What Percent of Budget Should Subcontractors Spend on Software?
How much should subcontractors spend on software? Benchmark budgets by company size and avoid the risks of overspending or underspending.
Table Of Content
Ask subcontractors how much of their budget should go to software, and you’ll likely hear: “as little as possible,” “more than we’re spending now,” or “I have no idea.”
The truth? Software spend isn’t a nice-to-have anymore. It’s a competitive requirement.
Industry Benchmarks
Construction companies spend an average 1–3% of annual revenue on software. But the right number depends on trade, size, and maturity.
Signs You’re Underspending
Worried you’re behind the times? Here are a few key signs you aren’t investing enough in software:
- Estimating is manual or in spreadsheets.
- Scheduling relies on emails and texts.
- Field updates are delivered by phone.
- PMs waste hours re-keying data.
Underspending isn’t about saving money; it’s about hidden costs in labor and lost bids.
Signs You’re Overspending
Does it feel like you’re spending too much on software? Keep an eye out for these signs you’re overspending:
- Redundant software tools.
- “Shelfware” licenses going unused.
- Low adoption with crews reverting to old habits.
If your software spend isn’t helping you be more accurate and make fewer errors, reduce manual tasks, or increase profitability, it might not be worth the investment.
Guidelines by Company Size
In a recent RiffleCM survey of 100 subcontractor leaders, software spend varied by organization size:
- Small (<$5M revenue): 1–2% on foundational tools (estimating, scheduling, communication).
- Mid-size ($5M–$20M): 2–3% on project management, document control, integrations.
- Large ($20M+): 3–4% on advanced tools (safety, BIM, analytics).
Conclusion
Think of software like equipment: Would you hesitate to buy a skid steer if it made your crews more productive? Software works the same way; it’s just another tool.
The right spend isn’t about “as little as possible.” It’s about the level that keeps you competitive. For most subs, that’s 1–4% of revenue.
Eliminating Manual Errors in Construction Bids
Common questions about reducing errors and improving accuracy
What causes most manual errors in subcontractor bids?
Manual errors usually come from disconnected workflows — things like outdated spreadsheets, inconsistent templates, or rekeying the same data multiple times. When project info lives across emails, texts, and PDFs, small mistakes add up fast.
How can software help reduce bidding mistakes?
Purpose-built estimating software automates repetitive tasks like data entry, quantity takeoffs, and revision tracking. Instead of chasing down the latest drawings or retyping costs, your team works from one centralized, accurate system — cutting errors before they happen.
Is automation complicated to set up for small subcontractors?
Not with modern tools like Riffle. You can connect your email or ITB inbox in minutes, and automation starts working behind the scenes — identifying bid invites, tracking updates, and helping you prioritize the right opportunities. No IT department required.
How much time can automation actually save?
Most subcontractors save 6–10 hours per week just by eliminating manual re-entry and version confusion. That’s more time for estimating the next job, reviewing margins, or simply getting home on time.
Does automating bids mean losing control over pricing?
Not at all. Automation handles the busywork — you keep full control over pricing, scope, and judgment calls. Think of it as an assistant that gets the numbers right so you can focus on strategy.
How do I know if my team is underspending or overspending on software?
A good rule of thumb: most subcontractors invest 1–3% of annual revenue in digital tools. If you’re still running bids manually or using outdated systems, the real cost might be hidden in lost time and missed opportunities.
Why does accuracy matter so much in bidding?
Every error compounds — one missed line item or miscalculated rate can erase your entire profit margin. Accuracy doesn’t just win jobs; it protects your business from losses you don’t see coming.
How does Riffle help subcontractors eliminate manual work?
Riffle automates your bidding and project workflows from start to finish. It finds ITBs in your inbox, organizes bid invites, fills in estimating data, and tracks updates — helping subcontractors bid smarter, reduce errors, and grow revenue.
We Understand the Bottlenecks for Subs
My biggest weakness has always been follow-ups—I’m just not great at it. If I had a built-in reminder feature to follow up on projects automatically, that would be a game-changer. I’ve gotten better, but I could still use that extra nudge.
Quoting can be chaotic. You have five different contractors sending out the same bid invite, each named differently. We end up with duplicate bids on the board or miss one entirely because it was labeled another way. There is no clear procedure when invites come in from multiple people.
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