The Ultimate Tech Stack for Construction Contractors

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ℹ ABOUT THIS EPISODE

Your construction business needs more than shiny apps - it needs a financial engine that works. We reveal how specialized tech stacks give contractors real-time job costing, streamlined workflows, and allow construction-focused accounting firms like Carpenter & CPAs to offer 30-50% cost savings over traditional accounting. 

From receipt capture apps to automated purchase orders, discover the systems that turn your business from cash-burning chaos into a profit-generating machine. Perfect timing for your 2026 planning.

⌚️ Key moments in this episode:

• 00:00 Introduction: The Shiny New Truck Analogy
• 00:44 Understanding the Modern Tech Stack
• 01:09 Challenges with Traditional Accounting Software
• 01:55 Streamlining Financial Processes
• 04:24 Real-Time Job Costing and Cash Flow
• 07:40 The Importance of Efficient Receipt Management
• 10:35 Time Tracking and Labor Productivity
• 15:29 The Role of Purchase Orders in Cost Management
• 21:18 Conclusion: Building a Command Center for 2026

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Wade Carpenter, CPA, CGMA | CarpenterCPAs.com
Stephen Brown, Bonding Expert | SuretyAnswers.com

Transcript

[00:00:00] 

Wade Carpenter: Every contractor loves a new truck. The paint's clean, the rims shine, the bluetooth works, and it just feels good to drive. But pop the hood. The oil's thick, the belts are cracked, and that check engine light's been on so long you stop noticing it.

That's your accounting system. You've got shiny apps up front: estimating, scheduling, invoicing, but the engine that runs your money is sputtering.

Today we're gonna pop the hood on the financial engine and show you how a smarter, specialized setup keeps your business running smooth instead of burning cash on the side of the road. This is the Contractor Success Forum. I'm Wade Carpenter with Carpenter Company CPAs, alongside Stephen Brown with McDaniel Whitley Bonding and Insurance. Stephen, today we're talking about a Modern Tech Stack for a construction company. Any initial thoughts on this topic? 

Stephen Brown: Wade, what a great idea. And I love the illusion of popping the hood on the truck to fix the engine, and that engine's cash flow. We talk [00:01:00] about it all the time. One thing that you constantly referred to in this podcast that we're gonna do today is a Tech Stack. I don't even know what that means. 

Wade Carpenter: Well, there's a lot of things that technology can do nowadays and I think it is a myth that you can get everything in one package.

We've talked about this many times, QuickBooks online is not really built for contractors. Whether it's QuickBooks Online, Desktop, Sage, Foundation. There's a thousand of them out there. And some of them are very good, but they have certain limitations. Especially if you're talking about something like QuickBooks Online, we add in something like the Builder Trends, the Procore, the Job Treads, ServiceTitan. There's a lot of those out there.

We've talked about the myth of okay, we want to get everything in one place, all these other add-on systems are not true accounting systems. And then you get into the more expensive systems like the Foundations and the Sage 300.

And they're great systems, the idea is how can we get this streamlined? How [00:02:00] do we get it so we have more real time books? So that's what I wanna talk about. Some of the things we put into place. I'm not knocking any software. It's just the fact that the modern software can really give you a lot more real time information if you know how to apply it. So that's what I wanted to go into today. 

Stephen Brown: That's everything. Real time information if you know how to apply it. And just like that shiny truck you talked about in that introduction of the podcast, everything's wonderful when it works great and when it's running smoothly. And how do you go about setting up this tech stack for your back office support, for tracking your accounting, for giving you the information that you need to run your business?

Wade Carpenter: Well, I think a lot of it for me has been trial and error. There's a lot of things that have changed over the last years, obviously, last couple of years, AI is coming into a lot of this stuff. It's like you're trying to hire some kind of translator that knows half the language. And again, I think that's probably self-serving, but it sets us apart.

