The article presents a modified finite element (FE) based algorithm for nonlinear analysis of 2D beam structures, which takes into account the influence of the shear forces. The method proposed enables using complex materials with nonlinearities without the need of implementing advanced constitutive models in FE routines. It can be directly integrated with commonly available FE software for linear analysis of beam structures, so its functionality can be easily extended also with material nonlinearities. The presented approach adopts the generalized constitutive law algorithm to iteratively modify the stiffness of beam element. To address an influence of a shear stiffness, a Timoshenko beam element was used. The methodology was implemented and its performance was verified on several numerical examples. For validation, the displacements and the ultimate loads were compared with the values from a commercial FE software. The results shown a good correlation between the reference model and the method proposed.