Definitions
Review these definitions to understand how key features, records, and cost concepts work in Sage Construction Management.
A combined list of customers and vendors.
People associated with companies.
Company and contact record examples
| Company | Contact |
| Stika Concrete |
Ray Stika John Stika |
| Smith, John and Mary or Smith Residence |
John Smith Mary Smith |
| Home Depot (Irvine - Store #02102) |
Sales Department Estimating Department |
Use Leads to track design or construction opportunities for estimating and sales teams. The lead number and title represent the structure being built, not the company name.
The lead directory includes all companies and contacts associated with a lead. This includes the prospect and your firm, but it does not include subcontractors or suppliers.
User-defined stages that help track the progress of a lead. You can also use these stages for lead analytics and reporting.
A project represents an awarded job. You can create it manually or by using the Lead to Project wizard.
The project directory includes companies and contacts associated with the awarded project. This includes the client, architect, your firm, subcontractors, and suppliers.
The drawing log tracks lead or project plans and revisions. Typically, you upload and link the CAD, PDF, TIFF, or JPEG file to the drawing log record.
Specifications are often submitted to contracting firms in electronic formats, such as PDFs. They outline project requirements and quality standards set by the design team. Specifications are usually distributed with drawings because they complement one another.
Commercial general contractors and custom home builders often send ITB emails to subcontractors and suppliers to announce an upcoming job opportunity. Drawing and specification files can be linked to the ITB so vendors can decide whether to participate.
Estimates include cost line items that you can add manually. You can also import items from an industry standard database like RSMeans or from a custom database you create. Using a cost database helps ensure consistent descriptions, units, and pricing. It also reduces manual data entry. There are five (5) types of database items: labor items, equipment items, crews, work items, and work assemblies.
Each lead or project can have one or more estimates, such as Base Bid, Rev 1, and Rev 2. Estimates include work breakdown structures, cost line items, markups, narrative scope sections (inclusions, exclusions, and clarifications), and request for pricing (RFP) packages. If the job is awarded, you can use the estimate to set up the project financially by creating job cost codes, client contracts, budgets, purchase orders (POs), and subcontracts.
Estimate request for pricing (RFP) packages
Request for pricing (RFP) packages help you request, track, and analyze pricing for items needed for a project. Packages are typically created for each scope of work, such as concrete, doors, windows, and electrical. Use packages for subcontracted work or supplier material quotes. If the project is awarded, you can issue a PO or subcontract to the winning bidder for each package in the Procurement module.
You can create RFP packages from the Procurement module or directly within an estimate. The processes are nearly identical, but when you create packages within an estimate, you must link items to a package. It is common to have multiple RFP packages in one estimate. Manage them from the estimate Bid Management view.
Job cost codes are required to track project financials. Use them when entering transactions such as budgets, change orders, POs, expenses, and timecards. Although you can add job cost codes at any time, it is recommended that you define them during project setup.
Prime contract (client contract)
A prime contract defines the formal agreement between your firm and the client. Sage Construction Management supports four contract types. Each type affects how invoices are processed for both prime contracts and subcontracts. Typically, there is one prime contract per project. However, in cases such as design-build firms, multiple prime contracts might exist. Each prime contract enables you to define the scope of work and enter original budgets.
A change proposal request (CPR) tracks a potential change from inception to acceptance or rejection. Although CPRs can be created for all contract types, they are typically entered for Fixed Lump Sum or Unit Price contracts. Changes to Cost Plus contracts are documented directly in the change order (CO) feature and do not require the CPR process.
When one or more CPRs are approved, they are rolled into an official CO, which affects prime contract budgets.
A change order (CO) occurs when there is a change to the original prime contract scope of work. Owners, architects, regulatory agencies, or even your own firm can initiate changes, such as in response to adverse field conditions. You can document COs for Fixed Lump Sum, Cost Plus, or Unit Price contracts. When approved, COs affect budgets for any contract type.
Progress payments for prime contracts are processed in the prime contract invoice feature. Commercial contractors often refer to prime contract invoices as applications for payment. In residential construction, the term bank draw is used when a construction loan is the funding source.
Prime contract invoices must not be confused with subcontract invoices, which are progress payments for subcontracts.
Anticipated costs are future project expenses that have not yet been incurred. For example, expenses like electrical or plumbing fixtures and cleanup fees often arise in the final project stage, even if vendors or specific items have not been identified. As a result, financial dashboards that compare estimated cost budgets versus commitments can be inaccurate unless anticipated costs are updated monthly.
