Wondering if now is the right time to make the switch from a generic project management software package to a dedicated construction accounting software package? There is never a clear answer, and your decision will largely depend on how much you want to go from simply recording job data to having the ability to manage jobs and costs in a more proactive manner.
Below, I’ve listed some things that you need to consider when deciding if making the switch is the right decision.
First, you need to be aware that upgrading your software costs more than the price advertised by the vendor. Beyond the actual cost of the software, you need to be prepared to provide the funding for training. If you aren’t prepared for the investment in intense training on top of the software price, now may not be the time to switch.
Further, you need to be able to commit the necessary time and resources to get the new software up to date with current and old data. If not, the software’s capabilities will be limited.
What makes you think you need new software in the first place? Have you had bad job experiences that resulted from poor tracking? Do you currently have real-time job cost tracking? Or do you want new software just because it seem like a good idea?
Progress billings are another thing to consider. Do you create them separately from your accounting system and need a way to integrate them? Does your current system ensure that all costs incurred are billed? Do you need a way to automate that process?
What about purchasing controls? Does your current system monitor your committed costs in relation to your estimated costs?
Are you currently using spreadsheets for your estimating? Would you benefit from a more powerful estimating system or are you getting by just fine with what you currently use?
Do you have new management that is pushing for new software? One of the biggest reasons that companies switch software is that a new set of management comes in and recognizes the need for a better software system. Sometimes, new management is brought is specifically for that purpose.
Other things to consider are the growth rate or predicted growth rate of your company. Will your current software be able to keep up?
Finally, consider how much you can spend to acquire new timberline construction software. If you can’t afford an initial investment of around 2-3% of your current net revenues, you may want to delay the expense. On the other hand, if the additional benefits of real-time data reporting will dramatically increase your net revenues, the steep up front cost may be worth it.
If you plan to make the switch, you need to figure out how you’ll find the best software for your company. A quick web search will point you to more software that “looks” like it will work than you can possibly sort through. The challenge becomes creating a short list of possible solutions and choosing between them. Of course, many companies struggle with step 1 - getting the short list. This is where it can be hugely beneficial to check out construction accounting software reviews that will allow you see beyond the marketing hype that all vendors apply to their products. What this really means is that you need to find a person or a team with the capability to perform this difficult task.
Choosing somebody to be in charge of selecting new software for your company should never be done without careful thought. Don’t pick somebody simply because they have the most free time or will be the cheapest. Likewise, stay away from people that don’t have experience working directly with construction software, like accountants.
Ideally, you will be able to find a person in your organization that understands both the accounting and operational sides of your business, has strong communication skills, and is trusted by upper management.
