Construction Industry Update: Advancements in Second Generation Computer Software; Construction Accounting Software
De Lorenzo, Paula, Wicks, Jack, The CPA Journal
As with most industries, computerization in the construction industry has moved from a technological luxury to a business necessity. Today, in fact, 95% of large firms have their accounting tasks computerized, 70% of medium-sized firms and, typically, 25% of small firms. Outlook for the year 1995 increases these percentages to 100% for large companies, 90% for medium-sized ones, and 60% for small construction firms. But, the real story lies in the software upgrades that are taking place in construction companies that are already computerized. More and more firms are moving from general accounting software packages to industry specific systems that meet head-on the unique accounting needs of the building industry.
In the past several years, industry software has grown from an embryonic stage to adulthood. Software has become industry (and even sub-contractor) specific.
Initial packages could handle only a limited number of sub-companies. Today, the most sophisticated packages now afford the capability of processing up to 99 companies. Today's construction software also has the ability to combine or consolidate all or any selected portions of the separate companies.
Produces Detailed Analysis
One of the most sophisticated and powerful examples of the new generation of construction accounting software is The Construction Manager, from Software Shop Systems. With this software, each company can be departmentalized. This provides very detailed sub-ledger analysis. The features afforded by its Job Cost module further enhance the detailed analysis factor. Each job can be studied from the aspect of estimated versus actual costs in as much detail as management and auditors could ever require.
Detailed cost reports are another important feature of TCM and many other second generation software packages. The reports help identify potential problem areas early and allow management to isolate these areas and implement corrective measures. In addition, estimators rely on historical data to fine tune future bids for more successful results.
From an auditor's viewpoint, such systems can produce schedules of all kinds when balance sheet or income statement analyses are requested.
Although The Construction Manager comes with many pre-written reports, its custom report capabilities are invaluable. The accountant can pull data from any module (Job Cost, General Ledger, Accounts Payable, etc.) and combine it into any format necessary. No programming knowledge is needed to write these reports. They are very easy to create.
The Construction Manager takes networking beyond the typical installation by allowing more than one workstation to access the same company and the same module simultaneously. …