Request for pricing (RFP) packages help you request, track, and analyze pricing for items needed for a project. Packages are typically created for each scope of work, such as concrete, doors, windows, and electrical, when the work is subcontracted or materials are needed from suppliers. You can issue a PO or subcontract to the winning bidder for each package. As mentioned above, you can create RFP packages in the Procurement module or within an estimate. Both processes are almost identical, but when you create packages within an estimate, estimate items must be linked to a package.
Options for project expenditures:
- POs --> Bills or Bills (without POs)
- Subcontracts --> SCOs --> Subcontract invoices
- Employee miscellaneous expenses (for everything else)
After the prime contract is established, materials and services are procured using purchase orders (POs), subcontracts, or both. In general, POs are easier to use than subcontracts because they do not have retainage (holdbacks) or change orders. Vendor invoices for PO items are processed using the PO to bill wizard.
After a purchase order (PO) is issued and goods or services are delivered, the supplier invoice is converted into a bill using the PO to bill wizard. You can also create bills manually, such as when no PO has been issued.
After a prime contract is set up and marked approved, purchase orders (POs) and subcontracts are available to procure goods and services. Both transaction types are shown as committed costs in project analytics dashboards. Unlike POs, subcontracts enable you to track scope changes through subcontract change orders (SCOs) and apply retainage (holdbacks) to subcontractor invoices. Like prime contracts, there are four contract types available: Fixed Lump Sum, Cost Plus with or without a guaranteed maximum price, and Unit Price.
Subcontract change orders (SCO)
A subcontract change order (SCO) modifies the original subcontract due to changed conditions or work scope. Approved SCOs can be created manually or from CPRs. They impact the revised subcontract amount and time. SCOs are typically created for Fixed Lump Sum or Unit Price subcontracts.
Subcontract invoices are similar to prime invoices but apply to subcontracts. For example, the data entry process changes depending on subcontract type, and these transactions can include retainage or holdbacks.
Employees can be entered as contacts under your company profile in Contact Management or in the Time & Expenses module. The Time & Expenses option is recommended because the employee form includes additional fields and tables, such as education, licenses, and payroll rates.
Payroll items are required to establish employee cost and billing rates. They typically match the items in your accounting system. For example, ST - Straight Time, OT - Overtime, DT - Double Time, and TT - Travel Time.
Payroll rates are set up in the employee profile for each payroll item. Rates include the base cost rate, burden cost rate, and billable rate. The billable rate applies only to Cost Plus prime invoices where expenses and timecards can be imported.
Labor timecards can be entered daily or weekly. Like other financial transactions, each timecard must reference a project, prime contract, and job cost code. Approved timecards are exported to an accounting system using AccountingLink, or to a CSV or Excel file for processing by a third-party payroll company.
Equipment items can be used for estimating and timecards. For timecards, Run Time (RT), Idle Time (IT), and Down Time (DT) rates can be set up per project and equipment item.
Like labor timecards, equipment timecards can be entered daily or weekly, but they apply only to owned equipment. Rental equipment costs are recorded through the purchase order (PO) or billing process.
Employee miscellaneous expenses
Employee miscellaneous expenses record project expenditures when a standard purchase order (PO) or subcontract is not feasible. For example, an employee purchases fuel for a vehicle using a company-issued credit card. Like bills and subcontract invoices, employee miscellaneous expenses are categorized as Cost To Date transactions and can be exported to an accounting system using AccountingLink.
Budgeted costs
Budgeted costs are derived from the detailed cost estimate prepared at the start of the project. They can include the current best estimate of costs based on progress and changes after the original cost budget was formed. Budgeted costs can also include an itemized summary of intended expenditures for a given period of time. In other terms, they are the total amount of money allocated for a specific project. Budgeted costs can also be considered a formal statement of estimated expenses based on future plans and objectives.
In Sage Construction Management, cost budgets do not include markups, such as fees, and are compared to actual costs such as POs, subcontracts, and timecards. Sage Construction Management includes five built-in resource types: materials, labor, equipment, sub, and other. As a result, you can enter cost budgets for each resource and job cost code. The job cost code total budget is the sum of the five resource budgets.
Anticipated costs
Anticipated costs are future project expenses that have not yet been incurred. For example, expenses like electrical or plumbing fixtures and cleanup fees often arise in the final project stage, even if vendors or specific items have not been identified. As a result, financial dashboards that compare estimated cost budgets versus commitments can show overinflated budgets unless anticipated costs are documented.
