WHAT IS CONSTRUCTION SOFTWARE?
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This is the third in a series of articles that will help contractors understand what construction software is and what it can do for them; our particular focus here is job costing software.
For many construction firms, the first technology investment is an accounting software package. This is hardly surprising; tracking payroll is critical not just for good business practices but for tax purposes as well. However, as contractors expand, gaining new projects and new employees, they often find that general accounting software packages do not offer the functionality they need. These firms turn to job cost accounting software, also known as job costing software, to track costs, execute change orders and create cost reports.
A. What is construction job costing software?
Construction job costing software is a collection of programs, processes and information that enables its users to keep track of costs related to a construction project. It offers functionality common to general accounting software, such as accounts payable, accounts receivable, general ledger and payroll, along with modules for activities such as cash management that a company can add as it continues to grow.
Additionally, contractors may add different modules to their job costing software package depending on what type of work they do. For example, firms that purchase an abundance of materials or manage lots of subcontractors would want modules such as requisitions, subcontractor management and payables.
B. What can construction job costing software do?
By using job costing software, contractors are able to collect the costs of labor and materials much faster and with more accuracy than they would with a spreadsheet or on paper. Most job cost accounting software includes benefits such as the following:
• Pulling raw job costing data and performing separate transactions for the comparison of categories such as material costs, labor hours, subcontractors costs and so on
• Creating reports that give users an overall view of project costs
• Creating progress reports that display the percent completion rate for each phase of a project
• Tracking all owner and subcontractor change orders and entering an unlimited number of change orders; you can see an example of this in a screenshot of Builder Information System's job costing software.
C. How can you find the right construction job costing software?
Since construction job costing software usually starts with standard accounting modules, many construction companies choose less expensive generic accounting packages, like QuickBooks software or Peachtree accounting software, instead of a construction-specific package.
The drawback to this approach is that, as a company grows, it may find itself needing cost estimating or construction management software and purchasing such packages without considering whether it integrates with its accounting software.
Thus it is useful for a contractor to consider its near- and long-term growth potential and its need for construction-specific job costing modules that integrate with construction project management software. Such integrated accounting packages include (in alphabetical order) Primavera P6, Sage Master Builder, Viewpoint and Wennsoft.
D. Additional resources
The following pages on ConstructionSoftwareReview.com should provide some additional insight into the best ways to start learning about construction job costing software tools and deciding what software might be right for you.
• Construction job costing software buyers guide
• Job costing software vendor overviews and end user reviews
