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Best Accounting Software For Construction Businesses

Best Accounting Software For Construction Businesses

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Best Accounting Software For Construction Businesses


As a construction business owner your time is limited enough let alone deciding which Accounting Software is best for you. We have compared the most popular construction accounting software packages on the market, so you don’t have to!


In the past, accounting software was complex, difficult to use and not suited for a typical construction business instead it was designed for large corporations with in-house accountants. Now there is a range of compatible softwares designed specifically for SME businesses.


Some of the benefits of using cloud accounting software include:


  • Access your financial data from anywhere
  • Real-time financial reporting
  • Easy to collaborate up-to-date reports with accountants and stakeholders
  • Secure storage with multi-factor authentication
  • Ability to connect to other third-party apps to make it completely customisable to how your business runs


The softwares we will be comparing are the 4 largest for SME businesses:


  1. Xero
  2. Quickbooks
  3. Sage
  4. FreeAgent


1. Xero

Xero was founded in 2006 although quite new to the industry it is at the forefront in terms of innovation and is often perceived by accountants as the best accounting software for businesses. It offers SMEs the ability to transform the way they do business and control their finances, reduce paperwork and streamline processes.


In terms of features and ease of use, Xero is definitely up there. It has a user-friendly interface and a great range of functionality. Xero does offer add-on packages such as expense tracking, projects, payroll and CIS add-ons. If something is missing for your business needs, Xero hosts one of the largest marketplaces (over 800 listed apps) of direct integrations meaning you can completely customise your software lineup to match your business needs.

With Xero you also receive HubDoc included within the price, this saves so much time and money in terms of receipts and invoices. You are able to snap a photo of your receipt/invoice from your phone! No need to send that bag of shame to your accountant anymore, and once your receipt has been uploaded you no longer need the physical copy since all the information will be in Xero. It really is as simple as taking a photo on your phone.


If you need to contact the support team, Xero have developed a knowledge base, community forums and training videos covering almost everything in the software. It doesn’t have a direct helpline, it uses a ticket system which can cause the waiting times to considerably longer as it often leads to back and forward messages. However, the system is so good, that the requirement for the support team is not usually required! If you are working with an accountant then you shouldn’t need to be speaking to Xero’s support team.


Xero has extensive reports to give you a basic insight into your company, such as cashflow, profit & loss, and balance sheet reports. There is also the ability to produce customised reports showing only what you need to see.


Xero’s prices are split into 3 packages:


  1. Starter


The starter package is £12 per month and is ideal for sole traders and new businesses.


What’s included:


  • Send quotes and 20 invoices
  • Enter 5 bills
  • Reconcile bank transactions
  • Submit VAT returns to HMRC (MTD)
  • Capture bills and receipts with HubDoc (included)
  • Automate CIS calculations and reports.


  1. Standard


The starter package is £26 per month and is ideal for growing small businesses


What’s included:


  • Send quotes and invoices
  • Enter bills
  • Reconcile bank transactions
  • Submit VAT returns to HMRC (MTD)
  • Capture bills and receipts with HubDoc (included)
  • Automate CIS calculations and reports.
  • Bulk reconcile transactions
  • Short-term cashflow and business snapshot reports


  1. Premium


The starter package is £33 per month and is good for established businesses of all sizes.


What’s included:


  • Send quotes and invoices
  • Enter bills
  • Reconcile bank transactions
  • Submit VAT returns to HMRC (MTD)
  • Capture bills and receipts with HubDoc (included)
  • Automate CIS calculations and reports.
  • Bulk reconcile transactions
  • Short-term cashflow and business snapshot reports
  • Use multiple currencies


Optional Add-ons:


  • Payroll - £5 per month for up to 5 payroll employees, then £1 for each additional employee per month.
  • Claim Expenses - £2.50 per month for one user, plus £2.50 for each additional active user per month.
  • Track Projects - £5 for one user per month, plus £5 for each additional active user per month.
  • Submit CIS Returns - Submit CIS returns from Xero for £5 per month.
  • Pay with Wise - Pricing starts from £3 per month.
  • Xero Analytics - Analytics Plus is free until 31 January 2022. Then pay the usual price of £5 per month.


