Improving Accounting Processes in the Construction Industry
The construction industry is known for its complexities and challenges in financial management. With fluctuating costs, tight deadlines, and countless variables affecting project outcomes, having robust financial planning, bookkeeping, and accounting processes in place is crucial. Keeping up with modern technology can seem like an impossible challenge when you’re a contractor or running a construction firm.
To stay profitable and ensure that projects are completed on time, it’s essential to leverage the best tools and processes available. Luckily, various ways exist to use emerging technology to achieve better outcomes for firms and contractors. In this blog post, we will explore the strategies we implement for our clients to improve these processes to enhance construction firms’ financial health and stability.
Develop a Comprehensive Financial Plan
A solid financial plan is the cornerstone of any successful construction business. It should include the following:
- Revenue projections based on market research and historical data
- Detailed budgets for individual projects, including labor, materials, and overhead costs
- Cash flow management strategies to ensure liquidity during slow periods
- Contingency plans for dealing with unexpected expenses or changes in project scope
Working closely with your accounting team, you can develop a financial plan that helps your firm navigate the uncertainties of the construction industry and maintain a healthy bottom line. We help our clients by regularly recording and updating this data and assembling it into regular reporting to keep you updated.
Implement Effective Bookkeeping Practices
Accurate bookkeeping is essential for tracking expenses, managing cash flow, and making informed decisions about your construction business. While we are on top of this for our clients, if you’re not getting this practical help, follow these tips to improve your bookkeeping processes:
- Standardize expense tracking and reporting procedures across all projects.
- Use cloud-based accounting software for real-time access to financial data and seamless integration with other business tools. We use QuickBooks and Sage Intacct.
- Regularly reconcile bank accounts and credit card statements to ensure accuracy.
- Keep personal and business finances separate to avoid confusion and potential tax issues.
Streamline Your Invoicing Process
Efficient invoicing is crucial for maintaining positive cash flow and getting paid on time. This is one of the best ways to optimize your cash flow; our clients know we are handling this for them.
- Create clear, detailed invoices that outline work completed, materials used, and payment terms.
- Implement a standardized invoicing schedule to ensure consistent and timely billing.
- Utilize invoicing software to automate the process and minimize errors.
- Establish a system for tracking and following up on outstanding invoices.
Invest in Advanced Accounting Software
QuickBooks and Sage Intacct can significantly improve your financial management processes by providing features tailored to the industry’s unique needs, such as job costing, progress billing, and change order management. Investing in a construction-specific solution can streamline your accounting processes and gain valuable insights into your business’s financial health. All clients with Devine Consulting get access to these powerful applications to help boost their accounting and recordkeeping processes.
Collaborate with an Accounting Professional
Hiring an experienced accounting and bookkeeping firm specializing in construction can provide valuable expertise and guidance on industry best practices. They can help you:
- Develop and refine your financial plan
- Ensure compliance with tax laws and regulations.
- Identify cost-saving opportunities and strategies for improving profitability.
- Provide financial analysis and reporting to support decision-making.
Accounting Technology to Employ Today
Accounting is known for being staid, traditional, and slow to adopt new technologies. But is this true? No. Technology is transforming accounting—and in an equally exciting way, accounting is changing technology.
Many people might not realize that accounting has been revolutionary throughout its history, especially when it comes to driving the adoption of new technologies and adapting to new technologies. In driving the adoption of new technologies, for example, the accounting profession first used adding machines (specifically for use in tax calculations), which ultimately were precursors to the computer. In modern times, accounting, including management accounting, drove the adoption and improvement of ERP systems.
Even today, accounting has managed to keep up with modern times by embracing the growing trend of digital solutions such as cloud-based software and other tech innovations. These advances help streamline accounting processes, making accounting more efficient and assisting businesses to stay competitive in a fast-changing industry.
Devine Consulting employs QuickBooks and Sage Intacct. Intuit QuickBooks helps you manage back-office processes, and Sage Intacct helps larger companies with a financial management tool that integrates with other applications, streamlining your financial operations. When you embrace technology for accounting and bookkeeping, you get:
Real-Time Reporting And Auditing
Real-time reporting and auditing allow financial information to be delivered faster, more accurately, and more trustworthy, changing how business and decision-making can be handled.
Driving Insights And Value
Accounting might have been known for repetitive, manual tasks in the past. Today, technology has automated these processes, and accounting has moved beyond just “the process” and into value territory that offers needed financial insight into trends, helping business owners plan effectively.
Improve Your Accounting Processes with Devine Consulting
Improving financial planning, bookkeeping, and accounting processes is essential for construction firms seeking to thrive in a competitive market. Construction firms can build a solid financial foundation that supports long-term success by developing a comprehensive financial plan, implementing effective bookkeeping practices, streamlining invoicing, investing in industry-specific software, and collaborating with an accounting professional. To help you with your accounting and bookkeeping processes, as well as financial planning and forecasting, Devine Consulting is an Intuit QuickBooks certified Pro-Advisor and a proud accounting partner of Sage Intacct.
We help select, install, and set up the software, customize it for your business, and train you in its operation. We’re here to help you update your processes and provide support. You get custom cloud bookkeeping and accounting with an actual professional to help you manage it without the added costs, learning curve, or management.
We offer the solutions and strategies you need to leverage the software best. To get started, request an estimate today!