Free Construction Inventory Template: How to Track Materials Efficiently and Avoid Costly Delays

It’s challenging to keep the business running when you can’t track available supplies. Project delays, customer dissatisfaction, and budget overruns are just some of the results of inaccurate inventory records.

To resolve this, we designed a free construction inventory template that contains every detail you’ll need to ensure easy, quick, and accurate inventory tracking.

We’ll also explain why static PDF documents and spreadsheets can prove unreliable in the long run, then show you how ServiceTitan automates the inventory management process for construction shops of all sizes.

How to Download and Use Our Free Construction Inventory Template

This template is designed using insights from construction companies and employees with construction experience. We’ve included fields such as:

• Materials list

• Quantities

• Usage tracking

• Reorder levels, and so on.

To use this inventory template, simply click here to make a copy.

Once you’ve downloaded it, make copies and use them when conducting inventory counts or updating inventory records.

However, while PDF and Excel spreadsheet templates offer some advantages, they’re not a system you can rely on for accuracy, due to:

• They’re isolated from other business tools, meaning you’ll have to manually record data whenever items are transferred between locations or added to clients’ invoices.

• There’s no way to access real-time inventory-level data since transactions are manually recorded.

• Construction workers can neglect PDF templates because they’re misplaced, damaged, or left behind in the office.

For complete accuracy and efficiency, it’s best to invest in contractor software like ServiceTitan with an inventory tool that integrates with other business tools. This way, you can:

• Set reorder points that automatically trigger the creation of purchase orders.

• Eliminate manual data entry and minimize errors.

• Give project stakeholders access to real-time inventory levels.

• Access inventory reports and use them to anticipate future needs.

• Accelerate transfers and increase the accuracy of inventory counts.

As such, we’ll explain later how construction companies like yours use ServiceTitan to automate inventory management from start to finish.

Why Is Construction Inventory Management Important?

Construction inventory management is important for the following reasons:

• Prevents material shortages — Accurate stock-keeping ensures that the right amount of essential supplies and materials are available when needed, preventing stockouts and project delays.

• Reduces waste and overstocking — Inventory management provides valuable data on a construction company’s historical material needs. This data can inform purchase decisions instead of overstocking the warehouse with materials that are never used and which eventually degrade in quality.

• Improves cost tracking — Tracking project costs is easier when materials are well accounted for throughout the project lifecycle. This helps with accurate budgeting and financial planning.

• Boosts productivity — Having the correct stock quantity helps construction workers and team members execute their assigned tasks. This reduces downtime caused by missing materials, keeping the project on schedule.

• Enhances job costing accuracy — Keeping accurate records of the inventory items used on a project and their costs helps you create accurate estimates and invoices, which in turn enhances profitability.

• Streamlines supplier management — By tracking inventory levels, you can reorder materials on time, negotiate better deals, and avoid paying premium rush order fees.

• Increases profitability — It helps you spend only on required materials. This cuts down unnecessary expenses, improving overall profit margins.

While PDF, Google Sheets, and Excel templates may deliver the above benefits for small businesses, they quickly become an unreliable system as you scale up. 

Here are some reasons for that.

The Challenges of Construction Inventory Management a Template Won’t Solve

Inventory management isn’t supposed to be chaotic. If it is, stockouts, overstocking, waste, and delays become the norm. 

And that’s precisely what happens when using inventory spreadsheets, which only gets worse as your company grows.

Here are some other issues that inventory management templates can’t solve:

1. Lack of real-time inventory updates

Multiple people take part in transactions that impact inventory levels. Field technicians add items to invoices, warehouse managers transfer materials from one location to another, and so on.

For inventory data to be accurate, the stock quantities and locations must be updated in real time as each transaction occurs. 

However, templates do not allow this.

They introduce a time lag between when an item is used or moved and when the inventory record is updated. 

This lag makes it hard to keep accurate inventory records. Warehouse managers only notice a specific material is unavailable when there’s a request for it. Then, you’re forced to pay more than you should to expedite delivery to cover the shortfall, which may cause a budget overrun.

To solve this problem, you need to implement a system for real-time tracking, whether through regular manual updates or an automated tool like ServiceTitan.

2. Over-reliance on manual tracking

Using spreadsheets and paper logs to track materials increases the potential for error. The error potential skyrockets as the number of projects increases.

Another challenge with manual material tracking is version control since inventory records are scattered across multiple pieces of paper, spreadsheets on computers, or construction workers’ memories.

