Using Xero For Your Construction Business
Updated: Dec 14, 2020
The construction business is a tricky beast. Standard accounting practices do not necessarily apply here. Here, several projects are handled at the same time, and the work related has to be tracked separately. In doing so, all the records need to be maintained in their proper places. Otherwise, the actual cost may be different from the estimated costs, leading to possible losses.
Fortunately, cloud accounting has made working through construction accounting much simpler!
In this article, we will explore how the cloud accounting software Xero keeps your bookkeeping and project management easy to handle.
Track All the Projects and Leads
In construction, you will have multiple projects with different statuses. New projects will keep coming in, other projects are currently undergoing, and yet others completed or cancelled. Maintaining records of all your leads and projects is vital in this situation.
In this situation, all the financial transactions done in the construction company for project management can be done accurately by Xero, without missing any of them.
Online InvoicingProgressive Billing
The online invoicing feature in Xero makes it straightforward for the construction companies to send any invoice to any client quickly. Not only does this make it easier to get payments from the clients, if it is a recurring and consistent payment, Xero is able to automatically send the invoices on your behalf, so you don’t have to worry about forgetting. In particular, construction companies have progressive billing and money retention, this is easily doable in Xero.
Real-time Cash Flow View
Xero enables the real-time cash flow view of the construction company in a much easier way. By being able to forecast what your projected cash flow will be, it makes it a lot easier to plan around. In addition, since you can access Xero through its mobile app, it makes it easy for you to carry out these activities in a vastly-simplified way.
Team and Client Collaboration
Xero can be easily accessed from multiple locations at the same time because it is a cloud platform, meaning, you can access it as long as you have an internet connection. In this way, different teams at various locations can efficiently work on the same portfolio, and with a separate login for each entity. As such, bookkeeping using Xero for construction or project management is easier to do.
To get the exact amount of payment needed for different projects, you need to track all the proper reimbursable expense details. If not, you might end up undercharging your clients and taking a loss. With Xero, these reimbursable expense details are easily captured, and are easily added to the correct invoice so you don’t lose money.
Ever had to scroll through file after file in order to consolidate your accounts or for an audit? Xero allows you to store all your documents online where it is safe, secure, and easy to access and sort. You will not have to sort through files ever again, and you can automatically tally what you need to, making it easy for you to track your various transactions.
Finally, Xero is able to integrate seamlessly with hundreds of apps. These include apps that deal with inventory management, project management, time tracking, and so on. What this means is that no matter what your business needs, there is likely another app that can help you do so, and Xero is probably able to automatically send and receive the data to and from the app. This allows you to utilize Xero as a hub for all your needed actions.
As you can see, using Xero in construction accounting is an excellent choice. If you would like to find out how you can integrate Xero into your construction company, contact us at firstname.lastname@example.org to get a FREE consultation on how we can assist you in doing so.