A construction project is a lot more than the sweat of the actual labor—the bottom line is just as important, if not more so.
Going over budget is the norm, not the exception. Large construction projects take 20% longer than their schedule calls for on average, and they are up to 80% over budget, according to a McKinsey & Company report.
That’s why you need good construction accounting software to beat that dismal average.
It’s daunting to search for new software that fits the needs of your business, but there are a few must-have features to look for as you shop around.
To help you out, we’ve compiled this handy construction accounting software checklist of the features you need to ensure that you avoid going over budget on your next construction project.
We’ll also illustrate those software features with examples from construction accounting software options in our directory that have a minimum of 75 reviews and a 4 out of 5 star rating.
1. Accounts payable/receivable
Accounts payable refers to the money your company owes because it purchased, say, a backhoe on credit from a supplier. Accounts receivable is money owed to you from a customer. It is vital that you be able to track both in order to properly monitor where money is coming and going, so this is one of the most fundamental functions of any good construction accounting software.
You also want software that keeps accounts payable and accounts receivable separate, and integrates with your budgeting software so that you’re not surprised by a sudden inflow or outflow of cash.
Software feature spotlight: Eclipse software has an accounts payable feature that does more than record expenses and write checks. It also automates invoice routing and allows you to attach invoices and other documents to transactions.
2. Payroll management
Payroll can be a difficult task for construction managers. Employees may work at different rates in multiple locations with a variety of benefit packages. You must stay on top of payroll to keep your employees happy, to keep yourself out of legal trouble, and to keep everything on the job site running smoothly.
The old way of doing payroll is to manually mail out paychecks or pay stubs to your employees, which can be a hassle and puts you at risk of making mistakes if you’re filling out forms and licking stamps yourself. A good payroll function should take all of that out of your hands by calculating payroll and automatically sending payments so you can focus on other things.
Software feature spotlight: ClockShark offers a time clock that integrates with QuickBooks to automate your payroll management. Data for customers, jobs, service items, and employees are automatically imported.
3. Job costing
The initial budgeting process is the most critical phase. If you don’t do job costing properly, you run the risk of operating at a loss. You must account for every possible expense early on, whether that be labor, materials, or fees for permits. And to do that, you’ll need a good job costing tool that can keep you organized and focused on the bottom line.
Good construction accounting software will allow you to accurately track all job costs in one place and monitor everything from invoices to timecards to purchase orders.
4. Document management
Documents, documents, and more documents. When you run a construction project, you are awash in documents—contracts, permitting forms, and blueprints. You have got to keep all this stuff organized, which is why a good document manager is absolutely critical to your construction project.
Construction accounting software lets you dial up a document within seconds, or see them all neatly organized in one place. You’d be shocked at just how much this feature will unclutter your mind, as well as your desk.
Software feature spotlight: Aconex offers a document management feature that lets you share and control documents. The software also keeps your documents secure from people looking to steal it, a constant threat in this day and age.
5. Mobile accessibility
As a construction manager, you can’t be chained to your desk. You need to be out on the job site, checking in with foremen and workers and reviewing progress. So instead of relying on software that only operates on a desktop or laptop computer, look for software that works as a standalone app—or at least has mobile accessibility—so you can pull up necessary details such as progress reports, documents, and your budget.
Software feature spotlight: We’ve put together this handy list of the top mobile construction apps out there, and some have them have useful accounting features. For example, BuilderTREND has financial tools that allow you manage budgets and purchase orders on your mobile device.
Learn more about construction software
Are you looking to learn more about your industry? Check out this great reading material to help you become a better construction manager:
- 7 Eye-Opening Construction Stats About the State of the Industry
- 5 Ways to Market Your Construction Company
- 4 Things You Should Know About Construction Software Licensing
- Construction Software Pricing: How Much Should You Pay?
Looking for Construction Management software? Check out Capterra's list of the best Construction Management software solutions.