To say say the Greater Seattle Area is under construction is an understatement. Whether you’re a contractor, subcontractor or building your own firm, a CPA specializing in construction is exactly what you need to keep costs down and financial analysis accurate so you don’t need to constantly worry about slim profit margins or unhappy clients.
A construction engineering CPA doesn’t simply file your taxes, they provide a wealth of experience in the industry (and especially in the PNW market) to help provide fiscal guidance for your business. Much more than taxes, an accountant keeps track of expenses and overhead to keep costs down and help you make informed financial decisions. Think you’re spending a lot of time networking with clients that don’t turn into leads? Your CPA can perform a cost-analysis, deduce the cost of continuing with your current operations as well as determine if it’s time to make your first hire or find a new means of outreach.
Having an accountant who specializes in construction engineering ensures you’re allocating funds and can continue to grow.
Some of our construction-specific services include:
- Detailed analysis of insurance coverage
- Strategic business planning
- Cost segregation
- Mergers and acquisitions
- Business valuation
- Claims dispute resolution
- Tax preparation and planning
- Cash flow and cost analysis
- Contractor pre-qualification
When you work with a construction engineering CPA, know that the partnership goes well beyond taxes, it’s about leveraging resources, financial planning to ensure open communication and helping you to build a positive relationship with your clients, contractors, and stakeholders.
We work with numerous construction companies across the PNW and are eager to start working with you today. Contact us to start building a steady financial foundation for your business to flourish.
There are a different set of strategies to bookkeeping and tax saving when you work in construction engineering or architecture in the Seattle area.
Bookkeeping for Construction, Architecture, Engineering
We’ll explore whether cash method accounting or accrual method accounting will work best for your business.
As with any profession, you can set in place a plan to make the most of your tax dollar. But, as you already have a clear idea of what you’ll be doing within your profession, you have an advantage. There are common deductions available to those that work in architecture and construction engineering. We’ll just mention a few here.
Clean Energy Manufacturing Credits
This is a common tax break that may be available to you. The American Recovery and Reinvestment Act offered a tax credit for investments in manufacturing facilities for clean energy technologies. If you don’t already know whether you meet these requirements, it would be best to find out.
Auto Deductions for Construction Engineering
- A common deduction for those in the industries of construction.
- Standard Mileage Deduction:
- $.51 per mile in 2011
- Qualifying travel expenses may include travel to and from site, and other business travel, such as for supplies, to the bank, etc.
- Actual Expense Method Deduction:
- Deducts the business portion of actual expenses to operate your vehicle.
- Expenses may include gas, repairs, oil changes, etc.
Home Office Deductions
- Requires that you meet one of the following:
- The aforementioned is your principle place of business
- Where you meet clients
- Office is a separate structure, not attached to your house
- Where you store your inventory
Domestic Construction Production / Activities Deduction
- Many architects, engineers, and contractors are entitled to a deduction for participation in domestic production.
- You can still amend tax returns if you missed this deduction in 2007, 2008, and 2009.
There is a lot more to consider if you are working in this industry. Consider our years of experience working with professions in the manufacturing industries.Give us a call at1-425-483-6600 or send us an email at firstname.lastname@example.org to schedule an appointment today.
Frequently Asked Questions
How is construction accounting different?
Excellent question! With construction you want a specialized CPA because construction features myriad differences in how it generates income. For instance, change orders can make a tremendous difference on your company’s profits, income, and forecasts. In addition, given customer deposits, turnover, and mitigating supply factors, it can be wildly different.
What type of accounting is used in construction?
Construction is tricky especially since jobs can go on for longer than the fiscal term allotted. While the two main forms of accounting are cash-flow and accrual, both have limitations with regards to construction. Cash basis makes it difficult to forecast as there tends to be large deposits all at once whereas accrual is more methodological, but difficult to capture late payments or interference from other means. Two ways construction companies differ is their PCM (or Percentage of completion method) which measures the total amount in and the total amount out for the fiscal term. Meanwhile, the CCM (or completed-contract method), does not account for projects until they’re completed. The latter tends to be useful for short-term contracts, while the former is more of a long-term deal.
What costs can be expensed during construction?
Generally, you can expense things like permit and license fees, worker salaries and software (or development costs). You can also expense security measures (alarms and locks), in addition to consulting and procurement costs.