Jim,
You are right. Your software truly sounds like a piece of work.
From the description of your operation, you could use a job cost accounting
program. That kind of software allows discrete projects to be accounted for
as if they were separate jobs, each with a labor and materials budget, along
with other cost categories. If you wish, you can set up a budget for labor,
materials, equipment, farmed out (subcontractors), and other. As actual
costs are accrued, you can track variances to indicate whether you need to
adjust costs or pricing. I used to be the controller for a food
manufacturing company. They insisted on sticking with a general accounting
software then compensate for the missing job costing function with a staff
that did a laundry list of custom reports and spreadsheets every month.
They were into their JD Edwards package and their IBM mainframe over
$800,000 and they still spent a fortune having people do ancillary
reporting. Sounds like you are suffering from the same frustrations.
After that, I consulted with a construction company that had a manufacturing
subsidiary, doing discrete batch manufacturing. We got them into a job
costing software that matched their construction side perfectly. Their
controller started tracking their manufacturing side with each batch being
accounted for as if it were a job. Surprisingly, it was a great match. Now,
he pulls from inventory for each batch, expensing costs as if they were
jobs. Using this software, he noticed two things. First, he dropped his
staff from 11 to 8, within three months, then to 5 by the end of the first
year. I haven't talked to them for a few years, but they were satisfied
that 5 people could do what used to take 11 and they were operating with
current, accurate information. Their job costing software had everything
they needed, so they didn't need all of the supporting databases and
spreadsheets. They paid for their software purchase in reduced costs about
every two weeks. Quite a deal.
Second, he got such a good handle on costs that they actually identified
products that were being sold at or below cost. They adjusted pricing on
some SKUs and dropped other that they could not produce at competitive
prices. Bottom line: Their "bottom line" was significantly improved. In
fact, the CEO now treats the CFO with a level of respect he never had
before. That might be a byproduct of his financial contribution to the
bottom line.
That company ran around $80 million a year in gross sales. The software
they purchased, cost less than $10,000, including installation and it was
the smoothest software implementation than I have ever seen. You can check
that job costing program out at:
http://www.a-systems.net/jobview.htm
Last I heard, the software was rated 5 Stars. Looks like it still is. I
would give them 5 Stars for how much they saved our client. I'd give them
another 5 stars for making me look good for recommending their software to
the client. See if it will work for your company. Let us know what you
find when you call them.
Best of luck,
AJ