Generally, anticipated expenses are a master list of items that have not been recorded in the following transactions:
- Purchase orders (PO)
- Subcontracts
- Subcontract change orders (SCOs)
- Labor timecards
- Equipment timecards
- Employee miscellaneous expenses
Committed costs
Committed costs include the agreed or incurred price between the contractor and the vendor. Primary committed costs include subcontracts, subcontract change orders (SCOs), purchase orders, and anticipated costs. In Sage Construction Management, committed costs also include booked costs such as approved vendor bills not from POs, approved miscellaneous expenses, labor timecards, and equipment timecards.
Sage Construction Management committed cost transactions:
- Approved purchase orders (PO)
- Approved bills that didn’t originate from POs
- Approved subcontracts
- Approved subcontract change orders (SCOs)
- Approved labor timecards
- Approved equipment timecards
- Approved employee miscellaneous expenses
- Anticipated costs
Actual cost or Cost To Date
Actual cost is the total cost incurred for work completed to date. In simple terms, it is the amount you have spent so far. Actual cost can include amounts paid for services, goods, materials, labor, equipment, and more. In Sage Construction Management, actual costs are recorded when incurred. In other terms, actual costs are expenditures required to produce or sell a product or service, or to get an asset ready for normal use.
Sage Construction Management actual cost or Cost To Date transactions:
- Approved purchase orders (PO)
- Approved bills that didn’t originate from POs
- Approved subcontracts
- Approved subcontract change orders (SCOs)
- Approved labor timecards
- Approved equipment timecards
- Approved employee miscellaneous expenses
- Anticipated costs
Markup %
Markup is the percentage added to the cost to determine the selling price. It is calculated using the following formula:
Markup % = Profit / Cost
Example:
| Selling price | 125 |
| Cost | 100 |
| Calculation | 100 * (125-100)/100 |
| Markup % | 25% |
Profit margin %
Margin is the percentage of the selling price that is profit. It is calculated using the following formula:
Profit Margin % = Profit / Sell
Example:
| Selling price | 125 |
| Cost | 100 |
| Calculation | 100 * (125-100)/125 |
| Profit margin % | 20% |
Even well-run jobs have issues. Documenting issues and correspondence helps minimize risk and delays. Some issues are minor and resolved quickly, while others are critical and can lead to changes. Track issues as events progress because this information is often used as backup when presenting a CPR or CO.
With the exception of RFIs and submittals, basic project correspondence such as letters, faxes, notes, and phone conversations can be documented in journals. Like other correspondence features, journals can include reminder and due dates, which appear as alerts in Sage Construction Management.
A request for information (RFI) documents questions and responses from project team members that might impact the schedule or budget. For example, a contractor emails an architect with a question about how to interpret a drawing detail or a note in the specifications. The email includes a hyperlink to the TeamLink portal so the external team member can respond securely.
Submittals are items documented in project specifications that must be provided to the project owner or architect for review and approval. Examples include shop drawings, engineering data, material samples, test results, and product literature/manuals. Certain submittals, such as product manuals, are often used later by the client for operational purposes.
In construction, a transmittal is a document used to communicate actions required on one or more items between parties. Transmittals often act as a cover sheet when mailing information through FedEx, USPS, or another carrier, and they list the contents of the package.
Builders and contractors need to manage risk, and daily logs help support that work. Daily logs are especially important if a dispute arises. Documenting daily activities, progress milestones, employees, major deliveries, equipment, and weather/site conditions can provide valuable information. Daily logs can also be reviewed in a claim or legal proceeding, so record information accurately.
The meeting minutes feature documents discussion items for project meetings, such as owner and subcontractor meetings. You can track the meeting date, location, purpose, attendees, new issues, and old issues.
As the project progresses, milestone photos can be taken at periodic intervals to provide a high level overview of job status. This feature is not intended for daily photo uploads. For daily documentation, use daily logs.
A work order (WO) can be used in a variety of ways by project staff. For example, use WOs as a daily communication tool for field crews by outlining tasks to be performed. You can also use WOs to document work directives issued by the owner. You can track both estimated and actual costs in either scenario. You can then copy these costs to a CO, SCO, or prime contract invoice, depending on contract type: Fixed Lump Sum, Cost Plus, or Unit Price.
Like estimates, Sage Construction Management can track multiple schedules for a project. You might need multiple schedules for separate design and construction phases, or when a project involves multiple structures.
Calendars display due dates (alerts) for time-sensitive information so team members can follow up. Lead and project records marked closed do not appear in calendars or the alerts list.