Thanks to low interest rates on loans and a nationwide focus on infrastructure development, it is an excellent time to run a construction business in Australia.
However, the many moving parts of this type of business can make the financial management side of things difficult. This is why it makes sense to have not just an accountant but a construction industry accountant.
Take a look at 7 reasons why you need an accountant who specialises in the building industry and how this professional will help you to control and grow your business:
1.Your construction industry accountant understands your challenges
You are time poor, juggling a million things at once, waiting on suppliers and trying to manage your team’s quality of work as well as their on-site safety. You may also be waiting on a big payment from a client and nervous they won’t come through, even though you have already purchased the supplies for their job.
The difficulties faced by construction businesses are different from other service providers. Many people see the big budgets but don’t understand the incredible amount of work required to keep things operational. They also don’t understand the hidden expenses, such as home owner’s warranty insurance.
An accountant who has experience with the building industry knows you can’t always drop everything to answer the phone and will work around your needs and speaks your ‘language’ when it comes to the back-end of your company.
2. You don’t have time for detailed accountant management
It took you years to build your knowledge of the processes, materials, people and planning required for a successful construction business.
You’re an expert in construction, not in financial management.
Unless you truly enjoy spending hours reviewing balance sheets, transferring payments to people and figuring out how much money you need to put aside for your GST and tax bill, it makes sense to outsource this task to a professional.
Just as you would never recommend anybody who has very little experience to go ahead and build their own home, it doesn’t make sense to try to tackle the financial side of running your business by yourself. Save yourself the stress and the confusion, and focus on what you do best.
3.Your construction industry accountant can help you to stay compliant
When you are dealing with a range of different workers, from subcontractors to temporary and permanent employees, there are different requirements for how you pay them and what equipment you must provide.
In some circumstances, you will have to pay your workers shift loading and holiday pay. You may also need to pay certain workers superannuation because of the way they are employed.
If you have a construction industry accountant working with you, they will be able to identify which members of your team are defined as employees and make sure they are compensated accordingly. Your accountant will also be able to help you pay the right people at the right times.
4.Your accountant will help with cash flow
One of the biggest challenges of running a construction industry business is staying on top of cash flow. Paying for supplies and labour can start to put your company in the red if you don’t make sure there is more money coming in than going out.
Work with a specialised construction industry accountant and they will help you create a system to manage the ebb and flow of cash. They will also put you in touch with a lawyer to help you create contracts for larger jobs (if you don’t have one already).
5.You can define a strategy to better manage your tax payments…
As mentioned, cash will ebb and flow. At some points, you may find your business has a surplus of cash due to the structure of a project. This cash isn’t all yours to keep and a lot will need to be spent on expenses so you don’t want to pay tax on it simply because you have it in your account at the end of the financial year.
A specialist construction accountant will help you figure out how to structure your accounting so you don’t pay tax unnecessarily.
6… and how to make those payments
Tax is a necessary evil and you can’t side-step it altogether but a specialist construction accountant will help make sure you don’t pay too much.
When you work with an organised accountant in Chatswood, you will be able to keep digital records of income and expenses throughout the year. Your accountant will help you to prepare for tax time by letting you know how much revenue to put aside as tax payments. As a result, you won’t suffer from bill shock at tax time.
Your accountant will show you all the legal methods to distribute income so you can minimise tax. This may include making investments or establishing a family trust. They should also remind you to pay yourself superannuation as this money will be yours to keep but it won’t be taxed (up to $25,000 per year).
7.Your construction accountant will help protect your business
When you run a business it is easy to get caught up in the day to day and run out of time to think about what’s around the corner.
A good accountant will have your best interests in mind and will remind you, for example, to make sure you have insurance as well as the right business structure to protect your personal assets in the event of something going wrong.
Your accountant will spend time thinking about your future as well. You can get together regularly to review progress, take a look at forecasts and talk about what’s next for your business.
Quality accountants understand how to grow a small business into a larger one because they have seen it done many times over.
Finally… your specialist construction industry accountant will save you in so many ways.
Firstly, having this person on your side will free up your time, giving you more evenings and weekends to spend with family or giving you the flexibility to focus on growing your business.
Having an accountant saves you the stress of trying to stay on top of Australia’s complicated tax system. You’re also going to save by way of not paying too much in tax, potentially tens of thousands of dollars per year.
Looking at all of the above, you can see why it makes sense to have a construction industry accountant.
Want to calm the chaos and take control? Imagine Accounting specialises in helping construction business owners. Contact our accountant firm in Chatswood today.