April 24, 2020
How Construction and Real Estate Developers Can Move Into the Future With Cloud Accounting
Posted by Ryan Prindiville
Construction, general contractors and real estate developers need an industry-specific cloud financial management system that addresses their critical issues.
Recent events have shown the importance of preparing your business for the future with a proactive approach. For construction, general contractors and real estate developers, a crucial aspect of that strategy is ensuring that your accounting software enables you to capture data instantaneously and dynamically. Your business is becoming more complex every day, and being able to analyze all its facets quickly and accurately is a requirement for helping it continue to grow.
Traditional accounting solutions make it harder for the construction industry to take full advantage of their data because users cannot easily access or retrieve information or integrate it with other business apps. Advancements in cloud technology and investments in the space have addressed key issues that may be holding your company back. Here are some ways a construction cloud accounting solution can address typical pains you may be feeling today in your business.
Anywhere, Anytime Access and Agility
Construction, general contractors and real estate developers often use antiquated on-premises financial management systems that require users to access their systems in the office. Remote access is imperative because, traditionally, the construction industry needs employees to be on-site with real-time visibility into project data to make necessary decisions. Even if your business is centrally located, your workforce may not be. And events may transpire where the people who need to analyze your financial and operational data must do so remotely and from any device.
Sage Intacct Construction Cloud Accounting is one recent example of a SaaS platform with anywhere, anytime remote access. It has an open API and lets you connect systems and harness data from the field, payroll and other critical business applications.
Another thing to consider is that regulations change frequently. Unlike an on-premises system, cloud-based construction accounting software can capture those changes in legislation and adapt accordingly without requiring your IT team to step in.
Ideally, your business is growing — the construction industry certainly is facing higher complexity than ever — and as a result, you may have multiple entities that need individual tracking and to be easily rolled into similar projects. It is critical to have consolidated, top-level views of financial data across various entities so you can see information like revenue against labor and expenses at the project and company level. Whether you’re tracking by location, timing, project size or division, you may be wasting hours, if not days, manually consolidating this information and never truly getting real-time data visibility.
To simplify your end-of-period closes and reduce reporting times, you need all your entities’ data readily available in one system. The modern way to track your GL chart of accounts is to use dimensions. This tracking method reduces the number of GL accounts for easier management and more flexibility to slice and dice your data as needed. A dimensional chart of accounts provides options to break down your data, such as by project or task.
The construction industry often finds time and accuracy get derailed by importing and exporting data between programs. Your team may be using separate spreadsheets to record financial data based on projects or regions, then manually re-entering that data into an accounting software system. Again, this takes valuable time away from your core business with tedious manual data entry and increases the likelihood of human error.
Multi-dimensional reporting is critical for construction, general contractors and real estate developers to be able to create financial reports quickly and accurately within one system. To do this, you need the ability to quickly analyze financial and organizational data by project or region without needing to import or export data. The financial report writer within Sage Intacct Construction, for example, is an integration solution that lets you accomplish this expedited and simplified reporting by using drop-down lists that filter, group and organize data instantly.
Full Project Life Cycle Visibility
Our CFO Evolution Benchmark Survey found that 73% of CFOs believe if they fail to transform their technology infrastructure, their company will not exist in the future. A crucial factor in that belief is a transition in the CFO role from only historical reporting to also including more strategic planning. You now need to be able to track and manage costs and productivity throughout the life cycle of a project with features like estimates, job controls and accounting.
This transformation of the CFO role is complex but can be aided through technological improvements in your project management processes. These improvements can yield benefits such as greater visibility for tracking and managing costs and productivity from beginning to end on projects through up-to-the-minute financial, managerial and operational data.
This greatly increases your likelihood of accomplishing an important goal — improving the accuracy of your forecasts. With a dashboard, like the one in Sage Intacct Construction, this data is easily accessible and updated instantly.
Our dedicated construction and real estate team is here to help you assess and strategize for your business needs or answer questions you may have about switching or updating your current accounting solution. Contact us at info@armaninoLLP.com.
Ryan heads the Strategy and Transformation consulting practice, providing management consulting, assessments and roadmaps for clients in all of Armanino’s business segments. He has extensive business, technology, cybersecurity and operations leadership experience in Fortune 50, mid-market and entrepreneurial environments, and has led global teams in the Americas, Asia and Europe.
He has held line leadership and consulting roles in a range of industries, including retail/consumer goods, entertainment, hospitality, technology, healthcare, biotech and financial services. His multi-functional experience includes strategy, technology, product commercialization, innovation, operations, solution delivery, process improvement and management consulting.