What is the next step after your construction business outgrows its accounting software?

August 22, 2023

What is the next step after your construction business outgrows its accounting software?

August 22, 2023

hard hat and a laptop sitting on a desk

How do you know when your construction business has outgrown its accounting software, and how do you choose the right solution to support future growth?

Tanner MacDonald

A Manager at MNP Digital, Tanner is an experienced and versatile information technology consultant with experience developing IT strategy and deploying systems. His focus is leveraging technology to generate financial improvements for companies with industry expertise and background in construction, supply chain, logistics, field service, and manufacturing.

Many businesses in the construction industry start out using basic accounting software to track their finances. These types of software are simple to use, reasonably priced, and equipped with all the essential features a new company needs to be successful.

But what happens when your company begins to grow?

You might run into problems that accounting software cannot solve as your construction business expands and becomes more complex. Upgrading to a business platform such as an enterprise resource planning (ERP) system or a project management tool may help you overcome obstacles and support future growth.

Let’s investigate some of the limitations of accounting software that your business may face as it grows. We will also examine how a specialized business platform such as an ERP system can support your company throughout its lifecycle — and some of the key features to prioritize when upgrading.

What are the limitations of accounting software?

There are several telltale indicators that your construction business has outgrown its accounting software. These limitations can stifle growth and create slow profit leaks that may be difficult to realize or calculate.

Some of the limitations of your accounting software may include:

  • Job costing — Lacking functionality to track costs by job phase or cost code, and the profitability for each of your construction projects.
  • Change order management — Missing necessary features required to track and manage change orders effectively.
  • Project billing — Unable to handle complex billing requirements, including progress or unit-based billing.
  • Inventory management — Unable to effectively handle project-specific inventory tracking (e.g., materials, equipment, and tools for each of your construction projects).
  • Reporting — Your accounting software may not provide enough reporting options such as WIP reports, projected costs, and retainage. Access to those insights is essential to make informed business decisions.
  • Vendor management — Cannot manage the complexities of construction accounting, such as lien waivers, managing retainage, and vendor compliance processes.
  • User limits — Limits on the number of users and transactions that can be processed as your construction business grows.
  • Accounts payable (AP) automation — Lacking workflow features to effectively involve purchasing managers, project managers, and accounting staff all in AP processes.

If you are experiencing any of these pain points, it may be time to explore other business solution options that have the potential to improve efficiency, increase profitability, and support the future growth of your construction business.

How the right digital platform can support your business

It is important to keep the unique needs of your business in mind when upgrading to a specialized business platform. The right solution should provide advanced financial tools to support your growth, along with productivity tools to help track your progress on projects and manage your costs.

No matter which solution you choose, keep these features in mind to ensure you select the best fit for the needs of your business both now and in the future:

Construction-specific functionality

Accounting software can handle basic tasks but may not have the construction-specific features to support your company’s needs as it grows. The right solution will likely offer enhanced construction accounting features, including job costing, change order management, and progress billing.


Construction businesses can grow quickly, especially during busy seasons. Your specialized business platform must be able to scale with your company to handle an increasing number of users, projects, and transactions.


Your construction business may use project management software or estimating tools that need to integrate with your accounting software. Look for a project management tool that can integrate with your other tools to avoid duplicate data entry and streamline processes.

Ease of use

Business platforms that are easy to use and navigate can help your construction company save time and increase efficiency. Choose one that is designed with your business in mind and that has a short learning curve for your employees.


Transitioning to a specialized business platform such as an ERP system or project management tool may have a higher initial financial cost than your current accounting software. However, it can provide significant cost savings in the future. Prioritize systems that balance features with cost and consider your potential return on investment when upgrading your platform.

Support and training

Moving from accounting software to a specialized business platform can be a significant change for your company. Consider system providers that offer training and support to ensure a smooth transition process and ongoing support for your business.

How the right system can support your business throughout its lifecycle

You have a wide range of specialized business platform options that can support your company’s growth. These can each provide the advanced financial, resourcing, and planning tools your construction business needs as it expands and becomes more complex — often in one integrated package. The right system can also provide comprehensive support throughout the lifecycle of your construction business, straight through your eventual exit.

  • Growing your business — Centralized access to financial information allows you to track expenses, scale payroll, and make data-driven decisions to support future growth.
  • Mature business — A high-level view of your finances enables you to pursue larger objectives as your business matures and empowers you to make long-term decisions for the future.
  • Exiting your business — Centralized financial information and records can help you answer questions from prospective buyers to speed up the sales process.

Connect with us to get started

Our team of dedicated professionals can help you determine which options are best for you and how adopting these kinds of solutions could transform the way your organization works. For more information, and for extra support along the way, contact our team.