Since we only do [00:03:00] construction. We're speaking one language. It's like we're not trying to speak manufacturer, retail service type business. We have had to figure out how to make it as efficient as possible, because I'll say upfront, everybody expects a CPA firm to be more expensive. Everybody charges by the hour and the rates were unreasonable.

Well really, we pride ourselves on being able to say we are usually at least 30 to 50% cheaper than hiring somebody in-house. Plus we usually bring our own tech stack with us. So, we know what works and what can streamline things.

And I think I've told you this story a few times over the years. We had this $30 million developer that we were working with a couple years ago, and they were still very paper based. And two and a half people spending 4 full days every month. The last half of the month, nobody could take a vacation because they had to get their pay apps, their draws out by the end of the month otherwise they [00:04:00] had to wait.

We streamlined it, digitized the whole thing. Then we could give them a full cost report within five minutes that they could bill by and have all the receipts and the backup for it. We see it all the time when you know how to do it properly. So that's an extreme case. In that same story we also found about $2 million worth of unbilled stuff that was able to help their cash flow.

But the point of all this is real time job costing. And again, said it many times, nobody wants to go pay their bills, but you need to know what it's costing you, and you need them as quick into the system and not riding all around in that foreman's truck that picked it up at the job site.

Stephen Brown: It's like an old contractor I had once years ago. I've asked him how he was doing, how's business going? And he just pulled out big lot of cash. I said well, it looks like you're doing great. Have you paid all your bills? Yeah, it's just that simple, isn't it? 

Wade Carpenter: Well, I don't know that having a lot of cash means anything nowadays. 

Stephen Brown: It [00:05:00] doesn't. that's the point. And think about how much money you lose by not billing properly, just by not billing. And you say, how could I forget to bill this? Well, you got a lot of moving parts in your organization. It's not just you. You have to rely on your system, your tech stack. Right? 

Wade Carpenter: Having real time access to your cash. I know I've said this many times as well, for years and years I would preach like, you gotta have great accrual books. Contractors would tell me they know exactly how their business is doing by what's in their bank account. But we both know that can be an illusion.

That big money comes in all at once and then it can disappear just as fast. Profit First, that was sort of my epiphany. It's like, okay, maybe you don't really know if you have one bank account. But if you have your bank account set up properly, if you're covering your overhead and covering your job costs, putting money aside for yourself to be paid, putting money aside for your taxes, putting money aside to actually have cash profit, that goes a long way and the tech stack moves into it.

With the modern tech stack, you can [00:06:00] be on top of your banking a lot faster. For years, people being able to look at their phone by what they're doing. That's one of the most requested things when I talk to a new prospect is how can I forecast my cash flow?

Looking out 13 weeks and bringing us back to where we were going with this, is getting that job cost, getting the payables in there quickly. 

Stephen Brown: Wade, that makes perfect sense. I think of my cell phone, I use with the card and immediately it dings to show me that it's been processed. It's so fast and easy for money to go out of my account and so much harder for it to come in. Wouldn't it be wonderful if your cash flow was coming in as fast as your expenses? 

Wade Carpenter: You know those expenses, until we get them in the system, we don't know they're sitting there. So if you got one riding around in the truck with your supervisor, or they go to the project managers and they're sitting on somebody's desk stuck under somebody's coffee cup that's been sitting there a week, and then they turn it in to bill, I mean, you don't know where you're at.

Changing the system, the workflow, I've talked about this [00:07:00] too. When we started doing this about 10 years ago, trying to support contractors remotely, job costing, some of the software out there to be able to capture payables. It's like, okay, well we can do the payables, but it was only for-- yes you can tie it to a job, but it would be the chart of accounts level where labor materials subs as opposed to okay, we got HVAC or electrical or plumbing, or whatever those cost code line items that we wanna see the detail in. We couldn't get that. And so we ended up having to build our own on top of somebody else's software to be able to get those cost codes in there.

