Making the most of your relationship with your construction accounting team means that you’ll achieve better results with less hassle resulting in more efficiency for both parties. Put another way, by avoiding the common mistakes listed below, your construction company will be better equipped to Run With the Big Dogs!
Avoid These 10 Common Mistakes
1. Forgetting that audits always happen at the most inopportune times.
Keeping financial reports up to date and ready is simpler and more cost-effective than going back and “getting them straightened out.”
Clarity is important! The questions you ask help your accounting team give you better insight. Here’s why that is critical; upgrading your understanding of the numbers allows you to make more informed decisions – decisions that drive your profitability.
Your construction-centric accounting team is well-equipped to deal with the numbers. But they are better equipped to serve you when they understand your goals.
Just as change orders affect both budgets and timelines, the changes you make in your construction company will often necessitate changes in the accounting process. When you ask your accounting team to do remedial work (as opposed to doing it only once with full information,) there will be difficulties.
That heightens the chance of not getting the right “stuff” in the accounting pro’s hands at the right time and in the proper format. When the accounting team is forced to decipher what you gave them instead of what they asked for, they must chase down the missing items. Not only does that affect the accounting team it is also a time waster for you and your staff. Multiple requests for missing items (the chase) are inefficient and can be avoided.
6. Sending “stuff” they don’t really need.
Harkening back to number two in this list (not asking questions) can lead to sending information to the accounting team that is not necessary. Opening multiple emails or combing through lists of unnecessary information delays the accounting process.
Not everything is a tax deduction. Your construction accounting team must play by the rules, and ineligible items won’t be assigned as tax deductions. If you’re unsure of what can and can’t be included, the best option is to ask.
One example of a proper process is maintaining a documented separation of duties that adds a layer of protection for your financial transactions.
One instance of this problem might be overlooking the recommendation to integrate your technologies so that all of your records automatically stay accurate and up-to-date.
Don’t rush your construction accounting team. While the accounting team is highly skilled, they’re not miracle workers. Remember they’re busy professionals (just like you,) and allowing them to do their job accurately and in a timely manner produces a better outcome for you.
Bonus Mistakes to Avoid
Here are three bonus items for you to consider when avoiding mistakes.
Bonus Mistake #1: Skipping the collection of W-9s from your subcontractors BEFORE you pay them.
Bonus Mistake #2 Neglecting to spend time reviewing your financial operations regularly. Spending this time gives you opportunities to make better decisions that lead to greater profitability.
Bonus Mistake #3: Engaging a common bookkeeper when what you need is a construction-centric accounting professional. You need a team that provides accounting services as well as workflow analysis, software implementation, WIP reporting, job costing, and a plethora of other important construction accounting nuances.
Ambitious Construction Contractors look to The Profit Constructors to provide advocacy in dealing with:
Clients and customers
Employees and subcontractors
Vendors and service providers
Governmental entities
Working with The Profit Constructors gives Construction Contractors the means to organize their operations in ways that help them:
Remain informed
Avoid hassles
Reduce risks
Be future-ready
Ready for action? Or want to know more? Get in touch today to schedule a complimentary discovery call. 866-629-7735