Last Modified: February 2nd, 2023
4 min read
Construction companies have a unique set of challenges when it comes to accounting and finance. With its constant changes in materials, labor costs, and other factors, the construction industry has always been one of the most difficult to manage. The rapid pace at which construction projects are managed can be overwhelming for any company, especially if they’re not using the right system or software to effectively handle these shifts. It’s a very labor-intensive and also extremely seasonal industry.
NetSuite is a powerful cloud-based business management suite that offers the tools construction firms need for better cost control, more accurate forecasting, and seamless financial reporting. NetSuite is a highly efficient, accurate, and scalable business management solution offering a long list of benefits that are everything to contractors.
Key construction industry-specific NetSuite features:
NetSuite offers a wide range of features that are tailored specifically for the needs of the construction industry.
Job costing
NetSuite’s Job Costing feature can track all costs associated with a project, from materials to labor costs. This helps firms to better control their expenses and stay within budget.
Income calculator
NetSuite also offers a unique Net Income Calculator that provides accurate, real-time job profitability tracking. This feature allows firms to quickly determine which jobs they need to focus on and which ones they can drop. Job Management (under Project Management) is another integrated feature in NetSuite that helps construction companies simplify contract management by letting them automate tasks such as billing, collection, and reporting.
Product costing
NetSuite is also equipped with advanced product-costing tools that are tailored towards the construction industry to ensure an accurate total cost of inventory value per project or job. This is accomplished by allowing companies to track true material costs by using either built-in or customized bills of materials (BOMs).
Progress billing
Progress billing is an invoicing method used by many construction companies to bill their clients regularly during the course of a long-term project. NetSuite’s Progress Invoicing feature charges customers as project milestones are met and allows firms to track revenue and expenses at various stages.
Invoice management system
NetSuite’s Invoice Management feature provides an accurate real-time view of inventory levels and outstanding invoices by customers or projects. contractors can create professional invoices in minutes, and can automatically send invoices and statements to customers. This helps to streamline the billing process and improves cash flow by ensuring that bills are paid on time. Additionally, automated billing can help construction companies to track payments and expenses, which helps with budgeting and forecasting.
Purchase orders
Create, manage, and track purchase orders. NetSuite also offers an automatic Purchase Order feature that sends purchase orders directly to your vendors. This helps to ensure that orders are placed in a timely manner and that you always have a current inventory of materials and supplies.
Advanced sales & operations planning
With NetSuite S&OP solutions, construction companies can plan better in order to reduce costs while increasing revenue. From operations to inventory and forecasting, NetSuite provides the tools required to manage business processes throughout the year.
Other essentially important NetSuite product features include:
Custom roles & permissions
It enables you to create custom roles and permissions so that only the most essential information is available to each user. This ensures accurate and up-to-date project data is accessible only to the people who need it when they need it, so there’s less risk of mistakes and confusion.
Single data point
With NetSuite, you’ll have a single data point for all the information you need to stay on top of your projects. You’ll be able to track projects from initial proposal through final invoice and ensure that costs are managed effectively (including estimating, ordering materials, logging time and expenses, reviewing financials, managing subcontractors, and more).
Real-time project performance tracking
Real-time tracking of project performance (including in-depth KPIs to track utilization rates, man-hours, labor costs per unit, etc.) helps you identify areas for improvement and ensure you’re completing projects within budget and on time. NetSuite helps construction companies meet the industry’s most stringent reporting requirements so you can get paid faster on job sites while having a comprehensive view of your entire company through one portal – all at low cost.
Comprehensive documentation
NetSuite offers a comprehensive set of documentation-management features for construction firms. Using the audit trail feature, you can log changes to data and documents, which helps companies track system activity and demonstrates due diligence in compliance situations. Documents can be tagged by client or project, archived, searched, printed, and e-mailed directly from within NetSuite.
Cloud Functionality
NetSuite’s cloud functionality means you don’t have to worry about system downtime or whether there’s a physical server to maintain—keeping your business running smoothly without interruption. If there is an issue, your IT staff will be able to address it immediately without the hassle of installing upgrades. With this, you’ll have the ability to access financials online at any time, allowing construction experts such as project managers, estimators, and accountants to easily view key performance indicators (KPIs). For example, using mobile devices, they can share the data instantly with on-site auditors and subcontractors, saving time and money.
Overall scalability
NetSuite’s scalability means you can grow with your business and ensure that your technology is up to the task. All data is easily accessible via mobile devices, allowing your team to respond quickly at a moment’s notice, in real-time. With the Mobile Sales app, you can easily collect signatures on proposals while on-site, eliminating the hassle of back-and-forth emails or fax. Whether you add one new construction site or a hundred, NetSuite’s cloud-based architecture is flexible enough to accommodate the changes.
Conclusion
Many construction companies outgrow their accounting software quickly, turning to more robust ERP systems that offer basic cost, job costing and financial management tools. But since many firms have contractual billing requirements to customers, they are often forced to choose between expensive custom-developed solutions or inflexible off-the-shelf software.
