Construction accounting software can be a game-changer when you are a busy contractor trying to get jobs done and make ends meet!
A quick online search for “best construction accounting software” will lead you to pages and pages of results. One particular site lists 74 different products!
How do you know which ones are the best…and which one is right for you? We’ll introduce you to 3 in this post that we think are some of the top accounting software options for contractors.
But first, let’s take a look at what all is involved in doing bookkeeping and accounting for construction companies. It’s not exactly like every other industry, so knowing what makes your business different will help you make better decisions when it comes to your software.
How To Do Bookkeeping for a Construction Company
While bookkeeping for construction companies follows the same Generally Accepted Accounting Principles (GAAP) as every other business, it is unique in the ways it has to go beyond basic accounting methods. One of its main functions is to help contractors be able to track all of the different elements of each job to make accurate bids and realize good profits.
Contractor accounting is different from typical business accounting in 3 ways:
1. It is based on projects, not products.
Retail businesses can track sales of individual items. Manufacturing companies can base their accounting on how they turn raw materials into items that can then be sold.
In construction, however, each project has its own unique expenses when it comes to materials and labor. And what the contractor gets paid varies from one bid to the next. Therefore, the profit margin does as well.
Construction company bookkeeping helps keep everything organized to minimize expenses and maximize profits.
2. It happens in multiple locations.
Unlike a brick-and-mortar store or restaurant, construction companies are doing business in a variety of places…often at the same time.
The accounting processes for contractors have to be able to juggle all of the financial variables that are happening in multiple locations. Many times, those locations are spread across several states, which all have their own requirements when it comes to regulations, labor, and record-keeping.
Good bookkeeping is essential to keep things from getting out of hand financially!
3. It takes a lot longer.
Standard invoicing includes terms like “Net 30” or “Net 60”. That’s when most businesses can expect to be paid for their products or services. Construction contracts, however, can sometimes last for years.
Contractors are often paid as certain construction benchmarks are passed. So they have to be able to budget their costs to keep from outspending their income. The terms of a construction contract may also include things like “retainage”, which can often delay payments even further until the job is completely finished.
Tracking expenses and revenue accurately at irregular intervals is something that construction bookkeepers need to be able to do well.
Best Construction Accounting Software
There’s a lot to keep up with when it comes to construction accounting. Fortunately, advancements in technology and software have made the job a lot easier. Here are 3 construction accounting software options that are highly recommended:
Buildertrend is a full-service software solution for people working in the construction industry. Their product is designed to help contractors from home builders to remodelers to commercial construction.
It lets you stay on top of pre-sales processes, project management, finances, and communication all in one place. Since the focus of this post is financial, here are some ways Buildertrend incorporates financial tools you need:
- Bid requests
- Payment processing
- Purchase orders
- Integration with other financial apps
CoConstruct is another project management solution that offers good construction accounting integration. If you are already using Quickbooks for accounting, bookkeeping, and payroll, their software lets you sync your information seamlessly.
They promote features in their software such as:
- Easy time tracking
- Digital invoices and change order updates
- PO’s and client payments generated as you complete work in the field
- Up-to-date job costing and “budget vs actual” information
3. Sage 100
Sage 100 is software aimed at small-to-medium-sized construction businesses. Sage serves a wide range of industries and is already a leader in the accounting software space. They make other products with more features specifically for builders, but Sage 100 has everything most contractors will need to stay on top of their finances.
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Construction Accounting Software Cost
The real question you probably want to know is: how much is this going to cost me?
Since you’re familiar with needing to watch every dollar in order to protect razor-thin profit margins, that’s a smart thing to be concerned with. You aren’t gaining much by accurately tracking your financials…but breaking the bank for the software that does it.
You can spend a little or a lot when it comes to construction accounting software. How much you can expect to pay ultimately depends on how robust and reliable you want your bookkeeping software to be.
Here’s how our 3 construction accounting software recommendations break down price-wise:
Their “Core Plan” is $99 for the first two months. After that, it costs $349/month. If you choose to pay annually, the price is $2899. (Paying monthly would total $3688 for the year).
Their “Pro Plan” starts at $399 for 2 months then goes up to $599/month. Annually, this option costs just under $5000, about an $1800 savings over what you’d pay for the year if billed monthly ($6,788).
Their pricing is (as of this post) identical to Buildertrend’s. So it’s simply a matter of comparing features and ease-of-use if deciding between these two companies.
Sage doesn’t post their prices directly on their site. Instead, they invite you to contact them for a quote. That’s probably because your price will change depending on the number of users and features you select. However, it is reported that their service starts at around $115/month.
Construction Accounting and Financial Management You Can Count On
Whatever software you ultimately use to track your projects, manage your finances, and streamline your business…the important thing is that you are doing it. Most businesses in the construction industry that fail do so because of poor financial and project management.
CRS CPA has a team of experienced accountants and business advisers who have helped hundreds of contractors over our 40+ years. We understand how important accurate numbers are to your business, and we know how to make sure your finances are in order so you can focus on building great things.
For help navigating accounting software and other decisions you face, schedule a call with us today or give us a call at (731) 668-4482!