Specialized Financial Accounting: The Foundation for Success in Construction
Why Specialized Financial Accounting is Essential for Construction Companies
An accurate financial accounting for construction companies is, we are sure, much more than just a legal obligation; it is the backbone for the economic success and sustainable development of your company in the construction industry. Given the complexity of construction projects, which are often characterized by long durations, high order volumes, and a multitude of subcontractors, standard accounting quickly reaches its limits. This is exactly where specialized systems and processes are necessary to allocate costs accurately, record revenues on an accrual basis, and transparently present the profitability of individual projects. Only then can you make informed decisions and steer your company safely through the dynamic market conditions. We at Valoon GmbH understand these challenges all too well and offer solutions tailored precisely to the needs of construction companies to optimize your financial accounting. Discover with us how you can streamline your processes and avoid some of the pitfalls.
- Specialized financial accounting is more than an obligation – it is the backbone of success.
- Standard accounting is insufficient for complex construction projects (long durations, high volumes, many subcontractors).
- Specialized systems are needed for precise cost allocation, accrual-based revenue recording, and transparent project profitability.
- Informed decisions and secure company management are based on precise financial accounting.
The Unique Challenges of the Construction Industry Regarding Accounting and Compliance
The construction industry presents us all with unique demands on the financial accounting for construction companies. This includes the correct representation of advance payments, the management of guarantees and retention funds, as well as compliance with specific tax regulations such as the construction withholding tax and the reverse charge mechanism (§ 13b UStG). The must not only document ongoing business transactions but also accurately portray complex issues like the evaluation of unfinished construction services and the creation of provisions. And then there are the compliance requirements, such as the GoBD (Principles for Proper Management and Storage of Books, Records, and Documents in Electronic Form as well as Data Access), which must be strictly adhered to in order to avoid unpleasant surprises during audits. Compliance with these regulations is essential for a solid financial accounting for construction companies and, as we know, protects against severe penalties.
Overview of the Key Aspects of Financial Accounting in Construction
To master the complexity of financial accounting for construction companies , a clear understanding of the core aspects is crucial. These form the basis for accurate and insightful bookkeeping, helping you keep track and secure the profitability of your projects. This includes particularly performance accounting, handling of the construction withholding tax, and the use of industry-specific chart of accounts. Careful attention to these points is just as important for a newly founded construction company as it is for established businesses – we can say this from experience. The correct application of these principles ensures that your financial accounting for construction companies is not only compliant with the law but also provides valuable insights for company management.
- Performance Accounting: The correct recording and billing of construction services, often via partial invoices and final invoices, is absolutely central. Here, the precise allocation of costs and revenues to individual construction projects plays an important role for the control of major projects and the assessment of project progress.
- Construction Withholding Tax: A specific procedure in the construction industry where the service recipient must withhold 15% of the invoice amount under certain conditions and remit it to the tax office. Correct handling is crucial to avoid back payments and penalties.
- Specific Charts of Accounts: The use of charts of accounts such as SKR03 or SKR04, tailored to the needs of the construction industry, allows for detailed and structured recording of all business transactions and is a foundation for meaningful intelligent reporting..
Efficient Accounting in the Construction Industry: Mastering Systems and Standards
Double-entry bookkeeping vs. simple bookkeeping: Which system is suitable?
For most construction companies, double-entry bookkeeping is simply essential , to ensure transparent and traceable, um eine transparente und nachvollziehbare financial accounting. accounting. In contrast to simple income-expenditure accounting (EÜR), which is only permissible for smaller businesses with lower revenues and profits, double-entry bookkeeping provides a really detailed insight into the company’s asset, financial, and earnings situation. It allows for the creation of a balance sheet and an income statement (P&L), which are important not only for internal management purposes but also for external parties such as banks and tax offices. One could say that the is the basis for meaningful cost and performance accounting, and thus an important tool for the successful management of a construction company and solid financial accounting for construction companies.
