Are you about hiring an accountant for your construction firm? If YES, here are the duties and job description of an accountant in a construction company.
Accounting is a very vital part of the management and administrative process in any business. In firms with several moving parts such as in construction, it is up to the accounting team to accurately track the movement of assets into and out of the company in order to ensure both transparency and profitability.
If is important to note that the role of an accountant in a construction company will not be exactly the same as in a regular company.
For instance, a business like a restaurant or Grocery Store uses typical accounting principles. This model works perfectly for that type of business that sells products from a fixed location. The business understands the cost of each item it sells and overhead is kept relatively constant.
On the other hand, construction businesses are mobile and they have complete customized works in novel locations on a regular basis.
As such, construction companies must monitor totally different categories of costs: travel time, mobilization costs such as packing tools and equipment, delivery of materials to the site, and even clearing the site of excess materials once a job is completed.
In a sense, the business has no fixed location and it is moved to wherever the customer needs it, along with the materials necessary for the job.
In addition, construction companies also use the Percentage of Completion Method, where revenue is accounted for based on the estimated profit of a contract and what percentage of that project has been completed. This makes it even more critical that construction firms implement cost-accounting methods that enable accurate tracking of their expenses to accurately project profit and loss.
Construction accounting is significantly more complex than what is obtainable in other types of businesses. Being able to track, report and categorize costs and other expenses in your construction business is important for understanding how to bid on projects, which projects are profitable for your business, how to bill clients accurately and fairly, and how to make the most of your firm’s resources.
Here are some of the duties and responsibilities of an accountant in a construction company.
- To provide management and financial accounting support for the organization which includes taking responsibility for the entries on the general ledger including reconciliations and completing detailed reviews of the profit and loss account on the company accounting system.
- Preparation and reconciliation of Profit and Loss and Balance sheet reports on a monthly, quarterly and annual basis.
- Assisting with budgeting and forecasting.
- Managing relationship with external stakeholders, ensuring that appropriate reports and documentations are submitted to and are updated with the IRS.
- Managing the company’s financial affairs and general book keeping.
- Daily monitoring and management of several company bank accounts.
- Assistance with preparation of annual tax returns and other regulatory submissions.
- Effective management of a projects budget.
- Ensuring that the accounting process complies with the law.
- Providing accurate, understandable, timely information that supports your management decisions, including analysis and recommendations.
- Overseeing bookkeepers in the firm (if any) and setting up and monitoring the accounting system and interpreting the data from the bookkeeper’s activities.
- Apply required construction accounting standards and procedures to the recording and reporting of construction activity
- Set up jobs, budget control, subcontracts, and change orders in accounting software.
- Work closely with Construction Project Managers from beginning to end of project to ensure receivables and payables are handled properly and timely accounted for.
- Understand terms in owner contracts and subcontractor contracts to ensure accuracy and timeliness of progress billings and payments.
- Understand and maintain standard cost codes in accounting system
- Communicate with various funding agencies (i.e. Title Company, Escrow Company) regarding pay application process and requirements needed for payment.
- Manage lien waiver disbursement and collection.
- Review and approve payables weekly for payment.
- Communicate with Construction division and external vendors and subcontractors via phone and email.
- Prepare journal entries.
- Assist with month-end and year-end closings.
- Assists with prep of monthly financial reports and account analyses.
- Monitor and resolve bank issues including fee anomalies and check differences.
- Review account/bank reconciliations.
- Assist with preparation and coordination of audit and tax return processes.
- Assist with implementing and maintaining internal financial controls and procedures