The legendary Jack Welch, former CEO of General Electric, once said– “change before you have to.”
Nowhere does this quote hold more weight than in the construction industry, as the last few decades have seen an unprecedented amount of technological innovation. Despite this, many contractors are yet to join this digital revolution.
The reasons are many, from lack of time for training to data security issues and employee resistance. As a result, contractors are left wondering if it really is worth incorporating technology into their business.
To answer the question, the groundbreaking joint study, “Impact of technology use on workforce performance and information access in the construction industry,” conducted by Colorado State University, the University of Kentucky, and the National Center for Construction Education, concluded that “there is a statistically significant strong correlation between the total number of technologies implemented and used on site and the average respondent’s personal performance record.”
Put another way, on average, the more a contractor embraces technology, the more their performance improves.
At the heart of these performance improvements is the ability to better track costs, review financial reports, and organize data to foster better decision-making. Contractors can set themselves up for a better financial future by ditching Excel and antiquated by-hand accounting methods.
For this reason, we recommend contractors actively seek out and incorporate cloud-based software to improve the overall financial standing of their business. Contractors must change now before they have to.
To improve financial management via a set of digital tools, Knowify recommends starting with four categories:
- Project management
- Accounting and bookkeeping
- Payroll
- Data security
Below is a construction software buyers guide of digital tools and resources to improve financial growth.
Project management tools
These platforms help construction companies manage projects from beginning to end. They’re often made up of several different tools for specific tasks, like scheduling, tracking timelines, coordinating resources, tracking job progress, document management, and overall job performance. By using these tools, contractors can expect to streamline workflows, enhance efficiency, and improve profitability.
Buildertrend
Best for home builders and remodelers · $$ · buildertrend.com
Buildertrend provides construction management software tailored toward residential contractors, home builders, and construction remodelers. As a cloud-based platform, it primarily features preconstruction, financial tracking, customer relationship management, and scheduling tools to help manage the entire construction process.
Procore
General contractors and project managers · $$$$ · procore.com
Procore delivers project management software that covers various solutions, including quality, safety, and financial management. Additional features include field service, takeoff, estimating, bidding, and scheduling capabilities. All of these features come in an à la carte-style system allowing customers to choose the features they need; however, one drawback is the lack of comprehensive financial and accounting capabilities. With a large swath of tools, Procore is best suited for large or enterprise-level construction companies.
Autodesk
Best for large companies or contractors working on large projects · $$$$ · autodesk.com
Autodesk is a well-established company that provides an extensive suite of tools for different stages of the construction process. Primarily geared toward engineers, architects, designers, contractors, and construction managers, the most popular tools include the cloud-based BIM 360 and Plangird. Key capabilities steer mostly toward project management but financial services are prevalent through reporting, dashboards, and some cost management features.
Smartsheet
Best for small businesses · $ · smartsheet.com
Delivering an extensive catalog of templates, Smartsheet provides a framework for organizing tasks, due dates, reports, and various other construction documents. Smartsheet is not built specifically for the construction industry and provides a more generalized set of tools that can be spread across multiple industries. However, construction professionals can still find templates for project timelines, estimating, and resource planning.
Knowify
Small to midsize specialty contractors · $$ · knowify.com
Knowify sets itself apart from the competition by being built specifically for small to mid-sized specialty contractors. Through powerful scheduling, budgeting, invoicing, and job costing, Knowify delivers an all-encompassing platform for specialty contractors to manage multiple projects simultaneously. Additionally, Knowify offers project collaboration tools like chat and document sharing, allowing team members to easily communicate with one another. Knowify aims to give contractors the insights needed to manage their finances, teams, and projects more effectively in one platform.
Spectrum
Small to midsize contractors · $$$ · viewpoint.com
Spectrum presented by Viewpoint is a project management tool that delivers accounting, HR, field reporting, and mobile applications in one platform. With features spread out across multiple uses, Spectrum is a document management solution favored by general contractors and specialty contractors alike.
Accounting and bookkeeping tools
These tools help contractors manage overall finances through automated processes and tracking capabilities. Knowing where you stand financially at any given moment is crucial for business owners. These tools give business leaders the information they need for just that.
Contractors who want to take more control of job costing, cash flow management, and overall accounting procedures simply cannot afford to neglect accounting software. Companies that use accounting software do five times the amount of business than those that don’t. Having a full grasp of your finances means better, more intentional choices that result in enhanced profitability.
Another advantage of construction accounting software is its ability to eliminate the need for manual data entry, making it easier to generate accurate reports for better financial decision-making. While not all of the tools listed below are entirely focused on the construction industry, each aims to help construction professionals with the unique aspects of construction accounting, such as job costing, labor, and material cost tracking, change orders, progress billing, etc.
Below our construction software buyers guide will look at some of the different software tools available to contractors and their key features.
Freshbooks
Best for small business owners or construction accountants · $ · freshbooks.com
Freshbooks is a web-based accounting software built with small business owners and accountants in mind. For business owners in the construction industry, FreshBooks delivers tools for invoicing, expenses, time tracking, and accounting. Accounting features include P&Ls, chart of accounts, sales tax summaries, and more.
