An ERP system manages a company’s core back-office processes in one integrated database: general ledger, accounts payable and receivable, payroll, purchasing, equipment and, in construction, job cost and billing. Construction ERPs add industry-specific features like cost codes, commitments, retainage, AIA billing, certified payroll and WIP reporting.
Why it matters
In most contractors, the ERP is the financial system of record, but the field and project teams live in separate project management tools. The gap between them is where double entry, stale cost reports and month-end scrambles come from. A PM approves a change order in one system; accounting finds out days later.
Worked example
Illustrative: CO #14 for $86,400 is approved in the project tool on Monday. Unless it’s integrated or re-keyed, the ERP still shows the old contract value, so Pay App #9 is drafted without it and the WIP schedule understates revenue. Someone catches it at month-end review, or no one does.
Common mistakes
- Assuming integration means real-time; many sync nightly or only some fields.
- Customizing an ERP so heavily it can’t be upgraded.
- Letting the field and accounting maintain separate cost code lists.
How os.construction handles it
We’re building project management and construction accounting on one data model, so there’s no sync between a PM tool and an ERP to break. It’s in development with founding contractors.