How Time Tracking Helps Builders Avoid Insolvency

The construction industry is known for its high rate of insolvencies. According to the Bureau of Labor Statistics, 45% of construction businesses close within the first three years, and less than 20% survive for 20 years.

Fluctuating material costs, labor shortages, the complexity of managing multiple projects simultaneously, and failure to invest in new technologies contribute to financial distress for many construction companies. As a result, these businesses must adopt effective strategies to ensure their survival and success.

One such strategy is time tracking, a seemingly simple yet profoundly impactful tool that can transform the way construction companies operate. By adopting advanced time-tracking systems, construction companies can improve project management, enhance productivity, ensure accurate financial tracking, and prevent costly delays. This comprehensive approach not only mitigates the risk of insolvencies but also positions companies for long-term success in a highly competitive industry.

This article explores the industry’s common problems and demonstrates how time tracking can help prevent financial instability.

Challenges in the Construction Sector

The construction sector faces a number of challenges that companies must address if they are to be successful. Here are the key issues:

Cost overrun

One of the most pressing issues in the construction industry is cost overrun, which occurs when a project’s expenses exceed its initial budget due to unforeseen costs, inflation, delays, and unexpected challenges. According to a study by McKinsey, large construction projects typically take 20% longer to finish than scheduled and can be up to 80% over budget. Such financial discrepancies can erode profit margins and compromise the viability of future projects.

A key driver of cost overruns in construction continues to be the rising price of building materials. Market volatility makes it difficult for firms to forecast costs accurately, leading to budget overruns and lower project profitability. After the sharp spikes of 2022, the growth rate in the average price of inputs to residential construction (excluding energy) slowed dramatically, dropping from 15% in 2022 to about 1.0% in 2023. Throughout 2023, the average monthly increase was only 0.2%, a sharp decline from 1.5% in 2021 and 0.7% in 2022.

This moderation continued into 2024, with input costs rising just 0.8% for the year, signaling some relief for the construction industry. However, by 2025, prices began creeping up again, with year‑over‑year growth estimated at around 2.3–2.8%, reflecting renewed cost pressures. Early 2026 data show that input prices remain elevated, although they are far from the double‑digit spikes of 2022.

Inflation continues to push up construction costs in 2025 and 2026, though below the extreme peaks of 2022. Building material prices for new residential construction rose about 4.2% year‑over‑year in late 2025, while global construction cost inflation is projected at 3.9% in 2025 and 4.0% in 2026. Labor costs remain elevated, adding to overall project expenses. Despite some easing, prices are still above long-term averages, making careful cost management essential.

Another significant contributor to rising costs is lagging productivity within the industry. Despite technological advancements, productivity improvements have not kept pace, causing delays and additional costs. To combat this, construction companies need to adopt new technologies such as automated timesheets, drones, and artificial intelligence to enhance efficiency.

Delays to Building Projects

Delays pose a significant hurdle in the construction industry, impacting timelines and profitability. The intricate nature of construction projects, involving various subcontractors and suppliers, often results in unexpected delays.

A key cause of these delays is supply chain disruption. The industry depends on the timely arrival of materials and equipment, which can be hindered by natural disasters, transport issues, or regulatory changes. Moreover, modifications in project scope, design, or budget can cause delays if not managed efficiently.

According to data by machine learning company nplan, nearly 9 in 10 large-scale construction projects (85.5%) are delivered late. The research showed that the median delay for projects completed before the pandemic was approximately 100 days, while pandemic-era projects have a median delay of more than 200 days.

Effective project management is one way that construction companies can mitigate delays. Automated tools such as Jibble enable real-time tracking, identify bottlenecks, and facilitate prompt corrective actions. Weather conditions and unforeseen events also frequently disrupt construction timelines.

Slow Adaption To Emerging Technologies 

One of the biggest challenges facing the construction industry is its resistance to new technology. Tools like Building Information Modeling (BIM), time-tracking tools, and 3D printing could revolutionize the way things are done, making construction professionals’ lives easier and construction sites safer for everyone involved. Despite recognizing these benefits, many construction companies struggle to finance these innovations.

