Plumbing contractors are on a job site from the footings to the last fixture, so a costing mistake can run for months before anyone sees it. Generic accounting software and QuickBooks will not show you labor, job costs, and projected profitability while the crew is still on site.
We implement accounting systems for plumbing and mechanical contractors. Tina and Troy explain what the trade needs the software to do, and which product fits.
Most of the guidance we give for plumbers also applies to mechanical, electrical, and HVAC contractors. These four trades are commonly grouped as MEP, and this article has a lot of nuggets that will apply across the MEP family.
On site from footings to fixtures
Underground plumbing goes in with the footings. Rough-in follows as the building takes shape, and fixtures are installed near the end. That is a long stretch to be wrong about a number.
We recognize that mechanical, electrical, HVAC and plumbing aren't the same trades. When it comes to accounting and operations they all operate the same, and they're uniquely distinct from the other trades on a project.
Troy Guevara · Construction TechnologistWhat the four trades share is the calendar.
The longer a contractor remains on site, the more chances there are for small problems to compound. Hours run over, crews wait on other trades, material assumptions change, fixture deliveries slip, and work gets revisited. Each of those costs a little, and each one lands on project profitability weeks after the day it happened.
Tracking costs during the job
For a plumbing contractor, rough-in is both a construction milestone and an accounting checkpoint. The company has already spent a substantial portion of its labor budget, but there is still plenty of work left. This is a useful time to compare actual performance with the estimate.
They do their rough-in, and if they don't compare their numbers immediately they may not get that information until they're done with the rough-in, and then they're going 'oh crap, now we've got to catch up.'
Troy Guevara · Construction TechnologistLate job costing turns a manageable variance into a historical explanation. The numbers are right. They just arrive after the work they describe.
Labor is the largest variable on any job. Material quantities are knowable, and a change in material usually comes back through a change order. The hours rarely do.
I can build a school. I know how many brick it takes, I know how much concrete it's going to take. If something's out of whack on any of that, I get a change order, so I'm compensated. But I can't control my labor. I literally have to guess what it costs me to lay every brick and pour every yard of concrete. It's an educated guess, but it's a guess. If I can't control that number I'm going to lose money, and if I control that number I make money.
Troy Guevara · Construction TechnologistPlumbing contractors generally have less risk with basic materials such as PVC. Fixtures can create more uncertainty, especially when the specified product is unavailable when it is needed. On a school that takes two years to build, the contractor sets the bid long before purchasing many of the materials.
When material prices increase after the bid, contractors have few ways to recover the difference.
Let's say all of a sudden you're paying 10% more on materials. We've got to make that up somewhere else. The easiest place is labor — it's really the only place, because your material prices are set.
Troy Guevara · Construction TechnologistRecovering that cost requires project-level visibility while the job is still underway. If the system shows budget status and projected profitability every day, managers can move crews or change the sequence of work before the final cost is set.
Review and update the budget for every job each week. Estimate how much work remains and what it will cost to finish. Then update projected profitability to see whether the job is likely to finish above or below the amount you bid.
Sage Intacct Construction provides this daily view. One day of data will not save a job by itself, but it can reveal that labor is moving off plan during rough-in, while the crew is still on site and managers can respond.
Construction, service, and licensed crews
Before choosing software, determine what type of plumbing company will use it. A service-only company, a construction-only contractor, and a company with both divisions have different accounting and operational requirements.
Many plumbing contractors operate like two businesses. Construction involves long-term projects, budgets, change orders, and progress measured across cost codes. Service involves shorter calls, dispatch-driven work, and a faster operating cycle. The accounting system must provide a clear view of each division while also supporting the company as a whole.
The workforce also has different requirements. General contractors typically subcontract MEP work to specialty contractors, whose field employees may need individual apprentice, journeyman, or master licenses.
They can't just send any person out to do the work. They've got to get a licensed person.
Troy Guevara · Construction TechnologistThese licensing requirements add complexity to staffing and administration. Larger plumbing contractors may have substantial office teams and can even be larger than the general contractors they work for.
Each company has different ERP requirements. Sage 100 Contractor fits smaller construction firms and companies buying their first construction accounting system. It may remain the right product for businesses that do not expect to need a larger system. More complex contractors may need Sage Intacct Construction.
Sage offers several construction products, including Sage 100 Contractor, Sage 300 CRE, Sage Estimating, and Sage Intacct Construction. Sage Intacct Construction is not the same product as standard Sage Intacct.
Start by defining the company’s business requirements. Then evaluate which product meets them.
When bookkeeping no longer shows the job
QuickBooks can be a practical bookkeeping system for a startup. It records checks and invoices and organizes transactions in the general ledger. Many contractors build successful businesses using it.
Problems arise when the company needs a bookkeeping system to perform construction accounting.
QuickBooks doesn't do construction accounting. It does a really good job of identifying categorically where checks and invoices go, but it doesn't provide you true job cost information.
Troy Guevara · Construction TechnologistCategorizing a check as an expense does not connect that cost to a project, cost code, and cost type. A general ledger answers, “What kind of expense was this?” Job costing must also answer, “Which job consumed it, what work did it support, and how does it compare with the budget?”