The add-ons are not compulsory and are only needed if you are trying to run the software yourselves.


2. Quickbooks


Quickbooks has been around for quite a while with its initial release in 1983 developed by Intuit. 


Quickbooks have focused on making their software as user friendly and attractive as possible. The dashboard is very visual and puts key data such as income, expenses and profit and losses in understandable graphs as soon as you log in. Similar to Xero is can transform the way you do business, give you control of finances, reduce paperwork and streamline your processes.


Quickbooks have an excellent range of features including a Receipt Scanner (like HubDoc), payment integrations and mileage tracking. Quickbooks largest packages also include stock management, multi-currency and budgeting.


Quickbooks have more support options when compared to Xero such as training videos, chat boxes, email, phone and community support forums where you can speak to other Quickbooks users.


When it comes to reporting, Quickbooks has worked on making their reports as visually attractive as they could. They have a great dashboard that is fully customisable and gives you the ability to track unlimited departments and projects giving you detailed insights into your business performance.


Quickbooks prices are split into 3 packages:



  1. Simple Start


The Simple Start package is £12 per month and is ideal for sole traders or small businesses who need to manage their VAT and Tax.


What’s included:


  • Free UK phone support
  • Manage income & expenses
  • Forecast cash flow
  • Snap & sort receipts
  • Track mileage
  • Create estimates & quotes
  • Submit VAT to HMRC
  • Calculate and submit CIS


  1. Essentials


The Essentials package is £20 per month and is ideal for small businesses working with suppliers. You can manage your account with up to 3 users.


What’s included:


  • Free UK phone support
  • Manage income & expenses
  • Forecast cash flow
  • Snap & sort receipts
  • Track mileage
  • Create estimates & quotes
  • ​​Manage bills
  • Do business in 145+ currencies
  • Submit VAT to HMRC
  • Calculate and submit CIS


  1. Plus


The Plus package is £30 per month and is ideal for businesses managing projects, VAT, stock and tax. You can manage your account with up to 5 users.


What’s included:


  • Free UK phone support
  • Manage income & expenses
  • ​​Forecast cash flow
  • Snap & sort receipts
  • Track mileage
  • Create estimates & quotes
  • Do business in 145+ currencies
  • Track stock
  • Submit VAT to HMRC
  • Calculate and submit CIS
  • Budgets


Optional Add-ons:


  • Standard Payroll - £4 per month + £1 per paid employee
  • Advanced Payroll (extra features including HR & Reporting) £8 per month + £1 per paid employee


3. Sage


Sage was founded in 1981 and before the rise of technology, Sage was the product every accountant would recommend instantly. With Xero and Quickbooks adopting the cloud approach very quickly, Sage took an extra few years to really see it wasn’t becoming a choice, they had to adapt and ever since they have always been a few years behind. Sages Marketplace was only introduced in 2020 compared to Xero which was in 2016.


If you are SME still on Sage, we highly recommend switching over to Xero or Quickbooks. We can handle the Xero conversion if you are interested.


Sage’s biggest issue is that it was designed for a trained accountant and not the end-user. Although Sage may not be ideal unless you’re an accountant, it still has some great features such as cashflow management, stock management, department tracking and purchase orders. Sage don't offer a free receipt scanner like Xero or Quickbooks however they do own one called AutoEntry.


As it is made for accountants, it does have some complex accounting features plus the reporting is good but nothing amazing. The user interface is quite lacklustre when compared to Quickbooks for example.


Unlike Xero and Quickbooks, Sage does offer a phone line! However, it doesn’t have the best reputation… You can call in but you are charged at a standard rate number and for some reason, they take a while to answer.


Sage prices are split into 3 packages:



Start


The Start package is £12 per month and is ideal for sole traders or small businesses who need to manage their finances


What’s included:


  • Create and send invoices
  • Track what you're owed
  • Automatic bank reconciliation
  • Calculate and submit VAT
  • Be Making Tax Digital Ready for VAT
  • Supports one user



Standard


The Standard package is £24 per month and is ideal for small businesses that are looking to grow.


