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Among the most important advisors to a
construction firm are:
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Professional surety bond producer
Construction-oriented certified public accountant
Knowledgeable construction/surety attorney
Business banker
This presentation will focus on construction–
oriented certified public accountants (CPAs).
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• Business professionals who specialize in providing
audits and reviews to, and who offer accounting,
taxation, business formation, business operation
consulting, and other planning services for
construction firms
• They are critical to the success of the financial
management of your business.
• The quality of the CPA and the degree of
construction financial and taxation knowledge are
crucial to obtaining the optimum level of surety
credit.
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• A CPA is a certified public accountant who is
licensed by a state board of accountancy.
• They must possess a baccalaureate or higher
college degree and have completed at least 150
semester hours (five years) college credits with a
sufficient number of accounting and business
credits.
• To earn the license, CPAs must pass a rigorous
uniform exam on financial accounting, business
environment concepts, auditing, and regulation.
• Many states also require additional educational and
experience requirements for certification.
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• Provide audit and review services to construction firms
• Understand the complex accounting and tax issues
facing construction firms
• Prepare timely and accurate financial statements, which
sureties use in determining bonding capacity and lenders
use to determine borrowing limits
• Know and work well with your surety bond producer,
attorney, and banker
• May provide consulting services on financial, regulatory,
safety and management issues
• Help a construction firm understand the proper
relationship between direct costs (labor, material,
subcontracting, and equipment costs) and indirect costs
(payroll taxes, supervision, tools, vehicles, supplies,
insurance and support costs)
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• Help a construction firm understand its cash flows
and cash needs
• Consider tax implications and strategies to
mitigate taxes to improve a construction firm’s
cash flow and profitability
• Assist the construction firm in selecting and
maintaining a strong internal cost accounting
system
• Assist a construction firm with its business
planning tasks (budgeting, tax planning, and
strategic planning) to improve profitability and
financial strength
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Mutual commitment
Respect and trust
Clear communication
Responsiveness
Availability
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• What is your background and experience with construction
clients?
• How long have you handled construction clients?
• Explain your knowledge of and experience with the
construction business, including accounting rules, tax laws
and regulations, internal cost accounting systems, cash
management, and tax planning strategies.
• Do you specialize in construction firms that are my size or
larger?
• What software do you recommend for my business?
• Can you help me select my accounting system or optimize
my current system?
• Does the CPA adequately understand my business and its
unique problems?
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• Has the CPA received positive recommendations from my
peers and business advisors in the construction
community?
• What is your fee structure? How often will I be billed?
• Will you work on the matter or will an associate be
involved as well? If so, how will the work be divided and
billed?
• What is the estimate of how much this will cost?
• How will the you inform me of developments?
• Do you offer free construction-related newsletters
and/or seminars to your clients?
• Are you an active member of local, regional and national
construction trade associations?
• Can you provide a list of references?
• What was the result of your last peer review and can you
provide a copy of your peer review’s report?
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• Seek the advice of your professional surety bond
producer, who can serve as a valuable referral
resource.
• Talk with your peers in the construction
community about their accountant.
• One resource to consult for names of CPAs
specializing in construction firms is the CICPAC
(Construction Industry CPAs/Consultants
Association) member directory, available at
www.cicpac.com/member .
• You may wish to contact the relevant state board
of accountancy office to ensure that the CPA is
currently licensed.
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