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The Missing Link Between Your Bills and Accurate Job Costing with Avi Edelson · Contractor Business Builder Podcast

• 0:00
  Welcome to another insightful episode of the Contractor
• 0:03
  Business Builder podcast. How much time and money are you
• 0:06
  losing every week because bills get coded late, coded wrong, or
• 0:10
  approvals happen? Somebody elses inbox with 0
• 0:13
  visibility. Today we have the honor of
• 0:16
  hosting Abby Edelson. He is the founder of Upmarket
• 0:19
  PDF. How you doing today Abby?
• 0:21
  Doing great. Eric, how are you?
• 0:22
  How's everything? Great.
• 0:23
  Yeah, wonderful. Looking forward to diving into
• 0:26
  this. So for our listeners out there,
• 0:28
  can you share a little bit about your background and kind of what
• 0:31
  pulled you into, you know, bookkeeping financial management
• 0:34
  for construction companies? Sure, sure.
• 0:37
  So like my career spans a number of different industries and
• 0:40
  sectors. I've worked in logistics,
• 0:43
  operations, finance. I was a FEMA disaster manager
• 0:47
  for a number of years and my own logistics company based in New
• 0:51
  York City for a handful of years.
• 0:53
  And over the last little less than a decade or so, been
• 0:56
  working really only in construction, mostly on the
• 0:59
  operations end of the business. And that transitioned kind of
• 1:05
  seamlessly a few years ago into a bookkeeping and business
• 1:10
  services firm, which I've been running now for a few years
• 1:13
  working as an outsourced bookkeeper for builders around
• 1:17
  the country at this. Point much needed service, make
• 1:20
  sure nothing gets missed and things are in the right right
• 1:23
  places. So you said before there's
• 1:25
  there's no great way contractors handle, you know, vendor and sub
• 1:28
  bills before they hit the accounting.
• 1:30
  What does? Where do you find like the mess
• 1:33
  happens or the confusion happens with just figuring out where
• 1:37
  things get handled in the in the process for a builder?
• 1:40
  For sure. Well, any anyone who's ever run
• 1:43
  a construction company or work with a construction company
• 1:46
  knows that bills are coming in all day long, every hour.
• 1:50
  Bills are always arriving and it's a normal part of the
• 1:54
  business and it creates regular record keeping challenges for
• 1:59
  anyone who's involved in the construction company.
• 2:02
  So what do you do? How do you treat these bills?
• 2:05
  And it doesn't really matter whether or not they are going to
• 2:08
  be made billable to a client, whether they're just being
• 2:11
  tracked against a fixed projects for job profitability.
• 2:15
  We need to find a way to record them against the project.
• 2:19
  Apply a cost code or maybe a an account from the tread of
• 2:22
  accounts, apply terms. Any information about the bill
• 2:27
  needs to be attached to it before it can be recorded.
• 2:29
  Now, this is a relatively straightforward process.
• 2:33
  The very small construction company where the person who is
• 2:36
  receiving the bill from the sub of the vendor knows intimately
• 2:40
  the project, the Costco, they want to apply to it and maybe
• 2:43
  they're on their own just inputting that information
• 2:47
  directly into the accounting system.
• 2:48
  Simple. As a construction company grows
• 2:51
  and becomes more complex, these roles become separated,
• 2:55
  bifurcated. You've got project on one side,
• 2:59
  you've got admin office on the other.
• 3:01
  And oftentimes project isn't responsible for inputting data
• 3:05
  into the accounting or project management system.
• 3:09
  That's the office side. So then how do you communicate?
• 3:12
  You have these folks on projects, you have all the
• 3:15
  information about the details of the job, the project scope.
• 3:20
  They need to be able to communicate with folks who are
• 3:22
  in the office on the details of each and every bill.
• 3:25
  And this creates some challenges as soon as you get beyond the
• 3:30
  kind of most basic small construction company.
• 3:34
  How do you deal with this information?
• 3:36
  Share This is typically done in a few ways.
• 3:39
  One which I think most people are probably pretty familiar
• 3:42
  with, the bill comes in, it gets printed off and then that bill
• 3:47
  and maybe a stack of others gets handed off to the site
• 3:49
  supervisor or the project manager who hand writes on them,
• 3:53
  the Costco, the project, the terms, whatever it might be.
