Accountancy for construction

The construction industry is unpredictable, so a specialist approach to manage the unique complexities of this sector is needed. Effective accounting systems help construction business owners to track job costs, manage upcoming expenses and revenues, and make informed decisions. Our construction accountants boost business outcomes by providing services tailored to this sector.

Our construction accounting services

Construction accounting is more than just numbers. We offer full accounting services for the construction industry, and our expertise allows us to offer you several specialist services. These include:

• Keeping up with HMRC regulations, including the Construction Industry Scheme (CIS) and VAT reverse charges is vital. We stay up to date with changes so your business remains compliant.
• We produce detailed financial statements, including balance sheets, monitor costs and budgets and work with your accounting department to produce financial reports. Our construction accountants give you the financial visibility to make decisions.
• Accurate project cost management is critical in the construction industry. We help you track expenses, manage budgets and forecast future costs. Your project managers will have the financial data to stay on track.
• Cashflow management is key for any construction business. We give you actionable insights to improve your cash flow so you can meet your financial obligations and invest in growth opportunities.
• We recommend and implement accounting software that links the office to the site so you can have access to up-to-date data and make changes on site using mobile devices.
• We service construction businesses of all sizes, from independent subcontractors to national companies. Whatever your company size, we give you the same level of service and expertise.

Our construction accountants have years of industry experience so we are the trusted partner for your financial needs.

Get in touch with one of our expert construction accountants today.

What is a construction accountant?

A construction accountant is key to managing the financial health of construction companies. They are responsible for the Construction Industry Scheme (CIS) and other areas of regulatory compliance. Our experience has shown us that construction accounting is not straightforward; specialist knowledge is required.

Financial statements

Accountants for construction produce financial statements including balance sheets so they accurately reflect the company’s financial position. This includes balance sheets, profit & loss and cashflow statements. Financial reporting helps stakeholders make informed decisions and comply with industry standards.

Cost monitoring and budgeting

Cost monitoring and budgeting are key elements of construction accounting. Construction accountants work with project managers to track project expenses and keep within budget. This proactive approach prevents cost overruns and optimises resource allocation across construction projects.

Reporting

Working with the accounting department, construction accountants produce in-depth financial reports. These reports show project profitability, cashflow and overall financial performance. Visibility and accuracy is key for stakeholders to assess financial health and strategy.

Tax planning and compliance

Tax planning and compliance is key in the construction industry. Our construction accountants understand the complex tax rules and ensure compliance with the law. They manage CIS returns and offer VAT structuring advice to reduce tax liabilities.

Project profitability analysis

Project profitability analysis is key to long-term success for construction firms. Construction accountants review financial data to see which projects are most profitable. This analysis informs decisions on future construction projects and resource allocation.

Growth advisory services

In addition to day-to-day financial management, construction accountants offer advice on business structure, capital allowance tax claims and identifying areas for financial improvement so the business can grow.

Construction accounting is a combination of compliance, financial management and planning. Our bespoke accounting services mean construction businesses can take on the financial complexities while focusing on growth and profitability.

Construction accounting vs standard accounting

All construction businesses need to understand the difference between construction accounting and standard accounting. Construction accounting has its own practices specific to the industry.

How is construction accounting different?

Construction accounting is different from standard accounting because of the project-based nature of the industry. Standard accounting looks at the overall company finances, while construction accounting looks at individual projects. This means tracking job costs, revenues and expenses. For example, construction accountants need to manage variable project timelines, multiple stakeholders and changing budgets. The need to track costs accurately, such as materials and labour, is different to standard accounting practices where financial statements are uniform across periods.

What are the best construction accounting methods?

There are several ways to ensure accuracy and financial health in construction accounting.

1. Accurate Job Costing: A robust job costing system is key. It tracks all costs associated with a project including labour, materials and overheads. For example a construction accountant will allocate these costs to specific projects to see financial performance.

2. Percentage of Completion Method: Recognising revenue based on percentage of work completed gives a more accurate financial picture. This method aligns income with project progress and shows earned revenue against incurred costs.

3. Timely Billing: In construction accounting timely billing means consistent cash flow. Billing at the end of each month or upon phase completion keeps finances steady and obligations met.

4. CIS Compliance: Contractors and subcontractors must comply with the Construction Industry Scheme (CIS). Compliance avoids penalties and keeps the business in line with HMRC rules.

By using these methods, accountants can help construction companies in this sector stay financially stable, profitable and grow long term.

