Embracing the Digital Shift: How Acumatica Addresses the Unique Challenges of Construction Accounting

Construction is a complex industry with numerous considerations throughout a project’s lifecycle. These include determining project feasibility, meeting promised deadlines and budget targets, navigating regulatory and environmental hurdles, managing stakeholder relationships, and mitigating challenges like supply chain disruptions and labor shortages. As a result, construction accounting is one of the most arduous yet mission-critical tasks to manage.

Acumatica offers a comprehensive solution that helps construction companies confront and overcome the specific challenges they face, particularly within the accounting and finance realm.

CHALLENGES AND PAIN POINTS

Each construction project encompasses a multitude of tasks, including project costing, job tracking, equipment management, subcontractor coordination, and regulatory compliance. As such, managing the financial aspects of these projects can become quite complex. For larger organizations juggling a dozen or more projects simultaneously, these complexities increase tenfold.

To facilitate project success and business sustainability, accounting has the responsibility of ensuring accurate financial reporting and profitability analysis. Failure to do so can cause a ripple effect across the organization, resulting in everything from cost overruns to project delays to cash flow problems. The need for visibility, security, and integration of multiple systems into a single source of truth cannot be understated.

A TAILOR-MADE SOLUTION

Acumatica is a cloud-based ERP solution designed to address the specific hurdles facing construction accountants. The specific design of the system enables streamlining of construction project budgets and allows for project budget forecasts, which can be crucial in re-timing or phasing project budgets as circumstances change during the project lifecycle.

Acumatica also provides integrated payroll and tax compliance specifically designed for construction companies that handle union work, prevailing rates, and certified payroll. It prevents outdated tax compliance, and accruals can be calculated based on hours/cost info and posted to the project as timecards are posted, aiding in the accurate and timely management of payroll and related compliance.

Finally, Acumatica helps with better management of work in process (WIP), which can be challenging for construction companies, particularly when not operating on time and materials jobs and/or dealing with seasonal fluctuations or supply chain delays. Acumatica automates and simplifies this process by allowing custom billing and allocation rules for calculating WIP value in real-time.

BENEFITS OF ACUMATICA FOR CONSTRUCTION ACCOUNTING

Acumatica is tailor-made to support construction companies, providing streamlined processes, real-time insights, and can lead to increased profitability. Specifically, it integrates accounting, construction projects, inventory tracking, and manufacturing all in one system, delivering maximum visibility and oversight.

The platform offers a user-friendly licensing model based on consumption, as well as the ability to fully customize the solution. This allows construction companies to adapt to evolving business needs, digitally shift to address challenges, and easily expand into other industries, such as distribution, manufacturing, and professional services.

KEY FEATURES AND FUNCTIONALITY

There are many ways Acumatica helps construction companies thrive in the digital economy. Here are a few of the platform’s most noteworthy features:

PROJECT ACCOUNTING

Acumatica facilitates real-time tracking of project costs, budgets, and profitability. Custom billing and allocation rules help companies automate and customize their billing and financial calculations. Rules can be used in tandem to provide real-time accruals and financial tracking for project costs.

JOB COSTING AND TRACKING

Acumatica’s construction accounting software helps monitor job progress, costs, and timelines for greater project control. The platform also assists with calculating work in process (WIP) values, particularly for time and materials-based jobs.

EQUIPMENT AND INVENTORY MANAGEMENT

The platform helps optimize inventory management, offering options for inventory replenishment and can integrate with other types of activities such as field service. It also allows for flexibility in tracking inventory based on project needs and accounting perspectives.

SUBCONTRACTOR AND VENDOR MANAGEMENT

Acumatica streamlines communication and collaboration with subcontractors and vendors. Thanks to its unlimited user license model, subcontractors can access the system and can be deactivated as needed. Complex security allows complete control over what users can access and what they are allowed to do while working within the platform.

PAYROLL AND TAX MANAGEMENT

Integrated payroll and project accounting is beneficial for construction companies, especially those that deal with certified labor and prevailing rates. Time not only impacts payroll but also project profitability. Acumatica has its own integrated payroll system specifically designed for construction companies, handling certified payroll, unions, prevailing rates, and tax compliance.

COMPLIANCE SUPPORT

The compliance module in Acumatica’s construction management software allows tracking of various compliance documents, such as subcontractor insurance certificates and lien waivers. It helps ensure that all necessary documents remain up-to-date to more easily remain in compliance.

CHOOSING THE RIGHT CONSTRUCTION ACCOUNTING SOLUTION

Accounting, like just about every other function in the construction sector, is anomalous and complex. It cannot effectively be managed with one-size-fits-all software, but instead requires a robust solution that is explicitly designed to support the unique needs and challenges of the construction industry.

Not only does Acumatica’s construction accounting platform offer industry-specific features and functionality, but it also provides users with control, visibility, security, and seamless integration with existing infrastructure. This positions Acumatica far above other ERPs and underscores its commitment to the industry.

MARCUM TECHNOLOGY: A PARTNER YOU CAN TRUST

The process of researching, evaluating, selecting, and ultimately implementing the right solution can be a daunting task—particularly for larger entities or those that operate within a sub-speciality. Having the right partner in your corner can save you time, money, and the headaches that often arise from pursuing such an endeavor on your own.

Marcum Technology brings decades of experience in planning, implementation, and support to the table. Our deep understanding of the construction industry enables us to provide invaluable insight and field-specific guidance and support, from planning to implementation to deployment and beyond.

Furthermore, because Marcum is an active user of Acumatica for our organization, we are uniquely positioned to assist others seeking to integrate the platform. Our direct, hands-on experience, coupled with Acumatica’s powerful, industry-specific software solution, will elevate, and optimize your construction accounting to build a brighter future.