Construction Accounting Software Review - 2004

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• April-May 2004 Issue
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Once upon a time, there were three companies. Company A builds 10 to 20 homes a year. Company B handles upwards of 100 jobs a year, subcontracting out about 70 percent of its jobs and building a variety of projects. Company C is in development and handles most of its construction, but it also owns another company that handles the electrical work for all of their construction projects.

Aside from being in the construction industry, these three companies have very little in common. So when these three very different companies go searching for software to make their business more efficient and more productive, it's ridiculous to think that they would be looking for the same exact things.

The construction industry is one of the most highly specialized software markets. Companies, large and small, have to be able to efficiently track their job and material cost. Equipment must be accounted for and sufficiently maintained, and operating expenses must be factored in when looking for bottom-line expenses. It's helpful to have multiple billing formats, depending on your specialty. It's also helpful to have a system that won't take months and months and thousands upon thousands of dollars to implement.

In an effort to help you better identify how each of these products might meet the needs of one of your clients, we have established a prototypical company. Our prototypical company employs one estimator and three office personnel. Our company works with about 50 different subcontractors, and takes about 25 jobs per year, with the average job running about $50,000. We have established that our prototypical company also requires the following modules in order to run their business effectively: General Ledger (GL), Accounts Payable (AP), Accounts Receivable (AR), Job Costing, Inventory, Purchase Order, Equipment Tracking, Reporting, Sales Order/Work Order Entry, and an optional Payroll module. For our scenario, we believe that training for one person will be needed, as well as one year of product support.

We have also obtained the cost from each vendor for this particular prototypical company. Since module requirements vary from company to company, we hope that this standardizing of product costs will help to clarify what each program will cost on average. We also decided to look at the program in general, focusing on eight specific areas. By evaluating the same areas in each product, we hope to present a clearer picture of that product, its strong points, and what, if anything, it lacks. This will help the small company find a product that will suit their needs, without paying for a dozen modules it will never use. On the flip side, it also helps the multi-million dollar company that is in the market for enterprise level software and does not want to upgrade their software every year.