WEBINAR: Why Both Subs and GCs Hate Paper T&M Tags

A conversation with Doug Jagoda from Clark Construction and Joe McKeown from Anderson Commercial Flooring around the shared pain point of tracking extra work on paper T&M Tags.

Extracker’s CEO and Founder, Cameron Page, along with Director of Sales, Greg Seldon sat down with Doug Jagoda, Senior Superintendent at Clark Construction and Joe McKeown, Vice President at Anderson Commercial Flooring to discuss how Extracker has improved transparency, productivity, and clarity around cost exposure. Additionally, they also addressed how streamlined processes and technology help to mitigate against some of the labor market challenges that the construction industry is facing. The webinar in its entirety is definitely worth a listen, but in case you want a quick summary, we’ve outlined the major topics discussed in this article.
 

Why Extracker? Why Now?

As a former construction Project Manager, Cameron founded Extracker to address the frustrations he experienced while dealing with Change Orders. “Whether it be tracking overtime, trade damage, paint touch ups, or just an ongoing set of work on T&M, the process always felt painful,” he stated. “With the complexity of construction projects today, the way they're designed, the way they're delivered, with fast paced schedules, things change,” he added.

The construction industry has tried to keep up with the increasingly accelerated changes on projects by including allowances, planning for overtime, and trade damages, but Change Orders were an area that lagged behind. “I think you're absolutely right that the industry is savvy enough and clients are comfortable enough to carry allowances. We know things are gonna happen, and at the end of the day, all those allowances have to be tracked onto a ticket,” Doug added.

Before Extracker, all of this Extra Work, typically performed on a Time and Material basis, was tracked on paper tickets, which required several manual steps before being processed and ultimately paid. This process caused major frustration for GCs, Subcontractors, and Owners alike. Extracker’s digital T&M Tags and centralized platform digitized and streamlined the process to bring transparency and efficiency to change orders.
 
Webinar 2 Why Subs and GCs hate T&M Tags Zoom featured images


Transparency through Better Documentation

 
One of the primary benefits Extracker provides to construction teams is transparency and clarity around cost exposure. By eliminating paper from the process and tracking costs in a central platform, contractors and owners always know where the project stands. “The frustrating and challenging thing about the paper carbon copy process is the lack of visibility for everyone involved,” Greg stated. “The cool thing about Extracker’s digital solution is if someone emails you to proceed with the extra work, you can easily just take that email and attach it to the tag. So if I'm an owner, looking at this tag a month later, I can see where the work was directed from,” he added.

For General Contractors, staying on top of the project budget is critical to ensure the project’s success and profitability for all parties. “At the end of the day, we all want to be profitable companies, and we have to manage our finances. In the GC world, our margins aren't really that wide. We were talking tenths of a percent here and there. If I have several exposures out there in T&M Tags that have been hiding in the weeds, I'm going to be blindsided,” Doug explains. “You need to know every single day, every week, every month, what your exposures are like, and where you are spending money.” Extracker provides real-time visibility into the project’s cost exposures so owners and GCs aren’t surprised at the end of a project.


Productivity and Processing Time


By ditching paper and going digital, contractors that use Extracker save themselves hours in productivity each week and get Change Orders processed and paid faster. The old process was extremely slow and put subcontractors at financial risk. As Doug explains, “Let’s just say a subcontractor performs extra work on May 1. I would typically get a proposal at the end of May, maybe very early June. After approval, it might end up in the July billing, and then I'm net 45. The subcontractor isn’t going to get paid until September for work performed on May 1.” This lag time has the potential to create serious cash flow issues, in addition to creating potential conflict between subcontractors and GCs.

By speeding along the documentation, approval, and submission process, Extracker enables GCs to pay their subcontractors faster. “We have so many metrics to pay our subs on time, because it keeps our relationships healthy, and it keeps people coming back to our projects and giving us competitive bids. It behooves me to always have a process that is as efficient as possible, to get people paid as quickly as possible,” Doug added. This also helps the owner to understand exactly how much money is being spent and where.


Better Tools Make Happier Builders


Adopting Extracker has reduced frustration for Clark and Anderson’s project teams, and it enables them to maximize their workforce. The construction industry is currently experiencing a labor shortage, which means contractors must appeal to younger generations. “Young builders come out of school, ready to learn, and then we ask them to sort out thousands of dollars of paper tags. They get this disgruntled experience, and the industry was seeing a lot of turnover.” Greg agreed, “The easiest way to get someone to leave construction is to put them behind a spreadsheet for 20 hours a week.”

Extracker is a solution that benefits the entire team, reduces painful processes, and is embraced by both field and office staff. How do you manage extra work on your projects? If you’re dealing with a disorganized Change Order process, the cost impacts are likely adding up. Contact our team for a demo today.