These construction companies will need support and guidance to use systems to keep them efficient and effective. CPAs can provide some or all of this assistance based on their ability to learn about the needs of the construction company and resources that are available to assist them. Therefore, this article is focused on an overview of software that is designed to support accounting and management operations of construction companies.
Many CPAs already know that there a number of industry specific software. Some, maybe a lot, know that not every need can be solved or fixed with Excel or QuickBooks. It is important to start asking questions about how to approach delivering support to construction industry companies. These questions include:
• Do you have clients in the construction industry now?
• Do you want clients in the construction industry?
• How knowledgeable are you with construction software?
• Do you believe that everything can be solved with Excel?
• Do you believe every accounting software need can be solved with QuickBooks?
Construction company operations include a wide range of operational and transaction data, including:
• Project information – descriptions of work to be done
• Customer information – standard CRM type data
• Project management application – summary and details of tasks to be done
• Estimating – budgets, task start and completion dates, manpower scheduling
• Job Costing – financial analysis of project operations
• Scheduling – people and materials delivered to job site
• Accounting – leading to financial statement preparation
Construction accounting software generally has a similar set of features.
• Standard accounting general ledger transaction detail
• Sub-ledgers such as accounts payable, payroll, inventory and purchase orders
• Accounts receivable for progress billings and accruals:
Job cost data for materials, labor, indirect costs (overhead), fringe benefits and other costs
• Job estimates for detail task management of time and costs
• Budgeting of each job component
Construction projects depend on smart scheduling and time management. One small delay or missed timing can upset one or several projects. Delays happen – weather, sub-contractor errors, worker illness, etc – therefore it is essential to have the right tools to manage projects to reduce the impact of any specific problem. This includes cash flow on a real-time basis that can be significant when payroll is due and the company needs to collect its outstanding accounts receivable
Choosing a software package for use in the construction industry should take some thoughtful considerations. Some of the factors to consider include:
• What tools does the company need within their operations?
• Are people available to manage any installed software?
• How does the company mange individual construction projects?
• How does the company mange overall company operations?
• Does the company currently use a software program?
• If software is in use currently, is it effective?
• Will networking help the company better manage its operations?
The following identifies a few of the vendors of construction software. It is intended to deliver enough information to set a platform for you, the CPA, to move ahead with your own research and analysis. Rating them would be a disservice as each application has features and qualities that may make one or another better or worse for any one construction company. It is significant to understand that your accounting insight is needed to provide the right match for functionality and usability within the construction company.
A-Systems JobView
As stated on their website, A-Systems JobView® was built specifically to do job costing. This program has been around for over 32 years and is still supporting customers with continual updates, upgrades and enhancements.
There are three editions – Preferred, Standard, and Small Builder. Each edition focuses on accounting needs surrounding the construction business. This includes all General Ledger related processing – accounts payable, accounts receivable, sales order processing, job costing and payroll. There is also a contact manager module.
There is a job startup wizard that makes initial installation and entering new companies relatively painless. Job cost coding can be defined by the user. The accounting entries can be entered through each individual module. G/L entries can be entered through a batch mode.
JobView provides a single summary display showing a full overview of the company. This system is designed using a dashboard metaphor so that the user can click on any summary information shown and drill down to the underlying detail. This capability is available for all accounting related data.
The key application is JobView’s job costing module. For this application there are nine pages of data entry, based on the amount of detail that will be required for each job. After the job is set up, financial reports, showing actual vs variances and other information can be created. Each accounting transaction can be traced through each G/L module. Cash balances can be viewed on a real-time basis.
Each construction job can be analyzed individually. For example, information about sub-contractors can be reviewed, such as: billings, change orders, back charges and other financial transactions. Data that is created using QuickBooks or Excel can be imported directly into JobView.
With Preferred and Standard editions, A-Systems provides Visual Bookkeeper system for enhanced accounting features. The company has lots of training modules and can assist with getting users installed and operational.
Cougar Mountain Software – CMS Professional 2009 Accounting & Job Cost
Cougar Mountain Software has been delivering accounting software for over 27 years. CMS Professional 2009 Accounting is one of the more popular accounting software products. The software has a range of add-on modules including a Job Costing module. The rest of Cougar Mountain Software is not construction industry specific. However, what it lacks in construction modules, it makes up with good general ledger transaction oriented accounting. This would be a choice for small and medium sized construction companies.
The Cougar Mountain accounting package includes modules for GL, AR, Order Entry, Inventory, AP and Data Exchange. The Job Cost module is an add-on and integrates seamlessly with all the appropriate core applications. Along with the Job Cost module, all applications are integrated. Each module can be purchased separately as needed, including Payroll.
The Job Cost program captures basic information such as job number, description, job type, and customer. Cost codes and time estimates are attached to each job. Each step in the construction process can be entered as individual phases, or timeframes. This allows users to create a setup to organize components of each job. Cost, material, subcontractor (if any), process, and miscellaneous expenses can be tracked in summary or detail. Budgets and variance from budgets can be generated from this information.
