The world of construction accounts management software can be somewhat confusing – this guide breaks down some of the jargon.
In addition to our helpful introductory video, we’ve also compiled this glossary of terms to help you decode some of the potentially confusing language we use on our website. If we’re ever guilty of indulging in a little too much jargon, simply refer to this handy guide!
Applications and retentions - Applications and retentions are the processes through which subcontractors receive payment. Using construction software, subcontractors will frequently apply for payment and the funds will be retained until the work has been completed to a satisfactory standard.
BACS (Bankers Automated Clearing Services) – BACS is a system of automatically processing transactions without the need of a cheque. Transferring funds from one account to another, either from firms to suppliers or companies to contractors, is usually processed using BACS.
CIS (Construction Industry Scheme) – The Construction Industry Scheme is a piece of legislation passed by the government in order to regulate how contractors and subcontractors receive payment. Any construction accounts software processes must comply with the terms set out by CIS. See our guide to remaining CIS compliant.
Compliance – This brings us neatly to compliance. When we talk about compliance, we’re referring to the act of fulfilling the legal terms of legislation and regulations set out by the government or other industry bodies. These may relate to tax, working practices, health and safety or even project management. A solid software platform will make remaining compliant a simpler process, either through automating some procedures (such as CIS) or making the processes more visible.
Construction-specific accounting software – Construction-specific accounting software is, as the name suggests, designed specifically for use within the construction industry. This crucial difference sets it apart from generic software.
CVR (Cost Value Reconciliation) – Cost Value Reconciliation, commonly abbreviated to CVR, is the process of determining the profitability of an individual construction project by comparing overall costs with anticipated revenue. Construction software is an important tool used to make this process easier, and should highlight profits and costs on a project by project basis as well as for your organisation as a whole.
Generic accounting software – Contrary to construction-specific accounting software, generic accounting software is not designed for any one particular industry. This flexibility may be useful for some, but it means that the overall usability of the system is intrinsically limited. Often, generic systems will not provide automated contractor verification or specific CVR visibility, for example.
Help to Buy Scheme – When we refer to the Help to Buy Scheme, we are talking about the government initiative established to help new homeowners successfully apply for their first mortgage. This scheme has helped to reinvigorate residential construction here in the UK.
Job costing – Job costing is a process through which construction firms calculate the likely overall costs of a project. This process is important in helping firms to price their services competitively whilst maximising profit, and construction software can help to achieve it to a more accurate standard.
Late payments – Late payments are particularly rife in the construction industry. The practice often sees large companies delay their invoice payments for as long as possible, maintaining their cash flow processes at the expense of those of their smaller suppliers.
Markit / CIPS – The Markit / CIPS survey is an annual report that provides financial information and other valuable data on the construction industry. This data can be used to help forecast future trends and prepare for growth or contraction.
PAYE (Pay As You Earn) – The acronym PAYE stands for Pay As You Earn, and although the legislation was introduced in 1944, recent changes have made a significant difference to payroll services here in the UK. Construction software needs to take these changes into account.
Payroll services – Payroll services refer to financial dealings in a company’s accounts, encompassing everything from salary payments to wages, bonuses and deductions. They also include the applications and retentions we referred to earlier.
PPM (Planned Preventative Maintenance) – Planned Preventative Maintenance is a process used to ensure that equipment, vehicles and other mechanical or electrical items are never allowed to fall into disrepair, or to become unsafe. Some construction software programs will allow you to schedule PPM automatically.
Reporting – When we refer to reporting on the Integrity Software website, we mean the process of producing detailed financial documents that report on your company’s accounts. Some construction software programs provide more detailed, legible reports than others.
SEPA (Single Euro Payments Area) – The Single Euro Payments Area is an initiative that intends to modernise and streamline the processes of making and receiving card payments – in Euros – across the Eurozone. For Irish construction firms, the date to bear in mind is the SEPA deadline of February 1st 2014. View our guide here
SLA (Service Level Agreements) – Service Level Agreements are used to outline the levels of service one can expect during the terms of a contract. When bringing on subcontractors, for example, construction firms will expect SLAs to give them an indication of the performance they can expect from their new employees.
SMEs (Small to Medium Enterprises) – The acronym SME stands for Small to Medium enterprise, commonly understood to be businesses of between 1 and 250 employees, boasting an annual turnover of no more than €40 million.
User volumes – The term ‘user volumes’ is used to refer to the number of people that can be expected to use a piece of construction software. Some construction software programs will not be capable of managing large user volumes spread over multiple sites.
Workflows – Workflows refer to the processes a piece of work must go through before it can be considered ‘complete.’ A document, for example, might have to pass under a large number of eyes before it can be published, in which case it can be said to undergo a complicated workflow. Naturally, some construction software solutions are more suitable for complex workflows than others.