Solid Foundations: Specialty Construction Accounting

Accounting can be a tricky subject to handle in any industry, but this is particularly true in the world of construction. A set of very specific complexities alongside all of the usual tax headaches can mean that mistakes are made easily.

Many construction businesses are now making use of specialty construction-focused accounting firms that are able to understand their needs and ensure everything is managed properly.

Here’s a look at some of the benefits that construction firms can enjoy when they work with an accountant who knows the industry.

COST CONTROL

When it comes to big projects, it is easy for costs to get out of control. Having a dedicated accountant on hand means that you can talk to them about your needs and your budgets, putting them in a position to help you stay on track. They can monitor how much is being spent on crews, tools and supplies, making it much easier for you to make the most of your resources and avoid overspending.

Understanding the taxes that impact your business can be difficult, so it is important to use an accountant who has that expertise. They will be able to keep track of your tax bills as well as ensure that you have the finances in place to pay them, and they can help you avoid missing those all-important deadlines.

NOT AN INSIDE JOB

Managing your accounts is a full-time job, and assigning the task to someone within the business can end up taking up more of their time than you might have anticipated, pulling them away from other important tasks. In the struggle to juggle it all, things can fall by the wayside. Taking on professional accounting services can free up your employees to do other things, ensuring that they can be more productive and therefore more effective for your business.

Your accountant can also advise you on which construction accounting software is best for your business and help ensure you are qualified to use it effectively—meaning that you can have an efficient system in place from day one.

Everyone makes mistakes, and some of them can be more costly than others. Making mistakes in your accounts can have huge consequences, both for the financial viability of the firm and in leaving you open to penalties from the authorities. The best way to avoid these errors is to bring in the professionals and hand your finances over to experienced accountants. When the job is being done by experts, there is much less room for error, and you can be more confident that all of the numbers you see are correct.

FORWARD FOCUS

Every business needs to plan for the future and evaluate its long-term financial picture. This can be difficult to anticipate in the construction industry. In many cases, contractors receive little or no payment until a job is completed while incurring massive costs along the way, making it difficult to forecast how their finances will look when the project wraps up. A good construction accountant can help you to draw a bigger picture of how financially healthy the firm is, what is predicted to happen and when, and how you can help your firm grow. This gives you the essential knowledge that you need to ensure that your business booms and that every project is managed properly and realistically.

COMPLICATED AND FLUID

In most industries, products and services are sold from particular locations, and the costs and profits of these are easily calculated. However, in construction, projects can span months or even years, meaning that they won’t all fit neatly into one time period. End dates can be flexible, costs can change or be reassigned to other areas—and so a specialist accountant is needed to stay on top of a situation that is often complicated and fluid. They will need to understand the complexities of subcontracting work, the implications of equipment or materials being moved to other sites and payments being made in installments.

This can be a lot to keep track of and will have an impact on how you submit your tax returns and end-of-year accounts, so it’s vital to ensure that you have a dedicated accountant on hand who can stay on top of it. They will ensure that everything is put through the books in the right way, make sure nothing is forgotten and check that everything is considered at the right time.

THE BOTTOM LINE

When it comes to a construction business, there are a lot of rules and regulations that need to be adhered to, not least of which apply to your finances. Having a professional accounting firm on board means that you have access to experts who know exactly what reporting foundations you need to have in place and what you need to be able to show. This means that they can help to maintain the financial compliance of your business at all times and keep you out of any legal trouble.

Running any business requires that you always have a handle on your finances, but this is especially important in construction. The nature of the projects that are undertaken means that a very close eye needs to be kept on the numbers to ensure that there are no nasty surprises.