Accountants for Construction Business

Ballarat Accountants

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Construction is a unique business. Building projects can take months and years and often, you are both an employer and contractor. How do you do construction accounting?

How is construction accounting different?

Those who work in the construction industry know that there is rarely a fixed business structure. The site manager usually doesn’t employ people – they are often contractors. A huge percentage of the construction workforce are contractors who work on several projects at the same time or who employ their subcontractors for help. Temporary workers come and go as necessary and formal payrolls often change weekly. Construction is more changeable and fluid compared with any traditional business. What do you need to know about construction accounting?

Like other business owners, if you are starting a construction business, it’s best to do it correctly right from the start. Get your business and accounts in order before you accept any work. First, incorporate your business to get legal protection. It depends on the type of company you set up – limited liability companysole trader or partnership. Buy insurance because construction is dangerous physically and legally. Insurance will cover you in case anything goes wrong.

You need to hire an accountant, a bookkeeper or both to manage your daily accounts, process your bills, expenses and invoices. Accountants help with business structures and advise on reducing taxAccountants and bookkeepers save you more than they cost – if they are the right accountants for you. It’s also important to keep your skills up to date – your certification and trainings. This is important for builderselectriciansplumberscarpenters and other workers.

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Accountants for Construction Business

Construction accounting regulations differ around the world but you may have options on how you want to manage your accounts. You can use cash accounting for smaller construction projects. Expenses and income are accounted for as money changes hands. Income is taxed after expenses are deducted. Accrual accounting is used for larger projects. Expenses and income are accounted for as they are incurred, not when paid. Accounts are based on the part of the contract that has been completed, particularly for projects that take more than one tax year.

Australia has specific construction laws so it can be a complicated topic. Speak with your accountant or bookkeeper to help you avoid costly mistakes.

As a sole trader or contractor, you will rely on referrals for much of your projects so it’s best to build a network of contractors and subcontractors. If you are a builder, get a good carpenter. If you are a plumber, get a reliable electrician. A good social network will help you get larger projects and you get to refer or share work with each other. When making a proposal, make a good impression with professional and well calculated estimates and quotations. Good accounting software will help you create documents to impress clients.

Accountants for Construction Business

Accounting as part of your workflow

You have to do construction accounting regularly by updating your accounting software with cashflow, expense reviews, employee information and invoices every week. If you are not updated, things can get out of hand as construction is a fast moving business. It is important to put accounting into your workflow and use a good accounting software. This is not difficult if you have modern accounting tools that are cloud-based. They are online so you can use any device to access them anytime, anywhere.

You can use your mobile device to send invoices, record bills of materials or track expenses. You will always have the most updated information. You can avoid undercharging because of missed expenses and maximise business tax allowances. You will also minimise audit risks and surprises.

Construction accounting must be taken with caution. You need to keep your cashflow balanced in that big expenses must be match by big revenues. Invoice your clients regularly and be paid upfront for major materials and labour expenses to avoid losing money or even going bankrupt. If payments stop, so should your work. Manage your cashflow properly so you won’t be like other construction firms that fail because of bad debts.

Take time to organise your construction accounting to save you a lot of trouble in the long run.

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Accounting for the Construction Industry

The construction industry requires more than the conventional accounting and tax services. Sky Accountants can help your company – we service to the construction sector and focus on specific issues faced by different kinds of construction companiescontractors and professionals. We provide cost reporting analysis, financial statement preparation and analysis, Goods and Services Tax and succession planning. We are experts in various construction areas such as architects, engineers, building services, property developers, project managers, plumbers, electricians, carpenters and audio or visual contractors.

Experts in Construction Industry Accounting

Accountants are important in various industries and hiring the right accountant is just as important in the construction industry. Why is an accountant with expertise in the construction industry important?

There are many prerequisites required for building construction and an expert accountant can identify improved methods of building and help increase desirability of a construction project. There are risks involved in the construction industry and an experienced accountant can help you understand the scope of insurance that you need. Accountants can provide various strategies and techniques to minimise risks and save on costs.

construction business can fall into several categories and business structures like C or S corporations, LLCs and other legal structures. A good accountant can help you start with the right business structure by helping you measure company goals and matching them with the most suitable business structure.