Now believe it or not, a lot of those software are still built that way. Receipt management. Again, not knocking anybody else's software. Receipt bank decks, all those things a lot of them would not do anything beyond the chart of accounts level. So this is where we had a problem with trying to get the true job costs. We'll come back to the receipts, but whether it's a paper receipt or payables or whatever, [00:08:00] guys in the field don't want to deal with that kind of stuff.

So we've gotta make it as stupid simple, I guess I would say, as we can to get that into the system as rapidly as possible.

Stephen Brown: So what do you do do you just try to b ypass them? Or try to speed up how your accounting system processes the expenses that you have? 

Wade Carpenter: Well, let's stay with the payables for a minute. Having a defined system, this is how the workflow goes. It's more of, okay, let's have a dedicated email that it comes in to a system. We try to avoid as many of those manual paper bills as we can. It takes scanning and they get lost in the mail, try to make it electronic as possible.

And a lot of these modern systems, not just OCR for many years, they were very unreliable. Optical Character Recognition, I should say. And now the AI power is actually doing a lot better job of reading invoices and capturing that data, and it's a lot more [00:09:00] accurate. You still need to check it. But part of the problem is the fact that, what's not on the receipt is like, this goes with this job and this is this job, this cost code. And, we can set up rules to where this vendor applies to this cost code or something like that. But the idea is how can we get it streamlined so that we can get it in there really quickly?

The other part of that is receipt management. Depending on the type of construction you do. If you send guys to Home Depot multiple times a day, if they're out of town they got receipts for meals or hotels or whatever it is, they're less likely to be able to get that in there, bring it back to you if you wait until... the idea is how can we actually get it to the system really quickly?

So we have actually built our own apps for things like this, to where we can actually have them take a picture on their phone. OCR will read it and get it into the system, and they can just quickly tag it to this is this [00:10:00] job, this cost code. And most of them they can just toss the receipt away.

But I'm working with another one right now that's trying to catch up like a year's worth of stuff, chasing receipts down from project managers. It's impossible. You go a couple weeks, they don't remember what they've done.

So this is the kind of thing that we end up dealing with and how can we use technology to be able to streamline this and capture the information as soon as possible so that we, first of all, don't forget what it was, but second, get it in the system so that we can actually turn it into cash flow. 

Stephen Brown: Makes sense. 

Wade Carpenter (2): We also have the issue with things like the time tracking. If you have your own labor force and you're trying to measure the labor productivity we talked about last week on the show, if you can't track it, you don't know.

A lot of contractors out there, this is one of the other areas that they struggle with. How do we capture the time? Because the guys in the field, it's a constant sore spot. They don't really wanna mess with that [00:11:00] kind of stuff. And you end up having somebody like, okay, well we gotta have a foreman that's gonna hand write all these time cards because they forgot to clock in, clock out.

The modern timecard systems, they can do some things like geolocation, geofencing around a job site. And hopefully you don't have to rely on that kind of stuff, and it does get into some of the privacy issues. But being able to capture that kind of stuff, whether it's the time or equipment time, where it's located, how to charge those kind of things out, equipment hour meters, it's amazing what the technology can do to report back, where you're not sending a human to go, hey, let's read this hour meter on the excavator. So what I'm talking about today is how can we get that kind of stuff?

Going back to the time. I get a lot of people asking, which one's the best? There's a lot of them out there. There's QuickBooks time, it was formerly TSheets, which was a better program before Intuit bought it, but it's a good program. There's Clock Shark, Clockify, there's a bunch of them out there.

[00:12:00] And if you got the proper tech stack, in my mind, it doesn't really matter, as long as you can say, this is my jobs, and these people were working on there. If you can capture it one way or another from that, we've had to build some of these ways, but we can try to get some of that stuff streamlined.

This is another thing that really does go back to the tech stack, but we had a contractor that has about 50 people civil grading. They had a lot of jobs, and they had people all over the place, and they gave us a spreadsheet that was about a thousand lines long. And it was very poorly formatted and it was taking one of my ladies three hours plus to get all the time tracking every week. And believe it or not, we built a system to extract all that and I can have her an import file in 15 seconds.

