When is it Time to Hire a Project Accountant?
Effective financial management is crucial to the success of any project. One key aspect of financial management is project accounting. This position can impact a construction business's profitability and efficiency.
In this blog post, we'll discuss the signs that hiring a project accountant is time. Additionally, we'll cover how their expertise can benefit your organization.
What Does a Project Accountant Do?
Before diving into the signs that it's time to hire a project accountant, let's clarify their role. Project accountants wear many hats in a company. This is because of the complexity of construction projects. Yet, they do have some core responsibilities.
- Accounts receivable This includes billing, documentation, and payment follow-ups.
- Compliance Project accountants deal with insurance certificates and bond requests. They are also responsible for making sure subcontractors are compliant.
- Subcontractor accounting Such schedules of value, payment requests, and other documents as required.
- Certified payroll Finally, project accountants should be comfortable handling payroll requirements and agencies.
- Forecasts & data analysis Project accountants should forecast and provide reports on project progress.
What skills make a good project accountant?
Project managers juggle many tasks daily. Complicated construction projects call for good prioritization and consistent organization. It's tantamount that they have excellent attention to detail. Project accountants may handle large sums or deal with unions and outside companies. Errors in billing or documentation can cost a company thousands or millions a year. This is why looking at certifications and continued education is essential. Good project accountants develop their knowledge base and hone their skills.
Signs it's Time to Hire a Project Accountant
Increased Project Complexity
As projects become more complex, financial management tasks increase in volume and intricacy. Hiring a project accountant can help you handle the added complexity.
Overwhelmed accountants & employees
Is your current accounting team struggling to keep up with the project workload? It may be time to bring in a dedicated project accountant. Project accounts focusing on projects removes extra work from the rest of the team.
Financial Errors are Becoming More Common
Mistakes in financial management can have severe consequences. Errors lead to cost overruns, legal penalties, and reputational damage. These errors may be a sign that your team could enjoy the expertise of a project accountant.
Frequent Compliance Issues
Construction projects often involve many compliance requirements related to insurance, bonds, and payroll. The more conditions there are, the more you worry about meeting them. Hiring a project accountant helps you meet all necessary regulations and avoid penalties.
Inaccurate or Incomplete Financial Data hinders decision-making.
Informed decision-making requires up-to-date financial data. Suppose you're finding that your financial information is inaccurate or incomplete. Without a project accountant, you may miss reliable data to inform your decision.
Benefits of Hiring a Project Accountant
Hiring a project accountant provides many benefits for your business, such as:
- Reduced the risk of errors and cost overruns
- Fewer errors and cost overruns
- Enhanced compliance with insurance, bond, and payroll requirements
- Minimized risk of penalties and reputational damage
- Streamlined financial processes
- Allowing your accounting team to focus on broader tasks
- Access to specialized construction accounting expertise
- Better financial management and decision-making
If you're experiencing any of the issues above, consider hiring a project accountant. Dedicated project accountants help you manage the financial aspects of your construction projects. Adding one to the team could play a crucial role in the success & profitability of your business.