Did you know?
There are over 3,787,470 construction businesses in the US – Source
Running a construction company with multiple concurrent projects is a formidable endeavor, demanding exceptional organizational prowess. You may easily recall being swamped in steering projects toward success by embodying effective leadership and implementing strategic measures.
In my career, I have seen construction owners deeply engrossed in project management and monitoring resources, schedules, budgets, and progress, leaving little room to identify potential financial leaks. These hidden financial leaks can quietly seep through the cracks, risking profitability. Outsourcing accounting is a concrete solution, ensuring uninterrupted project management.
57% of small and medium businesses have improved focus on core business by outsourcing accounting – Source
Yet, misconceptions outweigh the benefits of outsourcing accounting, casting a shadow of doubt over its true potential. It is time to dispel these myths, to challenge the status quo, and re-center the journey to maximize the business potential.
Let’s debunk the myths and answer the questions that hit the wall every time you try to deep dive. Also, discover the real power that outsourcing accounting holds for contractors, subcontractors, and business owners like you.
Before that, we will understand why there’s a dire need for outsourcing accounting in the construction industry with the story of Mr. Clark.
Meet Mr. Clark from Missouri, the Owner of a Leading Construction Company
Mr. Clark wears multiple hats daily to complete the project according to specifications, on time, and within budget. He has many projects running in parallel. On top of that, managing client and vendor relationships, refining project processes, and overseeing budget and cash flow forecasting are just a few of the tasks that consume his day.
In this process, accounting has been a constant challenge for him. With the growing complexity of financial operations, Mr. Clark spends countless hours trying to balance the books, understand construction-specific accounting nuances, and stay abreast of regulatory compliance.
As Mr. Clark goes beyond bearing capacity for construction management and fulfilling accounting responsibilities, he can’t help but wonder if there’s a better way to handle his company’s financial operations. When thinking about switching to outsourced accounting, many questions swirl in his mind:
Is outsourcing construction accounting a viable solution?
Will I lose control over my company’s finances?
Can an outsourcing partner truly understand the intricacies of the construction industry?
Are there security risks associated with sharing sensitive financial data?
And what about communication challenges as the partner is sitting in the other corner of the world?
These concerns plaguing Mr. Clark’s mind are getting stronger due to myths and misconceptions that persist around outsourcing accounting.
In this article, I will debunk the myths surrounding outsourcing construction accounting and shed light on the realities. By examining the facts and dispelling misconceptions, I will address the accounting concerns of contractors like Mr. Clark. Discover how outsourcing accounting can streamline financial operations, alleviate the burden on contractors, and help businesses thrive in a competitive industry.
Debunking the Myths Around Outsourcing Construction Accounting
Myth 1 Loss of Control:
One of the most common myths is that outsourcing construction accounting results in loss of control over financial operations.
Outsourcing accounting allows contractors and subcontractors to have robust control while leveraging the expertise of specialized professionals. Contractors can define the scope of work, set expectations, and establish clear communication channels with the outsourced accounting team. This ensures transparency and enables companies to retain an iron grip on financial management, all within the dynamic realm of the construction industry.
Myth 2 Security Risks:
Another concern is the security of sensitive financial data when contractors are thinking of outsourcing accounting operations.
Reputable outsourced accounting firms employ robust security measures to protect client information. They invest in advanced data encryption, secure servers, and follow industry best practices to safeguard data. Prior to partnering with an outsourced accounting provider, it’s essential to check that the ideal partner has ISO 9001:2015 and ISO 27001:2013 certifications and dedicated physical infrastructure to ensure data security.
Myth 3 Lack of Construction Industry Knowledge:
Some believe that outsourced accounting providers lack the necessary knowledge of the construction industry, leading to inaccuracies and inefficiencies.
Leading outsourced accounting firms often specialize in construction accounting and have dedicated teams with expertise in the field. They understand the unique financial aspects of the construction industry, such as job costing, change orders, progress billing, and compliance requirements. By partnering with a reputable firm, contractors and subcontractors can benefit from their specialized knowledge and experience.
Myth 4 Cost Inefficiency:
It is often assumed that outsourcing accounting is more expensive than hiring an in-house accountant.
Outsourcing accounting can actually be more cost-effective when considering the total operational costs. By shifting from in-house to outsourcing accounting, contractors eliminate expenses related to employee benefits, onboarding, training, and hardware infrastructure. Additionally, outsourcing provides scalability, allowing construction owners to adjust the level of service as their business needs change, without the burden of hiring and retaining employees.
Myth 5 Communication Challenges:
Some worry that outsourcing accounting services will lead to communication challenges due to physical distance.
Most outsourced accounting providers understand the importance of clear and timely communication. They use various channels, such as email, phone, video conferencing, and project management tools, to ensure effective collaboration. Moreover, construction businesses can increase their productivity time as the records are updated and reconciled overnight.
Ready to break free from the chains of myth and embrace the transformative power of outsourcing constructing accounting? Witness the game-changing benefits of cost-effectiveness, industry expertise, and reliable solutions. Remember, every construction business is unique, so it’s imperative to evaluate the specific requirements of the business before partnering with the ideal and experienced outsourcing partner. It’s time to revolutionize the construction landscape, fuel success, and propel your business towards unparalleled financial greatness. The future awaits – Are you ready to make your mark?