If you are ready to purchase new accounting software for your construction business, here are some top considerations to get you started with the process.
#1 Create a Software Selection Advisory Team (SSAT)
A software selection advisory team (SSAT) is a group of four to six knowledgeable team members from various departments of your construction firm who will benefit or be affected by the implementation of a new accounting software platform. These team members should understand the ins / outs of the day to day operations, as well as the operational and management reporting needs of their department.
Once created, the SSAT will be able to evaluate a solution with the entire company in mind, not just focusing on one specific department (like IT or Accounting). This will help to ensure that you make a purchase that benefits the company as a whole and receive buy-in for all the divisions.
#2 Determine your needs, wants, wishes and reporting capabilities from new accounting software
It is best to start the software selection process by determining the current challenges within each department. Could these challenges be alleviated by a change in software platform or workflow? Then determine the challenges you are encountering with your current software platform.
Have the SSAT answer the following questions:
- What does the current accounting software do well for my construction company?
- What does your current accounting system lack?
- Are there critical business functions done outside of the software?
- What is our transaction volume?
- What functionality is vital to day to day operations?
- Does my new software need to integrate with existing software or hardware?
Then you will want to discuss what functions you need the new accounting software to do. A need is a function critical to day to day operations. For example, you might need to have a procurement system within the software or more robust job costing. These are features that without them, your construction firm cannot function.
After discussing your needs you will want to figure out what new features you want in the software. Wants are functionality that your current software is lacking that would help you better control your business and construction projects. For example, perhaps you would like a web-based platform or to regionalize your income statement. Ask the following: what functionality would help me run my business more efficiently?
Lastly, discuss your wishes. This is where you can get off track. Remember, software is a tool. While it can help automate and streamline certain tasks for you, it still requires a human to operate it. You must be realistic about what your software wishes are. Make sure to create a list of wishes that are attainable.
Now is the time to figure out what type of reporting you need the new accounting software solution to produce. Have the SSAT discuss what the internal and external reporting needs will be.
Financial Reporting Questions to Consider:
- How is data shared between departments?
- What type of financial reporting is needed internally and to external users (bonding, banking, insurance)
- What reporting is required for day to day operations?
- What reporting is important on a monthly, quarterly and annual basis?
#3 Create a budget
Start thinking about how much you would like to spend for new accounting software. Make sure you do not forget to include the cost of items like hardware, implementation, data migration and training for staff.
Sometimes it can be easy to compare products based on price alone. Don’t fall into this trap. Many times investing more money on implementing the right solution can save you tons of money. Purchasing the wrong software that might be cheaper upfront could lead to more costs on the back end with additional add-ons, customization or programming needs. Be sure to take advantage of current promotions.
#4 New Accounting Software Evaluation Process
Now that you know what features, functionality and reporting is important to your construction company, you can begin your search for the right solution. But where do you start your search for the perfect new accounting software? Why not start by asking other companies, like your subcontractors or competitors what they are using for software. Do they like their software – why or why not? Is it meeting their needs?
Sometimes professional organizations where you are members of can provide you with a list of preferred vendors.
The internet also provides a wealth of information when researching for new accounting software. You can find the products available in your market, read reviews, watch demo videos and also find local retailers or software partners.
If you have any specific questions, please reach out to one of our Plumb experts for help.
