What is Job Costing for Contractors and Construction Companies?

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The success or failure of any construction job is based on profit.

Profit margins are razor-thin in construction. Job costing helps you project job expenses to identify problems before they impact profit. Can work be completed with the money and budget available? What are the risk factors on the job? What do you need to do to be successful?

Job costing is the key to managing a construction budget and identifying if a job will be profitable. It simplifies the complexity of managing a contracting job. It gives you the power to focus on the work with the highest reward.

Job Costing and Construction Accounting

Precision and accuracy are required in construction.

You need to build with the right materials. You need to accurately follow blueprints. You need precision with every cut and measurement.

Job costing brings accuracy and precision to your construction accounting.

With job costing, you can accurately predict, record, and control the cost of each job. Your materials, labor, subcontractors, and equipment expenses are tracked and monitored during the job. You can see where the money is going as work is completed. You can more accurately predict future costs and build a precise record of expenses.

That record is data you can use. It’s the data you need to manage, and grow, the business.

The Benefits of Job Costing

Accurate job costing gives contractors the ability to grow the business. Here’s how it works:

  • Estimate jobs accurately and quickly: Without job costing, estimates are a best guess. With other bidders competing for the same work, many contractors end up underbidding. Without quick and easy access to historical records, mistakes are made that end up hurting the job and business. Job costing puts the data at your fingertips, so you can estimate jobs accurately and quickly.
  • Manage profit for every job: Job costing gives you control of the money you make for every job. You see how much a job is costing. There’s no more stress, worry, or guesswork in managing a job, because expenses are broken down accurately. You can see how you need to manage work to maximize profit.
  • Work better with customers and vendors: Over estimating and under estimating can lead to project delays, lost profit, and broken budgets. This causes stress between you, your customers, and vendors. Job costing eliminates that stress. You can better collaborate and deliver more value to customers. That means future work and business for your company.

Job Costing and your Growing Business

For many contractors and construction companies ready to take control of their business, job costing through construction accounting software is the key. It’s the tool that helps them leverage their ambition with the practical needs of the business.

To make money in construction, you need to stay on top of cost and expenses. That’s what job costing will do for you. You can accurately run labor analysis and measure productivity. It lets you select the most profitable jobs and find profit even when problems happen. It gives you the power to take control of your business.

For companies ready to stop losing money or breaking even with every project, job costing gives them control. It replaces guesswork with accuracy and precision for every job.

Have questions? Contact us at info@computerease.com.

Real-Time Labor Costs Improve Your Bottom Line

Real Time ReportingAny contractor knows that successful project management hinges on labor. That’s not to say that smart material purchases and inventory control don’t also play a role in job profitability. However, unproductive labor will always kill profit, which is why knowing your real-time labor costs can improve your bottom line.

Traditionally, labor costs have been notoriously difficult to track because of the time lapse between what was happening in the field versus what your office records reflected. It wasn’t that long ago when, if a project manager wanted to know the job progress, he had to look at the last payroll processed – which could be a week old or more. While this was good information for the time, it certainly wasn’t accurate.

Thankfully, technology has revolutionized how contractors manage labor – and the overall job. Today, project managers can get real-time labor costs that tie into their construction accounting software, like ComputerEase.

In the construction industry – where customer expectations are high, profit margins are slim and the pace is faster than ever – you need labor costs on a daily basis to make informed decisions. Today, you don’t have to wait until the paperwork is turned in; you have technology to help you.

Field-to-OfficeTimesheets, daily logs, change orders and job costs can all be captured from the field so you know what’s happening at all times. Mobile devices with internet access can transmit data from the field directly to your accounting system in the home office, eliminating the double-entry problem.

When a real-time field-to-office solution is set up, you can manage a job from anywhere. Imagine a workplace where your crew is out in the field during the day, and by night you know who worked on what job, what tasks they performed and even what equipment was used. It really is that simple when you have the right system in place.

Learn more about our real-time solution, FieldEase.

Three Factors That Can Determine Whether Your Equipment is Helping You Profit

Equipment Should ContributeDo you question whether the equipment in your construction fleet is profitable or if you should be renting equipment as needed instead? Do you have a piece of equipment that often sits idle for months and don’t know whether to sell it or hold onto it – just in case?

