General Ledger Software for Construction Accounting Reviews and Ratings
The General ledger module is the financial reporting backbone of the construction software package and prepares and prints the balance sheet, income statement and cash flow reports according to GAAP (generally accepted accounting principles). Data is fed to the General Ledger from the sub ledgers to keep track of all expenses, accounts receivable, accounts payable and various assets. It maintains all key financial information including budgets information and transaction history. One may think of the General Ledger as company wide financial reporting vs. the job cost ledger which is project specific. The total of all the job cost ledger postings should balance to all the costs in the general ledger to maintain accounting integrity.
Thus, it is important that the general ledger has accessible and flexible databases to maintain all of this information. Good general ledger modules work with Report Writing modules to produce traditional financial statements and allow for custom reports as needed. Modern systems support drilldowns which allows you to click on an account in the General Ledger which shows all detail postings from sub ledgers and then “drill” back to the sub ledger to see the original entry and an associated document (such as a PO or vendor invoice).
Contractors who keep multiple entity sets of books often need the ability to perform intercompany transactions where you can affect two separate entities with a single transaction. An example might be recording the receipt of inventory for one entity while simultaneously creating an accounts payable entry to a second entity who will be using it for their work. Creating a consolidated financial statement with intercompany elimination entries would be another example of more robust requirements for general ledger.
Contractors who do divisional accounting and want to attribute revenues and expenses for a single job across those divisions will also need a more robust general ledger capability. This “project accounting” will require a modern robust database capability not available in older products.
The ability to both export and import data from other programs is important when interfacing with third party systems for estimating, document management, scheduling or for corporate wide reporting.
Date sensitive posting
Finally, a well designed system should not allow the general ledger to ever be out of balance with the job cost subledger totals. This means that a job identifier must be entered with every transaction, unless you specifically identify it as a non-job related item, otherwise the system will not allow the entry. A monthly reconciliation report proofing the General Ledger cost code balances against the job ledgers would be a useful audit trail in case any questionable entries must be traced back.
For comparisons of different construction software products, download the free Construction Software Selection Kit.
Review by Sheldon Needle | Construction Software
Construction Software Selection Kit
Free 15-minute call to discuss options with software expert Sheldon Needle
Talk to the Expert