You have likely seen firsthand that construction management comprises many essential elements. However, without strong financials, you see waste pile up. Also, as a decision-maker, you could even lose financial control over your projects. Success depends on having a firm grasp of the principles of accounting for construction companies and access to advanced financial software built for construction.
Making The Most Of HammerZen Accounting For Construction Companies
HammerZen is an accounting platform built with accounting for construction companies in mind. As an Intuit approved app, it can integrate Home Depot and Pro Xtra with QuickBooks Online or QuickBooks Desktop.
This platform makes it possible for CPAs for construction companies to manage and organize the receipts of multiple employees or subcontractors when they purchase products from one of Home Depot’s 2,200 stores. HammerZen accounting for construction companies automatically imports multiple statements from purchases into QuickBooks. This minimizes the time that CPAs for construction companies spend manually inputting information, and it reduces errors to almost none.
Preparing For Tax Challenges In The Construction Industry
Tax planning for construction companies is challenging because of regulations created by the IRS to limit when and how deductions can be recorded. The IRS scrutinizes the interactions between construction firms and their subcontractors. Construction firms have to be careful about how they record their financials or they could face the wrath of the IRS.
Handling employment tax can be a challenge because many construction firms rely on subcontractors. However, what a construction company sees as a subcontractor, the IRS may interpret as an employee. When determining whether a person is an employee or a subcontractor, the IRS looks at three factors. These include:
· Behavioral control
· Financial control
· The relationship of the parties
For example, if a person is getting a 1099 for the regular work they do year after year, they may garner the attention of tax authorities. The IRS may require a construction firm to pay back payroll taxes. CFO advisory for construction companies can help you distinguish between employees and subcontractors with the goal of avoiding unwanted IRS penalties.
Cost segregation is a useful tool when doing tax planning for construction companies. This could allow your company to separate building components into different asset classes. This will allow your company to speed up depreciation for shorter life assets. This can lead to tax savings and improve your cash flow.
The Important Role of Bookkeeping For Construction Companies
Accurate bookkeeping is essential for the financial health of your construction company. You may need to record materials purchased, payments to subcontractors, income received from completed jobs, and other data.
HammerZen, the platform we mentioned at the outset, captures your essential data. It organizes this data based on your workflow, the location of the job, the materials used, and the class of the job. This platform allows you to keep track of payments regardless of the payment method you use.
Fortunately, we Fusion CPA offer CFO advisory for construction companies. We are based in Atlanta, Georgia, and have worked with several small to medium-size construction companies in our area and in other parts of the country. We can help you better understand how to use programs like HammerZen with QuickBooks Online to get control of your company’s financial situation.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.