There’s a new revenue standard in town. Taking effect is Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, which introduces the new “five-step model.” See what that means for you.
With the challenge of keeping job costs and financial analysis precise through narrow profit margins, it’s no wonder that numerous contractors turn to outside help to manage it. But who are these "CPA" people, and what do they have to do with you?
While construction accounting and bookkeeping draws on many basic accounting principles, it has several important and distinct features. Dive in with an overview of the fundamental differences and examples, along with bonus learning resources.
Many contractors have enjoyed American Contractor as industry-leading software and would love to continue using for years into the future. Today, one option is to convert their data over to FOUNDATION construction accounting software. So just what would that look like?
Check out these contractor-favorite books that can help you avoid those common construction management pitfalls. Regardless of if you’re an industry newbie or veteran, construction management is hard. Learn from the best!
In construction, we sometimes throw around a lot of words, acronyms and alphabet soup. Find out what we've been talking about the whole time as you jump around on our Definitive Construction Accounting Glossary, and zoom in on related articles to learn even more.
You may have heard of work-in-progress reports or been asked to help provide information for them. So what's the big deal with WIP, and why does the field need to get involved?
Plus, see a sample WIP report!
Construction is one of the top industries for startups. It also has one of the highest rates of failure. See how researching your market, drafting a plan and getting help can ensure you have a strong foundation to grow your business on.
Construction software reviews are easy to find but not always easy to use. Follow these tips when you're trying to find the best software for your construction company to ensure that the reviews you use are trustworthy.
In today’s competitive environment, it takes a great deal of project management finesse and scheduling magic to deliver projects on time and within budget. The main challenge lies in the allocation of a company’s resources, which are finite and constrained by time and cost.
QuickBooks® is among the best accounting systems for smaller companies, and for contractors just starting out, it’s a great place to begin toward an organized accounting system. While it isn’t designed for construction, it’s made to work for a wide range of businesses.
How do you allocate construction overhead? There are numerous methods contractors can choose from. Learn about using the rate of direct job costs, weighted proportions and more in an easy, high-level overview.
Software companies sell software, so vendors will always be happy to sell their application to whoever raises their hand. Well, almost always. The truth is, not everyone needs new construction accounting software, and we think that’s important for contractors to know, because the software you don’t need isn’t going to help you be successful.
The easiest part of baking is picking out the shape of cookie you want to eat. The easiest part of hiring is writing a job description. The only problem is the taste doesn’t come from the cookie-cutter.
While mobile and cloud technologies are moving swiftly onto jobsites and offices across the construction trades, financial software has been slow to be adopted into the constellation of Internet-based business tools.
Doing business teaches us a lot of things, but not all of them are true, and some can actually hold us back if we don’t know what else is possible. When it comes to construction accounting software, not knowing what else is out there can set false limitations on your business. Myths don’t always make the world magical. In fact, sometimes they make our world... Read More
General-purpose accounting software is often the best way for small contractors to start out their businesses, but once you outgrow your software, it shouldn’t hold back your growth. How do you know it’s time to graduate into construction-specific accounting software? Greek mythology tells of a hostel keeper named Procrustes, who had only one bed, one size. If the guest was too tall, or too short,... Read More
Ask most contractors, and you’ll find that job costing is among their top business concerns. That’s not surprising, considering successful job costing can mean the difference between a profitable business and one that struggles to stay alive. It’s not enough to know only whether your business is profitable overall, just as it’s not enough to know your boat is above water; small leaks over time... Read More
These days, contractors must do everything they can to control their job costs. Controlling material and subcontractor expenses is especially critical because mismanagement can jeopardize both cash flow and profits. To avoid these risks, many companies use purchase order and subcontract management systems. The big hitters take it a step further. They rely on construction-specific accounting systems to help streamline the processes and improve their... Read More
It’s no secret that payroll costs represent the single largest operating expense for most contractors. What’s surprising, though, is that so many contractors struggle to manage their payroll—and their job costs—when construction-specific software technology can make easy work of this increasingly complex process. Whether a construction business is considering new construction accounting software or simply evaluating its current accounting system, contractors should consider 10 major... Read More
