Construction accounting is a specialised type of accounting, focusing on the specific and unique needs of construction businesses. Here are some of the things you’ll need to consider if you own a construction business:

1. You’ll need to track both your project and overhead costs.
2. You’ll also need to track your retainage.
3. You may find yourself using progress billing.
4. Change orders are common.
5. Lien release tracking is important.
6. You’ll need project management software integration.
7. Due to the nature of the work, you may have many employees who are paid hourly, making time-tracking an important part of your accounting practices.
8. In some cases, you may need to borrow money to finance your projects, so it’s best practice to track loan payments and interest expenses in your accounting records.
9. Accounts receivable and accounts payable management are essential, as is cash flow management.
10. Audits are typically required, due to the large amount of money involved in most projects.
11. Because you’ll often be working on multiple projects at one time, you’ll need to stay on top of job cost reporting.
12. Tax laws in construction are different from other businesses, so it’s important to use a tax professional who is familiar with your industry when preparing tax returns.
13. In order to be successful, you’ll need a good understanding of both the business and the industry, and to keep up to date on changes in both areas. Construction accounting can help by providing you with detailed reports about your projects and finances.

By understanding these requirements and needs, you can ensure that you’re using the right type of accounting for your construction business and avoid making mistakes that could cost time and money.

Construction accountants can provide valuable insights into business operations, and help make sound financial decisions. If you’re a business owner in the construction industry, consider investing in construction bookkeeping services to help your business succeed, and get in touch with us for any questions!

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 Need a bit of assistance with your business? Contact an Outside Accounting team member today and learn more about our fixed fees. You won’t regret it.

Aside from business consultation, we are business accountants Wellington who offer accounting, bookkeeping, payroll services designed to help you achieve greater financial success.

You can click here to speak to a business, accounting and bookkeeping firm. We will give you a call to know more about your needs. We will explain to you how we can improve your business.

 

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Te Aro, Wellington 6011, New Zealand 

Mail: PO Box 24-457, Wellington 6142

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