Complexity in construction accounting abounds due to unique requirements, processes, documents, and procedures. Projects often rely on various funding sources to cover expenses such as office space, equipment, materials, and labor. However, establishing a precise fixed-cost framework for the construction industry is challenging. With correct cost estimates, a company can accurately determine its actual profitability, even if the project appears profitable on paper.
Maintaining control over construction projects requires continuous monitoring of changes in the construction process. In addition, all relevant data must be regularly updated to prevent the estimated funding risk from exceeding the company’s financial capacity. Implementing accounting software applications specifically designed for the construction industry can solve much of this.
In conjunction with our Construction Niche team, Grimbleby Coleman’s Client Accounting Services team has spent their careers helping construction industry business owners assess their complete financial picture and plug into technology to assist in automation.
Here are three key questions to facilitate taking a construction business’ accounting practices to the next level of success.
I need to receive timely financial statements for my construction business, but I’m always behind. What am I doing wrong?
Clients who ask this question are usually stuck in what our team calls the “ticking and tying” functions of the accounting process. They are trying to match every expenditure with its source — an inefficient process that can hold up a financial statement report for several months. By this time, the information is no longer relevant. Often, our team discovers the client is focused on certain less critical issues and essential accounting has been placed on the back burner.
Fortunately, we can suggest a relatively easy fix. Online services deliver real-time data 24/7. The business owner can download the QuickBooks app to their smartphone, place controls to manage cash and payables through Bill.com, and track expenses on the go by uploading expenses through Divvy. Thanks to software integrations, these programs can be synced together to create a cohesive, easily accessible financial snapshot. The “ticking and tying” is done automatically, freeing the business owner to focus on future goals. Need help setting it all up? We handle set-up routinely for our clients.
I know what financial statements are, but what is business reporting — and do I need it?
A financial statement is important, but it’s just one piece of the puzzle. Grimbleby Coleman’s Client Accounting team recommends business reporting, which gives the construction business owner a suite of indicators and projections that can answer crucial questions, such as: Where is your business’ money coming from?; Which opportunities should be explored next?; and What isn’t working?
Business reporting answers those questions through a dashboard containing success indicators, projections for the year ahead, labor analysis, or the business’s break-even point. Our team works with each client to create a customized dashboard focusing on key areas of concern. Once the dashboard is in place, it becomes exponentially easier to execute strategic decisions.
Why would I outsource my accounting team?
A good number of Grimbleby Coleman construction clients are mid-size businesses. They need a full-time staff accountant, accounting manager, and controller on their team but are either unable to afford the cost of additional employees or handle attracting and retaining staff in a difficult labor market.
Enter Grimbleby Coleman Advisors and Accountants. Our firm has intentionally developed and expanded specifically so businesses can access additional resources; the Grimbleby Coleman team now includes more than 20 professionals who serve as members of outsourced finance departments. Our team has extensive experience across multiple industries, with the construction industry being a mainstay, along with agriculture, trucking, manufacturing, and professional services. We are cross-trained on numerous accounting platforms and have developed an excellent knowledge base clients can access.
Grimbleby Coleman creates a team approach by joining the client’s internal staff and providing services and roles to fill gaps. As a result, clients enjoy full-service accounting teams without the need to manage them internally — and they gain the peace of mind of always-accessible help, even if someone from their internal team is on vacation.
With an embedded Grimbleby Coleman accounting team, clients have the resources and reporting they need to make decisions and manage their businesses. In addition, our firm is part of the local community and is invested in helping it thrive — we are passionate about the people we serve and understand that their success is our success.
One client told us, “Having up-to-date information has helped us confidently plan for our business goals and future projects. I have transparency in my business and am always made aware of any concerns that might impact our progress and how to course correct them. Our Grimbleby Coleman team is part of our business. They help us move our business forward and are always looking ahead.”
Get in touch
To learn more, contact us for a consultation and discover how we can slash your to-do list, eliminate confusion, and set your construction business up for its brightest future.