When was the last time you took a dictionary off the shelf to look up the meaning of a word? What about checking movie times in a newspaper? It’s probably been a while. And chances are you no longer use that set of encyclopedias gathering dust in the basement when helping your children write a research paper. This is of course because everything is on... Read More
According to the United States Census Bureau, there are over two-and-a-half million firms involved in the construction industry in the U.S. That’s a lot of competition. The good news is, just like you, they started their business and grew it from the ground up. They made mistakes, learned from them, and gradually improved not only the work they do but also how they do it.... Read More
Running a construction business without a solid job costing plan is like walking blindfolded around the Grand Canyon—one misstep could spell disaster. Job costing allows contractors to truly see how they’re doing on projects, both individually and overall. This insight doesn’t appear magically; it requires hard work and commitment. Contractors with an effective plan in place can gain a significant advantage over their competitors. Step... Read More
Mobile devices have become a major player in the construction industry, enabling contractors to use powerful construction applications on their smartphones and tablets to work effectively in the field. A wide variety of applications are available to the construction industry, spanning multiple aspects of the job, including remote time-card entry, equipment management, materials usage, completed quantities, project management, GPS tracking, service dispatch and more. But... Read More
In a perfect world, contractors could select just one construction software product, from one vendor, to run all aspects of their business: estimating, accounting, project management, scheduling and so on. In reality, many all-in-one enterprise software systems available today can be too expensive, complex or functionally deficient to be of any real value to contractors. Contractors continue to debate the merits of vertical, best-of-breed construction... Read More
We have all learned at one point or another that too much of a good thing can be bad thing. The examples abound: birthday cake, direct sunlight, spreadsheets. For many small contractors, spreadsheets are the first and ultimate technological solution needed to get their companies up and running quickly. Certainly, they can be used to create and track job estimates, billings, payroll, job costs, financial... Read More
Construction equipment represents one of the largest investments a contractor can make. As necessary assets that support construction operations, these specialized machines and vehicles can also help fuel a company’s success. But before that can happen, contractors must know their actual equipment costs in order to bid competitively and win work, and they must track equipment usage to keep their jobs on track. Surprisingly, however,... Read More
The right software fit means a program that meets accounting and bookkeeping needs and helps run the business Zeroing in on the appropriate accounting software for construction clients can be a daunting task, even for the most seasoned CPA professional. Recommending a solution that will meet the contractor’s accounting and bookkeeping needs is just one part of the equation. The real challenge lies in finding... Read More
Not long ago, being on the “cloud” couldn’t have less to do with being productive. In fact, a lot of managers have probably had to tell their staff to get their heads out of the clouds. Today, it’s generating a huge buzz in the technology world and the business world with it, but for some contractors, the image of their accounting and payroll data floating... Read More
As any contractor who has tried running payroll through general-purpose accounting software or payroll service knows, construction payroll is different from any other industry. From working in multiple states and localities, on multiple jobs with multiple pay rates, to preparing and submitting compliance reports, maintaining an accurate payroll can be frustrating and discouraging. Many contractors can feel overwhelmed by all of the complexities under today’s... Read More
Learn more about our payroll service: Payroll4Construction.com Payroll Services Just for Construction Really DO Exist! There is no denying that processing payroll in the construction industry can be difficult. With such complexities as multiple states and localities, prevailing wage work, and construction reporting, outsourcing payroll can seem like a nightmare. While all payroll services can handle basic payroll processing tasks like checks/direct deposit, tax filing,... Read More
Ask any contractor what has the greatest impact on a job’s bottom line, and chances are the answer will be the same: labor productivity. Compared to other construction cost items such as materials and equipment, no other job cost comes close to providing such a variable for rewards and risks. As a result, contractors need to see labor production reports to answer specific job questions... Read More
