There are a lot of things to document in construction. Agreements to perform work, invoices, pay apps, lien waivers, change orders, daily reports, claims…the list goes on and on! Managing construction documents can be a nightmare. However, effective construction document management is as critical to success as anything else.
Challenges in Construction Document Management
Here’s some food for thought: A recent study showed that inaccurate documentation comprises 55% of all rework on construction projects! That’s a lot of time and money wasted solely due to lack of organization and coordination.
There are so many project participants and documents on a single job that it’s hard even to approach the topic. Still, there are general themes that can be identified. Let’s first look at the significant culprits to poor construction document management. After that, we’ll talk solutions.
Access Difficulties
Finding the right documents at the right time can be incredibly time-consuming. If you’re still using physical paperwork for everything, it might seem impossible to keep everything straight. Regular, old files on a computer can get cumbersome, too, if there’s a high volume of projects. More tech-savvy construction businesses might use the cloud or utilize some construction software to keep files easily accessible. Still, access problems exist even if you use digital management software.
Many times a file can’t be located, the internet connectivity is slow, or file permission access problems persist. When material deliveries come in, or when a payment application is submitted, you’ll need to cross-reference and verify these quickly. Also, customers always want to keep updated on the project status. Quick access to documents, drawings, and reports can help to ease customer concerns and increase transparency and visibility.
Version Confusion
Even if documents can be accessed – do you have the most up-to-date version? Or, is that version likely to change any given moment?
Most documents on a construction project go through numerous revisions and editing. Change orders happen all the time, adjusting the scope of work. Markups are made in field notes daily – then those markups are sent back and forth until they’re eventually approved (and by then, there are probably more markups). With invoices and pay apps coming in every month, daily reports coming in daily, and other documentation flying around all the while – it can be hard to know what’s up to date and what isn’t.
Unfortunately, this problem might remain even for some of those using document management software. Some options are not capable of making edits or changes while onsite. Relying on old documents can lead to costly errors and reworks if the crew is looking at an outdated version. Therefore, it’s crucial for every participant to know that they are working from the most recent version of a document.
General Wasted Time
Delays happen all the time on projects. There’s no reason to add additional and unnecessary delays to the project due to simple documentation issues. Without a centralized location for project documents, everyone on the project wastes time trying to find what they need. For example, if it becomes apparent that a crew is working off of old versions of drawings or specs, they’ll need to stop, wait for the new version, and then restart construction.
Another example is lien waivers going MIA. It’s extremely common for customers, owners, and lenders to refuse to release payment simply because a stray lien waiver can’t be tracked down. The delay in payment can lead to a multitude of problems – and certainly could even result in project delays.
Benefits of Well-Organized Construction Document Management
Construction document management is critical as it provides a comprehensive record of the project. The mountains of paperwork that pile up need to go somewhere, and they need to be organized in a way that’s accessible. After all, this documentation is the foundation upon which all proposals, changes, orders, and claims are built.
Claim Preservation
Obviously, nobody walks onto a job hoping for problems. Hopefully, no lien claims, contract claims, or any other sort of claim will be necessary. But hope is not a strategy. In order to preserve the ability to make an effective claim later on (should one become necessary), it’s crucial to have your documents organized. This includes finding a way to organize all the preliminary notices you send, all of the daily reports throughout the life of the project, all receipts for payment, and all lien waivers submitted – just to name a few. In order to set yourself up for success in the unfortunate event that some claim becomes necessary, managing your construction documents is absolutely a must.
Project Cost & Status Tracking
The goal for every project is to stay on time and under budget. Recording all project expenses, such as purchase orders and payment applications, can help track where the money is going and whether adjustments need to be made to the schedule of values. Also, stakeholders and project participants alike will want to know the current status of the project. Organized documentation, daily reporting, updated construction schedules, and photos can help build a comprehensive understanding of what phase the project is in and any addressing any outstanding issues.
Well Established Scope of Work
Many times delays and extra costs are due to crews working off outdated drawings and specs, or starting work before all relevant information is made available to them. Every team on your project needs to have a clear idea of what their obligations, responsibilities, and goals they need to achieve. Having all of these resources organized and readily available will reduce any confusions concerning their scope of work.
Quick Change Order Approval
Construction projects are almost always fluid, changing work line items or specifications multiple times before completion. When contractors request a change order, the project manager or GC will likely ask for reasons why they should cough up more money. Submitting your change orders with field notes and photos can strengthen your argument and chances of getting approval.
Efficient Quality Control & Inspections
Regular site inspections are a great way to evaluate the status of your project and uncover any red flags. Consistent documentation and photography can make these processes much more manageable. Establish early points of comparison. That way, when evaluating the job site, you’ll be able to quickly identify whether the condition has improved or gotten worse.
Best Practices for Managing Construction Documentation
Centralize Document Storage
One of the easiest ways to improve your construction document management system is to consolidate all project docs and data into a centralized location. You should establish one place where all your documents and data are to be kept. Now, that doesn’t have to be a physical space – managing documents in the cloud is much easier and consumes a lot less space. Further, there are integrated software solutions on the market that will do it for you. Regardless of how it’s done, centralized document location means no one has to search through emails or contact other parties to get the information they need to finish the project.
Increase Accessibility
Storing all pertinent information in a single place is useless if no one can access it. Increasing your teams’ ability to access project documents will streamline task completion. Instead of waiting for emails for access or permission, a team leader should be able to obtain relevant information from their phone or tablet.
Utilize Coding Systems
Documents can tend to have long titles. For instance, the title of a given file needs to identify what it is, who it pertains to, and which version of the file it is. One helpful tip is to establish a system of “coding” or renaming certain documents.
Once those documents are coded, they need to be organized in a way that they’re located near other related documents. Files and folders can help create “category clusters” to assist in the organization of all these individual documents. This practice can ensure everyone has easy access to relevant project information – and it won’t take a lifetime to find the right doc!
Bottom Line
Construction document management is one of the most tedious and time-consuming tasks for a construction business. However, effective document control is crucial for a business’ success (much less, the success of any given project). Without proper organization, projects become more challenging to complete on time, within budget, and it becomes harder to defend against claims. Having all the essential documents and data readily available to all will ease day-to-day operations and reduce time wasted rummaging through file folders.
Related Resources
- Pay Apps: A Simple Overview – Common Forms and Parts
- Should You Sign That Lien Waiver?
- Understanding the Schedule of Values
