Accounting Software for Construction Companies – Find all you need to know before you buy the best accounting software for general Contractors business In Nigeria Kenya Ghana
While construction may not be a daily routine as we already know, it is one of the projects that require huge cash outlay and lots of on-site activities when awarded to a company and as such, there is the need to have a proper system of monitoring inflow and outflow of cash within the project execution period.
If you are a construction company manager, general or independent contractor or accountant looking for the best accounting software that will organise all your finance in one place and generate a financial report on all construction activities, this guide may help you understand your needs accurately.
Before you deploy accounting software for your construction company, here are key functional questions you should find answers to before you pick one.
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- Does the software create a room to name a specific project or job?
- Can the software help you track project income earned and expenses incurred to a specific project?
- The software should help you ascertain profit or loss on a project as the construction work progresses.
- Can the software track all the petty cash disbursement to a project supervisor on a site?
- Can the software track all expenses incurred by the supervisor on a site?
- Can the software track all materials purchased and consumed on-site with an accurate inventory balance.
- Can the software do a project comparison report – actual performance against budget cost?
- The software should help you monitor all clients details and account receivable balances.
- The software should help you monitor all clients’ progress payment while the project is on-going and at the end generate a client account statement.
- The software should track all sub-contractors balances and cash disbursement so far.
- Overall company’s financial statement and bank transaction reporting can’t be ruled out as this reflects the business position on a periodic basis
- The system should also manage your withholding tax receivables and payables account and VAT deductions.
- Can the system create room for multiple users to access the data file on a central network?
These are some of the issues you might want to find answers but guess what? We have small business software that had proven to be a success among real estate constructions company and independent contractors.
Using recent clients in a related sector, here are core customizations our team of consultants implemented:
Clients and Project Tracking
Good accounting software designed for construction should not only let you manage your client’s profile and receivable balances but also monitor the progress of the jobs awarded by these clients. This will help organize your receivables by projects so that clients that had awarded multiple projects to your company are able to see a break down of their obligations.
In QuickBooks, we use JOB to manage all the transactions that are tailored to existing and new projects and as you spend onsite, you can as well see the break down of your project expenses – from material supplies, site inspections, wages due to labourers, rent or hiring of construction equipment up to the interior decorations and designs, if applicable.
Customer Payments, WHT and Banking
As the job progresses, you may have an agreed payment plan with the clients that may depend on the certificate of completion or value delivered so far, QuickBooks lets you track all credit inflows into your bank account and account for VAT or withholding tax charges.
The tax withheld is treated as WHT receivables until the client shows proof that such deductions have been paid into relevant tax agencies account, then you can write it off to an expense account.
The banking sections provides a template for real-time analysis of your cash inflows and outflows while also giving you room to effect fund transfers between banks and reconcile any difference on a weekly or monthly basis. And if you require the multi-currency feature to manage your local and foreign currency denominated bank accounts, then you’d need to activate that feature without incurring additional cost.
Expenses and Inventories
I am sure you incur expenses on-site via the project supervisor but do you know that you can actually monitor the daily, weekly or monthly cash disbursement for petty expenses and request for a report of how they were utilized? That’s the magic of QuickBooks software!
We treat this type of expenses as a direct cost of construction as they help you determine the overall profit and loss position of all the construction projects.
Beyond that, you can also see detailed reports on how building materials were used and the on-hand quantity in store after the project is completed with inventory reporting.
For jobs that are outsourced to other vendors, the software gives room for vendors and payable balances – a report that tracks all the transactions between you and your sub-contractors who are construction material suppliers, surveyors, architect, or any other service providers.
Financial Reporting
The reporting side of your accounting software gives displays a full picture of how you are doing – from the P&L that tells whether you are generating more revenue than the expenses incurred on different projects or job to the Financial position that shows you the value of your business and Cash Flow that reveals the actual cash in your wallet and how they are utilized, this critical side of a construction company is all you need to make swift business decisions.
Platform
When it comes to deploying QuickBooks desktop for a construction contractor, you can either opt for the on-premise version where you have the software installed on your local system and network the users on LAN or a cloud server. The latter allows you to access your data remotely with no restrictions while the former is limited to the office environment.
Since construction is an on-site activity, you can deploy the desktop hosted on a cloud so that supervisors can update their record of daily, weekly and monthly expenses or get them to use an excel sheet, send it to the officer in charge for direct import, that’s if you want to save cost.
While these are the basic features accounting software customized for construction or general contractor business should deliver, you can also connect with us if you have specific challenges you’d like us to discuss and implement for you.
You can reach out to us at bigresourcessolutions@gmail.com, info@accountingsoftware.com.ng or call 08105090001