Qualities to Look for in a Contractor Accountant

Not all accountants are created equal. While a general accountant might be adept at handling standard financial tasks, a contractor accountant brings a specialized skill set to the table. Contractors often struggle with financial challenges distinct from other businesses. These can range from fluctuating incomes to project-based financial planning. Here’s why a specialized accountant can be a game-changer:

• Expertise: They understand the nuances of contractor finances, ensuring you’re always on the right side of the law.
• Savings: With in-depth knowledge of financial goals, the accountant can create a budget that aligns with the goals.
• Time: Instead of worrying about complex financial jargon, let an expert handle it, giving you more time to focus on your business.

Finding the right fit is crucial. Here’s what you should be on the lookout for:

• Certifications: Ensure they have relevant qualifications and are affiliated with recognized accounting bodies.
• Experience: An accountant with a track record of working with contractors and small businesses is preferable.
• Reviews: Word of mouth still reigns supreme. Look for testimonials or seek recommendations from peers.

What Construction-Specific Knowledge Actually Looks Like

“Specialized” isn’t just a buzzword. A contractor accountant who actually understands construction finances should be fluent in things a general accountant typically isn’t:

• WIP schedules: Tracking job costs, percentage of completion, and billing status across every active project, not just your overall books. See CIP vs WIP for Contractors for how this works in practice.
• Bonding requirements: Knowing what sureties look for in your financial statements, and how your numbers affect your bonding capacity. Regular CPA Reviews and Audits in Construction help keep those numbers surety-ready.
• CIP accounting: Understanding how construction-in-progress costs are tracked and when they move to a fixed asset account, if your business builds its own long-term assets.
• Percentage of completion method: Recognizing revenue accurately as a project progresses, rather than only at the start or end of a contract.

If a prospective accountant can’t speak to these concepts specifically, they may be a capable generalist, but not a true contractor accountant.

Cost Considerations

While it’s tempting to opt for the cheapest option, it’s essential to understand the value a specialized accountant brings. Consider:

• Pricing Models: Some might charge a fixed fee, while others might have an hourly rate. Understand what’s included in the package.
• Long-Term Value: A good accountant can help you save money in the long run, making it a worthy investment.

Making the Final Decision

Once you’ve shortlisted potential candidates:

• Ask Questions: Understand their approach, tools they use, and how they stay updated with the latest regulations.
• Watch Out for Red Flags: Be wary of those promising unrealistic returns or those who are not transparent about their fees.
• Trust: At the end of the day, this is a partnership. Ensure there’s mutual respect and open communication.