Construction Accounting Software

Construction accounting software provides a foundation for entering transactional information and reporting it through financial statements and specialized reports specific to the construction industry. The very first element in construction accounting is to prepare an estimate for a job by cost types and track this through the life of the job by comparing actual costs to date against the budgeted amount. Job cost accounting tracks costs from all vendors and contractors, or company employees, for materials, labor, indirect costs (overhead), fringe benefits and other costs which is then allocated to jobs by cost type. This covers the cost side of construction. Applications such as accounts payable, payroll, inventory and purchase orders are used to enter this information and feed the “job cost ledger” with the cost side of the business. Accounts receivable handles the revenue side of the business and is used to record such things progress billings, professional service billing and any other revenue accruals.

The information from these applications, known as subledgers, is passed to the general ledger where it aggregates the data for assets liabilities, expenses and revenues and prints financial statements and various audit reports according to GAAP, Generally Accepted Accounting Principles.

Construction Management Software

Construction management involves using the “hard” information from financial reports and specialized job cost reports to run the company. A true construction software solution will handle such items as commitment accounting when purchased orders are issued in order to track the total amount of expenses which are committed, or accrued to the job even though materials or labor have not yet received or used. Reports that are used to help “manage” construction included cost to complete, cash flow of cash received vs. cash expended on a job to date and various project management reports that may, for example, update accounting data with change orders approved by project managers in the field which can affect the cost, revenues and expected profit on a job.

The goal of construction management is to run the business more effectively by collecting data sooner, and make it accessible in order to project costs vs. expenses by job as soon as possible. To accomplish this can involve the technology used to collect the data, the level of detail reported, the accuracy of the data, how soon the data is passed from its original collection point in the system and posted to the various ledgers and how often reports are printed and reviewed. There are also executive “dash boards” which will show certain information on a real time basis without having to even run a report.

Of course for all this to be accomplished properly requires well trained and motivated employees who have a vested interest in the make the system work to its potential.

CTS features expert reviews and ratings for construction management software including job costing, project management, purchase orders, inventory, and more.

We will help your business:

• Learn about leading construction accounting software
• Get the most from software demos and discussions with vendors
• Make a smart software selection decision

For comparisons of different construction software products, download the free Construction Software Selection Kit.

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