Most contractors feel more at home on the job site than managing numbers in the back office. Yet, having an integrated job cost and accounting system is essential for a business’s success. Many contractors, however, face difficulties with job costing, redundant data entry, and generic accounting systems that lack the specific capabilities needed for construction. With Cumulus Applications Job Costing, contractors can streamline financial tracking, complete AIA forms efficiently, and tackle their biggest accounting hurdles. Here are three key accounting challenges contractors face and how upgrading your accounting software could help.
Determining profitability
The biggest accounting challenge most general and specialty contractors have is trying to answer a simple but critical question: Did I make money on the job? Typically, this is estimated and tracked outside of the accounting system on spreadsheets. Many times, the spreadsheet is missing the data, and who really knows how much they actually made?
This process can be challenging because of the complexity of the construction industry. But the real reason contractors struggle is because many popular accounting systems don’t provide the detailed level of cost tracking that contractors need. By not being able to quickly see where the job ran over the estimated cost and then drill down into the details, contractors are left to put the pieces together themselves to get a complete accounting of the project and determine profitability.
In order to make profitability analysis faster and easier, you need an accounting solution with robust integrated job cost tracking. Consider upgrading to accounting software that offers multiple work categories and cost codes that can be personalized to your specific type of jobs. You should be able to view estimated hours, estimated costs, actual hours, actual costs and even purchase order commitments in one easy-to-use interface. Look for software that helps protect your cash by providing an easy way to pay vendor invoices based on job, not what you owe them.
The software should then be able to provide a complete financial summary so you can view transaction details in one easy-to-use interface. This will allow you to keep better track of all your costs and determine profitability faster. The ability to view these details as the job is in progress can make the difference in whether the job is profitable or not. Simply put, having better job costing capabilities is the first step to ensuring every project you complete benefits your bottom line.
Creating required forms and document management
Many general contractors operate under the AIA billing format, which dictates specific forms like the G702 and G703 to track and process payments and other financial data. As anyone who has worked with this kind of billing knows, it can be labor intensive to create these forms. Manually filling out these forms and tracking them leaves lots of room for error and is very time consuming.
Cumulus Applications Job Costing makes generating AIA forms easy by automatically populating fields with data stored in your Gravity Software accounting system. This automation reduces the time required to create these forms, allowing you to spend less time on paperwork and more on getting paid. For contractors who rely on these forms, Cumulus’s streamlined process enables you to focus more energy on managing projects and driving revenue. It also provides you and your team with additional time to analyze job history for more informed bids on future construction projects.
Streamlining your operation
Too often, contractors aren’t able to view a job’s profitability and the actual cost and time spent on various work activities in a comprehensive way. That’s because many contractors using basic accounting systems don’t have the functionality, they need to analyze data in real time. This disconnects financials from the actual project, pushing profitability analysis and other critical functions back until after the work has been completed. This obviously creates a lot of risk in regard to profitability. So, contractors need accounting software that allows them to quickly view complete job profitability details in one easy-to-use solution.
Gravity Software integrates seamlesslessly with Cumulus Applications Job Costing, automatically updating jobs when vouchers are posted in accounts payable, tracking committed costs through purchase orders, and allowing you to establish processes for receiving material so you can always make sure you’re paying for the materials you received. This all happens seamlessly. Because the software is cloud-based, your project managers can access data on site on a mobile device. They can even attach any documents to a job, including drawings, change orders, agreements and quickly view them on site to make sure you’re not wasting time and resources. This can ultimately help keep costs down and increase profits. By creating a comprehensive system that integrates your financial data with the work being done in real life, you can help ensure the financial health of your business.
General and specialty contractors know that time is money, and they can’t afford to waste time on routine accounting processes. By upgrading your accounting software, you can automate many of these processes and achieve the data visibility and analysis you need to complete jobs on time, on budget and remain profitable for years to come.
Ready to enhance your job costing? Contact Gravity Software today to schedule a demo and discover how our powerful, integrated solution can help contractors like you overcome financial challenges and thrive.
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