A 2024 survey by the Associated General Contractors of America (AGC) found that only 56% of construction firms have a process for testing and implementing new technologies. The slow adoption rate is due to high initial costs and the industry’s fragmented nature, complicating large-scale implementation. Additionally, a McKinsey report highlighted that construction labor productivity has grown by only 1% annually over the past two decades, compared to 3.6% in manufacturing. The report suggests that adopting technologies like AI, drones, and advanced data analytics could boost productivity by up to 60%.

Time-tracking software, in particular, has shown substantial benefits. These tools provide real-time data on labor hours and project progress, helping to identify inefficiencies and optimize workforce management. A report by Software Advice indicated that companies using time-tracking software saw a 30% improvement in project completion times and significant labor cost reductions.

Labor Shortages

The global construction industry continues to grapple with significant labor shortages, a trend that shows no signs of abating in 2024. This persistent issue stems from a variety of factors, primarily an aging workforce and a widening skills gap. According to the Associated Builders and Contractors, over half a million additional workers are needed on top of the typical hiring pace to meet project demands. Labor shortages have also resulted in delayed projects as there are not enough workers to take on all of the work that is needed.

The construction unemployment rate in the US in December 2025 was about 5.0%, while the national unemployment rate hovered around 4.4%, reflecting persistent hiring challenges in the sector. Job openings also remained elevated, with roughly 292,000 unfilled construction positions reported in November 2025.

To mitigate labor shortages, companies are also leveraging time-tracking software like Jibble to optimize workforce management. These tools provide insights into labor allocation, helping managers deploy workers efficiently and monitor productivity, reducing overtime costs and improving project timelines.

Poor Forecasting/Planning 

While labor shortages in the construction industry are a persistent challenge and significantly impact project timelines, costs, and overall efficiency, these shortages are exacerbated by poor planning. One of the most significant factors contributing to poor planning and forecasting in the construction industry is the lack of accurate, up-to-date data. Construction projects require precise information regarding timelines, material costs, and labor expenses to develop realistic budgets and schedules. Without this data, project managers often face difficulties in forecasting cash flows and allocating resources effectively, leading to delays and cost overruns.

To address this issue, construction companies can invest in advanced construction management software, time tracking, and project management tools. This can help companies identify inefficiencies, streamline productivity, and onboard new staff members quickly. 

Unrealistic client expectations can also pose significant challenges. Clients may demand accelerated schedules or have limited budgets that are not feasible, leading to strained resources and reduced productivity. Project managers should manage these expectations from the outset by breaking down long-term forecasts into achievable short-term goals.

Another critical challenge in the construction industry is the lack of effective communication among project stakeholders. Misaligned expectations and conflicting priorities often arise when there is insufficient communication between the construction company, project managers, and other stakeholders. This can result in delays, cost overruns, and compromised project outcomes. A study by FMI Corporation found that 48% of rework in construction projects is due to miscommunication and poor project data.

Delayed Cash Flow

Many construction companies rely on outdated invoicing systems that disrupt cash flow and project funding. Invoicing delays can lead to late payments, causing significant cash flow issues. These disruptions can halt project progress, delay employee and subcontractor payments, and stall procurement of necessary materials. A report from the National Association of Home Builders (NAHB) indicated that 75% of builders face issues with delayed payments, which significantly impacts their ability to complete projects on time and within budget.

To mitigate these problems, the construction industry must adopt modern invoicing software that ensures timely and accurate financial transactions. By streamlining payment processes and improving cash flow management, construction companies can maintain steady project progress and better navigate the challenges posed by labor shortages.

Furthermore, implementing digital payment systems can reduce the time taken for payments to be processed and received, thereby improving overall cash flow. According to a report by Deloitte, construction companies that adopted digital payment solutions saw a 20% improvement in cash flow stability. These systems can help ensure that all financial transactions are handled promptly and accurately, reducing the risk of project delays and financial instability.

How Time Tracking Software Reduces Insolvencies

The good news is that time tracking construction software can help to reduce many of the common problems that construction companies face. Over time, this can help to save costs, improve efficiency and plan ahead. Here are some of the main ways time tracking software can help construction companies: 

Enhanced Project Management

Using time tracking software plays a crucial role in preventing delays and reducing costs in the construction industry. By accurately monitoring employee hours and project timelines, it ensures that tasks are completed on schedule and according to deadlines. Real-time data enables project managers to identify and address bottlenecks promptly. If your project management software includes precise tracking of costs, this will help in maintaining budgetary control and preventing cost overruns. It is worth noting that time tracking software facilitates better project management and financial oversight.

