10 Best Construction Accounting Software + 2024 Pricing Guide

It’s tough to do this though without retainage tracking being built into your accounting system. If retainage isn’t being applied to the correct retainage accounts on your balance sheet, you risk over or understating your books – and you risk losing track of what you’re owed. Construction contracts can take months or even years to complete, which means you need to have eyes on your financial performance as the progress is being built – not after the fact. To make sure you’re not missing anything or underbilling, you need the ability to bill progressively as work gets done.

Manage job costs

• Managing equipment depreciation, subcontractor invoicing, and retention schedules is key to avoiding delays in payments and ensuring financial control.
• This task involves seeing how much of the project is finished when compared to the initial estimate and budget.
• However, these rates may vary depending on the size of your company, the number of jobs and employees you manage, and your unique needs.
• One of the key advantages of construction ERP is its ability to integrate various business functions into a single platform.
• The work-in-progress dashboard allows you to mark the percentage of jobs completed, adjusting the costs and cash-flow predictions as you go.

Using software and tools can help construction companies streamline their bookkeeping process and improve efficiency. There are many software options available that are specifically designed for construction companies, such as QuickBooks for Contractors, Foundation Software, and Sage 100 Contractor. By collaborating with them, you can free up your time and resources to focus on growing your business while they manage the financial aspects with precision and accuracy. Additionally, they can provide valuable insights into your business’s financial health and performance, helping you make informed decisions to optimize your operations and maximize your profits.

Sage Paperless Construction

Professional bookkeepers also keep up to date with changing tax laws, ensuring your business is always in compliance and avoiding penalties. Mixing business and personal funds can lead to errors in financial reporting and tax filing. It’s essential to keep separate accounts for business expenses and income to ensure accurate bookkeeping. Construction bookkeeping services help manage complex tax obligations, including sales tax, contractor-specific taxes, and payroll taxes. They ensure timely filings and minimize the risk of penalties by staying up to date with tax regulations.

Expense Tracking and Management

Construction accounting software automates repetitive processes such as invoicing, payroll processing, and financial reporting, reducing manual errors and saving time. By digitizing workflows and centralizing data, businesses can eliminate paperwork, streamline communication, and focus on core activities, ultimately enhancing overall efficiency and profitability. Construction accounting software suites are specifically tailored to help construction businesses navigate the most common challenges in the industry. These have been designed around the project-based nature of construction work and facilitate billing and working with multiple third parties and subcontractors. Examples of common reports you can generate using construction accounting software include standard financial statements like an income statement, balance sheet, and cash flow statement. Metadata enables tracking, allowing you to see when a report is sent, opened, printed, clicked, or responded to.

Reducing Administration Time

For heavy contractors, it includes equipment cost and equipment manager tools, along with an inventory control system. Jonas Construction Software’s job costing module lets you track labor, equipment, materials, and subcontractor costs for each project. This helps https://digitaledge.org/the-role-of-construction-bookkeeping-in-improving-business-efficiency/ you create accurate invoices for your clients, as well as identify inefficiencies or inaccurate estimates.

• The reporting will enable you to track the profitability of each project so that you can stay ahead of costly mistakes.
• Your construction firm should set a budget and assign a team member to expense management and approvals.
• Once the costs have been categorized, monitoring expenses closely against the budget is important.
• To ensure compliance, construction companies should consider hiring a tax professional or a bookkeeper who is knowledgeable in tax laws.
• To do bookkeeping for a construction company, track job costs, record all project-related expenses, and separate business and personal finances.

So it only makes sense to consider this task when choosing a software option for you. Sage 300 is as comprehensive as it gets with prebuild reports; there are more than 1,400 to choose from. This means you can get any detailed report that you can think of with just a couple of clicks, helping you manage all the project costs. This software platform is best for contractors seeking detailed bids from subcontractors and vendors to have the most comprehensive preproject data. RedTeam is a company built out of a commercial construction firm, so it understands the needs of a construction company intimately. This is one reason it has received several industry awards, including Software Advice’s 2021 Front Runner award and making Capterra’s Shortlist.

Track Time to the Minute

Regardless of the type of payment schedule you use for each contract, long-term contracts require meticulous bookkeeping records. If you don’t have a highly accurate and efficient construction bookkeeping system, the rest of your business will suffer. Mobile access, enabling teams on the field to capture construction bookkeeping expenses, invoice clients, and track payments directly from their devices.

Costs of Accounting Software for Contractors

• Job costing can be used in the context of both estimating a new project and also adding up the incurred costs on an ongoing project.
• You’ll be able to get into the weeds with budget management tools that allow you to go from budget to change order requests instantly.
• As you take on more projects or expand your team, these systems allow you to manage growth without sacrificing accuracy or efficiency in financial reporting.
• For example, if you typically bring in $500,000 per month in contracting work, keep $1.5 million to $3 million available in cash.
• One challenge with this is that you possibly do not want to give non-accountant users too much access to sensitive company information.
• These programs can also help with other aspects of payroll management, such as generating pay stubs and handling direct deposits.

Once you get the hang of it, it’s a breeze, but getting there can be tough.” – Emily W. This cloud-based solution has a base of user interface (UI) customizations, custom workflows, search tools and collaboration features. The next function layer is the Procore analytics feature that works with the specialized app marketplace filled with third-party solutions that integrate with Procore. This is best for any contractor looking for a comprehensive, ready-to-use solution for accounting and project management. It also means that you are on top of your finances with accurate information so that you can make well-informed decisions, improve profits, and manage your cash flow.