Feb 21, 2020
This Podcast Is Episode Number 0355, And It's About Bookkeeper, Accountant, And CPA For Contractors - Understanding Roles
The tax season is here. This is when most construction company
owners think about getting their construction bookkeeping system in
order, so they can file their annual tax return for the previous
year.
Keep in mind that each branch of accounting serves a different
function similar to how it works in construction. There are
framers, rough carpenters, and finish carpenters, and all three
works with lumber, yet in most cases, the skill sets to do everything are
rarely found in the same person.
If you're like many construction business owners, you may not
be exactly sure of the differences between a construction
bookkeeper, a construction accountant, and a Certified Public
Accountant (CPA) - and whether you should hire one, or
all.
An established, growth-focused construction company will
employ the services of both an accountant and bookkeeper. The two
professionals work in tandem to ensure business financials are up
to date and accurate, and the financial health of the company is
carefully monitored.
If you're still in the early days of your business, you might
choose to do the bookkeeping yourself, or hire a bookkeeper for a
couple of hours a month until it makes sense to bring someone on
full time. An accountant, however, should be a key player on your
team from day one.
Three Skill Sets = Three
Types Of People
Bookkeeper
The primary role of a bookkeeper is to handle a company's day
to day financial management. A bookkeeper will take care of the
small but essential details that are essential for providing an
accurate picture of where a business stands at any given
moment.
In addition to a bookkeeper's main job – making sure every
financial transaction is accurately recorded in the general ledger
– they may also lend a hand with other critical tasks like
invoicing, paying suppliers and vendors, and processing
payroll.
Ideally, a construction company's books are updated at the end
of each business day, so you always have an accurate account of
your sales, expenses, and the bottom line. If your business is
still in its early stages, however - without much financial
activity or the funds to hire a bookkeeper – you should aim to
reconcile your accounts at least once a week.
Accountant
An accountant's primary role is to help companies make sense
of their numbers for strategic planning - analyzing, summarizing,
interpreting, and reporting on financial data to provide "big
picture" business advice.
As a construction business owner, you'll want to work with an
accountant from very early days to help with budgeting,
forecasting, and decision making – as well as for strategic tax
advice and identifying opportunities to reduce costs and maximize
profitability.
Many business owners think they only need to talk to their
accountant once a year at tax time. But to be able to gauge the
health of your business - and make the most of your accountant's
expertise - it's recommended you check in at least once a
month.
Your monthly meeting is a chance to review key reports, like
your profit and loss statement, discuss opportunities or areas of
concern, and get timely advice to help meet the goals you've set
out in your annual business plan.
Certified Public
Accountant
The CPA's primary function is to prepare the annual tax
return, perform audits, and prepare Certified Financial Statements
for bank loans when a construction contractor requires them before
issuing a construction bond. Keep in mind that most Certified
Public Accountant accounting specialists can do all of the
accounting for most standard businesses who only need regular
accounting but not construction accounting. Construction company
owners who think it's costly to hire a construction accountant and
would instead only seek a CPA's help might be in for more business
damage in the long run.
Final
thoughts
As your construction business grows, it's essential to have
trusted financial professionals managing your books and providing
strategic financial advice.
After all, the busier you get, the more complex financial
management becomes - and the less time you'll have to maintain your
books and try to make sense of all the data.
A trustworthy bookkeeper's services are essential for a
thriving business, and hiring an accountant that specializes in the
construction industry can do so much more than handle your taxes.
Think of your accountant as a trusted business partner - someone
whose services you rely on year-round for advice on how to increase
profitability as you take steps to achieve your business
goals.
P.S.
We are excited and honored that Randal is nominated for the 2020 Small Business Person Of The Year award in our city. If you are on Alignable, I would appreciate it if you can connect with us and "like" our recommendation.
Screenshot of Alignable nomination
About The Author:
Sharie DeHart, QPA is the co-founder of Business
Consulting And Accounting in Lynnwood, Washington. She is the
leading expert in managing outsourced construction bookkeeping and
accounting services companies and cash management accounting for
small construction companies across the USA. She encourages
Contractors and Construction Company Owners to stay current on
their tax obligations and offers insights on how to manage the
remaining cash flow to operate and grow their construction company
sales and profits so they can put more money in the bank. Call
1-800-361-1770 or sharie@fasteasyaccounting.com