A great writer once said, “Beginnings are always messy,” and this is often true in the construction industry. Some of our most trying events happen at the beginning of a new project, which can make the whole project messy from day one. However, with the proper plan, potential pitfalls can usually be avoided.
The same can be said for implementing new construction accounting software. Contractors often hesitate investing in a more efficient system – not because of the cost, but because of the anticipated pain associated with a conversion.
However, many of the errors can be avoided when you apply what you know about running a successful and profitable construction project to converting to a new accounting system. Here are some of the most common errors and how to avoid them:
Error #1: Beginning Without a Plan
Approach this conversion the same way you would approach a construction job – with a solid plan – and tap into the resources of your software provider to develop a logical implementation strategy. They’ve helped hundreds of other clients before you, so allow them to be your trusted partner throughout this process.
Error #2: Not Defining Success
Success is more than simply having the system up and running. Look deeper. What procedures aren’t working with your current accounting software and how can those be improved? Is there too much time wasted in duplicate efforts? Do you want work-in-progress (WIP) reports at the ready? Identify those tangible measurements of success at the onset of this conversion.
Error #3: No Project Manager Assigned
You wouldn’t begin a new job without a project manager (PM) so don’t start a software transition without one. Dedicate a person from your firm as the PM and request a point-person from the accounting software provider, too. Ultimately, those two will be the ones to champion this changeover from start to finish.
Error #4: Doing It the Way It’s Always Been Done
The reason for converting to new accounting software is to increase productivity and profitability, so it is important to review old procedures and make adjustments. Spend the time up front to establish a more standardized and logical coding structure for your jobs, chart of accounts, customers and so forth. Setting up a master job cost code structure, for instance, will allow you to compare data across jobs.
Error #5: Migrating Outdated Information
Before migrating your existing data to the new system, review all your records. Eliminate duplicate vendors, evaluate outstanding items, and archive old employee information. Once your data is clean, develop a procedure for how and when to approach this moving forward – so you avoid this scenario in the future.
Error #6: Not Approaching The Transition in Phases
Converting to a new construction accounting system should be approached in phases, just as you would a job. Map out each phase and timeframe. Using this tactic will keep your staff from feeling overwhelmed as you move forward because you are giving them time to learn the basics before adding more complex functionality.
Error #7: Overlooking Ongoing Training
Your staff will get the best understanding of how to use the new accounting software from experience, and there will probably be some frustration along the way. Don’t stop after the initial training. Instead, allocate funds for ongoing training – say every three months – for that initial year. Not only will this trouble-shoot any issues, but as your team’s familiarity of the system increases, ongoing training will increase their knowledge base and overall efficiency. Over time, this will enable them to utilize the software to its maximum ability.
The beginning of anything new is always a bit messy, but change is necessary for growth. When you set expectations early on and approach implementation with a solid strategy, you’ll avoid common errors, decrease frustration and be on the path to greater profitability and efficiency for your business.
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