• 3:57
  And then they hand that back to admin office person.
• 4:01
  Other this might be the bill comes in, gets emailed to the PM
• 4:05
  or sites advisor and they add some text fields to the bill and
• 4:09
  then they e-mail it over to the admin or put it into a folder
• 4:12
  that's shared. Another option is using a stamp
• 4:15
  that some software is provided that you can then type in the
• 4:19
  cost code and then again share that with your admin office
• 4:22
  person. These are all functional
• 4:25
  approaches to a problem that all construction companies face.
• 4:30
  But because there hasn't been a software developed specifically
• 4:33
  for this problem, they're all kind of ad hoc.
• 4:37
  And you, I imagine speaking to lots of builders around the
• 4:41
  North America have probably seen all kinds of ways that
• 4:44
  businesses treat this. And because there is no kind of
• 4:48
  set system to manage it. So everyone comes up with their
• 4:51
  own. Some of the problems with it are
• 4:53
  my again, while these are all functional approaches because
• 4:55
  there hasn't really been a software that solves it.
• 4:58
  As the problems with it are that it can be slow, especially if
• 5:01
  you're printing off documents and handwriting them and having
• 5:05
  to print them off. Move to this pile, someone hand
• 5:08
  writes the cost code project and some back it gets scanned into
• 5:12
  the system uploaded that way can be kind of a time intensive
• 5:17
  process. Also there's issues around data
• 5:19
  permanence. So if you're adding text fields
• 5:21
  to a PDF document in either Apple preview or like an Adobe
• 5:26
  product, it's really easy to incorrectly save that document
• 5:30
  and lose whatever data you put on top of it.
• 5:33
  So when you and shift it over to the office, they might not see
• 5:37
  any of the content that you put on top of that.
• 5:40
  And then of course, there's probably the most important
• 5:42
  issue, which is errors that when we're handwriting or were typing
• 5:48
  in transcribing, you know what we're looking at the budget, the
• 5:51
  Costco, the project name, it's very easy to type or handwrite a
• 5:55
  cost code incorrectly or to transpose the numbers you meant
• 6:00
  to write 123, you're out 321. There's no way to catch it up
• 6:03
  until the very last point where someone is actually inputting
• 6:07
  the information about the bill into the accounting or PM system
• 6:11
  that they are typing in a number, but it doesn't register
• 6:14
  in the system. So if to then go back to the PM,
• 6:17
  go back to the sites guys, we figure out what cost could be
• 6:20
  applying to this specific transaction.
• 6:25
  And there really hasn't been a great way to handle these
• 6:28
  problems of Mark PDF. The software I've developed is
• 6:31
  my solution to these problems. Yeah, definitely.
• 6:35
  It's a, it's a major pain point for sure, for most every
• 6:38
  builders that I've talked to is first, how do we get accurate
• 6:41
  job costing hunting? Because you have the field and
• 6:45
  multiple people, you know, office team and project managers
• 6:48
  and, you know, everyone kind of needs to have a touch point or
• 6:51
  input typically. And then a lot of owners I
• 6:53
  talked to until we kind of dial it in there, they can't really
• 6:59
  trust their numbers that, you know, that they can see the job
• 7:01
  costing. It kind of like gives them a
• 7:02
  picture of what's going on. But they, they're still lenient
• 7:06
  to really trust that everything's actually made it
• 7:08
  into the project that should be, and it's been been coded
• 7:11
  properly. And then there's like loss
• 7:13
  situations where he's talking to somebody the other day where
• 7:16
  builder had paid a sub twice, you know, $20,000 and, and they
• 7:20
  didn't, you know, catch it till I think a month or two later or
• 7:23
  when they were, you know, reconciling or something like
• 7:26
  that. So without a good process, you
• 7:28
  can definitely things get missed and, and you can make improper
• 7:32
  decisions based on, you know, faulty numbers and things like
• 7:34
  that. So run us through the the
• 7:36
  upmarket PDF and maybe like the what specifically it solves and
• 7:41
  how it works. So we've kind of framed the
• 7:43
  problem or the challenge, right, challenge that all builders
• 7:46
  experience on a daily, hourly basis.
