Today, accounting software is one of the more accessible pieces of technology for construction SMEs – anyone can put together a custom Excel spreadsheet or pick up some free software to use. However, using the wrong kind of software is likely to cost your business more than it saves. If you’re on the lookout for your first software package as a construction company, make sure the system you choose has these features.
Applications and retentions control
As an SME, you know how important cash flow is to the short term success of your business. Even the most promising of businesses can be scuppered by cash flow mismanagement. In construction, this matter is even more important given the prevalence of late payments and the irregular nature of payment structures. Therefore, your first software package should allow for the control of applications and retentions so that your accounts reflect staggered payments for your services.
Don’t assume that integrated software packages are out of your price range. Look out for systems that integrate accounts with payroll, helping you to keep all your figures in one place whilst fulfilling your legal requirements (in terms of reporting to HMRC). Using a separate system for payroll could cost you hours each month – and time is money, particularly for a small business where man hours are already stretched.
CIS verification and subcontractor management
As a construction company, you’ll be working with plenty of subcontractors during each job. Of course, there’s another batch of legislation you have to abide by when working with subcontractors – including CIS300. This set of reporting requirements is almost unique to construction companies, so if you’re considering a generic accounting system, be sure to grill the provider on its CIS verification capabilities. You should look for a system that can handle CIS verification automatically each month.
Another basic feature, but one that all too many entry level software packages don’t contain: job costing. With the complex budgets of construction projects, it’s important to keep an eye on costs for each part of the job. With job costing software, each cost area is tracked against its pre-defined budget. Job costing allows you to identify problem areas before they jeopardise the profitability of the job.
It would certainly be unwise to opt for the most expensive software package on the market while your company is still in its infancy, but it’d be equally damaging to fail to plan for the future. Ideally, you should opt for a software package that offers the best of both worlds – an entry level system that provides the features you need with the option to upgrade to a heftier system when your requirements change. Scalability of this type means there is no need to worry about the costs associated with switching providers in the future – your data will stay in the same database and the upgraded software will remain familiar to your users.
Still searching for the right entry-level software for your construction company? See what Evolution Standard job costing software has to offer.