Many businesses can benefit greatly from project accounting software. If you have large projects that happen over a span of weeks or more, you are likely entering many invoices and paying invoices as the project continues. As time goes on, you will want to know where you stand on income and expenses. Enter, project accounting software. Using a project function within your accounting software allows you to maintain income and expenses for specific jobs or projects. Assigning a project to each of your transactions provides an easy way to track the cost of a project. Some programs also allow you to assign projects to labor costs, for even more accurate project cost calculation.
Who needs project accounting software?
There are three main scenarios for which project accounting can be useful.
- Bids/Jobs
Companies that manage ongoing projects and projects that require job bids can benefit from project accounting software. Tracking the income and expenses of a project lets you see at any given time where you are financially with your project, so you can make adjustments if needed.
- Traveling/Shows
Companies that travel and do business at events, or companies who simply want to track the effectiveness of trade shows can use project accounting software to see which events are the most profitable. When you use project tracking, it’s easy to run a report and see how profitable that event was, which can help you decide which events are most profitable.
- Internal projects
Are you building a new warehouse? Remodeling your office? Use project accounting to manage and track your expenses so you don’t go over budget.
How does project accounting software work?
A typical project accounting system works by tracking each expense and purchase and attributing it to the project you have set up in the system. So, you first set up and name your project. Then with every income and expense invoice you enter, you need to be sure to choose your project. Most systems will display a “project” field for you to choose from. If you enter an invoice and forget to choose the project, of course that invoice will not be attributed to that project. Don’t forget to add the same project to your payroll software system, if that system allows for project tracking. Adding project tracking to your payroll can help you also track labor expenses to your project, which is likely an important component of your project’s cost. Once transactions have been entered with the appropriate project, you can run reports and filter them by projects.
Is project accounting software the same as job costing software?
Project accounting software and job costing software are similar in function, but there are some major differences. Job costing software offers the ability to track the status of a job in progress as well as the income and expense; whereas project accounting only tracks the income and expenses. Job costing also lets you assign the parts of a job to a class or category. You can see what’s been billed for that project, as well as the status, retainage amounts, and more detailed information than you would find in project accounting. Job costing is typically a more complex system; whereas project accounting can be set up and used fairly quickly within your accounting system.
If you are looking for a way to track income and expenses to your project(s), project accounting might be a simple way to accomplish that! Why not set it up in your accounting system and give it a try today?
What is the best accounting software available on the market? Good question! And though we’d all like to believe there’s an answer out there just waiting for us to find it, the truth is, there are so many different accounting software programs available for your business; the answer is largely based on your needs. So, what do you need to do to find the best accounting software for your business? Follow these steps to make sure you find your optimal solution!
Decide who will be involved.
For a small-medium sized business it typically includes the CFO/CEO, staff accountant or controller, IT person, bookkeeper, and often will expand to other employees. Since the decision will affect most employees, it’s good to include them, at least in some part. Of course, only the major decision makers will be involved in the actual search processes, but you can keep employees happy for years to come and make their jobs easier by considering their feedback in your decision.
Develop a ‘must have’ and a ‘wish list’ of features.
For your best accounting software, there are certain things you must have for your business, and other things you want but don’t need. Sort out your absolute needs from your wish list items and write them down on paper. Have others who are involved do the same, and then organize them neatly on one document, so it will be easy when you talk to vendors. Use this accounting software checklist to keep you organized.
Search for potential vendors.
Once you have your list in hand, you are ready to start your search for potential vendors. There are many ways to start creating your short list, whether it’s asking your accountant for advice, asking friends and business associates for recommendations, or searching on the internet. Searching on the internet can be a challenge, since there are so many Web sites available. Use FindAccountingSoftware.com and search by need to start narrowing down your choices.
Contact vendors.
Now it’s time to start contacting vendors and see who has the best accounting software for you, your business and its specific needs. Remember, every accounting software is the best in somebody’s eyes. But the only one that’s best for you is the one that can handle your specific needs, and remain within your budget.
With the startup of a new business comes a wide range of choices. Often, accounting software is not the most top of mind concern. However as a company grows, the need for a more robust accounting software package becomes evident. The basic software package that was installed upon startup lags behind and cannot keep up with the complexity of the growing business. Here are five main ways that basic accounting software packages differ from more advanced (or mid-range) accounting software.
Customizability: The longer you are in business, the more you realize that your business has a unique set of needs. For example, you want to show a special field on your invoice, or you want to start tracking information by sales category or by project. With a basic accounting software package, there is limited customizability, and therefore you must make due with a system that is made for the masses. Advanced accounting packages recognize that your business develops its own specific needs over time as it grows, and therefore allows for customization.
Data Limits: This is a major different between basic and advanced accounting software packages. A basic system will only allow for a finite number of things like inventory items, concurrent users, transactions, accounts, etc. Often this is the main reason for needing to upgrade to a more advanced system. When your business starts to require additional data storage, this is when a more advanced system can really make your life easier. Reporting: Again, for the sake of ease of use, basic accounting programs provide a limited set of reports for you to run. Yet your business may really need to see the data in its own way. For example, perhaps you want to include a line that shows the subtotal per item with tax. A more advanced program will allow for revisions to be made, and the reports can then be saved for later use, so that you can view the information in a way that is more helpful to you and your accountant.
