How to Enhance Your Construction Bookkeeping Knowledge

Many construction bookkeepers have gaps in their knowledge about how to produce quality financial statements, which eventually comes to a head. There is only so much your accounting or tax advisor can do at the end of the financial year to correct or modify poorly recorded transactions.

In some companies, bookkeepers may keep records in a certain, albeit less-than-perfect, way simply because it is how things have always been done. That may not help your business meet the challenges in today's competitive world where lending, bonding, and mergers and acquisitions depend on accurate representations of business transactions. Well-trained construction bookkeepers can help you plan and save cash, gain access to more leverage and credit, and finance large-scale initiatives.

If you want to encourage your bookkeeper to take on additional education, that doesn't necessarily mean you have to pay the tuition. An alternative to consider is incentivizing your bookkeepers to increase their education by promising them a raise, provided they meet certain standards after the courses are completed. The prospect of a raise can motivate workers to get a degree or new accounting certification and hold them accountable for doing so.

However, if you do choose to cover your employees' expenses for work-related education it’s important to know that the amount paid or reimbursed is a deductible business expense.

Investing in your bookkeeper is an act that will likely pay off in dividends. There will be fewer mistakes and less of a mess for your CPA or tax accountant to clear up at the end of the year. In addition, the more information the bookkeeper has at hand the more likely the person is to find additional ways to help your firm save money through improved financial management.

Education is crucial, of course, when a person wants to move up to an advanced, executive position. Much of construction accounting, finance and tax can be learned on the job with the right mentoring, but some of it requires a bachelor's degree in accounting along with a specialized certificate in construction accounting, tax or finance.

However, if a bookkeeper has aspirations on taking the helm of a large construction company, a CPA license generally is a must.

Many construction contractors have a certain idea of what a bookkeeper is worth, and they will not pay more than that under any circumstances. They'd rather hire a new bookkeeper than let a good person grow in the position to become a controller or a CFO.

But other executives realize the value of surrounding themselves with tenured people who know their business as well as they do. As your bookkeepers' skills grow, they are likely to start applying better techniques for managing cash, collecting receivables and cutting costs, all of which can mean your business will be more profitable and cash rich.

Consult with your accountant and tax advisor about the specialized training you and your staff need to remain competitive in the construction accounting, finance and tax market. Also consult with your accountant for help drawing up a controller or CFO employment agreement that can protect you as your bookkeeper grows in the position. This will give you the security of knowing that you will always ultimately have control while your bookkeeper helps you plan for cash and spending in ways you couldn't have imagined.

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