Your financial statements are only as accurate as the accountant who prepares them. It’s important to work with a CPA who is construction-savvy and knowledgeable about construction accounting.
What Interview Questions Can Be Used to Make Sure A CPA Is Construction-Savvy?
Joseph Catania, President of Anderson & Catania Surety Services, LLC (firstname.lastname@example.org), suggests that you find out how many contractors the CPA currently provides services for, specifically annual and semi-annual reviews.
“I would ask, ‘What are some tax strategies you may implement? How often do you come in to review my internal bookkeeping?’” he adds.
How Much Should I Budget Annually to Work with A Construction-Savvy CPA?
This does depend on the state/metro area you may be in.
“Budgeting for CPAs definitely can range from rural areas to metro areas,” Joe says. “CPA audits, semi-annual reviews, and tax returns could cost a little more than $25,000. These CPA services are generally for contractors that are over $25,000,000 in revenues.”
Joe breaks down approximate CPA engagement costs as follows:
· CPA reviewed financials, including annual and semiannual: $15-$20k with a tax return
· CPA review financials with no tax return: $8-$10k
· CPA compilation: under $2,500
How Often Are CPA Financial Statements Needed?
“This really depends on the size of your company,” Joe explains. “Typically, as you get near the $10,000,000 threshold and obviously beyond it, it’s twice a year.”
What Type of Financial Statement Is Needed to Obtain Bonding?
You will need to provide a CPA review if your single-size project exceeds $1,000,000.
If you do not have many bonding requirements annually, you may be able to get away with a CPA compilation for projects under $1,000,000.
It is very important to have a construction-oriented CPA. Like contractors, they’re looking, their spec book…that’s what an underwriter’s spec book is: The contractor’s financial statement.
Underwriters also look for the corresponding schedule for the work on hand. Presentation is very key because that says a lot about the contractor and what their CPA provides in the presentation.