You might know that it’s time to find new software for your company, but that doesn’t mean you know what direction to head in. The lists of possible features can be long and frankly intimidating. Friends and colleagues might all have their own recommendations about different packages they’ve used or heard about. To keep this important task manageable, consider these ten practical tips. 1. Do... Read More
To win jobs and work as efficiently and profitably as possible, construction executives need detailed, reliable data about their businesses, and they need instant access to financial statements. When used correctly, new construction-specific accounting software applications help turn information from accounting and operations departments into concise representations of data that aid decision-making immeasurably. The real challenge comes when trying to implement a new software purchase... Read More
Learn more about our payroll service: Payroll4Construction.com Getting Construction Reporting from a Payroll Service When it comes to the construction payroll, reporting is essential. Whether it’s job labor costing; working prevailing wage jobs and submitting required certified payroll reports; handling complex union reporting; tracking workers’ compensation; or any other number of reporting needs, reporting remains a critical aspect to running a successful construction business. Many... Read More
If you have ever worked on a project for or funded by the federal government, chances are you’ve had to work within the constraints of the Davis-Bacon Act, often referred to as “prevailing wage.” Simply put, federal prevailing-wage laws require contractors working on federal jobs to pay their employees a wage equivalent to that paid by other union and non-union shops in the area. In... Read More
The purchase of new software often brings with it a range of emotions. Excitement about great new features. Promise that the software will increase efficiency, saving time and money. And, relief that a final consensus has been reached. So, with all of the excitement, promise, and hope pinned on the new product, why is it that software implementations are more likely to be unsuccessful than... Read More
Technology Makes Simple Work of This All-Important Task Overhead allocation is one of the most misunderstood concepts contractors face in running their business. But it is also an essential task—worthy of a great deal of attention— because it is central to determining a company’s profitability. On the surface, overhead allocation seems simple. In addition to direct costs for materials, labor, subcontractors and equipment, companies must... Read More
Don’t Get Overwhelmed by Overhead Allocation There are so many ways technology can help maximize profitability. Overhead allocation is one of the most misunderstood and challenging concepts that contractors face when running their businesses, but it’s an essential task in determining a company’s profitability. On the surface, overhead allocation seems simple. In addition to direct costs for materials, labor, burden, subcontractors and equipment, companies must... Read More
Heavy equipment purchases are on the rise. Following a lackluster economy during the past few years, many U.S. construction companies are investing again in new and used construction equipment. According to the 2005 Construction Industry Forecast’s survey of more than 900 U.S. construction executives, contractors planning equipment purchases this year expected to spend nearly double what they budgeted in 2004. Construction equipment represents the largest... Read More
A Proactive Plan to Simplify Affirmative Action Reporting For the government-employed contractor or subcontractor, minority compliance reporting is a regular part of doing business. Sometimes difficult and often changing, this reporting requirement calls for businesses to stay current with affirmative-action regulations, as well as to maintain accurate and up-to-date employee information. Failing to do so can mean the loss of federal contracts or, worse, litigation... Read More
With history as a guide, it’s likely the construction industry will continue to experience peaks and valleys during economic cycles. And, if the past really does help to predict the future, business failures will surely increase as markets decline. How is it that some companies survive — and thrive — in less-than-perfect economic conditions? Like the ship’s captain who can weather a bad storm, successful... Read More
Setting realistic expectations can make your project smooth and trouble-free After six months of intense arguing, pleading and cajoling with your boss, that new software package you’ve been after for your department is now yours. Couldn’t live without it, you stated. Will increase productivity tenfold, you declared. Need it if we want to grow, you lamented. Thrilled by your win, you engage in an exaggerated... Read More
It stores your all-important data, but what else should you know about this system that lurks in the shadows? As the chief information officer for Lighthouse Electric, Inc., in Canonsburg, PA, Ron Felix had a problem. His accounting and job costing software worked just fine for day-to-day data entry and even produced a fair amount of standard reports. But as the business grew, the tool... Read More
Some positions in baseball (think pitcher) get all the glory, while other players (think catcher) are vital to the game yet remain somewhat invisible. And so it is with construction accounting software features. Some are just not as glamorous as others. A detailed audit trail, for example, may not excite contractors like some cool bell-and-whistle features. On the other hand, the audit trail could quite... Read More
