper places. And it means that because it’s predictable and repeatable, I can now start to gain more information about how to improve what I’m doing with my projects moving forward. And if there is a constant change order. Oh, maybe I should be adjusting my estimate to include that because it’s coming up so much.

Rachel Wieser:

Right. And the other thing is, I was talking with a builder here just a few weeks ago, actually. And he said that a lot of times his project managers out in the field are the ones that are taking on the responsibility of identifying if a change orders should be created or not.

Zach Wojtowicz:

Mm-hmm.

Rachel Wieser:

Well, they don’t have a place to create those change orders right now. So, what we …

Zach Wojtowicz:

Just like texting each other?

Rachel Wieser:

Yeah.

Zach Wojtowicz:

Change order.

Rachel Wieser:

And not even that, they just tell the subs that they can do the work.

Zach Wojtowicz:

Oh, and then they wait for the invoice?

Rachel Wieser:

Yeah.

Zach Wojtowicz:

Oh, that sounds fun.

Rachel Wieser:

They pay the subs, but they’re not charging the client for some of those smaller items. So, we definitely went through some really important processes where … the project managers don’t need to create all of the details in there. You could ask the project manager just to put a description in a change order and then maybe the office staff who has a little bit more time and can see this maybe from a different view on the desktop. They will be able to then update all of the details that are necessary. When I was done with that trip, the owner said that just based off of the change orders, he thinks they’re going to save close to 2, $3,000 a week.

Zach Wojtowicz:

That’s insane.

Rachel Wieser:

Yeah.

Zach Wojtowicz:

I mean, think about how much that adds up over the course of a year.

Rachel Wieser:

Right.

Zach Wojtowicz:

It’s insane.

Rachel Wieser:

That was my thoughts exactly. I was like, why have we not done this sooner?

Zach Wojtowicz:

Yeah. And it’s just so easy to get into those habits. This is what my company has always done. And finding ways to put some actual conditions around those habits, it takes a little bit of effort. And I think that’s where our onsite consulting service Rachel, is so impactful. A lot of times on trips, I’d be having these conversations with people in the room and I just got the feeling that they had never sat together and discussed it.

Rachel Wieser:

Right.

Zach Wojtowicz:

Even little things like that, procedurally from a business operation can lead to big cost savings down the line because now, you know the communication piece is there. And if there is a question, people aren’t just going to do things without checking or with potentially impacting the bottom line.

Rachel Wieser:

Right. Most definitely, most definitely. And that’s it. Like you said, you hit the nail on the head there, Zach. Every visit that I go on, I feel like people are apologizing to me for sitting there and having this conversation about their business. And I was like, I’d rather you do it now because you are here. So, just finding that time to sit down and really have those deep discussions is necessary for any company. Even if, you feel like you are running your business efficiently, is that communication from the field to the office very clear? Does the office know what they’re needing to pay that the field is approving or not? And so, any of that communication or a lack thereof can obviously impact that bottom line. And between communication, having systems to track all that information, those are probably two of the most important keys besides actually having tools to help assist with that.

Zach Wojtowicz:

Yeah. Are there any other tools inside Buildertrend that maybe we haven’t touched on yet that maybe have a kind of a potential to save revenue and you haven’t really thought about it? I have a few in mind, but is there anything that you’d like to coach to your clients that you should be doing this because it can help you in the long run for this reason?

Rachel Wieser:

Yeah. Honestly, I think invoices, obviously, is one of the most important, even if your clients are not active in Buildertrend, by utilizing those invoices to send them into QuickBooks or your accounting platform. You’ll be able to identify where you’re at in the project compared to your costs and make sure that you are invoicing ahead of your project costs in most instances.

Zach Wojtowicz:

Mm-hmm.

Rachel Wieser:

A really easy way to see that then as well is going to be the WIP report. It really requires that you use all of the financial pieces of Buildertrend but …

Zach Wojtowicz:

Yep, kind of the last step. You have to kind of get everything else in place first.

Rachel Wieser:

Exactly. But you’ll be able to even see just through that, through that WIP report, not just your costs, but if you’re over or under invoiced for those projects as well.

Zach Wojtowicz:

Mm-hmm. How do you get people to buy into using these features in Buildertrend? We talk about a lot in different places, building a culture. What do you find works on the road to kind of get people to commit and start using these things? Because we know it will save money, but sometimes it can be hard to paint that picture for people.

Rachel Wieser:

What I’ve honestly found has been the most successful, when I’m onsite, especially for the builders, the bookkeepers that have been kind of hesitant or given a lot of pushback for implementing a new process is, just showing them the simplicity of how effective Buildertrend can be.

Zach Wojtowicz:

Mm-hmm.

Rachel Wieser:

Like we mentioned at the beginning, capping or giving your company caps on how much to spend. The contract for your subs. Being able to apply multiple payments, having lean waivers. All of that being on your purchase order in a single location is something that very few people understand until they can actually see it put into place.

Zach Wojtowicz:

Awesome. Well Rachel, I’m glad you brought up contracts and lien waivers. We’re going to have Buildertrend’s legal counsel, Nick Knihnisky, to talk about those very things in our episodes coming up. That’s all we have time for today. Thank you everybody for listening, for joining “The Better Way.” Rachel, thank you so much for being here.

Rachel Wieser:

Yes. Thanks Zach. Good to see you.

Zach Wojtowicz:

It was fantastic. If you want to learn more about Onsite Consulting or even potentially bring Rachel out to your office, feel free to reach out to our pro service department, and we can have those conversations. This is Zach Wojtowicz, signing off. Thanks.

Outro:

Thanks for listening to “The Better Way.” If you’re a Buildertrend customer, schedule a training to learn more. All listeners, be sure to rate, review and subscribe to “The Better Way” wherever you get your podcasts. Also, visit buildertrend.com/podcast to sign up for the email notifications when the next season drops and explore our other podcast, “The Building Code.” Don’t miss our next episode where we will be talking all about contracts.


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