Construction

Q. How is Construction accounting different than Other Accounting?
A. In various aspects, construction accounting is different as compared to accounting for other businesses. In general, there are 2 main ways to maintain construction accounts. Percentage of Project Completion – In this way, accountant has to update books on the basis of stages of project completion i.e. Income/ Expense will be accounted for once a pre-decided stage of project will be completed. The revenue recognition based on achievement of a pre-decided milestone is also called as progressive billing/invoicing. Another way is Project Based – in this method an accountant considers every project as a separate entity. At the commencement of every project, a new set of books is prepared with a new chart of accounts, separate project-wise income and expense entries and often with even new bank accounts specifically dedicated to the project.

Q. What services do you provide under construction accounting?
A. We have a good understanding of construction accounting concepts/terms such as job-codes, cost-codes, change orders, draw sheets, retainage/holdback, commitment invoices, construction contracts and general construction expense types. We can process accounts payable in both ways: two way match (PO with invoice) and three way match (PO, invoice and packing slip/goods receipts) processes. Our accountants have good expertise in processing construction company invoices with complexities such as divisional accounting, multi location allocations, multi-project allocations, draw order invoices, commitment invoice, retainage/holdback reconciliation among others. We also have expertise in document filing, accounts receivable processing, general ledger maintenance, month-end closing including expense accruals, bank and loan reconciliations, and financial statement preparations. Our expertise in construction accounting across US and Canada enables us to also handle customized services.

We have a high level of expertise in Timberline and QuickBooks in construction accounting. In QuickBooks, we have a high degree of familiarity with and understanding of concepts such as classes, jobs and associated reports. In Timberline, our accountants are familiar with the different reports, search tools, header and distribution windows, divisional coding among others.  Our extensive work with many construction companies has provided us with good industry expertise in this area.

Q. Do I need to take services of CPA for tax services?
A. We focus on providing Construction Accounting Services with utmost accuracy and timeliness. We are able to process bookkeeping, financial closing, payroll and provide audit support activities. However, we do not perform audits and annual compilations or provide opinions on your financial statements. We can assist and coordinate these functions with your current CPA to ensure that they have the necessary information to prepare these for you.

Q. Won’t I lose control if the books are done by an outside service?
A. It is unlikely that you will lose control by outsourcing your accounting. In most cases, clients experience an increase in control as there are able to hire a dedicated offshore accountant instead of a part-time accountant. You can also easily communicate with your accountant through email, Skype, phone calls and more.  Our team will revert promptly and work diligently to execute their work responsibilities and deliver up-to-date financial output. Since our accountants are qualified and experienced, they require minimum supervision and attention.

Q. What software do I need to manage my construction accounting?
A. Your software needs are dependent upon the accounting needs of your business. It depends on volume & type of projects, annual revenue, number of suppliers & subcontractors and several other factors you want to manage through it. Our team is capable of handling variety of construction accounting software ranging from a complete construction accounting package like Timberline to a small business QuickBooks construction accounting package.

Q. Who will work on my data?
A. Your day to day construction accounting services will be safe and work will be assigned to team of skilled professional construction bookkeepers/ accountants with several levels of construction accounting skills. Depending on the complexity and scale of the processes and work, we allocate junior accountants for simple accounting tasks and senior accountants for monthly financial preparations, management reporting and other complex tasks. We also allocate an engagement manager for projects that have four to five member team of dedicated accountants.

1. A well known Canadian real estate developer based in Vancouver with proven expertise in construction and developing high rise concrete homes.

Our Services:

We provide accounts payable processing services including capture of images, entry of invoices, appropriate routing for approvals and generation of reports.

Software: TimberScan

2. Mid-size general contractor based in Denver, Colorado

Our Services:

We provide complete monthly accounting services except customer invoicing in QuickBooks including accounts payable processing, bank and credit card reconciliations, general ledger maintenance and month end reporting. Year end accounting is also done by us.

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