The 14 Best Construction Accounting Software for Subcontractors

Break silos and improve cash flow with tools that keep everyone on the same page. We looked at third-party ratings and reviews to see how actual users felt about the software. The average threshold rating needed to be 3.5 stars or better to get the highest rating in our research. We turned to popular sites, including Trustpilot, G2 and Capterra, for these customer responses.

• And check out tools like Siteline that centralize all your billing data and give you quick, organized access to your A/R.
• In this article, I’ll break down the essentials of bookkeeping for subcontractors.
• The platform manages the request through the documentation provided by vendors.
• This approach uses a fixed price per unit provided (i.e., any predetermined measurement, such as a foot of installed guardrail or a square foot of dirt that is moved).
• In the highly competitive world of the construction industry, maintaining a solid financial footing is crucial for your company’s success.

What’s Different About Construction Accounting

• At NorthStar Bookkeeping, we help construction firms develop clear accounting processes that fit the industry’s demands.
• Even though external parties typically conduct audits, staff members play a big role in how smoothly the process goes.
• A fully integrated tech stack will save you time, reduce errors, and increase profitability.
• However, the nature of construction companies makes how these businesses recognize revenue more complicated.
• For those working to create healthier financial outlooks, it’s beneficial to conduct internal audits more proactively.
• Leveraging tools like QuickBooks and FreshBooks can streamline income and expense tracking.
• For instance, the cost of a piece of machinery used across multiple projects should be distributed based on usage.

Tracking income and expenses involves recording every financial transaction accurately. Tools like QuickBooks and FreshBooks help categorize expenses, generate invoices, and produce reports. Consistent tracking ensures all revenue and costs are accounted for, aiding in tax preparation and financial analysis. CMiC is a construction ERP purpose-built to meet the needs of subcontractors.

• The percentage of completion method (PCM) is a method of accounting that records revenue when it has been earned but not yet received.
• The whole system has bank integration so that you don’t have to waste time with time-consuming reconciliations.
• When in the project management segment, you can incorporate quality and safety standards, have design coordination and oversee the entire project.
• Consider hiring a construction accounting firm to help you assess the problem, implement better processes, and clean up your records so your documents accurately represent your financial details.
• A construction bookkeeper plays a vital role in managing financial data for construction projects.
• This includes the compilation of accurate job costs, effective management of the firm’s working capital, and timely and correct billing.

Talk to one of our financial experts to see how Billd can help your business grow.

Premier is the most comprehensive construction accounting software on our list, earning the best overall. It is a cloud-based solution that can help you scale your business by having the right data at your fingertips. Its feature-rich platform starts by allowing you to manage multiple companies where construction bookkeeping you differentiate projects.

• By outsourcing, your business can reap numerous advantages such as tapping into a wealth of expert knowledge, streamlining processes for better efficiency, and cutting down on overhead expenses.
• Costs should be allocated to specific jobs to accurately reflect profit margins and assist with financial planning.
• Choose a platform that complements the workflow and allows real-time updates.
• Change orders must be documented and included in the job’s financial tracking documents.
• This, in turn, increases the risk of cash-flow interruptions, meaning you must monitor your accounts receivable closely.

How does accounting software improve productivity?

Ignoring or inaccurately allocating indirect costs can skew the profitability metrics of a project. Construction accounting software can help in tracking and allocating these costs effectively. Recognizing and accounting for indirect costs is crucial for a construction business to ensure accurate job costing and project profitability. Managing subcontractor costs requires setting up the appropriate expense accounts to accurately track payments and expenditures related to their work. Managing payroll for various workers and subcontractors is crucial in construction.

Handling Overhead and Indirect Expenses

Bookkeepers must track accounts receivable diligently, keeping a close eye on the collection efficiency to maintain a steady flow of cash. Using cash-basis accounting or generally accepted accounting principles (GAAP) can influence cash flow reporting and decision-making. Effective bookkeeping for ongoing construction projects necessitates constant monitoring and updating of financial data to manage progress billing, track project budgets, and handle retainage. This enables construction companies to maintain financial control over their operations and plan for future projects. Construction companies must track contractor payments and ensure progress billing aligns with project milestones and retainage practices.