The Main Charts of Accounts in the Construction Industry (SKR03, SKR04): A Comparison
In Germany, the standard charts of accounts SKR03 and SKR04 are widely used and, as many of you know, form an important foundation for the financial accounting for construction companies They provide a significant foundation. The SKR03 is based on the business processes of a company (process structuring principle), while the SKR04 is structured according to the final structure principle and is more oriented towards the structure of the balance sheet and income statement. For construction companies, the choice of chart of accounts may depend on the company’s size, the complexity of business transactions, and of course the preferences of the tax advisor. Both charts of accounts offer the possibility of making industry-specific adjustments, for example, to set up cost centers for individual construction sites or to maintain specific accounts for the construction withholding tax. A careful selection and adjustment of the chart of accounts is crucial for meaningful accounting and often significantly facilitates cooperation with the tax advisor.
Basic Booking Principles and Their Application in the Construction Industry
The correct accounting of business transactions is, as we all know, the heart of every accounting in the construction industry.Typical booking principles in the construction industry include the purchase of materials, recording of wage costs, and handling of advance payments. For example, when purchasing materials, the account ‘Expenses for raw materials, supplies and operating resources’ is debited, and the liability account or bank account is credited. Wage costs are accordingly booked onto wage and salary accounts. A particular attention point is advance payments: According to these, they are often treated as received deposits and only recognized as sales revenues upon acceptance of the service. The Percentage-of-Completion Method (PCM) is a common method here to distribute revenues and expenses over the project duration. The precise application of these booking principles is essential for accurate financial accounting for construction companies and the correct determination of the company’s success.Value Added Tax in the Construction Industry: Mastering §13b UStG and Advance Payments
The Reverse Charge Mechanism (§ 13b UStG): When it applies and how to apply it correctly
Die Reverse Charge Mechanism according to § 13b UStG is a central VAT particularity in the construction industry, which we encounter repeatedly. It applies when a construction company (service provider) provides a construction service to another company that sustainably provides construction services (service recipient). In this case, the tax liability for VAT shifts from the performing entrepreneur to the service recipient. This means the service recipient must calculate the VAT themselves and remit it to the tax office. The prerequisite is that it concerns a valid construction service and the service recipient engages in sustainable construction services, which must be evidenced by a valid exemption certificate according to § 48b EStG or proof USt 1 TG. The correct application of this regulation is, as you can imagine, crucial to avoid tax liabilities and liability risks and is an important aspect of the financial accounting for construction companies, die uns immer wieder begegnet. Sie kommt zur Anwendung, wenn ein Bauunternehmen (Leistungserbringer) an ein anderes Unternehmen, das nachhaltig Bauleistungen erbringt (Leistungsempfänger), eine Bauleistung erbringt. In diesem Fall geht die Steuerschuldnerschaft für die Umsatzsteuer vom leistenden Unternehmer auf den Leistungsempfänger über. Das bedeutet, der Leistungsempfänger muss die Umsatzsteuer selbst berechnen und an das Finanzamt abführen. Voraussetzung ist, dass es sich um eine handelt und der Leistungsempfänger selbst nachhaltig Bauleistungen erbringt und dies durch eine gültige Freistellungsbescheinigung nach § 48b EStG oder einen Nachweis USt 1 TG nachweist. Die korrekte Anwendung dieser Regelung ist, wie Sie sich vorstellen können, entscheidend, um Steuernachzahlungen und Haftungsrisiken zu vermeiden und ist ein wichtiger Aspekt der financial accounting for construction companies.
- § 13b UStG (Reverse Charge) is a central VAT particularity for construction companies.
- The tax liability for VAT shifts from the performing entrepreneur to the service recipient.
- Prerequisites: defined construction service and the service recipient provides sustainable construction services (evidence required).
- Correct application avoids tax liabilities and liability risks.
Important steps for the correct application of § 13b UStG:
- Check the definition of construction services: Ensure that the provided service is indeed considered a construction service within the meaning of § 13b UStG. This includes work that serves to create, repair, maintain, change or remove buildings.
- Verify the entrepreneurial status of the service recipient: The service recipient must themselves engage in sustainable construction services. Request appropriate proof (e.g., copy of the exemption certificate according to § 48b EStG or the form USt 1 TG).
- Correct Invoicing: The invoice must be issued net and include a note on the reversal of tax liability, e.g. “Tax liability of the service recipient according to § 13b UStG”. Correct invoicing is essential in this case..
Value Added Tax on Advance Payments: What to Consider?
