Wajiha Danish | November 29 2023
Construction business owners often wonder about the key responsibilities of their controller or full charge bookkeeper. They understand the basics, such as creating income statements, handling bills, managing payroll, and overseeing various accounting tasks. But what more should they expect?
Beyond the routine financial tasks, business owners seek added value from their accounting team. They require regular updates and timely reports that contribute to increased profits, efficient management of weekly job costs, accurate determination of labor and equipment rates, assistance in estimating final project costs versus initial estimates, cash-flow projections, effective management and investment of cash balances, detailed work-in-progress (WIP) and completed progress schedules, oversight of the line of credit, and regular reports for bonding companies.
Many business owners and presidents gained expertise in supervision, estimation, or project management rather than finance. As a result, they might need to learn the accounting support their company needs. Since owners are typically not bookkeepers themselves, they depend on professional accounting and financial management to foster company growth. They require someone who can oversee the numbers, enhance value for the owner and management team, establish effective accounting systems, handle the accounting workload and additional staff, and promptly deliver reports and information. Growing construction companies often find that a generic accounting professional needs to meet their specific needs.
Contractors often initiate their business with an office manager handling bookkeeping duties. However, as the company expands, the office manager/bookkeeper may become overwhelmed, struggling to meet the increasing demands. Larger companies with more projects start requiring additional personnel over time to manage invoices, payroll, and job reports. Recognizing that the office manager/bookkeeper may be unable to handle the growing workload, owners must decide on a suitable solution.
Successful construction contractors aiming for the next level require professional financial management expertise, meticulous tracking of weekly job costs related to labor and equipment, timely financial reporting, and the ability to address insurance, banking, and bonding needs. What they don’t need is an untrained bookkeeper ill-equipped to manage the accounting operations of a professional construction company.
Successful construction companies have professional accounting teams that provide regular reports and advice to help company leaders manage their business effectively. As companies grow, contractors find value in hiring an experienced “full-charge bookkeeper” instead of a more expensive controller or chief financial officer (CFO).
Let’s explore the key distinctions between these roles.
A full-charge bookkeeper is a financial professional responsible for managing all company accounting aspects. This includes transactions, the general ledger, income, receivables, payables, expenses, reports, workload, and deadlines. They are well-educated in accounting, stay updated on financial rules, and understand the unique accounting needs of construction companies. Full-charge bookkeepers consistently implement best accounting practices, identify and solve financial problems, and manage various financial aspects such as statements, balance sheets, payroll, job costs, etc. They work closely with company owners and managers, handle bank accounts and credit lines, assist with tax returns, and supervise accounting staff.
A controller oversees financial operations in larger companies with multiple departments and accounting teams. Unlike full-charge bookkeepers, controllers don’t perform accounting tasks but manage teams that handle these responsibilities. They advise executives on financial matters, contribute to budget creation, and ensure smooth accounting functions.
A CFO is responsible for the overall financial health of a company, overseeing financial strategies and decisions at the highest level.
There are several reasons for hiring a bookkeeper. Let’s take a deeper look at a few of the most important ones.
Hiring bookkeepers allows founders to concentrate on essential aspects like strategy, marketing, and funding, leaving daily operational tasks to professionals.
It utilizes a certified finance professional’s expertise to handle complex tasks, reducing the likelihood of mistakes and financial issues.
It helps maintain a healthy work-life balance for everyone involved by delegating operational tasks to a bookkeeper, preventing team burnout.
By hiring a bookkeeper, you can obtain a fresh perspective on the business operations and needs, since analyzing financial data is their forte, and thus they offer insights through comprehensive reports that others are not able to in a timely manner.
Letting the bookkeeper handle mundane financial tasks ensures accuracy and efficiency in areas that might need to be more exciting for founders.
Hiring bookkeepers helps ensure that bills and payments are managed promptly, preventing oversights amid the challenges of running a startup or business. It also helps you avoid having your credit affected by late or forgotten payments. Entrust a bookkeeper with the responsibility to ensure everything is handled promptly and confidently.
You would want to avoid facing audits or tax issues just because you forgot to file quarterly or annual taxes. Depending on your startup’s business structure, you’ll have different tax requirements, such as estimated tax payments, corporate taxes, 1099s for freelancers, and so on.
Do make sure that when you look for a bookkeeper, you select one that can handle your startup’s taxes, payroll, and other financial matters.
During your busy schedule, you might overlook outstanding payments from your clients. Late payments can negatively impact your startup’s cash flow. A bookkeeper can stay on top of this to ensure optimal cash flow. Showing positive cash flow with the help of a bookkeeper is beneficial when seeking additional funding.
Having multiple founding partners can lead to conflicts over spending money. A bookkeeper can act as a gatekeeper, establishing approval processes to prevent unauthorized withdrawals by partners.
While doing everything yourself may seem cost-effective, a professional bookkeeper can save you more. Their expertise reduces the risks of errors, missed payments, and delayed accounts receivable – it also minimizes lost time and opportunity costs. This allows you to focus on growing your business and generating revenue.
Investing in a full-charge bookkeeper and integrated software is wiser than buying assets like a new truck. The cost may be comparable, but the returns from hiring the right person to manage your accounting department can be at least four times greater.
If you need a strong accounting team, it’s time to invest in professional help. A skilled bookkeeper can help you manage your finances, boost your revenue, and make more profitable withdrawals from your bank account.
Start the hiring process today to set your startup on the path to financial success. For more information and new insights about ongoing accounting and financial topics, contact Monily at info@monily.com
Also Read: Personal Bookkeeping Services Guide for Small Businesses
Wajiha is a Brampton-based CPA, CGA, and Controller with 17+ years of experience in the financial services industry. She holds a Bachelor of Science Degree in Applied Accounting from Oxford Brookes University and is a Chartered Certified Accountant. Wajiha spearheads Monily as its Director and is a leader who excels in helping teams achieve excellence. She talks about business financial health, innovative accounting, and all things finances.
