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In our latest guest blog, Grace Hutchinson from Integrity Software details the issues with traditional spreadsheets in construction accounting.
In 2024, numerous construction companies will continue to use spreadsheets for their accounting tasks. Despite being a longstanding tool in financial management, spreadsheets have notable limitations that can hinder a company’s growth and the precision of its financial reporting. Here’s why accountants in the construction industry should think about transitioning from spreadsheets to more sophisticated construction accounting software.
Spreadsheets are prone to errors
Spreadsheets are infamous for their susceptibility to errors. Manual data entry, incorrect formulas, and accidental deletions can result in significant mistakes that are challenging to identify and rectify.
A study by MarketWatch found that 88% of spreadsheets contain errors. In the construction industry, where financial precision is vital for project bids, cost estimations, and budgeting, even minor errors can lead to substantial financial discrepancies and potential project delays.
Inefficient & time-consuming
Managing spreadsheets manually is highly time-consuming. Construction accountants invest countless hours inputting data, cross-referencing figures, and updating records.
This time could be better used for strategic financial planning, analysis, and supporting project management. Construction-specific accounting software such as Evolution Mx from Integrity Software automates many of these tasks, enabling accountants to concentrate on higher-value activities that propel the company forward.
Lack of real-time data & collaboration
Construction projects involve numerous stakeholders, including project managers, engineers, suppliers, and clients. Spreadsheets often fail to support real-time updates and effective collaboration, resulting in outdated information being used for decision-making.
Construction-specific accounting and management software provides access to all essential documents and data, ensuring that all stakeholders have the most current information readily available.
Security concerns
Spreadsheets are susceptible to security breaches, particularly when shared across numerous platforms and users. Without proper security measures, sensitive financial data can be compromised.
Integrity Software’s Evolution Mx provides robust security features, such as multi-factor authentication, secure user access, and regular backups. Our cloud-based construction accounting software ensures that financial data is protected against unauthorised access and cyber threats.
Difficult to scale
As construction companies expand, their financial data and accounting needs become more complex. Spreadsheets are not well-suited to handle increased data volume and complexity, leading to inefficiencies and a greater risk of errors.
However, dedicated construction accounting software is designed to manage large datasets and complex financial scenarios, offering scalability and flexibility that spreadsheets simply cannot provide.
Regulatory compliance
It’s crucial that construction companies ensure they adhere to all relevant regulations and compliance requirements, and this is where spreadsheets can really hinder a company’s progress.
What’s more, with a direct link to both ROS and HMRC, Evolution Mx saves construction accountants hours upon hours compared to using spreadsheets that require manual checks and are more susceptible to errors and oversights. Integrity Software’s advanced accounting software includes features that help maintain compliance, such as automated tax calculations, regulatory reporting, and audit trails.
Embracing technology
While spreadsheets have served as a useful tool for many years, the demands of modern construction accounting require more robust, efficient, and secure solutions. Transitioning to advanced accounting software like Evolution Mx can significantly enhance accuracy, save time, improve collaboration, and ensure regulatory compliance.
Construction company accountants should embrace this technology to better support their company’s financial health and overall success. By doing so, they will not only mitigate risks associated with spreadsheet errors but also unlock new opportunities for growth and efficiency in their financial operations.
Many CIF members are already benefiting from Integrity’s construction-specific accounting and management software Evolution Mx. Will you be next?
Get in touch for more information and to book your demonstration today.