Choosing the Best Construction Finance Software

How to Choose the Best Construction Finance Software

Imagine slashing your financial management time in half while eliminating costly errors. For construction companies still relying on manual processes, this transformation becomes possible with dedicated construction finance software.

By automating budgeting, expense tracking, and real-time reporting, construction finance software transforms complex financial tasks into streamlined processes. Consequently, construction businesses can focus on what they do best: building.

In this article, we’ll guide you through the key considerations for choosing the right software for your business. First, we’ll discuss why finance management software is a game changer for companies not yet utilizing it. Then, we’ll outline what to consider when selecting software. Finally, we’ll review examples of different construction finance software options.

Let’s dive into how to find the best construction finance software to elevate your business.

Importance in the Construction Industry, Specifically for SMBs

Managing project finances in the construction industry challenges any business, especially small to medium-sized businesses (SMBs). The stakes are higher, and non-profitable projects can significantly impact overall profitability.

Typically, project financial management involves juggling numerous spreadsheets and manually transferring information between different sources and company functions. Since a lot of manual effort goes into this process, and often several stakeholders are involved, errors occur more often than desired.

Construction finance software helps construction companies take firmer control of their project finances. With standardized, automated workflows, businesses save valuable time by eliminating non-value-adding tasks such as double data entry and manual number compilation. Moreover, automated processes significantly reduce the risk of human error. 

To summarize, construction finance software can greatly affect the efficiency and accuracy of project financials. As a result, SMBs spend less time on budget management and instead focus on value-driven activities. Ultimately, they enjoy more accurate budgets that are less prone to human error.

Assessing Needs and Challenges 

Identifying the project financial management challenges your construction company faces is crucial in selecting the right software. Are there too much time and effort spent on managing budgets? What is the main cause of that? Are numbers scattered across various spreadsheets or systems? Why is that? Addressing these questions can help pinpoint the specific issues your company encounters. Here are some typical challenges construction companies face:

1. Inaccurate Budgets
   • Issue: Difficulty maintaining accurate and up-to-date budgets.
   • Impact: Frequent discrepancies between projected and actual costs, leading to budget overruns
2. Inefficient Management of RFQs, Purchase Orders (POs) and Subcontracts
   • Issue: Time-consuming processes for managing tenders, POs and subcontracts.
   • Impact: Increased administrative workload and risk of overbilling
3. Manual Data Entry
   • Issue: Excessive time spent on entering data manually.
   • Impact: High risk of errors and inconsistencies in financial records, reducing data reliability.
4. Fragmented Financial Reporting
   • Issue: Difficulty compiling comprehensive financial reports.
   • Impact: Lack of real-time financial data, leading to delayed decision-making and a lack of financial visibility.
5. Client Contract Management
   • Issue: Delays in sending invoices and receiving payments.
   • Impact: Cash flow problems and decreased client satisfaction due to poor financial transparency.
6. Poor Integration with Other Tools
   • Issue: Difficulty integrating financial data with other software, such as accounting.
   • Impact: Inconsistent data flow between different systems and departments, causing inefficiencies.
7. Resource Allocation Problems
   • Issue: Challenges in effectively allocating financial resources across projects.
   • Impact: Inefficient use of resources and increased project costs.
8. Invoice Management
   • Issue: Difficulty streamlining the tracking, processing and approving invoices.
   • Impact: Payment delays and cash flow problems, affecting overall financial stability.

By understanding these common challenges, you can better identify the features and capabilities you need in your construction finance software to address these pain points effectively.

Key Features to Look for in Construction Finance Software

To effectively address your company’s specific financial management challenges, it’s crucial to select construction finance software with the right features. Here are key features to look for, aligned with common challenges:

1. Automated Budgeting
   • Challenge: Inaccurate Budgets
   • Solution: Automated budgeting tools simplify the budgeting process, ensuring accurate and up-to-date financial plans. These tools help maintain consistency between projected and actual costs, reducing discrepancies.
2. Expense Tracking
   • Challenge: Inefficient Management of Purchase Orders (POs) and Subcontracts
   • Solution: Real-time expense tracking allows for effective monitoring of all project-related expenditures. Centralized tracking for approvals and updates streamlines the management of POs and subcontracts, making the process more efficient.
3. Request for Quotations (RFQs) Management
   • Challenge: Time-Consuming RFQ Processes
   • Solution: Efficiently manage the RFQ process from creation to response tracking and contract awarding. This feature ensures you receive competitive pricing and timely acquisition of materials and services, saving time and improving procurement efficiency.
4. Real-Time Reporting
   • Challenge: Fragmented Financial Reporting
   • Solution: Real-time reporting provides instant access to comprehensive financial data, helping you make informed decisions quickly. This feature ensures that you can compile detailed financial reports without delays, giving you a clear financial overview.
5. Integration Capabilities
   • Challenge: Poor Integration with Other Tools
   • Solution: Ensure the software can seamlessly integrate with your existing tools and systems, such as accounting systems. Smooth data flow between different systems enhances overall efficiency and reduces data silos.
6. Purchase Invoice Management
   • Challenge: Inefficient Processing and Tracking of Purchase Invoices
   • Solution: Streamline the collecting, processing, tracking, and approval of purchase invoices. This feature helps reduce delays in payments to suppliers and subcontractors, maintaining good relationships and ensuring timely project progress.

