7 Tips for Successful Construction Accounting Software Implementation

Many contractors delay construction accounting software implementation and purchasing due to the anticipated pain associated with conversion. A successful software implementation is similar to a successful construction project in that thorough planning combined with skilled execution results in project success. Similarly, this basic construction logic can be applied to software implementation.  Keeping the construction process in mind, here are seven tips for a successful software implementation.

1.  Define What Success Looks Like

In construction, the project estimate defines success by establishing a budget with an anticipated profit margin. Although defining success as it relates to your software implementation isn’t so straight forward, it’s still important to establish guidelines for measuring success.

The easiest way to define a successful software implementation is to identify existing processes that aren’t working and outline how construction accounting software will improve them. A real-world construction example would be if you wanted to replace a labor intensive, spreadsheet-based work-in-progress (WIP) reporting system with an automated process within your new construction accounting software that eliminates duplicate effort and takes seconds to complete. In this case, success is easily measurable and clearly defined. 

Invoice approval is another example. If you’re replacing manual invoice routing with an electronic invoice approval system, success might be defined as achieving approval 50% faster while eliminating lost or misplaced invoices. This same concept can be applied to all of your procedures, whether they are related to jobs, employees or equipment.

2.  Spend Time Up Front Planning Your Coding Structure

Pre-planning is an important part of a project and also construction accounting software implementation. Take advantage of the accounting software planning process to establish a more logical and standardized coding structure for your jobs, general ledger (GL) chart of accounts, vendors and customers. This is especially true if you are migrating from an antiquated legacy system with limited flexibility or a generic accounting methodology that offers little structure at all.

A standardized coding structure allows you to gain greater business insight through your software reporting system. For example, with a departmentalized GL structure, you can quickly access specific information related to a business unit, such as your service department. In addition, when a master setup for job cost codes is established, account #100 will always signify the same thing regardless of project details which allows you to compare data across all jobs.

3.  Clean Up Your Data

In construction, you wouldn’t start a new project with old data. The same applies when you begin migrating existing data into new construction accounting software. Take this opportunity to clean up your data by eliminating duplicate vendors, purging old information, evaluating outstanding payables and receivables, and getting accurate inventory counts.

This step helps you start with an updated and organized dataset making it easier to utilize the full potential of your new accounting software. If you have receivables that are outstanding by 120 days or more, question why they still exist and create a plan to collect payment. If outstanding credits are present with little-used vendors, instead of carrying those credits forward consider requesting refunds. Do you have old employee data? Perhaps it’s time to archive this data. For current employees, review to ensure you have updated W-4 forms on file or if any critical licenses or certifications have expired.

4.  Create A Schedule With Milestones

Treat new accounting software implementation like a construction project by creating a schedule with milestones. Assign an in-house project manager (PM) and ask for a designated project manager from your software vendor. To achieve new software implementation success, there needs to be accountability. Enable the project managers and communicate that they’re ultimately responsible for driving the project towards completion, managing timelines, and budget.

The size and complexity of your construction accounting software system dictates your schedule, but try to set a firm go-live date. Like many construction projects, unforeseen delays happen during software conversions. It’s okay to make adjustments to your schedule but be aware if your go-live date keeps getting delayed.

5.  Implement Your New Software in Phases

Every construction project is executed and completed in phases. Software implementation is complex and also benefits from a phased approach to implementation. A phased approach will ease the adoption of new software by allowing your staff to become comfortable with the basics before more involved functionality is added. 

Phase 1 – Build the Foundation

Implement basic functionality that replaces and improves upon the legacy processes that were being previously executed. The focus during the first phase should be on core accounting including job cost and payroll.

Phase 2 – Add Framework

Implement functionality that wasn’t being utilized before and focus on improving operations that are vital for success. Processes like inventory management, purchasing, equipment management, and customer reporting should all be optimized and implemented during this phase.

Phase 3 – Add Custom Finishes

Once the core functionality is established, now is the time to build for the future. Implement functionality that will not only improve your day-to-day, but revolutionize your operations. Electronic document management, field-to-office collaboration, remote timesheet entry, and a field service system are all things to think about during this phase. 

6.  Establish New and Improved Procedures

Just like you implement new procedures for improving things like job site safety, capitalize on new software implementation by establishing new procedures that improve construction accounting processes.

Better processes make the people that execute them more efficient and help important details from getting lost. Some examples include creating collection policies for past due invoices, scheduling payables to take advantage of vendor discounts, and using triggers or alerts for insurance expiration dates or to flag missing employee information.

7.  Set A Profitable Training Mindset

It takes time and investment for an apprentice to become a journeyman. The same rings true to become an expert of your new construction accounting software. Don’t view training as an expense, look at it as an investment and budget accordingly.

Without adequate training, software devolves to a disposable tool. When user training is prioritized, software becomes an investment that delivers a positive return over time. In addition to initial software training, it’s a good idea to schedule more in-depth training at three, six, nine, and 12-month intervals.

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To learn more about how Deltek + ComputerEase construction accounting software can increase job profitability and help grow your business, request a demo today.