Data drill down: How easy is it to view all of the details of a transaction when you are looking at your business numbers on a report? In a more basic system, you will likely need to close out the report and go searching through layers of information to find the details. By contrast, a more advanced system will allow you to view the transaction details that make up the number with just a few clicks, and will even allow you to edit the information on the fly.
Service: As with any product available today, the end result of paying too little means your service will be less as well. Many basic accounting software programs will defray service expenses by outsourcing their service to an overseas call center. More advanced programs provide more complete support services, with a variety of contact methods, and technicians with years of experience.
When choosing accounting software for your business, be sure to consider all of the above points so your system will grow along with your business.
Has anyone ever tried to sell you something you were completely uninterested in purchasing? You know, the long and drawn out sales pitch with the salesperson talking non-stop about features, not even stopping to take a breath for fear you will say, “NO.”
It’s times like this when we appreciate our ability to be assertive and walk away. This situation can happen just about anywhere from the car dealership to the perfume counter, or to a work situation. The simple resounding answer to give these tenacious sales people is “NO.” Purchasing software for your company is no different! If you are currently satisfied with the accounting or payroll software for your business, it’s probably a good idea to stay with what you have. After all, switching software involves a learning curve, and your company will need to take the time to adjust.
While the above is true most of the time, there are certain times when a business person believes they don’t need to move to a different software application, yet for the good of their business, they absolutely should. Here are the main reasons a company should consider a software move, even when they don’t think they need to.
- You are still using a DOS based product. There were many excellent DOS products available in the 1980’s. In fact some of them still work well to this day. This leads some people to believe they can keep using the program(s) to run their business indefinitely. If you are using a program that was created in the 1980’s, the upside is that the company you bought it from must be pretty good to have kept it working that long. If you drive a car from the 1980’s you have surely had a lot of work done just to keep the thing running. Nothing can last forever. When it comes to software, DOS based software is a thing of the past and you need to move forward as soon as possible, or at least develop a plan to do so. Operating systems are moving forward and Microsoft has released Vista, with talk of the next system around the bend. Your DOS system probably won’t work on either one. So if any of the computers in your operation crash, you will need to purchase a new one. Where will you be when there aren’t computers available to run your DOS program? Develop a plan now, and you won’t have to panic later.
- Your software product is no longer being supported. If your product is no longer supported, you will not be able to get your questions answered and will be left to handle questions and problems on your own. Updating to something newer will allow you to ask questions and get help when you need it.
- You are spending more time ‘tricking’ your system than simply working with it. This is the kind of thing you don’t realize you are doing until after you change software. Set aside one whole week where you consciously keep track of how much time you or your staff spends manipulating your software to handle the way you need to enter or analyze your data. Are things such as invoice entry or inventory tracking taking you three to four steps when they should really only take one or two? If so, you and your staff could save significant time by moving to a system that can handle your needs.
- You have a hard time finding hardware that will work. Simply put, you should be able to find hardware such as computers, printers, and other devices for your business without much hassle. If you have to search from store to store or on eBay to find a device that will work with your old software system, it’s time to upgrade your software.
- You stay with your accounting software and/or payroll software because you are afraid. Don’t feel bad. There are many business people who simply stay with the software they have even while they know full well they really should move to something different. They know that their security would be better, their processing would run more smoothly, and that they would save themselves and their staff valuable time by moving to newer software. Feeling bad won’t help, but developing a plan to move forward will. Even if you can’t make the switch now, planning it out ahead of time will reduce the worry and stress you are feeling right now.
You know you need it for your business, but what is the best way to sort through all the accounting systems out there? These days there are many different ways to purchase accounting systems. Here are the main ways to find and purchase accounting systems today.
Partner
Many accounting software companies sell their products through partners, who are often referred to as VARs or Value Added Resellers. The main benefit of purchasing your software from a VAR is that they are typically located near you and can provide training and implementation help, and can also help support you as time goes on. Sometimes VARs will be listed on a software company’s Web site, or else you can simply call the company and ask if there is a VAR near you.
Retail Stores
Most basic accounting systems can be purchased at retail stores these days, such as office supply stores. You may get a better price on software when purchasing it from a retail store, but you also may miss out on some of the services you could get by purchasing through a VAR or other reseller. And without talking to a company representative, VAR or reseller, it is hard to know whether the system can handle your specific needs. The more complex accounting systems won’t typically be found at retail stores.
Accountant
Your accountant could be a great resource in helping you select the right accounting system for your business. A great advantage to working with your accountant on this is that he or she knows your business and what kinds of special features and needs you have that accounting software could help with. Accountants usually have the experience and knowledge of available systems, and which one would fit best for you. Some accountants are resellers or partners of software companies, and others simply make recommendations.
Online
The term “accounting software” is searched for in Google about 40,000 times per month! People are going to the Web to do their research to find out which accounting systems are out there. However, searching for the term ‘accounting software’ does not give you a neatly organized, comprehensive list of accounting systems. Instead of doing a Google Search, use www.findaccountingsoftware.com or www.capterra.com. Both of these Web sites help you narrow down your search by plugging in your price range and the features you need. You can even talk to representatives of the Web site via phone and have vendors contact you. These Web sites can save you many hours and give you a comprehensive list of companies, so you can find the one that is right for you.