Best Construction Accounting Software 2025

Managing accounts payable (AP) efficiently is crucial for construction companies that handle complex, project-based workflows involving multiple vendors, subcontractors, and job sites. Regular updates to these templates ensure that they remain compliant with any changes in industry standards or regulations. Moreover, customization options allow businesses to tweak these templates to suit their construction bookkeeping services specific needs.

Progress Billing and Revenue Recognition

Regarding accounting, Safe 300 breaks tasks down into assignments and work orders. It also retains information about POs, time worked and equipment usage for specific sites. The wage rate for a worker in a state or locality is not the same but rather the US Department of Labor and regulatory agencies in each state. The compensation that an employee is supposed to be paid can also be affected by union rates, travel pay, and taxes. As your construction firm oversees additional projects and engages more personnel, it gets much more critical to keep your accounts in place. Construction payroll wages can vary greatly depending on the location of the job, the size of the job, and the individual skill level of the employee.

• In other words, it’s a measure of ownership in a company or asset after considering all outstanding debts.
• Where tracking results on a single project is tricky, what’s even more challenging is tracking results across multiple jobs running simultaneously.
• Luckily, there are numerous software solutions to make job costing more automated and seamless.
• By leveraging Rippling’s powerful tools, you can save time, reduce errors, and gain valuable insights into your construction business’s financial performance.

Essential Bookkeeping Practices for Construction Companies

For example, suppose your company uses progress billing on large jobs (where each invoice is charged against the total cost of the job over time until the balance is paid). In that case, your construction accounting software needs to be able to produce a schedule of values to help you track the running total. This category looked at the most common features sought by construction contractors and defined which companies provided them. Those that had all features provided for contractors without additional fees fared better than those that required you to choose a higher subscription service to unlock them.

• This automation helps contractors easily keep both systems up-to-date and accurate.
• By creating accurate financial statements, managing cash flow effectively, and budgeting and forecasting, construction companies can achieve financial success and grow their business.
• However, with the right knowledge, systems, and tools, it’s manageable for businesses of all sizes.
• Companies that had client tracking, software integrations and mobile apps performed better than those that didn’t.
• Smaller companies may have a single-page chart of accounts, while larger construction companies may have a ten or 20-page chart of accounts.
• Improving your process starts with understanding how construction accounting is unique, and determining the different types of job costs you can incur on each project.
• Pramod has over 11 years of experience relating to finance and accounts in diversified industries.

Workflow and Approval Management

This section will cover the fundamentals of bookkeeping for construction companies, including accounting methods, chart of accounts, and job costing essentials. Most businesses simply record the cost of the products sold, but construction companies are quite different. Each job incurs direct and indirect costs that may fall into a wide range of categories. It’s essential that contractors have an effective method for keeping track of income and expenses, and for reconciling every transaction. As one of the most popular types of accounting software for a construction company, many in the industry use QuickBooks for their needs. QuickBooks offers four service tiers depending on your needs, allowing users to track income and expenses, capture and file receipts, and run reports.

Bookkeeping services ensure accurate wage calculations, compliance with tax requirements, and timely payment, preventing delays and disputes. Budgeting and job costing tools to manage material, labor, and subcontractor costs. Comprehensive job costing tools for tracking costs across multiple job sites and departments.

Common construction accounting mistakes

When searching, try to strike a balance between user-friendliness and functionality. If you’re looking for the perfect middle ground, we recommend FreshBooks accounting software for construction. This is why it has flexible billion options, such as American Institute of Architects, time and materials and freeform billing. The software makes invoice routing easy and conveniently reconciles things with the GL when paid.

Get Bookkeeping Assistance for Your Construction Company

There’s nothing simple about running a construction company, especially when focusing on client service, contractor scheduling, and other challenges. But, when you do it right, you’ll uncover unique financial opportunities for building a stronger business. At New Lyfe Accounting (NLA), we offer premium financial services to construction clients nationwide. From personalized bookkeeping engagements to holistic CFO partnerships, we’ll help you find the construction accounting service that’s right for your business. For more information on what we have to offer, schedule a free strategy session with us today. Inventory management is crucial for construction companies to prevent overstocking or running out of materials.

Get the Construction Financial Help You Need from New Lyfe Accounting

It involves tracking How Construction Bookkeeping Services Can Streamline Your Projects hours worked, calculating wages, managing benefits, and ensuring proper tax withholding and reporting. Both plans allow you to track income and expenses, send invoices and accept payments and maximize your tax deductions with tagging features for expenses. The system also allows you to scan and organize receipts so that all project expenses are kept in one place. The reporting will enable you to track the profitability of each project so that you can stay ahead of costly mistakes. Plus, they tend to have unstable materials costs, varying wage rates and workforces, and changes based on a project’s location. Under regular business accounting circumstances, revenue recognition is simple because they sell a product or service and collect a fixed price right away.