Why Construction Accounting is Different
Whether it’s organising payroll, bookkeeping, invoicing, bank reconciliation, chasing Debt or anything in between, construction accounting software needs to be comprehensive, easy-to-use and efficient.
Xero has become the weapon of choice for construction professionals of all shapes and sizes, and even integrates with your estimating software like Cubit and Tradify. Let’s look at the nature of construction accounting and why you NEED TO consider a specialist accountant and Xero for your business.
Why Construction Accounting Needs to be Different
The chances of finding a fixed business structure in the construction industry are small. Your site manager, likely a contractor, probably does not employ most of the people working on their project. Also, many contractors hire subcontractors and a team of temporary workers.
For this reason, construction companies are more fluid and changeable compared to conventional business structures. This makes the use of online accounting software like Xero a popular option.
Xero Tips for Construction Contractors
Xero accounting software is commonly used in the construction industry because it is convenient, offers an easy-to-use platform, and saves builders and other trades people a lot of time allowing them to concentrate on their businesses. Here are 8 essential uses and ways to get more from the platform.
Master Your Online Accounting Dashboard
Xero allows you to see all your accounting information on an online dashboard. This means that you can track your invoices, bills, payments, PayPal, credit card accounts, and bank balances in real time. The online accounting dashboard is designed to help you monitor your cash flow using simple graphs and charts. You can also customise your reports.
Use the Mobile Accounting App
Xero allows you to take charge of your finances from anywhere using its mobile accounting application for both iOS and Android. Mobile accounting makes it easier for you to approve expenses, send invoices, input receipts, and reconcile. If your construction business operates across multiple locations, you can set up an office wherever you want.
Xero allows you to connect to your bank and ensure your bank transactions are fed directly into the software each business day. This makes keeping tracking of your cash inflows and outflows is easy. Furthermore, you can also reconcile bank transactions
Use Online Invoicing
Xero’s online invoicing system is an easy-to-use software that allows your customers to pay you faster and with convenience. The program enables you to customise attractive invoice templates as well as set up online payments options and automatic reminders. Your customers will also admire your professionally crafted invoices that include your branding theme, business logo, and payment terms.
Integrate Xero with Your Other Software
You can tie Xero with other software systems like Buildertrend (a construction management software) and Cubit for estimating. Integrating your Xero account with the other platforms you use every day will streamline your processes, minimise errors and save you time and money.
Use Contacts and Smart Lists
Xero contacts address book allows you to view a customer’s or supplier’s sales history and email exchanges to drive more business and make informed decisions. The complete visibility provided by Xero contacts allows you to foster and grow customer and supplier relationships while developing opportunities. Customer history ranges from invoices, bills and purchased products to how quickly they settle their accounts.
Making Tax Digital
Xero is MTD compliant which means it can deal with all of your VAT filings online. If you are currently using a manual system or a software that is not MTD compliant you will need to change your system before 1st April 2019
Use Search and Find Features
Xero brings together all your business’ essential information. It also has a simple search bar feature that allows you easy access to any information you need from contacts to transactions. You can even use keyboard shortcuts in search to view other screens or add new items like contacts.
Xero is adapted for use by construction companies and builders because it has an intuitive dashboard that allows easy tracking of overall financial performance. It also allows easy integration with other construction software, streamlines bank connections, and is accessible across multiple devices including PCs, tablets, and mobile.