The Best Accounting Software Platforms for Growing Contractors
By Tim Kennedy
As a part of the accounting team of a small construction company, you likely use QuickBooks as your accounting software. It’s affordable, intuitive and user-friendly.If your needs are still simple — you’re in the growth stage and generating a few million dollars in annual revenue — QuickBooks provides a reliable platform to manage your accounting needs.
QuickBooks is at its best, handling simple cash inflows and outflows (rent, utilities, insurance, vehicles, paying vendors, tracking receivables) and begins to become outdated when you need to handle complex transactions, a large volume of contract activity and/or heavy balance sheet activity. The reason that I see most of my clients switching away from QuickBooks relates to lackluster job cost reporting and its inability to actively manage the contract schedule and growing backlog. As your firm grows, a platform such as QuickBooks may no longer meet your needs.
Below, I have outlined leading accounting software platforms strictly for the construction industry that we find are most useful to our clients.
Sage 300 Construction and Real Estate
Formerly known as Sage Timberline, this is the software most familiar to many of my contractor clients. The informal consensus is that it provides excellent job costing and functionality, good usability and multi-user capabilities for large businesses. However, running standard out-of-the-box reports can be difficult and cumbersome, or the report you are looking for might not exist. Often, a Timberline consultant from Sage will need to come out to build custom reports in the system, which comes with a price tag for the consultant’s time. Timberline has a reputation for good customer support, an advantage, since your team will most likely require additional training in order to get the most out of this platform.
Viewpoint Construction Software
This software system is the “new kid on the block” and is making an appearance at a lot of trade shows. Viewpoint bought Maxwell Systems in 2014 and the platform excels at keeping an eye on users’ bottom lines, with proprietary tools for assessing profitability both before and during jobs. Viewpoint also looks to have improved report writing tools. The key is that you want the software to be easy to use but still be able to maintain good internal controls over your data. When good controls get in the way of ease of use it can be frustrating for the user. An example of this is not being able to move forward to 2016 accounting until the 2015 accounting is fully closed.
Sage 100 Contractor
Formerly known as Sage Master Builder, Sage 100 Contractor bills itself as being designed to meet the needs of smaller and mid-sized contractors. Winning features include a customizable dashboard, centralized project workspace, email alerts and readily available project profitability and status reports. Various “modules” are offered besides the standard general ledger modules. Inventory, service billing and estimating add-ons are some of the add ons which might appeal to my clients.
One of our clients who works in Sage 100 pointed out its easability and key features:“Its number one strength is that it is flexible. It can do as little or as much as you want depending on your level of interest in the detail of the output. It has worked well in it’s ability to provide relevant real time cost tracking data, while not strangling me on the input side”. The client also mentioned that, similar to Timberline, the out-of-the-box reports were not adequate and he needed to spend $6,000-$10,000 on custom job cost reports and union benefit remittance forms.
If you’ve outgrown QuickBooks and are looking for a more robust platform, I advise visiting accounting system websites, watching product demos and taking advantage of free trial offers where available. This is a decision you’ll have to live with for quite some time. Most software requires a sizable initial capital investment, so find a software solution that will grow with your company and pay for itself in enhanced productivity and error reduction.
Tim Kennedy, CPA is a manager at Wiss & Company LLP with a focus on auditing and accounting services for privately held businesses in the construction sector. Reach Tim at firstname.lastname@example.org or 973.994.9400.