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Estimating, Finance, Project Management

Improve Your Closeout Process: Top Tech Solutions for Subcontractors

Read time: 4 minutes
Published: October 19, 2023
Last updated: October 03, 2024

The subcontractor closeout process is a crucial step that marks the completion of a project in commercial construction. However, it can often be a complex and time-consuming phase, involving numerous documents, approvals, and last-minute tasks. For subcontractors, managing this process efficiently is key to submitting timely payments and maintaining strong relationships with general contractors. The good news? Leveraging the right technology can make the closeout process faster and more streamlined, saving time and reducing stress.

In this blog post, we’ll explore the best technology tools available to expedite your closeout process, share practical strategies from industry experts, and highlight why a proactive approach from the start can make all the difference.

Why the Closeout Process Matters

The closeout process is more than just wrapping up the final paperwork—it’s the important final step that determines the project’s overall success and the foundation for future relationships. This is typically the last opportunity to ensure all contractual obligations are fulfilled, every deliverable is handed over, and any remaining issues are resolved. A smooth and efficient closeout process not only demonstrates a subcontractor’s professionalism and attention to detail but also reinforces their reliability and commitment to quality, which can significantly enhance their reputation within the industry.

For subcontractors, a well-executed closeout can be a powerful illustration of their ability to deliver on promises, often leading to repeat business, positive referrals, and a strong network of trusted partnerships. On the flip side, a poorly managed closeout can have long-lasting negative effects. Delays, overlooked tasks, incomplete documentation, or unresolved issues can result in disputes over payments, potential legal conflicts, and strained relationships with GCs and clients. This can damage a subcontractor’s standing and lessen their chances for future projects. In a competitive market, where trust and reliability are key, the closeout phase is as much about protecting your reputation and building long-term relationships as it is about closing the current project.

Key Challenges in the Closeout Process

Several challenges can complicate the closeout process, including:

  • Document Management: Keeping track of numerous documents like warranties, as-built drawings, and compliance certificates can be overwhelming
  • Change Orders: Managing change orders and ensuring they are accurately reflected in the final documentation can delay closeouts
  • Communication Gaps: Miscommunication between subcontractors and GCs can result in misunderstandings and delays
  • Incomplete Information: Missing or incomplete documentation can cause project delays and payment issues

Top Technologies for Faster Closeouts

To handle these challenges and make things easier, many construction professionals are now using technology to simplify the closeout process. These tools help improve the closeout process by allowing subcontractors and project managers to automate tasks, keep track of documents, and communicate better with general contractors and other team members. Here are some of the best tools available to speed up the closeout process and ensure everything goes smoothly:

1. Raken

Raken is a project management tool allows subcontractors to keep a bird’s-eye view of their project by tracking all necessary documents, coordinating with team members, and compiling reports that are easy to share with project stakeholders.

2. Monday.com

Monday.com offers customizable templates for project tracking, task management, and document organization, making it easier to manage the myriad of tasks involved in the closeout process. 

3. StructionSite

StructionSite is a tool that leverages 360-degree cameras to document site conditions and tie these images directly to the project floor plan.

Expert Tips for a Smoother Closeout Process

1. Set Expectations Early

One of the best ways to ensure a smooth closeout is to set clear expectations at the very beginning of the project. Kyle Follett, VP of Finance for Sparr Envelope, advises getting the right people in the room before finalizing contracts to ensure transparency around all expectations. This proactive step can help prevent misunderstandings and ensure that everyone is on the same page regarding the closeout process.

2. Use Contractual Guidelines

Incorporating specific guidelines into contracts can help streamline the closeout process. For example, one subcontractor recommends including a clause that requires all change orders to be processed within the same month the work is completed. This helps to keep the project moving smoothly and prevents delays caused by unresolved change orders.

3. Plan for Document Lead Times

Some documents, like warranties and compliance certificates, may take longer to obtain due to manufacturer lead times or administrative processes. It’s important to factor these lead times into your overall closeout timeline to avoid last-minute delays.

