5 Best Construction Accounting Software for 2025

Construction payroll wages can vary greatly depending construction bookkeeping on the location of the job, the size of the job, and the individual skill level of the employee. Common construction payroll wages range from minimum wage in some areas to more than $50 per hour for experienced workers such as carpenters or electricians. Now that you know how company accounting is different, let’s get into the nitty-gritty of accounting for contractors. Technology has emerged as a pivotal driver, revolutionizing construction accounting in various ways. In the ever-evolving construction landscape, unpriced change orders can have material impacts to a project. At the same time, contract claims — the formal requests for damage compensation due to unforeseen disruptions — are critical items that can impact a project’s bottom line.

Advantages of working with an accountant

• Sage was the standard accounting software for general contractors for a long time, but it’s lost popularity as other platforms have become available.
• To calculate the current ratio, simply divide current assets by current liabilities.
• Accrual accounting is beneficial for contractors because it allows them to track their expenses and earnings in real time, giving them a better understanding of their financial situation and cash flow.
• The purpose of the Act is to protect local wages from being undercut by out-of-area contractors and construction workers.

It’s especially useful for small construction companies that deal with longer-term contracts and transactions. Construction accounting is an important part of any construction business because it helps ensure that the company has solid financial reporting. By understanding these practices, owners can better monitor the financial health of their projects, identify cost overruns, make strategic decisions, and control costs. https://azbigmedia.com/real-estate/commercial-real-estate/construction/how-to-leverage-construction-bookkeeping-to-streamline-financial-control/ In the highly competitive world of the construction industry, maintaining a solid financial footing is crucial for your company’s success. As a construction business owner or manager, you understand that the industry’s unique characteristics require a specialized approach to bookkeeping. With multiple ongoing projects, fluctuating timelines, a diverse workforce, and countless subcontractors, construction bookkeeping can quickly become a daunting task.

Job costing

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. The Advanced plan adds the ability to create accurate estimates and provide full financial transparency. The Complete plan builds on the first two plans by centralizing complex processes and allowing businesses to have complete control of projects from beginning to end.

Best for Project Drawing Integration

Additionally, invoices provide necessary tax information for the client and contractor, allowing them to keep accurate records and file their taxes on time. Construction accounting is different from standard accounting as it deals with long-term projects that have uncertain results, changing costs, and complex contracts. On the other hand, standard accounting is about short-term deals, simple contracts, and set prices. Plus, construction accounting requires a detailed look at each project, checking its money flow, how well it’s doing, and how profitable it is. Another important aspect of expense management is ensuring that all expenses are properly documented and accounted for.

• AIA billing is a standardized billing method developed by the American Institute of Architects (AIA).
• Establishing a solid foundation at the beginning of a project ensures that all aspects of the job are clearly defined, budgets are set accurately, and changes are managed effectively.
• Construction billing is a critical aspect of construction accounting, directly influencing cash flow, project profitability, and the overall financial health of a construction company.
• While there isn’t a “one-size-fits-all” solution, considering your firm’s size, resources, business and technical requirements can guide your decision.
• The average threshold rating needed to be 3.5 stars or better to get the highest rating in our research.

The Complete plan starts off at $799 for the first month, then goes up to $1,099 per month after that. Features, such as timecards, can be synced automatically while working remotely so that nothing slips through the cracks.