Construction companies that don’t spend money on efficient software may find that they end up spending a lot of time – and even more money – building up their software deficits as they work to reduce the number of stacks of records, transactions, financial activity, progress and other aspects of a project.
Another view is that as a small construction company with inefficient construction accounting software, you are likely to fall behind the company with the good stuff.
What are the advantages of construction accounting software?
- Project command and control is more profitable: every action on a construction project causes or costs money. Track, record and adjust exponentially improved time, materials, costs, order changes, shipping and other factors with effective software. The data provides an up-to-date description of the latest financial and operational projects. It’s better to know that something – or many things – are not working well in a project and are affecting profits or causing losses.
- Enabling claims and debts faster and more accurately: the information generated by the information is more precise, checked and verified. The result is a more efficient payment and billing process.
- Increase the confidence of potential customers: how well and at what cost the company can complete the project, is directly related to how well you can manage and explain its many components. As much as your accounting software impresses customers, it adds weight to getting the job done and maybe more in the future.
- Recording investigations is safer: documentation is essential for all elements of the project and unfortunately sometimes for the protection of the company if it is the target or initiator of litigation related to the project. If something isn’t documented, in most cases it’s nothing, no matter how many people are “confident” about it. However, make sure to back up your data second.
- Better access to information: If the data collection is concentrated by accounting software, it allows direct access to the latest information from all parties, the work becomes smoother. Such direct access can also prevent or terminate arguments; real error; or save bugs. And because everyone knows the same thing at the same time, you save time in meetings, conferences, and planning.
- Tax returns: Taxpayers in complex industries like construction can better ensure that their taxes are properly calculated and paid – and that they can enforce allegations of inaccuracy by tax authorities.
- Financial reporting: Instead of a soul-loving prospect having to track down or return RIM documents, papers, and receipts, accounting software flashes a number onto a screen in seconds. If time is money (and it is) this only underscores the need for a good software system.
There are many good construction accounting products out there. A useful place to start your investment or upgrade search with our list Best Accounting Software in Construction industry.
Make sure the accounting software you choose meets these unique requirements as described below:
Construction companies with multiple offices and departments need accounting software to track, manage, and analyze finances as a whole and by office or department. Each office or department has its own financial goals that add to the overall profitability of the parent organization. The organizational structure and workflow in a construction company with several branches and departments are very different. Large companies benefit from solutions
Some projects require AIA Billing, a standard form developed by the American Institute of Architects for billing progress. Billing AIA uses standard forms G702 and G703 for billing based on work progress. Foundation Software has built-in AIA accounting tools to create AIA accounting records and schedule values. The information can then be printed directly on preprinted AIA forms or blank paper. With the AIA accounting module part of the Foundation’s software, the data in AIA’s accounting records are published in the general ledger and in job evaluations.
Billing time and materials
For projects without AIA invoices, your construction company can pay according to time and materials. Accounting software for construction companies creates invoices based on project costs charged and all additional costs. Software Software offers complete flexibility in automating material marking and timing. Whether billing flat rates, percentages, plus fees, etc., the foundation allows additional fees of your choice. Bookkeeping of time and materials is also recorded directly in the general ledger and operating cost accounting.
Construction equipment management software is a significant investment for many companies. Accounting software for construction companies provides the ability to enter fixed assets and manage depreciation schedules to comply with IRS rules.
In addition to equipment, many construction companies operate warehouses stocked with products. Product management and inventory control is a critical requirement. Accounting software for construction companies provides inventory control, item tracking, pricing, purchasing, and usage options. Keeping track of any inventory and trends ensures your team always has inventory to keep the project going. Similar to the billing method described earlier, each use of inventory for a project is factored into order costing to ensure an accurate estimate of actual costs.
Which construction accounting software is right for your company?
There are hundreds of different construction accounting software programs on the market. The first step in narrowing down your choices is to filter the options based on the size of your business. Some solutions are better suited for small, medium, and large businesses. Small business accounting software is usually very competitive. However, it will not be able to sustain the complex workflows required for medium and large businesses.
Construction companies looking for new accounting software need to ensure that it integrates with project management software and other applications used by the team. Use accounting solutions that will keep your accounting team happy. You can also use project management solutions that will keep your team and project managers happy. As a result, the integrated system ensures a smooth flow of information between the two teams, ensuring that everyone is satisfied.