Construction
Accounting
A Backhoe Can Be Far More
Effective Than a Shovel
In the construction industry, having the right physical tools and equipment is essential for completing projects.
As you take on larger, more complex jobs, you'll find that these projects demand specialized tools for optimal efficiency. For instance, using a backhoe can be far more effective than relying on a shovel for certain tasks.
The same principle applies to the software you use for job management. Are you utilizing the right tools for your accounting needs? This largely depends on your current stage as a business. While standard accounting software may suffice for contractors in the early phases of their business, it often lacks the depth, control, and visibility required for future growth.
Focus on the Future of Your Business
As your business evolves, the need for construction-specific accounting software becomes crucial. Such software includes built-in features designed to manage job costs, committed expenses, progress billing, unit billing, equipment tracking, project documentation, and field operations. These tailored solutions empower contractors to focus on the future of their business, providing greater control over profitability and operational efficiency.
Action Steps for Construction-Accounting Transformation
Helping You Assess Where You Are Today and
Where You Want to Be
Take a moment to reflect on your organization in light of the insights you've just gained. Are you adhering to these best practices? Identify key areas where you'd like to see improvement. Perhaps you haven't been tracking committed costs effectively, or maybe you'd like to hold more frequent team meetings to review work in progress (WIP).
There's no need to overhaul everything at once; instead, adopt a phased approach. Start with small changes and gradually scale up for greater success. Most importantly, establish key performance indicators (KPIs) to measure your progress. While these KPIs may evolve over time, having a clear North Star for success from the outset will ensure that everyone is aligned and working toward a common goal.
Helping You to Identify a Software Ecosystem That
Will Support Your Goals
Do you have the right tools for the job? While you may have the appropriate tools for your current needs, consider whether they will still meet your requirements six months or a year from now. Reflect on your goals: do you have a comprehensive ecosystem of tools that will support your ambitions?
If you're uncertain, assemble a team tasked with researching and evaluating options as part of your broader strategy. Be sure to involve key stakeholders and leaders from various functions beyond accounting, such as project management, to ensure a well-rounded perspective.
Helping You Embrace Rapid Learning and
Adapt for Lasting Success
When venturing into uncharted territory, don’t expect a flawless experience right away. Initially, prioritize improving your processes over achieving perfect results. Regularly meet with key team members to assess what is effective and, crucially, what isn’t. Use these insights to make adjustments and set new objectives for your next meeting.
Transforming your construction accounting and operations will inevitably involve setbacks, but it’s essential to keep your long-term goals in sight. Embracing a mindset of adaptability and patience, while learning from each experience, will be vital to your success.
Offering Invaluable Support
It's crucial for contractors to grasp the unique elements of construction accounting, as these factors significantly influence their business success. A solid understanding of this specialized accounting enables better cost management, accurate project forecasting, and improved cash flow. By mastering these aspects, contractors can make informed decisions that enhance profitability and drive sustainable growth.
Optimizing Your Financial Processes
Shapcott & Lauber along with our solutions partner DELTEK can provide invaluable support by offering tailored accounting solutions specifically designed for your construction company. Our consultants along with their experts will work closely with you to optimize your financial processes, ensuring accurate reporting and compliance. Training is provided and along with the necessary resources to help your team understand and leverage construction accounting best practices, empowering you to focus on what you do best—delivering exceptional projects.