For advance payments in the construction industry, another important point is that VAT generally arises upon receipt of payment, that is, at the time of payment by the customer. This also applies if the underlying service has not yet been completely performed or accepted. For the financial accounting for construction companies this means that VAT from received advance payments must be declared and remitted in the respective VAT advance return. If the service is provided to another construction entrepreneur and the reverse charge mechanism according to § 13b UStG applies, the service recipient also owes VAT on advance payments. In this case, the performing entrepreneur issues a net invoice for the advance payment with a reference to § 13b UStG. Accurate documentation and timely booking are, as always, essential for a correct financial accounting for construction companies .
Special Cases: Construction Services Abroad
When construction companies provide services abroad, the financial accounting for construction companies, as you can imagine, becomes even more complex. Here, the VAT regulations of the respective country in which the construction service is performed (place of service) must be observed. This could mean that the German construction company must register for tax purposes abroad and remit VAT there. While there are harmonized principles within the EU, there are also national differences that one should be aware of. For construction services to private persons in EU countries, generally the VAT of the country where the property is located applies. For services to entrepreneurs in EU countries, the reverse charge mechanism of the respective country may also apply. Our advice here: An early clarification of the tax obligations abroad, possibly with the help of a specialized tax advisor, is essential to ensure compliance financial accounting for construction companies to avoid double taxation or tax liabilities.Understanding and Correctly Handling Construction Withholding Tax: A Practical Guide
What is construction withholding tax and who is affected?
Let’s move on to another important topic: The construction withholding tax is a tax deduction of 15% of the invoice amount (including VAT) that the service recipient (client) must withhold from payments made to the performing contractor (contractor) and pay to the tax office for construction services in the country. All entrepreneurs as defined in § 2 UStG and legal entities under public law as service recipients are affected. The service provider must provide construction services as defined in § 48 Abs. 1 Satz 3 EStG. The aim of this regulation is to secure tax revenues and combat illegal employment in the construction industry. For the financial accounting. service recipient, this naturally means an additional administrative task, while it entails a temporary decrease in liquidity for the service provider, which will later be offset against their own tax liability. A thorough understanding of this regulation is essential for accurate financial accounting for construction companies calculation and payment on both sides.
Calculation and remittance of the construction withholding tax: explained step by step
Good news first: The calculation of the construction withholding tax is relatively simple: 15% of the gross invoice amount. The service recipient must withhold this amount from the payment to the performing contractor. The withheld construction withholding tax must then be reported and paid to the responsible tax office for the performing contractor by the 10th day of the following month after the month of withholding. A officially prescribed form must be used for this. For the financial accounting. service recipient, it is important to document this process accurately and to adhere to the deadlines scrupulously. The performing contractor receives a statement from the service recipient regarding the tax deduction, which they in turn need for their financial accounting for construction companies and later offsetting against their tax liability. Careful documentation, for example via a measurement app, can provide significant support in this regard.
Exemption from the construction withholding tax: requirements and application process
Is there a way to avoid this deduction? Yes! Performing contractors can be exempted from construction withholding tax by presenting a valid exemption certificate according to § 48b EStG . This certificate is issued by the tax office of the performing contractor if there are no tax concerns (e.g., no tax arrears). The requirements for issuance include, among other things, the tax reliability of the applicant. The application must be made informally to the tax office. If the service recipient has a valid exemption certificate at the time of payment, they do not have to make a tax deduction. For the financial accounting for construction companies service recipient, it is crucial to check the validity of the certificate and keep a copy for their own records. The exemption certificate is an important tool to preserve the liquidity of the performing construction contractor.
The role of the exemption certificate
This exemption certificate according to § 48b EStG thus plays a truly central role in the system of the construction withholding tax and is therefore an important component of the financial accounting for construction companies. It serves as proof to the service recipient that the performing contractor is exempt from the obligation to withhold tax. But beware: The service recipient is obliged to verify the validity of the presented certificate, for example through the online portal of the Federal Central Tax Office (BZSt). Only an exemption certificate that is valid at the time of payment releases the service recipient from the obligation to withhold and pay the construction withholding tax. Otherwise, the service recipient is liable for the unpaid tax – and that can get expensive. Therefore, careful management and verification of these certificates is a critical process in the financial accounting for construction companies, to minimize financial risks in the construction industry .Mastering construction wage complexity: SOKA-BAU and collective agreement regulations in control
What is construction wage and why is it so special?
