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,
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 bottom line.
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
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 the project.
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
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 business.
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
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 Saratoga Springs.
Photo Courtesy Whittemore, Dowen & Ricciardelli LLP