Margins in construction are often decided long before a project is finished — and not always on the jobsite itself. Misaligned communication between the field and office, missed change orders, and delayed financial visibility can quietly erode profits before anyone realizes.

According to CFMA’s 2024 Financial Benchmarker, typical pre-tax net profit margins for contractors range from approximately 5-6%, depending on the type of work.¹ With margins this tight, even modest profit fade can have a significant impact on a project’s financial outcome.

A cost overrun or billing delay that erodes just a few percentage points can wipe out most, if not all, of a project’s expected profit. This level of vulnerability exposes a critical gap in communication and financial oversight that traditional financial management practices have long perpetuated.

At the center of this issue is a long-standing gap: project managers (PMs) frequently lack the real-time financial data needed to make timely, informed decisions. Historically, financial teams controlled enterprise resource planning (ERP) systems and safeguarded access, but as project complexity grows, so does the need for greater transparency and shared ownership.

Today’s technology removes many of the barriers that once kept PMs out of financial conversations — and gives them the tools to better forecast, manage cash flow, and protect profits.

This article explores how construction companies can shift away from limited access to financial partnership, equipping PMs with both the tools and training to play a central role in financial performance — and why doing so is becoming essential for long-term stability and growth.

Financial Education & Transparency: Aligning Field & Office Teams

A key to successful project management lies in education and transparency. When PMs clearly understand their project’s financial standing, they can make informed decisions that align with the company’s goals. Financial literacy — from basic Accounting 101 principles to key financial ratios and KPIs — helps PMs prevent profit fade and stay aligned with business objectives.

As Clint Alessandro, CEO of Alessandro Electric, explained, “When PMs aren’t aligned with financial goals, it’s like having two teams playing different games.” By sharing financial data across teams, companies create alignment, reduce miscommunication, and minimize costly errors.

Key benefits of financial transparency include:

1. Improved decision-making: When PMs have access to real-time financial data, they can identify issues such as cost overruns or billing discrepancies before they escalate.
2. Enhanced collaboration: Transparency builds trust between accounting and operations, fostering a culture of partnership.
3. Reduced administrative burden: Accounting teams can focus on higher-value activities by equipping PMs with the necessary tools.

Modern Tools: Eliminating Risks & Enabling Access

Construction financial professionals have long been the gatekeepers of ERPs — for good reason. These systems are not only complex, but are also the backbone of a company’s financial operations, housing critical data such as budgets, forecasts, and billing details.

Any error, whether intentional or accidental, can have catastrophic consequences. A single misplaced decimal, an incorrect data entry, or unauthorized access could lead to billing inaccuracies, financial reporting discrepancies, or even compliance violations. The potential fallout — hours of corrective work, lost revenue, and reputational damage — makes such risks unacceptable.

Given these stakes, it was far more straightforward and safer for financial professionals to control ERP access tightly. By keeping the keys to the kingdom firmly in their hands, they could ensure data integrity and maintain a centralized flow of information. This approach allowed them to disseminate critical financial data as needed and on their terms, minimizing the risk of errors while maintaining control over sensitive operations.

While this model worked in the past, it created a bottleneck, limiting the flow of information to those who needed it most: the PMs responsible for the day-to-day success of construction projects.

Today, however, technological advancements have rendered many of these concerns obsolete. Modern tools integrate seamlessly with ERPs, providing secure, role-based access to real-time financial data without compromising accuracy or control. This shift makes it possible to empower PMs with the information they need to make proactive, data-driven decisions while ensuring that financial professionals retain oversight and that the ERP remains safeguarded.

By rethinking the traditional gatekeeping model, construction companies can eliminate inefficiencies, foster collaboration, and unlock new opportunities for profitability and growth.

Advancements in construction technology now allow PMs to track budget vs. actual costs in real time, forecast cash flow and adjust plans dynamically, and streamline communication with stakeholders through shared, up-to-date data.

Implementing the Shift: Practical Steps

Making this transformation requires a strategic approach. Empowering PMs to take ownership of project financials involves selecting the right tools, providing effective training, fostering accountability, and managing the change thoughtfully.

The following are actionable steps to guide this process.

Step 1: Invest in the Right Tools

Equipping PMs with the right tools is the foundation of success.

Look for technology solutions that integrate seamlessly with your ERP system and offer features designed to empower PMs without overwhelming them.

Key features to consider include:

• Role-based access controls: Ensure PMs have access to relevant data while maintaining security for sensitive financial information.
• Intuitive dashboards: Simplify complex data into user-friendly visualizations that PMs can easily understand.
• Real-time updates and forecasting: Enable PMs to monitor project progress and anticipate potential financial risks in real time.
• Data visualization: Tools that display trends and patterns help PMs make informed decisions quickly.

Idea in Action: Standard Operating Procedures

Update or create standard operating procedures (SOPs) to standardize how PMs use the technology.

For example, develop an SOP that outlines how PMs should track budgets vs. actual costs within the solution. Ensure that the technology is actively used during discussions between the accounting team and PMs to address cost overruns and determine the best strategies for adjusting project timelines and budgets.

Step 2: Train Your PMs

Access to data is only valuable if PMs know how to use it effectively.

To ensure that training is impactful, it should focus on financial literacy and the practical application of tools while incorporating principles of adult learning theory. Adults learn best when training is relevant to their current roles, builds on their existing knowledge, and allows them to engage actively in the process.

Some training topics to consider are:

1. Basic financial principles: Teach PMs how to interpret financial statements, manage cash flow, and understand key metrics such as gross margin and earned revenue. Ensure these lessons relate directly to their daily decisions, making the material immediately applicable.
2. Dashboards and reports: Provide hands-on training that allows PMs to explore tools in a real-world context. For instance, during training sessions, PMs can use their own project data to see how to extract actionable insights relevant to their responsibilities.
3. Proactive decision-making strategies: Introduce scenario-based exercises to empower PMs to make data-driven decisions. Examples could include reallocating resources to avoid delays, managing change orders effectively, or identifying cost overruns early.

Idea in Action: Training

Invest time in comprehensive training for PMs. Consider implementing a dedicated financial boot camp that includes workshops on reading financial reports and scenario planning for change orders.

For example, you could simulate a scenario in which a project faces a sudden budget overrun, guiding PMs through analyzing the problem using dashboards and collaboratively developing solutions. This approach ensures that PMs gain practical, hands-on experience that helps them proactively manage budgets and reduce profit fade across their projects.

Step 3: Foster a Culture of Ownership

PMs must take responsibility for their project’s financial performance to drive meaningful change. Cultivating ownership ensures that PMs feel invested in achieving positive outcomes and become proactive in managing project success.

A few ways to foster ownership include:

• Setting clear expectations: Define roles and responsibilities for financial management. For example, PMs should regularly review costs, track earned revenue, and monitor change orders.
• Rewarding proactive problem-solving: Recognize PMs who address issues early. Quarterly incentives such as gift cards, team lunches, or bonuses for maintaining accounts payable under 60 days can reinforce positive behaviors.
• Encouraging collaboration: Establish communication channels between PMs and accounting teams to effectively share challenges and solutions.

Idea in Action

Restructure project review meetings so that PMs present concise updates on their projects. Use a structured format — need to know, roadblocks and barriers, and next steps — to ensure discussions focus on key financial impacts. Tie these updates to specific KPIs, keeping PMs engaged and aligned with project goals.

This format also provides leadership with insight into PM priorities and serves as an opportunity for mentoring and professional development if presentations don’t meet expectations.