Since many construction companies start out as just one guy with a truck and a piece of equipment or two, sometimes obtaining professional help such as accountants doesn’t come into play until much later. Still, having the advice of a good CPA is crucial, says Denise Bendele, a partner with Texas-based Padgett Stratemann, a CPA firm that specializes in construction clients.
“I recommend hiring a public accounting firm as soon as the company is formed,” Bendele says. “The CPA can assist with the best way to form the company from a tax perspective. Additionally, the CPA can assist with annual tax filings and any financial statement needs.”
Bendele has more than 27 years’ experience in public accounting and leads the construction industry practice for Padgett Stratemann. She also works with organizations that specialize in wholesale, retail, and manufacturing. In addition, Denise manages the firm’s audit department. Padgett Stratemann is headquartered in San Antonio, Texas, with offices on Austin and Houston. The firm has been in business since 1945.
If you didn’t hire a CPA when you founded your company, you may be handling financials in-house or through part-time help such as a receptionist that does double duty, or a bookkeeper. Although adding a CPA firm will increase your operational costs, over the long term a relationship with a good CPA will save your company money through minimized tax liability and improved accounting procedures, as well as proper financial planning.
If you’ve been doing everything in-house, you may not know how to choose a CPA that pairs well with your company. Ask someone you trust for recommendations. “The contractor should talk to their banker or bond agent for referrals to a qualified accounting firm,” Bendele says.
Once you start looking for referrals, consider looking for firms that have experience in servicing construction clients’ accounts.
“Construction is a unique industry,” Bendele says. “CPAs that understand construction and the related accounting and tax issues are critical for the company’s success. For example, contractors recognize revenue on the percentage of completion basis. It is important that your CPA understands the mechanics and complexities of this calculation.”
Bringing the right CPA on board can help your business in the long run not only through tax filings, but also by setting up a proper system for monthly closing procedures for your bookkeeper. A good CPA will also offer many ideas to improve the accounting and operations of the company.