Best Construction Accounting Software 2024

There are several industry-specific settings to set up progress reporting for receivables and billables. You can customize how your invoices look like and how you break down the costs. You’ll have real-time project profitability records at the portfolio and single job level.

• Working capital turnover measures how much revenue each dollar of working capital is producing.
• This enables them to access project information and communicate with other team members from anywhere.
• Unlike traditional accounting methods, accounting for construction focuses on project-based financial management, often dealing with long-term contracts and variable costs.
• There are many software options available that are specifically designed for construction companies, such as QuickBooks for Contractors, Foundation Software, and Sage 100 Contractor.
• The construction cost control software is ideal for contractors who streamline processes and improve project profitability.

Construction business billing methods

Inventory management construction bookkeeping services is crucial for construction companies to prevent overstocking or running out of materials. Implement a system for tracking inventory levels and reordering supplies as needed. Also account for equipment depreciation and maintenance costs to ensure accurate financial reporting. One key difference is the need for detailed job costing, as construction projects often involve multiple contracts, subcontractors, and materials. Additionally, the financial reports that construction companies rely on to measure their performance differ slightly. Foundation breaks its software down into modules that you can put into a custom solution.

Understanding Construction Bookkeeping Tax Liabilities:

• Indirect costs are any costs that are vital to your business, such as equipment repair, insurance, transportation, software, etc.
• To ensure compliance, construction companies should consider hiring a tax professional or a bookkeeper who is knowledgeable in tax laws.
• This means construction bookkeeping must accommodate fluctuating material costs, varying labor rates, and the unique challenges of managing subcontractors.
• Internal controls are procedures and policies that construction companies put in place to ensure the accuracy and integrity of their financial records.
• Getting a quick response through their customer support line can also be challenging, which should be considered for busy construction businesses.
• In this in-depth guide, we will explore the key aspects of bookkeeping for construction companies.

Exact features and specifics can vary, but it normally offers reporting, tax preparation, invoicing, and payroll tools. Not all standard accounting software has the features you need for the construction industry. For example, suppose your company uses progress billing on large jobs (where each invoice is charged against the total cost of the job over time until the balance is paid). In that case, your construction accounting software needs to be able to produce a schedule of values to help you track the running total. That’s why so many in the industry are now on the lookout for the best accounting software for construction.

• Companies can avoid fines and other legal trouble by maintaining accurate books and proving they align with these rules.
• Terms, conditions, pricing, features, service and support are subject to change without notice.
• The software offers features like job costing, progress invoicing, and specialized reporting that cater specifically to the construction industry.
• Job costing helps maintain organization in the construction accounting process since the accounts related to individual projects are kept separate from the centralized accounts.

Best for Managing Multiple Jobs

If you can bring the same excellence to your accounting, you’ll begin to see the results of your growth firsthand. Any subcontractors involved in a project can rack up costs if payments and expenses are not accurately tracked. Maintain separate accounts for each subcontractor, and pay invoices promptly to maintain a positive relationship and avoid penalties. Working with a certified bookkeeper or accountant specializing in construction accounting can greatly benefit your business.

• A benefit of this approach is that you can track income, operating expenses, profit, and taxes on the micro-level so you gain a better understanding of where you stand on each construction project.
• Cloud-based accounting is an online accounting system that allows businesses to manage their financial data through the internet, rather than using traditional, on-premise software.
• There are simple workflows for employees to submit the time cards and manager approvals to approve them.
• Navigating the financial ebbs and flows of construction projects demands a deep understanding of how to manage cash flow.
• In the construction industry, projects are often executed at different sites simultaneously, each requiring distinct management and resource allocation.
• These experts possess in-depth knowledge and expertise in handling complex financial responsibilities such as job costing, payroll taxes, and reporting.

Retainage doesn’t belong in accounts receivable or payable, because it is not collectible (or payable) until the contract conditions have been met for its release. The percentage of completion method has numerous advantages for companies that are balancing several long-term projects. Most importantly, this method enables financial managers to get a clear view of the current financial status of each project as well as the financial horizon as each project progresses. However, you can take a “completed contract” approach as well, which involves calculating taxes owed on each contract. A benefit of this approach is that you can track income, operating expenses, profit, and taxes on the micro-level so you gain a better understanding of where you stand on each construction project.

It is crucial to track these different expenses to be a successful construction company. Contractors can get to the most recent financial records whenever they need them using construction bookkeeping software. Because of this, they can make intelligent choices based on data that is updated in real-time.

Accounting ratios

Implementing modern construction cost control software is the quickest and easiest way to improve portfolio projects’ profitability to save the team time and unlock the company’s potential. Choosing the right accounting software is essential to meet the complex demands of construction. Generic accounting products fall short in addressing these realities, making it important to seek products purpose-built for the construction industry.