• 7:49
  What have we had to treat these bills and the systems we have
• 7:53
  while functional, there are some issues with them.
• 7:56
  Unmarked PDF is a software that's purpose built for this
• 7:59
  problem. Think of it as essentially a
• 8:01
  database. A database for any organization
• 8:05
  stores their list of cost codes, project names, terms, sales tax
• 8:11
  rates, anything that it's important that we enable users
• 8:16
  to be able to apply to a transactional bill or expense
• 8:20
  could save us a list and upward PDF.
• 8:23
  And then when you're marking up or annotating a bill, you can
• 8:26
  pull that information in by use of a essentially what say, and I
• 8:30
  think everyone can picture this digital post or essentially
• 8:34
  looking at the the bill as a PDF and we're applying a digital
• 8:38
  post it note on top of it. And we're pulling cost codes,
• 8:42
  project names, terms, what have you into that post it note
• 8:46
  applying on top of the bill and then sending it off to by
• 8:51
  e-mail, the admin, the bookkeeper or the project
• 8:55
  management software or the accounting software or being
• 8:58
  able to just export that now upmarket bill and putting into a
• 9:02
  folder that's shared with other people in the organization.
• 9:05
  So it solves a number of the issues which I mentioned.
• 9:09
  It's a little bit faster. We're not printing off the
• 9:11
  arguments. We're also catching errors.
• 9:14
  Most importantly, because we have all the cost codes in the
• 9:18
  database, it's impossible to transcribe it correctly because
• 9:22
  we're using drop downs to select what were the the cost code or
• 9:26
  the project that we want to apply to this transaction.
• 9:28
  So it really solves these kind of major issues and of course
• 9:32
  permanence too. Once that at mark, the digital
• 9:36
  post note is on top of the bill and it's exported, it becomes
• 9:38
  part of the permanent record of that bill.
• 9:41
  So there's no chance of it being augmented or removed at some
• 9:44
  point in the future. So really streamlines and
• 9:47
  simplifies this complex process and makes it very.
• 9:50
  Verifiable makes sense. And to upload a bill or receipt
• 9:56
  or what have you, is that taking a picture with your phone?
• 9:59
  Are you uploading from like an e-mail or from your files on
• 10:03
  your computer? How do you get the information
• 10:05
  in? And then how does the
• 10:06
  information kind of get out? Does it go through an e-mail?
• 10:09
  Does it go directly to another program?
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  What? What does that kind of in and
• 10:13
  out process look like? Yeah, I tried to make it as
• 10:15
  simple and intuitive as possible.
• 10:17
  You've got 2 means of bringing bills in.
• 10:20
  One is a drag and drop. You have a bill on your desktop,
• 10:23
  maybe someone emailed it to you or it's in the folder on your
• 10:26
  desktop and you can just grab it and pull it right into upmarket
• 10:29
  PDF super quick. Or there's a browse feature
• 10:32
  where you can search any of the documents on your file and be
• 10:36
  able to pull it in that way. So very simple, very intuitive.
• 10:40
  And once the bill is within upmarket can very easily ensure
• 10:44
  that's the correct because you're looking at it, you can
• 10:46
  see it, you can see what vendor might have come from, etcetera.
• 10:50
  And how it gets out is I mentioned before about being
• 10:53
  able to export it as a PDF. Very simple, takes half a second
• 10:58
  to do that. Or you can e-mail it directly
• 11:02
  from the app without having to open up Gmail or Outlook or
• 11:06
  whatever e-mail client you're using.
• 11:08
  You've got built in software that you can add a list of
• 11:12
  recipients, basically like a small directory.
• 11:15
  And then you can just e-mail your up mark PDF directly to
• 11:19
  that individual. And I mentioned before about
• 11:21
  something it also to the bookkeeping software or the
• 11:24
  project management software that might use OCR to extract data
• 11:28
  from it. You can treat it that way as
• 11:30
  well. So very simple, incredibly
• 11:33
  quick, easy to verify and really it really cuts down on errors
• 11:39
  that people might be experiencing when they're making
• 11:42
  up bills, the situation with the current workflow they have in.
• 11:45
  Place yeah sounds like a you know a nice easy tool to be able
• 11:49
  to facilitate that that in and out of that information and make
• 11:52
  sure that the right project and Costco and things are assigned
• 11:56
  properly so it could be job costed.