4. Designate a Point of Contact

Having a designated point of contact who is responsible for communicating with the GC can help ensure consistent and clear communication throughout the project. This can prevent misunderstandings and ensure that any issues are quickly addressed, reducing the risk of delays during the closeout process.

5. Conduct Regular Walkthroughs

Regular site walkthroughs can help identify potential issues that may not be covered in the standard closeout checklist. This proactive approach allows you to address any problems early on and ensures that nothing slips through the cracks.

6. Iterate and Improve Your Process

Continuously refining and improving your closeout process can help make it more efficient over time. One subcontractor suggests making small tweaks to improve the presentation and organization of your closeout documents, which can add up to a more professional and streamlined process.

How to Build Stronger Relationships with GCs Through Better Closeouts

A well-executed closeout process can not only mean more timely payments but also builds trust and strengthens relationships with GCs. Here are a few additional tips:

  • Communicate Clearly: Don’t be afraid to ask the GC clarifying questions about what they want from you. Clear communication can prevent misunderstandings and ensure that both parties are aligned.
  • Be Proactive: Establish the required closeout documentation early in the project and communicate any changes promptly.
  • Show Appreciation: Consider small gestures, like sending thank-you notes or gifts, to show appreciation for the GC’s cooperation throughout the project. These gestures can help build goodwill and make future collaborations smoother.

Conclusion

A streamlined closeout process is essential for the success of any construction project. By leveraging the right technology, setting clear expectations, and maintaining strong communication with GCs, subcontractors can ensure a faster and more efficient closeout process. Not only will this lead to timely payments, but it will also help build strong relationships with GCs, paving the way for future opportunities. Remember to stay proactive, refine your processes continually, and use technology to your advantage to make your closeout process as smooth as possible.

About Billd: At Billd, we provide a payment solution that enables commercial construction contractors to free up cash for material purchases while enjoying the flexibility of 120-day payment terms. You get financing for commercial materials upfront with the freedom to pay it back at your own pace. Learn more about how we can help eliminate your company’s cash-flow problems so you can win more bids and grow your business.

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FAQs

Why is it a problem if owners are still working long hours at the $25M+ stage in construction subcontracting businesses?

Once companies arrive here, owners should begin to kick their feet up and they aren’t working 60-hour weeks. At most, they’re signing checks and taking cursory looks at the finances since they’ve created a team to manage the day-to-day. The owner putting out fires should be a thing of the past, and if they’re still doing it, it likely signals they’re having problems delegating.

What is the biggest pain point for construction companies making over $40M+ a year?

One of the owner’s biggest pain points at this stage is their ability to keep the business invigorated with the culture and vision they initially outlined. The company can have more subcultures and siloes, and quality control becomes difficult. 

What operational changes should a construction company make at $40M+?

- Technology to Automate Where Possible: With a larger team and established processes in place, evaluate if there are ways the business can automate redundant work or help employees streamline their processes. Using technology instead of performing tasks manually can also help establish consistency. 
- Develop an Exit Strategy: This is another conditional recommendation. If the owner plans to exit, they should develop that strategy as many years in advance as possible to get ahead of any potential hiccups. Exit strategies take many years to accomplish. Don’t underestimate the work that needs to be put into this process
- Continue to develop leadership and employees: As in any stage, training is critical to keep employees sharp. Tap into younger talent who show the capabilities of being a great leader and nurture those skills immediately.
- Full-time cost control department: Projects are larger and more complex, which can result in far more profit loss on projects. Consider having a full-time cost control staff properly trained in both estimating and project management and have them dedicated to continually monitoring costs on projects. 

Hayden AbrevayaProduct Marketer

Hayden has worked in the heavy civil construction industry in estimating, project management, and concrete production. He is an avid learner and lean construction proponent who believes that the construction industry is ready for technological advancements in all aspects of the construction process. At Billd he uses his skills to help contractors grow their companies by providing them the information they need to win more bids, and take on more projects.

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