Those minor expenses on your projects can really add up if not monitored properly.
- Small charges – those little charges under $1,000 for things needed on your projects
- They are often not monitored well because of the effort needed
- These are the little charges for misc. materials, small tools, cleaning supplies, surveying (second time), etc.
- They don’t fall into a specific category or sub so they go un-noticed
- Budgeting for these is a real challenge
- How do you know upfront how many signs you might need, how many drills will go bad
- Typically these things are covered with a plug number based on historical data or absorbed into overhead (I don’t recommend the later)
- These things need to be watched carefully
- I worked with a client that spent over $200K on these charges
- We found that almost half was wasted expenses
- Proactively managing these costs
- Create a procedure for buying these small items
- I used to require pre-approval for materials over $200 and tools over $100
- Add part of the savings into a bonus pool – it buys lunch for the crews
- Manage tools centrally to get the most out of the buying power of multiple units
- We used to buy small tools twice a year – you get great prices when buying 50 shovels at once
- Create a procedure for buying these small items