Both Groups Are Important, And Each One Fills A Need
Project Management Construction Accounting Professionals (PMP) work above the line and focus on generating positive outcomes and results for contractors:
Certified Public Accountants (CPA) work below the line focused on filling out annual income tax forms, ensuring contractors pay their fair share of taxes, preparing certified financial statements, and performing audits on your QuickBooks contractor file.
Three Times Construction Contractors Need A CPA In Their QuickBooks For Contractors File:
Most construction contractors with annual sales under $10,000,000 and less than 20 employees will never have those issues.
Preparing end-of-year reports and filing taxes can be complicated. If you're not doing it right, you could be liable for penalties or, at the very least, not take advantage of tax gains and financial opportunities. A Construction Accountant can ensure your business remains compliant (and pay as little tax as possible), help you analyze your business performance, and work with you to achieve your goals.
On the other hand, Tax Accountants can kill more cash flow and profit in your construction business (in less than an hour) by preparing your annual tax return using a messed up QuickBooks file than you can make up for with hard work in several months, if not years. This is because saving you money on your tax bill is not what they are paid to do; they are paid to fill out tax returns.
Why does it need to be separate?
Trust but verify! When you need financing, most bankers and finance sources like to see a separation of duties. They want to see two different firms involved because it reduces the chance of errors, collusion, cover-up, and fraud. They may not say a word to you; however, we often hear about it!
We insist our construction contractor clients use an outside CPA or tax preparer to review the QuickBooks Contractor's bookkeeping services that we have performed and prepare the annual income tax return. As a result, we have developed good working relationships with several CPA firms and yearly qualified tax preparers.
It is good to know our contractor clients trust us and know that we have their best interest in our minds and hearts; however, we are human, make mistakes, and welcome input from CPAs and tax preparers. It is all about teamwork and people working together to ensure everything in your construction accounting system works correctly.
Bottomline: Construction Accountants should not be preparing annual tax returns because nobody can serve two masters. Either be a Tax Accountant and serve the interests of the tax collection agencies or be a Construction Accountant and serve the interests of contractors.
Please don't think we are too hard on Tax Accountants. Understand that we have great relationships with them. We have had Tax Accountants review our QuickBooks and prepare our business and personal returns for over thirty years, and we refer many businesses to various Tax Accounting and Preparation companies.
What you need to look for is someone who is experienced, capable, and understanding. You should feel they'll be a good advisor and are interested in developing a long-term professional relationship with you.
Having the right Construction Accountant for your business leaves you free to focus on why you started the construction company in the first place – to see it grow and become profitable. A Construction Accountant and a Tax Accountant are integral to this because they'll keep your finances on track. Which, in the end, is the whole point.
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