Accounting Processes Matter… A Lot.
A recent ConstructionExecutive.com article (read full article here) mentions how accounting methods in the construction industry affect cash flow and financial reporting. The decision to account for “small tools” purchases as a job cost as opposed to a capital expense absolutely affects near-term financial metrics but can also affect corporate reports and financial statements that bonding companies and lenders analyze. While the implications at the project or business unit level may seem small and unimportant, it is important to communicate these basic accounting principles to all levels of the organization.
For small and medium-sized companies in any industry, the importance of proper accounting processes cannot be understated. A close review of your company’s policies can be a valuable first step to creating clarity for you, your team, and your financial partners.
If you’d like to discuss your financial processes or have need for strategic advisement, our team at The Fahrenheit Group can provide valuable insight. Two of our colleagues have had considerable exposure in the industry. Doug Jones is a Managing Director of our fractional finance practice and has over 25 years of CFO experience, and significant experience in the construction and real estate industries. Jeff Wraley started his career as an engineer at one of the country’s largest general contracting firms and quickly worked his way into a finance role managing the financial reporting and audit process for over $400M in construction. Jeff has a passion for technology and effective processes and since joining Fahrenheit in 2013, has led projects in many industries including insurance, biotech, SaaS, real estate, and several service sectors.
Please feel free to reach out to Doug, Jeff or any of our other team members to discuss your business needs.