The dot-com mania of the late 1990s taught us all a lot of hard-earned lessons regarding technology. Chief among them is that a company motivated strictly by the fear of being left behind usually will be left behind. When technological change presents itself, the company that reacts thoughtfully and creatively will have a much greater advantage over the company that frantically reacts or quickly buys... Read More
Many people believe, as the saying goes, that “you can never please all of the people all of the time.” True as that statement might be, successful construction business owners never stop trying. When it comes to a contractor’s accounting system, the goal should be to find a system that will help the entire company, not just the accounting office. Many of today’s construction-specific accounting... Read More
Implementing a new technology initiative is never easy. It takes a lot of planning and decision-making and, above all, cooperation. Despite a new product’s potential for boosting productivity and efficiency, it is often the end users of the system who pose the largest threat to its success. Six months to a year after introducing a new technology, companies often find that many employees (if not... Read More
If only construction accounting and financial management could be as easy to understand as baseball. But surprisingly, it is. America’s favorite pastime is basically a game of numbers, where keeping count and tracking statistics are the cornerstones of a team’s winning strategy. In construction, the winners are those who know their numbers and use them for better decision making. And just how do successful contractors... Read More
Construction accounting processes and procedures can vary greatly from one contractor to the next. But one common frustration shared by many construction businesses is the tedious work of manually preparing over/under billing reports, also known as work in progress and percent complete. For companies using generic and small-business accounting software, the over/under billing report is often the least favorite of all accounting tasks. What is... Read More
Even if a contractor has a strong backlog of work, failure to monitor current cash flow and track financial data will be problematic. It’s easy for contractors to focus the majority of their attention on running the jobs in the field, but they must remember that it’s cash that’s making those jobs possible. Monitoring cash flow is one of the most critical components of owning... Read More
In addition to reviewing standard financials and cash flow statements each month, the most successful contractors also regularly examine Over/Under Billing reports. These billing reports are necessary for proper revenue recognition, plus they help contractors to stay on top of billings and secure required project bonding. Running frequent Over/Under Billing reports helps contractors see where each of their jobs stands. This provides a more accurate... Read More
When the game is on the line, not many coaches would send an inexperienced rookie to the plate. Similarly, project owners today are managing their risks by requiring that contractors obtain bonding. As it turns out, bonding can be good for contractors, too. Not only does a surety bond confirm the contractor’s financial credibility, it may also provide construction owners with a competitive edge when... Read More
Cash is one of the most critical components of a construction company’s success and stability. In addition to developing cash flow forecasting at the planning stage of every contract, contractors need a system at the corporate level to monitor cash flow in a proactive and timely manner. This system, known as cash flow reporting, provides the data necessary for analysis and decision-making. Construction business owners... Read More
America’s #1 construction accounting software now offers remote timecard and field log entry for mobile devices! To keep your field connected with your construction accounting and project management software, keep FOUNDATION mobile® in your pocket. Smartphones, laptops and tablets can log in securely from anywhere to record critical job data as it happens — even out of Internet and service range — then send it back... Read More
Where Can A Contractor Looking To Outsource Payroll Find An Effective Solution? Mike Ode: The most important thing a contractor needs to know when looking to outsource its payroll is that there are options beyond the well-known providers. Many contractors turn to services that cover multiple industries and only scratch the surface when it comes to the complexities of construction payroll. As a result, contractors... Read More
Reap the Benefits Using Construction–Specific Accounting Software Client satisfaction. Employee loyalty. A company’s reputation. Some things are difficult – if not impossible – to measure. But in the world of construction, productivity is not one of them. Hard as it may seem, many contractors are successfully tracking and measuring the outputs that define their production rates.And the reasons are clear. Only detailed production reporting provides... Read More
Q: I’m having a hard time getting prior years’ data out of my accounting system, especially when the data crosses over a fiscal year-end boundary. The Department of Labor’s Office of Workers’ Compensation Programs (OWCP) came in recently for an audit and requested information from July 1, 2006 through June 30, 2007. It took us nearly an entire day to manually summarize the information from a compilation... Read More