Construction companies that don’t spend money on effective software may well find they eventually spend a lot of time – and even more money – making up for their software deficiency as they work to keep track of the mountainous number of records, transactions, financial activities, progress, and other project aspects.
Another way to look at it is that if you’re a small construction firm with ineffective accounting software you’re likely to be falling behind companies that have the good stuff.
What are some of the benefits of construction accounting software?
- More profitable project command and control: Every action on a construction project makes or costs money. Tracking, recording, and managing time, materials, costs, change orders, subcontractor work, and other factors are exponentially improved with efficient software. The data provide an up-to-the-moment financial and operational project picture. That’s superior to finding out too late that something - or a lot of somethings - on a project aren’t working well and are affecting profits or creating a loss.
- Enables faster and more accurate accounts receivable and payable: Software-generated information is more easily compiled, reviewed, and verified. The result is a more efficient payment and collections process.
- Increases potential client confidence: How well and at what cost your company can complete a project is directly related to how well you can manage and account for its numerous components. To the extent that your accounting software impresses the client, it’s adding credibility to the weight of your pitch to win the work and perhaps more in the future.
- Record keeping is safer: Documentation is vital for all project elements and, unfortunately, sometimes for protection of the company if it is either the target or the originator of a project-related lawsuit. In most cases if something isn’t documented, it doesn’t exist regardless of how many people are “sure” about it. Take care, however, to back up your data in a second location.
- Better information access: When data collection is centralized through accounting software it enables immediate access to up-to-date information to everyone involved, the work progresses more smoothly. Also, such immediate access can prevent or settle arguments; correct errors; or keep errors from occurring. And because everyone knows the same thing at the same time, it saves time in meetings, conferences, and planning.
- Tax filings: Taxpayers in complex industries such as construction have a greater ability to ensure their taxes are properly computed and paid – and that they can defend against charges of inaccuracy from tax authorities.
- Financial reporting: Rather than the soul-chilling prospect of having to track or go back through reams of documents, paperwork, and receipts, accounting software puts numbers on the screen in seconds. If time is money (and it is), this alone validates the need for a good software system.
There are an abundance of good construction accounting products on the market. A useful place to begin your search to either invest or to upgrade is with Construction World’s “Top 10 Construction Accounting Software” list.
If accounting software is used correctly and works as it should, the outcome is green. That’s green as in money.