CMS Professional 2009 accounting reports can be customized from their standard formats. This is one more area where the CPA can provide insight and understanding about the business uses accounting information. This Support can take the form of designing the reports, and if not an audit client, can be part of the report generation. This would be especially helpful in testing audit trails and other security and reconciliation of the data.
In 2009, Cougar Mountain has started a customization program which will enable companies to get custom changes for terminology or other unique needs of the organization. The company also provides substantial training programs through attended workshops and e-learning modules.
CYMA Systems
Founded in 1980, CYMA Systems, Inc. is the oldest continuously operating personal computer accounting software company in the United States. CYMA’s Job Cost module provides support for small to mid-sized businesses including the construction and contractor industries.
There are separate drop down menus for maintaining, entering, processing, and reporting on jobs. Users have options for customizing each of the application menus. Reporting on budgets and detailed project financial information can also be customized. The system provides a dashboard style master control display as an overview of all financial data related to jobs, job dates vs. deadlines, budget vs. actual and other financial analysis. This enables the company to perform basic management functions and fully integrate financial reporting. This includes:
• Analysis and reporting of labor and job costs
• Review and date management of billings
• Review of contract information
• Company-wide integration of financial reporting
• Allocation of labor and indirect costs by project and summaries
• Automatic generation of invoices and updating of accounts receivable
• Audit trails for internal and external auditors
The newest version of CYMA works well with Windows 2000 or later, including Windows Vista.
Learning Curve/ Ease of Use -- 5 Stars
With an easy checklist style of setup, installation and implementation is simple. Job Masks, either standard or customized, allow users to enter a job number, base job segment, segment length, type and name. New in the current version is a Job Budget Estimator, which identifies and compares task delivery dates with task start and task completion dates. All transactions associated with a specified job can also now be viewed. Program navigation has been enhanced with drop-down menus separating out maintenance tasks, data entry, and reporting.
Budgeting is a major issue for construction firms and CYMA provides a useful Budget Estimator feature in Job Cost. This feature allows for entering revenue, direct labor and material costs, along with subcontracting totals and overhead; it also displays contribution margin. Overhead can be entered along with materials and personnel skill levels so that estimating budgets can be accurate and continuously updated.
After purchasing the System Manager, CYMA users can purchase each module as needed. This includes all of the accounting modules that are not specific construction industry focused.
Intuit QuickBooks Enterprise Solutions 9.0: Contractor Edition
Intuit is the “anything and everything” accounting software company. From Quicken to each version of QuickBooks, Intuit products have found their way into the minds, if not the hearts of CPAs around the world. As stated at the top of this article, QuickBooks is not the only option, but it is a good answer to the contractor needs and requirements of managing financial and operational information.
QuickBooks Enterprise Solutions 9.0 covers a wide range of business needs including: Manufacturing & Wholesale, Nonprofit, Professional Services, Retail, and Accountant editions. Intuit QuickBooks Enterprise Solutions 9.0: Contractor Edition provides significant resources for the construction industry along with standard accounting data collection and reporting. These extra resources start with job costing tools that enable all job details to be identified, including customer and vendor information, expenses, estimates, change orders, invoices, purchase orders, bills, payments, and more. Job costing reports show job status and analysis of costs and profits. There are nine other contractor reports along with a profitability snapshot of any open job. Users can track individual job costs for employees, vendors and sub-contractors.
From the top navigation bar there are drop-down menus that include a flowchart diagram representing the anticipated logical flow of transaction entry through reporting. This is especially useful for new and occasional users. Another useful feature is the capability to customize the screens. This is an area that can be supported competently by the CPA. Another useful feature where CPAs can help is the percentage complete feature available in the Contractor, Professional Services, and Accountant editions. This will allow the company to manage their business through identification of how much of each job has been completed and how much is left to be done. This management tool can provide an overview of the overall job progress and how the original job estimates are being met.
Standard accounting modules for GL, AP, AR, Purchase Order, Fixed Assets, Banking and Estimates can be integrated with the Job Costing function. Intuit has included a Time Tracking tool that provides for transfer of appointments and other calendar information from Microsoft Outlook directly into QuickBooks Enterprise Solutions. This feature can be helpful when dates and deadlines need to be moved forward or back.
Contractor Edition is focused on mid-sized contracting companies and can be purchased in multi-user bundles of 5, 10, 15, 20, 25, and 30 user versions.
Sage Software
www.sagenorthamerica.com/
www.sagecre.com/
The Sage Group plc, provides three construction software solutions -- Sage Master Builder, Sage Timberline Office, and Peachtree Accounting. Along with MAS90, MAS500, SAGE CRM and SAGE Sales Logix, the company provides a cornucopia of accounting related and supported applications. Each of the SAGE products are stand alone applications. So when viewing the modules, recognize that each construction software is its own application and not intended to be integrated with other SAGE construction software programs.
