Construction Today - September/October 2017 - 12
most common denominator
behind construction errors and
attempted fraud is paperwork.
You can prevent fraud and mistakes by going digital. BY JOHN KENNEDY AND RICHARD BERGFELD
very construction site is busy.
Suppliers deliver shipments.
Subcontractors complete tasks.
An architect may consult with a
foreman. Invoices, receipts, planning documents, blueprints and more move from
person to person.
At the heart of it all is a construction trailer where workers, supervisors and vendors
come and go, leaving and taking paperwork
as they handle their tasks. It's an exercise in
controlled chaos, and the resulting mix can
become a recipe for costly mistakes or even
The risk of errors exists on even the most
tightly managed sites. And the common denominator behind most construction errors
or attempted fraud is paperwork. Whether
committed on purpose or through careless-
CONSTRUCTION-TODAY.COM SEPTEMBER/OCTOBER 2017
ness, these inaccuracies cost the industry up
to $860 billion per year, according to a 2013
report from accounting and advisory group
Grant Thornton. The report, according to
Risk Management Monitor, also projects
the costs could rise to $1.5 trillion by 2025.
Detecting errors and safeguarding against
suspected fraud should be a top priority for
builders and their customers.
In addition to the financial impact of mistakes and fraud, the effort required to manage traditional paper-based processes also
carries other significant costs, according to
PricewaterhouseCoopers. For example:
* $122 - The administrative cost of
retrieving one paper document
* 20 minutes - Average time it takes
employees to retrieve, copy and forward
needed information in a document
* 20 percent - Amount of their time that
the average employee wastes searching
for information in paper-based filing
* 7.5 percent-Average amount of company documents lost completely, directly
impacting receivables, customer satisfaction and productivity, according to
The Paperless Project.
In addition, an International Data Corporation (IDC) study found that the risks associated with outdated document business
processes are extremely high. These risks
include failing to meet compliance requirements, losing key customers or employees,
IT breaches, audits and PR crises.
In the construction industry, where
compliance with a variety of governmen-