6 Ways Outsourced Accounting Helps Construction Companies Prepare for Tax Season

Recent findings from Adobe revealed that only one in three small business owners feels prepared for tax season. While filing taxes is an undoubtedly stressful and burdensome task in and of itself, messy and inaccurate record-keeping throughout the year can further exacerbate the stress of tax season. With the scramble of the 2024 tax season now behind us, it’s an ideal time for businesses to start prepping for the upcoming tax season.

Outsourcing the accounting function is one of the top ways construction companies can help improve the filing process and reduce stress next tax season. Below are six of the ways outsourcing can benefit construction companies and help them prepare for a smooth 2025 tax season.

1.    Allows for an increased focus on core competencies

First and foremost, outsourcing the accounting function allows staff to focus on nurturing their business, instead of on mundane number-crunching. By leaving the financial intricacies to specialized professionals and redirecting internal resources to concentrate on delivering quality projects, construction firms can enhance overall productivity and project delivery. This focus on core competencies is especially crucial for companies in the construction industry, which has recently been plagued with a myriad of challenges, including labor shortages, supply chain disruptions and rising costs.

2.     Prevents messy and inaccurate records

As previously mentioned, much of the headache business owners endure during tax season is perpetuated by messy and inaccurate record keeping. Placing this responsibility with an outsourced accounting firm can help ensure organized and accurate financial records, ultimately mitigating risk and streamlining the tax preparation process.

3.     Saves time and stress

Beyond this, outsourcing can also help construction companies save time and stress. Each spring, businesses face the overwhelming task of collecting all the records and documents they need for filing. This is a stressful and time-consuming endeavor for construction companies and their accounting staff. Partnering with an outsourced accounting firm can help you keep all your paperwork in order, ultimately saving time and stress next tax season.

4.     Minimizes financial errors

Construction accounting involves unique challenges, from project cost tracking to compliance with industry-specific standards. The professional oversight offered by outsourced accounting firms with experience in construction finances minimizes the risk of errors and potential tax penalties. Furthermore, involving a third party adds another layer of defense to strengthen controls over the financial function.

5.     Ensures compliance with industry regulations

Tax compliance is another area where construction companies can benefit from outsourcing their accounting function. Outsourcing the accounting function to professionals with specialized industry knowledge can help you remain compliant with relevant standards and stay abreast of current tax regulations and changes.

6.     Supports informed business decisions

Lastly, outsourcing the accounting function can provide you with up-to-date financial data. This not only streamlines the tax preparation process, but also allows companies to gain insight into the financial health of their organization. By understanding where their businesses stand financially, construction firms can make more informed business decisions that support the organization’s financial health.

In short, outsourcing the accounting function can help ease the burden of tax season for construction firms. Through placing the financial responsibility with an outsourced accounting firm, construction companies can spend more time focused on core competencies, save time and stress, improve the accuracy of financial records, ensure compliance with industry standards and make more informed business decisions. With these benefits and more, outsourced accounting can help set you up for a successful 2025 tax season.

Although tax season is still months away, it’s not too early to start preparing by partnering with an outsourced accounting firm. Waiting until tax season is upon us to work with a third-party firm will still involve a stressful, last-minute scramble to find and hire experienced professionals, let alone provide them with the necessary financial records. The best time to start prepping for the upcoming tax season is now.