Best Construction Accounting Software

Of course, the value of the software will largely depend on the size of the business and how much it grows over time. Something like QuickBooks might be the most affordable option, but it won’t include all the accounting features needed for the construction industry. Acumatica Construction Edition is a scalable option for both small contractors and larger construction companies. We picked it for features like multi-company and multicurrency support and intercompany accounting, making it versatile for a wide range of business sizes and types. We also like that Acumatica integrates easily with other systems like Procore, ProEst, and eSignature apps like DocuSign.

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• QuickBooks Desktop Enterprise is a good compromise between hefty software plans like Jonas Premier and generic cloud-based accounting software like FreshBooks or Xero.
• As your business expands, managing multiple projects, invoices, payroll, and tax filings can become overwhelming.
• This ensures precise tracking of profitability and prevents budget overruns.
• With construction bookkeeping services, business owners gain a clearer view of the financial health of their business.

Construction companies can use one of the following methods to recognize project revenues. With a financial management platform like Fincent backing up their every move like a trusted sidekick, there’s nothing they can’t do and do right. We know, we know, there’s quite a lot to digest with construction bookkeeping, but you might want to stick around. Dave Nevogt is an American entrepreneur and the co-founder of Hubstaff, a workforce management software company.

Are You Managing Construction Bookkeeping and Accounting Effectively for Your Construction Business and Contractors?

This enables precise job costing and better project profitability analysis. Create a chart of accounts that reflects the specific needs of your construction business. This should include categories for materials, labor, subcontractors, equipment, overhead, and revenue from each project. At Appletree Business Services, our accountants and CPAs have years of experience helping construction businesses reach their full potential through accurate bookkeeping and payroll services. We’re ready to help your firm with the services you’re too busy to take care of yourself, but still need to get done. Things like deciphering income-to-expense ratios, managing your financial records, generating easy-to-understand reports, filing tax payments, and more.

How Can Construction Business Owners Make Informed Financial Decisions?

So, the bookkeeping system must be flexible yet organized enough to track cash flow when needed. Most industries are product or service-based, but project-based industries are both. This includes sourcing materials, labor, consulting, engineering, and AI in Accounting more. This means tracking business expenses in each category to clear a reasonable profit margin. Send subcontractors a request right in QuickBooks to add their W-9 and tax ID info. Our accounting software also helps map contractor payments to the correct boxes on 1099 forms.

• This automation sets up jobs, contracts, and subcontracts in their respective modules without re-entering data.
• Factors like the price of equipment, labour and materials can change quickly.
• Premier Construction Software makes these reporting processes easier through automated data collection and analysis.
• Keep accurate records of all incoming and outgoing payments, including client invoices and vendor bills.

Can QuickBooks Be Used for Construction Accounting?

As an evolving industry, construction accounting can be a sweeping task – covering everything from routine bookkeeping for construction companies repairs, single-house renovations to new and large developments. It is influenced by global economic events, trends in property investment and new government initiatives like a drive to build more affordable housing. As an industry in constant flux, construction accounting can be complicated. Job costing and budget tracking for each project, helping you manage expenses and identify cost overruns. Estimating and bid tracking tools to help with accurate pricing and bid management. Document management to organize contracts, change orders, and project documentation in one place.

Job costing is the practice in construction accounting of tracking a cost category (like indirect costs and direct costs) to specific projects and production activities. Construction accounting systems must integrate both job costing and accounting general ledger functions seamlessly. However, some bookkeeping software is more construction-specific than others.

Labor costs are usually the biggest expense category, so you need to watch hours and productivity closely. Good job costing practices include fully-burdened labor costs, such as employer-paid benefits, workers’ compensation, and payroll taxes. Premier Construction Software makes cost tracking easier with automated features that sort costs immediately.

• Efficient management of accounts payable helps maintain positive relationships with vendors and suppliers.
• Construction bookkeeping considers all the variables specific to the construction industry, so bookkeeping and financials are accurate.
• Construction companies should use a percentage-of-completion method that recognizes both revenue and expenses as they are accumulated over time.
• This means that you recognize income in the accounting period when it’s collected, and not at the time of sale.
• If your construction business follows generally accepted accounting principles, you should use the percentage of completion method for financial statements as well.
• Regardless of the option you choose for your bookkeeping needs, it is useful to understand the process involved in construction bookkeeping.

• Jonas Premier can help you tackle all three of those tasks—and many more—but construction accounting isn’t a one-size-fits-all situation.
• Construction accounting is a specialized type of accounting tailored to the unique needs of construction projects.
• Under regular business accounting circumstances, revenue recognition is simple because they sell a product or service and collect a fixed price right away.
• The result helps the business understand whether its operations are primarily funded by debt or equity.

The software makes invoice routing easy and conveniently reconciles things with the GL when paid. RedTeam is a company built out of a commercial construction firm, so it understands the needs of a construction company intimately. This is one reason it has received several industry awards, including Software Advice’s 2021 Front Runner award and making Capterra’s Shortlist. Sandra Habiger is a Chartered Professional Accountant with a Bachelor’s unearned revenue Degree in Business Administration from the University of Washington.