Accounting Services for Construction Companies

Accounting Services for Construction Companies

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Accounting and Bookkeeping Services for Construction Companies

You’re the owner of a construction business, participating in the growth of economy through numerous ways. Providing all that value around the globe, you deserve to be wealthy too! There should be a clear way for you to:

  • Keep a track of where your money comes from,
  • Have perfect knowledge of what your expenses are,
  • Stay on top of all your project bills,
  • Get accurate tax filling on time,
  • Know why your competitors make more money than you although both of you are doing the same work

But how? Only through well-organized accounting.

Just ask yourself these simple questions:

  1. When was the last time you had a meeting with your accountant?
  2. What if you’re just spending too much on your expenses?
  3. As a construction business owner, are you at a point where you’re unaware if you’re making or losing money?
  4. What if you’re making decisions based on inaccurate financial information?

If all your answers are negative then all you need is a great accounting firm to prepare and maintain accurate and complete accounting records of your business which effectively means your business decisions are made on the basis of reliable information.

We at Push Digits Global can help you manage your books timely and accurately so that you can focus on growing your business rather than growing your in-house finance team.

Why is Construction Accounting Different from Other Industries?

Construction industry is a distinctive business practice, different in every way from all the other industries. Construction book-keeping is highly complex because:

  1. Contracts Time-period: Unlike other business operations, construction contracts take years to complete and the invoices raised have elongated credit period. This makes it difficult to keep a tract of payment, receipts, retention money, or retainage withholdings. Only specialized team of accountants can help you fill all the cracks.
  2. Project Influenced: Your business is based on project contracts with labor, production or billing. Your lively hood and rational bidding depends on the profit margins. This drastic project –wise financial focus requires highly accurate bookkeeping to track individual job costs.
  3. Dispersed Production: Being a construction company you have several projects hence several sites. Frequently moving of equipment and labor increases the mobilization costs. Less predictable production and fluctuation of costs require a more robust tracking system.

Push Digits Global understands that you need not just any bookkeeper but a team of highly skilled professionals to do the job. Our experience of construction industry can help you make right decisions without a fail!

Should you Outsource Construction Accounting?

Just imagine your business costs are under-recorded and/or being recorded in the wrong category, showing a profit when in reality it might be a loss. All this time you might be making wrong decisions based on incorrect financial information.

So if:

  • You’re not getting weekly or monthly financial reports on time,
  • You’re struggling to complete the audits on time,
  • Your audited financials have tons of reclassification notes,
  • You’re not provided with an accurate debtors or creditors list,
  • Your jobs are being posted to the wrong projects,
  • Your accountants have little knowledge of construction accounting,
  • And if you feel you cannot rely on your in-house financial information anymore

Then you need someone who:

  • Can track accurate payments – avoiding late contractor payments and overdue invoices,
  • Does effective job costing – avoiding loss on a completed job,
  • Masters in efficient inventory management – avoiding over/under stocks,
  • Understands tax filing – avoiding penalties and fines
  • Knows construction accounting principles!

Our vast experience in construction industry can help you mitigate all these challenges so you can emerge as leaders.

Our Specialized Services for Construction Companies:

We have years of experience with construction industrialists. Our sector wise bookkeeping and accounting services have not only enabled us to prepare accurate accounts, but also helped our clients to grow their businesses and lift their profits by making right decision based on accurate financial information. Our aim is:

Not to find customers for our services, but services for our customers

Our services specific to construction industry are briefly detailed below:

