Construction accounting software packages provide financial accounting designed specifically with contractors in mind. Features included usually include project accounting, job costing, and specialized progress billing. Whether your construction project entails residential, commercial, or industrial work, a construction accounting software will help track real-time expenses such as materials and labor, track revenue, and pay your employees effectively.
With the varying software bundles that exist (such as fully-integrated construction management software), it can be confusing to decide which option is right for you. A busy construction manager or engineer needs to spend time managing project activities rather than worry about finances.
To help you find the best solution, we’ve conducted research and put together a collection of our 2020 best picks for construction accounting software.
ProContractor by Viewpoint is a fully integrated construction software with a strong accounting tool. Included accounting features include construction-specific payroll such as union and certified reports, a general ledger, and accounts payable and accounts receivable. The cloud-based approach provides a worry-free IT experience, and the scalable approach lets you purchase the project accounting applications on it’s own, and add on additional features such as project management and estimating (if needed).
This construction ERP solution is scalable, highly configurable, and fully integrated to manage your operations, improve your productivity, and enable better decision making. The solution can help reduce the accounting burden on your staff, meaning they can become more efficient in other areas of your business. Since the solution seamlessly integrates project management, accounting, and operations, ViewpointOne is one of the most complete construction accounting solutions available.
Sage 100 Contractor is a popular choice for small to mid-size contractors. The integrated solution offers management and accounting tools to meet your estimating, scheduling, project management, equipment management, and payroll needs.
Many users of Peachtree or Sage 50c have switched to Sage 100 Contractor due to it’s industry focus and ability to provide improved job costing and estimating. Sage 100 Contractor also has a large network of dedicated providers who specialize in implementing the software into specific facets of contracting, such as plumbing, electrical work, and more.
ZipBooks is a forever free accounting software that can be used in any industry. For the construction industry, the solution stands out over other free accounting solutions (such as Wave) due to the ability to handle project accounting. The ease-of-use includes drag-and-drop expenses into cost categories, invoicing, transaction views, balance sheets, and reports.
ZipBooks can be accessed anywhere you have a web-browser. If you’re on the job site, you can pull up the needed details from your phone or mobile device. The free version of ZipBooks includes unlimited customized invoicing, advanced financial reporting, and can accept digital payments via Sqaure or PayPal. The paid version of ZipBooks adds-on recurring invoicing, time tracking, multiple bank account connections, and up to 5 users.
ComputerEase Cloud is the web-based version of ComputerEase Construction Software. Companies can access ComputerEase from any computer with an internet connection, including mobile devices such as phones and iPads. The cloud software aims to lower IT costs, lower up-front costs, and provide greater mobility for companies with multiple offices and job sites.
The cloud version of ComputerEase offers all the same functionality as it’s on-premise version, including job cost accounting, project management, subcontracts, dispatching, and cost control.
Jonas Premier is a cloud construction software for general contractors, design builders, home builders, and real estate developers. The job costing feature helps find unprofitable jobs, match payments to invoices, drill down to the documents of each job, create accurate reports with real-time costs, and automate the calculation of any expenses on payroll.
Job costing capabilities in Jonas Premier will aid in dividing costs into main categories such as labor, materials, equipment, subcontractors, and any other custom fields needed. Their job costing will also let you record costs on jobs worked and compare estimated vs actual costs. The job costing capability within Jonas Premier will overall increase customer service and billing cycle times through the use of real-time data.
Want more options? Check out our list of best job costing software.
Knowify is a construction management software used by a variety of contracting industries, such as remodeling, plumbing, and HVAC. It’s progress billing feature lets you bill projects on a percent-completion basis and break them down into phases individually billed by these percents. This includes one-click invoicing with change orders, custom invoice templates, and customized reporting.
Knowify also handles AIA g701/g702 forms and tracks data on job performance such as purchase orders and timecards. The solution works best for companies that are currently using manual methods or QuickBooks for accounting. Knowify ensures your accounting is kept up to date as you invoice your jobs.
What more options? Check out our list of best progress billing software.
Construction accounting software performs a type of project accounting that has been developed for construction projects. These systems will track the financial data of every construction project you complete in real-time, while also monitoring your expenses (like the cost of materials and labor), revenue, as well as invoicing and payroll.
Construction acccounting can also be found as a portion of a fully-integrated construction management software. Whatever solution your business desires, unique functionality included in construction accounting software modules include:
The construction field uses many terms not used in other fields of accounting, such as progress billing, which involves invoicing the customer based on the percentage of work completed for that billing period. Construction companies also need to account for vehicles and equipment which may or may not be owned by the company as a fixed asset.
Construction accounting is more complex when it comes to sales, cost of goods sold, expenses, and your breakeven. Construction companies usually have a variety of products and services being sold. This leads to a variety of direct and indirect job costs, leading to extremly complex expenses that can be difficult to calculate. This is because most of your projects will be custom jobs and will be harder to predict in your books.
