The Ultimate Guide to Outsourcing Your Accounting For Construction Firms
Is bookkeeping bogging you down? Do you feel overwhelmed by accounting software? Are you struggling to navigate your accounts? Then you’re not alone.
Accounting (especially for construction companies) is an incredibly complex job. Not only are you required to manage a large amount of data, you then have to analyze that data and somehow turn it into an effective growth strategy. (Needless to say, there’s a reason why being an accountant for construction companies is a specialized role in itself.)
So, what’s the solution?
Simple – start to outsource your accounting services! If you let someone else manage your accounts, you can reinvest all that time and energy back into your business!
But how exactly do you outsource an accountant for construction? And is it really worth the investment?
All the answers you’re looking for are here in this guide! We will discuss everything you need to know, from the services you can outsource to the benefits you can expect to receive.
So, if you’re interested in expanding your business, increasing your profits, and delegating your accounting tasks, then get ready to deep dive into our guide to outsourcing accountant services for your construction firm.
What is outsourced accounting for a construction business?
As the owner of a construction company, you have a lot of responsibilities. Thankfully, investing in outsourced accounting services can significantly lighten your load. But what actually is outsourced accounting?
Outsourcing your accounting simply means hiring an external accountant to manage your business accounts, processes, and activities. So whilst they’re taking care of the numbers, you can focus on what you do best!
Why should construction companies outsource accounting services?
Okay, so you can pay an external party to take care of your company’s finances. But why should you bother?
There are a whole host of reasons why outsourcing an accountant for construction can be hugely beneficial to your business. (We’ll get into that later.) But, for now, our primary incentive for investing in outsourced accounting services is because accounting (especially in the construction industry) is incredibly complex.
Let us explain.
Unlike other industries, construction relies on a lot of ever-changing variables. For example, instead of having permanent staff members, you’re almost always working with a series of different contractors and sub-contractors – all of which have varying rates, hours and responsibilities. Similarly, unlike selling the same product over and over again, no two construction projects are the same. So managing things like payroll, expenses, and overheads can be incredibly difficult.
Like we said, accounting in the construction industry is very complex. So, instead of trying to spin a million different plates, you should seriously consider letting an accountant take care of your company’s finances. After all, they are the experts! (Not to mention, they can save you a lot of time and money!)
What are the benefits of accounting outsourcing services?
Outsourcing accounting services for your construction company is an incredibly smart move! Not only will it make your life so much easier, but it will also help improve your bottom line. Allow us to explain why.
You probably started learning about bookkeeping out of necessity – a means to an end so you can fulfill your ambitions as a business owner. But an accountant (especially one in the construction industry) has trained for years to learn how to optimize accounts, manage books and streamline businesses. So, why not let the experts take care of your accounts?
Still not convinced? Here’s a list of benefits you can expect to enjoy once you begin investing in outsourced accounting services:
More time – instead of spending hours pouring over your books, you can reclaim that time by delegating your accounting tasks to an external party.
Greater accuracy – human error is inevitable. But your accountant is far less likely to make mistakes (saving you time and money).
Improved efficiency – your accountant doesn’t just manage your accounts – they analyze and improve your entire business model! Now, doesn’t that sound nice?
Increased revenue – we’re all looking for ways to improve our profit margins. But did you realize that outsourcing your accounting services can help you do exactly that?
Streamlined processes – if you’re still entering your data manually, you’re wasting a lot of time! So, allow your accountant to streamline your processes by adopting cloud-based software.
Greater security – with outsourced accounting services, you can improve your business’s security in more ways than one. Not only will you have an in-depth understanding of your finances, but your data will also be stored safely within the cloud.
Is it cheaper to outsource accounting services than to hire in-house?
Yes, yes, and YES! Arguably one of the biggest benefits of opting to outsource accounting services instead of hiring in-house is the amount of money you can save whilst still receiving the same quality of service.
But how is that possible?
The truth is that there are a lot of additional costs that come with hiring an in-house accountant. For example, you have to finance recruitment fees, onboarding costs, training expenses, and the cost of equipment – and that’s all on top of their salary! Whereas, when you work with an external accountant, you simply pay for their services.
So, if you’re looking to improve and expand your business, we strongly recommend outsourcing accounting services instead of hiring in-house. It’s more cost-effective and yields the same results!
What accounting services can be outsourced?
Now that we understand the benefits of accounting outsourcing services, it’s time to discuss exactly what services an accountant for construction can offer.
Luckily, there are countless accounting services available to outsource. From audit preparation to job cost tracking – we can help you as much (or as little) as you need. Here are just a few examples of the outsourced accounting services on offer within the construction industry:
Audit prep – your accountant will ensure all your paperwork is in order and ready for financial audits.
COI – certificate of insurance tracking ensures you and your company are protected from construction-related liabilities (i.e. injuries and project delays)
Growth strategies – your accountant will work to identify and address any inefficiencies within your business whilst also developing strategies to increase revenue.
Internal and external financial reports – having access to accurate forecasts, budgets, and estimated profits will help improve the efficiency and profitability of each project.