You aren’t alone. Many contractors ask the same questions. To find the answer for your construction company, you need to know the three factors that determine profitability of construction equipment.

 

1. Equipment Costs

Two categories make up your equipment costs – cost to own and cost to operate. Cost to own is composed of fixed costs – whether you operate the equipment or it sits idle in your warehouse. These expenses are insurance and depreciation.

Cost to operate are variable costs associated with actual operation, such as maintenance, repairs and fuel.

 

2. Equipment Revenue

Revenue from your equipment is generated when you charge an internal rental rate to your jobs. To establish this rate, you need to know the costs to own and operate the equipment (as mentioned above) and the going rate within current market conditions.

Setting an internal equipment rental rate is similar to bidding a construction job. For example, if your costs indicate that your backhoe rental rate is $200 per day, you don’t want to set a higher internal rental rate just to show a profit on the backhoe.

Conversely, if your equipment costs exceed the going market rate, you’ll need to figure out why and decide if continuing to own the equipment is good for your bottom line.

 

3. Equipment Utilization

Equipment Not in UseAnother factor in determining your equipment profitability is how often you use the equipment. To evaluate this properly, have a clear understanding of both annual usage and lifetime usage for each piece of equipment. For example, say you’ve determined that your backhoe needs to be in use 50 hours annually to break even. In the first year, it is used 120 hours, which makes it profitable. In the second year, it is only used 20 hours. Does that mean it’s not worth holding onto it? Maybe, but you need to look deeper than that.

When you only analyze one year at a time, your conclusion will keep changing. But when you look at the equipment over many years, the law of averages provides a more realistic picture. Historical data is vital to making important decisions regarding the profitability of your fleet.

 

Now that you know the determining factors, let’s look at three options for tracking equipment usage and gauging profitability.

A spreadsheet is one way to track your equipment usage. Many CFMs are experts in designing complex formulas to compute data and to help them analyze the results. While using a spreadsheet isn’t a bad option, it does require you to manually input data, and there are man-hours associated with keeping the spreadsheet up to date. Often, construction firms do this on a weekly or even monthly basis, which means real-time data are never available.

Another option for tracking your equipment is using your accounting program’s job cost functionality. Every accounting program on the market has a different level of complexity, so the process of setting it up to track and manage your equipment can vary (detailed set-up instructions can be found here). While this option does allow you to collect equipment utilization data in a central location, manual input is still necessary.

Paper ClutterThe best option is to use equipment management software that is a component of your construction accounting program. With this approach, you have a variety of built-in tools for managing all aspects of your equipment as soon as a piece of equipment is set up within the system. These tools include preventative maintenance alerts and work orders for maintenance and repairs.

An integrated equipment module also automates a number of tasks to greatly reduce the number of man-hours and human-error factor. Tasks such as assigning equipment to jobs and generating recurrent billings can all be automated. Not only does this improve efficiency, but it also give you a more accurate snapshot of your job costs to-date.

Once you begin to track equipment costs in this fashion, you can easily identify which pieces of your fleet are profitable and which ones aren’t. Discover how the ComputerEase Equipment Management module can provide you with the historical data you need to make your construction equipment profitable.

Common Errors in Converting to New Construction Accounting Software

Napkin Floor PlanA 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

Make a PlanApproach 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

TrainingYour 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.

To learn more about ComputerEase construction accounting software, take a tour to see our full-range of capabilities.

6 Ways Construction Jobs Lose Money to Unproductive Labor

Kenwood Town CenterTo appreciate how construction firms can make a greater profit on projects, you first need to recognize that one of the most common way to lose money is with unproductive labor. Downtime, overtime and reworking a project will kill profits – and oftentimes, morale.

However, when management and the field work together to reduce costs, you can beat the labor budget and complete the project on time or ahead of schedule. Not only does this make the project more profitable, it also makes everyone proud to be a part of such a successful project.

Here are the six most common ways construction projects get hit by unproductive labor:

1. Sloppy documentation – If a job isn’t well documented and organized, things get missed. Schedules get jammed, materials and equipment aren’t delivered when they are needed, and crews are standing around. All of this results in lost production, unproductive labor – and lost profits.