When shopping for construction accounting software, your business should focus on the features that make a construction accounting software unique. Some of these features include:
|Job Costing||Assign costs to labor, equipment, materials, and subcontractors associated with each project.|
|General Ledger (GL)||Tracks all information related to income and expenses of the company. Creates balance sheets and income statements. Maintains all details to track profitability and help make financial decisions.|
|Accounts Payable (AP)||Manage expenses from labor, equipment rentals, and materials. Maintains cash flow to ensure your bills are paid on time.|
|Accounts Receivable (AR)||Stores details on customers and integrates into the general ledger. Includes construction billing and invoicing such as AIA, time and material, and progress billing.|
|Financial Reporting||Create custom reports to visualize where your time and money is being spent for each project. Analyze expenses and net profit to see where improvements can be made to increase ROI.|
|Payroll||Manage wage calculation, direct deposit, and tax management for subcontractors and employees assigned to the project. Manage all types of construction payroll including Certified, Union, and Non-Union.|
Construction businesses that use manual methods to handle their accounting are at a huge competitive disadvantage to their competitors. Alternatively, construction businesses that use the wrong construction accounting software, or use multiple systems that all handle unique features, may struggle with integration issues or waste time on double-entry tasks.
Whatever your pain points may be, you’ll want to explore these benefits of construction accounting software to find out if an upgrade is for you.
The biggest benefit of job cost accounting software is comparing estimated vs actual costs. This will let you monitor your financial performance in a job in real-time. Only a software developed with the construction industry in mind will be able to handle both small and large jobs for your construction business.
In our September 2017 Construction Technology Trends report, we found that job costing was the 2nd most desired feature in a construction software, with 72% of buyers saying it was a necessary to be included in their ideal solution.
Detailed records of every financial movement your company makes is the first step to increasing revenue. Quality construction accounting software will be able to monitor every piece of income or expense accumulated during a construction project.
Common factors improved include time tracking, material costs, change orders, and details on work a subcontractor has performed. With better insight into these pieces of information, you’ll have a more complete view of not only your financials, but also your operational plans and expectations. If a project is not performing up to standards, you can find out before you affect profits or incur a loss.
Construction accounting software can provide financial reporting that give you better insight into your operations. These reports can help facilitate better managerial decision making and let you monitor the performance of your business on a continuous basis.
Some of the most requested reporting options within construction accounting software includes consolidated financial statements, budget vs actual margins on jobs, cash and working capital status, and profitability by customer.
What is the difference between regular construction management software and construction accounting software?
A construction management software may sometimes lack a traditional accounting setup of accounts payable, accounts receivable, and a general ledger. This will require you to use a secondary solution for accounting.
A construction accounting solution can sometimes be defined as an accounting solution designed to be used by a construction company. This will include the AP, AR, and GL features, along with job costing and progress billing capabilities.
Rather than having two standalone solutions that work together, all-in-one tools will provide the benefits of both. In fact, a large percentage of construction software options will include accounting as either a core, or optional feature. Likewise, a solution may be marketed as a construction accounting software, but will include non-accounting features such as estimating, scheduling, and project management.
QuickBooks can be used as a construction accounting software given the availability of invoicing, job costing, and reporting features. You can monitor spend and make for each job, upload photos of receipts, and tag hours and expenses to jobs. Optional payroll features let you manage your contractors and save time on 1099s, W-9s, and tax ID inputs.
Construction companies looking to use QuickBooks for construction accounting will need to choose a version that includes QuickBooks Projects, which includes the job costing feature. This feature is only available to QuickBooks Online Plus and Online Advanced customers.
A few users of QuickBooks explained why they use QuickBooks in a construction environment:
I use it for client invoices, change orders etc… keeping track of subs costs on each job, overages on jobs for materials. It is a powerful tool that used properly will help your business with paper trails. kevjob, ContractorTalk.com
You are pretty much breaking things down into categories and then into sub categories. So if you want to know how much you spent on subcontractors… … [or] want to know how much you spent on subcontractors for job A, Job B, and Job C, you can. fast fred, ContractorTalk.com
Pricing for QuickBooks Online Plus will start at $35/month for the first 3-months. After the introductory rate, the software continues at $70/month. This includes up to 5 users. If needed, payroll will cost an additional $18/month + $4/employee/month.
While QuickBooks may work for some businesses, others will want to review alternatives, or explore options that offer features QuickBooks doesn’t. Our 2015 QuickBooks Alternatives study surveyed over 4,000 cases of QuickBooks users searching for replacements.
Common functionality requirements for contractors replacing QuickBooks included better job costing, project management, equipment management, bid management, and field service management.