Construction firms face a number of unique challenges specific to the industry. Small construction firms must manage the time-consuming tasks of tracking and recording a multitude of items, such as labor and material costs, construction progress and subcontracting costs, supplies, and insurance, and more.
In Maryland, where construction is steadily on the rise, a construction business needs a competitive edge to bid and properly run projects. Taking on the dual role of serving as the company accountant just isn’t workable, which is why many construction firms hire a CPA.
What Is Your CPA Doing for You?
A CPA can be a great asset to a construction firm, provided you are working with a CPA that plays an active role in ensuring your business’ success. Too many construction firms make the mistake of hiring a CPA simply for tax filing services. Another common mistake is choosing a CPA that doesn’t have in-depth knowledge of the construction industry. Either of these oversights results in an unfortunate disservice to the business and should be remedied as quickly as possible.
A regular CPA just won’t understand the specialized reporting, material price trends, and many other specifics unique to the industry to make a valuable addition to your firm. In fact, their lack of industry-specific knowledge can actually be a huge detriment to your firm. If they make mistakes that adversely affect your cost structure or cause you to lose a bid on a project, it can be a short spiral to financial ruin.
Cost margins can often be very tight, and using a CPA that doesn’t know how to manage your accounting and financial affairs effectively in a shifting economic and market environment is a risk you just can’t take.
Why Industry Knowledge Matters
Selecting the right CPA, one who not only fully understands construction accounting but is also up to date with important changes in the construction industry can aid a business in many additional ways beyond simple tax preparation.
For example, construction-specific CPAs have the expertise to offer knowledge and assistance in developing strategies that improve your overall ROI. A savvy CPA can also integrate job cost accounting software with your current system for improved tracking and reporting on job sites.
And, the benefits of working with a construction-focused CPA go even further. With professional connections throughout the industry, a knowledgeable and experienced CPA can help to foster relationships with banks and other entities.
Smartly managing overhead costs also showcases your strong financial standing to sureties, improving the chances of a business relationship. A knowledgeable CPA can aid in this endeavor, helping the construction firm to make sound financial decisions that better appeal to the requirements of sureties and enable them to select the firm for projects that make operational and financial sense.
CPA Construction Accounting — Much More Than Yearly Tax Prep
CPAs are mainly hired to file annual taxes. But you shouldn’t be afraid to inquire as to additional services a well-rounded CPA can and should provide. This especially holds true for CPAs experienced in and serving the construction industry.
In-Depth Quarterly Analysis
Having your CPA perform a quarterly analysis can provide you with great insight into how well the numbers are performing and if your quarterly tax payments need adjustment. The quarterly evaluation can also be a great tool for helping your business make strong, informed financial decisions for short-term as well as future goals. After performing the quarterly analysis the CPA can present his or her findings, providing you with a deeper understanding of your financial situation. This enables you to make important decisions sooner rather than later.
When things get busy, it can be all too easy to let consistency and organization falter. And that means important numbers might get missed. Having a CPA check in once a month to take a quick look at the books can help to keep everything on track. It’s a surefire way to maintain precision and order even in your busiest months.
A construction-focused CPA can be so much more than just someone to look at the numbers. The CPA can help you avoid insurance risks and offer suggestions for improved protection, as well as offer sound guidance on how to best prepare for a bidding process that requires the preparation of accounting and financial documents.
A reputable and knowledgeable CPA will also have contacts with experienced attorneys to assist with legal matters pertaining to building projects and provide consultation when necessary.
As you can see, there are many benefits to working with a CPA experienced in construction accounting. The team at BradyRenner has successfully helped general contractors, home builders, remodelers, materials suppliers, and specialty trade businesses manage their accounting and financial affairs effectively in a shifting economic and market environment. Working with many construction clients in Maryland, we’ve provided a host of value-added services that have enabled our clients to achieve stronger ROIs with each project.
To learn more about how a CPA with industry-specific knowledge can help you maintain strong financial footing, contact the team at BradyRenner CPAs.
Image Credits: Freepik @ Creative Commons