2. No job schedule – Job schedules change, but you still need a plan to manage the job. The easiest way to lose money on a job is to fly by the seat of your pants and be in reaction mode. Map out the job from start to finish, and then fine-tune the plan in small increments (about once every 2 weeks). This strategy is fluid enough to adjust, yet solid enough to keep the project on schedule.

Construction Site in the Snow3. Weather – You can’t control Mother Nature, but you should be documenting weather-related issues and delays in your daily log. You also need to communicate these hold-ups with others who need to know so the schedule is adjusted accordingly.

4. Miscommunication – In the construction industry, it is important to have good external communications with architects, owners, general contractors and subs, but good communication skills always start internally. If your staff isn’t communicating with each other, mistakes happen. Everyone should understand the common goal of making the projects as profitable as possible and appreciate how their role benefits the overall health of the company.

5. Inaccurate job cost history – A crucial element of developing a solid estimate is knowing production rates and the cost of labor. How much is your fully-burdened labor rate? How many feet of pipe can you run per hour? Don’t guess. You should have access to past history from your job costing report. When you don’t use historical data to estimate, the bid you won can quickly turn into a company loss.

6. Resources not available – The quickest route to unproductive labor is to have guys standing around because equipment or materials aren’t available. To make sure you have the right resources at the job when they’re needed, you need to manage the project with organizational skills, good communication and an accurate job schedule.

So how do construction jobs make money?

By addressing all these common mistakes – which all revolve around having an accurate job costing report. When you have an accurate picture of the job, you know:

  • Work in progress and where your resources are being used compared to where you allocated them.
  • Project costs to calculate if your project is on target with the estimate.
  • Labor analysis to determine if your labor hours are on target with the estimate.
  • Unit productivity so you can see if you are completing the work at the pace you estimated.

When you have solid construction accounting software in place, the ways in which construction jobs lose money become more visible – which means you can adjust and fix any issues quicker. You are more organized, which makes you better equipped to schedule jobs. This leads to better communication and more productive labor. The only thing that job costing still can’t control is the weather.

Find more job costing tips in our webinar, “How to Optimize Your Profits through Job Costing.”

Is your CPA doing everything they can for you? 7 Questions to Ask

HelpThe construction industry is a difficult one – full of strategic planning, tight deadlines, demanding customers and lean margins. In some projects, just 2-3 percent can be the difference between profit and loss.

However, construction companies that navigate this industry expertly have learned to surround themselves with others who understand the business – especially their CPA firm. You look for subcontractors who have experience in a particular type of work; your CPA firm shouldn’t be any different. Don’t settle for just any old number-cruncher. To be on target in this business, you need a CPA that understands construction.

Certainly, no matter what business you are in, your relationship with your CPA firm should be active year-round, not just during tax season. But there are other factors that are unique to the construction industry that can help make you more efficient and more profitable.

How do you determine whether or not your CPA firm is meeting all of your needs? Here are 7 questions to ask:

