We’ve just finished another busy year, and our office staff is trying to prepare over/under-billing reports required by our surety company. The only way we can get this information is to pull data from numerous reports and do the calculations manually. On top of all the other year-end tax and payroll activities we are facing, it’s an enormous amount of work. Is there a better way?
Though you failed to mention what kind of accounting system your contracting company is currently using, I think I can guess. It’s most likely a generic, off-the-shelf, small business accounting system. Am I right?
The reason I say this is because you are experiencing the same problem that thousands of contractors face every day…and particularly at year-end. You have limited access to the kind of detailed job costing data you need for construction reporting. In your case, it’s the over/under-billing reports necessary to get or stay bonded.
But there is good news. Contractors can eliminate 99 percent of this work (gathering numerous reports, dumping the information into spreadsheets and calculating the percent-complete for every individual job) by switching to a construction-specific job cost accounting system. Once the job cost information has been entered into the system (in the form of timesheet data, invoices, etc.) this report can be produced automatically. And instead of waiting until year-end to retrieve this useful information, you can retrieve over/under-billing reports on a monthly—or even weekly—basis. It’s just a mouse click away.
Of course, over/under-billing reports are just one example of what contractors might be missing from their current accounting system. If you’re having trouble with payroll reporting, overhead allocation, change order tracking, production reporting or any other issue that’s specific to construction, it may be time to change software packages. When you consider the time you are wasting trying to get the information you need, not to mention the benefits that come from having timely and accurate data, it could be one of the best investments your company makes in the new year.
Best wishes for your success!
Construction Business Owner, February 2008