Sage Master Builder
www.sagecre.com/
Sage Master Builder is designed for the small to medium sized construction company. It enables tracking of each job from bid to completion. Management of the jobs are accomplished through support of various application components: development of job estimates for bidding, vendor and subcontractor CRM data, cash flow analyses, job costing modules, and an inventory system for the tracking of equipment and support resources.
This program provides a set of integrated business modules that include management and accounting applications. All the expected accounting components - payroll, accounts payable, accounts receivable and general ledger are included. There are modules for job estimating, job scheduling and job management. The scheduling and project management functions enable company control on an individual project basis and the overall company operations. It is important for construction companies to be able to plan the sue of its resources – people, equipment and materials.
Sage promotes is analysis and reporting tools to help review and assess financial results from operations. This includes an individual job review and a summary of company wide operations for all jobs. Billing for work completed can be based on time and materials or as a percentage of completion, also known as progress billing. In addition, the program provides for construction-specific billing along with the capability to customize reports. Customization is always an area for CPAs to provide direction and suggestions.
Bidding on jobs can enhanced by selecting one of three different estimating modules – Basic, Standard or Extended. This financial calculations module is another area that CPAs can provide insight and assistance. Participating with a client in the development of future revenue expectations can provide long-term benefit for the continuity of the construction company.
Sage Master Builder provides user assistance through setup help, training, and online courses.
There is good value from each of these resources.
Sage – Peachtree Premium for Construction
http://www.peachtree.com/peachtreeaccountingline/construction/
Peachtree Accounting software is designed for small businesses and offers all of the expected accounting functions in addition to construction-specific features. Construction features include progress billing, labor burden calculation, and insurance expiration tracking. Peachtree Premium Accounting for Construction 2009 is targeted at small construction companies. Again, this is an opportunity for the small CPA to assist a small company move its operations forward by using technology to support its business.
Peachtree offers a flowchart diagram to aid with navigation from its top level and vertical navigation bars. Clicking on any of the system functions changes the flowchart displayed to reflect the features found in that function. In addition, toolbars can be customized to display only the functions that will be used.
As part of the setup process, users can enter new job detail, identify specific job phases, select the appropriate billing methods and enter any existing beginning balances. This last entry is important as it allows the company to start using the system for existing jobs without having to start re-entering all transactions.
One good feature is the ability to create bidding quotes. and the system permits the emailing of the quote direct from this system. Another key feature in Peachtree is the Internal Accounting Review. Users select a period to review and the system checks up to 15 areas for the selected period. The system red flags any area that needs further analysis.
For an entry level program, navigation is simple. There is a wizard that can be used to set up a new company and data entry fields can be customized. Peachtree’s Business Status Center is used as a dashboard to select and view reports. All of these features are another opportunity for the CPA.
And when the construction company starts to grow beyond Peachtree Premium, they can migrate to Peachtree Quantum. This larger program can support up to 10 individual users. So the company can start small and grow. The CPA can provide value-add assistance for each step of the company’s growing issues.
Sage – Timberline
www.sagecre.com/
http://www.sagecre.com/products/timberline_office
Timberline is known as the “gold standard” of construction software programs. It is used as the measuring stick for comparisons with other products. Therefore, any assessment of possible software candidates for a construction company must include Timberline.
Sage Timberline Office is targeted for the larger construction companies. This includes high-end construction companies and specialty contractors with big contracts from the federal government and other deep pockets. Timberline is for construction companies that need lots of customization capability and all of the modules available. There are more than 250 user-defined fields in the system.
Every phase of construction is included within the package – from assembling information to quotes to leasing and managing the real estate. Timberline is designed to handle large volumes of data, such as purchase orders, job sites and sales centers. There is no limit to the number of workstations or number of concurrent users that may use the software.
Timberline is designed to allow control over data flow from requisitions to purchase orders to change orders to issuing receipts to invoices and then into all of the subsidiary ledgers. This data flows directly into other modules such as job cost, equipment allocation and cost, accounts payable, Billing and accounts receivable.
The system has a centralized data base for all transaction and information data. Consequently, reports and on-line queries will always be accessing the most current data. Reports can be easily customized for daily or weekly or monthly reporting about jobs in progress. Change orders impact real-time data to permit better control of costs and resource allocation.
An advantage of this larger system is the accessibility to the data. Managers and technicians in the field can call up and view reports onscreen rather than on paper. Accounting department can see the information and do management and audit reports at any time. Data collected and stored includes warranty and servicing agreements.
Within Sage Timberline there are more than 65 separate software applications. This is another prospective job for the CPA, helping the company decide what to use and when to implement each selected software application.
CONCLUSION
Whatever choice is made by the contractor, it needs to be recognized how the CPA can assist with the entire process of design, selection and implementation. Construction software can be setup and installed by some construction companies, but that is typically a small percentage of all construction industry. The CPA has the skills necessary to make sure that cost records and accounting transactions match up with the business operations. This is another example of the CPA providing value-added services that can immediately impact the client’s bottom line.