Here at Passman Leonard, as accountants for construction and building companies, we are aware of all of the variables involved in this industry. Building and construction businesses have to improvise due to economics which will impact the planning and implementation of their projects, meaning careful financial planning, managing cash flow and remaining efficient is vital. The property and construction sector is unique because it has precise financial and accounting requirements. Generally, there are two elements to construction accounting:
- Business-level construction accounting must provide the financial data to make sure there is enough cash coming in, the labour is productive, there is enough work coming in and the profit margin is healthy.
- Project-level construction accounting aims to have the financial details to know if the construction project is on schedule, if there is the right project costing to make sure the project is on budget, the work is getting done correctly the first time and free from defects and is everything being carried out safely.
As accountants for construction companies, other considerations we take into account include submitting tax returns via Making Tax Digital, requirements for processing payments in the Construction Industry Scheme (CIS), plus the UK government changes which include the VAT domestic reverse charge (DRC), so it’s good to have an accountant to guide you through these.
What is CIS (Construction Industry Scheme)?
The CIS covers areas of construction work including roofing, plumbing, electrical, plastering and building works. In brief, if you are self-employed or a company working as a contractor or a subcontractor within the construction industry, you are obliged to register for the scheme and to make the appropriate payments to HMRC. For full information on how our team of construction accountants can help with CIS read our blog on What is a CIS return and how can we help?
Providing monthly accounts
Whether you are a small construction company or a medium-sized construction firm, you will be carrying out project based work which needs construction accounting services including accounts payable, accounts receivable, costs estimates, revenue recognition and more, so having an accountant on board is the best way to make sure your accounts are all in order.
HMRC
We are here to help ensure construction firms stay HMRC compliant and never miss a deadline. We will send you automated email reminders when your accounts and returns are due to be submitted.
Bookkeeping
We’ll handle all specialist construction accounting needs including helping with job costing, reconciling your bank accounts, and providing you with balance sheets and financial reports, dealing with your end-of-year accounts, Corporation Tax returns and VAT returns.
Payroll
We will check for any changes to salary or changes to staff details before each pay run, process the pay run, send each employee a digital payslip and notify HM Revenue and Customs (HMRC) in real time details of the payments that have been made.
Construction Industry Scheme (CIS)
We can deal with the CIS process and returns for you – it is essential you get it right. The crucial element is to ensure the monthly CIS returns are filed on time and the liability is paid to HMRC on time. Penalties apply for late filing of the CIS returns. If everything goes well i.e. previous returns are submitted on time, we can help you with the application for the business to be a ‘gross status’ for CIS. We offer great value and fast, accurate accounting support to small and medium-sized construction or property businesses around London.
Preparing final accounts in construction
Financial statements in your final accounts will include invaluable information about your company’s financial position. It’s strengths, challenges and profitability long term. The information contained in these final accounts will help to drive decisions and chart a course for the company’s future.
Ensuring tax efficiency
Tax efficiency refers to structuring your business so that it receives the best possible taxation. As your dedicated accountant, we will conduct regular tax efficiency reviews to make sure your business is operating in the most efficient way. If times are hard, we will be here to help you review your situation and make suggestions to streamline your costs.
Setting up your cloud based accounting software
We can help you select the right accounting system to fit your firm’s needs. It is not necessary for everybody to understand construction accounting in full, but you do need to have access to accurate and up-to-date data. Using cloud-based accounting packages such as Xero and DEXT can simplify your bookkeeping to easily create business records and reports. The software is easy to operate, it’s easy to make adjustments when events occur, and means we can see instantly when situations change.
Building your accounting foundations…
Our specialist accountants for construction companies will offer advice on business structure, tax advice, tax planning and cash flow, all to improve the smooth running and profitability of your construction or building business. We ensure all builders, developers, contractors and subcontractors meet the new and existing regulations so that you stay compliant and continue growing your business. Our expertise in the construction sector, we can provide you with everything you need to make the right business decisions, solve any problems and boost your profitability. For an agreed monthly fixed fee, you will always know where your finances stand, and you will get a named dedicated accountant to support you. Get in touch today if you are looking for accountants for construction companies or CIS Tax Specialists on 01895 434515 or contact us via our email address info@passmanleonard.co.uk if you have any questions.