That's why I'm talking about when you build specialized tools and we are seeing this stuff over and over, if you've got a CPA that does manufacturing and retail and restaurants and they do a little bit of [00:13:00] everything, they can't specialize in anything very well.

So, that goes back to how can we do it 30 to 50% cheaper than hiring somebody else, plus bring a tech stack? Well, number one, the tech stack is a big part of the ability for us to do it at a rate that makes sense for a contractor. We believe we're giving them a lot better value as well as more real time numbers that they can rely on. I don't know how many people come to me say, I don't really trust the job cost numbers that my in-house accountant, my bookkeeper is giving me, and there's a lot of reasons for that.

Stephen Brown: Makes perfect sense. Sometimes you invest a lot of money in something that you're getting bad advice. And you kind of keep hanging onto it because you say, I've invested this amount of money. I would say take it as a job cost loss and rethink where you wanna be with this support system and change accordingly. So many of my contractors will hire someone and they have certain familiarity with certain [00:14:00] software or program, and that's what they want you to use. But at the same time, how adept are different people at learning these new software and what they can or cannot do for you?

So it really takes a coach, doesn't it? 

Wade Carpenter: Well, I don't wanna necessarily call myself a coach for that. The idea is let me give you real time numbers. Everybody says they want a dashboard. We recently did some episodes on a traditional look, looking backwards dashboard, this is where we are versus the FP&A, the Financial Planning and Analysis where we can actually look forward.

We're taking this rear view mirror to looking at, let's have some radar on what's coming out ahead of us. So the ability to do that is based on how fast you can get the data in there, streamline it. As much as you can take humans out of the loop to be able to get that data accurately, when a machine can do it, typically it's a lot faster. It's a lot more accurate and more reliable. To be able to get some of these custom tools we can be a [00:15:00] lot more efficient. We have this multiplier effect on our efficiency, where we can actually do more and not spend hours and hours working up a bill or, some estimates and things like that.

Being an accounting nerd and a computer geek, that's what we've become, but we have had to build a lot of these special tools and specialized apps to do receipt capture. You don't have to use one of these canned ones, you can customize it to the way you work.

I'm pretty proud of some of the other stuff we've built. I say the word purchase order, POs, and a lot of contractors will wince like I said you need a root canal. But a good PO system can save you in a couple of different ways.

Number one, getting that streamlined cost coding. Because if you've got a PO that you can tie to it, you can number one, probably code it a lot faster. Machines can code it.

It also gives you a protection of, okay, your material supplier said you would charge this per square foot or per whatever unit, and the bill came in at a higher price. It can [00:16:00] check some of that. If your subs have gone over, or double billing, that kind of stuff, you'd be surprised how often we see double payments out there, and they end up having to get corrected or sometimes they're never caught.

Stephen Brown: And sometimes it's too late when you find it, to correct it. It's too late for you to file a payment claim. Maybe the timeframes run out that you're allowed to do that. You're right, this purchase orders seem to be more of a headache than a task order where you're getting an order to do the work. And I like your idea of streamlining this to the point where the two go right together as quickly and as efficiently as possible. 

Wade Carpenter: Yeah. I recently built one for pay applications. A lot of times we get the pay applications for the contractor, they do their own pay applications. And number one, it is human error on calculating those things.

But even if they're calculated correctly, we have things like, okay, a engineer will come back and cut your change order, the GC, whatever it is. We built a system where we can ingest [00:17:00] these pay apps and double check the math, double check, and pull it all into the system, do the journal entries. Because you have to look at what was billed last time versus this time, what's the change in the retainage and doing it properly.

And that system actually 35 seconds versus manually looking at it, going back and checking all that stuff. It's amazing the time savings. We just built that in the last two months, but it's already paying off amazingly well for us. So. 

Stephen Brown: Do you have a lot problems with the invoices coming from your suppliers or vendors that are just not specific or detailed enough to let you tie it to a particular job? 

