Changing your construction company accounting software may be a time-consuming and costly process, but an ineffective accounting software is burdensome and impedes growth. Are you a construction company owner? Have you considered changing accounting softwares?
Before committing to a new software package, you should asses the following:
- What are your construction company’s NEEDS from its accounting software?
The first step, before changing an accounting software, is to discuss with all employees. From shop personnel, who will be receiving inventory, to the CFO, who will be running reports. Ask these individuals, what tasks should the software ideally perform? What tasks in the current software are not operated in an efficient way?
- What are the potential time and cost BENEFITS a new accounting software could provide?
Discuss the time and cost benefits your construction company may experience from making a change in accounting software. Potential benefits include:
- Removing the need to double track jobs in an excel spreadsheet or other outside application.
- Reducing time related to chasing down paper documents. Many softwares are able to host all documents electronically.
- Improving office to job site integration through add-on applications to the accounting software.
- Increasing understanding of individual jobs, which can lead to improved estimating, budgeting, forecasting and predicting of costs for current and future jobs.
- Does your CURRENT accounting software meet the above needs?
Changing accounting software is a commitment from every level of your construction company. Once you have accumulated your list of needs, take the time to determine if your current software has the ability to meet those. Consider the addition of modules, training and support offered by the vendor. Also consider your level of satisfaction with your current vendor. If you determine your current software cannot meet both your current and future needs, you can then consider making a change
If, after the above assessment, changing accounting software is the best option, below are four items to consider:
- Fully Integrated vs. Basic Accounting Software
A fully integrated construction accounting software helps to ensure your job costing and the accounting general ledger should reconcile to the penny between each other. A fully integrated system includes things such as, construction payroll, billings, purchasing and subcontract controls, general ledger reports by job, and job reports. Basic accounting software will not include modules specific to job costing. However, there may be a separate job costing system to meet your needs and may be used alongside your accounting software.
Note: In most cases, it is beneficial to switch to a fully integrated software once your construction company regularly has $3 million in annual revenues or have five or more major jobs occurring at one time.
- Access & Portability
Things to consider include multiple user access, security preferences, multiple business support, cloud based versus server based, and mobile access. Determining what your construction company needs, will help eliminate software options that do not meet the minimal requirements.
- Knowledge Required
Take into account the knowledge and willingness of your employees. Some software requires high-level accounting knowledge to use, while others are geared towards individuals with limited accounting education or experience.
Be aware of all aspects of the cost of the software. This includes fees for upgrades, annual licensing, support fees, training and hardware costs. Often, the premium features are not part of the basic software package and have additional add-on costs.
Running your construction company goes smoother and profits stay higher with the right accounting software. Smith Schafer can help you choose the right financial management tools for your construction company and guide you through the implementation.
Smith Schafer is a recognized leader in providing accounting, auditing and consulting services to the construction industry. Our Construction Group, comprised of numerous professionals, is committed to serving over 800 Minnesota construction and real estate entities. From large construction companies to specialty contractors, we have the experience to bring you innovative solutions. Click here to schedule a free 30 minute consultation.
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