What is the Construction Industry Scheme?

The Construction Industry Scheme (CIS) governs how contractors pay subcontractors in the construction industry. It’s aimed at reducing tax evasion by taxing at source.

Our CIS accountants

Our dedicated CIS accountants understand the complexities of the Construction Industry Scheme. Unlike standard accountants, our construction accountants have in-depth knowledge of CIS rules. From registering with HMRC to maintaining full records, our CIS accountants will do it all.

CIS registration

Whether you’re a contractor or subcontractor, CIS registration is key. Contractors need to register to deduct the correct tax before paying subcontractors, while although subcontractors don’t need to register, higher deductions apply if they don’t. Our construction accountants will make the registration process smooth and HMRC compliant.

Compliance and changes

CIS compliance is vital. In 2021, the UK government changed CIS and VAT reverse charges for construction work. These changes affect contractors and subcontractors. Our CIS accountant is up-to-date with these changes so your construction accounts are compliant with the latest rules.

Work in Progress (WIP) management

Work in Progress (WIP) management is key in construction accounting. WIP is the value of work completed but not yet invoiced. Our construction accountants will track WIP for you to keep your financial records accurate and cashflow optimised.

By using our expertise, we will simplify your operations and help you make informed business decisions.

Construction accounting best practices

Construction accounting requires specific best practices to be financially stable and compliant with industry rules. As construction accountants we know what these are. They include:

Job costing

A system put in place to track and report costs against each job is key to job costing. Costs can include labour, materials and overheads incurred during the project life. This accuracy will help you manage your project budgets and make financial decisions based on facts.

Timely invoicing

Cashflow relies on timely invoicing. Construction companies should invoice customers at the end of each month or at the end of each project phase. This frequency will help you meet your financial commitments and avoid cash shortages that can stop your business.

Percentage of completion

Using the percentage of completion method for revenue recognition gives a more accurate view of the project’s completion and the money owed for work done. This method aligns income with project progress so construction companies can see the financial health of your business at each stage of the construction process.

CIS compliance

CIS compliance is key for contractors and subcontractors in the construction industry. The Construction Industry Scheme dictates how payments should be made to subcontractors to reduce tax evasion. Being CIS compliant will avoid penalties and ensure tax is paid correctly.

Construction experts

Having accountants who are specialists in the industry is invaluable for construction firms. These experts can help with tax planning, revenue management and cash flow optimisation specific to construction projects. By using their expertise, construction companies can tackle the financial complexities of the sector and have strong construction accounts.

As construction accountants, we highlight these best practices to help construction companies become financially healthy and compliant with the rules. Job costing, timely invoicing, percentage of completion and CIS compliance are key to construction accounting.

Who we help

Construction company owners have unique financial challenges that require specialist expertise. Working with dedicated construction accountants ensures that you keep your business compliant and financially strong. Our team knows the ins-and-outs of job costing, timely invoicing and the Construction Industry Scheme (CIS). Effective accounting systems are crucial for construction business owners to track job costs, manage upcoming expenses and revenues, and make informed decisions when bidding, estimating, and growing their companies. We will provide you with tailored financial strategies to optimise cashflow and long term growth.

Whether you’re a small contractor or a large construction company, our services are designed for you. We’ll help you understand the construction accounting complexities so that you can focus on what you do best – building and growing your business. Trust us to be your financial partner for stability and success in the construction industry.

FAQs

Why do I need construction accountants?

Construction accountants will ensure HMRC compliance, provide financial advice and keep your construction business financially stable. They will help with financial reporting, tax planning, cashflow optimisation, job costing and invoicing.

What do construction accountants do?

Construction accountants will do compliance, financial reporting, tax planning and cash flow optimisation. They will also specialise in job costing, timely invoicing and percentage of completion.

What is percentage of completion?

The percentage of completion method is an accounting method that recognises revenue and expenses in proportion to the completion of a project. This method matches income and costs with the construction project progress.

Why is CIS compliance important?

CIS compliance is key to avoid penalties and to ensure contractors deduct tax from payments to subcontractors correctly. It keeps accurate tax records and shows HMRC compliance in the construction industry.

What are the best practices in construction accounting?

Best practices in construction accounting are job costing, timely invoicing, percentage of completion and CIS compliance. These will keep your business financially healthy and compliant.

Do I need a construction accountant for my company?

Yes, you need a dedicated construction accountant who is industry specialist. They will help your construction company navigate the construction accounting complexities and keep your business financially strong and compliant.