3 Tips for Choosing the Right CPA For Your Construction Company
2018-07-16 | by Gene Reynolds
Like any good partnership, both sides need to reach a mutual understanding of what each party brings to the table in order to achieve positive results.
Mutual understanding can only be achieved, though, if both sides put in the effort to appreciate each party’s role, capabilities, and qualifications in the relationship. The same concept applies to choosing the right CPA firm for your construction company.
You could open up the white pages or do a Google search for a CPA firm, but how do you differentiate between firms that seem the same? In this article, we will capture what you need to know to accurately assess CPA firms to determine the right fit for the construction industry.
How to Choose the Right CPA Firm for the Construction Industry
To narrow the scope of choosing the best CPA firm, you should take the time to do your homework and test each candidate’s knowledge of construction accounting issues to evaluate their knowledge, expertise, and advice.
Tip #1: Check the Track Record of the CPA Firm
Information is readily accessible to evaluate whether a CPA firm has history working with construction clients. If you encounter a CPA firm that does not seem to have any experience in your industry, you likely do not want to be the guinea pig for the firm to jump into a new industry.
Reach out to the CPA firms that you are considering to have a conversation about their practice and your industry. Gauge their expertise and their ability to understand the accounting challenges specific to the construction industry.
- Does the CPA firm understand the need to track unique expense categories such as mobilization costs, delivery to the job site, and clearing material at the site?
- Does the CPA firm have a good understanding of the Percentage of Completion Method for revenue recognition?
Tip #2: Present a Hypothetical Scenario to Each CPA Firm
As you begin to narrow down your options, consider walking through an accounting scenario that your company experiences on a regular basis. This exchange will help you gauge whether the CPA firm is capable of understanding the issue, analyzing the situation, accurately recording the activity, and strategizing a solution for future recording.
- Walk through a scenario where you are trying to calculate the Break Even point of each construction job.
- Can the CPA firm recommend the best practices for tracking revenue and the related expenses when a variety of costs fall into multiple categories?
Tip #3: Have Multiple CPA Firms Perform a Mock Audit
Once you narrow down the CPA firms to a few candidates, consider having each firm perform a mock audit of your past financials.
This step will allow you to see how well they know the construction industry in a simulated setting. You will also see if the candidate CPA firm can locate critical accounting issues that should be addressed, and see if they can identify growth opportunities through more strategic accounting practices.
- Evaluate whether each CPA firm performs accurate calculations of your construction jobs.
- Did they use the correct formulas to calculate specific expenses such as Cost of Goods Sold?
- Can they locate specific areas for growth through more effective accounting practices?
Reynolds and Associates is Capable of Supporting Your Construction Accounting Needs
Reynolds and Associates works with a variety of small-to-medium sized businesses to support their accounting needs and implement a strategic approach to accounting for their industry.
We would appreciate the opportunity to discuss the specific needs of your construction company and how we can provide support for the accounting issues that concern you.
To schedule a free consultation, reach out to our team either by email at firstname.lastname@example.org or by completing our Contact Form.
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