EPC (engineering, procurement, and construction) companies face some challenges during project closures that are quite unique to the sector. Often, these obstructions may lie unnoticed under the surface, but when it comes time to eventually close out a project, these little (often arbitrary) issues start to pile up.
Let’s look at some of these challenges and examine possible solutions that could help EPC companies close projects seamlessly.
Challenges that EPC companies Face While Closing Projects
- Reconciliation of Assets Across Locations
For project delivery, EPC companies need several different kinds of assets deployed across sites. The assets could be owned or rented. They also have to keep track of these assets across different locations. However, the process of reconciliation often acts as a stumbling block when it’s time to close a project.
It’s not easy to keep track of assets at these locations using traditional Excel spreadsheets as records could be outdated, incomplete, and inaccurate, while being effort-intensive to build. Firms continuously require more input from different departments for asset tracking, maintenance, accounting, etc. If there are bottlenecks between the departments’ systems, errors can be compounded.
And the process intricacies don’t end here. Once a project adds an asset in their inventory list, how can managers be confident of its current status and potential utility? Someone may have to visit the site and inspect the asset to validate that they can use it. Perhaps their finance department might have to make a judgment call on the value to assign to the asset based on its current status and projected utility. The process is prone to errors and is time-consuming.
- Reconciliation of Timesheets and Payroll Across Multiple Locations and Offices
Trying to roll up timesheets and payroll accurately and completely is another challenge. This is especially true for EPC companies since they often must reconcile their payroll across locations. The degree of complexity is high. There will be different types and categories of employees. There will be contractors. Some of them may belong to unions, requiring different kinds of payroll notations. Things get even trickier at the granular level. Different rates may apply at different places.
Folding all that complexity into a final reconciliation exposes several issues. Often, things match up; other times, they don’t. From extra bills and paperwork to otherwise hidden expenses, the process can be troublesome — enough to disrupt the paper delivery of a project that is “almost” complete.
- Funding Being Received from the Government
Funding from the government can become a source of stress for EPC companies, especially when nearing the completion of the project. After all, the government is most likely to look closely at reported statistics. It’s not uncommon for contractors to be pressured with performance targets and incentives. These requirements may pertain to the scope of the project as well as its progress.
Besides, these requirements can hold compliance up, especially if their reports about certain elements of the project are inaccurate or outdated. For example, EPC companies with a government contract may have to schedule a certain number of work hours per day or week. If they fall short, they may face scrutiny. And this is just one of the many things that can hold up a project. Companies need to get approval from multiple agencies before they can progress, and they might have a hard time assigning a value on these assets when they get them. Federal payroll requirements are different too. Achieving compliance with pen-paper or Excel-based systems can be a major cause of delay or error.
- Different Regions; Different Regulations
It’s not that companies don’t know what is required of them, but they often can’t keep up with all the changes. Federal, state, and local governments are prone to modify rules from time to time leading to complications in compliance and reporting.
Since there are so many financial rules and regulations, it can be very difficult for companies to figure out what they must do before they can close the books safely and surely.
- Contractor View
EPC companies work with multiple subcontractors on each project. I It is essential to keep an eye on each of these contractors to ensure that they know what is expected of them and they deliver their work as agreed. It’s important that these contractors understand what they are responsible for and to track, monitor, and report on their activities transparently and completely. It’s hard for EPC companies to keep this on track, especially when they are dealing with multiple contractors.
In the end, EPC companies need to balance all these challenges and still realize closure. In the case of listed companies, they must run this gauntlet every quarter, not the most pleasant activity.
So, what can be done to change this?
Digitization to the Rescue for Closing Projects
Digitization could be the answer. Using EPC industry-specific software solutions, companies can now be more precise with their data regarding projects and resources with less overhead. Powerful software solutions could automatically keep track of all the relevant financial information on a project, thus, reducing the need to rely on clunky Excel spreadsheets or manual methods.
Such robust solutions could facilitate:
- Swift and seamless ordering and procurement
- Tracking and scheduling manpower
- Easier and faster invoicing and payments
- Online updating of billing sheet
- User-friendly interface
- Improved control over budgets
- Better collaboration between project management team members via secure cloud storage access to crucial documents like information about the project, contracts, etc.
- Greater transparency and accountability
- Optimized workflows and improved utilization of resources
- And finally, a consolidated view of the project.
Want to learn more about how digital solutions can help your project run smoothly and achieve its reporting and monitoring schedules? Contact us today! We’d be more than happy to assist with a demo of a few solutions that may be a perfect fit for your business.