  1. Does your CPA simply prepare your information? Your CPA firm should be doing much more than the bare minimum quarterly tax paperwork. They should be analyzing the data and providing you with information that your team can use to make educated decisions moving forward.
  2. Does your CPA add value to your internal accounting department? Your accounting department is your eyes and ears on your jobs and the overall financial well-being of your company. Those job costing numbers need to be accurate, which is something that our construction accounting software specializes in. Your CPA firm should be willing to share valuable insight with your accounting staff to help them see the bigger picture. This, too, will go a long way to providing you with the information you need to make higher-level decisions with confidence.
  3. acctdeskcomputerDoes your CPA firm conduct or have access to benchmarking? Here in the Cincinnati area, the CPA firm VonLehman conducts an annual construction survey, analyzes the data and then shares the information with others. This report helps construction firms benchmark how they are doing in comparison to the rest of the regional construction industry. If you are located in a large metro area like Cincinnati and your CPA firm specializes in assisting construction clients, they probably have access to information to help you benchmark where you stand.
  4. Does your CPA have a proactive approach to bonding? As a construction firm, you need specific information to present to your surety company to secure the bonding capacity you need. Your CPA can proactively help you through this process by reworking your financial statements and restructuring your debt to give the surety the specific information they need. Being proactive allows you the opportunity to bid on a large project when the right one comes along.
  5. Has your CPA firm talked to you about your succession plan? Developing a succession plan is a long process, and your CPA should be helping you through it. Furthermore, a succession plan is more than your legacy. The surety and financial lenders will want to know your succession plan, too. This gives them the assurance that if anything happens to you, your company’s projects will be completed.
  6. Does your CPA help you understand your financial statements? When you work with the right CPA firm, not only will the numbers be accurate, but you will understand where they come from. Intelligent overviews of your financial statements are crucial when meeting with surety or banking representatives.
  7. Does your CPA understand work-in-progress reports? Job costing isn’t an after-the-fact item; it is an ongoing task. When you review your work-in-progress report on a monthly basis, you see what happened in the last 30 days and can make any needed adjustments immediately. The right CPA firm will also hone in on over- and under-billings and work with you to get the project back on track.

The right CPA firm will proactively analyze pertinent information and provide you with the data you need to make business decisions with confidence. Any CPA can crunch numbers, but wouldn’t you prefer a firm that can be an active participant in your business? To discover more ways your CPA firm can be helping you, view our “What Your CPA Should be Doing for You” webinar.

If you want your CPA firm to work with ComputerEase to provide the best possible accounting services to your company – or if you are a CPA with the same goal in mind – find out how our CPA Partnership Program can help!

 

Prevent Major Construction Losses with a Solid Job Costing Structure

Have a PlanIn the construction industry, cash flow is essential to staying viable in a competitive market. Even some of the most profitable construction firms have gone out of business because of poor cash flow management.

Perhaps the reason cash flow is so difficult in construction is that by the time a job is awarded, significant resources have already been invested into it – from the time spent on the lengthy bidding process, to manpower on the job site, to purchasing materials and renting equipment. Often, these expense are incurred months before ever seeing a payment.

How well your company is doing financially may not be an accurate reflection of what money you have in your bank account. You may be over-billed on a project, so it is important to understand how to manage the project properly – so you have money to pay expenses when the time comes.

Contractors with the best understanding of cost and schedule will be the most successful. Having an accurate picture of your labor and material costs allows you to bid competitively and stay profitable.

Successful contractors manage their cash flow on a daily basis. They have a system in place that allows them to access job information in an organized fashion. They have access to accurate work-in-progress and percent-complete reports. They know, with confidence, where each job stands.

That success begins with a solid job costing structure.

Job costing can manage jobs more thoroughly.
As the CEO, you may know the overall financial health of your construction company, but you also want to make sure that each job is holding its own to support the cash flow of the business. Jobs should be broken down into activities (labor, materials, subs) and/or phases so that you can compare real costs against the budget. A solid job costing structure allows you to manage each job more thoroughly because you are able to see where gains (and losses) are happening and plan accordingly.

Job costing allows you to spot potential issues early on.
Spot Issues EarlyIt is important to know where each job stands, and to do this we need to have accurate “Work in Progress” and “Percent Complete” reports. If you’ve only done 25 percent of the work but you have spent half the budget, you need a red flag alert that will make you aware of the problem. Jobs go off-course for a variety of reasons, but diagnosing and correcting them early minimizes the loss and goes a long way toward making the job as profitable as possible.

Job costing generates accurate estimates.
One of the easiest ways a construction firm can lose money is through the estimating process. When you start with a poor estimate, you are immediately beginning a project with a deficit, and you might spend the entire job trying to dig your way out of it. You can generate accurate estimates by using historical data for calculating labor rates.

Imagine your estimator is bidding a job using $45 per hour as your fully-burdened labor rate, but historically over the last 12 months, that rate has actually been $46 per hour. With a solid job costing system in place, this information is available to help you create solid estimates.