  1. Transaction Journal Creation: Create series of journals for effective daily transaction recording of accounts receivable, accounts payables, materials, job costs, equipment, rent, utilities etc.
  1. Deposits and Retainage Tracking: Daily records to track project-wise payments of periodically sent invoices as they are sent or received throughout the job. Managing multiple project records so nothing is lost.
  1. Backup of Detailed Records: Keeping hard or soft copies of all your transactions and records. Providing you ultimate storage and backup through digital copies on cloud-based technology, enabling easy access from anywhere anytime.
  1. Job Costing Records and Analysis: Accurate recording of job costs categorizing individual projects, cost activities, and cost types. Producing detailed analysis to help you improve budgeting and estimates of different projects.
  1. Construction Billings: Using specialized software to manage, track, and record project-wise billing processes (point-of-sale billing or fixed price billing).
  1. Set-up and Management of Construction Accounting software: 
    • Selection of right accounting software for your business such as SAP, Oracle, etc.
    • Setup and complete implementation of the accounting software.
    • Customization of the software to meet specific requirement.
    • System setup to generate automatic VAT reports for filing with Federal Tax Authority.
    • System customization to automatically reconcile with Federal Tax Authority and Federal Customs Authority.
    • Set-up descriptive lay-outs for bills, invoices, organization details, and setup of chart of accounts.
    • Initial and on-going set-up of the Chart of Accounts, effectively categorizing all your project transactions,
    • Recording of transactions in one centralized location,
    • Customized management reporting templates (monthly, quarterly, and annual) as per requirements.
  1. Assist in Online Conversion from One Accounting Software to Another:
    Most of the times, construction business owners are aware that the current accounting software might not be the best option but fear jumping to the best option due to all the complications. We will effectively move everything from one software to another that serves best for your construction business, through the following services:
    • Migration of complete historic transactions of the business or only the audited balances depending on the requirement,
    • All bank, credit cards, and other accounts information transfer,
    • Migration of customer master as well as creditors master data,
    • Financial year wise reconciliation of the migrated data with the previous, accounting software and the audited financial statements, 
  1. Analysis of Business Transactions:
    • Daily reconciliations of bank transactions
    • Provide detailed job-wise costing for greater insight into your business
    • Categorizing area-wise projects to identify project progress, profit or loss,
    • Producing detailed breakdown of project-wise job costs so that you have a clear picture of your business expenses and revenues
    • Effective recording of daily customer/vendor wise sales/purchases
    • Maintenance of monthly project wise expenditure
    • Maintenance of general overall common expenditure
    • Maintenance of monthly costs of general overheads, salaries, and other overheads
    • job-wise cost allocation for comparison of costs of multiple projects
    • Allocation of refund for cancelled sales/purchases
    • Appropriate recording of revenue as per IFRS 15
    • Accurate recording of refund liabilities
    • Accounting software trainings to client’s finance team
    • System discrepancies monitoring
    • Cash withdrawals recording
  1. Filling of Tax Returns: 
    • Accurate calculation of tax liability by taking account tax reliefs as per local regulations,
    • Timely filing of tax returns to avoid penalization or late filing charges,
    • Reconciliation of tax as per books with the tax as per authority records
    • Timely payment of tax liabilities,
  1. Construction Material and Order Management:
    • Recording and setup of project-wise material tracking into accounting software,
    • Effective recording of sales and returns to produce accurate figures of construction material re-stock,
    • Monthly reconciliations between material used and jobs completed,
    • Separate recordings of project-wise usage,
    • Separate computation and recording of un-used, obsolete, or destroyed material/articles
  1. Reporting
    Push Digits Global, along with big 4, is specialized in construction accounting. We will not only provide accurate bookkeeping but will also help in strategic planning and analysis through our detailed reporting:
