By Brian Poage, Raken

Disputes severely impact the profitability of a construction project, especially when a disagreement between parties cannot be resolved without legal intervention. Sometimes the process is so costly it puts construction companies completely out of business.

Most contractors know the best way to protect themselves from litigation is through careful documentation and good communication. But, with all the other complexities of managing a job site, it’s difficult to implement better reporting practices efficiently. You need a solution that is easy to adopt and that will reduce the chance of disputes without taking time away from crucial job-related tasks.

Digital reporting software that’s designed for the construction industry can help your field team collect high-quality data in less time and with more consistency than pen and paper, increasing project visibility. With a more detailed and accurate view of day-to-day progress, construction companies can identify risks, quickly react to them, and make sure their customers stay informed, preventing delays and misunderstandings.

How Does Better Documentation and Communication Protect Against Disputes?

In their 2022 Global Construction Disputes Report, international consulting firm Arcadis found that the average dispute value was $52.6 million worldwide in the previous year, and the average dispute length was 15.4 months. While these numbers can vary greatly depending on the size of a company and the projects they typically undertake, it’s clear that the industry spends a significant amount of time and money resolving conflicts.

One of the main reasons for disputes is a lack of clarity. When one or both parties misinterpret contract terms, misunderstand deadlines, or develop unrealistic expectations about budget or design, disputes are bound to happen.

Good documentation helps both prevent these communication errors and catch them sooner when they do occur. When field contractors consistently document progress – and setbacks – on the job site, project managers can closely monitor how the project is progressing compared to the proposed budget and schedule and react in real-time when adjustments must be made. With good, organized documentation, they can also more easily share important updates with customers, who will appreciate the transparency and may be less inclined to push back against necessary changes.

Some disputes are truly unavoidable. In this case, good documentation protects construction companies against litigation and helps them resolve conflicts quickly. They can reference data from the field to fairly identify the cause of the dispute and offer proof to their customers, quickly resolving the issue without the need for mediation.

Finally, good documentation helps construction companies plan estimates and create better budgets and schedules. Using historical data, they can craft more accurate bids based on their team’s real production data.  With more realistic bids, the chance of disputes decreases.

What Are the Benefits of Digital Reporting?

Digital reporting improves documentation and communication over traditional methods by utilizing modern technology to make collecting and sharing information easier. Digital reporting software with the following features helps prevent disputes by improving clarity and visibility for all stakeholders.

Mobile data capture: Handwritten reports take too much time to complete, and the challenges of storing them in a physical file system or digitizing them later can lead to confusion and miscommunications. Digital reports can be completed using mobile devices. Field workers can quickly type reports using their preferred device, which eliminates concerns of messy or hard-to-read handwriting. With some tools, they may even be able to use a voice-to-text recording that makes data capture even faster and more consistent.

Photo and video documentation: A picture is worth a thousand words, and with digital tools, field workers can attach as many photos or videos as they’d like to daily reports. Visual data clearly shows what’s happening onsite without requiring lengthy text explanations.

Photos give project managers the best visibility they’ll have without being able to monitor every single task each day. It can also improve communications with customers who may not be familiar with construction terminology. With photos and videos, they can clearly see progress and notify the construction company immediately if they have any quality or design concerns.

Cloud storage: Using cloud storage, reports can be shared in real-time. Whenever information is uploaded to the cloud, it is instantly available for review to any stakeholder with access. Having real-time visibility can make the difference between realizing and correcting a potential issue early before it evolves into a full-blown dispute or missing it entirely until it becomes a real issue.

Cloud storage is also easier to manage than a physical file cabinet. When stakeholders need to review historical data to plan new estimates or resolve disputes, they can quickly locate the appropriate reports using a search function.

Integrations: With integration capabilities, digital reporting data can be shared instantly with your preferred accounting or project management software, further increasing visibility for office-based stakeholders. Integrations eliminate the need for manual data entry, reducing communication errors.

Messaging: Some software allows for project-related messaging directly within the digital reporting system. This can streamline communications and make sure important safety or risk updates don’t get lost in text messages or email inboxes.

Using Technology to Mitigate Risks

For many construction companies, digital reporting software is a worthwhile investment to help reduce disputes and protect your business from costly litigation. It’s important to choose tools that are easy to use and that improve visibility without overcomplicating your report process.

With better, more accurate reporting, disputes that can’t be avoided can be resolved quickly and fairly.

Raken’s comprehensive digital daily reporting app helps construction companies of all sizes mitigate risks through better documentation practices. With their standardized report templates, photo and video capabilities, checklist library, and in-app messaging system, contractors can quickly capture clear, detailed data from the field and share it with the office or external stakeholders in real-time.

Improve profitability and protect your company against disputes using Raken’s industry-specific tools for reporting and productivity tracking. Schedule a demo today to learn how Raken can better your construction business.