This makes it harder to track changes to inventory levels and rely on a single source of truth.

The solution to this?

Use a structured template or consider upgrading to digital inventory management software like ServiceTitan with guardrails that prevent team members from entering the wrong data.

This not only reduces errors but also helps you to save time for other strategic tasks.

3. No standardized inventory process

Construction companies typically work on several open projects simultaneously. These involve various team members whose daily tasks affect inventory levels. 

Without a standardized inventory system, they struggle with:

• Discrepancies between what’s recorded and what’s stored in various locations.

• Confusion between stakeholders about inventory records.

• Delays in projects due to stockouts.

The basic fix to this is creating a clear, company-wide inventory tracking process and training employees to follow it. 

This template should be consistent across all company units. Each section of the template should consist of simplified bullet points that workers can easily follow.

However, to solve this permanently, adopt a digital inventory management platform that centralizes inventory records and has established workflows that automate key inventory processes. Then, train employees to use it.

4. Ignoring minimum stock levels

The minimum stock level represents the lowest allowable amount of materials. Reaching this level indicates the need for the construction company to restock quickly to avoid stockouts.

Because templates don’t update in real time, they make it harder to monitor stock levels and identify reorder points. This leads to project delays and extra costs from emergency purchases.

That’s where digital inventory management tools come in. They automatically notify you whenever each material’s quantity falls below the reorder thresholds.

5. Overstocking materials

Each material has a lifespan – the period in which it can reach its maximum potential before it must be replaced. Purchasing such materials in quantities above what is required leads to waste.

For example, caulks often have expiration dates that’s within 1-2 years of manufacture. The chemical compounds can degrade or evaporate, rendering them ineffective. Therefore, buying cases of caulk and leaving them on the shelves for too long could mean the remaining tubes are hardened and useless when pulled from storage months later.

Additionally, overstocking materials increases storage costs.

To prevent this, monitor usage trends and order only what’s needed for upcoming projects. You can use data from previous projects and adjust your orders accordingly.

6. Poor supplier coordination

Poor supplier coordination occurs when there isn't clear communication between suppliers and business owners concerning order dates, restock quantity, delivery dates, and other logistics. 

This delays deliveries, derailing projects and increasing project costs.

To solve this, implement the following:

• Build stronger supplier relationships so they prioritize your deliveries, reducing lead times.

• Reduce lead times by placing your orders early.

• Identify backup suppliers for critical materials to minimize delays caused by supply chain disruptions.

7. Lack of integration with job costing

When inventory and job costing systems are disconnected, construction workers may omit certain materials from the weekly reports. This makes it hard to know what’s been spent on the project, leading to budget overruns. 

The way out of this limbo is to use an inventory management system that integrates with job costing. This way, you’ll be able to track expenses accurately.

Best Practices for Construction Inventory Management

While construction projects differ by scale and complexity, they all share the same inventory management best practices. They include the following:

1. Implement a standardized inventory process

Tracking inventory levels becomes more manageable when there’s a standardized process all stakeholders can follow.

Stressing the importance of establishing a defined inventory process, Steve Cossette, IT Manager of Nice Home Services (NHS) in Virginia, says:

“Honestly, the most painful part about inventory is not the tracking of the actual materials. It's the human factor. Sometimes people don't do it right or they don't understand the nuances of the system.”

All inventory process documentation should reveal:

• What each inventory process involves.

• The core inventory management tasks.

• Those directly or indirectly responsible for each task.

• Standard operating procedures (SOPs) for ordering, storage, tracking, and restocking inventory items.

These documents should be used across all work sites to ensure consistency. Also, make the documents a part of your onboarding process for new hires and organize refresher training programs.

Learn more about using ServiceTitan to eliminate chaos from the inventory management process.

2. Use real-time inventory tracking

Understanding how much of each inventory item is available is the first step to effective inventory management. 

That’s the essence of real-time inventory tracking. It ensures that recorded stock levels match what’s in the various inventory locations – warehouses, trucks, and job sites.

For inventory tracking to benefit you, stock levels must be updated regularly. Unsurprisingly, this is hard and almost impossible with an inventory template – unless you don’t mind manually updating inventory records every second.

To fully resolve this, consider using a digital tool like ServiceTitan that updates your inventory records immediately after each transaction.

3. Set minimum stock levels and reorder points

Minimum stock levels define the lowest inventory amount that contractors need to execute their projects. They serve as a buffer against supply chain disruptions and help prevent stockouts.

