Tips for Successful Subcontractor Audits
When assessing which subcontractors are right for your upcoming projects, there’s so much to be on the lookout for. It’s your reputation that’s on the line as much as theirs!
Hiring the wrong subcontractor for the job can lead to a variety of significant setbacks, ranging from project delays to skyrocketing labor costs, and plenty of complications in between. But every construction manager has a seemingly endless list of tasks and responsibilities to take care of, which means performing subcontractor audits often gets overlooked.
That’s why having innovative construction management software is an essential component to auditing subcontractors. The right technology for your business can give you an arsenal of resources to properly assess financial information and other imperative traits.
Before you start officially evaluating your next subcontractor, here are four more tips to keep in mind for conducting a smooth and successful audit!
1. Define Your Contractor Obligations
First things first: It’s important to review and outline what obligations you have to provide for all clients and contractors involved in the project.
Commitments can be as simple and routine as ensuring that your workplace or job site is entirely safe and that the safety of your employees, including subcontractors, is being properly monitored. Beyond basic obligations, you’ll need to review every subcontractor you plan on working with to ensure that they have the proper licenses, insurance, and performance bonds.
If you’re working with external auditors or state-sanctioned safety regulators, the first thing they’ll ask for from your subcontractors is to see official evidence that verifies they have official documentation that aligns with what they’re being asked to perform on the project.
2. Verify Credentials and Previous Work Experience
It’s one thing to be told by your subcontractors that they’re experienced and have the proper licenses, certifications, and insurance for the job. But it’s all on you to verify their credentials and previous work experience to ensure there are no surprises moving forward.
For starters, ask to see their legal records, and ask for specific references you can call upon to inquire about how satisfied previous clients were with their performance. After reviewing their previous projects and past clients, ask them for any and all safety and legal records.
Once you’ve officially verified all of their qualifications, you can continue with carrying out company inductions, which will inform your subcontractors what to do in the event of any on-site emergencies, hazards, setbacks, etc., while instructing them on all relevant protocol, procedures, and contact information.
3. Assess Their Finances and Contract Details
Now comes the more intricate part of the auditing process: finances.
This is where having proper construction accounting software comes in handy, eliminating the need to manually review all financial records and therefore significantly reducing any errors in accounting assessment. Once their financial information and arrangements are deemed accurate and legit, start hammering out their contract details and payment terms.
Avoid verbal arrangements at all costs, and don’t consider bringing them on until all aspects of project and payment contracts are agreed upon and in writing for both parties to sign.
4. Maintain Proper Communication
When you’ve reached the conclusion of the subcontractor audit process, the last thing you want to do is merely let them carry out their tasks with minimal monitoring. Maintain proper communication channels with them by ensuring that everyone is equipped with and has access to official project management software and mobile construction apps that will keep everyone on the same page with project progress moving forward.
If you start to notice any gaps in communication, immediately seek your subcontractors out and issue a warning that failure to properly update or liaise with will not be tolerated.
Construction Management Software for Superior Subcontractor Audits
Performing subcontractor audits can be a trying, taxing process, especially when you already have enough on your plate as a construction manager. That’s where having innovative construction management software at your side will help, with Sage 100 Contractor giving construction companies more tools and resources to ensure every aspect of their projects are running smoothly.
At Software Consultants, we have decades of experience when it comes to training and implementing Sage 100 Contractor into our clients’ current business operations. Contact us today to learn more about how Sage Construction software can enhance your project management process!