How to Choose a CPA for Your Construction Business

Understanding What Choosing a CPA Means

Yes, you WANT someone who can prepare tax reports for your construction business (and many people can), but what you NEED involves more than tax preparation. The IRS says, “Anyone can be a paid tax return preparer as long as they have an IRS Preparer Tax Identification Number (PTIN). However, tax return preparers have differing levels of skills, education, and expertise.” 

A non-credentialed tax preparer primarily focuses on preparing and filing tax returns for individuals and businesses.

A Certified Public Accountant is credentialed and typically offers a broader scope of services. CPAs have a more extensive skill set, broader expertise in accounting and financial matters, and the legal authority to represent clients before the IRS.

Motivation for Choosing the Right CPA

The late comedic speaker, Jeanne Robertson, told the story of discovering that her grandson wasn’t required to learn cursive at school. She took it upon herself to help her grandson understand why it would be vital for him to learn cursive independently. You can see for yourself (in only three and a half minutes) how she handled the situation by watching the following video. 

You’ll notice that she used money as a motivator in her own humorous way. 

Money is only one of the motivators for choosing the right CPA. The following list will help you see what the right CPA can do for you. 

• Save time 

• Reduce errors

• Avoid penalties 

• Maximize deductions and credits 

• Provide strategic tax planning

• Decrease stress

How to Choose the Right CPA

Now that we’ve shown you why you should choose the right CPA, we’ll give you what to look for when selecting one for your construction business. 

Your CPA should: 

Be construction-centric and well-versed in all the intricacies of the construction industry. For example, they must understand project-based income, fluctuating expenses, and specific tax credits and deductions.  

Understand Work in Progress Reports and the Percentage of Completion WIPs in particular.

Identify potential issues related to worker classification. 

Be knowledgeable about issues surrounding company vehicles and fleet management. For instance, they should be able to help their clients put together a written Personal Use of Company Vehicle policy, which is an IRS requirement. They should also know about other fringe benefit requirements. 

Understand multiple entity accounting well, and know when a client should separate things such as land, buildings, and other items into a separate entity for tax and/or legal protection benefits.

Be able to provide an Adjusted Trial Balance with Adjusting Journal entries after tax preparation.

Stay ahead of tax changes in the construction industry.

Be able to articulate what they do and do not do regarding proper tax planning. (Many think that CPAs automatically offer tax planning alongside tax preparation, and nothing could be further from the truth.)

Choose a CPA

Below are some ways to look for the right CPA for your construction company.

Weak Way – Ask your friend, Google. (Good luck with that – but at least Google may have gotten you here.) 😉

Somewhat helpful way – Talk to fellow contractors in your trade or other trades.

Excellent way – Ask us! We’re construction accounting and advisory specialists, and we’ve got some remarkably good suggestions. 

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