Whether you’re a startup or an established enterprise, you may find it challenging to manage your finances and keep up with your accounting. And having a full-time, in-house accountant means there’s one more person to manage and one more person taken away from other projects.
Accounting may not be the most enjoyable part of your business, but it’s a necessity for success. If you fail to prioritize your organization’s finances, you might damage relationships with third parties, find it difficult to make strategic decisions, and end up with cash shortages.
As a contractor, you’re quite familiar with the power of outsourcing. Delegating different aspects of your business or a particular project to subcontractors is nothing new to you. What if you used that same logic to outsource your accounting? Here are our top nine reasons why that may be a good call:
1. You Gain Access To Construction Accounting Expertise
Construction accounting is complex and varies greatly from conventional accounting. You have to worry about revenue recognition rules, tracking job costs, dealing with capital expenditures, labor costs, retention, insurance certificates, and subcontractors. There’s a lot on your plate (and that’s not even close to everything).
Outsourcing your accounting to a construction-specific firm like New Lyfe Accounting (NLA) can provide some much-needed peace of mind, free up your valuable time, and get your financial goals back on track. Plus, our years of industry experience mean we know exactly what to look for when managing a construction company’s accounting.
2. You Save Money And Maximize Profits
One of the greatest benefits of outsourcing your finance and accounting functions is cost savings. Hiring an expert to dig through your books can help you identify ways to cut costs and overhead while maximizing profits. Plus, outsourcing can reduce labor costs because you’re not having to handle the salary, payroll taxes, benefits, and training of a full-time employee.
3. You Avoid Staffing Issues
As your business grows and becomes more hectic, you’re likely to experience significant staffing issues. Maybe your bookkeeper takes unexpected time off due to an illness, causing you to miss a deadline or forgo a fruitful new business opportunity. Not to mention the recruitment costs to replace someone who quits.
Outsourcing your accounting means you no longer have to worry about staffing issues, sick days, vacations, or recruiting new candidates. You have a trusted team on your side through good times and bad.
4. You Save Time
Devoting enough time to accounting feels impossible when you’re busy finding new clients, creating bids, and completing projects. But failing to allocate enough time to your financials can lead to critical errors that go unnoticed. If you want your business to grow, you need to devote more than an hour here and there to your accounting. A strategic partner like NLA can help.
When you outsource administrative tasks like bookkeeping, accounting, and financial management, you’re able to focus on what you do best: construction. You’re not taking staff away from other functions to prepare financial statements, find mistakes in the data, or manage the accounting piece of your business. This gives you and your staff more time to serve your clients’ needs.
5. You Gain Access To Accounting Software Solutions
If you’re still doing things the old-fashioned way with checklists and file cabinets, we’ve got some tough news for you. In 2023, pen and paper aren’t going to cut it. There are many construction accounting software solutions and automation tools available to help streamline your financial management. However, it can be tricky to determine which one is right for you.
The right accounting partner can set you up with an affordable and user-friendly automation tool, making your overall accounting functions more efficient, accurate, and cost-effective. Plus, this provides you with actionable insights in real-time. Not to mention, you no longer have to worry about important documents and statements being lost in the event of a disaster.
6. You Can Better Manage Cash Flow
Poor cash flow management can be a huge detriment to your business. Without the cash on hand to pay for supplies and employees, you’ll find it tough to get new contracts and stay in operation.
Your employees expect to be paid on a weekly basis. If you’re not getting paid for a job for another 60 days, and you don’t have sufficient cash reserves available, this can become impossible.
To avoid a situation like this, you need precise cash flow management. A strategic financial partner like NLA ensures you remain current on customer billings and receive timely payments. Plus, we keep you up-to-date about any potential issues or upfront costs so you can avoid a cash crunch.
7. You Can Strengthen Your Business Reputation
Outsourcing to a strategic financial partner can help you to strengthen your relationships with bankers, creditors, surety, and other professionals by providing timely and accurate financial statements.
These partnerships can enhance your reputation among current and potential clients, who are likely going to research your background before signing new contracts. Plus, as a business owner or GC yourself, you can more easily request financial statements from the contractors you’re working with.
8. You Can Leverage Business Intelligence
The construction business is highly competitive. You’re not competing against one other company, you’re competing against an entire list of new and established businesses.
When you outsource accounting, you’ll gain access to valuable business intelligence data and financial guidance. Learn more about your customer base and what’s driving their decisions. Plus, you’ll receive counsel on various business decisions of your own.
9. You Can Scale Your Business
The construction business can be incredibly cyclical. Another benefit of outsourcing your accounting is that you can easily scale your operations up or down. If the economy experiences a building boom, you can outsource more services. In a recession, instead of laying off workers, you can scale back or receive guidance on ways to be more efficient with your funds.
Ready To Outsource The Financial Side Of Your Construction Business?
There’s nothing simple about starting and running a construction company. It’s a challenging industry with some unique financial requirements and regulations. Outsourcing your accounting to a strategic partner is one of the best ways to stay organized, save time and money, and focus on your goals for growth.
At NLA, we offer personalized outsourced accounting services to clients in the commercial construction industry. Through our extensive industry experience, we’ve made construction accounting our sole focus.
Our construction CFO services are designed to help strengthen and grow your business and are supplemented with project accounting, bookkeeping, and construction software solutions.
To learn more about how NLA can give you peace of mind and drive your financial success, contact us today.