Accounting forms the basis of all business. Knowing how to interpret financial data can calculate costs can be the difference between success and failure. Some industries, such as engineering, prefer specialized accounting systems in order to operate at optimal capacity.
Engineering accounting software automates basic financial practices such as analysis, cost management, and payroll balancing. In addition to these core functions, engineering firms have several unique accounting priorities compared to other industries:
By using accounting software with this type of functionality, engineers can better prepare their financials for upcoming projects. Along with engineers, these industry-specific accounting solutions can be used by contractors, subcontractors, and architects.
There are many benefits to using accounting software specifically for engineering firms:
Engineering projects can take months or even years to complete. Having an accurate timeline and budget is essential before any work can begin. In fact, an initial estimate may be required with the Request for Information (RFI). Project managers with accounting software can streamline the job costing and estimation process necessary for establishing a clear budget.
Project cost management (PCM) tools help estimate the initial costs of a project. For example, you can track past equipment usage to determine if there may be any repair or maintenance expenses during the project. Knowing these numbers in advance can greatly reduce unexpected expenses further down the line.
Having a budget in place can then determine the project timeline by showing what work you can afford at any given time. If your firm’s payment plan is based on percent-complete billing, setting this schedule can help the client prepare their payment far in advance to meet all deadlines.
Engineering firms need accounting software in order to calculate project costs far in advance. However, daily expenses and employee payroll can cause changes to those financial plans. Even with limited accounting experience, you can instantly review your company ledger at any time from any browser or mobile device.
Depending on the nature of your work, you’ll likely have to follow strict government regulations. Tracking adds to transparency when reporting on project compliance. Easy-to-share reports can be sent between different departments through the accounting software so everyone remains up-to-date on the latest financial information.
Finally, billing clients is one of the final steps for engineering firms wrapping up a project. Billing and invoicing tools from accounting software make it easy to generate custom expense reports for every project. And software can automate the billing process to get invoices out to clients on a set schedule. This is particularly useful for firms using percent-complete billing practices.
As described above, accurate employee timesheets are essential for tracking billable labor. If independent contractors, subcontractors, or freelancers are involved in a specific project, you can use accounting software to accurately calculate payment for their services.
Accounting software contains a lot of different modules and applications for services beyond basic financing. For other areas, these systems can integrate with several other types of software to fully streamline your back-office processes, such as:
Combining all of these systems with an accounting software will make running your engineering firm easier than ever before.
Accounting software can be deployed either on-premise at your business or through a Cloud-based platform. The deployment model you choose will depend on what works best for your company. Additionally, there are hybrid deployment models available which combine on-premise and web-based solutions.
On-premise solutions are known for their extra security, since they are controlled directly by your company. Enterprise-level firms all the way down to independent contractors may prefer to keep their financial data stored on-premises.
Cloud-based systems can be accessed from any mobile device with Internet access, making this beneficial for making real-time changes to product data. This is useful for engineering firms with multiple field offices. And these applications are remotely accessible on iOS and Android mobile devices.