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How using software like a crystal ball can help construction finance leaders plan ahead 

Find out how using software can help you as a finance leader, and your finance team, to work more efficiently and effectively. 

Seeing what lies ahead can be challenging when the skies of uncertainty are overcast with numerous clouds. 

Construction projects involve lots of uncertainties, such as changing material costs, labor fluctuations, and unexpected delays.  

Project timelines are often influenced by regulatory approvals and client decisions, which makes accurate predictions very challenging.  

And long project lifecycles, evolving economic conditions, and reliance on subcontractors further complicates forecasting.  

It’s the unpredictable nature of construction projects that makes it difficult for finance leaders to see ahead clearly. 

In this article, we look at how moving away from manual processes and using software can help you, as a finance leader, and your finance team work more efficiently and effectively. 

Know where you stand—and where you’re heading 

Modern accounting software can be your crystal ball. 

It plays a pivotal role in transforming the reporting and forecasting capabilities of your construction company because it offers sophisticated tools to navigate the industry’s intricate (and sometimes unpredictable) challenges. 

Your construction company can harness accounting software for enhanced reporting and financial forecasting in the following ways: 

  • Custom dashboards allow you to monitor key performance indicators (KPIs) tailored to your company’s unique requirements, which facilitates informed decision-making here and now. 
  • Advanced accounting software can automatically calculate job costs, incorporating labor, materials, and overheads, to provide real-time insights into project profitability. 
  • By integrating with other operational systems (such as customer relationship management, CRM, or enterprise resource planning, ERP, software), financial data can align with operational metrics and give you a comprehensive view of your company’s performance. 
  • If your construction firm operates across multiple entities or geographical locations, accounting software simplifies financial consolidation and provides visibility into the financial health of the entire organization. 

And modern financial management software is scalable. For example, as your construction company grows, the software can accommodate higher transaction volumes and complexity without a drop-off in performance. 

Look ahead with confidence 

Construction projects are inherently dynamic, subject to unforeseen delays, scope changes, or economic shifts. Things often change—and quickly.  

With the ability to model and forecast financial scenarios, modern financial management solutions can help your construction company: 

  • Anticipate cash flow needs 
  • Identify potential financial risks 
  • Plan for future growth.  

Financial management software can incorporate flexibility into forecasting models, which allows you to adjust assumptions and scenarios.  

Risk management is a critical aspect of construction forecasting, and modern accounting software can also empower you to identify, assess, and mitigate risks.  

The financial software comes equipped with analytics tools for the evaluation of various risk factors such as market volatility, supply chain disruptions, and regulatory changes. 

To get predications right, team collaboration and communication are integral— especially when it comes to forecasting.  

Rather than drowning in spreadsheets and using manual processes to look at old data, having access to real-time financial data courtesy of software will make everyone more efficient. 

It allows different teams and departments in your construction firm to work concurrently, ensuring everyone is on the same page regarding project finances. 

And remember, a collaborative approach to finance minimizes delays and miscommunications, and leads to more accurate forecasting. 

Get reports on what’s happening right now 

Things move fast in the construction business and there are many aspects of operations to keep an eye on.  

Using software that gives you access to a dimensional general ledger will provide your construction company with a flexible and powerful accounting foundation, because you can track financial data based on multiple dimensions, such as projects, locations, departments, or cost centers.  

Tagging transactions—as well as operational data—lets you quickly view your data from any angle. 

You can add specific business context to your data, while maintaining a lean chart of accounts.  

You can also create role or task-based dashboards that leverage KPI scorecards and dimensional filters that give your key decision makers access to the information they need on-demand. 

Make better decisions with real-time dashboards and reporting 

Ill-informed decisions can cost your construction company time, money, and opportunity.  

Imagine using outdated labor costs when quoting a bid, for example. 

Modern software offers a wide range of customizable financial reports, dashboards, and visualizations, enabling your construction business to track KPIs, identify trends, and make data-driven decisions.  

From the minute you login, you’ll see the most up-to-date data, so you know what’s going on with your construction business.  

You can also set up project managers with custom dashboards, so they can see current information to help them do their jobs. 

Big returns in the cloud 

The advantages of cloud-based financial management software are significant.  

Cloud systems, being web based and real time, accelerate crucial financial processes such as collections, consolidations, and period closes.  

Being in the cloud means:  

  • Upgrades are deployed and managed by the vendor 
  • Fast deployment and virtually zero unplanned downtime 
  • Always-on integration with leading business-critical applications, such as Salesforce.  

And using software with extensive automation and integration capabilities means you can eliminate manual data entry and significantly reduce the need for spreadsheet maintenance.  

In addition,  

cloud-based solutions offer a 4x higher ROI compared to on-premises software, according to Nucleus Research. 

Faster closes means faster reporting 

Lastly, imagine having period-end figures in less time. 

Using software means you can substantially shorten close times. Its automated workflows, streamlined business processes, and real-time integrated systems reduce the average month-end close time by up to 50%.  

This means your finance team can close the books faster and have financial statements ready promptly. 

Final thoughts 

Modern financial management software can be a crystal ball for construction companies seeking to improve their forecasting capabilities.  

By automating processes, providing detailed insights, fostering collaboration, adapting to changes, managing risks, and ensuring compliance, these advanced tools empower you to navigate the complexities of the construction industry with greater precision and confidence.  

As construction projects become more intricate, the adoption of modern accounting software becomes not just a convenience but a strategic imperative for sustainable growth and success.  

Ready to transform your financial processes with automation?

Unlock the power of innovation by downloading our comprehensive guide "Fast Close. Faster Insights".

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