I spend a lot of time speaking with construction company owners, and members of their accounting department, who are looking for improved construction accounting software. Many times they are hesitant, and want to know why they should make the change. I obviously would like everyone I talk to, to choose the software I’m selling, however what I really want is what is best for them. Construction companies should evaluate the reasons they want to switch to a new software – are they having specific problems or looking for new functionalities? The are particular reasons to switch, in my opinion, and these are the “big three.”
Job Cost Accuracy – Including Budgeting, Forecasting, and Predicting
A construction company wouldn’t survive without projects, so it’s imperative that the job costs are closely managed. Your construction accounting software needs to not only track costs accurately, it needs to give you the information necessary to budget, manage, and predict all of your job costs.
Most accounting software programs will say they can assist with job costing. That doesn’t mean it was made for the specific needs for construction accounting. Your accounting software should be able to build budgets rapidly, predict, and follow the accuracy of those predictions. When looking at different accounting software applications, see if it lets you import estimates and pre-populate a project’s costs with those estimates. This functionality saves time, so if you don’t have it, or aren’t using it now, you will need it as your company continues to grow.
Predicting and tracking are as equally important as budgeting. Your companies budgets need to be continuously tracked and adjusted, therefore your construction software needs to show your project managers any and all the data they need to keep job costs on track. If your software doesn’t allow for this, it’s time for a change because without the right information at the right time, accurate predictions are close to impossible to make.
The busier your company becomes, and the more it grows, the more data is being collected. All three of these areas (budgeting, tracking and predicting) need to work seamlessly together, not as individual components. If any, or all, of these areas aren’t up to snuff, it’s time to look for new software.
Information and Data Management
This seems like it should fall under project management software, but it truly is an accounting software issue as well. Most companies are going paperless for several reasons, which means no more routing through file cabinets to look for documents. Electronic documents are made to be easier to find, which saves time and money. Project managers need access to the most current data to keep a job on track, and those in the office need the same data for expense reports and to manage overall profitability.
Your construction accounting software must be able to deal with job costing effectively and information and data management too.
Most run of the mill construction accounting software programs have some amount of data storage capabilities, but they don’t always link the projects data together. To be effective and efficient, data for a job and all related information need to be linked to the appropriate job. Without this capability, accounting personal and project managers will waste vast amount of time looking for pertinent data.
Current Technology
Using technology in this day in age seems like a no-brainer – but the issue needs to be addressed. Software becomes obsolete quickly, more now than ever as the construction industry needs current information faster, whether they are in the office or in the field. If your particular software runs in a Windows platform, it means it is loaded onto a computer and your software is not keeping up with the growth of your company. Cloud-computing and mobile capabilities are needed in order for the absolute most current data to be available to everyone in your company, whether at the job site, on the road, or in the office. If you are not considering accounting software with cloud and mobile capabilities – you should be.
While there are many other reasons to consider changing your accounting software, I feel these are the three most important ones. This is a decision that shouldn’t be taken lightly.