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Best Practices for Construction Accounting Software


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Best Practices for Construction Accounting Software

  1. 1. May 29, 2013Presented by Rob Scherer, Olivia Roemer andSeth MyersBest Practices in ConstructionAccounting SoftwareWorkshop #5
  2. 2. TAG supports and strengthens your company’s accounting departmentand management with outsourced bookkeeping, controller, and CFOservices.Whether you are a CFO who could use a quality controller once aweek, a controller who needs bookkeeping assistance, or an officemanager looking for higher level finance and accounting oversight, TAGcan fill the need.From sales to implementation, training to consulting, TAG’s team ofcertified consultants work to improve your efficiency and reportingcapabilities with the best accounting software for the building industry.TAG is an Authorized Reseller with a team of Certified Consultants forSage Timberline Office, Sage Master Builder and Contractor V.Beyond the Numbers…TAG provides valued financial and business resources &counsel for companies and individuals on the move.
  3. 3. January 30, 2013 - Understanding Your ConstructionFinancial StatementsFebruary 27, 2013 - Job Costing & AccountingMarch 27, 2013 – Banking & Bonding ManagementApril 24, 2013 – Tracking your Field ProductionMay 29, 2013 – Best Practices in ConstructionAccounting SoftwareJune 26, 2013 – Construction Financial ManagementBoot Camp
  4. 4. Topics of Discussion• Key Components of Construction Software• Key Components Considerations• Which software is right for your organization?• Should the key components integrate?• Should software grow with your business?• How much should your software cost?• What is the “Cloud”?
  5. 5. Key Components of ConstructionSoftware• Estimating– Historical data to confirm accurate estimating• Project Management– Track compliance and/or scope changes• Accounting– Produce accurate reports on a regular basis• Security– Confident that your information is secure
  6. 6. Key Components Considerations• Estimating– What level of detail do you need for your estimates?– Do you need an Excel spreadsheet or a multi-tiered database?– Are you bidding at a GC, subcontractor or mixed level?– What type of work are you bidding? (e.g. Private, Public, Government)– Do you need to keep track of historical data for future estimates?• Project Management– Do you need to track costs related to bidding and preconstruction?– Do you need to track correspondence during the life of a bid and/or job?– Do you need to track compliance items?– What type of reporting is required by operations?– Does operations need access to this information in the field?
  7. 7. Key Components Considerations• Accounting– Do you need to track multiple companies, locations and/or divisions in onedatabase?– Do you need to track subcontractor compliance items (e.g. prelims, lien waivers,insurance certificates, etc.)– Do you need to track cost to budgets and/or commitments? Warned if exceeded?– Do you need to customize reports and/or inquiries?– Do you want a document management solution?• Route invoices for approval?• Do you need all documents related to the job to be managed?• Security– Do you need to restrict access based on• Employee duties/roles?• Certain jobs and/or job types?• Company database?• Individual tasks?• Individual reporting?• GL structure?– What level of detail do you need in security logs?
  8. 8. Software Type Overview• Level 1– QuickBooks– Peachtree• Level 2– Sage 100 Contractor– Contractor V– Foundations– American Contractor– Computer Ease• Level 3– Sage 300 Construction and Real Estate– Viewpoint– Dexter + Chaney– Maxwell– CoinsEstimating: Microsoft ExcelProject Management: Microsoft SharePointEstimating: ProEst / Microsoft ExcelProject Management: Prolog/PrimaveraEstimating/Project Management: Modules
  9. 9. Software Type Overview• Level 4– JD Edwards– SAP– Oracle• Other Construction Software– Prolog– Primavera– ProEst
  10. 10. Which software is right for yourorganization?QuickBooks• Small construction company• Easy to use by all skill levels• Basic job cost reporting• Some purchase order tracking• Entries can be changed with ease (Good & Bad)• Limited estimate entry and tracking• No integration with Estimating or Operations.• Static reporting available• Minimal security restrictions
  11. 11. Which software is right for yourorganization?Contractor V• Small to mid size construction companies• User friendly interface• Multiple billing formats including Trade, Progress billing and AIAformats• Can process Certified Payroll• Contains Subcontractor Management• Can assign costs to equipment• Can track insurances• Can track Purchase Orders
  12. 12. Which software is right for yourorganization?Sage 100 Contractor• Customize dashboards with menus, desktops and work processshortcuts• More than 1200 built in reports with report drill down to transactiondetail• Built in report writer• Schedules can be viewed by Gantt Charts, task grids or critical path• Many billing formats – including AIA, contract billing and T&M• Built-in alerts can send emails (e.g. when job exceeds budget)• Fully integrated with other Sage products (e.g. Sage ACT! and SageConstruction Anywhere)
  13. 13. Which software is right for yourorganization?Sage 300 Construction and Real Estate• Mid to large size construction companies.• Estimating, Project Management and Accounting softwareintegration.• Track estimates/budgets and commitments with ease.• Track subcontractor insurance, lien releases, certified payroll, etc.and be notified when vendor is not in compliance.• Receive updated job cost reports while out in the field.• Automatically be notified when job and/or cost code is over budget• Remote time entry for payroll• Multi-level security available• Ability to create and modify reports and inquiries• Document management solution available
  14. 14. Which software is right for yourorganization?Viewpoint• Mid to large size construction companies• Specialty for heavy highway construction – which bills in productionunits• Can easily tie costs to production units• Contains HR module and Pre-Construction modulesDexter + Chaney• Mid to large size construction companies• Have JAVA based version on the web• Robust Service Management and Equipment modules• Forces GL accounts to cost types
  15. 15. Should the Key Concepts Integrate?YES!!!• A good construction software package should work with all areas ofyour business, from start to finish.• Estimating– Entering job budgets/estimates or having them import directly from the estimatorare vital to accurate job costing and future data analysis.• Project Management– Track RFIs, submittals, transmittals and daily reports in one central location.– Track change requests and/or change orders within your software for accuratebilling and job cost reporting.• Accounting– Tracking subcontractor contracts and supplier purchase orders help you staywithin budget and avoid possible overpayments and price discrepancies.• Security– Multi-level user restrictions and data access
  16. 16. YES!!!• Can your current software grow with you?• As you become more sophisticated in your business approach, soshould your software.• The software should be able to easily scale up when you do.• It should have scalable security so only the right people haveinformation to the right areas.• Profit can be won and lost in the field so you need the rightinformation at a moments notice.• It should be intuitive to use, so training new employees isn’t adaunting task.Should Software Grow With YourBusiness?