Der Construction wage – a topic in itself and often a real challenge in the financial accounting for construction companies. Its uniqueness arises from a multitude of collective and legal regulations that are tailored to the specific working conditions in the construction industry. This includes regulations on flexible working hours (e.g., working time accounts), winter employment support (seasonal short-time work allowance, winter allowance supplement, additional winter allowances), various bonuses and allowances (e.g., hardship allowances, travel reimbursements) as well as the mandatory contributions to SOKA-BAU. This complexity requires specialized knowledge and often also specialized construction software for calculation and billing to avoid errors and related financial risks. Accurate construction wage accounting is crucial for employee satisfaction and compliance with legal requirements in the accounting – this goes without saying.
The social fund of the construction industry (SOKA-BAU): tasks and contributions
Anyone working in construction knows them: the SOKA-BAU, a joint institution of the collective bargaining parties in the construction industry (German Construction Industry Association, Industrial Union of Construction Agriculture Environment, Central Association of the German Construction Industry). It finances and organizes various services for employees and employers in the construction industry that are necessary due to industry-specific peculiarities such as frequent job changes and weather dependency. Core tasks of SOKA-BAU include securing holiday entitlements (holiday procedures), promoting vocational training, and additional retirement provision (ZVK-Bau). Employers in the construction industry are obliged to make monthly contributions to SOKA-BAU. The amount of these contributions is based on the gross wage sum of the skilled workers and the valid contribution rates. The accurate calculation and remittance of these contributions is a significant and not to be underestimated part of construction wage accounting and thus of the financial accounting for construction companies.
Collective agreement regulations and their impact on payroll accounting
In addition to SOKA-BAU, the applicable collective agreements (Federal Framework Collective Agreement for the Construction Industry – BRTV-Construction Industry, Collective Agreement on Social Fund Procedures in the Construction Industry – VTV, Collective Agreement on Additional Retirement Provision in the Construction Industry – TZA Construction) also play a key role in payroll accounting in the construction industry. These regulate among other things minimum wages, working hours, holiday entitlements, allowances for overtime, night, Sunday, and holiday work, as well as special payments. Our task in the financial accounting for construction companies is then to ensure that these collective agreement provisions are implemented exactly. This requires accurate time recording on the construction site and careful maintenance of employee master data. And since collective agreements can change as well, these changes must be promptly reflected in the payroll accounting software to ensure accurate and compliant billing. The complexity of the collective agreement landscape makes construction wage, as you can see, a truly challenging task within the financial accounting..
Specific wage types and allowances in the construction industry
And as if that weren’t enough, there is a variety of specific wage types and allowances in construction wage accounting that must be accurately documented and billed. These include, for example: financial accounting for construction companies korrekt erfasst und abgerechnet werden müssen. Dazu zählen beispielsweise:
- Additional winter allowance (MWG) and winter allowance supplement (ZWG): Benefits to promote year-round employment.
- Seasonal short-time work allowance (Saison-Kug): A special form of short-time work allowance for construction companies during bad weather periods.
- Hardship allowances: For particularly demanding or dangerous work.
- Travel time compensation/travel cost reimbursement: For trips to the construction site.
- Daily allowances: Meal allowances for external work.
Accurate determination and taxation or social security treatment of these payroll components requires in-depth expertise and a precise data basis in the financial accounting for construction companies. Errors can, as you can imagine, quickly lead to unpleasant additional demands from social security agencies or the tax office.Optimal software selection: Efficiency boost for your construction financial accounting
Overview of common software solutions for construction companies
Fortunately, there is now a wide range of software solutions specifically tailored to the needs of the financial accounting for construction companies . These range from pure accounting programs to comprehensive ERP systems for the construction industry, which can truly cover all commercial processes. In general, the solutions can be divided into Cloud-based software and on-premise installations . Cloud solutions offer the advantage of location-independent access and often lower initial investment costs, while on-premise systems can provide greater control over data and infrastructure – both have their right to exist. Important features include, in addition to standard accounting, often modules for cost accounting, dunning, asset accounting, and specific functions for the construction industry such as representing partial and final invoices or integrating construction wages. A careful analysis of one’s own needs is absolutely critical for selecting the right software for your financial accounting for construction companies.
- A wide range of software solutions for construction financial accounting available, from pure accounting programs to ERP systems.
- Distinction between cloud-based (flexible, lower initial costs) and on-premise solutions (data control).
