Innovative Industrial Contractor Turns Timekeeping Into Profits

Sept. 28, 2010

The news was shocking. A multinational telecommunications contractor had to lower stated earnings by $25 million. The restatement wasn’t the result of fraud, mismanagement or lower sales figures. It was solely attributed to "accounting errors … The majority of the required adjustments related to project work-in-process accounts within the cost accounting system at one location."

The news was shocking. A multinational telecommunications contractor had to lower stated earnings by $25 million. The restatement wasn’t the result of fraud, mismanagement or lower sales figures. It was solely attributed to "accounting errors … The majority of the required adjustments related to project work-in-process accounts within the cost accounting system at one location."

For some time contractors have recognized that "cost-accounting errors" contribute to lost profits, but most companies have no idea how big those losses are. Simple things like inaccurately filling in timecards, incorrect recording of worker time, material and equipment use, and mistakes in transcribing data are a few of the items that contribute to costly mistakes.

At best these mistakes cost extra man-hours to correct, at worst they contribute to loss of time and materials, misallocation of resources, inaccurate reporting, and management decisions based on inaccurate data.

As the above announcement demonstrates, this can be very, very costly. But the subject of this article is not lost profits, but how one contractor not only reduced errors but increased their competitive edge and profits by implementing electronic timekeeping.

"Just six years ago we were using paper timecards on our job sites," explains

Mike Armstrong, vice president of Information Technology for Casey Industrial, Inc., headquartered in Broomfield, CO. "But manual timekeeping was time-consuming and error-prone. We knew we were losing profits and we needed to make a change. That’s when we started looking at electronic timekeeping, and we’ve never looked back."

Casey Industrial is a mid-sized contractor specializing in industrial construction. Casey has been working nationwide since 1947 and at any one time may have 15 to 20 active projects ranging in size from $500,000 to $100 million. With projects spread across the United States, Casey can easily have up to 400 full-time and contract workers on a single project.

"Keeping track of projects, workers, equipment, cost codes, and overtime on all these projects was and is more than important," Armstrong adds. "It is a big factor in our profitability. It is key to our success."

In 2002, when Casey started looking at electronic timekeeping, there were several choices, and they investigated them all. Armstrong and his staff did the normal vetting, hoping to find a product that fit their existing processes. What they found was that most products were canned, out-of-the-box applications that were not easily customized or modified. Finally Casey invited three companies to demonstrate their products. Key elements on their wish list were:

  • Ease of use in the field;
  • Point of Sale time entry transactions;
  • Easily customizable to communicate with almost any cost-accounting system;
  • Ability to customize to fit Casey’s timekeeping process;
  • Ability to grow and adapt to Casey’s growth in the industry;
  • Equally efficient on both large and small projects; and
  • A reliable partner that Casey could count on for product, training and support.

After the demonstrations and discussions with several vendors, Casey settled on an experienced U.S. company – TimeScan, Inc.

At that time, TimeScan’s application consisted of a customizable software application for project timekeeping – a barcode generator to automatically print employee, equipment, material, and cost codes – and a barcode scanner that allowed the user to easily record employee, equipment, and material codes and related activity times.

Working with the TimeScan technical department, custom electronic timesheets were created to emulate Casey’s existing time-cards. Labor cost codes were set up based on Casey’s existing ViewPoint cost-accounting system, and the software was datamapped to ViewPoint to allow for automated data transfer. In the field, Casey installed the software on a desktop computer with a printer, and equipped five foremen with barcode scanners.

"The first project was about 150 workers," explains Armstrong, "and from demonstration to installation was only about one month."

The system was simple. Instead of a foreman carrying time-cards, he would carry a barcode scanner and a small book of printed barcodes for each worker, labor code, piece of equipment, material, and increment of time. Instead of writing each record, as tasks were completed the foreman would use the scanner to scan the appropriate barcode for the worker, task, equipment or material, and related time.

At the end of the day, the data on each scanner was uploaded to the field computer, checked, and then sent via e-mail or synchronized via VPN to the home office. Immediately, the project data from the field was received by TimeScan at the home office, and output in custom reports for review by the cost-accounting department. Once approved, the data was sent from TimeScan to the ViewPoint cost-accounting and payroll system, and the daily recording was complete.

"It’s hard to overstate the impact of electronic timekeeping. Almost immediately our accuracy improved significantly, and each foreman was saving at least 15 minutes a day on timekeeping." Armstrong explains. "In a month we had completely transformed our project timekeeping and field cost-accounting processes. Gradually we implemented electronic timekeeping on all our projects and within seven months had achieved a full return on investment."

Between 2002 and now, Casey has made many changes, expanding the use of the software, adopting new technologies, and even changing their cost-accounting system to Dexter+Chaney. With each change the software has been adapted to accommodate Casey’s growth and innovation, and sometimes has driven it. In 2005 TimeScan introduced the use of Palm PDAs to replace scanners for data collection and just recently released the software to run on new Smartphone technology using Windows Mobile 6.0 for collecting and transferring data.

Ricardo Jansen, president of TimeScan, explains, "The purpose of electronic timekeeping isn’t just to emulate manual timecards. That’s only the most obvious feature. The real purpose is to achieve a new level of efficiency, accuracy and portability of data. To do that, the software must be flexible enough to accommodate innovation and change on the part of the customer and new technologies."

With the new TimeScan release for Smartphones, Casey is now able to load the software on any Smartphone using Windows Mobile 6.0. At the beginning of the day, the foreman synchronizes with the office computer by simply selecting an option on the Smartphone. The phone is identified by the foreman’s name, and data pertaining to only his projects is automatically downloaded to TimeScan on his phone.

Now he has complete information for his project and can immediately enter cost codes and times for each activity. At the end of the day, the foreman resynchronizes his Smartphone with the head-office computer, and the project data is updated on both the head-office computer and the Smartphone.

"Today," Armstrong explains, "we run 15 to 20 projects at any one time, with a majority of direct, self-performed labor. We may have a foreman driving from small project to small project, or have five to 10 foremen on a single project. We can accurately track our costs on every project right down to the worker, including overtime. At the end of each day, we have data coming in from all over the country and in hours know exactly where we are on each project. This kind of project cost-reporting used to take weeks, now it takes hours. We literally know on a daily basis exactly where we are on each project and where our resources are. As a result we’re saving time, reducing errors and making better management decisions."

Companies that have implemented electronic timekeeping are finding significant savings and increased profits, including:

  • Time savings in the field and office;
  • Reduced field and clerical errors;
  • Faster project data reporting that facilitates quicker and more informed decisions;
  • Greater control over each project; and
  • Greater profitability through accuracy and efficiency.

Casey Industrial’s experience is not necessarily typical throughout the construction industry; there are still many companies laboring with manual timekeeping. What Casey’s experience demonstrates is that companies willing to innovate and work with a good software partner can benefit from this new technology on both large and small projects. They have also demonstrated that electronic timekeeping not only saves time, but can help any contractor turn a good profit.

Nickolai Vasilieff is a freelance writer specializing in the construction and high technology industries.