Job costing creates better work schedules.
Unproductive labor is one of the top reasons jobs lose money, and inaccurate job schedules can cause work stoppages. As a project manager, you want to allocate your labor properly so you can meet or conserve your labor budget. Say you were planning to have five workers on the job site for the next five weeks, but then you realize that you are ahead of schedule and only need four. Job costing allows you to see whether you are ahead of or behind schedule and plan your labor intelligently.

Job costing gives you the “fade and gain” comparison.
Every job has a natural flow to it. A job that is a little bit behind in the beginning can catch up midway, but contractors need to know where they stand at all times. When a solid job cost structure is implemented, you can see the flow come into focus and be better equipped to track the “fade and gain.”

In construction, managing cash flow begins with a solid job cost structure that can detect and help prevent huge cash flow mishaps. Get more job costing tips by viewing our webinar, “How to Optimize Your Profits through Job Costing.”

Why You’re Running Out of Time to Save Big on Taxes through New Software

Uncle SamSection 179 Deductions and Bonus Depreciation have been used extensively in the construction industry. Both grant your company big savings on taxes as a result of any major equipment purchases you’ve made in the tax year. Accounting and project management software is included in the equipment that qualifies, and it’s been one of the most popular routes that contractors have taken to seize this opportunity.

That opportunity, however, may be coming to an end. With tax law changes looming, this may be your last year to take advantage of historically high savings under Section 179 and Bonus Depreciation laws. That means that if you’ve been putting off purchasing new equipment or upgrading your software system, you’ll want to stop putting it off now! Starting January 1st, some of the major tax advantages of implementing those changes may disappear entirely.

If you want to learn more about Section 179 and Bonus Depreciation, or if you want more tips on what you should be doing to prepare for Year End, you may want to check out our recent construction accounting webinar on the topic, featuring Steve Hausfield, CPA who specializes in construction accounting.

7 Tips for Successful Software Implementation

Many contractors delay purchasing new construction accounting software because of the resulting growing pains, but successful software implementation is similar to a successful project: thoughtful planning coupled with skilled execution results in greater profitability for your company. Since you already know how to build profitable projects, applying basic construction logic to your software implementation lessens the pain so you can move forward with anticipation instead of dread. Keeping the construction process in mind, here are seven tips for a successful software implementation.

1. Define Success Up Front

The project estimate defines success by establishing a budget with an anticipated profit margin before the job contract is even won. Although defining success as it relates to your software implementation isn’t so straightforward, it’s still important to establish guidelines for measuring success. If you don’t define the meaning of success, how will you know if you’ve achieved it?

The easiest way to define a successful software implementation is to identify existing procedures that aren’t working and outline how you will improve them. For example, if you have a labor-intense, spreadsheet-based work-in-progress (WIP) reporting system, one of your definitions of success could be to replace it with an automated process that eliminates duplicate effort and takes only a few seconds to complete. In this case, success is easily measurable.

Invoice approval is another example. If you’re replacing manual invoice routing with an electronic invoice approval system, success might be defined as achieving approval 50 percent faster while eliminating lost or misplaced invoices. This same concept can be applied to all of your procedures, whether they are related to jobs, employees or equipment.

2. Spend Time Up Front Planning Your Coding Structure

Pre-planning is an important part of both a construction project and a software conversion. A new software implementation is the perfect time to establish a more logical and standardized coding structure for your jobs, general ledger, vendors and customers, especially if you are migrating from a legacy system with limited flexibility or a generic accounting program that offers little to no structure.

A standardized coding structure allows you to gain greater business insight through your software’s reporting system. For example, with a departmentalized general ledger structure, you can quickly access specific information on a single department, such as your service department. Standardized codes also let you compare data across all jobs, because account #100 will always signify the same thing, regardless of the project.

3. Clean Up Your Data

You wouldn’t start a new project with old information, so why would you start using new accounting software with old data? Before migrating existing data to your new system, take some time to clean it up by eliminating duplicate vendors, purging old information, evaluating outstanding payables and receivables and getting accurate inventory counts.

This step helps you start with a fresh and timely dataset in your new system. If you have receivables that are outstanding by 120 days or more, ask yourself why they’re present and what you can do to collect the money? If you have outstanding credits with little-used vendors, consider requesting refunds instead of carrying those credits forward. Perhaps it’s time to archive data for employees that haven’t worked for the company in years. For current employees, this allows you to identify whether you have current W-4 forms on file and if any critical licenses or certifications have expired.