- Important features: standard accounting, cost accounting, dunning, asset accounting, construction-specific features (partial/final invoices, construction wages).
- Careful needs analysis is crucial for the right software selection.
Criteria for selecting the right software
But what really matters in selecting the right software for the financial accounting for construction companies ? The decision should be based on clearly defined criteria to ensure that the solution meets the specific requirements of your operation and provides real added value for the financial accounting for construction companies business. Because unsuitable software can quickly lead to inefficiency, errors, and understandably also frustration. Therefore, thorough evaluation is essential.
Important selection criteria at a glance:
- Industry-specific features: The software must be able to reflect the specifics of the construction industry, e.g., managing retainage, §13b UStG, construction withholding tax, partial and final invoices. This is a must!
- User-friendliness: An intuitive operation and a clear structure are important to shorten training periods and increase acceptance among employees. We at Valoon GmbH, for example, place the highest value on Simplicity and user-friendliness.
- Interfaces to other systems: The ability to integrate with other systems used in the company (e.g., construction payroll, inventory management, construction calculation software, project management tools like our solution at Valoon GmbH) is crucial for a seamless data flow and the prevention of duplicate entries.
- GoBD compliance: The software must meet the principles for proper management and storage of books, records, and documents in electronic form as well as for data access. Certification (e.g., GoB/GoBS) is an important quality feature.
- Scalability and flexibility: The software should be able to grow with your company and allow for adjustments to changing needs. Think about the future!
Presentation of selected software solutions (with reference to research input)
As already mentioned, there are various software providers that specialize in financial accounting for construction companies construction management. We at Valoon GmbH focus, for example, on the seamless integration of popular messaging services like WhatsApp, to simplify data collection directly from the construction site and transform unstructured communication into usable project data – an approach that makes practice easier. Other solutions like Pro-Bau/S® financial accounting feature strong automation, for example through a ‘posting automation’, and a GOB/GoBS certification. Bau-SU financial accounting stands out for its ability to integrate with other Bau-SU modules and customizability, including document management with an archive number system. For smaller companies or those that value particularly easy handling and direct integration with tax advisors, sevdesk could be an interesting option, promoting automated document processing and ELSTER interface. SIS-KEOPS focuses on construction-specific features like partial/final invoice automation. For our colleagues in the Swiss market, SORBA is a well-known cloud-based solution. You see, each of these solutions has specific strengths that should be considered when selecting for your own financial accounting for construction companies business.ERP integration: Data-driven decisions for your construction company enable
The advantages of an integrated solution over isolated solutions
Another major step towards greater efficiency and better decisions is the integration of the financial accounting for construction companies into a comprehensive ERP system (Enterprise Resource Planning). This offers significant advantages over the use of isolated software applications, known as silo solutions. Imagine: An integrated solution creates a central data base, accessible by all relevant departments. This not only avoids redundant data entries and reduces sources of error but also significantly improves data consistency. Information from project planning, material management, or time tracking flows directly into financial accounting and cost accounting, allowing for timely and accurate project calculation and control. This seamless flow of information is a key factor for an efficient financial accounting. and supports agile corporate management. As we also see with some providers like Bau-SU, there is a strong emphasis on this integration.
Core modules of an ERP system for construction companies (order processing, material management, personnel planning)
What is included in such a powerful ERP system for us in construction? Typically, it includes several core modules that are closely intertwined. These include the financial accounting for construction companies order processing (from quote creation to invoicing to change order management), the material management Materialmanagement (purchasing, inventory management, planning), the personnel planning (staff planning, capacity overview) and often also equipment planning. The beauty of it: The data from these operational modules, such as material costs from purchasing or labor hours from personnel planning, flows directly into project accounting and thus into the project accounting . This enables a detailed post-calculation and effective controlling of large projects. The integration ensures that all relevant information for financial decisions is current and consistent – a solid foundation.
