Any business owner will tell you that one of the biggest challenges, if not the biggest, is managing finances. Staying on top of your accounting is a daunting task. One that can keep owners and CFO’s up at night. There are many ways to go about it. Some construction firms rely on a paper-only approach. Hiring bookkeepers to manage company finances and keep all of their information in binders. Most construction firms use a computer program like QuickBooks or Excel in addition to some paper-based methods. For example, while they may use QuickBooks, they may also use timesheets for payroll. One tool that can be of great help is construction accounting software.
Construction accounting software offers an all-in-one accounting solution for construction firms. All major aspects of accounting can be accessed and performed from one place. Here are five reasons why construction accounting software should be considered by construction firms.
All In One Place
One of the biggest advantages of construction accounting software is that now accounting functions can be done from one program. No need to use Excel to track Inventory and QuickBooks to manage payroll. With just one program, access to Job-Cost, Project Management, Payroll, Accounts Receivables/Payables, Purchase Orders and more is possible.
Another big advantage is that the software is that it is made specifically for construction firms. While Excel and QuickBooks are made for anyone to use, construction accounting software has unique functionalities geared toward the construction industry and specialty trades.
Let’s say a mechanical contractor that performs a lot of service work. It can prove quite difficult to use QuickBooks to create and manage work orders. This will then force the contractor to either use a separate application for work orders or to do them by hand. Most construction accounting solutions come with a built-in module that allows for the creation and management of work orders. The mechanical contractor can now manage works orders and other aspects of their accounting all within the same program.
With construction accounting software everything is tied together. When a job is created in the software, multiple parts of that job are tied to different modules within the system. The materials and equipment used on the job, come from the inventory within the system. Those materials are then deducted from the inventory. The employees who worked on the job can be entered into the system to conduct payroll. All of those expenses are integrated to conduct job cost. Any change orders are logged into the system as well.
Contractors need extensive reporting to really stay on top of their finances. Items like WIP reports or Certified Payroll reports are not things that can be done easily. Construction accounting software comes prepackaged with that functionality. Also with better reporting, one can get a better understanding of job status in real-time.
The upfront cost of construction accounting software may be expensive, but the money saved by using the software over time can be substantial. Since the software is able to streamline so many processes, the time saved alone is valuable. Employees can be freed up to focus on other tasks. Making your office even more efficient. Job-costing is one area in particular that realizes true savings in time and money due to construction accounting software. The extensive reporting features help project managers know exactly where they stand on a job and helps them forecast for future similar jobs.
The emergence of construction accounting software over the past two decades has allowed construction firms to become more efficient and profitable than ever. Tasks that before took hours can now be done through a series of clicks and keyboard strokes. Firms that have embraced construction accounting software have been able to realize new opportunities and tackle new areas such as mobile applications. The best part is that every day new innovations are being made to make construction accounting software the best solution for accounting needs.