Construction Accounting Software

What's Special about Construction Accounting?

Construction Accounting Software is unique – because the Construction Industry is like no other.

A construction project is not a manufactured item – so why attempt to use Manufacturing or ERP (Enterprise Resource Planning) originated software to manage construction.

If you look closely at your database and see lots of Pricing Tables then there's a good change the package was designed for selling products not for building. These solutions typically have unnecessary duplications in their data files.

Muli is one of the very few Construction Accounting software packages in the world where every module, function, report and feature was conceived exclusively with your industry in mind. And Muli was designed not by a “software techie” but by an experienced Site / Project Manager for Major Projects.

Q. Why does Construction Accounting need to be unique?

A. Construction projects themselves introduce complications. They may involve large value contracts that are executed over a number of financial periods and effect profit reporting. This also has Taxation implications.

A. Large projects can have changes in scope (variations) that may be greater than the project's Gross Profit. Unless these variations are managed properly then the very viability of your business is at risk. You need purpose built Construction Accounting Software that produces the required Notices to ensure that if contracts are disputed then you have the required paperwork to help justify your claims in a court of law.

A. Construction involves other risks that can cause cost increases or time delays or both. You need to manage these risks and ideally the software would incorporate a Risk Management system to ensure the key items of work, decisions or verifications are properly managed.

A. Taxation Laws of Australia (and probably elsewhere) treat certain construction specific transactions in a special way. Consider the treatment of:

  • GST (Goods & Services Tax) on Progress Claims
  • Retentions

A. In fact Retentions Management should be totally integrated into the progress claim process. And there is nothing similar in any other industry so if its not part of the software design then it's back to managing your retentions on spreadsheets.

A. Because how you claim and invoice can vary depending upon how you contract – whether it's Lump Sum or Cost Based (construction and project management). Your software needs to handle both.

A. Good Project Managers will maximise the income from their projects (under the terms of the contract) resulting in funds being received prior to expenditure. Companies that squander this liquidity run a risk of failing. Construction Accounting Software should focus on providing tight liquidity management with current liquidity status for all projects being always available.

A. This Liquidity represents "project prepayments" which should reported as such and not confused as "profit". A proven approach is to report on current "earned value" by projecting both Income and total Project Costs to completion. This is often referred to as Earned Value Project Management and is best incorporated into the interface between the project management and general ledger modules as part of the software design.

In summary, General Accounting Software, or even job related packages such as Work Order Management software or Job Costing software, fails to provide what your industry requires; namely a package that mitigates disputes, manages risks, conforms to industry Taxation requirements, handles all contract types, and accurately reports liquidity and profits. And you are best served if your software is totally designed with this in mind – rather than having extras “bolted-on”.

All of these functions are best met through software conceived as Construction Accounting Software.

Prefer Watching Construction Accounting in action?

 

Introduction to Muli:

  • 3 minute overview
  • 21 minute tour
  • All main modules

watch an indepth demo