Construction contractors are faced with a variety of challenges every day. These challenges include accurate bidding, cost estimating, project management and much more. In addition to the everyday business challenges facing every construction contractor, there are also a wide range of accounting, tax and financial reporting complexities to deal with on a regular basis. These complexities make it extremely important for contractors to partner with CPA firms that have experience in the industry as well as the appropriate qualifications to assist with complex accounting, tax and financial matters.
So how should boards, business owners, and executives evaluate CPA firms?
The Institute of Certified Construction Industry Financial Professionals (ICCIFP) recently published an article to provide guidance to contractors on this matter. The ICCIFP recommends a two-step approach to finding the right CPA firm.
The first step involves researching to identify CPA firms that work in the construction industry. The ICCIFP recommends gathering information from other professionals in the industry including CFOs, bankers, sureties, etc., as well as researching trade associations to identify firms involved in the industry.
The second step in the process involves narrowing down the list of firms to the one most suitable for the contractor. In this step, the ICCIFP recommends examining the details of each firm’s construction practice with consideration given to the composition of the firm’s construction industry client base; how much construction-related training the firm’s staff receive; how the firm typically staffs construction engagements; in what construction-related professional organizations is the firm involved; and how many of the firm’s professionals have the CCIFP designation.
The Top 10 Most Important Characteristics of a Construction CPA Firm
In conclusion, the ICCIFP ranks its top 10 most important characteristics of a construction CPA firm:
Demonstrates a commitment to the construction industry with multiple staff – partners through the senior level – who have obtained the CCIFP designation.
Has a low partner to staff ratio which leads to more senior-level involvement in your engagement.
Speaks or presents at construction industry conferences at the local and national level, authors thought leadership publications and publishes a construction newsletter.
The firm has members of the Construction Financial Management Association (CFMA) and has an excellent reputation in the industry with sureties, bankers, attorneys and software vendors.
Works on a large number of construction clients of all sizes and types across a geographic region similar to your company.
Provides other value-added services, not just assurance and tax compliance.
Senior members understand the industry through experience working for a construction company, not just the accounting side of the business.
Senior members are accessible and want to be a partner with your construction company.
Has a reasonable and fair fee structure.
Does not have a history of claims or litigation related to their construction practice and has a clean PCAOB and peer review reports.
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Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.