“Always use the right tool for the job.” A favorite maxim of grandfathers throughout time, it’s especially appropriate in the construction industry — not only on the jobsite but in the office as well.
Whether you’re a small contractor, a large commercial developer or something in between, your accounting software is asked to do a lot of heavy lifting: bidding, job costing, project management, retainage, invoicing, change orders and payroll (including possibly multi-state, multi-trade, and union vs. non-union).
Your accounting software also needs to play nicely with your construction management solution, and the more you can closely integrate the two, the more time and money you can save.
Thankfully, specialized accounting software specifically for the construction industry is now widely available and can tackle those unique demands of the job. Which means it might finally be time to upgrade from QuickBooks.
Learn the drawbacks of QuickBooks for construction
Don’t get me wrong: QuickBooks has its place, and it’s doing quite well. In fact, it’s considered the most popular accounting software, not just in the U.S. but around the world. And when you’re just starting out in construction, the product is certainly sufficient. Easy to use and affordable, it truly was created with that small-business mindset.
But as firms grow – bringing in more than $2 million in annual revenue, for example – your accounting department is probably drowning trying to manage it all with QuickBooks, especially given some of its significant drawbacks:
Payroll – Construction companies often work in more than one state, but QuickBooks is not known for handling multi-state payroll well. As a result, you’re likely forced to create manual workarounds that waste time and increase the likelihood of errors.
AIA Billing – The AIA created this standardized and transparent framework for payments to promote “consistency and clarity in the billing process,” which the organization says will reduce confusion among parties and reduce errors. Unfortunately, QuickBooks can’t handle AIA Billing at all, which forces you to build these in Excel, which also invites human error.
Certified payroll reporting – If you’re working federally funded projects, you need to quickly submit these weekly records with the U.S. Department of Labor. But – you guessed it – QuickBooks can’t help you with these, which means a lot of time is now spent completing these manually.
Change orders – QuickBooks doesn’t handle auditable change orders well, which can be severely detrimental to an industry that must maintain careful records of every modification and the cost associated with them.
QuickBooks also has one feature that may seem like a plus but can be dangerous for your firm: It’s incredibly easy to make changes to any of the inputs. While that means correcting a mistake is a simple task, it also eliminates an accurate audit trail to easily identify when changes were made (and by whom).
Consider top choices for construction-specific accounting software
The way to solve for all those QuickBooks limitations? Upgrade to accounting software built for the construction industry and the unique challenges you face. These specialized products can help you easily calculate fringes and deductions based on regular, overtime or special rates; process multi-state, multi-union and multi-trade payroll; provide multiple billing formats (including AIA, time and material, credit memos, etc.); and more. They can even allocate your indirect costs to specific jobs automatically, unlike the manual process required by QuickBooks.
Two products are growing in popularity and may be a good fit for your firm:
Produced by software leader Deltek, ComputerEase has become a recognized name in the industry and built for contractors as they grow. The product makes it easy to view real-time job costing data and compare it to the profit and loss report, and you can easily track labor and materials data to quickly spot discrepancies.
Other key features include:
Work in Progress report data
Permission-based user access for tracking labor, material, subcontract and equipment costs
Simple AIA billing
Easily accessible vendor insurance certifications and lien waivers
Flexible billing and payment options to get paid sooner
A trusted name in construction since 1985, Foundation calls itself “a contractor’s one-stop shop,” capable of addressing the many complexities of the industry. The software integrates well with other software solutions, including those for estimating and takeoff, safety, HR and more.
Other key features include:
The ability to easily calculate multiple jobs, locations, rates and trades on a single time card
GPS location data for employee clock-ins
Instant reports on cash flow and works in progress
Mobile app for simplified approval of time cards from the field
Partner up for better results
The benefits of both software solutions can dramatically improve your operations (and your bottom line). If you’ve just made the switch, are in the middle of a transition, or just taking another look to see what’s out there, our team can help.
Not only can we provide technical assistance to make sure the transition is smooth, but we can also offer training and support as you get your team up and running.
If you’re ready to find the right tool for the job, give us a call and we can tackle the project together.
