Owning and implementing construction accounting software allows for two very crucial things: keeping track of finances and analyzing key metrics.
While keeping track of receipts, bills, expenditures and other finances is important, tracking metrics is often overlooked, despite being far more important to construction companies. It is important for growing companies to remain organized when it comes to their finances, but the benefits of using accounting software reach their peak once you know what to do with the data that is recorded in your books.
The Onset of Big Data
We don’t have to prophesize about the coming onset of big data and what it can do for companies because the results are already in. Data analysis is becoming a top business priority for many companies. Retailers are projected to be able to increase their profits by up to 60 percent, while the healthcare industry is estimated to be able to save billions.
It’s a strategy that is still severely overlooked by companies across all industries, yet it is remarkably easy to implement, once you know what you are looking for.
Know Your KPIs
The first step to take when leveraging the data you collect is to know what metrics are important to you and which to ignore. Before you go off looking for generic information on data collection and analysis, know that not every company, let alone every industry, should be interested in the same information.
The amount of data that can be collected is massive, and software programs like Sage are very good at aggregating a large range of figures. But you can spend countless hours sifting through all of it only to come up empty handed if you don’t have an understanding of what you are looking for.
The first essential step is identifying your key performance indicators. What is important to your business? Are you looking to cut down on expenses, better optimize your internal processes or make better use of your payroll budget? All of these can be answered from the data you collect, you just have to figure out bets relates to your business goals.
Great Metrics for Construction Companies
Some of the patterns that you may want to focus on are:
Checking billing invoices for errors and fraud
Trends in sales (seasonal, weather related, etc.)
When are your costs higher or lower (what external factors are affecting them)?
Where is your business coming from?
This all helps you plan ahead to see if you need to hire more workers, when the best time is to purchase equipment and when you may need to increase your marketing strategies to boost sales. It will also provide you with monthly and annual reports to help you budget better.
Software that Offers Solutions
So much more comes from owning a good construction accounting software than being able to organize your bills. It provides you with a clear look of your company’s finances so that you can make better business decisions in the future. Contact us today to learn more about the different types of software that are available to you.