(Small business coaching) How Advertising Consumes Our Life
No commentsBy Karl Sultana
Many of the techniques used by advertisers are often criticized by the public, but by and large most of the adult population sees advertising as an open book for anything new. In today’s world you don’t have to make an effort to know about things, the new products themselves come to you. With TV commercials, billboards all over the place and kiosks and shows happening in most busy market areas, advertising has become a normal part of the modern Western society.
Advertising encourages consumerism, as many products are bought by consumers, because they have seen it already in a picture or on the TV screen. But consumerism also means a better economy, because after all the advertiser only wants to sell his products or services, and if he is successful in doing that, his target is achieved. The industry has been criticized by many to promote only consumption and encouraging an economic mass production system. All that the product seller does through advertising is to lure the consumer, and if he gets lured, whose fault is it?
Since advertising has a major social impact on the consumers, especially on children and the teenagers, there must be some amount of transparency in their methods. Parents and educationists complain often about the ill effects of advertising, but they are the ones who can solve the problems by working with educational materials in schools. At home too, parents should explain to their children that advertising is a mere marketing strategy to encourage consumers to use their products. The actual popularity and financial gain of the company is linked to the product itself and not to its publicity alone.
The common complaint of the public is the misuse of advertising. When products and services are advertised, the advertiser should be truthful towards the customer. Haven’t we heard of politicians promising hoards of improvements just before the elections? As soon as he sits on his comfortable political position, he forgets all about his promises that were advertised to get his votes. The same applies to simple products like soap or the new gel pen in the market, but it hits the consumer as he spends his money and believes in the advertisement that he has seen.
Today’s consumer has been used to advertising and hence he treads the path of purchasing products and investing his money in it carefully. Public awareness is important and people often call or enquire from friends before falling into any trap caused by advertising.
The broadcast industry, the tourism industry and the print media rely heavily on advertising and hence in spite of the criticism, no country can lose the revenue that comes in through tourists and conventions. And after all, when a new product is launched, advertising is the only way to make it known to the people. Wouldn’t it be boring to use the same things for years together, without an element of change? Advertisements help to bring in this whiff of fresh air to make the atmosphere more cheerful and meaningful too.
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Construction Scheduling Software and Project Analysis
By Shawn Simmons
Construction Scheduling Software and Project Profit Analysis Management
Project Profit Analysis Management is a process of reviewing periodically, usually weekly, the changes in each project’s profit margin. Knowing how much and why the profit margins have changed provide management the ability to preview the financial finish line throughout the project. It gives management and the construction scheduling software they are using a “heads up” and allows more time to address problems at earlier construction stages. This process usually results in improved profits.
Common Approach
A common approach to managing projects in construction scheduling software is to set a budget for all the activities required to complete the project and then compare actual costs against budget. Many accounting systems use this approach which is frequently referred to as “Cost Accounting”.
There are major weaknesses using this approach to manage project profitability. They include the time differential between activity in the field and posting of information by accounting, running behind schedule, allowing actual costs to exceed earned value, and not identifying the reasons for missing budgets.
The time differential between field activity recorded in the construction scheduling software and posting of information can adversely affect profits. When an invoice is not posted and related to work completed & billed, project profit margins look better than they really are. Or, if cost accounting reports are reviewed weekly and payroll is bi-monthly, a portion of weekly payroll will not be posted nor reflected on the cost accounting report.
It is important to know in the construction scheduling software if the project is running behind schedule because the project completion date may not be met unless additional resources are utilized. Using additional resources often results in profit erosion as actual costs exceed budget. Alternatively, if the project completion date is allowed to extend, on-going general conditions may eat away at the profit margin.
Allowing actual costs to exceed earned value during the completion of an activity indicates the cost to complete may exceed budget. If this occurs without a change in scope (i.e. change order), the additional cost must be borne by the contractor and the profit margin is reduced accordingly.
Not identifying reasons for missing budgets, such as a bad estimate, non performance by a subcontractor, not billing the owner for a change order, or simply not billing the owner because a subcontractor’s invoice was missing at invoice time makes it more difficult to review the project at its completion and gain knowledge to improve future bids and control projects in your construction scheduling software.
The Project Profit Analysis Approach
To effectively manage profit margins, accounting information needs to be analyzed against actual field activity recorded in construction scheduling software on a timely basis. This can be accomplished by daily synchronization of relevant information between the accounting system and a central server that integrates field reporting, scheduling and project management.
For accounting and the central server to communicate timely, a “common denominator” for both is required. Frequently, the cost code is used as this “common denominator”.
The budget can be imported from accounting to the central server one time at the beginning of a project. Actual costs can be imported from accounting on demand, preferably daily.
Every day field reports should be transmitted electronically to the central server and include sub-contracting crews, work accomplished (% complete or work put in place), materials received, and self perform labor.
Gathering these sources of information into construction scheduling software is required to produce a comprehensive Project Profit Analysis Report. This report can identify by cost code the budget, approved owner change orders, approved subcontractor change orders, contracted (committed) costs, actual costs, earned value, percent complete, cost to complete, over committed, open committed and unbudgeted on-going general conditions.
This report produced weekly can track the reasons why the current profit margin of a project is different from the original budget: change orders, buyouts, cost to complete, over committed, over general conditions, and on-going general conditions due to extended project end dates.
The original profit is equal to the budgeted profit. With the project 95% complete, the change order margin shows a reduction of profits because approved subcontractor change orders exceed approved owner change orders. The profit margin is increased as buyouts were less than budget. Both cost to complete and over committed indicate additional profit erosion. Although General Conditions are currently on target, Excess General Conditions show additional profit erosion because the project will not be completed on schedule. The current expected profit margin, consequently, is about twenty thousand less than originally planned.
As with any approach, Project Profit Analysis Management is only as good as the timeliness and accuracy of the information entered. It is important that field activity and progress be entered every day and accounting remains current in the posting of accounting related activity.
With integrated field, construction scheduling software and project management information interfaced with accounting, management has the basis to make better decisions earlier throughout the life of a project.
Construction scheduling guru Shawn Simmons is with HeadsUp Construction Scheduling Software.
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Thursday, November 20th, 2008 at 7:10 pm and is filed under business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
