Enhance Your Bookkeepers' Knowledge
Many construction bookkeepers have gaps in their knowledge about how to produce quality financial statements. That can matter at year-end. There is only so much your accounting or tax advisor can do at the end of the financial year to correct or modify poorly recorded transactions.
Idiosyncrasies of Construction Bookkeeping
Unlike in other trades, bookkeeping skills cannot easily be transferred from non-construction jobs. As a result, construction hiring teams tend to look for job candidates with bookkeeping skills specific to the industry.
One reason for this is that bookkeeping standards and methods differ significantly from those used in most other industries. Consequently, the learning curve for new hires is much steeper and employers want to avoid the time it can take to train and the errors that can occur if they hire a person without the required experience.
Bookkeepers in construction jobs learn quickly that job roles are blurred, especially in small firms, where unloading trucks and stacking boxes is not an uncommon part of the job. People taking on these jobs will advance farther if they embrace the need to do that what is necessary rather than what is strictly in their job description.
A bachelor's degree in accounting and a specialized certificate in construction accounting, tax or finance can show an interviewer or prospective employer a candidate is serious about serving the construction company. It can also land the would-be bookkeeper a job if the hiring team is highly educated themselves, because in that case the new staff person can be mentored.
In some companies, bookkeepers may keep records in a certain, albeit less-than-perfect, way simply because it is how things have always been done. That may not help your business meet the challenges in today's competitive world where lending, bonding, and mergers and acquisitions depend on accurate representations of business transactions. Well-trained construction bookkeepers can help you plan and save cash, gain access to more leverage and credit, and finance large-scale initiatives.
If you want to encourage your bookkeeper to take on more expensive education, that doesn't mean you have to pay the tuition. Encourage your bookkeepers to increase their education by promising them a raise, provided they meet certain standards after the courses are completed. The prospect of a raise can motivate workers to get a degree or new accounting certification.
Of course you can reimburse or pay for your employees' expenses for work-related education. The amount paid or reimbursed is a deductible business expense.
You will likely find that the employee's increased abilities are worth giving the bookkeeper a raise, reimbursing for the education or both. There will be fewer mistakes and less of a mess for your CPA or tax accountant to clear up at the end of the year. In addition, the more information the bookkeeper has at hand the more likely the person is to find ways to help your firm save money through more clever financial management.
Education is crucial, of course, when a person wants to move up to an advanced, executive position. Much of construction accounting, finance and tax can be learned on the job with the right mentoring, but some of it requires a bachelor's degree in accounting along with a specialized certificate in construction accounting, tax or finance.
However, if a bookkeeper has designs on taking the helm of a large construction company, a CPA license generally is a must.
Many construction contractors have a certain idea of what a bookkeeper is worth, and they will not pay more than that under any circumstances. They'd rather hire a new bookkeeper than let a good person grow in the position to become a controller or a CFO.
Having someone become more and more involved in major company financial decisions can be uncomfortable for some employers, particularly when they built the business and want control over all financial decisions.
But other executives realize the value of surrounding themselves with people who are smarter than they are. As your bookkeepers' skills grow they are likely to start applying better techniques for managing cash, collecting receivables and cutting costs, all of which can mean your business will be more profitable and cash rich.
Consult with your accountant and tax advisor about the specialized training you and your staff need to remain competitive in the construction accounting, finance and tax market. Also consult with your accountant for help drawing up a controller or CFO employment agreement that can protect you as your bookkeeper grows in the position. This will give you the security of knowing that you will always ultimately have control while your bookkeeper helps you plan for cash and spending in ways you couldn't have imagined.