Job cost tracking and analysis – your accountant can track each job’s expenses and compare those metrics to your budget and overall revenue.
Payroll management – managing payroll is a huge responsibility. But as a business owner, you have other things to focus on – so save yourself the hassle and let your accountant handle it.
Revenue analysis – an accountant can compare your revenue to previous years and use this information to strategize for the future.
Software implementation and optimization – accounting software has many benefits. For example, efficient software can streamline your financial processes, improve accuracy and provide real-time updates. So we strongly suggest letting your accountant set this up for you.
Sourcing financing – not only can your accountant support you with loan applications, but they can also find the best loans for your business and help you attain them.
What is the difference between outsourcing accounting and bookkeeping?
By now, you’ve heard us use the terms accounting and bookkeeping. But what actually are they? And most importantly, what’s the difference between the two?
Think of bookkeeping as fulfilling your basic accountancy needs. For example, your bookkeeper will manage your payroll, record financial transactions and track your invoices. However, an accountant will then use this information to develop growth strategies, financial plans, and year-end reports for your business.
So, in a nutshell, a bookkeeper will take care of your business’ finances so you can spend more time focusing on what you do best. Whilst an accountant for construction will do all of the above and help you expand your business by developing and implementing growth strategies (if that’s what you want).
Should I hire an accountant or a bookkeeper?
We often get this question, and the honest answer is – it truly depends. But here is some general advice.
- If your business is in its infancy and you’re working with a limited budget, then hiring a bookkeeper is probably your best bet. They will manage your cash flow and payroll whilst ensuring your books are accurate and HMRC compliant.
- However, if your business is growing and you’re struggling to stay on top of your projects and contractors, then an accountant would be a more suitable option. Again, they will take care of your books, but they will also support your company’s growth and ensure you continue to turn a profit.
- If you are also considering transitioning from sole trader to trading as a limited company, you will typically need an accountant to help you with your statutory year-end accounts.
How do you find the best accountant for your construction company?
Before you begin to outsource your accounting services, you want to find an accountant you can trust. But how do you do that?
Firstly, you want to assess their qualifications and experience. So here are some things to look out for:
Memberships for accounting bodies
When vetting a prospective accountant, you want to ensure their members of a reputable accounting body like the Association of Chartered Certified Accountants (ACCA), the Institute of Chartered Accountants in England and Wales (ICAEW), or the Association of Accounting Technicians (AAT). These bodies ensure their members are highly skilled and experienced professionals. (They also continually assess their member’s behaviour and performance, so you can rest assured they are the real deal!)
Chartered accountants are specialized accountants who have undergone a lot of in-depth training. But how do you identify one? Usually, you can identify a chartered accountant by researching whether they’re represented by one of the above bodies (ACCA or ICAEW) or the Association of Chartered Accountants (ACA), or FCA (Fellow Chartered Accountant).
Once you have verified the legitimacy of your accountant’s skills and experience, you want to ensure they’re up-to-date on the latest legislation and technology.
For example, Making Tax Digital (MTD) is a government-led scheme working to move tax administration online. This mandatory change will completely change the way you file your taxes. So, you’ll want to make sure your accountant is well-versed in the MTD initiative.
Similarly, ask about what software they’re using. Ideally, you want to work with an accountant who uses cloud-based software like Xero and Quickbooks. Why? Because they’re incredibly efficient and user-friendly! So you can easily access and understand your finances (whilst remaining MTD compliant).
Lastly, you want to ensure your accountant’s personality is the right fit for your business. Although they may not be employed in-house, you will still be working closely together, and they will, almost certainly, need to communicate with various contractors and project managers. Therefore, you want to focus on finding an accountant you can get along with. Trust us, it will make both your lives a lot easier if you can effectively communicate with one another.
How much does it cost to outsource accounting services?
Unfortunately, there is no definitive answer to this question. Each accountant will charge a different rate based on their expertise, experience, and the services you require. For example, an accountant with ten years of experience will likely charge you a lot more than an accountant with only two years of experience. But a bookkeeper will charge you a lot less than an accountant. So it really depends on your goals, intentions, and (of course) budget.
However, market research does suggest that small businesses can expect to pay between £59 and £400 a month, depending on the size of their business, the services they require, and the industry they work within.
So, whilst we cannot definitively say how much it will cost you to outsource accounting services each month, we can guarantee you will have an impressive return on your investment!
Let the experts oversee your accounts!
Although it may seem like a daunting (perhaps even unnecessary) investment, opting to outsource accounting services for your construction company can improve your business in more ways than one! You can increase efficiency, accuracy, security, and revenue – all whilst saving yourself tons of valuable time!
So save yourself the hassle of navigating complex construction accounting by letting someone else take the reins. Not only will they do an excellent job, but they will also allow you to focus your energy on what you do best!
Accurox are Specialist Construction Accountants who can save you time and resources with their industry expertise and experience. If you would like to discuss your business requirements, get in touch; we’d love to talk about how we can partner with you.