By Drew Preiner
Rising price volatility and earlier commitments are driving the need for real-time visibility into costs, cash flow and project exposure in construction.
Construction firms are taking on more risk earlier in the project lifecycle. They’ll often commit to pricing, schedules and procurement, for example, before costs fully settle and owners finalize all of the details. That shift leaves less room to absorb surprises later, especially in an environment known for having thin margins.
Cost volatility only adds to the challenge. Material prices can change quickly, which makes early estimates harder to lock down with confidence. At the same time, many owners expect faster timelines and tighter pricing commitments earlier in the process. That combination forces contractors to commit earlier, often before costs and conditions fully stabilize.
“Recent reports indicate that even as demand in certain sectors remains steady, the cost to complete construction projects continues to rise. The pressure is not solely the result of inflation or labor shortages,” Baldwin CPAs reports. “Rather, it stems from a confluence of interdependent forces that include tariff policies, long lead times for critical materials, competition from large-scale industrial and energy projects, and tight global supply conditions—particularly for metals like copper and aluminum.”
These and other outside forces are pushing both financial and operational risk upstream for the typical construction firm, which can’t afford to wait until projects are “fully defined” to understand their exposure. They need earlier visibility into costs, commitments and cash flow to manage risk before it shows up on the balance sheet.
Recognizing and Addressing Exposure Early
Construction firms are using more technology, automation and AI to manage projects, but many of them still rely on lagging indicators to understand project health. Leaders don’t see cost overruns, margin erosion or cash strain until after commitments are locked in. By that point, options narrow and corrective action becomes difficult and more expensive.
With pricing, procurement and staffing now happening earlier—and with financial insight arriving later—companies can’t proactively manage risk. Even when projects appear healthy on the surface, they may actually be draining cash, margin and resources before those problems even show up in reports.
So what does this all mean? Construction firms can’t afford to wait until projects become fully defined to understand their exposure. They need earlier visibility into costs, commitments and cash flow so they can identify issues while decisions still carry leverage. This is important because by the time the designs are completed, materials arrive and labor schedules finalize, many of the most important financial decisions have already been made.
Adjusting Sooner, Protecting Margins
Construction teams that rely on after-the-fact reporting lose time they’ll never get back. On the other hand, teams that have early financial and operational signals can adjust sooner and protect margins while projects are underway. In practice, this comes down to timing. Teams need financial and project information while decisions still matter, not weeks later.
An integrated cloud enterprise resource planning (ERP) platform like NetSuite changes that dynamic by keeping project activity and financial data in the same system of record. Estimates, commitments, labor costs, change orders and billing all roll up together as work progresses. Leaders aren’t waiting for reconciled reports to understand exposure; they see how decisions affect cash flow, margins and schedules in real-time, as it happens.
Here's how it works:
- Project and financial information stay together. Job activity and dollars update in the same place instead of across separate systems.
- Commitments show up right away. Purchase orders, labor and subcontract costs appear as soon as teams commit to them.
- Actual costs line up against the estimate as work happens. Leaders can see when jobs start drifting before they get too far off track.
- Forecasts change when the work changes. Adjustments to scope, schedule or staffing update margins and cash outlooks automatically.
- Multiple jobs stay visible at the same time. Ongoing, phased and overlapping projects don’t disappear into separate spreadsheets.
- Field activity feeds the back office directly. Time, materials and progress entered in the field flow straight into job costing and billing.
- Decisions aren’t spreadsheet-driven. Dashboards replace manual reports that arrive after decisions are already made.
- The system grows with your business. New projects, entities and users get added without rebuilding processes every year.
These are some of the ways NetSuite helps construction firms see risk earlier and manage it before results lock in. When project activity and financial impact stay aligned, leaders see exposure as it develops, not after reports catch up.
For construction organizations carrying more risk earlier in the project lifecycle, that timing matters. Earlier visibility into costs, commitments and cash flow gives leaders time to respond before margins narrow or cash tightens. NetSuite provides that view, and the right implementation partner makes sure it works in the context of real construction projects.
Drew Preiner is VP of sales at Vursor, a NetSuite Alliance Partner that works often with construction firms, helping them control costs, manage pricing volatility and protect cash flow.