2009 Review of Construction and Contractor Accounting Programs

From the July 2009 Issue

The current recession has affected most industries, and the home builder and commercial construction industries have been hit especially hard, with new starts and permits just starting to rebound from 50-year lows. And these numbers are all the more agonizing since they directly followed a decade of tremendous record-breaking growth in the construction market.

Some of the incentives in the 2009 stimulus bill, including the first-time homebuyer credit and public infrastructure spending may bolster building, but construction firms and contractors need specialized software more than ever before to help strengthen their businesses by running more efficiently and tracking all costs.

Conversely, many service-oriented contractors such as heat and air firms, remodelers, electricians and plumbers, have seen somewhat of an increase in activity, as some Americans have chosen to add-on to their existing houses, improve energy efficiency or make other alterations, as an alternative to getting a new home. For these businesses, managing growth, service schedules and client relationships is more important than ever, and several products are available that incorporate features designed specifically for these tasks.

Fortunately, there are many options for accounting and business management software for both builders and service contractors, ranging from basic job cost add-on modules for general business accounting systems to entire systems designed specifically for either the construction or contractor industry.

Some programs are general business management software that have an available job costing or construction management module or industry-tailored version, versus a few programs on the market that are specifically geared for builders or those in the contract service industry. All of these programs include essential back-end financial functions, including GL, AR, AP and payroll options, while also offering job cost reporting and productivity analyses. Additional tools for equipment management and maintenance tracking, inventory and customer management add increased functionality. The more advanced systems even offer smartphone and texting capabilities for dispatch, scheduling and customer data input, along with integration to web-based mapping systems.

Global and U.S. economic conditions aren’t going to change overnight, which makes it all the more important for construction and contractor firms to more aggressively manage their business, from the nuts and bolts of their financials, precise project reporting, efficient scheduling of people and resources, and marketing activities. Those who are most successful at managing these tasks today are those who will be best positioned to survive the downturn and thrive when it passes.

When the current glut of homes on the market is absorbed, construction will rebound. After all, people will always need new homes and they will always need their houses or its utilities repaired, remodeled or replaced. Since construction and service contractors are often a large client segment for professional accounting practices, helping to ensure their success is also of significant interest to their public accountants. This review section looks at several programs available for builders and contractors that may be able to help your clients survive and thrive.

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