What Construction Accounting KPIs are Best to Measure?
Key performance indicators (KPIs) are useful to monitor the health and growth potential of a business. It's not a new concept. In fact, there are literally thousands of generic business KPIs and hundreds that are specific to the industry. How do you know if you’re measuring the right KPIs for your construction business? Here are four key metrics that will help you see the unique indicators of health in your construction company’s finances. The top 4 KPIs to help you get started are...
Construction Accounting KPIs to Help You Get Started
- Cash Management
- A comprehensive view of cash flow enables data-driven decisions on contractual commitments. This is critical in order to manage resources. Business conditions change so quickly that managing these processes manually is difficult, if not impossible. Scaling cash management automation is key as the business grows.
- Ideally, this process is automated so that your systems get updated immediately as business conditions change. You’ll always have instant access to the actual cash position and can easily see the details behind it.
- Acumatica Construction Edition is construction accounting software that manages all your cash needs in one place. You’ll get accurate reports with summarized views with drill-down capability. You can see all the account details because Acumatica integrates General Ledger, Accounts Payable, and Accounts Receivable modules making it easy to manage day-to-day transactions. Easily monitor, predict, and manage cash across multiple entities using customizable reports and streamlined bank reconciliation automation.
- Project Planning
- Your company can reduce risk, increase productivity and improve customer satisfaction with project planning KPIs. Start by defining key project metrics, making them available to your whole team, and measuring each project as it progresses. Cloud construction accounting software can make accurate data available consistently across your organization. Utilizing a dashboard, you can identify and communicate changes in project costs in real-time.
- With drill-down dashboards, your decision-makers and department leaders get the visibility they need to run your business at peak efficiency. KPIs to consider include expenses vs. budget, tracking projects to active and completed tasks, time by employee, and project profitability. Drill down to see budget versus actual, change orders, subcontractor commitments, compliance issues, and more.
- Project Tracking
- When you connect your accounting and project management teams on a single platform, it’s easy to track all aspects of a construction project. You and your team, in the office and in the field, will get real-time views of active and completed tasks, time by employee, and profitability. Everyone can drill down to see budget versus actual, change orders, subcontractor commitments, compliance issues, payroll details, and more. Project tracking KPIs track billing and revenue recognition by cost code, contract line item and other details. Project cost budget status compares actual and committed costs by task/sub-job.
- Profitability
- Conduct profit analysis using KPIs that will track original and revised margin/markup and estimates, as well as change orders. The Acumatica Construction Edition, allows you to drill down to analyze variances by line item, cost code, subcontractor or material. You’ll catch variances sooner and correct them faster without searching endlessly.
Get Started, Make it a Priority
The first step to adopting construction accounting KPIs in your business is to make it a priority and get started. Too many companies ignore their KPIs and end up missing out on valuable insights that can drive their business forward.
Opting for a cloud-based construction software platform that has built-in KPI functionality is the easiest path forward. The Acumatica Construction Edition can help you avoid hardware and maintenance costs. With Acumatica, you pay a subscription fee and access the software through a browser.
At Clients First Business Solutions, we have Acumatica experts ready to help guide you on your digital transformation journey and ensure your interconnectivity supports your company’s growth. Nothing replaces a live presentation so please reach out to us to schedule a demonstration for your business. Please call us at 800.331.8382 or send us an email at info@cfbs-us.com today.