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, 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. To help you find the best solution, we’ve conducted research and put together a collection of our best picks for construction accounting software.
Vista by Viewpoint is a fully integrated construction ERP 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 its own, and add on additional features such as project management and estimating (if needed).
Vista by Viewpoint Video Overview
Why We Like It: 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, Vista by Viewpoint 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.
Sage 100 Contractor Video Overview
Why We Like It: Many users of Peachtree or Sage 50c have switched to Sage 100 Contractor due to its 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.
Premier Construction Software (formerly 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.
Premier Construction Software Video Overview
Why We Like It: Job costing capabilities in Premier Construction Software 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 Premier Construction Software will overall increase customer service and billing cycle times through the use of real-time data.
Want more options? Check out our full list of best construction management software.
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 Video Overview
Why We Like It: 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 Square or PayPal. The paid version of ZipBooks adds-on recurring invoicing, time tracking, multiple bank account connections, and up to 5 users.
Procore is a complete online construction management software designed to combine project scheduling and job logging with accounting financials–leaving your business with nothing left to be desired. Unlike a normal accounting system that was built for the back office, Procore Financials was created with project managers in mind–allowing them to make changes in real-time.
Procore Video Overview
Why We Like It: The solution works on any mobile device, which is great for the project managers in the field who need to manage a change order or issue a purchase order. Project executives back at the office can create financial forecasts with the data the managers in the field provide. Project managers can look at where they are at in terms of project costs without having to wait until they get back to the office or even run month-end reports.
Procore can also integrate with a number of other accounting platforms, including QuickBooks Pro/Premier, Sage 100 Contractor, Sage 300 CRE, and Viewpoint (Spectrum/Vista). To manage the large userbase of most enterprises, Procore includes unlimited users for all plans–meaning the price is determined per company depending on the products needed and amount of construction you do.
Buildertrend’s financial tools features help you manage the lifecycle of your project finances–organized in one location. This includes capabilities such as purchase orders, change orders, time clock, online payments, lien waivers, and integrations with outside tools.
Buildertrend Video Overview
Why We Like It: Buildertrend allows you to generate line-item invoices from your estimate, change order, or customer selection sheet. You can also create, compare, and send bids and notify subcontractors via email or text. Accepted bids are rolled into contracts. Invoices can be paid online via check or credit card–allowing you to be paid faster.
To better control project financials, Buildertrend allows you to manage labor costs, billing, POs, and everything else that may be included within a project budget. Purchase orders that need to be created in the field can be signed off by subcontractors before being sent to management for approval.
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). If you use software to streamline your revenue reports, as well as invoicing and payroll processes, you can stay on top of your company’s finances.
Construction accounting tools can also be found in a fully-integrated construction management software. Whatever solution your business desires, unique functionality offered by construction accounting software modules include:
Construction accounting is more complex than general accounting when it comes to sales, cost of goods sold, expenses, and your breakeven. Real estate and construction companies usually have a variety of projects underway at any given time. This leads to a variety of direct and indirect job costs, leading to extremely complex expenses that can be difficult to calculate if you rely on manual data entry and endless spreadsheets. Industry-specific software can provide the tools you need to automate the process.
When shopping for construction accounting software, your business should focus on the features which make these industry-specific solutions unique. Some of these key features include:
|Job Costing||Assign costs to labor, equipment, materials, and subcontractors associated with each construction project.|
|General Ledger (GL)||Tracks all bookkeeping 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. Maintain 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 financial 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 timecards, 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. Filling out spreadsheets can take hours away from your other business tasks. Alternatively, construction businesses that use the wrong construction accounting software may struggle with integration issues or waste time on repetitive data entry tasks.
Whatever your day-to-day pain points may be, you’ll want to explore these benefits of construction accounting software to find out if an upgrade is for you:
Job cost software facilitates the assignment of costs to individual cost categories to enable improved cost control and job profitability. In construction accounting, job costing supplements the company’s general ledger. Tracking labor, equipment, material, and subcontractor costs is useful to both project managers (to ensure projects stay below budget) and financial managers (who attend to the big picture of the company’s financial health).
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 software developed with the construction industry in mind will be able to handle both small and large jobs for your construction business.
How many construction companies need job costing? In our Construction Technology Trends report, we found that job costing was the 2nd most desired feature in construction software, with 72% of buyers saying it was necessary to be included in their ideal solution.
