Taking on new projects or additional clients is a sure sign that your construction company is scaling up, but growing your business creates new challenges for construction finance management.

Working with multiple entities means you'll need to accurately report and track cash flow across projects, while consolidating your finances. The best accounting software makes it easy to job cost, monitor and share performance, and automate workflows.

We'll show you what to look for when choosing construction finance software, and how Intuit QuickBooks simplifies accounting processes. This way, you can scale up your business without adding to your administrative load.

Table of Contents

• Why is financial management more complex in construction?
• Key financial workflows in construction businesses
• Managing finances across multiple subsidiaries and entities
• What to look for in enterprise accounting software for construction
• How integrated systems improve financial visibility across projects
• How Intuit QuickBooks supports construction financial management
• Simplify construction finance management as you grow
• Frequently asked questions

Why is financial management more complex in construction?

Construction finance is unlike standard accounting since finance managers keep track of multiple projects and entities simultaneously. Because of this, it can be hard to get a sense of the construction company's overall financial situation. These are just a few of the difficulties your business might face:

• Multiple active projects make it a challenge to track which jobs are actually profitable in real time.
• Working with separate entities or subsidiaries requires you to track multiple expense and revenue streams to ensure CRA compliance.
• Project-based revenue and expenses fluctuate constantly, making it difficult to estimate cash flow.

Key financial workflows in construction businesses

Financial management for construction companies follows distinct workflows:

• Job costing is a detailed accounting system that tracks materials, labour, and overhead costs for a project so you can create estimates and bill accurately.
• Budget tracking gives you accurate data about each project's labour hours, material expenses, profit margins, and overall scope.
• Cash flow management means you're analyzing all income and expenses in real time, which can avoid unexpected costs and payment delays.
• Expense tracking across projects ensures your construction business is turning a profit.

Managing finances across multiple subsidiaries and entities

As your construction business expands and you take on more projects, you'll be working with multiple entities. For instance, you might subcontract work or rent equipment from other subsidiaries.

To successfully manage finances across multiple subsidiaries and entities:

• Keep separate accounting for each entity. Standardize your accounting practices, but keep bank accounts, statements, and tax IDs separate.
• Review and report intercompany transactions as accounts payable and receivable. Construction software allows you to manage transfers between entities and reconcile transactions to avoid errors.
• Practice consolidated financial reporting. Use accounting software to generate consolidated reports across all subsidiaries, so you get an overall picture of your company's finances.

What to look for in enterprise accounting software for construction

As your business grows, you want construction management finance tools that easily support your scaling operations, including:

• Consolidation capabilities: Although it's important to keep accounting for each entity separate, you need an overall idea of your entire company's profitability, especially when it's time to file your business taxes.
• Job costing features: Software should track and analyze fluctuating costs, materials, and services for each project to help you provide estimates to clients and generate invoices that reflect accurate costs.
• Reporting and dashboards: The best software is intuitive and accurate, to find the information you need at a moment's notice. Software should simplify your workflow, not add another program to keep track of.
• Integration with payroll and project tools: Combining workflows saves time and reduces errors like underbilling in your construction company invoices. Plus, you'll get access to project tools like invoice templates.

How integrated systems improve financial visibility across projects

Construction management relies on accurate financial planning and analysis across multiple entities and projects. Managing all aspects of construction finance can be overwhelming unless you're using an integrated system.

The benefits of using a streamlined system include:

• Real-time reporting across all projects, which gives you better visibility, so you can make more informed management decisions.
• Centralized data that allows you to find the information you need in a single place without wasting valuable time.
• Reduced manual processes that also save time while reducing costly mistakes.

How Intuit QuickBooks supports construction financial management

Intuit QuickBooks streamlines construction finance management so you can integrate and see every aspect of accounting in a centralized place. Intuit QuickBooks boasts these features:

• Multi-entity support that allows you to see individual projects and accounts, while consolidating your company’s finances into a general ledger.
• Reporting and dashboards that are customizable and user-friendly, so you and account managers can generate reports, set alerts, and share data with field crews.
• Integration with tools like inventory tracking software and invoicing software gives you instant insights into profitability. This helps you decide which projects to take on and how much to charge.