Day-to-day life is complicated enough for any construction firm without the added burden of deciphering construction accounting. Accounting for construction firms is a complex and fast-moving landscape, especially when you factor in the evolving rules around the Construction Industry Scheme (CIS), the VAT domestic reverse charge, and Making Tax Digital (MTD). Never has there been a greater need for specialised construction accountants.
Here, IN Accountancy explains what to look for when searching for a suitable construction accountant for your business. Check out our handy hints and tips to find the best construction accounting specialist for your firm.
Why Does My Company Need A Construction Accountant?
Just when you think you’ve mastered the vagaries of construction accounting, the rules change, and the goalposts move. Navigating legislative changes – like the amendments to the CIS, MTD and VAT – can be daunting. This is why it can pay to have a specialist construction accountant to help keep you compliant, profitable and tax efficient.
Should You Hire A General Or Specialist Construction Accountant?
As we have established, construction accounting is complex. With the ever-changing regulatory landscape and various industry-specific finer details to consider, opting for an accountant with a proven track record of accounting for construction firms is a wise investment.
Not only will a construction accountant have a firm grasp of the current rules and regulations, helping you to plan and implement any changes smoothly, but they can also identify potential areas of improvement to boost your profitability.
How To Choose The Right Construction Accountants
The question is, how do you choose the right construction accountants for your business? Ultimately, the accountancy firm you choose will come down to personal preference. However, there are a few factors to bear in mind that can help you gain some clarity over which construction accountant is the best fit for you.
This is a big one. It is vital to ensure your prospective construction accountant has the necessary education, qualifications and experience to manage your accounting needs properly. Take time to familiarise yourself with the accounting industry’s qualifications, and cross-reference those with your potential new accountants.
This is another key factor. It is essential to get an overview of your prospective construction accountant’s fee structure. Will it be an all-inclusive, fixed fee? Or are there likely to be added monthly or annual fees, such as for submitting tax returns? Getting a good grasp of where your money will be going is vital before you commit.
Check the services provided and make sure they tally with what you need. As a bare minimum, you will want a construction accountant specialising in CIS compliance, VAT, bookkeeping, annual accounts, and Corporation Tax returns. You may find it helpful if they also have cash flow forecasting, payroll, and R&D tax relief expertise.
MTD has made cloud-based accounting software, like Xero and Sage, a necessity. These tools not only keep you compliant but can also allow you to automate many mundane tasks. So you’d be well-advised to choose a construction accountant that offers up-to-the-minute accounting technology. It will reduce your admin and generally make your life easier.
As we have already mentioned, it pays to work with an accountant that has demonstrable experience in accounting for building construction firms. CIS, VAT and MTD expertise are all vital. Specialised knowledge of construction accounting for sole traders or limited companies and cloud accounting solutions can also be helpful.
Like in the construction industry, word-of-mouth recommendations go a long way in finding a good construction accountant. So ask around your peers and pick their brains about who they use and why. Be sure to quiz them about the level of customer service they receive. The last thing you want is an unresponsive accountant.
Cloud-based accounting software means that you could – in theory – choose a construction accountant anywhere in the world. However, if you would prefer the reassurance of regular face-to-face meetings, you should limit your options to within a 10-mile radius. The closer your accountant is, the less of a chore it should be to visit them.
As you can see, there are many variables when it comes to accounting for a construction company. Construction accounting is a specialised field, full of ever-changing and increasingly complex legislation.
This is why hiring a specialist construction accountant with plenty of proven experience in accounting for building construction firms makes sense. Not only will they have their finger on the pulse regarding the latest rules and regulations, but they can also offer insights and technologies that will boost your profits and save you valuable time.
Here at IN Accountancy, we are specialists in construction accounting. With many years of experience in CIS accounting, limited company accounting, sole trader accounting, and our Xero Gold Partner status, we can add value to your construction firm with a comprehensive range of services and software solutions.