Construction Accounting vs. Regular Accounting  

If you run a construction company, you know it’s unlike managing any other type of business. Since construction companies are driven by individual projects that are often inconsistent and varied, accounting looks completely different than it does for traditional companies. But what’s the difference between construction accounting and regular accounting? 

Construction accounting involves not only standard accounts payable, accounts receivable, and payroll transactions but also job costing, change orders, progress billing, customer deposits, profitability reporting, and more. 

Navigating Construction Accounting in a Fast-Paced Environment

It’s no surprise the construction industry has a high rate of failure. Construction cash flow can be hard to maintain, especially if it’s not properly tracked and accounted for by an accounting department. Getting paid in construction can take a long time, and if your team isn’t properly managing cash flow, it doesn’t take long to run out of money. 

So, how can you optimize the efforts of your accounting department to help your construction company thrive? Automate your AP process with construction invoice software.

Automated construction accounting software, like PaperTrl, provides advanced AP tools that help you take on many of the tasks associated with accounting in construction with more automated processes and supporting data that feeds directly into your existing accounting system. 

  • Project-Based Accounting – In construction, you must process vendor bills quickly and accurately while ensuring you’ve captured the necessary data to manage your project’s profit margins. With PaperTrl, you can code material and labor costs, track costs at a project, task, or subtask level, issue purchase orders, consolidate bills, and create reports to track projected costs vs. actual costs.
  • Subcontractor Management – Working to improve vendor relationships is key when working with so many different subcontractors simultaneously. PaperTrl offers an optional vendor portal that provides complete transparency for your subcontractors and makes it easy for your team to identify any overdue invoices or set up automated bill processing.
  • Cashflow Management – A pivotal component of construction accounting, you can more easily increase your working capital by optimizing payables. PaperTrl gives you visibility into managing discounts, forecasting cash flow, improving liquidity, and overcoming low cash balances. 
  • Distributed Workflow – Construction companies are used to managing projects spread across multiple work sites. PaperTrl allows workers and managers to remotely issue purchase orders or receive goods on-location. 

When exploring the differences between construction accounting and regular — or financial — accounting, it’s essential to understand that traditional AP departments don’t have to deal with many of the variables a construction AP department must handle. 

And while your team might be fully equipped to handle things like job costing, estimates vs. actuals reporting, and job profitability reporting right now, the more jobs you take on, the more this will become a burden. If you want to continue scaling your business by taking on more jobs without having to expand your AP team, your best investment will be construction AP software that can grow alongside your business. 

Construction invoice software is uniquely designed to streamline the entire AP process from purchasing to payments, which can minimize human error, cut costs, and speed up bill processing – all of which are essential when managing a construction company of any size. 

Automate Construction Accounts Payable with PaperTrl

PaperTrl is a fully integrated, cloud-based AP automation software solution that helps companies who manage third-party vendors simplify and streamline the AP process from purchasing to payments. Our construction invoice software is simple enough for growing organizations yet powerful enough for complex enterprises. Learn more about PaperTrl and contact us for a free demo.