Your earthworks/excavation company can only flourish if your company keeps accurate records. These records equip you to make wise and informed decisions. Some of the information you want your earthworks/excavation company CPA to keep track of include how much clients owe you, how much money you owe vendors, and other expenses related to your work.

Earthworks/excavation company accounting requires discipline because business transactions must be recorded on a daily basis. Any mistakes could cost your business money, interfere with your ability to pay bills or purchase equipment, and lead to serious fines and criminal penalties from the IRS.

What Earthworks/Excavation Company Tax Planning Could Mean for You Tax planning means deciding how you will manage your accounts. Earthworks/excavation company accounting can be handled using one of two arrangements:

Cash Accounting

If you have small construction projects, cash accounting may be best for you. With cash accounting, expenses and income get accounted for when other money changes hands. Expenses are deducted before the income is taxed.

Accrual Accounting

If your excavation or earthworks company works on larger projects, this method of accounting allows you to account for income and expenses when they are incurred as opposed to when they are paid. Accounts will be recorded based on the portion of a contract that has been fulfilled. This form of earthworks/excavation company accounting may be beneficial for you if your projects span over one tax year.

Tips to Improve Your Earthworks/Excavation Company Bookkeeping

Bookkeeping can be of the most difficult aspects of having a construction business. Accurate financial records ensure that your business runs transparently and efficiently. Here are a few tips to improve your earthworks/excavation company bookkeeping.

Use Different Checking Accounts

The easiest way for your earthworks/excavation company CPA to monitor expenses and profits is to keep three separate checking accounts. One is where you deposit the money your company earns. From there, funds are transferred to a second account that is used for payroll. The third account is for expenses.

Record Job Costs

Tracking costs from specific jobs helps you identify which projects are profitable and which ones are not. This information can be used to refine estimates based on historical job cost information. It can help you identify which earthworks/excavation projects your business should specialize in.

Backup All Relevant Records

From invoices to receipts, all of these must be organized in a way that makes them easy to find. Physical copies should be stored in a fireproof cabinet. Create digital copies as part of your earthworks/excavation company tax planning if physical copies are damaged or lost.

Make Good Use of Accounting Software

There’s a lot of accounting software on the market. Some platforms are finely tuned to meet the unique needs of construction businesses. QuickBooks Online has been successfully used by many earthworks/excavating companies.

Here at Fusion CPA, we offer earthworks/excavation company CFO advisory services. We can enhance your small to medium-sized business with our best-in class bookkeeping, tax planning, and financial planning services. Part of our services as your earthworks/excavation company financial advisers includes helping you find the right software for your accounting needs. You can learn more about our services by clicking the button below to schedule a complimentary discovery call today!


This blog article is not intended to be the rendering of legal, accounting, tax advice or other professional services. Articles are based on current or proposed tax rules at the time they are written and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.