With any business, the key to success is due, in part, to keeping a close eye on the bottom line. For a general contracting firm financial and management accounting processes can have a significant impact on how well this is done. And with contractors, these administrative functions are numerous and complex, and the risks associated with error considerable.
In today's high tech environment, for even the smallest firms, financial and management accounting functions are increasingly likely to be computerized. Specialized software that can be customized to fit individual requirements will perform a host of functions, including accounts payable, payroll, job costing, general ledger, accounts receivable, time and material billing, human resources and equipment management.
The software can be fully integrated to work hand-in-hand with field operations – estimating and project management – with all of the processes done over the internet. While the initial investment in these systems can be high, and getting everything up and running can take some time and require training, the benefits in terms of streamlined operations and management are certainly worth the effort and cost.
A Washington, NC-based general contractor, WIMCO Corp. began as a scrap metal business in 1950 and has grown into a multiple-award winning general contractor with annual revenues of $50 million. WIMCO Corp.'s growth and success have been greatly enhanced since 1998 by its use of financial and management software applications from Computer Guidance Corporation (CGC), which have had a significant impact on the company's bottom line.
WIMCO Corp. uses CGC applications for all financial and management functions, except for estimating software, which comes from Timberline Software. The company employs four servers – one for email, one for BlackBerry communications, one for file sharing and archiving, and the fourth a web server for financial management.
The web-based applications integrate corporate financial operations effectively because they are derived from a single database. For example, information for an invoice keyed into the accounts payable application automatically gets the debit posted and the credit for the liability for that account's expense in the general ledger application. If it is a job-related invoice, it goes directly to the job cost application and is coded according to how the project team assigned it. It also provides an account history to the proper applications for each vendor.
Operations, management and field activities are streamlined because everything from invoices to checks to owner and subcontractor contracts to change orders are scanned into the system. This allows invoices, for example, to be emailed as PDF files to the project superintendent who applies a code and computer signature stamp along with the date and time of approval. Then those invoices are electronically work-flowed into WIMCO Corp.'s system and sent to the proper project managers for approval.
Project managers get emails notifying them when an invoice needs to be approved. They are able to login to the system from anywhere in the world, retrieve email, and approve the invoices. Once approved, the invoices are electronically re-directed to the accounts payable department, which generates the cash disbursements.
Before the imaging system was implemented, what can now be done “instantly” took up to a month. Using web-based integrated applications has saved WIMCO Corp. up to two weeks of time to close out its costs each month.
To facilitate paperwork, WIMCO Corp. even lets some of its regular subcontractors use the system. They are allowed to email invoices, saving on the time and cost of mailing, and will get paid in accordance with the terms of their contracts.
A web-based system clearly allows contractors to be more efficient in the management of the company and individual jobs. It enables management to concentrate on the important issues and frees up project managers and project superintendents to focus on managing their projects.
Even for those who don't consider themselves to be especially computer savvy, web-based integrated applications turn out to be exceptionally easy to use. For example, when a project manager writes a subcontract using project management software, he includes the scope of work, terms, and inclusions and exclusions - based on the details in the bid. The application provides a three-screen entry process and the information shows up on the accounting software. The entire budget imports exactly as it was bid, and no one has to manually key anything into WIMCO Corp.'s accounting system. This is in real time. What took several days to complete can now be done in 10 minutes. Most importantly, web-based applications provide a distinct competitive advantage in a highly competitive business.
Darlene T. Moore is vice president of Finance for WIMCO Corp.