Many construction companies struggle in today’s economy and many contractors are looking for projects with the government. This entails setting up a bond to comply with special rules on bidding for construction projects. It’s important to maximise bond capacity to bid for larger and more lucrative projects and a knowledgeable accountant can ensure that all requirements are met for a competitive bid.

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Accountants for Construction Business

Accountants take into account tax strategies and implications to improve your company’s cash flow and profitability so you can work on more projects. Hiring a construction industry accountant can give you many benefits but it is important to hire the most qualified for the job.

What should you look for when choosing the right accountant partner for your construction company? What is construction accounting? Construction is a diverse industry. Construction is the process of gathering materials and capital resources and organising labour to build infrastructure such as buildings, roads, dams, bridges etc. There are several types of works under the construction industry – general contractors who oversee each stage of the construction project and subcontractors who focus on finishing a part of the project like electricity or plumbing. Contractors can handle different types of projects such as building shopping malls, super highways or house rehabilitation projects.

Accounting is the systematic recording of financial transactions of a business so you can make good decisions that would benefit the company. With this, construction accounting is a financial system used by contractors to track cost and revenue of a project from start to completion.

Accounting for construction companies is different. Construction accounting is different because construction projects do not have a fixed business structure. A construction project workforce is made up of both contractors and subcontractors and the site manager does not employ them. There are temporary workers that are not needed daily. This alone needs an accountant who is well-versed in the construction industry.

Accountants for Construction Business

Some accounting requisites specific to the construction industry include knowledge on the percentage of completion method. In the construction industry, revenues and costs are dependent on estimates from the contractor. The method tries to match the company revenue with costs that were incurred during the same period. The percentage of completion method needs wise judgments on estimates so your accountant must be knowledgeable on the industry figures. There may be modifications or change order once in a while because numbers are based on estimates.

It is important to hire accountants that are experienced in the construction industry. There are different requirements in the construction industry. It has specific accounting principles, tax regulations, and auditing requirements that govern construction companies. Some investors and surety companies require annual audits so to comply with audits, a contractor’s books must be ready. Financial statements prepared by an experienced accountant can help your construction company improve your bonding and borrowing capacity with investors.

Hire an accountant instead of doing the books yourself. Accounting is not easy and accountants continuously study for years to master it. Not all accountants know the ins and outs of the construction industry so it is advisable to hire an accountant instead of doing the books of your construction company yourself. You will save money because of their knowledge of legal and tax issues. They will help you get a clear idea of your financial standing. You will also have peace of mind knowing your tax requirements are being handled by an expert in construction industry accounting.

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Accountants for Construction Business

Customised services from construction accountants

Our specialised construction accountants and business advisers can help you in the construction industry. The construction industry is pressured by the government particularly in relation to employment of workers.

Work with Sky Accountants – clients in the construction industry understand the requirements of managing their construction business in terms of hiring employees and contractors, complying with laws and regulations, construction accounting focused on projects, land tax, inventory and capital gains tax, WorkCover and workers compensation audit, and having the right business structure to minimise business risks and maximise returns.

Our team of advisers and accountants can deliver optimised services to our business clients in the construction industry.

Construction Accounting for Contractors

Contractors are busy answering emails, sorting through paperwork, meeting with subcontractors, reviewing progress and making sure the project and budget are on track. Budgeting is only a part of the project. Contractors consider many financial factors such as billing, labour costs and production. Contractors work on a project bases so things always change.

It is important to understand accounting best practices and have a specialised knowledge of the construction industry. You should know construction accounting but if you do not have a financial background, here are some construction accounting basics all contractors need to know.

Accounting for Construction Business

As you look for different ways to grow and improve your business, seeking professional advice could prove to be an important and helpful decision.

You can click here to speak to a businessaccounting and bookkeeping firm. We also offer hospitality business consultation and mortgage services. We will give you a call to know more about your needs. We will explain to you how we can improve your business.

We would love to help you formulate investment strategies and streamline your processes to take your business to the next level.  Our goal is to help you grow your business, find ways to invest more and increase your productivity.

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