If project management is the heart of the construction firm, then financials is the oil that keeps operations running smoothly. That’s why even small financial software issues have far-reaching effects and can easily throw a wrench into job site productivity.
As CMiC client John Jacobs of J.E. Dunn so aptly put it: “Construction companies are really accounting companies that just happen to build buildings.” There are many important elements of construction management, but without strong financials, waste begins to pile up and decision-makers lose control over their projects.
So, what about your construction accounting software — is it holding you back? Here are some common issues that construction firms with sub-par accounting technology experience.
Lack of Trust
Project managers must be able to trust their financial software to make strong decisions in the field. They need to be sure that the data they’re using is up-to-date and correct. Unfortunately, older accounting systems can prevent this kind of clarity by making it difficult to access relevant information in real-time.
Similarly, financial management systems that are stand-alone complicate operations as you will need additional software for project management, enterprise planning, and enterprise content management. When data is stored in multiple locations, across different software applications, it’s easy for conflicting data to pop-up. To explain, here’s a common scenario:
A project manager enters timesheet information into his PM app. The timesheet information needs to get to payroll, so the information is printed out and entered manually into the payroll application. But, during the entry, there’s a small typo. When accounting accesses the payroll information to compare the project’s estimated costs with actual costs, the numbers are off. Everything looks fine to the project manager, but accounting sees a problem. Determining the source of the error and figuring out the correct payroll information is time-consuming and costly.
When your team has access to advanced financial software, they can rely on the data in front of them and use that data to make quick, confident decisions. With the best construction accounting software, you can easily manage invoices, workers and assets from custom dashboards — no second-guessing required.
Duplicate entry is all too common in the construction industry. Even with many so-called “integrated” solutions, complications can arise with each new tool your firm adds to its overall system. While individual apps can be useful for certain operations, they may create long-lasting inefficiencies — such as the need to manually copy over data from one database to another.
The most straightforward solution for reducing data entry is a unified solution. Unified software combines construction financials, project management and other enterprise tools into a single platform connected to one database.
Payment Delays & Maintenance Issues
Manually tracking payments and inventory can be incredibly time-consuming. Not to mention, there’s a huge margin for human error and lost data. When payment requests begin from outside the accounting system, PMs must collect, store and enter them into the accounting system. This lengthy process can cause serious accounting delays — and if your workers and vendors aren’t paid, you’ll have a hard time getting them to come through for you.
On the other hand, with financial automation software project managers can make sure their workers are paid on time so they’re ready to work their hardest. PMs will also know that they have all the equipment, tools and materials their teams need to get the job done.
Quick tip: Look for accounting software that can save predefined transactions and track invoices. This will make it easier to repeat complicated payments.
Lacking a strong, central database makes it difficult to share a clear overview of a project. And when the project status is up in the air, so are the client’s expectations. This is where construction estimating software is vital. A unified database creates a common understanding of the project stage and how well it’s aligned with the original estimate and timeline.
On top of avoiding these common challenges, advanced financial software tightens up management of assets and the ever-changing workforce. Take a good look at your financial tools and construction accounting software as they are today. Are these common challenges holding you back? Before you make any changes, find out the dangers of quick-fix solutions.