Working with a qualified construction accountant with specific knowledge within your sector is beneficial. Outsourcing your accounting and bookkeeping services is an excellent method to ensure that nothing falls between the cracks.
In addition to the typical accounts payable, accounts receivable, and payroll activities, companies in the construction industry also deal with client payments, progress billings, job costing, retention, change orders, and other anomalies. Finding the right accountant with specific knowledge in construction accounting may require a bit extra effort, but the following significant advantages make the search worthwhile:
Accounting procedures relevant to the construction industry
Construction industry accountants are familiar with accounting procedures relevant to your sector. For instance, they can assist you in putting into practice the percentage-of-completion approach for keeping your company’s records. By recording your income and expenses as a percentage of a specific project’s completion, you may understand your cash flow more precisely at any given time.
In addition to assisting you with implementing new accounting techniques, the ideal construction accountant will also be able to optimize your financial procedures so you can make the most of your company. They may even offer you reports to aid in planning your future employment.
Planning and assisting with taxes
One of the biggest areas of uncertainty for business owners is taxes, and construction taxes may be particularly complicated. According to state-specific sales tax laws, construction enterprises are often exempt from charging sales tax for their services but are obligated to do so for the supplies they buy to finish contracts.
Employing an accountant who is aware of how these particular laws and regulations affect your company and employees is crucial. They can ensure that you don’t break any laws, and in many situations, they can figure out how to prepare ahead so you can maximize your deductions when you file your yearly business tax return.
Quicker assurance decisions
Construction firms rely on sureties to get their projects forward, and sureties need to see up-to-date, accurate information about their business’s activities. An accountant with competence in construction accounting may offer quick and thorough updates upon request. This is advantageous for a construction company since precise data can speed up the funding process and shorten the turnaround time for your surety underwriter. This implies that engaging a qualified construction accountant may enable you to accomplish more for your business in a shorter time.
Credit and bonding
Lenders will only provide credit to businesses they trust when obtaining a business line of credit. But if you have the appropriate accountant, you can negotiate the credit application more deftly and make a stronger case for getting funding.
A construction accountant knows about bonding laws and procedures regarding the main categories of construction bonds. Your construction company may get larger bond lines with the aid of specialized accountants, opening the door to larger contracts and a greater amount of work.
The bottom line
Specialized accountants can assist construction companies with financial challenges that apply to the construction sector.