Revenue alone does not determine whether a contractor is ready for construction accounting software. Consider the work itself:
- How many jobs are active at the same time?
- How long do those jobs remain open?
- How much labor does the contractor self-perform?
- Does the company need formal work-in-progress reporting?
- Does it track retainage?
- How many change orders move through active projects?
- Can the accounting team produce project reports without rebuilding them manually?
Once the company needs its first WIP report, starts tracking retainage, or regularly manages change orders, simple expense categorization is no longer enough.
A construction accounting system organizes WIP and job costs to support both financial statements and project reporting. Sage Intacct Construction uses dimensions to organize transactions beyond standard customer and vendor records. The company can also organize data by project ID, location, cost code, and cost type. This structure gives the business several ways to analyze the same data without rebuilding reports every time its requirements change.
New reporting requirements can come from a state agency, lender, bonding company, management team, or private-equity owner. In each case, the company needs to see its information in a form the current system cannot readily produce.
Some contractors work around those limitations for years. One plumbing company had operated for 35 years with about 120 employees and seven or eight back-office staff. When QuickBooks could no longer support its needs, the team developed a paper-based process for invoicing jobs, matching invoices to jobs, and managing change orders. The company did not even use spreadsheets for these tasks.
The process worked because the employees worked hard, but every transaction required several manual steps.
There were a lot of processes that they believed had to be manual that they had no idea could be done a different way, because they didn't understand the concept.
Troy Guevara · Construction TechnologistThe contractor and its accounting team had built a process around the tools available to them. That is a normal stage of growth. A bookkeeping system may suit the company that originally bought it but be too limited for the company that business eventually becomes.
Construction accounting software should bring job costing, project profit and loss, cost codes, compliance, project management, submittals, transmittals, RFIs, and change management into one structure designed around construction work.
Two plumbing contractors, two different migrations
Every plumbing software implementation has different requirements. The existing system, the level of detail it contains, and the company’s approach to inventory and cost codes all affect the migration.
Ackerman, a plumbing client, came over from QuickBooks. They were more complex than a typical Sage-to-Sage move because they brought in a lot of inventory with very strict inventory information — item IDs, part numbers, the works. Compare that to a client like Interstate Mechanical & Core, who was very general with cost-code structure and didn't carry all that item detail. … The lesson is that "QuickBooks migration" isn't one thing — inventory-heavy contractors carry extra structure that has to be modeled carefully on the way in.
Tina Rehberg · Senior Sage Intacct ConsultantMoving from Sage 300 CRE presents different challenges than moving from QuickBooks. A Sage 300 CRE contractor is more likely to have an established multi-entity structure and an accounting model organized around general-ledger prefixes and subaccounts. A QuickBooks contractor may need to define its project and dimensional structure for the first time.
Interstate Mechanical & Core, which performs both HVAC and plumbing work, had outgrown Sage 300 CRE. The company also needed its new system to connect with Procore for its project managers.
The implementation team must understand inventory, cost-code detail, and existing processes before configuring the new system. An implementation partner should first learn how the contractor describes its own business, then translate that language into the system.
When they say 'I need to do compliance for lien waivers,' we understand what lien waivers you're talking about. We know that they're conditional, unconditional, partial and full. We know that when you say task, it's activities or cost codes. We understand that there's three or four different languages depending on what industry you're in — being able to understand that language and not have to have them explain it to us.
Tina Rehberg · Senior Sage Intacct ConsultantConstruction experience matters during this process. A partner that understands standard Sage Intacct is not necessarily experienced with Sage Intacct Construction. Contractors should look for a team that implements the construction product and works primarily with construction companies.
Alta Vista Technology’s construction team includes former project managers, estimators, owners, controllers, and CFOs. That experience helps us understand how construction work happens and how it should appear in the accounting system.
The rest of the technology stack also matters. Sage Intacct Construction has an open API, and third-party products may already provide integrations. Contractors that use systems such as ServiceTitan, Bluebeam, or Procore can evaluate those connections during implementation rather than assume the ERP must stand alone.
What the system needs to show
A plumbing contractor has outgrown basic bookkeeping when it cannot see labor costs and projected profitability during rough-in. Waiting until the job is complete may explain what happened, but it does not give the team an opportunity to improve the result.
They don't know what they don't know, and most of them have outgrown it before they realize they've outgrown it.
Troy Guevara · Construction TechnologistChoose software based on how the company works. Consider its size, the number and length of its jobs, WIP and change-order complexity, mix of service and construction work, field-access requirements, and need for daily project visibility.
Smaller construction-only companies may continue to be well served by Sage 100 Contractor. As contractors grow, project teams often spend more time on job sites and less time in the office. When those teams need to manage work and access current project information in the field, Sage Intacct Construction may be a better fit.
Changing systems is inconvenient, but continuing to use a process that cannot provide the information the company needs creates a greater risk.
The right construction accounting software records the final result. It also shows you where the job stands while you can still do something about it.
The right foundation for your next stage of growth
Our team of experts is here to help guide you every step of the way. Let’s start your ERP journey today!
