Four Things To Look For In A Construction Accounting Solution
Four Things To Look for in a Construction Accounting Solution
By Wesley Middleton
“Only two things in life are guaranteed,” right? The first we’ll leave for a day when you’re feeling a bit more philosophical. With a new tax year just around the corner, the second could use some attention now. Taxes affect all of us, personally and professionally, so knowing that they are taken care of in the most efficient and effective manner is a must for your peace of mind and your business’s bottom line. Increasingly complex regulations and a competitive business environment make finding the right accountant a vital business decision.
What can the right accountant, one who works with you on a consistent basis, do for you and your business?
- Protect you and your business with routinely scheduled audits
- Support growth by helping you win more business
- Ensure you are optimally positioned for underwriting
- Inform your company of relevant changes in legislation
- Check for compliance, saving potentially thousands of dollars in financial penalties
Choosing the right accountant or accounting firm is a big decision. It can also be a daunting one when you’re not sure where to look – or are simply overwhelmed by the number of options. With that in mind, we’ve simplified the search for you. Read on for four important things to consider when evaluating your accounting services options. (Note: You might have an inside accountant who deals with bookkeeping and related functions; this article considers what you might look for in an outside accountant or firm.)
While the accountant who keeps track of your bookkeeping doesn’t necessarily need to be certified, it’s a good idea to choose a licensed or certified professional to prepare your returns and give you tax advice. So, what are the distinctions?
A Certified Public Accountant (CPA) has an undergraduate degree in accounting and meets exam requirements for state certification, in addition to taking continuing education courses. CPAs might have additional designations, including Certified Valuation Analyst (CVA), Accredited in Business Valuation (ABV), and Personal Financial Specialist (PFS). Depending on your needs, you might look for someone with these designations. You’ll also want to look for a CPA with construction accounting experience, as we discuss next.
2. Industry Expertise
Industry expertise is vital in the accounting arena, particularly for the construction industry. Rules and regulations are constantly evolving and you need someone who stays informed on these changes and understands how they apply to your business. Someone who attends events like the AICPA Construction Industry Conference will be able to advise you on recent changes within the industry.
Increased regulatory complexity, as related to areas like tangible property, makes navigating the industry’s accounting functions difficult, so look for an experienced professional. Something as simple as terminology can vary greatly from industry to industry, and construction accounting has specific vocabulary associated with its functions. Your accountant needs to have a deep understanding of your industry, from the terminology to the contract lifecycle, revenue recognition, the WIP schedule, and over and under billings.
3. A Smart Team
When looking at accounting knowledge, it’s not always about an individual accountant, but about an accounting team as a whole. One person can’t know everything, so you might consider looking for a team of experts rather than one individual. Look for a firm with some diversity on their team in terms of specialties; they’re more likely to be able to help across all accounting functions you need – from business tax to personal tax planning.
4. A Proven Track Record
As with any business decision, it’s a good idea to ask for references. Better yet, ask others in your networking circle for recommendations. They can help narrow down your initial search or provide valuable insight about how to evaluate potential accounting solutions (ask about the good and the bad experiences to know what to look for or avoid).
A Final Note: The Importance of Communication
Technical and industry expertise are vital. But so is communication. The biggest firm isn’t necessarily your best bet. Look for an accountant or accounting firm who respects and embraces your communication style and who you feel comfortable working with closely, one who takes the time to understand your business and who answers the questions you have. When evaluating your options, ask yourself if you’re comfortable with the level of communication and interaction the CPA or firm is willing to provide.
Wesley Middleton is the Managing Partner at MiddletonRaines+Zapata, LLP, a leading Houston-based CPA firm offering a full suite of accounting, tax, audit, and consulting services to the small and middle markets.
The Punch List is Triune’s proprietary blog for discussing issues and providing insights specific to the commercial construction industry. Copyright 2013 TMV, LLC (Triune). Any and all rights reserved.