Detailed records of your company’s project costs offer valuable insight into increasing revenue. By understanding your costs associated with completing each project, such as job costs and overhead, you’ll be able to better determine what needs to be done to become profitable. Quality construction accounting software will be able to monitor every piece of income or expense accumulated during a construction project.
A good project management solution will also lead to improved profitability. This is because project costs are always tied into what is deemed as a successful project–keep costs down and finish the project under budget and within a specified amount of time. Make sure you track all costs and bill for them appropriately.
Better record keeping via time tracking, material costs, change orders, and subcontractor contracts can also lead to a better ROI. With better insight into this 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 in real-time before it affects profits or incurs a loss.
Construction accounting software can provide financial reporting that gives you better insight into your operations. These accurate reports can help facilitate better managerial decision-making and let you monitor the performance of your business continuously. Given the importance of job costs within construction, it is important to have the accounts and job cost ledger set up professionally. Cost allocations will become easier and more accurate–meaning job cost reports will be more accurate and useful for your business.
Since cost overruns do happen in the construction industry, a work in progress reports (WIP) is another report that only a construction-focused solution is going to provide. This report tracks past work against a profit analysis schedule (useful for large or bid spread jobs), provides real-time insight into estimated earnings vs. current billings, and/or conducts a deep dive on all jobs in progress to determine which are the most profitable.
Other reporting options within construction accounting software include consolidated financial statements, budget vs actual price margins on jobs, cash and working capital status, and profitability by customer.
Wondering why you need an industry-specific solution when there are plenty of generic accounting alternatives? Here are some frequently asked questions about construction accounting (with answers!):
What is the difference between generic accounting software and construction accounting software?
With general accounting software, the functionality is built around a general ledger and allows you to track your income and assets, expenses and liabilities, and more within an accounts payable or accounts receivable module. This software was usually developed to be used by multiple industry types, and therefore doesn’t offer tips, tricks, or features unique to any one industry. The most common example of general accounting software is a product like QuickBooks Online.
A construction accounting software will have the same features of a general accounting software but also include modules specific to the needs of construction professionals. This includes project accounting, which focuses on the financial transactions related to managing a specific project rather than the company as a whole. Project accounting will track costs, progress billing, and revenue.
Whether or not your company can get by using a general accounting software will depend on the size and scope of your operations and the projects you’re working on. Larger companies will more often than not find comfort in the use of something built for their industries, while a small business may be able to pick freely depending on their budget.
What is the difference between construction management software and construction accounting software?
A construction management software will have more of a focus on non-accounting features such as estimating, scheduling, and project management. 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 integrate with a secondary solution for accounting.
A construction accounting solution will focus more on reporting, financial statements, and job costing. This can sometimes be defined as any 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.
A large percentage of construction software options will include accounting as either a core or optional feature. Likewise, a solution may be marketed as construction accounting software but will include non-accounting features such as estimating, scheduling, and project management.
Depending on the size of your business or the types of projects being handled, you may look towards more advanced solutions.
Job costing will be the most important feature to help you manage your basic construction accounting. Most entry-level accounting solutions should offer some sort of costing functionality. A small contractor may be able to survive using industry-neutral software such as QuickBooks or Xero, but may find themselves limited. It’s important to weigh the benefits of cost-savings in software to not having the ability to categorize costs and analyze what jobs are profitable.
Growing construction businesses should desire a more in-depth estimating tool and some level of bid management. They will also need to have an industry-specific tool and won’t be able to survive using manual methods or a generic option like QuickBooks or Peachtree. These specialized options will also have vendors who specialize in implementing their software into construction environments.
Larger construction enterprises may specialize in a specific field and need specialized software to meet their needs (such as a large commercial real-estate developer, or a civil contractor). They may also have multiple entities with a need for many end-users. These enterprise-level organizations should look into a fully-integrated construction ERP solution that provides every accounting and management tool necessary to run their day-to-day operations.
Construction accounting software pricing depends on several factors, such as the size of your business, how many total users you have, and what modules you want included. Subscription costs for cloud-based platforms average between $10 and $400 per month. Some plans charge per user, starting at $50 per month and going up to $200.
Free construction accounting software is available, though is usually only offered as part of a trial or demo. Truly free options may be limited to small businesses with limited users and functionality.
QuickBooks can be used as a construction accounting software given the availability of invoicing, job costing, and reporting features. You can monitor spending 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 timecards to produce 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.
Pricing for QuickBooks Online Plus will start at $35 per 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 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. All of which are covered by industry-specific construction accounting software.