How small is too small for construction software?
Our team gets asked this question often by both project and service construction companies. To best answer this question; it depends on your current and future requirements. Many professional accounting firms advise their clients to use Quickbooks, Sage 50 or Xero for their financial construction operations. They feel that these systems offer enough functionality to meet their client’s needs and the accountant knows how to use and support them. Sometimes the accounting firms are correct’ however, as a construction business grows, it often outgrows the limitations of generic small business accounting solutions.
Construction companies can use these basic systems, but they must maintain other software, databases and spreadsheets to handle their other requirements such as project management.
I will give you 5 main requirements that help determine if you are not too small for construction software:
1: Project Management – None of these small business accounting systems offer any real project management capabilities, but construction software does. Therefore, you must consider the value of having this functionality. How do you currently track change orders? How do you track daily field reports? How do you control and give access to drawing and related project documents? How do you compare your budgeted hours and dollars spent to your actual on a timely basis? We have many construction companies that find this functionality critical to their survival.
2: Project Costing – Small business accounting packages do have basic project costing functionality, but construction software goes much further. How do you currently track purchase orders to a project? How do you determine your actual, plus your (Purchase Order) committed costs at any time? How do you track labour, subcontractors and equipment costs to project accurately and timely? Construction software is developed to handle these additional project costing functions easily.
3: Budgets & Estimates – None of the small business accounting packages offer any real budgeting capabilities, but construction software does. How long does it take you to prepare a manual or excel budgets? How many times have you found errors in the calculation? How long does it take you to enter your budget into a project for reporting? How do you control and document RFI’s or RFP’s? Construction software has budgeting built into the functionality that allows for the costs codes and tasks to flow directly to project costing and project management.
4: Service Management – None of these small business accounting packages offer any real service management capabilities, but construction software does. How do you control and dispatch your service technicians and equipment? How do you prepare accurate and timely invoices to customers? How you track service history for customers by site and equipment? How do you collect time and work orders from the field? Construction software again has this functionality included. Instead of the manual work orders or the reentry of data from multiple systems, you only enter data once and it flows to the service workers for billing and to payroll.
5: Equipment Tracking – None of these small business accounting packages offer any equipment tracking capabilities, but construction software does. How do you monitor internal equipment revenue and related costs? How to you handle equipment maintenance and the related scheduling? How do you track equipment location? Construction software with its integrated functionality tracks equipment from the projects and work orders they are working on. No additional time or data entry is required.
To determine if your small business accounting package is enough for your operation simply review the functionality listed above.
If you have major issues with project management and maintaining control, construction software might be one of the best investments that you ever made. You could save your business thousands of dollars a year. If you have major issues manually maintaining control over service technicians and equipment, integrated construction software will help. Look at these 5 main requirements and try to determine what it is costing you right now because all construction companies need some of this functionality done somehow.
So, to answer your question of “how small is too small”, you must look at your operation and determine what would be the value of changing. Construction software is available which is inexpensive, easy to use and integrated.
Sage 100 contractor is one of these integrated solutions Click Here to learn more.