QuickBooks
Best for small to medium-sized companies · $ · quickbooks.intuit.com
QuickBooks is a longstanding and trusted accounting software provider appealing to various industries. Although only partially tailored for the construction industry, QuickBooks delivers essential financial tools for small to medium-sized construction companies. This includes tools for tracking labor costs, invoicing, and overall contract management. As an easy-to-use cloud-based software, QuickBooks can integrate with many other software solutions allowing for better data management.
Xero
Best for small or growing businesses · $ · xero.com
Xero delivers a cloud-based accounting software solution emphasizing reports, invoicing features, and automated bill and receipt capture tools. For construction professionals, services include custom quotes, cost and time tracking, and cash flow management tools.
Sage 100
Best for small construction companies · $$ · sage.com
Sage software is a large provider of accounting and payroll services across several industries. However, their Sage 100 Contractor is a construction-focused accounting software formerly known as Sage Master Builder. Sage provides basic accounting services along with construction-centric needs such as work-in-progress reporting, certified payroll, and change order management.
CMiC
Best for small to medium-sized construction companies looking for improved financial planning · $$$$ · cmicglobal.com
CMiC is a construction-focused accounting software solution utilizing the cloud and on-field services. Core financial capabilities include budgeting, forecasting, general ledger, accounts payable, and accounts receivable. CMiC focuses on data integrity, forecasting, and accurate financial reporting.
Deltek
Best for medium to large construction companies · $$$ · https://www.deltek.com/
Deltek acquired construction software provider ComputerEase, allowing Deltek to service the construction industry through financial reporting and planning tools. The main features include payroll services, accounts receivable, accounts payable, general ledger, and hundreds of standardized and custom reporting options.
Foundation
Mid to large construction companies · $$$$ · foundationsoft.com
Foundation is a cloud-based construction management service specializing in cost tracking, financial reporting, and CPA tools. Financial capabilities include payroll services, general ledger, purchase order management, and overall financial management.
Payroll tools
eBacon
Small to mid-sized contracting/construction companies · $$$ · ebacon.com
eBacon is a cloud-based solution designed for construction companies to manage payroll and manage fringe benefits. eBacon aims to have all necessary payroll documents such as paystubs and tax documents in one location with the ability to create weekly payroll reports. Additional features include time tracking, fringe management, and payroll reporting.
QuickBooks Payroll
Small to medium-sized companies · $ · quickbooks.intuit.com/payroll
QuickBooks Payroll from Intuit delivers cloud-based payroll services, including automated tax calculations, tax filing, payroll runs, and reporting. Although it lacks time tracking, QuickBooks Payroll is another trusted tool from a long list of high-performing products from Intuit. Additional features include tax penalty prevention, same-day direct deposit, automatic tax calculation filing, and payment of payroll taxes.
Vista
Aimed at multiple industries from finance, hospitality, healthcare, and manufacturing · $$$$ · pdssoftware.com
Vista bills itself as human capital management (HCM) software that specializes in workflow, tax management, worker’s compensation, and training management. In addition, Vista offers self-service HR and payroll capabilities.
Payroll4construction
Small to mid-sized construction professionals · Depends on needs and size of business · payroll4construction.com
Payroll4Construction is a robust payroll system built specifically for the construction industry. A sister company of Foundation Software, this system supports paycheck/direct deposit, reporting, tax filing options, and features a QuickBooks integration.
Gusto
Small business · $ · gusto.com
Gusto is a payroll and HR software platform. Built with small business users in mind, Gusto aims to help with employee payroll for small contractors, including services for employee benefits, health, retirement, and other labor burden-specific information.
Data security tools
Investing in accounting software will inevitably require collecting and storing a significant amount of sensitive business data. As a result, properly storing and protecting sensitive data is paramount.
Unfortunately, the construction industry is one of the most vulnerable to cyber-attacks. In 2020, the construction industry saw an 800% increase in data breaches. Additionally, 35% of contractors who incorporate software into their business process say hackers are a top concern. For this reason, we recommend contractors adopt data security processes, which might include dedicated data security tools, to protect their data, maintain safety standards, and monitor compliance.
While we won’t recommend specific tools or software, contractors are encouraged to follow best practices when it comes to data security. Below are a few steps that contractors can take to ensure their information is safe and sound:
- Limit employee access to data and information
- Limit authority to install software
- Limit access to passwords
- Be wary of phishing scams via email
- Always ask about cybersecurity for any software you consider adopting
- Train employees in security principles
- Provide firewall security for your Internet connection
- Make secure (password protected) backup copies of important business data and information
- Control physical access to your computers and create user accounts for each employee
- Secure Wi-Fi networks with a password (set up a guest network if necessary)
Final thoughts
In conclusion, it’s clear that in order for construction businesses to remain competitive and profitable, contractors must embrace technology. More specifically they must incorporate cloud-based software that is built specifically for contractors. Cloud-based software provides contractors with the tools needed to streamline workflows, improve financial decision-making, and better understand their performance. Through these technologies, contractors will be better prepared to meet the demands of the ever-changing construction industry. We hope this construction software buyers guide helps you chose the tools to bring your business to new heights.
To see how Knowify can transform your business book a 30-minute demo with one of our experts today!