Is Your CPA Holding Back Business Growth?

As your business grows to a size that its jobs require bonding insurance, one of the first roadblocks you may experience is with your certified public accountant (CPA) firm issuing your financials. If you find yourself missing out on lucrative opportunities because your CPA is dragging its feet, it’s time to address the underlying issues. Here are three reasons why your CPA might be causing delays and how to tackle them head on.
 

Unresponsiveness: Are You at the Bottom of Their List?

If you’re constantly chasing after your CPA for updates or responses to queries, it’s a red flag. Your business deserves prompt attention, especially when it comes to financial matters. How do you know if you’re at the bottom?

• Delayed responses — Do you often wait days or weeks for a response to your emails or calls?
• Lack of proactive communication — Are you the only one initiating conversations about your financials?
• Missed deadlines — Have multiple deadlines been missed, causing disruptions or penalties for your business?

If you consistently find yourself at the bottom of your CPA’s client list, it’s time to move on.

They Don’t Get You

If your CPA firm is unresponsive, it might be because you’re at the bottom of their list. But it could be that they don’t do enough construction-specific engagements to know how to get through the process in a timely manner.

The CPA firm performing your  audit or reviewed financial statements may be extremely competent, but if they’re unfamiliar with the construction industry’s unique financial intricacies,  it can lead to significant hurdles in dealing with bonding agents and obtaining underwriting.

A CPA firm that focuses on the construction industry has well-established processes in place that enable them to knock out financials very quickly. They’ll already know the right questions to ask, how to prepare the financials, what disclosures to include, etc.

Messy Financials: a Symptom of Deeper Issues

But what if you’re in constant contact with your CPA — lots of questions, back and forth — yet your financials are still delayed? It might be that the firm is unfamiliar with the construction industry, figuring things out as they go along. But it could be that they’re cleaning up your mess.

When your CPA constantly raises concerns about your financials, it’s a sign that deeper issues may be at play. These issues often trace back to internal problems within your accounting department (or lack thereof) that hinder accurate and timely financial reporting. Here are some common issues your CPA might flag:

• Poor recordkeeping practices can lead to missing or incomplete financial data, making it difficult for your CPA to accurately assess your financial health.
• Inefficient processes such as manual data entry are prone to errors or redundant workflows.
• Without proper oversight, errors or irregularities in financial reporting can go unnoticed until they are flagged by your CPA.
• Misclassification of transactions can distort your financial statements and misrepresent your company’s financial position. For example, expenses may be misclassified, leading to inaccurate reporting of profitability or financial ratios.
• Failure to comply with accounting standards or regulatory requirements, including discrepancies between your financial records and regulatory guidelines such as GAAP (generally accepted accounting principles) or tax regulations, may be flagged.

If your business has grown to the point of requiring a review, it’s time to move beyond relying on spouses or friends for bookkeeping. It’s time to find a CPA partner who not only ensures timely financial reports but also acts as a proactive ally in your day-to-day operational activities.

Don’t Hold Back

For construction business owners, successfully navigating the financial landscape is as critical as laying the foundation for a sturdy building. If your construction business is experiencing delays or missed opportunities due to your CPA’s unresponsiveness, it’s time to take action. Find a business partner who understands your industry and can keep pace with your needs. Don’t hesitate to make the difficult decision to part ways with your current CPA if they’re holding your business back, and seek out a new firm that aligns with your goals and expectations.