Accounting for Construction Companies: Audit, Tax, & Advisory Services

MST’s construction tax preparers provide customized solutions catering to various construction entities. Our widespread proficiency spans multiple sectors in the construction industry, including commercial, residential, industrial, and infrastructure projects. Serving clients for over 65 years, we have dedicated much of our practice to construction tax planning and accounting services. Dean Dorton brings comprehensive business advisory and construction accounting services to the forefront, providing tailored solutions to meet the unique challenges of the construction sector. Tracking inventory across jobs, ensuring progress bills match work completed, managing cash flow — these are just a few of the challenges you encounter. We understand these and the numerous other issues you face in a single day.

• It tackles the specific challenges of construction projects, such as long timelines, complex costing structures, and contractual obligations.
• At Grassi, we partner with construction companies to strengthen financial performance, streamline operations, and prepare for the future.
• The future of a construction company often hinges on successful succession and transition planning.
• Construction businesses that have annual revenues exceeding $25 million over the last three years are required to use the percentage of completion method.
• Effective construction accounting involves implementing robust systems for job costing, progress billing, and revenue recognition.
• Taxes are incredibly complex, so we may not have been able to answer your question in the article.

Partnering for Success

Whether you’re a realtor or own a construction company, you know how hard it is to manage your business while keeping up with works in progress, subcontractors, market pressures, and labour challenges. At SB Partners, we provide a full range of accounting solutions and services for your business. We’re here to make sure that you have the tools and information you need to succeed—and that you’re on top of all your financial obligations. Forecasting cash flow enables contractors to proactively identify potential cash shortfalls or excesses, allowing them to strategize for upcoming expenses and secure additional funding when needed.

Project-based Accounting

• A Porte Brown CPA for contractors can help you with tax compliance, cash flow management, and financial reports.
• With DB&B, you have a trusted team of construction accounting professionals who have years of experience and a record of results.
• Our virtual construction assistants ensure accurate payroll processing, track benefits, and guarantee compliance with collective bargaining agreements, making payroll management more efficient and reducing administrative burden.
• These expenses may be deducted as a general business expense if certain requirements are met.
• We provide proactive solutions that help clients evaluate and improve financial performance, operational efficiencies, technology systems and internal controls.
• There are dozens of accounting ratios that look into various aspects of a company’s finances.

You need to get the services of an accounting firm specializing in QuickBooks ProAdvisor the construction industry, like Porte Brown. The Melton & Melton Construction team provides high quality service to a large number of construction companies, including but not limited to general contractors, subcontractors and home builders. Since 2020, Melton & Melton has been recognized by Construction Executive in The Top 50 Construction Accounting Firms ™.

Benefits of Outsourcing Accounting for Construction Companies

• Our dedicated construction CPAs have deep expertise in accounting for construction and understand the full scope of issues unique to this field.
• By comparing their performance to industry standards and best practices, companies can gain valuable insights into their operations.
• We streamline both accounts receivable (AR) and accounts payable (AP) by implementing best practices tailored to construction businesses.
• When you partner with DB&B for construction accounting, you can achieve next level efficiency.
• DB&B’s outsourced construction accounting simplifies and streamlines your accounting.

Properly setting up a financial software package for construction accounting is essential for accurately managing and tracking project finances. Begin by customizing the chart of accounts to reflect construction-specific categories, including distinct accounts for materials, labor, subcontractors, equipment, and overhead. Next, establish detailed cost codes that align with the types of expenses and revenue unique to construction projects, allowing for precise allocation and reporting. Implement a robust job costing system to track costs and revenue by individual projects, ensuring that each job’s financial performance can be monitored in real time. This setup provides a solid foundation for effective financial management, facilitating accurate budgeting, forecasting, and decision-making throughout the project’s lifecycle. Construction owners outsource electrical contractor accounting services to manage complex financial tasks such as project-based job costing, payroll for electricians, and compliance with construction-specific tax regulations.

Project-based accounting focuses on transactions that are specific to that project. It allows construction firms to assess the financial implications of completing certain projects and plan their completion while meeting contractual parameters. Like any other industry, accurate and efficient accounting is also vital for success in construction. Decisions based on inaccurate financial reporting can cost contractors far more than what they would have paid for a reliable and professional construction bookkeeper.

What Unique Challenges Do Construction Companies Face in Financial Management?

This helps us to manage your construction industry accounting requirements with ease. Our approach to accounting and bookkeeping for construction companies & contractors is characterized by a proactive and collaborative strategy. Our construction CPAs work closely with project managers bookkeeping for contractors and stakeholders to ensure that financial data is seamlessly integrated into project planning and execution. Regular financial reviews and forecasting meetings enable us to identify potential challenges early and recommend solutions.

Due to the industry’s distinct nature, certain financial statements exist just for unearned revenue construction accounting. These statements try to address the complexities that are prevalant in construction operations and give stakeholders access to accurate, and actionable financial information. Due to the nature of construction, production is inherently decentralized, meaning it happens on various project sites instead of a single location.

Even when they are not collectible within the „current” timeframe of 12 months, retainage accounts are typically shown as current accounts and current liabilities, respectively. As a result, the financial statements of construction companies often include a paragraph describing the special treatment of retention. Construction businesses that have annual revenues exceeding $25 million over the last three years are required to use the percentage of completion method. These larger businesses also include general overhead costs within each project, which has the advantage of providing clear insight into exactly how profitable each job is.

Speciallized Expertise

Many construction companies will repeatedly use the same type of contract for similar projects, and over time these businesses grow in their ability to monitor job costs, revenues, and profit. Because the accrual method recognizes income and expenses before they actually occur, it enables construction financial managers to make decisions based on financial statements that project future cash flow. That way, management can see problems before they occur and make adjustments as necessary — like securing short-term financing or re-evaluating upcoming projects.