To help you better navigate your construction accounting software selection process, SWK Technologies has put together this guide of the various options available. When deciding on a new solution – or whether your current system needs to be offboarded – it is important to carefully the benefits as well as the drawbacks against what your business actually needs. Many firms may choose to stick with QuickBooks or Sage 50 (formerly Peachtree and Sage Simply Accounting) when they are smaller, but if you are growing then it may be time to consider a more scalable financial and project management system like Sage Intacct or Acumatica.
Here are the key points to navigate when choosing a construction accounting software program and the top options to compare:
The Essential Role of Accounting Software in Construction
Whether you are a general contractor (GC), subcontractor, land developer or fill any other specialty role for construction projects, streamlining your operations are critical for maintaining your ROI and the best way to achieve that is through technology and automation. A modern financial management and reporting system will help you save time on tedious back office work, keep your team connected, enforce consistency across reports and ensure accuracy for compliance requirements. Accounting software solutions that are tailored for construction will also significantly reduce the time it takes to manage data and industry-specific reporting for project managers (PMs), including AIA billing forms and field reports.
Accounting and Project Management Integration is Vital
An issue that is easy to overlook but that can come back to haunt construction PMs later is the (lack of a) connection between financial and project management systems. Since many contractors will use standalone programs like QuickBooks, the information between each application is inevitably going to be siloed, which means that at all of the points where the data needs to be combined it will have to be managed manually. However, choosing software that combines functions – as well as integrates with function-specific apps – will cut down on the headaches and streamline how your team handles all of the disparate reports.
Construction Accounting Software Choices
To choose the best construction accounting software program for your firm, you must consider all of the options and compare them against your needs and your goals. Ideally, your solution should have modern features and a scalable architecture to help better solve your challenges and give you the best ROI. This generally means that your system should be an advanced, cloud-based application that is tailored to fit in with your industry – including being able to integrate seamlessly with additional apps for project management, customer relationship management (CRM), payroll and more.
Here are some of the top options to choose from for construction accounting software:
Sage Intacct: Modern Cloud Construction Accounting Software
Sage Intacct is a robust financial management system born in the cloud, with virtually limitless scalability and depth of visibility delivered via a modern reporting UI (user interface). Being SaaS, it is accessible from any device with an Internet connection and a browser to plug in the login URL, and is designed to grow with your business no matter the number of transactions and reports generated. It also comes equipped with functionality and modules designed to manage construction and real estate-specific financial reporting.
Here is a list of the top features and add-ons for Sage Intacct for GCs and subcontractors:
- Sage Intacct for Construction – A standalone module that integrates bidirectionally with the core financial management app, Sage Intacct for Construction introduces several features built for contractors and to use in conjunction with their accounting software, including generating job cost codes, budget estimations, and creating subcontracting invoices.
- Spend Management – Available in the General Ledger, Accounts Payable (AP) and Purchasing modules, Spend Management allows you to automatically validate spending against budget limits and rules, deny transactions overlimit, and capture insights into budgeting against expenses.
- Dimensional General Ledger – Drill down as much as you need for a given report by applying an unlimited level of dimensions and filters to slice and dice your customized dashboards.
- Allocations – Sage Intacct’s allocations feature is designed to automate and streamline the process of distributing indirect costs and revenues across multiple dimensions, saving valuable time and ensuring accuracy.
- Revenue Recognition – Support various revenue recognition methods and scheduling periods (monthly, quarterly, etc.) that can be configured according to your needs and applied automatically straight from a template.
QuickBooks: Entry-Level Option for Small Construction Firms
There are a few options for using QuickBooks to manage your accounting for your construction projects, including choosing a basic QuickBooks Desktop plan, migrating to QuickBooks Online and take advantage of the mobile app, or choosing QuickBooks Premier for Contractors. However, the first problem with any QB subscription is that it is meant for individual users and small businesses, meaning that past a certain transaction volume it will becoming increasingly costly.
Here are some of the top options when using QuickBooks as your construction accounting software:
- QuickBooks Desktop – The traditional staple of small business users; however, because it remains on-premise and Intuit as continued to move away from it, anyone looking to migrate to the cloud or even just access dedicated support will need to work with a certified QB hosting provider.
- QuickBooks Online – The purely SaaS version of QuickBooks, available via mobile app as well as a desktop program. Its flexibility and ease of use are its greatest strengths, but it loses many features that came with QuickBooks Desktop.
- QuickBooks Payroll for Contractors – A standalone payroll system that can be integrated with QuickBooks Enterprise or used on its own.
- QuickBooks Contractor Edition – Available for QuickBooks Premier or Enterprise plans, the Contractor Edition contains the most features tailored for construction accounting of all the versions, but its biggest drawback is that it remains on-premise.
Acumatica: Cloud ERP Module for Construction Projects
Acumatica is an innovative ERP (Enterprise Resource Planning) system designed to be able to merge financial and operational silos into a consolidated source of truth. The Acumatica Construction Edition is a tailored suite built around a core accounting module with connected features for general contractors, subcontractors, land developers and home builders.
Here are some of the features included in the construction module for Acumatica Cloud ERP:
- Financial Management – Comprehensive accounting tools for managing finances, including accounts payable/receivable, a consolidated general ledger, and cash flow management.
- Project Accounting – Integrate your project accounting with your core financials to streamline budget tracking and revenue reporting.
- Job Costing – Detailed tracking of job costs against budget for real-time visibility into project profitability and proactive insight into potential problem areas.
- Inventory Management – Track and manage materials in real-time and from any location, ensuring availability and optimizing costs.
- CRM – Built-in Acumatica CRM that allows you to keep track of all customer-facing activities and data, such as quotes, orders, invoices, payments, support cases and service call logs.
- Mobile Accessibility – Cloud-based access from any device, enabling real-time decision-making and project management on the go.
Sage 100 Contractor: Designed for SMBs in Construction
The advantage of Sage 100 Contractor is that it is built specifically to be used by GCs in construction and comes with industry-specific features and reporting functions. The disadvantages, however, are similar to those of QuickBooks Desktop and the Contractor Edition – it is meant for a smaller volume of transactions, it lacks integrated functionality, and it is still an on-premise solution that would have to be manually hosted in the cloud.
Sage 50: Small Business Accounting Software Option
Sage 50 is a bit of a “dark horse” entry in this list, as while it is still a great alternative to QuickBooks, it still suffers from some of the same limitations as a small accounting software system. When used for construction, it also does not come with any industry-specific features, but can provide value as a standalone bookkeeping solution. Additionally, even when used as Sage 50cloud (now Sage 50 Accounting), it remains on-premise unless hosted by a third-party service provider or through the Sage Partner Cloud.
Deciding Which Features You Need for Construction Accounting Software
Choosing the best construction accounting software program for your business means comparing the features, benefits, drawbacks and other information listed here against your needs, challenges and goals. Speak to an expert at SWK Technologies today to gain a deeper understanding of the strengths and weaknesses of all of these systems, and see which will best fit for your current pain points and objectives.
Contact SWK here to get started on your search for the best construction accounting software system for your needs.