BY MICHAEL M. HARMAN, CPA
The look on the subcontractor’s face was priceless
as he was forced to reckon with the fact the man
sitting across from him not only knew the job site,
but also the contract and the business. Many of the
trades were not prepared to have the accountant
turned superintendent running the job site, but
in the end we all managed to stay on schedule, on
budget and deliver an award-winning, great product.
It is seldom that your CPA has actually built a
house, rehabbed a historical building in a blighted
area, developed acreage into a community or known
the struggles of shoveling snow before starting
construction for the day.
How can a CPA help a contractor? Many ways.
We are schooled in organization, budgets, controlling
costs and business processes. Often times a
few questions about your business can improve the
How can you make the project or process better?
What project did you complete which you are most
proud of? I still think of the time I finished my first
house and closed on it without creating a punch
list. We had no items to correct from the customer’s
walk-through. It was not unusual for the customer to
come through and pick apart the house and look for
missing options, paint touch-ups and other cosmetic
issues before the house closed.
However, we made a commitment on our job
site to finish the home 100 percent and not have
any open items. This shaved three days to a week
off our construction time frame because it was difficult
to get the customer to come back timely and
it also helped the house close on time. Each house
cost us roughly $300 a day to finance, so through this
process we were saving a minimum of $900 just in
financing costs of construction. I was very proud of
the first house I completed in this manner and it
eventually became our norm.
What project is your most profitable? Sometimes
the project you complete that you are most proud
of is also the most profitable but not always. A
contractor was selected for some larger commercial
jobs about an hour and a half away from their
office. Normally their jobs were within 20 minutes
of the office.
They ended up not making very much money
on the job. For one, they were subject to the drawn
out payment schedule of the general contractor.
Secondly, the employees would leave the job early
to get home at a decent time, but still record a full
day’s work. Thirdly, the owner was not as present on
the job because it was further away. The jobs they
made the most money on were close to home, with
general contractors they were used to working with
and where he was on site most of the time managing
How big do you want to get? This is a question
few truly ask. How big of a company can you lead
and manage? Fewer still ask this question and give
an honest answer.
The answer to both of these questions will fuel
your strategy, market, profit and business life. This
is where a CPA can be invaluable. A CPA builds relationships
with bankers, insurance agents, real estate
agents, lawyers and many other professionals and
business owners through normal everyday activities
that are a resource to help you grow. Accounting
is truly understanding every facet of business and
finding a way to quantify it.
A CPA has the resources to help you grow and
the insight to help you determine if bigger is really
better. When you are ready, the CPA can help you
pass a successful business to the next generation.
How? A CPA can show you how to control the
money that goes out to pay bills and help set up
systems that protect you from theft and fraud. They
can train you, your family and company how to
look at your income statement, balance sheet and
statement of cash flows to understand the overall
We can help setup job costing and per job profit
and loss statements. For the small contractor, the
CPA is your personal chief financial officer, guiding
you through financing, helping to determine pay
scales and plan for the future.
Did you know, depending on the size of your business
and structure you can create a retirement plan
for yourself and deduct it as a business expense?
Have you evaluated the cost effectiveness of using
iPads or tablets in business as an accounting, sales,
estimating and time tracking tool?
There are so many daily challenges in building,
repairing and installing in the construction industry.
It can be difficult to take a step out of the intense
day and look at the items from a business perspective.
Your CPA can help you do that and make more
money. As we enter the fall and winter season, now
is the time to decide how much money you want to
make next year.
Harman is a CPA with Whittemore, Dowen &
Ricciardelli LLP with offices in Queensbury and
Photo Courtesy Whittemore, Dowen & Ricciardelli LLP