With 15 years’ experience working within the industry, Prevail are specialists within construction accountancy and CIS, applying their sector
The construction sector is very a competitive market. Therefore if you work for commercial contracts or domestic clients, you need a good control over the projects and also manage people effectively.
We work with small and medium sized construction companies, providing management accountancy for the following:
- Main building contractors,
- Construction Companies
- Manufacturing companies
- Property developers
Within the construction industry we offer project costing, cost control, cost allocation, budgeting and cash flow forecast for projects.
We help to keep control of expenditure on materials, labour, tools and equipment throughout the duration of the project.
- The Construction Industry Scheme (CIS) is a set of rules for contractors and subcontractors in the construction industry. If you’re a CIS contractor, you’ll need to register with HM Revenue & Customs (HMRC). You’ll also have to comply with certain rules to make sure you pay your subcontractors within the scheme correctly.
- We help you to register as a contractor or subcontractor, organise training, apply for grants and ensure that you are fully compliant with all regulations.
- We will help you to apply for a gross payment status under a CIS scheme
The biggest mistakes made by the Contractors within Construction Industry and how to avoid them
Inaccurate Cost planning
It is not enough to have done only the valuation and pricing bit. During the contract the costs need to be checked and controlled for the jobs specified. Therefore to prevent the error you need to compare the actual figures to the budgeted figures and correct them. It is important to divide project into stages and plan the revenues and costs accordingly to the job required and materials.
Lack of a written contract.
When you start a bigger project which will be divided into stages, you might find a situation where you don’t get money on time, need more materials or need to do extra work for the client which was not specified in the first place.In order to avoid this situation, state clearly the works to be undertaken and stages of payment. Cosequently, make sure that each stage is accepted and signed off by the customer.
Wrong Costs allocation
In the UK most contractors use the accrual basis for the cost allocation which means that the costs and revenues are recognised in the period they are earned or incurred.Quite often the costs are omitted due to the delay in invoices being issued for the job.It is especially relevant to recognise those costs or revenues at the end of each period (month) and accrue for them correctly. Only with good planning and regular control will we avoid mistakes.
Not recognising the loss of a contract in a period the loss has been determined.
If you use a percentage of completion method, then an error could occur, as a loss could be incurred in a future period. By not estimating correctly, the contract could result in a future loss.To avoid the mistake you need a budget control and job control on a regular basis.Also, a profit and loss need to be prepared and compared to the whole budgeted project profit and loss forecast.