|
|
Job Costing: Do I really need construction accounting software?
|
In my line of work I speak with quite a few contractors who ask the question, "Do I really
need construction accounting software?" My response is always the same. I simply ask whether
they really want to keep track of their job costs! See, you can get by on Quickbooks or
Peachtree for a time. You will have the information necessary to file your taxes and send W-2's
to your employees. You might even figure out how to create jobs and assign cost to the jobs
as they progress; however, at the end of the day, you will have very limited information concerning
your job costs.
Now, a few years ago, this wasn't so much of an issue. Contractors had two year back logs and
jobs flowed like honey. I remember those days, it was a beautiful thing. Unfortunately, people got
greedy and our economy blew a gasket. Now, everyone has to put their salesman hat back on and
actually seek out jobs. Competition has increased, margins have decreased, and I think you know
where I'm going with this. Accurate and up-to-date job cost reporting is no longer a luxury; it
is absolutely instrumental for the success of today's construction companies.
I mentioned I've talked with a few contractors over the years, so I know what you're thinking. You're
thinking to yourself, "I know when I'm losing money on a job and I know when I'm making money on a
job." I don't doubt that, but what happens if I ask you to pinpoint specifically what phase of your job
is over budget? Is it labor, materials, subcontracts, maybe a combination? The bottom line is,
you don't know the answer to those questions if you're not using some form of construction
software.
Tracking costs is, obviously, the most important benefit you receive from job costing software; however,
there are so many other features you will find yourself taking advantage of. If you're a contractor, I
know you have worked on the jobs that require prevailing wages and certified payrolls. Depending on how it
went, it might have been the last job you pursued that required that! Likewise, I am sure your hair has turned white trying
to keep track of your subcontractor's (or vendors) insurance certificates. How about cost codes? I bet you
have a hard time fitting certain tasks into the general cost codes that Quickbooks has available to you. I
could go on and on. If you are a contractor and you want to compete in the tough construction market, go
do your research and find a job costing system that fits your needs. You won't be disappointed.
|
|
|