Wade Carpenter: Well, yeah, that goes back to the purchase order system and having some of those things that people cringe. A lot of reasons they cringe is because they can't get a number. The modern systems, now, we don't have to have a human filling out PO numbers. As long as they've got permission to do it we can do that, tie it to a job, and a human doesn't even have to be in the loop for that kind of stuff.

Stephen Brown: That's the most interesting thing to me [00:18:00] because it's hard for me to conceive of how to quickly and efficiently communicate a purchase when there's thousands of purchases made a month in an organization, track it to the right job and make sure that it was delivered, that it was accurate, and that it needs to be paid and not have to check back with the project manager and everyone else involved in the ordering system and the payment system. That's just grueling, isn't it? 

Wade Carpenter: Yeah, trust me we know people spend a lot of money on humans doing that work. Not that you don't need a human, but how efficient can you make them if you can maximize the efficiency with the technology? That's part of what I'm talking about today with the true return on investment of a specialized tech stack.

It's not about the apps, the systems, it's how all these systems really work together. That's why we like to say, the contractors that partner with a specialized accounting firm, like what we do, we can give a lot better real-time job costing for forecasting, [00:19:00] streamlining these accounts payable, receivables, workflows, we can do a lot better. The weekly dashboard, that's another thing. So many efficiencies we've gained in the last couple years.

Two, three years ago, we had a huge contractor that was really growing super fast, had huge capital, and their cashflow was tough.

They were really needing a weekly 13 week cashflow forecast. It took me probably six to eight hours a week to develop this. They really needed it and we accommodated them and they did pay appropriately. But now we've got the systems where I can pull out those 13 week stuff that would take hours and hours to do.

I've got another system that start to finish between the two, I mean, less than five minutes to get the data for it. So, it all means faster closeouts, fewer errors, and for us, we can say we can at least cost 30 to 50% less than hiring somebody.

Stephen Brown: Fantastic. Well, the whole mindset being as a [00:20:00] professional, as a consultant, you want people to do things right. You don't just want people to pay you your hourly rate to grind out same old things for them over again. You're not built that way, Wade. And the whole process of making things run smoothly and getting you the information that you need is an attainable goal. And you've done it over and over and over again. I think to a lot of our listeners, that goal just seems unattainable or it just always seems to be something you're chasing. And I would say to that at least get started and keep working on perfecting it. Make it as good as you can and don't beat yourself up if it's not perfect. 

Wade Carpenter: True, but again, this is the last quarter of 2025, that's when we're recording this. And people going into 2026, maybe if you've got a bookkeeper that you don't trust the job costing, maybe it's not efficient, maybe you've paid for that software for three, four years and never really got it set up properly. Bottom line, I guess if your systems still depend on your paper, your memory, and your [00:21:00] miracles, maybe it's time to pour a new foundation for 2026.

Stephen Brown: I love it. Well, that's a great point. And it's always something we're thinking about and it's something that we're always trying to put out in front of our listeners, Contractor Success Forum: what's available and how can we help you run your business better? 

Wade Carpenter: Yeah. Well, to bring this one to a close, my message is your tech stack is just a bunch of apps, it needs to be a command center. And if you build it, right, it gives you a lot of control, clarity, and you're mastering your cash flow.

So look under your hood and see, is your system all sludged up? Is it time to change your oil?

Stephen Brown: It's a great analogy, Wade. 

Wade Carpenter: Well on that, we hope you got some thoughts about some of the ways you're doing things and maybe it is time for 2026 if you haven't gotten the results you wanted to think about doing something different and how are you gonna change the game? The technology's out there.

We thank you for listening. If you have any questions, thoughts, comments, if our listeners have thoughts about things that they've built or problems [00:22:00] they've had, we'd love to see them in the comments below. We always welcome your thoughts and we do this every single week. We'd appreciate it if you like, share, subscribe, it always helps the channel out. And we will see you on the next show.