The Hidden Costs of Inefficient Permitting: Why Speed and Accuracy Matters

Maintaining your construction timeline is crucial. Any deviation can cost your organization money, as every delay, missed deadline, or permitting error can ripple across your entire project. These issues can increase costs, frustrate clients, and even lead to project cancellations. A common source of delays is the permitting process, which often involves time-consuming coordination with local authorities and maintaining compliance. Currently, this process is plagued by inefficiencies and errors due to outdated systems, human mistakes, and bureaucratic red tape.

The good news? Building permit software can streamline this process, reduce errors, and keep your projects on track. With features like automation, enhanced communication, and real-time status updates, permit software transforms permitting into an easy-to-use dashboard. This article discusses the specific ways an inefficient permitting process impacts construction projects and how building permit software can help mitigate those risks.

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The financial impact of inefficient permitting

Some ways that inefficient permitting can financially impact a construction process are obvious, while others are more long-term issues. These two categories are split into direct costs and indirect costs.

The direct costs of inefficient permitting

Some ways that inefficient permitting can directly impact your bottom line include:

• Project delays: Project delays shift the entire timeline, resulting in increased costs across many resources.
• Increased labor costs: Delays lead to idle time for workers, who still need to be paid. Severe delays might require overtime or additional team members to catch up.
• Extended equipment rentals: Specialized equipment rentals may need to be extended, incurring costs even when not in use.
• Deadline penalties or reapplication fees: Depending on the municipality, missed deadlines or reapplications can result in additional fees or fines.
• Material storage costs: Delayed permits can increase the costs of storing materials for extended periods, risking potential damage due to improper care or use.

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The indirect costs of inefficient permitting

Indirect costs are issues that can occur as a result of inefficient permitting. Some of these might include:

• Opportunity costs: Delays prevent your team from taking on new projects, limiting growth and new business opportunities.
• Competitive disadvantage: Organizations with more efficient permitting processes gain a market edge.
• Higher administrative overhead: Inefficient permitting requires extensive back-and-forth communication, demanding a dedicated team member to manage it.
• Increased regulatory scrutiny: Frequent permit errors can lead to more rigorous inspections and tighter oversight for all future submissions.
• Decreased team morale: Constant delays and setbacks can demoralize your workforce, affecting overall project performance.
• Revenue delays: Permitting issues can delay client payments, causing cash flow bottlenecks that impact the financial health of your business.

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Maintaining your reputation and preventing client dissatisfaction

Another way inefficient permitting can affect your business is through your reputation with your clients. Your client relationships are imperative for a referral-heavy industry like construction. When you quote your clients on a timeline, you should stick to that timeline as much as possible as that is the expectation you set for your clients. Granted, there are many reasons why projects can get derailed, but communicating those expectations is the hardest part. 

By using tools like building permit software, you can better accurately estimate how long your timeline will be for forecasting your project and give your clients a more accurate sense of what’s going on. Should any delays occur, building permit software helps provide a high-level overview so you can quickly identify where your permit is in the process and approximately how long it will take to go through.

Another thing to consider regarding client satisfaction is the speed in which your competitors can access permits. If your competitors are able to access permits more quickly because they work with permit expeditors, have an in-house team, or work with their own building permit software, this puts your organization at a disadvantage. Clients are going to want to go with the service that offers fast and reliable permitting every time. 

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Regulatory and compliance risks

Depending on the municipality your project is located in, submitting an incomplete or non-compliant permit application could lead to fines, delays, or challenging legal implications. Permits are the official authorization from the government that the project is safe to move forward and complies with local safety codes, environmental standards, and other regulations. However, if permits aren’t accepted, there can be other ramifications.

• Fines, penalties, or delays: Missing paperwork or communication errors with regulatory bodies can cause delays. Authorities may impose fines or postpone your project until all paperwork is correctly submitted.
• Increased scrutiny and inspections: Frequent errors in permit applications can raise red flags, leading to more rigorous inspections for all your future submissions. This increased scrutiny can slow down the permitting process, creating more delays.
• Full project shutdowns: In the most extreme cases, permit issues can result in a complete project shutdown. If construction begins without proper permits, regulators may issue a stop-work order, causing significant delays and damaging your reputation. Reversing these orders by reapplying with proper permits or resolving violations can take weeks or months, jeopardizing the entire project timeline.

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How building permit software solves these problems

One solution for all of these issues is to implement building permit software like PermitFlow into your permitting process. Consider the following benefits of building permit software:

• Accuracy and automation: The software alerts you to potential issues or mistakes in your application and automates time-consuming tasks, such as communications and status updates.
• Real-time tracking: With real-time tracking, you always know where your application is in the process, allowing you to manage timelines effectively and communicate expectations accurately.
• Scalability: Building permit software helps manage multiple permit submissions simultaneously, even across different municipalities, supporting business growth and expansion.

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Streamline the permitting process with PermitFlow

Inefficient permitting may seem like a minor issue in the long process of a construction process, but the domino effect that occurs can cause significant challenges later on. From major financial losses to potential stop-work orders, the impact of the error-prone permitting process can cause major financial impact to your construction business. 

If you’re looking to prevent these issues from occurring, consider building permit software like PermitFlow. With PermitFlow, your team can automate workflows, reduce errors, streamline communication, and generally speed up the permit approval process. Interested in seeing how it works? Talk to one of our experts today about how PermitFlow can help your permit process.