How to Propel Your Business Forward with Construction Accounting Software
The construction industry has many factors and business trends that separate it from other industries. Construction is project-based, and every project has unique requirements based on client specifications, site conditions, varied budgets and more. These projects tend to be long-term, taking months to years to complete, meaning it is very important to stay on top of these ongoing costs and revenues in order to avoid cash flow problems. Construction is also decentralized, occurring both in an office and out on job sites. Companies must closely track which resources are being used in what quantities and at which location. These unique factors can make it difficult for construction companies to keep track of the financial information they need to operate. This is where a robust construction accounting software with cloud capabilities customized to the unique needs of the construction industry comes in.
What Is Construction Accounting Software?
Since the construction industry has many unique attributes, the software used for its accounting purposes must be unique and adaptable too. A robust construction accounting software or construction ERP solution should offer integrations with a mix of applications used by the construction industry today and be flexible enough to adapt to the operational needs of the future. Construction accounting software is built specifically for the unique needs of the construction industry so it can handle multiple jobs simultaneously, such as updating new contract requirements, compliance reporting, generating accurate job profitability metrics and provide real-time visibility. Construction accounting software can leverage key data from the field, payroll, budgeting, customer relationship management (CRM) solutions and others to track metrics that are critical to your construction company’s financial and operational success.
How does construction accounting software propel your business forward?
1. Real-time visibility and insights
Construction company leaders need visibility into financial and operational metrics to make timely, data-driven decisions about jobs, staffing, subcontractors, and more. Construction accounting software like Sage Intacct Construction and Acumatica Construciton Edition includes dashboards designed specifically for construction and provides one place for monitoring many operational metrics. Dashboards use graphical visualizations of business metrics and KPIs all in one place, making it easy for you to monitor or generate visual reports for stakeholders.
2. Enjoy the benefits of the cloud
Cloud technology is playing an increasingly significant role in the current business landscape. While switching from conventional, on-premises software to a modern cloud solution can initially seem expensive and complex, the end result is a more accessible, more reliable, and more secure tech stack that offers contractors greater flexibility in dealing with whatever lies ahead. Switching to a cloud-based construction accounting solution provides significant gains, including real-time updates, greater collaboration, and ‘anytime, anywhere access to project-critical information.
Cloud technology is also easily accessible from any device — mobile or desktop — ensuring that you can access much-needed information on-site. Mac and PC users can use cloud-based software, and software like Sage Intacct can be utilized on both iOS and Android operating systems.
3. Better cash management and project costing
Built-in analytics tools in your construction accounting software allow you to identify profitable — or unprofitable — patterns across your projects, establish benchmarks, and scrutinize cash flow-related data. With accurate analysis, your next step is to assess operations from end-to-end and determine where overrun costs most often exist. You may discover that too much cash is being put into inefficient labour or that certain equipment is being underutilized.
Projects evolve over time, so it’s important to have a good handle on the different costs associated with each project. If a project shifts, you may need to allocate resources to pay for additional labour, resources or equipment, increasing expenses and cutting into the project’s margins. Accurate project costing can help project managers make sure the project is on track and profitable and adjust if not. The company’s financial managers can roll up project costing information in the general ledger for a larger picture of the firm’s financial health.
4. Better Headcount Planning with Budget Analytics
Making the switch from using Excel to construction accounting software can help you spend much less time on budget creation while incorporating information of greater scope and detail. You can easily create employee profiles that account for salary, bonuses and benefits and filter by their locations, client types, business units and more — all information that would have taken hours of rework on Excel.
With sophisticated scenario modelling capabilities, you can plan for unexpected events or “what-if” situations. This can help you get a read on cash flow and gain more visibility and confidence with your budget.
5. Improved Operational Efficiency
With a construction accounting software you can optimize workflows for the office and field with automation, while reducing operational expenses. It is crucial to get a software solution that can support numerous users and offer in-depth analysis and reporting on a variety of unique projects. Accounting software or ERPs allow your business to contain extensive information about clients, employees, projects, and assets within the same database, increasing the efficiency of your operations.
There’s a push in the construction industry to do more with fewer resources and an increased importance on harnessing real-time actionable information. It is also crucial for any construction firm to equip its staff with the tools needed to work as efficiently as possible. This is why implementing construction accounting software is of utmost importance if you want to propel your business forward. The right software can provide you with better visibility, insights, job costing, resource management, financial planning and much more. Talk to one of our experts today to talk about how you can start your digital transformation journey today.