Keeping a successful construction company running requires an efficient accounting system to track costs, manage cash flow, invoice clients, and create financial reports.
One way to achieve an efficient business operation is to hire accounting and financial professionals for their expertise. However, a less expensive solution is available: investing in industry-standard construction accounting software to avoid financial difficulties and ensure long-term success.
Here are common construction accounting challenges and how modern and innovative construction software can conquer them:
Complexity of Projects
Construction projects can complicate and vary depending on the project size and scope, materials and labour required, and multiple stakeholders and their corresponding contracts. There is also a possibility for unforeseen circumstances and unexpected challenges like inclement weather conditions, supplier delays, and poor site conditions. These situations make it difficult to accurately track costs and expenses and keep up with changes accordingly.
Solution: Excellent document management software integrated with its accounting system helps record all vital information relevant to the project. Centralised and accessible, records and notes about project information allow project managers and planners to estimate costs precisely.
Market Price Volatility
Consistent price changes for labour and materials commonly required in projects make it difficult to predict actual prices and plan accordingly. Especially after the COVID-19 pandemic, the raw materials and labour market became extra costly and unstable.
Solution: Integrating your business into accounting software for construction helps create price lists for various suppliers with the freedom to edit items instantly, depending on price changes. By updating and accessing relevant market prices, you can compare suppliers to determine which gives you the best and most cost-efficient deal.
Another way to conquer this challenge with construction software is by record-keeping historical project information, allowing you to analyse past trends and deliver accuracy. Precise planning and estimation ensure all resources are allocated efficiently and maximised for optimal performance.
Taxation and Accounting Compliance Requirements
Construction companies struggle to comply with tax and accounting regulations, operating in multiple jurisdictions and subject to various taxes, such as income, sales, and property. In addition, these compliance requirements are frequently changing, making it a challenge for construction companies to stay updated and monitor regulation changes.
Here are some of the most vital regulations you must comply with:
- Generally Accepted Accounting Principles (GAAP)
- Australian Accounting Standards (AAS)
- International Financial Reporting Standards (IFRS)
- Australian Auditing Standards (ASA)
- Australian Taxation Office (ATO) Guidelines
Solution: Investing in construction accounting software compliant with existing taxation and accounting compliance requirements and credited by regulatory bodies will help you navigate complex regulations.
The right software provides builder retention management, import and auto-match bank reconciliation, creditor and debtor invoicing, and business activity statements (BAS) without worrying about compliance.
Ensure accurate cost estimation, flexibility to market prices, and regulatory compliance with innovative construction accounting software.
Are you looking for the best software for builders? If so, contact Bizprac today to experience an ATO-accredited construction accounting software service.
Let Bizprac’s professional tech support team assist you in getting started on conquering construction accounting challenges.