Additional Key Considerations

When choosing construction finance software, it’s important to consider additional factors to ensure the software meets your business needs effectively:

1. Ease of Use
   • Benefit: A user-friendly interface makes the software accessible and easy for your team to adopt.
   • Impact: Reduces the learning curve and increases productivity, ensuring that all team members can use the software efficiently.
2. Ease of Implementation
   • Benefit: Smooth and straightforward implementation helps you get up and running quickly.
   • Impact: Minimizes disruptions to your operations and allows you to start reaping the benefits of the software sooner.
3. Scalability
   • Benefit: The software should be able to grow with your business, handling an increasing number of projects and more complex financial data.
   • Impact: Supports long-term business growth without the need for frequent software changes or upgrades.
4. Support and Training
   • Benefit: Access to comprehensive user guides and training resources helps your team make the most of the software.
   • Impact: Ensures smooth adoption and effective use, minimizing downtime and maximizing the software’s value.
5. Pricing
   • Benefit: Understand the total cost of ownership, including subscription fees, maintenance, and any additional costs.
   • Impact: Helps you budget effectively and ensures the software provides good value for the investment, considering both short-term and long-term financial implications.

By considering these factors alongside the essential and advanced features, you can select construction finance software that not only addresses your current needs but also supports your business’s future growth and operational efficiency.

Overview of Construction Finance Software Options

Let’s have a look at some viable options available on the market and a more detailed overview of Planyard.

Procore

Key Features: Comprehensive project management, real-time financial tracking, integration capabilities, user-friendly interface.

Pricing: Subscription-based pricing model with tiered options based on the number of projects and users.

Best For: Medium to large construction firms looking for an all-in-one solution.

Strengths: Excellent project management features, robust reporting, strong integration capabilities.

Weaknesses: Can be expensive for small businesses, steep learning curve for new users.

Builder Prime

Key Features: Comprehensive CRM, powerful estimating tools, production management, customizable workflows, automated lead tracking, scheduling, branded estimates, precise reporting.

Pricing: Subscription-based pricing with flexible plans tailored to the needs of SMBs.

Best For: Contractors in various industries, including roofing, siding, solar, painting, flooring, and more.

Strengths: All-in-one solution combining CRM, estimation, and production management; user-friendly interface; robust automation for lead tracking, follow-ups, and scheduling; highly customizable with strong reporting and analytics features.

Weaknesses: Initial setup can be complex and time-consuming; steep learning curve for new users; may be expensive for smaller businesses compared to simpler solutions.

Buildertrend

Key Features: Project scheduling, budgeting, customer management, communication tools, mobile app.

Pricing: Subscription-based pricing with options for different business sizes and needs.

Best For: Small to medium-sized construction firms looking for a user-friendly solution.

Strengths: Easy to use, excellent customer support, good mobile app.

Weaknesses: Limited advanced financial features, may require additional tools for complex financial management. Can be considered expensive for smaller businesses. 

CoConstruct

Key Features: Project management, budgeting, client communication, timesheet management, invoicing.

Pricing: Subscription-based pricing with flexible plans tailored to the needs of SMBs.

Best For: Custom home builders and remodelers.

Strengths: Great client communication features, user-friendly interface, comprehensive project management.

Weaknesses: Some users feel the software is expensive for the number of features offered, has occasional bugs and stability issues, and has a learning curve for some features.

Planyard

Planyard is a construction finance software developed in collaboration with industry professionals. The software helps construction companies eliminate spreadsheet-based processes, saving time while improving accuracy in their project financial management.

The software allows for utilization of various workflows that are directly interlinked with the project budget, assuring the financial updates are done automatically without manual input. 

Key Features

Strengths

Pricing: Planyard offers a straightforward, competitive, seat-based pricing structure with multiple packages tailored to best suit your company’s needs.

User-Friendly: Designed to be intuitive and easy to use, helping teams quickly adapt and become productive.

Comprehensive Features: Offers a robust set of workflows (eg., POs, invoice management) that directly integrate with your project budget.

Scalability: Suitable for growing businesses, with features that scale as the business expands.

Conclusion: Practical Steps for Evaluating Construction Finance Software

Choosing the right construction finance software is a critical decision that can significantly impact your efficiency and financial accuracy. To wrap things up, here are some practical steps to help guide your evaluation process:

1. Define Your Requirements

• Assess your specific financial management challenges and set clear goals for what you aim to achieve with the new software.

2. Research Available Options

• Conduct thorough market research and compare the key features, pricing, and customer reviews of different software options.

3. Request Demos and Trials

• Schedule demonstrations and take advantage of free trial periods to experience the software firsthand and ensure it meets your needs.

4. Evaluate Ease of Use and Implementation

• Choose software with an intuitive user interface and a straightforward implementation process to ensure quick adoption by your team.

5. Consider Scalability

• Ensure the software can grow with your business.

6. Review Support and Training

• Evaluate the level of customer support and training resources provided to ensure your team can maximize the software’s potential.

7. Calculate Total Cost of Ownership

• Consider both upfront and ongoing costs to ensure the software provides good value for your investment.

8. Gather Feedback from Your Team

• Involve key team members in the evaluation process to gather insights on usability and functionality.

9. Make an Informed Decision

• Weigh the pros and cons of each option and choose the software that best aligns with your business goals and budget.

Call to Action

Ready to transform your construction financial management? Discover how Planyard can help you get rid of spreadsheets, streamline processes, reduce errors, and save time. With features designed specifically for small to medium-sized construction businesses, Planyard offers the tools you need to manage your finances more effectively.

Book a meeting with us to explore how Planyard can make a difference in your projects. Let’s take your construction financial management to the next level.