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JOB COST ACCOUNTING SYSTEMS

Howard Birnberg

Among the most important tools for design firm project managers is the firm's job cost accounting system. This crucial software package is the backbone of the information reporting system for project managers, firm managers, comptrollers and many others. These systems typically provide project status reports, project time sheet (labor) summaries, billing information, accounting reports such as the general ledger and provide for payroll reporting and paychecks.

There are many systems available for engineers and architects including off-the-shelf software packages available at any computer store. I am emphasizing computer software as not even the very smallest design firm should consider tracking this valuable information manually. Some firms claim they must develop their own software as none of the off-the-shelf packages provide the information they need or in the form they require. In my experience, firms making this claim simply do not understand what they need to track, are not following generally accepted accounting practices, have not sufficiently widely available software packages or generally have weaknesses of various kinds in their firm management. Developing your own software is often a fruitless exercise doomed to failure.

A variation on developing your own software is the attempt to adapt a package developed by your accountant or other consultant. Typically, these systems fail to recognize the unique practices in the engineering and architectural professions. For example, costs such as printing, travel expenses, consultants, and many other items can fall into several categories.

Overhead items are not specific to any particular project, but are related to the general operations of your firm. A management consultant would fall into this category. Reimbursable items are, by contract, paid for by your client at cost or with a justifiable markup. A structural engineer working on a project where the architect is the prime consultant would be an example. Non reimbursable items are project related, but come out of your fee. The same structural consultant mentioned above might fall into this category if the contract was written in that manner. Unfortunately, many software packages do not recognize the distinction between these items. These distinctions are essential to properly manage your firm.

SELECTING JOB COST ACCOUNTING SOFTWARE

There are a number of factors to consider in the selection of job cost accounting software.

1. Integration: All data items must require only one-time entry. Using a cobbled together system drawn from spread sheet programs and off-the-shelf accounting/bookkeeping programs would require multiple entry of data. For example, time sheets would need to be entered once for job cost reports, a second time for payroll reporting and paychecks and a third time to generate the necessary accounting reports and the general ledger. An integrated package requires only a one-time entry to generate all necessary reports.

2. Specific to design firms: As discussed above, a software package must be specifically designed for engineering and architectural firms. Terminology, formats, reporting and organization must recognize the unique nature of our business. Attempts to customize off-the-shelf packages require far more time and effort than they are worth.

3. Wide user base: You should confine your search to only those specific industry software packages that have a wide current user base. Most of the recognized industry leaders have user bases in excess of 2000 frims. only does this give you assurance that the software is targeted for engineers and architects, but their support staff will will understand your needs.

In addition, an industry specific wide user base encourages quick innovation. As one (or many) users suggest changes or additions to the software they are often quickly implemented. For example, in 1975 I requested Harper & Shuman to automate the billing calculation process. They quickly did so saving me endless hours on the calculator. This simple innovation has become widespread in the years since. Many others have made requests of their software providers enhancing the products for all of us.

Nearly all of the major job cost accounting software providers hold annual national and more frequent local or regional user conferences and meetings. This offers the opportunity to exchange ideas, learn about solutions to problems, enhance your knowledge of the software, develop more applications for the data, etc.

4. Product support: As with any complex software package, product support is crucial. All of the major industry specific software makers have reasonably good product support to assist in installation and troubleshooting.

5. Innovation: Lacking the resources of the major software companies such as Microsoft, industry specific software producers do not come out with new versions each year. Microsoft, for example, tweaks its products just enough to make last year's version obsolete requiring everyone to buy the latest product. Firms producing job cost accounting software for engineers and architects typically do not do this. They innovate enough to generally meet the needs of the marketplace. None lead the market as would a firm like Microsoft. For example, although Windows has been out since 1989, most industry firms only converted their products from DOS during 1994-95.

SUGGESTED PACKAGES

The following list is based on my own experience and contacts in the industry. While I do not recommend packages, I would strongly suggest you confine your search to the following software providers. If you can't find it here, you probably need to take a closer look at yourself!

1. ACCI Business Systems, Inc. 1415 Wagon Gap Trail Houston, TX 77090 (800) 448-0601 contact: Paul Pamer

2. Axium Systems, Inc. 419 Canyon Avenue, #300 Fort Collins, CO 80521 (970) 224-9644 contact: Tom Ledder

3. BST Consultants, Inc. 5925 Benjamin Center, #110 Tampa, FL 33634 (813) 886-3300 contact: Diana Duvall

4. Harper & Shuman/Deltek 68 Moulton Street Cambridge, MA 02138 (617) 492-4410 contact: Bernie Buelow

5. Semaphore, Inc. 3 East 28th Street, 11th floor New York, NY 10016 (212) 545-7300 contact: David Clark

6. Wind-2, Inc. 1901 Sharp Point Drive, #A Fort Collins, CO 80525 (970) 482-7145 contact: Dave Marvin

Howard Birnberg is executive director of the Association for Project Managers. He may be reached at (312) 664-2300.


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