5 Things to Expect from Your Accounting Department in a Construction or Contracting Business
Building a construction or contracting company is not an easy task. You have to manage the construction, accounting, and bookkeeping for your business in order to be successful. There are many things that you need from your accounting department: accurate information, timely information, legally compliant practices- just to name a few. In this blog post we will discuss 5 things that you should expect from your construction accounting team!
What is your construction accounting team is responsible for?
Making sure every financial transaction your business performs is recorded.
Your money management process.
Providing the most accurate, understandable, and timely information to support all of your decisions and analysis.
Ensuring that you are conducting practices in compliance with the law.
You can pay penalties if you are not up-to-date with filing taxes for construction related transactions so it's important to make sure that you have an accounting department doing accurate work when handling these matters!
The construction or contracting company's accounting department has many responsibilities, but these five things should be expected from them! You'll want to make sure they have their ducks in a row before signing on the dotted line! Now let's jump into a more detailed list of what construction accountants can do for your construction company:
Provide valuable insight into cost variances between construction and construction-related expenses, prepare financial statements for construction or construction-related businesses, track the progress of contract jobs by monitoring labor costs and material usage to ensure that you're meeting budget parameters.
Every construction related business transaction should be processed accurately because it impacts the integrity of every other aspect of a company’s finances - invoices need to be processed correctly as well as payments from bank accounts, payroll reviews and more.
You'll receive timely information about what else happens next which allows you to predict costs and run your business more efficiently.
If there is no accounting department then by default someone will process these transactions who may not be qualified to process them correctly. Usually that task falls to the owner of the company or possibly to an administrative assistant who may have had no formal accounting training at all!
You need your construction business to stay in compliance with the law as much as possible and this includes taking care of taxes. Tax implications are built into every construction-related transaction, so you should have a bookkeeper that can provide accurate tax returns on time without any penalties or fines. The best thing about hiring a construction accounting firm as opposed to running things yourself is there are professionals working under contract who know how to keep your company in compliance with the various rules and regulations.
In conclusion, with all of the different regulations from the government; construction businesses need to have an accounting department or contract with an external accounting firm that is responsible for tasks relating to bookkeeping, financial statements and tax planning.
If you are the owner of a construction company and need some assistance in any of the 5 areas listed above, book a call with one of our experts today and we can show you the benefits of having an external accounting firm handle your books!