As we were wrapping up the reviewed financials for my General Contractor client, I asked the Controller, “what are some of the issues often overlooked by contractors as it relates to accounting?” And she was happy to oblige me with her top three issues for contractors to consider for better reporting:
- Accounting software: Research your accounting needs based on your size and specialty and pick the right fit for you. If you are a general contractor, chances are your reporting needs and cost codes differ from a subcontractor. It’s better to spend a little time upfront researching your options than having to deal with painful software do-overs later or implementing an expensive accounting software that has none of the functionalities you need.
- Project management software: Again, be smart about this decision and pick a PM software that talks to your accounting software and integrates well with it. You want your PM software to track labor hours, budgets, % complete and have the ability to run work in progress schedules and, hopefully, integrate all of this information into the accounting software to avoid duplication of data entry. Good PM software will help the field workforce track estimated costs and length of jobs more efficiently and provide accurate accounting progress reports for management.
- Take time to train and educate your project managers on accounting basics: Accounting is not just data entry; it covers: maintaining a proper backup and record of invoices, bidding and tracking revenue and income projections, and time cards can go a long way in keeping abreast of estimated costs. In addition, revenue and labor projections, when done correctly, can help the company hire more efficiently and staff projects more effectively. All in all, a win-win for the contractor!
Hopefully, some of these tips resonate with you. ASL’s Construction Group is at your service should you need help with implementing any of these tips.