We are embarking on a blog series where we identify how technology are enabling business processes in construction such as project management. Up next: accounting and job costing.
In construction, accounting is complex, but critical to business operations to ensure the company can operate on tight margins. Construction job costing tracks the company’s progress to help the business make informed decisions. If done well, the company will be able to create quotes that are low enough to compete, but still high enough to turn a profit. It is certainly a fine line.
In this day and age, technology—more specifically data—is key to enable all of this. Let’s take a look at one big trend in accounting to keep an eye on. Gartner suggests three quarters of finance organizations are wasting time and resources by trying to optimize accounting processes before they have established the ability to absorb the effects of new technologies and new ways of working.
To determine digital readiness in this area of the business, Gartner collected data from 192 senior finance leaders in December 2021. Here is what it found. The companies that focused on optimizing accounting close processes for digitalization were only marginally more likely to be digital-ready than those that took no action at all. Therein lies the rub. Businesses that focused on process resiliency first—before optimization—were three times more likely to be prepared for a digital accounting close, compared to companies that took no action.
The takeaway? Process resilience is key to a digital-ready accounting close. To help, Gartner suggests there are three steps to build resilience in the process.
The first is to establish a long-term vision for digitizing the process, meaning organizations need a framework for determining whether interim digitization decisions are moving the close process in the correct direction. The second step is to build a decision-making infrastructure, meaning ongoing alignment of the close process with ongoing digitization efforts requires both building a framework and continuously managing expectations. Finally, a company needs to be able to sense disruptions from upstream digitization decisions.
If done correctly, those working in accounting have an opportunity to transform the process with digital technologies. Naturally, the construction industry has a very specific set of accounting needs. As such, Sage recently announced Sage Field Operations is now available with Sage Intacct Construction. This will help construction businesses reduce the time to invoice, improve communication between the office and the field staff, integrate workflows and critical information, create and manage service agreements, and reduce paperwork and administrative overhead. And this is simply one example.
Do you agree with Gartner? Is resilience the key to a digital-ready accounting? Would these three steps work in your organization? What other changes do you see happening with accounting, specifically in construction? We want to hear about it!
Also, if you are a technology provider, consider entering it for the Constructech Top Products award. The construction industry is looking for solutions. Now is the time to make your technology known.
Want to tweet about this article? Use hashtags #construction #IoT #sustainability #AI #5G #cloud #edge #futureofwork #infrastructure