Rising costs, volatile commodity prices, and supply chain disruptions make today’s economic environment challenging for even the most experienced builders. Understanding your company’s financial performance has never been more important, and your budgeting process is one of the most important tools to help you do it.
Construction budgeting is notoriously hard — it involves estimating cost of materials that could change by +/- 20% over the lifecycle of the project, timelines that will inevitably get moved, and multiple stakeholders who might be slow to respond in the most critical times. But even the things you can control (like tracking expenses, allocating resources, and generating performance reports) can be time-consuming, error-prone, and may not provide the real-time insights you need to make informed decisions. That's where budgeting software comes in.
In this article, we'll discuss the reasons you should be using budgeting software and 5 key factors to consider when you evaluate software providers.
Why Use Budgeting Software
The budgeting process is a common point of frustration for small businesses and is particularly painful in the construction industry given the complex nature of construction projects. Reconciling financials, generating reports, and tracking performance vs. your original budget can feel impossible, especially for younger companies that don’t have a dedicated accounting team. The tools that worked when you were just starting your business (maybe a combination of Google Drive, Excel, and your memory) can only take you so far.
Software programs specifically built for the budgeting process often provide a combination of the following features:
- Real-time tracking of project expenses and financials
- Automated budget forecasting and variance analysis
- Customizable reports and dashboards for real-time insights
- Integration with other software tools used by the company
A software-enabled budgeting process can help construction companies make data-driven decisions, optimize and understand profitability on a project-level basis, and improve overall company performance.
How to Evaluate Budgeting Software Options
There are many different budgeting software providers, and we have identified 5 factors you should consider to make the best choice for you and your business:
Product features: Great budgeting software will typically offer real-time expense tracking and reconciliation, automated budget forecasting, and customizable reports and dashboards
- What you want to see: Look for software with features that alleviate the specific pain points you have in the budgeting process. For example, you may be confident in your estimation process but need more help tracking expenses. Make sure your provider has features that help you execute that task
- Where to be careful: Be careful with budgeting software that is not construction-specific. There are many nuances in construction (like change orders, partial payments, and workflow tools) that don’t exist in other industries and may not be included in general software platforms
Ease of use: Great software providers prioritize user experience and offer intuitive interfaces that are easy to navigate
- What you want to see: Choose software that is user-friendly and easy to learn so that everyone at your company can use it. We also recommend looking for mobile functionality, which makes it easier for your field workers to contribute to the budgeting process
- Where to be careful: Some budgeting software providers still rely on clunky designs that were designed over a decade ago. Instead of updating the product to make it easier to use, they’ve built new features on an old technology platform, making the product overly complex and making you frustrated
Integration: Great software providers prioritize integration and offer seamless connections to other software tools used in construction project management
- What you want to see: Consider your specific technology infrastructure and evaluate what integrations you need. For example, if you use accounting software (like Quickbooks), project management software, or takeoff software, you will want your budgeting software to integrate into them
- Where to be careful: Some software companies will offer limited integration options or require custom development work to integrate with other software tools. Make sure you ask about your specific integration needs directly to avoid being misled
Customer support: Great software providers prioritize customer support and offer responsive support teams that are available when you need them
- What you want to see: You should look for a provider that has positive customer reviews, an adequate customer support team, and online resources such as tutorials and documentation. Ask your salesperson who specifically you will contact if you have questions in the future. If they can identify someone quickly or have a detailed explanation of the process, that’s a good sign
- Where to be careful: If you’re unable to speak to an engineer, product manager, or a dedicated account executive, during the sales process, that may be an indicator of future customer service problems
Cost: Great software providers offer transparent pricing models that align with the needs of construction firms, with no hidden fees or surprises
- What you want to see: Choose a software provider with a simple cost structure like a fixed monthly or annual fee
- Where to be careful: Look for hidden fees (like implementation fees or customer support fees) that look small today but add up over time
Using budgeting software effectively can provide great operational and financial benefits to construction companies. Software can help save time, reduce errors, and provide real-time visibility into project financials. By evaluating potential software providers based on the 5 factors above, we are confident that you can find the best budgeting software for your company.
Automate Your Financial Management Workflows
The latest and greatest in technology is automation software, which can save businesses an immense amount of time and money by eliminating manual processes. Adaptive is combining artificial intelligence with simple software to help homebuilders and remodelers automate their accounting and project financials. We integrate with popular accounting software like QuickBooks, and can complete onboarding in under 30 minutes. To learn more and see how Adaptive can streamline your construction accounting processes, book a demo today.