Often times the relationship between accountants and their clients can be misunderstood as one that just produces a tax return or one time advice. If this describes your current relationship with your accountant, you might want to re-think your Accounting Firm. An accountant is supposed to act as a trusted advisor, one that you can count on to answer all your accounting questions on a year-round basis and someone you will never hesitate to call with a question.
So how do you maximize your relationship with your accountant?
It starts with hiring the right accountant. You need to find the professional accounting firm that has experience handling similar construction companies, someone who understands the nuances of construction accounting including job costing and revenue recognition. They should also show a general interest in your company. Your accountant should be able to ask relevant questions about your company/industry and should be able to provide advice that is specific to the construction industry.
You must understand that your accountant is a resource to your company. If you are only sending over your financial information and waiting for your accountant to send over a completed tax return – then you are missing an opportunity to better your company. Your accountant should be utilized as a financial resource. Accountants can develop corporate strategies, financial plans, can make recommendations to how to lower taxes and increase profits, and can open up doors to new relationships with lawyers and bankers for example. They might, for example, be able to introduce you to other key players in the real estate industry like property management companies that can become an unlimited source of revenue for your general contracting business.
In today’s economy many general contractors have attempted to do more work with less resources. This often times put more of a burden on employees and on the contractor or owner of the company. This has led to some aspects of the overall financial plan being ignored or not maintained. If you are a contractor, wouldn’t it be nice to receive monthly reports and analysis of your spending, cash flow, and other financial data? Utilizing your accountant to do this, can help you stick to a financial plan that increases your financial health and can help identify problems before they turn into significant issues. When hiring the right accountant, ask them if they are able to provide monthly analysis and reporting, if they say, “no”, then move on and find an accountant who can.
What else should you be looking for in an accounting firm for construction companies?
- Accountants with industry knowledge.
- Look for accountants who won’t charge for phone calls and will never put you on the “clock.”
- Look for CPAs who are in Construction related groups.
- Find your trusted advisor – someone you can envision developing a relationship with and contacting on a weekly or monthly basis.
- Someone who can provide insight into the construction industry.
- During your first meeting, ask the accountant a specific tax question about the construction industry. If they truly are a “specialist” in construction accounting, this will help you learn that.
Construction accounting is a specialty. That’s why you need an accounting firm that has keen insight into the challenges faced by general contractors and specialty contractors. Precision Bookkeeping’s in-depth understanding of construction accounting is the result of our specialization and experience in the construction industry.