• 11:59
  Can you maybe walk us through what a new client journey would
• 12:02
  be for someone who's as do most of your clients use QuickBooks
• 12:06
  or which which accounting softwares do you do you
• 12:08
  typically use? Yeah.
• 12:09
  For me and my my other business which is called Co constructors,
• 12:12
  all my clients are using QuickBooks Online.
• 12:14
  That's kind of the standard, but there's many others that
• 12:18
  businesses are using and upmarket PDF is designed kind of
• 12:21
  work seamlessly with any accounting software, project
• 12:24
  management software. It falls into this category of
• 12:27
  pre accounting. So we're using up our PDF to be
• 12:30
  able to apply some information to the bill that might not be
• 12:35
  obvious by looking at it. And this is where a lot of AI
• 12:39
  generated OCR generated software is, can sometimes have trouble
• 12:44
  because they have no context, right?
• 12:46
  And so oftentimes requires a human to still intervene and
• 12:49
  say, hey, we're going to apply this bit of information to this
• 12:54
  transaction. Mark PDF is designed to kind of
• 12:58
  provide a really simple, intuitive way to be able to add
• 13:02
  some information to speed the the rest of the intake process
• 13:07
  for that bill so that the OCR or whatever software the accounting
• 13:12
  is using or the project management software is using to
• 13:15
  be able to make most use of that data.
• 13:17
  I should say to that the goal of Apart PDF was to make it
• 13:22
  incredibly simple and intuitive to use.
• 13:26
  And if you've used any project management software, any
• 13:29
  accounting software, accounts payable software, list goes on.
• 13:34
  They're they're oftentimes very impenetrable if they spend a lot
• 13:37
  of time learning the functionality, dedicating real
• 13:40
  energy to it. The idea behind unmarked PDF is
• 13:43
  that would be used most likely by someone who's on the front
• 13:47
  lines of the construction company, the PM, the site
• 13:51
  supervisor, who doesn't want to spend a whole lot of time
• 13:54
  learning a brand new bit of software, educating hours or
• 13:57
  days to knowing how to use it. I want to make it so easy that
• 14:01
  someone who maybe isn't even that tech savvy to learn how to
• 14:06
  use a more PDF in 10 to 15 minutes.
• 14:08
  So trying to make it as simple, straightforward and as seamless
• 14:14
  as possible so that really anyone can use it and not have
• 14:17
  to spend a whole lot of time in their work day managing bills.
• 14:20
  Because right now how it's typically done is kind of an
• 14:24
  impediment to getting back to what's really important, which
• 14:26
  is serving clients, managing the team, keeping the project within
• 14:31
  scope and on timeline. And I think RDF is my solution
• 14:34
  to help get keep the project moving by adding a whole lot of
• 14:38
  extra burden to the bookkeeping record keeping component.
• 14:41
  Yeah, definitely with your, you know your background, you
• 14:43
  obviously know the space very well and can realize what the
• 14:47
  the different sides of the equation need there from the,
• 14:49
  you know the site to the office to the accounting, accounting
• 14:52
  bookkeeper, what have you. Can you maybe walk through like
• 14:55
  retainage on, on projects, their bills and for, you know, Subs or
• 14:59
  even from developers or whatever and maybe shed some light on
• 15:03
  that and how that gets accounted for?
• 15:05
  Sure, sure, and we should say that our PDF helps in the
• 15:08
  process of doing retainage calculations.
• 15:10
  But to take a step back, what is retainage?
• 15:13
  Imagine most of your listeners or viewers of this know what it
• 15:16
  is, but not everyone does. Retainage is related to.
• 15:19
  I'm going to get a little accounting for a second, both
• 15:21
  accounts payable and accounts receivable.
• 15:25
  So how it might work with accounts receivable and every
• 15:28
  builder, it's different who does retainage.
• 15:30
  But with accounts receivable, a builder might have a contract
• 15:33
  with a client that says that we're going to invoice you
• 15:36
  monthly, but each month and each invoice you as the client can
• 15:40
  hold back a percentage or a dollar amount and not pay that
• 15:44
  to us, the GC. You're going to hold on to that
• 15:46
  until some later point in the project or at the very end of
• 15:50
  the project and then you'll admit it to us at that point.
