By considering the pros and cons of new accounting software, you will be able to decide whether to make the move or not
Should you move to a new construction software solution? Consider these pros and cons.
Pro – Improved project management
The right construction accounting software will allow you to exert greater control over every detail of your projects, not just the finances. The centralisation of data will make your business units more efficient, providing even greater return on investment.
Con – Cost concerns
Specialist construction accounting software can be expensive. However, certain vendors now provide modules for popular accounts systems to extend functionality without the cost of a complete replacement package.
Pro – Improved CVR management
Specialist construction accounting software will help your business gain a better understanding of profit and loss on every contract, every month. Access to accurate and timely data will then help you take corrective action quickly to improve or maintain the margins on a project.
Con – Functionality overlap
A new construction accounting software solution probably offers similar functions to other tools you already use. Obviously the new solution could replace old packages, or you could invest in new modules to extend your existing system, avoiding functionality overlap.
Pro – Improved variations management
Managing contract variations is costly and time-intensive – unless you have the right construction accounting software to help simplify operations. Over time, these new efficiencies will result in improvements in variation management that will have a direct impact on the project profitability.
Con – Product familiarity
New software inevitably means new user training and a period of reduced productivity. Over time productivity levels will increase, allowing your business to realise larger benefits from the new efficiencies. Again, add-on modules for your existing accounts system will provide the functionality you need, without the usual period of familiarity and adjustment.
Pro – Improved retentions management
Keeping track of monies owed is essential for accurate forecasting and cashflow management. Implementing a construction accounting solution will help your business track every aspect of contract payment, making it easier to manage problem accounts and to remember to claim those retention monies.
How do you decide?
The cons of any new construction accounting software migration are more than counterbalanced by the pros. Remember:
- New software will create new efficiencies and better meet your existing business processes.
- Existing software can sometimes be extended using modules that add the required functionality.
- Investment in an updated solution is not optional – you’ll need the new functionality to better manage your contracts and finances.