Experienced Construction Accounting & Bookkeeping Services
Accounting for the construction industry is a meticulous endeavor. Companies are required to keep separate journals for a few different major account types. This means that you will need to provide your bookkeeper with a lot of receipts.
As a construction business grows, so does the importance of maintaining your books, tracking your spending, and keeping organized receipts. This is not only important to track profit and loss, but if you are ever forced to endure an audit or reconcile a company’s account, the diligence that you put in upfront can save you a lot of headaches.
We Understand The Construction Industry
At Sanjay Gupta & Associates, we understand that construction accounting comes with its own set of requirements and challenges.
The Bidding Process
One of the more tricky aspects of construction accounting is the bidding process. When a construction company bids on a project, it’s important to hit the “sweet spot” with their bid so the price looks attractive to the client but also creates profit for the company.
Bidding isn’t just a random estimate. Bidding requires a careful review of the individual situation, material costs, construction landscape and a number of other factors. It also requires the owner of the company to have a good grasp of his real operating expenses.
Involving a CPA in the bidding process can be a great investment, especially for a small construction company that’s trying to be competitive. There are just so many aspects to material costs, equipment pricing, and the various costs associated with running a construction business.
Make sure that you give yourself an advantage when it comes to the bidding process. Review your books with a CPA. This will help you position yourself for profit.
Construction projects are typically decentralized and long-term which presents unique billing challenges. Since construction companies use a wide range of billing methods, specialized software might be required to track those billings. Here are a few of the more common types of construction billing we’ve worked with.
Fixed price billing is when a company presents the client with the total cost for a project upfront. While this can be more attractive to the client and help win bids, it can also be risky for a construction company. The risk is that if there are any overages due to things like changing site conditions, lost materials, errors, or any other issues, this can impact the project’s bottom line.
Unit price billing is when a client is billed at a fixed price-per-unit rate. This billing method is fairly common in the construction industry, especially when it’s more difficult to estimate the unit production for the project. While a construction company stands to be more profitable if they’ve done a good just estimating, there is always a risk that production quantities can end up higher than expected.
AIA Progress Billing
AIA Progress Billing is the standard American Institute of Architects contract. While this methodology may be used in many construction projects, it’s important to closely review an AIA billing contract to make sure that both construction companies and clients are receiving benefits.
Outsourced Construction Accounting & Bookkeeping
It takes some experience to truly understand accounting and bookkeeping in the construction industry. While hiring an in-house bookkeeper has its benefits, it can also be very expensive, especially for a smaller business.
When you work with a CPA firm like Sanjay Gupta & Associates, you get the benefit of more than thirty years of accounting experience at a price that fits your budget. While it may seem like an unnecessary cost to some, it truly pays off in the long run.
Sanjay Gupta CPA is an experienced CPA firm as well as QuickBooks Certified Professionals. We focus on small business accounting, bookkeeping, payroll and a wide range of other accounting services.,
If you’re interested in learning more about our construction bookkeeping and construction accounting services, contact us today to schedule a consultation.
American Institute of Certified Public Accountants
Florida Institute of Certified Public Accountants