Real-time data access and improved decision-making through integration
One of the unbeatable advantages of an integrated financial accounting for construction companies within an ERP system is the access to financial data in real-time. Imagine, managers and decision-makers can access current key figures related to liquidity, project costs, or profitability at any time. This allows for quicker responses to changes, early recognition of risks, and well-informed business decisions. A practical example: The immediate visibility of cost overruns in a project can prompt timely countermeasures before it becomes really expensive. The Pro-Bau/S® financial accounting mentioned in the research input emphasizes its real-time reporting dashboard. This direct access to current information is a significant competitive advantage and a core benefit of a modern financial accounting for construction companies.
cost and performance accounting in the integrated system
Also, the good old cost and performance accounting (KLR), an indispensable tool for managing construction companies, benefits greatly from integration into an ERP system with a connected financial accounting for construction companies. By directly adopting actual data from financial accounting and operational modules (e.g., material withdrawals, recorded working hours), precise target-actual comparisons at the project and cost center level can be conducted. This allows for a detailed analysis of the profitability of individual construction sites and service areas. This way, deviations from the plan quickly become apparent, and their causes can be analyzed. An integrated KLR thus provides the necessary transparency for effective cost control and informed pricing, which is crucial for the success of the accounting and the overall operation. For example, Bau-SU financial accounting enables direct periodic charges to operational management (BBS) through its integration.Efficiency booster: Best practices for your financial accounting in construction.
Digitalization of receipt management: Scanning, OCR and automatic receipt recognition
Let’s be honest: Who doesn’t sometimes struggle with piles of paper and the manual entry of receipts? A paper-based receipt management system is not only time-consuming and prone to errors but simply inefficient. The digitalization of receipt management is therefore a crucial step towards optimizing the financial accounting for construction companies – a real game-changer! By scanning paper receipts or importing digital invoices (e.g., ZUGFeRD, XRechnung) and using OCR technology (Optical Character Recognition), relevant data such as issuer, date, amount, and line items can be automatically read and prepared for posting. Software solutions like sevdesk or BauSU with its XML server and incoming invoice control offer such helpful features. This drastically reduces manual entry efforts, minimizes errors, and speeds up the entire booking process. Digital receipt archiving also ensures GoBD compliance and allows for quick access to required documents, which significantly enhances the efficiency of the financial accounting. .
Automation of routine tasks: Bank reconciliation, dunning, payment transactions
And there are more areas where automation can make our lives in the financial accounting for construction companies easier, freeing up valuable time for more demanding tasks. The automatic bank reconciliation, where electronic bank statements (e.g., via CAMT import like in Bau-SU) are matched with open items in accounting and payment receipts are automatically assigned, is a wonderful example of this. Also consider dunning: It can be made significantly more efficient through automatic reminders and the generation of dunning letters at definable stages (as with Pro-Bau/S®). In payment transactions, software solutions enable the automatic creation of transfer slips or SEPA files, considering discount periods. These automations significantly contribute to increasing efficiency and reducing errors in the accounting and also improve liquidity management.
Regular account reconciliation and liquidity planning
A classic, but always important and often underestimated: A regular and careful account reconciliation is essential for solid financial accounting for construction companies. At least monthly, all balance sheet accounts, especially bank accounts, receivables, and liabilities, should be reconciled to detect and clarify discrepancies early. Closely related is proactive liquidity planning. And those who have their accounts under control can also plan liquidity better. This provides insights into expected inflows and outflows and helps identify liquidity shortages in time and take countermeasures. Modern software solutions often offer integrated tools for liquidity planning, based on current accounting data and planned cash flows. Especially for us in construction, where we are often confronted with high prepayments and long payment terms, proactive liquidity management is vital and a core component of professional financial accounting for construction companies. Pro-Bau/S® highlights current liquidity data as a feature.
Employee training and continuous education
But all the great software and optimized processes are of little use if the employees do not have the necessary knowledge and skills to use them effectively. Therefore, regular training and continuous education for employees working in the financial accounting for construction companies is simply essential. This applies not only to the operation of the deployed software but also to the understanding of industry-specific accounting and tax regulations (e.g., §13b UStG, construction withholding tax, construction payroll). After all, the world of laws and regulations doesn’t stand still: Changes in legislation or new case law must be communicated promptly and integrated into internal processes. Investments in the qualification of employees pay off with higher work quality, fewer errors, and improved compliance and strengthen the competence of the financial accounting for construction companies sustainably. We at Valoon GmbH actively support our customers in leveraging the full potential of our solutions.
Important areas for employee training:
- Software application: Efficient use of all relevant modules and functions of the deployed financial accounting software.
- Legal fundamentals: Current knowledge of commercial law, tax law (especially value-added tax, construction withholding tax) and social security law (construction payroll).