• 15:54
  So that helps to keep the builder doing completing the
• 15:57
  project, keeping the budget aligned, and also moving
• 16:01
  everything forwards. How it works on the accounts
• 16:03
  payable side is that a GC might have a contract with a vendor or
• 16:09
  subcontractor that says that we've contracted with you to
• 16:12
  work with us in this project. You're going to invoice us
• 16:15
  again, let's say monthly forsake of discussion.
• 16:17
  But we're going to hold back paying you a percentage, 5 or
• 16:21
  10% of each of your invoices each time until a later point in
• 16:25
  the project or at the very end to make sure you complete all
• 16:28
  the punch list items in the project from your, what's your
• 16:32
  responsible for is completed. So we've got retention on both
• 16:35
  sides, retainer on both sides. And not every builder does both.
• 16:40
  They might do one and not the other, but it might be common to
• 16:43
  do implement both. This record keeping is complex
• 16:47
  as you can imagine, because you're having to both track what
• 16:51
  you're paying to the sub or vendor and then what you're
• 16:56
  holding back and how you want to communicate that to the sub.
• 16:59
  Let them know here's how much we're holding back and have
• 17:02
  agreement on that. And here's when you're going to
• 17:04
  be receiving the Mather on. This is complex and the
• 17:08
  accounting around this is complex.
• 17:10
  So it requires someone who's doing the bookkeeping.
• 17:13
  They're really understand the complexities of construction
• 17:17
  accounting, but there also needs to be a mechanism there to
• 17:20
  streamline some of the math to make it easy so that everyone
• 17:25
  knows what's going on. Construction is all about
• 17:27
  communication and it's one of the most complex components of a
• 17:31
  construction project, keeping everyone aligned.
• 17:35
  And much of the software that we use, project management
• 17:37
  software, is meant to enable it. But if the software wasn't
• 17:41
  intended to communicate a component part like retainage,
• 17:44
  there can be some major issues. Bob Mark PDF has a built in
• 17:48
  retainage feature that as I mentioned before, you can have a
• 17:52
  directory and an emailed upmarket PDF to anyone you want.
• 17:57
  Well, it's very convenient once you've marked up the bill and
• 18:00
  you're going to with retainage and you're going to share with
• 18:03
  your admin team here at the same time, also e-mail it to the
• 18:07
  suburb vendor so they have a record too of what's being
• 18:10
  recorded in that specific transaction to build alignment
• 18:14
  and not have a lot of question marks about individual
• 18:17
  transactions. Saves a lot of this
• 18:21
  uncomfortable, difficult conversations down the line
• 18:23
  because retainage is obviously it's a critical component part
• 18:28
  of construction. And if you talk to any
• 18:31
  subcontractors, it's an area that create a lot of potential
• 18:35
  conflicts at various points within the contract.
• 18:38
  So we're trying to mitigate that as much as possible and about
• 18:41
  PDF helps to do that. Makes a lot of sense.
• 18:44
  Thanks for laying that out and explaining how the retainers
• 18:47
  gets handled and how you know apart PDF can can facilitate
• 18:51
  that as well, which is very nice and be able to send different
• 18:54
  people be the information as needed.
• 18:56
  So for contractor that's maybe has some sort of job costing but
• 18:59
  it's not really working out. Can you give us where you would
• 19:02
  get started or maybe even a like a client that you've worked with
• 19:06
  of kind of where things were at, how they incorporated up more
• 19:09
  PDF into their system and were able to achieve accurate child
• 19:14
  costing? Yeah, because of our PDF is kind
• 19:18
  of separate and distinct from the accounting software and the
• 19:22
  project management software. It's not a replacement.
• 19:25
  And I think if you look around the the software space for
• 19:29
  construction, you have a lot of software saying what you're
• 19:32
  using isn't great, you should use what we have instead.
• 19:35
  So requires you to do something different, to change something
• 19:39
  that you're already doing or actually move, migrate from one
• 19:42
  software to another. Mark PDF doesn't require this.
• 19:45
  It's totally separate and distinct.