4. Create a Schedule with Milestones

Treat your software implementation like a construction project by creating a schedule with specific milestones. Assign a project manager on your end and ask for a designated PM on your software vendor’s side.

To achieve software implementation success, you’re going to need some accountability for the things that must be done. Make the two PMs ultimately responsible for driving the project toward completion on time and within budget.

Let your company’s size and the complexity of your software system dictate the schedule, but try to set a firm go-live date. Like many construction projects, unforeseeable delays happen during software conversions. It’s okay to make adjustments to your schedule. But be aware that, if you keep pushing your deadline further into the future, you risk losing momentum and creating costly delays.

5. Implement Your New Software in Phases

Every construction project is completed in phases. Why should your software implementation be any different?

A phased implementation eases the adoption of new software by allowing your staff to become comfortable with the basics before you add more complex functionality.

Phase 1 builds the foundation. Implement basic functionality that replaces and improves upon the procedures you were doing before. The focus during Phase 1 should be on core accounting, including job cost and payroll.

Phase 2 adds the framework. Implement functionality that your company wasn’t utilizing before, but is vital for improving operations. Processes like inventory management, purchasing, equipment management and custom reporting fall into Phase 2.

Phase 3 adds custom finishes. This is your technology “wish list” that will revolutionize your operations. Electronic document management, remote timesheet entry and a field service system fit into this phase.

6. Establish New and Improved Procedures

Just like you implement new procedures for improving things like job site safety, you should use your software implementation as a way to establish new procedures that improve accounting processes.

Better processes make your accounting staff more efficient and keep important details from slipping through the cracks. Some examples include creating collection policies for past due invoices, scheduling payables to take advantage of vendor discounts and using triggers or alerts for insurance expiration dates or to flag missing employee information.

7. Set a Profitable Training Mindset

It takes time and money for an apprentice to become a journeyman. Likewise, it takes time and money to become proficient in your new software. Instead of viewing training as an expense, look at it as an investment and budget accordingly.

If you neglect training, your new software becomes a disposable tool. With proper training, however, your software becomes an investment that delivers a positive return over time. Achieving a successful accounting software implementation can take up to two full years. The first year is spent rolling out the system and the second year is spent fine-tuning your processes. It’s generally a good idea to allocate a portion of your budget for training at three, six, nine and 12-month intervals. Free resources offered by your vendor can help as well, including newsletters, e-mail updates, a knowledge base, online help, Webinars and conferences.

Mandating Change from the Top Down

Change is vital, but for most people, change isn’t easy. Because of this, the motivation to implement new software needs to come from the top of your organization. Set the expectation that your new tool will not only make your company more profitable, but will also increase efficiency and make your employees’ jobs easier. By being one part dictator and one part motivator – and by following the seven tips outlined above – your software implementation will be a successful endeavor that delivers a high ROI.

How to Evaluate Field-to-Office Software

Field-to-Office Communication

More and more contractors are recognizing the need for a fully integrated business management suite that allows for strong collaboration with owners, subs, suppliers, and field personnel. Without a constant link between your job sites and your office, data can get delayed or even lost in the shuffle. With that in mind, project management and accounting software companies are focusing heavily on providing cloud solutions for contractors. But with so many options, how do you determine what solution is best for your company? There are many factors to consider, but one feature is becoming increasingly important.

So far, most remote applications have relied on the “push-pull” method of synchronizing data. For example, a project manager will enter a change order in the field and the data will be sent back to the home office, where it needs to be manually entered or imported into the accounting system. This method has certainly been more convenient than a lengthy phone call or a trip back to the office, but new technology is beginning to make it obsolete. The future of field-to-office communication is real-time, live interaction.

This is one of the key factors you should look for. Your software provider should have plans to implement this technology in the near future if they haven’t already. If not, you may be using a package that has no motivation to improve in the future. If you want to stay competitive, your goal should be to find software that will evolve based on your needs. Be sure to ask your software provider about real-time collaboration.