Contractors do themselves a great disservice by refusing to use a certain CPA firm because it works for competitors and do not want their company information being shared. CPAs have a code of ethics that keeps the relationship between CPAs and their clients confidential, so contractors are actually better served by a CPA firm that works for as many contractors as possible.
A CPA who handles many contractors is well-versed in the nuances of construction accounting, including the numerous and recent pronouncements issued by the Financial Accounting Standards Board (FASB). This is more important now than ever due to the many changes in financial statement presentation. Lack of knowledge of these changes will be evident to the users of the company’s financial statements and could affect the contractor’s credit status.
It is important to have financial statements that are audited or reviewed by a firm with which the sureties are familiar. If a surety receives an opinion from a firm it respects, it will help pave the way for the contractor to obtain surety credit. Bankers have the same comfort with a firm they know as construction industry CPA firm.
Known construction industry CPA firms are familiar with various software programs that allow them to make suitable recommendations if a change or upgrade in a system is needed. Software vendors prefer to work with a firm that is familiar with their system because it makes the implementation and maintenance easier on all parties.
There also are several different methods of reporting income for tax purposes that are available to contractors. If the contractor is using a CPA firm that does not normally handle contractors’ work, they may not be able to benefit from the tax advantages available to the industry. If the contractor is the only construction-related client of the CPA, chances are taxes are higher than they need to be.
When choosing a CPA firm, ask the surety and banker for recommendations. Various industry association officials and members can also provide references. And do not be afraid to ask competitors who they use. If the CFO or controller of the company is active in the Construction Financial Management Association (CFMA), he or she can ask other CFMA members for names of quality construction CPA firms. Another resource is the Construction Industry/CPAs Consultants Association (CICPAC) Member Directory.
Look for firms that regularly write articles or speak at association meetings as possible candidates. Last but not least, consider the Internet: Review social media sites such as LinkedIn or Facebook for possible firms or do a simple search on Google or Yahoo for “construction accounting CPAs.”