Construction Accounting: Why it’s a Different Beast

If you’re running a construction business in Australia, you probably realize that keeping your finances in check is more complicated than in other industries. From tracking job costs to managing cash flow and processing payments, construction accounting is a whole different ballgame. At DFK BKM, we provide specialized accounting services designed specifically for the construction industry. In this blog, we’ll explore what sets construction accounting apart and why having the right support can make a difference.



What is Construction Accounting?


Construction accounting is a unique branch of accounting tailored specifically for the building and construction industry. It covers all the typical finance processes, like keeping track of income, expenses, and taxes, but also includes some industry-specific aspects such as:-

  • Project base work

  • Progress billing-

  • Equipment costs

  • Subcontractor management

These additional elements make construction accounting more intricate than standard business accounting.


Why is construction accounting different


Let’s dive into some reasons why construction accounting is unique.

  • Project-Based Financials

In the construction world, every project operates like its own little business. This means you keep a close eye on income and expenses for each job separately. This practice, known as job costing, is essential to find out if a project is making money or going over budget. If you mess up job costing, it can quickly chip away at your profits. That’s why precise tracking and reporting are crucial.

  • Process billing is retention

Unlike many other businesses that simply send out an invoice, construction companies often bill their clients in stages - this is known as progress billing. You might send a bill for a percentage of the total after the foundation is laid, another after the framing is done, and so forth. Then there’s the matter of retention, clients often hold back a portion of the payment until the entire job is finished. Managing these aspects properly requires solid record-keeping and a clear grasp of your cash flow.

  • Unpredictable cash flow

In construction, delays are part of the game. Whether it’s bad weather, material shortage, or issues with sub-contractors, these factors can stall a project and your payments. This can lead to cash flow that’s all over the map. An experienced accountant can help you plan, ensuring you have enough funds to pay your team and suppliers, even when payments are delayed.

  • Sub-contractors and payroll compliance

If you’re working with sub-contractors, it’s essential to keep track of their payments and ensure you’re meeting all tax and compliance regulations. You also need to manage payroll accurately, especially if your workers are moving between different sites or projects. Construction payroll can get complicated with factors like:

  • Overtime

  • Travel allowances

  • Site-specific rates

  • Superannuation

Getting any of these wrong can lead to audits and fines, so it’s wise to seek expert assistance.

  • Complex tax rules

When it comes to the construction industry, the Australian Taxation Office (ATO) has some pretty specific rules you need to follow. For instance, you might have to report payments to sub-contractors using the Taxable Payments  Annual Report (TPAR). It’s also essential to handle GST and Business Activity Statement (BAS) accurately. On top of that, construction companies could be eligible for various tax deductions or incentives. This is where professional accounting services can help you out, saving you both time and money

.

Why do you need a construction accounting expert?


A typical accountant might not fully grasp the hurdles you encounter in the construction world. That’s why it is crucial to partner with someone who truly understands the industry. At DFK BKM, we provide tailored accounting services for builders, traders, and contractors all over Australia.


Whether you are running a small renovation business or overseeing large commercial projects, we are here to assist you with:

  • Setting up job costing systems

  • Managing payroll and superannuation

  • Handling BAS and tax returns

  • Enhancing cash flow

  • Planning for long-term growth

When you look for “accounting services near me,” it’s not about the location, it's about finding the perfect match for your business needs. With DFK BKM, you’ll benefit from a local team that brings national experience.


How DFK BKM can help


Here’s how we can lend a hand to your construction business:

  • Cloud-based accounting

We utilize cloud accounting tools like Xero and MYOB to help you keep tabs on project costs in real time. This way, you get a clear picture of where your money is going and how your projects are faring.

  • BAS & GST lodgement

We’ll ensure your BAS statements are spot on and submitted on time. We also help you to stay on top of your GST obligations to dodge any unpleasant surprises.

  • Sub-contractor compliance

From TPAR reporting to payment summaries, we make sure you meet all ATO requirements when it comes to paying your subcontractors.

  • Payroll solutions

We take the hassle out of payroll with customized solutions that manage award rates, allowances, and super contributions, so you can concentrate on what matters most at the job site.

  • Business advice and planning

Thinking about expanding your business or tackling larger projects? Our advisors help you craft a solid business plan, manage your finances, and keep you ahead of the curve.


Construction accounting can be a bit of a puzzle, but it doesn’t have to stress you out. With the right accounting partner, you can concentrate on growing your business while we handle the financial details. Whether you’re a solo entrepreneur, a building construction company, or anywhere in between, DFK BKM has the expertise and know-how to back you up.  Googling for “accounting services near me”, reach out to DFK BKM today for dependable, professional support in construction accounting.
Location: Camberwell VIC 3124, Australia

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