Minimum stock levels and reorder points – the time at which you must order a specific item to replenish your stock before it runs out – are conjoined twins. 

To understand this, consider this scenario. 

Let's say a contractor uses five bags of cement daily (daily average usage) and orders from a supplier with a lead time of five days.

The minimum stock level will be 25 bags (daily average usage * lead time). To account for potential delays, a safety stock of five bags can be added.

To calculate the reorder points, we'll use the following formula:

Reorder point (ROP) = Minimum stock level (25) + safety stock (5) = 30

This means that the contractor must place an order for cement once the quantity available falls below 31 bags.

After setting reorder levels, set automated reorder alerts to restock before inventory levels go dangerously low. 

4. Conduct regular inventory audits

Perform routine inventory counts to reconcile inventory records with the actual number of items on the ground. This helps you detect early discrepancies caused by errors, theft, or damage, before stockouts occur.

According to Cossette, inventory audits should be done once a month and should involve "counting items in each one of your trucks and warehouses”.

Additionally, schedule your audits for weekends, not work days. Any job that’s completed while you’re still performing your audit skews your data.

“Do it when things are as quiet as possible, either through an evening when all the trucks are back in the shop and all the jobs completed, or on a day your company is closed,” Cossette says. “Your inventory is essentially your backpack. If you don't have a good inventory count, then why are you doing inventory tracking in the first place?” 

Lastly, scan items during your counts to save time. You can do this using ServiceTitan’s Inventory App.

5. Optimize storage and organization

An organized storage system improves safety and makes it easy to track available quantities. It also makes it easy to perform audits and find materials.

To optimize your storage, label shelves and use color-coded bins to simplify identification. Also designate a clearly marked space or aisle that employees can use to move around the warehouse quickly.

Lastly, train employees to implement your labeling system and keep materials in the right place.

6. Integrate inventory with job costing and accounting

To track material costs accurately, it’s advisable to integrate your inventory, job costing, and accounting systems together. This way, the cost of any material is accounted for on your work-in-progress (WIP) and financial reports.

This is less prone to errors than using separate systems for each process. 

7. Build strong supplier relationships

Suppliers typically service multiple contractors at the same time. This is why building strong relationships is the best way to secure priority service and favorable prices.

To build strong relationships with suppliers, do the following:

• Always pay on time to earn the supplier’s trust.

• Abide by your contract’s stipulations.

• Be clear about your expectations from the start of the engagement.

• Provide honest feedback about their services.

8. Leverage technology for smarter inventory management

Automate your inventory management process with technology for accurate up-to-the-second inventory records.

When choosing a new software, ensure that it integrates with your other tools. Otherwise, you risk encountering the same issues posed by spreadsheets and templates as your company expands.

Simplify and Optimize Inventory Management with ServiceTitan

We’ve already established the importance of automating inventory management with a digital tool. However, some inventory management tools don’t entirely eliminate the challenges that come with spreadsheets. 

To understand why, you should know there are two types of inventory management tools:

• Stand-alone inventory platforms built only for inventory management.

• Construction management software with a built-in inventory management tool that integrates with tools meant for other business tasks – invoicing, work orders, project management, etc.

For effective inventory management, stand-alone inventory platforms don't cut it.

One reason for this is that they don’t eliminate the tedious task of copying data from one platform to another.

For example, whenever a project is completed, an employee must manually update the inventory records to record changes in the quantity and location of materials used.

Even worse, this same manual process extends to other business processes related to inventory and worsens as your company expands. Over time, the errors and inefficiencies accumulate and cause revenue losses.

In light of that, we developed ServiceTitan to permanently resolve inventory issues by integrating it with other tools needed to run a construction business.

This integration eliminates manual data transfer, streamlines inventory workflows, and improves efficiency across your entire construction operation.

Real-time tracking and automated updates

ServiceTitan’s inventory dashboard provides granular and in-depth information about each inventory item. On the dashboard, you can see data about each item, such as:

• Total quantity and status (available, on hold, on order, and on hand)

• Average cost

• Total value

• The description and serial numbers attached to it

Clicking on each item on the dashboard reveals more detailed data about the item, including its:

• Total value across all locations

• Total negative locations (places where the item has a negative quantity value)

• Total locations

• Details

• Vendor source

• Historical transactions

Even better, the item overview dashboard automatically updates whenever an inventory transaction – an item is added to an invoice, transferred to a new location, received from a vendor, and so on – occurs. This happens because our inventory tool is integrated with business tools for other workflows related to inventory.

