Q & A and Tips on Accounting, Taxes and Personal Finance.

Selecting Construction Accounting Software

June 17, 2014 | By More

Construction Accounting Software

Accounting software comes in many varieties these days, some are industry specific such as construction accounting software, designed with the unique needs of contractors in mind.

Tu Dao is a Houston CPA and offers some great tips on selecting accounting software for contractors.

Tu: There is no one best software for all contractors.

Although QuickBooks is known as the most popular software among the smaller-sized businesses, many contractors are still searching for alternatives. QuickBooks users find the software easy to use and affordable. However mid-size self-perform contractors opt for more expensive software because the software gives them detailed job cost reports that they need.

In searching for accounting software, you have three options:

1. Purchase popular commercial software that your competitors use.
2. Purchase not-so-popular commercial software.
3. Hire a programmer to write software customized to your business.

In most cases the first choice is recommended not only because the popular software has been tested by many users but also because it is easier to find staff that knows how to use the software.

Using popular software helps you to lower support cost, maintenance cost, and training cost, which, in many cases, weigh over the cost of the software itself. In selecting accounting software, contractors ought to do a cost/benefit analysis. Below is a list of suggested cost elements that you should consider before deciding to implement new construction accounting software.

Costs associated with implementing new accounting software:

1. Software cost
2. Hardware cost
3. Labor cost for system set-up and installation
4. Labor cost for data transferring
5. Training cost
6. Cost of learning curve
7. Cost of interruption of business activities
8. Maintenance cost
9. Technical support cost (Items 4-9 are “soft costs”)

While software, hardware, installation costs can be easily estimated, the “soft costs”, which sometimes are much greater than software costs, are very often overlooked. The more sophisticated the software is, the more the soft costs are and the more sophisticated software is, the more time required to set up and maintain.

Contractors should decide how much detailed of job cost reports that would be beneficial for their businesses before seeking advices from accountants regarding selecting construction accounting software.

Contributed by Tu Dao – CPA, MBA
Dao CPA, P.C. is located in Houston, Texas. For more information or to contact Tu Dao, visit http://www.accountinginabox.com

Article information should not be used exclusively to make legal, financial or tax decisions. Because laws and rules can change frequently, topics may not always be updated to reflect these changes or may not apply to your unique situation. It’s prudent to seek out the advice of a professional for your specific needs.

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Category: Accounting Software

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