Selecting the Right Construction Advisor
A construction contractor’s guide to hiring an accountant
If you’re a construction contractor, the odds are you’ll require the services of an outside accountant from time to time. At first glance, it can be difficult to tell the difference between all of the Certified Public Accountants (CPAs) out there. They list the same services, have the same credentials and they all claim to work with companies like yours. But do they all deliver the same value? Is one CPA as good as the next? How can you tell if you are truly getting the best value from your service provider?
Delivering value to a construction contractor requires more than just technical expertise, understanding percentage-of-completion accounting and tax codes. Delivering value requires taking the time to understand the full picture of a business, their financial situation, and the challenges they face daily. Just as relationships between general and subcontractors are vital, a strong relationship with your CPA is the foundation for value-added delivery.
What should construction contractors expect from their accountant?
First and foremost, they should expect their accountant to be looking out for their best interest. That means proactively identifying opportunities and avoiding potential issues. If an accountant is only looking as far as the services requested of them, they aren’t doing their client many favors. A trusted advisor is not an order taker. They listen to what their clients are saying, what the industry is saying, and are creative and proactive in finding solutions.
An accountant should understand their clients’ business inside and out, allowing them to be forward thinking in identifying exposure to risks or implications of key business decisions. These decisions can cause ripple effects outside the business as well, affecting personal or family finances. So it’s important to stay well informed of the situation.
They should also expect their accountant to have construction industry expertise. There are many nuances specific to the industry and missing out on significant tax incentives and keen financial reporting could disadvantage them in the marketplace. An accountant with true construction specific expertise will know what lenders and bonding companies are looking for, and will advise accordingly.
What is a trusted advisor?
A trusted advisor will talk about more than just numbers and compliance. Conversations should be far reaching and include company operations, work-in-process, insurance and bonding, tax planning for the business and the owner, as well as succession planning.
Further, a good advisor must be willing to disagree with his or her client. Many business owners lack peers within their organization, and sometimes being a trusted advisor means challenging a business owner’s perspective. If a good accountant anticipates a mistake, they understand the importance of speaking up.
What is the key to getting value from a relationship with an accountant?
Open communication is the most important factor for ensuring a successful relationship. The more open the communication, the better the service. It’s important for clients to see their accountant as a member of their “team” and not merely a service provider.
When a client feels comfortable calling their accountant at any time, that’s a tell-tale sign of a good relationship. Clients should feel confident that their accountant is available to discuss whatever issues they’re facing at any given moment. Clients should know that their accountant won’t charge them every time a call is made.
It is also important that the accountant build a relationship or at least have an open line of communication with the contractor’s lender or bonding agent. A good accountant can “speak their language” and collaborate to find the most valuable solution that meets everyone’s objectives.
How can a construction contractor assess their relationship with an advisor?
Finding the right advisor requires fit and commitment. While construction contractors need a firm that has the right expertise and resources, it’s just as important to find an advisor who places high value on the relationship. Having an accountant with a high level of expertise doesn’t mean much if they don’t understand the client. While industry knowledge is important, it takes more than technical skills to create a relationship. It takes commitment and the willingness to invest the time to build understanding and trust.