    1. Customized Cash in Hand Report: Tells you the available cash which can be used for any purpose in your business.
    2. Balance Sheet: Tells you the current status of your assets, funds, and liabilities.
    3. Vendor-wise Accounts Payable Report: Provides you details about every vendor you owe money to.
    4. Customer-wise Accounts Receivable Report: Shows daily/monthly customer-wise money receivable for all the current and past jobs.
    5. Job Profitability Report: Provides a clear picture of your most profitable projects and places where you’re making most loses.
    6. Job Profitability Summary Report: This report provides customer-wise profits earned from each service within your selected date range, listing most profitable and least profitable customers.
    7. Job-wise Profit and Loss Report: Shows job-wise profit and loss for a particular selected date range, listing most profitable and least profitable jobs.
    8. Unbilled Costs by Job Report: List downs all the unbilled costs assigned to particular jobs or customers showing detailed billed & unbilled status of all the projects.
    9. Unpaid Bills by Job Report: List downs customer and job-wise unpaid bills. Helps to initiate a Pay-as-Paid analysis where you pay vendor bills for a particular job after receiving a payment from the particular customer.
    10. Job Estimate Vs Actual Summary Report: A customer or job-wise summary comparison of estimated costs and revenue with actual costs and revenue, assisting in future accuracy in estimations.
    11. Job Progress Invoices Vs Estimates Report: Comparison of progress invoices with estimates based on each job, detailing active estimates and percentage of estimate invoices on progress invoices.
    12. Open Purchase Orders by Job Report: Shows you customer or job-wise pending purchase order line items and their expected delivery dates.
    13. Vendor-wise Job Costs and Job Summary Report: It provides project-wise job cost incurred and is vendor-wise subtotaled, assisting you to categorize sub-contractor bills, labor costs, material supplier purchases for each individual job.
    14. Unassigned Expense Report: It list downs the costs that have not been assigned to any customer or job yet which effectively allows you to categorize and allocate costs.
    15. Job Costing Work-In-Progress (WIP): It is a special custom report that shows WIP for each project, so you can keep a track of project progress, costs/revenue to date, future expected costs/revenues etc.
    16. Monthly Project-wise Comparison Report: This report allows you to see month by month variations in different jobs/projects.
    17. Monthly Controls Review Reports: A report which contains evaluation of existing controls, systems, and standard operating procedures along with suggestions to improve them.
    18. Zone/Area-wise Revenue Report: It allows you to target most income generating construction areas.
    19. Job-wise Comparison with Competitors: Enables you to assess market competition and most importantly how your customers are performing on similar jobs.
    20. Year-wise P&L Comparison: A great tool to check financial performance of your company compared with historic financial years. For example, revenue and expense comparison between Jan-Dec 2019 vs Jan-Dec 2020.
  1. Day to Day Management:
    When you engage with us, we manage your books from scratch to end. On a day to day basis, we will manage the following:
    • Credit card management
    • Payroll management
    • Accounts payable (Creditors) management
    • Accounts receivable (Debtors) management
    • Cash-flow management
    • Accounting software support and management
    • Stock inventory statements preparation
    • Financial accounting and reporting requirements management
    • Tax returns computation and filling
    • Business analysis through detailed reports (review our section report generation)
    • Compliance with International Financial Reporting Standards and Internationals Accounting Standards
    • Reconciliation of bank balance as per books with the bank statements
    • Balance sheets & income statement preparation
    • Budgets vs actual financial reports
    • Detailed performance reviews
    • Effective budget monitoring
    • Construction project-wise KPIs and scorecard generation
    • Operational reviews and assessments
    • Succession planning assistance,
    • Assisting in draw requests/payment applications,
    • Non-current/fixed assets accounting & depreciation,
    • Planning, consultation and strategy guidance,
    • Segment-wise market analysis

