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Construction accounting

I have a near-term opportunity to land a relatively-small construction client for part-time CFO services.  I have worked in construction although such experience is a number of years past.  What would be good topics of discussion oriented toward construction accounting and finance?

Answers

(Agent, JKS Solutions, Inc.) |

Are you asking about what topics are good to attract the client during client discussion? Or are you asking about reference material for the construction industry?

Contact your local Buiders Association and ask them for a copy of the last 3 association magazines and see what the article topics have been.

Contact the AICPA, they just updated the industry guides for the construction industry.

If your client is using Quickbooks, you will need to understand estimating through invoicing using their method of accounting and be well versed in job costing and payroll job costing using Quickbooks.

Chris Shumate
Title: Accounting Manager
Company: Dominion Development Group, LLC
LinkedIn Profile
(Accounting Manager, Dominion Development Group, LLC) |

Bill - Is this client a general contractor, or a specialty contractor? If it is a general contractor, I would start by identifying the clients commitment cost per phase to its actual cost. Then determine which phases are over cost, and why. This may indicate a possible loss on change orders. A project I have started for the company I work for is going back to 2008, before the bottom dropped out, and evaluating the estimated margin at the beginning of the project to how the project finished.
I am doing this per project manager also.

What is company's A/P turnover?

How quick is it collecting its A/R?

What are the overbillings versus the underbillings?

What is the margin variance? This goes back to the project I am doing.

Are there any schedule variances, what caused them?

How are the change orders impacting the project cost? Change orders can be great ways to increase revenue, if done appropriately.

These are a few suggestions that I have came across, and some I use. I hope this helps. Valerie mentioned the AICPA. I would also add Sage CRE, Dexter-Chaney, and Sullivan & Associates. I have found these three to have great resources.

JEFFERY SAUER
Title: CFO
Company: CHRISTENSEN GROUP INC
(CFO, CHRISTENSEN GROUP INC) |

Hi

when I think of contractors - I think tax risk - percentage of completion accounting method - must master as it is needed for tax - must understand interplay of percentage of completion and alt min tax - must understand long term accounting contracts and look back provisions. Many contractors fail to recognize the importance of these tax implications of accounting contracts.

Bill Quinn
Title: Member: CFO & Senior Consultant
Company: Blackfish Consulting, LLC
(Member: CFO & Senior Consultant, Blackfish Consulting, LLC) |

Thanks, guys . . . appreciate it.

Mark Miller
Title: Interim Controller
Company: Quileute Nation
(Interim Controller, Quileute Nation) |

Following up on the other comments, I would swing by the AGC Building on Lake Union for resources plus the Subcontractors Group. Look at aging of Receivable and Payables. Have they filed the necessary "pre lien" notices before starting the job. You have 500+ connections on LinkedIn. Assuming these are "real" connections, I would share the # of people you know in the construction industry and your ability to pick up the phone and get receivables/payables issues resolved.

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