6 Things Your Construction Accountants Can Make Better
Let’s face it. Engaging a professional accountant can feel unnecessary, especially if you’re a small construction company just starting out.
Perhaps you have not bagged many projects — yet costs are already on the roof.
But wait a minute. If you don’t engage professional accountants, it is the IRS — not your construction company — that may actually reap the benefits.
The following are six things your construction accounting firm can help with that you might not have considered.
A Construction Accountant Can Help Improve Your Tax Strategy
The tax code can be quite complex — even for general accountants.
Then again, contrary to what you may have in mind, the tax code is more than how much tax to pay.
The tax code comes with several provisions construction accountants can utilize to help reduce the company’s tax burden or improve cash flow. Some of these are designed as tax credits: amounts you can subtract, dollar for dollar, from the taxes you owe.
A fine example is the R&D tax credit for construction companies.
Construction accountants who know the nooks and crannies of the tax code can help improve a company’s tax strategy.
They’ll exploit certain favorable provisions otherwise lost in technical jargon or legalese.
And make no mistake. These tax savings are not amounts to sneeze at. Sometimes, they can run into thousands of dollars.
Construction Accountants Can Help Improve Your Costing
If you’ve been in the construction industry for a while, you know that costing elements such as budgeting, staffing, and pricing can either make or break your bottom line.
There are few things as fatal as underestimating what a project will cost.
In some cases, cost overruns may be excusable, such as an unexpected disruption in the supply chain that eventually causes a spike in prices.
In many cases, however, underestimating costs boils down to human error — such as the failure to capture an overhead, for instance— or a scope creep. Scope creep is when certain additional tasks are suggested along the way that were not previously part of the contract agreement.
Whatever the case, construction accountants can improve a company’s costing process to the extent cost overruns are significantly reduced — or even eliminated.
Construction Accountants Can Improve Your Documentation & Workflows
Because construction accountants know the importance of documentation, particularly in the regulatory environment and workflow process, they can improve your company’s documentation processes.
For instance, construction accountants know that to claim R&D credit from the IRS, they’ll need — not only payroll information for workers directly involved in R&D activities — but also project notes, design drawings, work plans, and such-like documents.
This knowledge will motivate your construction accountant to improve the documentation systems — making them more reliable and effective.
And on the flip side, improving workflows will help streamline your accounting and induce considerable efficiency.
Construction Accountants Can Improve Cash-flow Management and Financing
While Pehr G. Gyllenhammar, by then the CEO of Volvo, may have been the first to write that “Cash is King,” he was certainly not the first to observe this eternal business truism.
And in the construction industry, perhaps more than any other industry, cash really is king.
This is because the construction industry is capital-intensive, and poor cash-flow management can see your business quickly come crashing down — stifled by its lifeblood.
Of course, by their training, any accountant appreciates cash-flow management. But construction accountants appreciate cash-flow management more because they often deal with projects that have long financial lives.
Therefore, construction accountants are often well-placed to manage cash flows better and make accurate forecasts.
Construction Accountants Can Help Source for a Better Construction Software
This is not the time for calculators, black ledger books, and other business tools that were used before the discovery of Penicillin. Today, if you’re running a construction company, you’ll need relevant niche-specific software.
And this should be more than some accounting software such as Quickbooks.
You’ll need software that integrates financial accounting with other business essentials, including regulatory requirements. This includes taxes and their deadlines, employee laws, and the numerous industry guidelines out there.
Because of their industry experience, construction accountants will help you get bespoke software for your company — or suggest improvements to the current software.
At Atlas Accounting Group, we only work with software that integrates with Housecall Pro, ServiceTitan, QuickBooks, Gusto, and Jobber.
Construction Accountants Can Help Improve Financial Statements Analysis
In the construction industry, perhaps more than in other industries, proper financial statements can stand between success and failure.
Aside from giving an accurate picture of your financial position or performance, well-prepared financial statements can help a construction company secure a surety credit more easily.
And this is where a qualified and experienced construction accountant, who knows the kind of financial statements needed, including the necessary technical notes, comes in.
Then again, construction accountants can help with financial analysis. For instance, they’ll look at your profit margins, the trends over time, and the industry averages. They can then give important recommendations for improvement.
Want To Get On the Right Financial Track?
You know the peace of mind that comes with engaging industry experts, that smile you get when a project finishes right on time and on budget.
Our goal is for you to have that same smile when you think about your financials. We’ll do the heavy lifting for you and work to put more money in your hands.
And here’s the thing; you can get started right away.
