Prepare for Your Construction Business Year-End

Q:
Is there any way I can better prepare for our business year-end? As the accounting manager at a multi-state contracting company, I rarely get to enjoy the holiday season because it’s tied to the frantic work of gathering tax and financial statement information, preparing payroll returns, W2s, 1099s and so on. And that’s on top of my busy daily workload.  I start the process earlier each year, but it just seems to take longer and longer.  Help… my nickname around here is Scrooge!

Terry

 
A:
For almost every company, the end of the business calendar year brings with it additional bookkeeping and accounting tasks. That’s just a fact of life. But here’s the thing: Your year-end checklist doesn’t have to be so endless.

The key to a less stressful year-end includes planning and preparation. I’m not talking about a pre-December rush of ordering W2 forms and pulling files.  I’m talking about ongoing preparation that includes the following fundamentals:

• Construction-specific accounting software. A true job costing system with complete date-sensitivity and audit-trail capabilities is the first step you can take to alleviate year-end work overload. Gone are the days of manually reconciling reports, doing hard closes and relying on spreadsheets for critical accounting and tax data. All of your reporting, including year-end financials and payroll tax reports, should be available at the click of a button.
• A CPA with a construction focus. A CPA who understands the unique accounting methodologies and complex tax rules/regulations of construction will offer the best help when it comes time to close your books and prepare financial statements or tax returns. In fact, this person is probably the best consultant your business could have all year. With access to your financial data, he/she can help minimize taxes, maximize income and properly characterize what is happening on income statements for bonding or loan purposes.

The good news is that it’s never too late to improve year-end productivity and make a positive change going forward. If you haven’t met with a CPA already, you may still be able to receive year-end assistance. And if you’ve ever considered upgrading your accounting software, the beginning of a new fiscal business year is the optimal time to switch. The break is clear, the cutoff is clean, and there is no moving of data.

Don’t forget, next year will be here before you know it. Best wishes for a happy and less hectic holiday season!

Fred

Fred Ode is the CEO/chairman and founder of Foundation Software, developer of FOUNDATION for Windows. Ode can be reached by phone at 800.246.0800.

Construction Business Owner, December 2009