Increased Productivity

Using construction software lets employers see at a glance how an employee is spending their time, providing valuable insights into productivity and efficiency. Managers can quickly identify which tasks are consuming the most time and assess whether employees are focused on high-priority activities. This visibility helps in reallocating resources and adjusting workloads to optimize performance. It also aids in recognizing patterns that may indicate inefficiencies or potential areas for improvement. Moreover, transparent tracking promotes accountability among employees, encouraging them to manage their time more effectively and stay on task. Furthermore, time tracking software generates detailed reports that highlight trends and discrepancies, enabling more accurate project forecasting and budgeting. By understanding exactly how time is being spent, companies can reduce wasted hours, ensure timely project completion, and avoid the costly delays that result from poor time management.

Accurate Financial Tracking

By measuring exactly how much time employees are spending on specific tasks, it makes it easier for companies to calculate exactly how much they should pay workers. 

This helps companies measure exactly how much time employees are spending on specific tasks, making it easier to calculate precise payments for workers. Another benefit of time tracking software is that it can reduce disputes over work hours and costs by increasing transparency. Moreover, it provides valuable insights into project profitability and cost management, ensuring efficient resource allocation and adherence to project budgets.

Choosing the Right Time Tracking Construction Software

The features you need will vary based on your business’s unique needs and challenges. However, certain key features are essential for any software to be effective. We discuss these below:

Cost-Effective

Construction companies already face significant challenges from cost overruns and insolvencies, so time tracking software shouldn’t exacerbate these problems. Choosing a cost-effective solution is crucial to streamlining operations and maintaining financial health. One of the most cost-effective time tracking software on the market is Jibble, which is free for unlimited users. 

Multi-Device Compatibility

For time-tracking software to be effective, it must work across multiple devices. With employees using iPads, mobiles, and laptops, seamless compatibility is essential to ensure timesheets are always accessible.

Overtime Settings

For accurate time tracking, choose software with multiple overtime settings tailored to your construction company’s unique needs. With workers doing overtime on different days and shifts, the right software will automate these calculations, ensuring accurate payments and satisfied staff.

Geofencing Features

Choosing time-tracking software with geofencing features simplifies assigning workers to specific construction sites and prevents them from clocking in before arriving. This ensures companies only pay for actual time worked.

Reliable Offline Functionality

Opt for time-tracking software that operates without a WiFi connection to maintain precise timesheets, especially on remote construction sites with poor signal.

Detailed Analytics

Another major problem for construction companies is accessing accurate data for forecasting, billing, and scheduling. Time-tracking software with comprehensive reporting and analytics helps identify patterns and calculate project durations, making planning easier.

User Friendly

The software should be intuitive and straightforward for daily use, which minimizes errors and miscalculations.

Industry Specific

Ideally, construction companies should invest in software that is uniquely adapted to the specific needs of their industry, ensuring streamlined operations and enhanced efficiency.

Syncs With Popular Apps

The best time tracking software should ideally integrate with popular apps such as Xero, Payroll Panda, Deel, Zapier, and more, facilitating seamless data transfer and synchronization across various platforms. This integration capability ensures efficient workflows and reduces the need for manual data entry, and thus optimises productivity and accuracy.

Time Tracking Software Can Prevent Costly Delays

Although time tracking software may not solve all of the problems that construction companies face, it can certainly go a long way to prevent costs and delays from spiralling out of control and leading to insolvencies. 

Gathering accurate data on how long construction projects are taking makes it much easier for construction companies to plan ahead and make more accurate forecasts.

Over time, this can help to prevent unnecessary delays, which lead to increased costs and forecasting problems.

Time tracking software automates many of the processes that are prone to human error, calculates timesheets, overtime, and identifies patterns for you. This can help you avoid many of the pitfalls that many construction companies have fallen prey to. Jibbles time tracking software can contain all of the features you need to analyze construction projects accurately and easily.