How To Select Accounting Software for Construction Contractors


There is no one best software for all contractors.

Although QuickBooks is known as the most popular software among the smaller-sized businesses, many contractors are still searching for alternatives. QuickBooks users find the software easy to use and affordable. However mid-size self-perform contractors opt for more expensive software because the software gives them detailed job cost reports that they need.

In searching for accounting software, you have three options:

  1. Purchase popular commercial software that your competitors use.
  2. Purchase not-so-popular commercial software.
  3. Hire a programmer to write software customized to your business.

In most cases the first choice is recommended not only because the popular software has been tested by many users but also because it is easier to find staff that knows how to use the software.

Using popular software helps you lower support cost, maintenance cost, and training cost, which, in many cases, weigh over the cost of the software itself. In selecting accounting software, contractors ought to do a cost/benefit analysis. Below is a list of suggested cost elements that you should consider before deciding to implement new construction accounting software.

Costs associated with implementing new accounting software:

  1. Software cost
  2. Hardware cost
  3. Labor cost for system set-up and installation
  4. Labor cost for data transferring
  5. Training cost
  6. Cost of learning curve
  7. Cost of interruption of business activities
  8. Maintenance cost
  9. Technical support cost (Items 4-9 are “soft costs”)

While software, hardware, installation costs can be easily estimated, the “soft costs”, which sometimes are much greater than software costs, are very often overlooked. The more sophisticated the software is, the more the soft costs are and the more sophisticated software is, the more time required to set up and maintain.

Contractors should decide how much detailed of job cost reports that would be beneficial for their businesses before seeking advices from accountants regarding selecting construction accounting software.

For more information, please contact Dao CPA, P.C.