News & Insights
The Right Accounting Mix for Your Construction Company
April 13th, 2021
By Clayton Stiffler |
Accounting & Outsourced Solutions |
Outsourced Accounting Solutions
Owning and operating a construction company comes with its fair share of rewards and challenges. Bidding jobs, managing projects, hiring and training staff, obtaining and executing bonds, and keeping AIA/union compliance on track are a handful of the many tasks filling a construction business owner’s day.
While ensuring accurate and up-to-date financials may seem like a no-brainer, many busy and well-meaning owners regularly overlook this mission-critical business function in favor of responding to the next pressing demand.
It’s often difficult to find experienced personnel with leadership qualities to fill accounting and bookkeeping roles, which doesn’t help the cause. Quality, competent, and self-motivated people with problem-solving skills and construction-industry expertise often require the use of considerable financial resources, which likely goes directly to overhead costs.
Most construction businesses require a full-time finance and accounting team to cover lower-level services, such as accounts payable and accounts receivable, and higher-level services, such as budgeting and forecasting. A construction business may find it difficult to have the financial resources to hire a team that is detail-oriented and knowledgeable about industry complexities and regulations.
If you’re a construction owner dealing with similar challenges, it may be time to consider hiring a full-service outsourcing accounting team that specializes in the construction industry.
The Benefits of Outsourcing
Outsourcing accounting and financial functions is becoming an increasingly popular option for construction companies across the country. While at first glance it may seem like a bit much, outsourcing can be as simple or complex as your business needs it to be. From CFO-level solutions to part-time bookkeeping needs, outsourcing is both flexible and tailored to meet your business’ unique needs.
Leveraging financial experts with deep industry knowledge can offer tremendous benefits. It can eliminate headaches and pain points, offer new efficiencies and reduce costs. In addition, outsourcing brings new perspective to the business. Experts can offer sound advice on improvements to cash flow management, suggest new ideas to enhance organizational KPIs and provide strategic planning insight to move the business forward.
A good outsourced team also offers an intangible – the ability to explain complex or technical financial functions to a non-technical audience. This can be very beneficial when explaining financials to prospective investors or even for a business owner who doesn’t have the time or interest in managing the ins and outs of financial reporting. A smart outsourced expert can offer insight in layman’s terms, bridging the gap between the technicalities and high-level insights business owner’s need to make informed decisions.
Questions to Consider
Before diving headfirst into hiring an outsourced accounting team, it’s prudent to ask yourself these questions to get a better sense of your needs and what you truly want to get out of an outsourced relationship:
- Am I currently getting financial information timely?
- Is my financial information accurate?
- Is my accounting team regularly scrambling to clean up the books for year-end taxes?
- Is assistance needed for high-level strategic planning or financial decision-making?
- Does the business need help with budgeting and projections?
- Are my accounting team doing the job they were hired to do?
- Is my CFO or controller spending time bookkeeping instead of focusing on high-level strategic accounting functions?
- Are my bookkeepers expected to perform functions that are generally beyond their capabilities?
- Is there a need for cash flow analysis or cash projections beyond what I am currently receiving (if at all)?
- Are there pain-points in my financial workflows/processes?
- Am I spending hours cleaning up WIP reports each month?
- Are my vendors getting paid late or not at all? Do my current bookkeepers and/or controller struggle with percentage of completion accounting?
- Is the business constantly behind in progress billings for jobs?
- Is my accounting staff having difficulty filing and paying appropriate taxes (sales, use, payroll, or income)? Are my bank accounts reconciled timely and are there proper controls over cash?
- Do you have a clear picture into the performance of each job and able to make decisions accordingly?
Maner Costerisan is deeply invested in Michigan’s construction industry, and we understand the complex challenges business owners face daily. We are committed to helping our clients build a sound financial strategy to support their growth. We are proud members of the Association of Builders & Contractor – Greater Michigan. We know construction, and we can help.