RSMUS.comConstruction-based companies have always been behind the curve in terms of accounting. Not because they neglect accounting but simply due to the nature of the work.
Here’s what we mean. Construction accountants often have to wait until after a project finishes to get data about the actual costs. And the data they receive may be incomplete, inaccurate, or incomprehensible. As a result, accountants are always reacting to circumstances they can’t adequately forecast or control. To put it differently, the accounting department is always catching up to the rest of the company.
This is problematic for a few reasons. It puts extra pressure on accountants to work on short timelines and overcome information deficits. Worse, arguably, it leaves a company with old, untrustworthy financial data that compromises sound decision-making. Construction companies have relied on reactive accounting because it was the only option, not because it was the best option.
Fortunately, that’s changing. Proactive accounting – the kind that anticipates things early, plans in advance, and adapts before not after things happen – is now possible thanks to modern financial management platforms like Sage Intacct. More than just another accounting tool, Sage Intacct transforms how construction companies manage money by putting them ahead of the curve like never before. Here’s how:
See the Past to Forecast the Future
The Sage Intacct Project Cost and Billing software exemplifies what proactive accounting looks like. It integrates and analyzes more historical data to understand the true cost of past projects. Then, based on that more accurate understanding of what drives project costs, it creates smarter estimates that preserve or even improve profit margins. An open API connects Sage Intacct with operations solutions so that accountants or project managers can see what’s in the pipeline, arrange schedules and materials, and turn estimates into projects without manually re-entering the data.
Take Project Management to New Heights
Sage Intacct proactively highlights issues before they become problems with specific workflows for time tracking and cost management. Teams can access this data online so they are always aware of the numbers, and they can easily compare actuals to estimates or quickly answer questions about project progress. Keeping this information top-of-mind and close-at-hand helps to prevent profit fade over the course of a project.
Put Billing and Revenue Recognition on Autopilot
Updating Excel spreadsheets to calculate work-in-progress schedules with earned revenues is the kind of reactive accounting we can leave behind. The billing automation in Sage Intacct automatically generates invoices with the right format, terms, and amounts (no typos). Revenue recognition, which happens separate from billing, automates the calculations and postings based on milestones, schedules, or percentage completion.
Build Confidence and Clarity into Decision-Making
Sage Intacct functions as a single-source-of-truth: one repository for all financial data. Instead of making people wait or hunt for data, Sage Intacct collects it together for easy exploration, automatically updates it in real-time, and condenses it (in the form of reports) to easily find actionable insights. Having a broad and deep view of data, on-demand, helps decision-makers inside and outside accounting come to the right conclusion more often—what could be more valuable than that?
Integrate Systems to Unleash Innovation
All-in-one accounting solutions are reactive by nature – they force users to take whatever the developer delivers. Sage Intacct goes in a different direction. It leans into its strengths – accounting and finance – and then integrates with other leading business tools like Salesforce for everything else. The open API empowers companies to proactively build their own tech stack to fit their needs and budget.
The Time is Now to Embrace Proactive Accounting
The difference between reactive and proactive accounting is night and day. Before, construction accounting was about putting out fires and crunching to meet deadlines. The whole point was just to keep up. With proactive accounting, keeping up happens automatically, so accountants can focus on bigger things instead. The old way looked backward; the new way looks forward, and companies gain a whole new outlook as a result.
Is reactive accounting a problem for your team? We are extending a limited time offer for a free one-hour assessment consultation with you and your team to understand your organization’s pain points and demonstrate how Sage Intacct can relieve that pain. Contact us to schedule an appointment today.
