We get a lot of questions from folks outside the industry about what a construction draw is, and how software can aid in the process.
A construction draw itself is the act of requesting funds from a project budget, either base on milestones completed or progress to-date. You can think of Constuction budgets, whether funded by a Lender or a Real Estate investor (or both) as money that is held in a sort of escrow until work is done. Each money request “draws” down against the budget. Real Estate investors draw money down from lenders and other co-investors in projects to fund their General Contractor. General Contractors draw down from the Real Estate Investor’s budget to pay their crews, subs and material bills.
Construction draw software therefore, blends the needs of project and progress management into financial management. It helps Real Estate Investors, Lenders and Construction professionals streamline their workflow, track progress and communicate effectively with project stakeholders.
Here’s a general overview of how construction draw software works:
1. Property and Site Setup: The software allows users to create a new property by defining location, start and end dates, and other relevant details such as the summary scope of the project. This information serves as the foundation for the construction schedule.
2. Creating Tasks and the Budget: Construction draw software enables users to break down the project into smaller tasks or activities. Each task represents a specific action that needs to be completed, such as excavation, foundation pouring, framing, plumbing, electrical work, and so on. Each task is assigned a budget target. For example the budget for Pluming might be “$25,000”.
3. Tracking Progress: In commercial construction, sophisticated software is used to track hundreds to thousands of tasks that might occur of several years. In homebuilding and smaller projects, progress is typically tracked by how much money has been consumed for each Budget Task. For example if $12,500 has been spent of a $25,000 Plumbing budget, then the progress is 50%. Progress tracking is often combined with audio / visual inspections and walkthroughs of a property to see the evolution of each task, and help capture the progress at a specific point in time.
4. Document & Expense Collection: Construction and Real Estate development includes a wide array of documents to track and store for future reference—from lien waivers to updated title reports to materials expenses. Good construction draw software can help store all the files related to the project and also tag them by draws, GC payments and other categories and events.
5. Communication and Collaboration: Construction draw software often includes features for communication and collaboration among project stakeholders. It may offer tools for sharing project updates, exchanging documents, generating reports, and facilitating discussions between team members, contractors, and clients. Good construction draw software supports SMS texting and email notifications to keep folks in the field working.
6. Reporting and Analysis: The construction draw software generates various reports and analytics. These reports can provide insights into project risk, speed, budgeting and more. They help stakeholders make informed decisions, identify areas for improvement, and ensure the project stays on track.
7. Mobile First: Since both Real Estate Investors and their General Contractors are on the move, the best construction draw software is “mobile first”, providing a mobile app for field users and “responsive” web pages that work on smaller laptop, tablet and phablet screens for cloud users.
Overall, construction draw software simplifies the complex process of project management, offering a centralized platform for planning, scheduling, tracking, and collaborating on construction projects. It enhances efficiency, reduces errors, and improves communication, ultimately leading to more successful and timely project completion.
At Sitewire, we’ve made construction draw software very easy to use, and also augmented it with virtual inspection capabilities so that tracking progress is simple. Other vendors in the market offer heavier packages that overlap with loan portfolio management software. They also cater to large construction projects for regulated banks that have multiple branches.