What’s included:


  • Create and send invoices
  • Track what you're owed
  • Automatic bank reconciliation
  • Calculate and submit VAT
  • Be Making Tax Digital Ready for VAT
  • Supports unlimited users
  • Manage and submit CIS
  • Send quotes and estimates
  • Forecast cash flow
  • Manage purchase invoices
  • Snap receipts with AutoEntry, 3 months free



Plus


The Plus package is £30 per month and is ideal for businesses managing projects, VAT, stock and tax. You can manage your account with up to 5 users.


What’s included:


  • Create and send invoices
  • Track what you're owed
  • Automatic bank reconciliation
  • Calculate and submit VAT
  • Be Making Tax Digital Ready for VAT
  • Supports unlimited users
  • Manage and submit CIS
  • Send quotes and estimates
  • Forecast cash flow
  • Manage purchase invoices
  • Snap receipts with AutoEntry, 3 months free(2)
  • Invoice in multiple currencies
  • Manage inventory


Optional Add-ons:


  • Payroll - £7 per month for up to 5 employees
  • Auto Entry - £9 per month for 50 credits


4. FreeAgent

FreeAgent was founded in 2007 and unlike Sage, Xero and Quickbooks, they are focused on offering a simple accounting package for small businesses. Another reason why it’s perfect for small businesses that want to save some money each month, you are able to get FreeAgent for free if you have a business current account with NatWest, Royal Bank of Scotland, Ulster Bank NI, or a business account with Mettle, for as long as you retain your account.


FreeAgent user face is probably the best on the list, it is simple and clear. It is made for a business owner, not an accountant and it shows you what you need to know in a simple way. As it is made for smaller businesses, it does lack the additional functionality such as multi-currency support or departmental tracking however, if you are a small construction business, you typically won’t be needing these. The reporting is not very detailed or customisable but if you are a small business is should be sufficient. 

FreeAgent Support is very good, they give you an option to book a call with a support agent meaning no wasted time, or back and forward messages! FreeAgent also offer a comprehensive knowledge base and regular training webinars to expand your knowledge!


FreeAgent accounting has a good level of support with training webinars, knowledge base articles and the option to book a call with a support agent.  You can also call directly and the knowledge of support is pretty good. 


Free Agent Features:


  • Estimates
  • Invoicing
  • Expenses
  • Projects
  • Time Tracking
  • Payroll
  • Banking
  • VAT


Limited Companies have access to self-Assessment and end of year functionality

Sole Trade have access to Self-Assessment.


FreeAgent base their prices on what type of business you are:


  1. Sole Trader


  • Free if you have an account with NatWest, Royal Bank of Scotland, Ulster Bank NI, or a business account with Mettle, for as long as you retain your account.
  • £19 per month
  • £190 per year


  1. Partnerships & LLP


  • Free if you have an account with NatWest, Royal Bank of Scotland, Ulster Bank NI, or a business account with Mettle, for as long as you retain your account.
  • £24 per month
  • £240 per year


  1. Limited Companies


  • Free if you have an account with NatWest, Royal Bank of Scotland, Ulster Bank NI, or a business account with Mettle, for as long as you retain your account.
  • £29 per month
  • £290 per year


If you are not looking to take advantage of the free account then in our opinion, it is worth using Xero/Quickbooks for the extra functionality for a similar price.


Conclusion


Choosing which software is best for your construction business comes down to what system you prefer and what’s suitable for your business.


If you are a small business (under £100,000) and need a system to get you started then FreeAgent is perfect. It has limited features but gives good visibility of your business and is quite simple to use.


If you are a growing business we highly recommend Xero with Quickbooks close behind. They are both a the forefront of the industry-leading the way of innovation and probably are the best accounting software currently available.


Sage is quite outdated and limited in today’s market. We help businesses improve their systems and automation and Sage is just not there yet. We’ve heard Xero is like using electricity in your house whereas sage is still using candles.


If you need any more information on software or want to find out how easy it is to switch from one to another send us a message and we would be more than happy to help.


This article was written for Saint Financial Group, a multidisciplinary group based in the UK that helps construction businesses develop and grow. SaintFG offers a range of quality solutions in supporting businesses.

Saint provides the luxury of free business consultancy for of our clients, call now for your free consultation with a friendly business advisor to discuss your burning questions and put that energy back into your business!

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Written by:

Dylan O'Rourke MAAT

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