This automated process reduces errors and helps you maintain accurate inventory records.

Supplier and purchase order management

ServiceTitan automates all inventory workflows, including the creation and management of purchase orders. Here’s how it works:

To set up an automated procurement order workflow, warehouse managers or the employees responsible for purchasing will first create inventory templates and assign them to one or multiple locations.

Within these templates, they’ll define:

• The items to stock in each location 

• Their respective minimum and maximum quantities

• And the SKU (stock keeping unit)

Once the template is created, ServiceTitan’s system automatically checks the stock level against the minimum quantity listed in the location’s template anytime technicians add an item to an invoice.

If it’s below the preset minimum quantity, ServiceTitan triggers a replenishment workflow to replace the item used. If the replenishment source is set as a vendor, an appointed employee receives a notification to create a purchase order.

FYI: The same automated workflow occurs when technicians set a vendor as the source when requisitioning parts, materials, and equipment.

When creating the purchase order, the appointed employee:

• Picks a vendor from the list they already created

• Selects where the item will be shipped to – the warehouse, a technician’s home, or a job site

• Defines the tax rate

• Picks a business unit, etc.

Once the purchase order is created, the employee can either print it out and mail it to the vendor or email it directly from the platform. If they choose the latter, ServiceTitan allows them to track the purchase order throughout its lifecycle using four statuses:

• Pending — Created but not sent.

• Sent — The purchase order has been delivered to the vendor.

• Partially received — The order hasn’t been completely fulfilled.

• Received in full — The order has been completely fulfilled.

• Canceled — The order was created but canceled.

When the vendor fulfills the purchase order, ServiceTitan’s automated three-way matching feature takes over.

It will automatically compare the purchase order, receipt, and invoice to ensure that the goods and services billed match what was ordered and received.

If there’s a discrepancy, the system will flag it for manual review.

By automating the creation of purchase orders, ServiceTitan helps construction companies maintain healthy stock levels and minimize lead times. This ensures workers have the materials they need, mitigating against project delays.

Detailed job costing report

Thanks to having job costing and inventory management platforms in one place that communicate with each other, ServiceTitan provides an accurate breakdown of the materials consumed during a project via a report.

In the report, you can find information such as:

• Actual costs

• Original budget (before a change order was created)

• Total budget

• Committed costs

• Percentage of budget used

• The variance between the total budget and the actual costs

• A summary of the expenses and billed amount

• Profit margin

Clicking on each expense item reveals its respective sources (e.g., the technician who billed for those hours, the vendor or purchase order tied to the material, and much more).

Construction companies find this feature helpful in avoiding budget overruns and executing projects profitably.

Another ServiceTitan tool that boosts profitability is the Pricebook Pro add-on feature, which integrates with the catalogs of top suppliers.

With this integration, the prices of your materials can be updated whenever suppliers update theirs, even if they do so overnight. Your technicians will be quoting the correct prices by morning.

Mobile accessibility for on-site inventory control

ServiceTitan provides an Inventory App that streamlines various inventory workflows. From its intuitive interface, employees can scan barcodes when:

• Receiving purchase orders

• Conducting inventory counts

• Picking transfer items

This ensures that the inventory records are updated whenever an inventory-related transaction occurs in the field. Thus, all stakeholders, including back-office staff, can access the same inventory data and plan ahead for upcoming projects.

Automated three-way matching

After the inventory is delivered, the next big headache becomes ensuring it’s accurate and is exactly what you paid for. In most cases, warehouse managers must manually reconcile the purchase order (PO), the vendor invoice, and the goods receipt. And as expected, this manual process is:

• Error-ridden

• Puts so much trust in human integrity, which is fallible.

To solve this problem, ServiceTitan’s three-way matching helps ensure inventory records are accurate before bills are paid. 

The system checks that what was ordered, what was delivered, and what the vendor billed all match. In the event that you prefer an extra layer of control, ServiceTitan lets you assign each step of the three-way matching process (approval, reconciliation, and payment processing) to various employees. 

If there’s a difference in price or quantity, it’s flagged right away. You can then notify the vendor physically or directly within the platform.

This reduces mistakes, prevents paying for items that weren’t received, and keeps inventory and job costs accurate without extra manual work.

Want to see these features in action?

Are you experiencing the inventory management challenges mentioned in this post? Interested in exploring the option of using construction management software to solve them? Schedule a free call with us to see a personalized demo of these features.