Why Push Digits Chartered Accountants?

Construction accounting is distinctive from any other regular accounting. Accuracy of bookkeeping is of extreme importance due to the high value projects. Wouldn’t you just love to have more from good clients and eliminate the loss-incurring ones? We will slice and dice all your business information for you to:

  • Identify your most valuable clients
  • Boast your profits
  • Help in cash flow management so you can better plan your future expenses

Top 10 Strategic Reasons to Appoint Push Digits Global:

  1. Above 10 years of experience in construction sector accounting.
  2. Above 20 years of experience in auditing of construction companies.
  3. Above 20 years of experience in international taxations.
  4. Every kind of accounting and ERP system can be used or implemented.
  5. Audit/Accounting Partners close collaboration with Client ensuring their financials are always in a sellable position for potential buyers/investors.
  6. Qualified Chartered Certified Accountants, Chartered Accountants, Certified Public Accountants, and experienced fraud examiners in the team.
  7. Multi-continent regional office collaboration to provide integrated financial services.
  8. Assignment supervision by Big 4 trained Accounting and Audit Managers.
  9. Constant ethical and professional development of all staff members by In-house and external trainers.
  10. Excellent support by dynamic and internationally recognized Accounting and Audit Partners.

Top 10 Operational Reasons to Appoint Push Digits Global:

We are not just the regular accountants or bookkeepers, we’re Construction Accountants and Bookkeepers. Our special team of construction accountants is the only one in UAE, along with big 4, who:

    1. Have been where you are right now
    2. Know what you know
    3. And understand your construction business better than you
  1. Software: Accounting Software Experts with Background in Construction Industry.
  2. Decision Making: Customized financial reports preparation and presentation to clients. Meaningful and accurate reporting is the only way to make well informed decisions. We will break down all that complicated data into useful reports to allow you to make right decisions for your business. 
  3. Project Management: We have excellent project management skills. We have the right team, with the right knowledge and the right capacity to handle all your large project paper work. Let us manage all your budgets, proposals, contracts, progress bills, and reporting requirements. 
  4. Subcontractors Management: Proper subcontracts management is one of the other benefits you will get when you engage with us. You wouldn’t want to overpay right? Well, we can help you avoid that by tracking all your subcontracts costs, making sure you are in compliance and sufficiently covered by your Worker’s compensation, General Liability insurance and any other insurances. 
  5. Inventory Management: Inventory management is another important process which we control through the software. We will set your inventory levels in the system and activate auto alerts to enable you to take actions when your reach a certain stock level e.g. inventories re-order level. We also ensure that your inventories are recorded in line with IAS 2. 
  6. Training: We provide regular training to your staff to enable them to use the system themselves and generate general reports for their day to day use.
  7. Assistance in Getting Business Finances: Every investor requires different financial reports before they fund your business. These reports include audit reports, business valuation reports, etc. We will prepare all such reports requested by investors. 
  8. Legal Requirement: The laws in the UAE require businesses to manage their financial records properly and keep them saved (hard/soft) for any regulatory review. Compliance with these regulations is integral to avoid massive penalties and even cancellation of your business license.
  9. Financial Audits: We guarantee audit completion within 1 month of the year-end. 
  10. Tax Reports: We prepare your tax returns, reconcile them with the regulator records, file the returns, and ensure payment is processed on time against the tax liabilities.

Frequently Asked Questions:

1. Where is the construction accounting done?

We provide services as per your convenience. Our specialized team will perform the duty either at your premises or our own office with frequent visits to your sites. We understand the value of integrity and work on strict policy of confidentiality.

2. How can we actually save cost by outsourcing bookkeeping?

  • You save the cost of equipment and maintenance as the service providers arranges for the same.
  • No air tickets
  • No overtime payments
  • No gratuity payments
  • No annual leaves
  • No training costs
  • You can request to change the accountant any time as normally accounting firms have many accountants
  • And most importantly, you will be saved from making inaccurate decisions based on incorrect financial information

3. Will you completely replace my current Accountant?

This decision depends on your management. If you feel your current CPA is inefficient, we will effectively take over all the CPA’s duties to add to the Board’s strategic decision making advices. But if you feel your CPA is sufficient, we can work side-by-side with your CPA and supervise the work.

4. Who will service my accounts?

We will assign one of our expert construction accountants to your work. Further, a dedicated quality control partner will also be assigned to your assignments for regular third party quality review.

5. How do you charge for services?

You will pay for only the type of service  you need. Whether you are looking for:

  1. One off service – initiation and set-up of your accounts – onetime payment
  2. Express service – to efficiently handle a deadline or avoid penalty/fine – onetime payment
  3. Regular support – to get the books off your hands completely, so your records are maintained efficiently – monthly payments/pay as you go

We will offer you a variety of payment methods so you can choose the best for yourself.

6. How your experience can benefit our company?

Construction accounting is not just like any other business accounting. It’s unique and comes with tons of highly complex accounting issues. We will apply the applicable accounting standards while doing your accounting to ensure compliance and our reporting will greatly assist you in decision making. Most importantly, your financial audits shall be completed within 1 month of the year end which will effectively help you in the renewal of bank loans and bank facilities.

7. Does accounting only include the recording of transactions?

Definitely not! transaction recording is just one part of the accounting. It also includes financial analysis, valuation reports, financial reports, cashflow reports, forecasting, etc.

8. Will I need separate assistance during audits and taxation?

No, we will manage the entire function i.e accounting to taxes to audits.

9. Will I need to clean-up my books before I outsource?

No. That will not be required. We will just need some particular information to get the work started for example your bank statements, credit card statements, or QuickBook file etc. We will understand and analyze the information, list missing information and request for additional information if required.

10. Will communication with my accountant be easy?

Very easy indeed! You will have constant contact with your allocated accountant throughout the business hours and even after that. Your accountant will also attend meetings with your management to present financials, if requested.

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