Set Contractors Up for Financial Success
For a contractor to achieve financial success, a strong financial management team is a prerequisite. Every contracting business is different, so we set up a system that will best fit your unique needs. As a CPA, I understand that in order to aid in a company’s success, I must first understand the company’s goals. We use sophisticated accounting solutions to make sure the correct system is in place.
Make Job Costing Clear and Accurate
A few of the things we do is set up and run a successful job costing system, and set up a platform that allows you to see your business from different financial viewpoints. We do this by using various methods of accounting depending on your needs at the time.
Job costing is used to track the company’s progress on each job. It is especially important in construction because you normally have a variety of projects active at any one time. It helps you to understand and track the money that is being made and lost on each job and gives you a true profitability of the work you are performing. We allocate all direct and indirect costs to each respective job, as well as the accompanying revenue earned for that particular job to give you a full picture.
Provide Accurate Financial Management
Financial management in all industries can be cumbersome, but in construction specifically, the varying lengths of contracts can make accounting more complex. For that reason, the IRS rules require that you use a method of accounting to accurately reflect your income.
Match Accounting Methods to the Task
Because construction companies have projects that often span multiple periods, the accounting can a bit more complicated than your average company. For this reason, Foundation to Cloud adjusts your books on whatever accounting method you need at the time, which would include accrual basis, cash basis, percentage of completion, and the completed contract method. If your company needs to be audited, we will have the books ready for your auditor to move forward smoothly.
The percentage of completion method will help you determine the future profitability of each job. It is a very accurate way for owners and accountants to keep track of each project’s net income throughout the life of the project. It is also the accounting method required if an audit was needed for the company. The completed contract method allows a construction company to only recognize revenues for tax purposes when the job is complete. This can create huge tax savings for companies.
Provide a Current Snapshot of Your Financials
We also make sure your financials are accurate on an ongoing basis, which includes keeping all the accounts reconciled and up to date, and maintaining your profit and loss statement so that it is continuously useful as an accurate portrayal of your business.