• 19:47
  And because it's in this pre accounting kind of role, it's
• 19:50
  like more of an amendment to what businesses are already
• 19:54
  using. So a business could use it,
• 19:56
  decide it's great and keep on using it, or they could stop and
• 20:00
  they could just go back to what they were doing before.
• 20:02
  It doesn't require full wholesale change of their
• 20:06
  current software. That because for the most part
• 20:09
  how businesses treat this is relatively simple, moving files
• 20:14
  around in folders, moving paper around from one individual to
• 20:19
  another. Typically businesses have
• 20:21
  developed these workflows because something better wasn't
• 20:25
  available. So trying out my PDF is really,
• 20:28
  it's kind of a low cost, low stakes Astrum.
• 20:32
  The feedback I've gotten has been fantastic.
• 20:34
  I think for a lot of businesses, being able to work from a data
• 20:37
  set has been incredibly powerful.
• 20:39
  And I should say too, the best feedback that I've gotten and
• 20:43
  the most powerful feature with Wikipedia is the ability to
• 20:47
  create custom budget specific Costco lists for each project.
• 20:53
  So as any builder knows who does, who has budgets, they're
• 20:57
  working from budgets. Like essentially an estimate.
• 20:59
  Estimate becomes once the project goes live, they have
• 21:02
  their global cost code list that includes all the cost codes that
• 21:06
  company has available, their disposal, but they're using a
• 21:08
  subset of those cost codes for any particular project.
• 21:13
  So the Anderson project has one subset of cost codes and the
• 21:17
  Smith project has a different subset of cost codes.
• 21:19
  So as a site supervisor or project manager to mark up and
• 21:24
  annotate bills, you need to have the budget in front of you to be
• 21:29
  able to make sure that as your cost coding, you're choosing
• 21:31
  cost codes that align with what's in the budget.
• 21:34
  If you choose some that's not in the budget, it can create some
• 21:36
  issues with accurate record keeping and make
• 21:39
  reconciliations. Iran were difficult with that
• 21:41
  part PDF you can create project specific budget lists and would
• 21:46
  enabled and you're marking up a bill from the Anderson project.
• 21:50
  You only see those cost gets that makes it so that you will
• 21:54
  never use a Costco that's not in that budget.
• 21:57
  It's incredibly powerful feature, but also very simple to
• 22:00
  use. Doesn't take a whole lot of
• 22:02
  training to be able to learn how to make to enable that function
• 22:06
  when using the software. And I think that's been one of
• 22:09
  the most powerful unlocks, the businesses they've been.
• 22:11
  Trying it, yeah, wonderful, yeah.
• 22:14
  Making it easy and simple and and and functional.
• 22:17
  That's, you know, the keys there for sure.
• 22:19
  So that's that's fantastic. So so for the people out there
• 22:21
  that want to get their hands on upmarket PDF, try it out and see
• 22:25
  what it's all about. What's the best way for them to
• 22:27
  do that? Markpdf.com So that's the
• 22:30
  landing page. You can see examples of up
• 22:33
  marked bills, very transparent pricing and opportunity to go
• 22:38
  and try and account for free. So we've got a free tier.
• 22:41
  It's not like 14 days and it's over.
• 22:43
  People can just go and use some basic functionality at Mark PDF
• 22:47
  for free. But if they want additional
• 22:49
  features like retainage, being able to add many job specific
• 22:54
  cost code lists and some other features to approvals, that's in
• 22:58
  the eight years. But if you want to try it, it's
• 23:01
  really no. Risk perfect.
• 23:03
  So no excuses go we had signed up for it.
• 23:06
  I'll put a link in the description of this, you know,
• 23:08
  video audio, wherever you're, you're checking it out.
• 23:10
  And yeah, there's no, no excuse to have bad, you know, job
• 23:15
  costing or no job costing. And and that's fantastic.
• 23:18
  The approvals is a really nice touch too.
• 23:20
  So you can make sure that, as I mentioned before, you know,
• 23:23
  you're not double paying Subs or who knows what, right?
• 23:26
  There's, there's a lot of money, a lot of bills flying here,
• 23:29
  there and everywhere. So make sure your your money is
• 23:31
  trackable at the end of the day. Thanks so much for coming on
• 23:34
  here. A really, really appreciate your
• 23:36
  time. Thanks for having me, this was
• 23:37
  great.