Best Construction Accounting Software for 2021 - NerdWallet

How do you know which construction accounting software is the best fit for your business? This article will familiarize you with the top construction accounting software programs available – both desktop-based and cloud-based.

But before weighing your options, it's important to understand how accounting software for construction companies is different from most typical business accounting software.

QuickBooks Desktop: Best desktop-based option

The desktop versions of QuickBooks — QuickBooks Pro, QuickBooks Premier and QuickBooks Enterprise Solutions — all have features you will find beneficial in your construction accounting software.

For the smallest companies, QuickBooks Pro will likely meet all your construction accounting software needs. QuickBooks Pro handles all the basic accounting functions a small construction business needs including invoicing, expense management and financial reporting — and is easily customizable to support your business's needs. You can customize the reporting to show job profitability, and the payroll add-on is robust enough for most small construction companies' needs. This construction accounting software costs $399.99, which is likely manageable for even startup construction businesses.

If you want more functionality in your construction accounting software, check out QuickBooks Premier. In addition to the features of QuickBooks Pro, QuickBooks Premier produces industry-specific reports, allows you to track costs for your inventory and gives you the ability to set prices by customer type. QuickBooks Premier comes at a one-time cost of $649.99.

Another construction accounting software option is QuickBooks Enterprise Solutions, the powerhouse of the QuickBooks Desktop products. Like QuickBooks Premier, QuickBooks Enterprise Solutions offers industry-specific tools, reports and features. It also allows you to set custom user permissions for up to 30 users, meaning you have complete control over who sees what information in your growing construction company. QuickBooks Enterprise Solutions costs $1,155 per year.

All desktop versions of QuickBooks can be accessed via the cloud using a hosting company like Right Networks. Hosting solutions require an additional, per-user fee.

QuickBooks Online with construction-specific add-ons: Best cloud-based option

One such cloud-based accounting software for builders is QuickBooks Online, which has made tremendous advances in job costing, project management and progress billing in the past few years, but alone it's probably still not powerful enough to support your construction company's accounting needs. It's important to note, though, that If you use QuickBooks Online as your construction accounting software, you will need at least one add-on app to help you manage all your construction accounting needs.

Let's take a closer look at some of these add-ons you may find most helpful with your construction accounting software:

• QuickBooks Time provides time tracking for your construction company. Employees can assign their time to a project, which makes billing a snap. But even more important for companies with remote work locations is TSheets GPS tracking. You can always tell where employees are when they clock in for work. TSheets costs $20 per month plus $5 per user per month for their small-business plan, which allows two to 99 users. If you choose to be billed annually instead of monthly, though, you'll save 20%.

• Hubdoc removes the hassle of collecting receipts and streamlines data entry. With the Hubdoc app, each member of your construction company can snap photos of their receipts and tag them for the appropriate project. With a couple of clicks, this data is transferred to your QuickBooks Online file.

• Knowify provides all the additional things general contractor construction companies need: project management, contract and change order management, and job costing. For $186 per month or $1,788 per year, you can manage up to 150 active jobs. Additional users can be added for $15 per month.

• CoConstruct is the highest-rated software for custom home builders and remodelers. If this is your construction niche, CoConstruct will give you all the tools you need to manage all aspects of your construction business. Like Knowify, CoConstruct integrates with QuickBooks Online. It's a little pricier than Knowify at $249 per month for the recommended standard pricing, but that price gives you unlimited user access and unlimited prospect and estimate projects.

For larger construction companies — especially home builders and remodelers — Buildertrend integrated with QuickBooks Online is preferred by Ruth Kohler of Due Diligence Bookkeeping and Kaydee Peterson of Measure Initiative, Inc.

With Buildertrend, you get all the reporting you need for your construction business, along with some helpful streamlining tools like direct vendor invoicing against a purchase order and direct submission and approval of change orders. Buildertrend does more than construction accounting, too — it also serves as a CRM and email marketing campaign manager.

Buildertrend's pricing is simple: $299 per month for up to three users, then $39 per month for each additional user. If you have more than 20 users, you can contact Buildertrend for custom pricing.

Core by BQE: Best all-inclusive option

If QuickBooks isn't a good option for you, another building industry accounting software solution is Core by BQE. Core is an all-inclusive project accounting software that handles project management, billing and accounting. Marketed primarily to professional services firms like architects and engineers, Core is still capable of helping you manage your small to medium-sized construction company's accounting. And if you need to manage government contracts, Core is DCAA compliant.

Core can be a little challenging to set up and use, but there is an active Facebook group full of users ready to support you. And Core has the most flexible pricing of any software on this list, with custom pricing for each type of user you need.

Sage 100 Contractor: Best features

Another construction accounting software program is Sage 100 Contractor. Designed for small to medium-sized construction businesses, Sage 100 Contractor offers most of the features provided by the other construction accounting software mentioned in this article, all in one spot. Add-on apps make QuickBooks Online more robust, but the cost for those apps can add up. Sage 100 Contractor gives you the functionality you need starting at $115 per month for one user.

Construction accounting software: What to look for

Construction companies have unique accounting needs. Although your profit and loss statement (P&L) and balance sheet will look very similar to that of any other business, there is a lot of important information you need that happens "below the surface" of these standard financial statements.

Some of the reporting your construction company needs in addition to the standard P&L and balance sheet are:

• Job costing: Job costing lets you assign expenses to each individual job. Without job costing, you have no way of knowing which jobs — or which types of jobs — are most profitable for your construction company.

• Project management: Project management is more than just knowing what phase each job is in, even though that in itself is extremely important. Proper project management helps you appropriately allocate resources to the various jobs your construction company has going on at any given time. It also allows you to project your needs for projects in bid.

• Budget and completion analysis: Budget and completion analysis lets you see how your construction projects are proceeding from a budget standpoint. In order to maximize your profitability on a job, you want to deliver it under budget and on time. Without this analysis in your construction accounting software program, you can be left guessing on whether or not this will happen.

• Change order tracking: A construction project without change orders is rare. If you can't track your change orders, you could easily leave money on the table or have to make costly changes to work that is improperly done.

These are the most "basic" additional accounting needs construction companies have. Your company might have different needs. This makes it even more important to use construction accounting software that fully supports your business.

A version of this article was first published on Fundera, a subsidiary of NerdWallet.