  17. 17. • Construction software packages can run between $500-$50,000.• Computer hardware can run between $1,000-$100,000.• What is included in these price ranges:– Software• Software package of choice• Software licenses• Software service and maintenance plans• Implementation Cost• Potential ongoing customization and/or consulting• Other 3rd party software applications– Hardware• Server(s)• Workstation(s)• Licensing• Printer(s)• Network Equipment• Ongoing IT maintenance costs• External peripheralsHow Much Should Your Software Cost?
  18. 18. • Considerations– Estimating• Staffing (Do you plan on growing?)• Job Types (Private, Public Works, Government)• Reporting Needs (Internal and external)– Project Management• Staffing (Do you plan on growing?)• Job Types (Private, Public Works, Government)• Reporting Needs (Internal and external)– Accounting• Staffing (Do you plan on growing?)• Job Types (Private, Public Works, Government)• Reporting Needs (Internal and external)• Outsourced work (PayChex, ADP, Etc)– Security• Staffing (Do you plan on growing?)• Reporting Needs (Internal and external)Software Costs Are Relative
  19. 19. What is Cloud Computing?• “Cloud” is a set of hardware, networks, storage, servicesand interfaces that combine to deliver different aspectsof computing as a “service”.– Services include software, infrastructure and storage over theinternet• There are 3 models of cloud services that can beprovided by a company– IaaS (Infrastructure as a Service)– PaaS (Platform as a Service)– SaaS (Software as a Service)• These models then lead to the “Cloud Clients”
  20. 20. Cloud Models• IaaS (Infrastructure as a Service)– The most basic cloud environment– The provider offers storage and computer resources thatdevelopers and organizations can use– Often times provided as virtual machines (or combo of virtual inphysical)– Ability to scale services up and down according to user needs– User typically will install their own OS and applications and thenmaintain updates and new installs– Examples: Amazon Elastic Compute Cloud, Azure ServicesPlatform, Google Compute Engine, HP Cloud
  21. 21. Cloud Models• PaaS (Platform as a Service)– The provider builds an environment that offers “black boxservices” where developers can build applications.– Typically the provider will include the operating systems, webserver, and possibly the programming language environments ordeveloper tools– This service allows developers to develop and run their softwarewithout worrying about the cost to build the environment theyneed– Sometimes providers will build environments that will growautomatically to match the demand of the developers– Examples:, Windows Azure Cloud Services, GoogleApp Engine
  22. 22. Cloud Models• SaaS (Software as a Service)– The provider builds the environment and hosts software and/ordatabases for the end user– Provider manages the infrastructure and platforms that run theapplications.– Typically there may be many virtual machines built to handle theload and load balancing is handled seamlessly in the background– Providers typically price the applications/environment on a pay-per-use basis or subscription basis• Typically monthly or yearly flat fee per user– User just connects via cloud client and uses system– Examples: Google Apps, Microsoft Office 365– Only downside is data is stored on provider’s server
  23. 23. Cloud Models• Cloud Clients– Users access through networked client devices– Users often use web browsers– Users seldom need specific software loaded– Minimal hardware requirements– Examples: Desktop computers, laptops, tablets or smartphones
  24. 24. Cloud Characteristics• What Makes Clouds Attractive?– Elasticity and scalability• The resources allocated can grow or shrink based on the company’s needs• This growth may come from the number of users or from the softwarerequirements– Self-service• Users can request changes to the environment (faster processor, morememory, more storage)– Standardized interfaces• What the user sees (application interfaces) is the same for all users. Keepscustomization costs low if basic layouts are all that is required– Billing and service usage metering• Pay as you go – the usages is metered and pay for what you use
  25. 25. Cloud Issues/Concerns• Providers and Business Considerations– Cloud security• Identity management – manage personal identity info for proper access tomaterials• Detection and forensics – ability to separate legal from illegal activity• Encryption – ability to protect your information– Cloud manageability• Assets as well as the quality of service must be managed– Cloud standards• Standards provided to company ensures that users can take tools,applications, images and data to other cloud environments without having torework anything– Cloud governance and compliance• Who is responsible and what are the policies and procedures surroundingthese responsibilities
  26. 26. Cloud Integration & 4 Keys• Keys Components of Software– Most businesses will fall into the SaaS model for their Cloudneeds– This is beneficial to them because they can do all the work theyneed in the first three components in any environment – whetherit be in the office or out in the field during meetings– The key component to consider is security• Who’s going to have access to the data?• Who has access to modify security? Someone in a branch office, someonein the corporate office, someone at the SaaS provider level?• Where’s all the data stored and how much data can they store before theyrun out of room?• With the two biggest concerns being increased security needs as well as datastorage, when do the costs get prohibitively expensive?
  27. 27. ?Q & A