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Running a successful construction company requires a solid understanding of your company’s finances. However, managing construction company bookkeeping tasks can be time-consuming and complex, especially for those who lack a financial background. In some instances, outsourcing your construction company’s bookkeeping can be a great decision, offering the expertise needed to navigate the intricacies of construction accounting. This allows construction companies to focus on building exceptional projects and fostering their business growth.

Benefits of Outsourcing Accounting Services

Here are some benefits of outsourcing your construction company’s accounting services.

1. Job costing and profitability analysis

Outsourced accountants can help construction companies track and analyze job costs on a per-project basis. They can break down costs by labor, materials, subcontractors, and overhead, providing detailed insights into which projects are the most profitable and where cost overruns may be occurring. This data enables better decision-making regarding project selection and pricing. Additionally, these experts can identify areas for potential cost-saving measures, allowing construction firms to optimize their financial strategies and enhance overall profitability.

2. Subcontractor management

Handling payments to subcontractors accurately and on time is crucial in construction. Outsourced accounting services can streamline the process, ensuring that subcontractors are paid promptly and that all documentation, such as lien waivers, is to prevent legal disputes. This meticulous approach enhances financial transparency and fosters trust among project stakeholders.

3. Complex financial reporting

Construction companies require specialized financial reports, such as Work-in-Progress (WIP) schedules and backlog reports, which standard accounting firms may not be familiar with. Outsourced accountants are well-versed in generating these reports, providing a clear picture of the company’s financial health and project status. With their expertise, businesses can make informed decisions to optimize resources and ensure the successful completion of their projects.

4. Union payroll and prevailing wage compliance

Construction frequently requires the engagement of union labor and adhering to prevailing wage rates, particularly in public projects. The intricacies of union payroll and compliance with prevailing wage regulations can be formidable tasks. Outsourced accountants excel in navigating these complexities, ensuring that every aspect of union payroll is meticulously managed to meet regulatory standards. Furthermore, they adeptly handle the preparation of certified payroll reports, a crucial requirement for government contracts. This expertise not only guarantees compliance but also fosters trust and transparency in project management, instilling confidence in both clients and regulatory bodies.

5. Change order management

Effective management of change orders is vital for proper documentation, accurate billing, and meticulous accounting of additional work in construction projects. Outsourced accounting services may play a crucial role in streamlining this process, significantly lowering the risk of disputes and financial losses. They establish efficient change order procedures, ensuring that any modifications to the project scope are thoroughly documented, precisely billed, and seamlessly integrated into the project’s financial records. This proactive approach minimizes the potential for conflicts and financial setbacks, contributing to more efficient project management and cost control.

6. Scalability

As your construction business expands, your bookkeeping requirements will change. Using an outsourced accounting firm makes it simple to adjust your financial management services, ensuring that construction companies have the right level of support for your company’s current size and future growth. These outsourced services can flexibly adapt to a construction company’s changing needs, whether managing a sudden payroll surge during busy seasons or providing extra assistance for audits and financial reporting.

Contact Us

Calvetti Ferguson works with middle-market companies, private equity firms, and high-net-worth individuals across the country. Regardless of the complexity of the compliance, assurance, advisory, or accounting need, our team is ready to help you. Please complete the form below, and we will follow up with you shortly.