The best accounting software for a construction contractor would need to have the following features:
Job Costing - This is what makes construction accounting special. It's an accounting method that tracks income & expenses for individual jobs, keeping them separate on the books. This makes it possible to run a number of helpful reports, like profitability by job-type. It gives you highly detailed information about expenses, like what materials are costing you the most. You can get a more in-depth explanation of job costing here.
Usability - The number one thing most companies are after is ease of use. If you have the most capable application on the planet, it's still useless if you don't know how to run it. If you can get a free trial or a product demo, it will serve you well.
Integration - Sometimes it's best to find a few different software solutions, rather than one giant app. You may prefer to use a third-party payroll app, for example. In these cases, it's critical that your accounting software will interface with those other apps. Being able to import data easily will save you time and make your accounting reports more thorough.
One essential integration is with your estimating software. If you can import a bid into your accounting software, you can use that as your project budget. That's really handy, because it saves you the time of setting up a budget manually.
Change Orders - Change happens, and it's important that your software can account for it. Many managers report that change orders are one of the more time consuming things they deal with. Having an automated process can make your life easier.
Time Tracking - Labor can vary greatly from one project to the next. It's important to keep good tabs on labor hours in order to keep your payroll accurate. It's also important because the more accurate that information is, the better you can estimate future job bids.
There are a number of time tracking apps built specifically for construction. They usually allow employees to clock in and out from their phones, which is a nice cost savings. This saves you the trouble of having to purchase a physical punch-in device for each job site.
Time tracking apps are also a great way to keep accountability among workers. Most tracking systems will send GPS data during clock ins and clock outs. Now managers can ensure their employees are in fact on the job site when they start the clock.
Payroll is integrated into many accounting systems, but if you want a full-featured time tracker, you may want to opt for a standalone program. Just make sure your accounting software allows you to import time sheets and you're all set.
Subcontractor Management - If you commonly use subcontractors, you definitely want subcontractor management as a part of your accounting. Adding a subcontractor to a job adds more necessary record keeping. Having your books in order will make this much less of a burden.
By tracking your subcontractor labor and expenses you get an accurate idea of who you can rely on for future jobs. If a subcontractor is consistently slowing down a job, or is requiring a lot of repeat work, that will show up in your books. Consequently, the better your subcontractor tracking is, the better subcontractors you'll have.
The best construction accounting software will also keep track of how much you owe to subcontractors and when you need to pay them. This will help you avoid getting behind or causing a dispute.
Inventory Tracking - Construction involves a lot of materials. It's vital to have a good tracking system so you know what's on hand and what needs to be purchased before your next job.
Inventory management also covers equipment, like generators and trucks. You can keep tabs on equipment location so you can move it around most efficiently. This is critical for companies with big equipment, like an excavator, because moving heavy equipment costs both time and money.
A good inventory module will allow you to update quantities so you can get real-time reports. These reports can also tell you how quickly you use your materials, giving you a good idea of how often you need to repurchase.
Project Management - With so many parties involved in large-scale construction, project management can be an invaluable tool. It helps manage important documents like RFIs and submittals. It can also make plans and documents available on the cloud for easy access on mobile and desktop.
Reporting - There's no point keeping records if you can't view those records in a nice formatted report. There's so much information to juggle, like subcontractor invoices, inventory, materials, and profitability. It's nice to have it organized well.
Good reporting is essential for good decision making. Having access to real-time data in an easy to use format can keep everyone informed.
Custom reporting is important to managers because everyone has their own preferred way of doing business. Being able to format the data in various ways gives you the flexibility to emphasize what's important at that moment. Maybe you need to highlight some expenses that are over budget. You may need to show revenue growth for certain job types. Custom reporting gives you much-needed flexibility.
A couple more things to consider: Is it easy to email pdf reports? If not, can you send a link for those reports to be viewed online?
Scalability - If you're a small contractor, you should consider whether or not your software can sustain your company's growth. Ideally, you will be expanding your projects as your company becomes better established. Can you software keep pace? Is it built for small businesses only?
Our top choice is A-Systems JobView. It's an easy choice, because we've been developing it for 46 years. Of course it has all the basics covered, like general ledger, accounts payable, accounts receivable, and payroll. But it also adds countless time-saving features that add to the convenience and usability of the program. It's a well-rounded software that was developed with feedback from many construction companies. If you're after a new construction accounting solution, you ought to give it a try.