Selecting Construction Accounting Software Based Solely on Price

Many construction business owners approach new technology purchases with an overemphasis on price.

What’s more, their concept of ‘price’ is often only considering the construction accounting software price tag and ignores the necessary costs associated with it. These related costs may include:

• Time and effort to research products
• Time and effort to implement a product
• Additional hardware or software needed to support the product
• Training and education of users
• Ongoing technical support

Price-focused technology shoppers usually fall into one of two categories:

1. Price becomes the No. 1 criteria for the selection process. Contractors focus on what they can afford instead of what they need.
2. On the other end of the spectrum are those who believe that acquiring any technology is most important, no matter the price.

Neither of these extremes usually end with the desired results — the real magic happens somewhere in the middle.

Key Takeaways For Contractors:

• Contractors should look past the sticker price of construction accounting software and consider the value of having accurate job cost reporting and exact accounts payable and receivable tracking.
• Construction professionals should evaluate their specific business operation and cost accounting needs before selecting their construction software.
• Hidden costs from inefficient cost accounting systems can impact construction projects by not having real-time job cost data and data entry duplication.
• The right accounting software solutions provide real-time job costing that improves decision-making and operational efficiency.

Assess Your Construction Company’s Needs

While the costs of your next software solution matters, the most important thing is how it fits into your company’s needs.

When it comes to construction accounting software, there are a few basic features that contractors frequently find themselves needing. These include:

• Job cost reporting
• General ledger
• Accounts payable/receivable

It’s important to determine your needs before purchasing accounting software because it helps you choose the right option.

If you go into the process without knowing your needs, you could overspend on construction accounting software or purchase a product your operations will quickly outgrow.

Determine Your Accounting Software Budget

The right construction cost accounting software can give your company a competitive edge, but purchasing a product that doesn’t fit your operations can create administrative headaches for your accounting teams.

While reviewing the upfront cost of the software is important, it’s equally crucial to understand the impact of indirect costs caused by the wrong fit.

A few examples include:

• Indirect costs of not having real-time job cost data
• Indirect costs of having to create off-line reports on spreadsheets
• Indirect costs of duplicate data entry
• Frustration and time spent with inadequate customer support

In short, if more contractors took the time to assign dollar amounts to lost productivity and inefficiencies of operation, it might lead to a more realistic technology budget.

Buy for Fit

It’s important to understand that technology does not bring about organizational and procedure changes overnight. While accounting software offers powerful features, it really comes down to how it fits within your operations.

One way to ensure the job cost accounting software fits your company’s needs is to make a list of must-have features. A few examples include:

• Real-time job cost reporting
• Integration with your payroll service or software
• The ability to build your own custom financial reports
• Improving accounting processes

By creating this list, you can narrow down your list to the strongest construction accounting software options.

Compare Pricing and Schedule Accounting Software Demonstrations

Once you’ve determined a few construction accounting software options that could fit your operations, you should review pricing and see where they fall within your technology budget.

After determining a few strong options, there are a few steps you can take to help you find the right option:

1. Create a set of questions that address your needs
2. Schedule demonstrations with a few different software providers
3. Attend the demonstration, take notes and ask follow-up questions
4. Review each construction accounting software with other members of your team and create a pros and cons list for each
5. Make your decision on the software that best fits your operations and needs

Once you’ve completed these steps, you should have construction accounting software that helps your business grow and reach its long-term goals.

Get the Jobsite Information You Need With FOUNDATION®

Identifying your needs, budget and must-have features are the most important aspects when selecting the right construction accounting software for your business.

Taking the time to complete each of these steps ensures your company receives an accounting solution that scales as your operations continue to grow.

FOUNDATION — a leading construction accounting software — offers real-time job costing, custom financial reporting and integration with payroll services.

By investing in FOUNDATION, you receive a long-term accounting solution that gives you the information you need to make more data driven decisions to expand your operations.

For more information, speak with an expert today!