- Internal processes: Understanding and compliance with internal company processes and guidelines for accounting and documentation.
Future-proof financial accounting: Your path to greater profitability in construction
The importance of professional financial accounting for the success of construction companies
If there is one thing we hope to make clear in this article, it’s this: Professionally managed financial accounting for construction companies is far more than a tedious obligation – it’s a strategic tool for the sustainable success of your construction company. It not only provides the basis for compliance with legal regulations but also enables a transparent presentation of the asset, financial, and earnings situation. And you also feel this in dealing with banks, investors, and business partners, as it creates trust. Furthermore, a well-organized financial accounting. provides valuable data for the project controlling., the cost accounting and liquidity planning. Let’s be honest: Who wants to make important business decisions in the dark? Investing in modern, industry-specific software and qualified employees pays off through increased efficiency, risk minimization, and ultimately, higher profitability.
Future trends in financial accounting in the construction industry (e.g., AI, automation)
And the journey continues: The financial accounting for construction companies is in constant change, driven by exciting technological developments. Keywords like Artificial Intelligence (AI) and further automation are no longer just music of the future but will play an increasingly significant role. AI-supported systems can become even more precise in automatic receipt recognition and posting (as hinted at by providers like Candis or sevdesk), detect anomalies in data patterns, and create forecasts for liquidity development. The automation of routine processes like dunning or payment transactions will continue and create space for more sophisticated analytical activities. Cloud technologies enable more flexible access to data and better collaboration. The integration of data from various sources, as our Valoon GmbH software drives through the connection of messenger services for the digital onsite data capture , will become increasingly important for a comprehensive financial accounting for construction companies .
Recommendations for construction companies to optimize their financial accounting processes
So what can you do concretely to make your financial accounting for construction companies future-proof and optimal? Here are a few recommendations from our side: Focus on digitization and automation, wherever it makes sense, to reduce manual efforts and minimize sources of error. Choose a software solution that is specifically tailored to the needs of the construction industry and can be seamlessly integrated into your existing IT landscape. Pay attention to high user-friendliness to promote acceptance among your employees – a core concern of ours at Valoon GmbH. Invest in the training of your employees, so they can use the systems efficiently and understand the complex regulations of the construction industry. And very important: Stay on top of things! Regularly review your processes and adjust them as needed to new circumstances. Optimizing your financial accounting for construction companies is a continuous process, but one that pays off through greater efficiency, transparency, and ultimately economic success. Optimizing your financial accounting in your construction company is a crucial step towards more profitability and security. Contact us at Valoon GmbH today via our contact page, to start your individual consultation and jointly unlock the potentials for your company. Register and find out how we can simplify your data capture and project communication.
Why is specialized financial accounting so important for construction companies?
A specialized financial accounting is essential for construction companies, as it accurately represents complex requirements such as progress payments, construction withholding tax, and § 13b VAT Act . It enables precise project cost tracking und periodic revenue recognition, which is crucial for informed decisions and compliance with regulations such as GoBD.
What is the difference between SKR03 and SKR04 for my construction company?
Der SKR03 is based on the business processes, while the SKR04 is structured according to the balance sheet and income statement . Both can be adapted for construction companies to represent cost centers for construction sites, for example. The choice often depends on the size of the company and the preferences of your tax advisor; a careful adjustment is crucial for meaningful accounting.
How does the reverse charge mechanism (§ 13b VAT Act) work in construction?
In construction services between two construction companies, the VAT liability is transferred to the recipient of the service. The service provider issues a net invoice with reference to § 13b VAT Act. It is essential to check the construction service characteristics and the entrepreneurial status of the recipient (e.g., by exemption certificate) to avoid liability risks. What do I need to know about construction withholding tax and how do I get an exemption?
Was muss ich zur Bauabzugssteuer wissen und wie erhalte ich eine Freistellung?
The client must withhold 15% of the invoice amount and pay it to the tax office. An exemption certificate according to § 48b Income Tax Act, issued by the tax office of the performing entrepreneur, exempts from this deduction. The service recipient must verify the validity of the certificate.
Which software functions are particularly important for financial accounting in construction?
Pay attention to industry-specific features such as the representation of interim/final invoices, §13b VAT Act, construction withholding tax, and ideally, construction payroll. Also important are user-friendliness, interfaces to other systems (e.g., project management, messenger services like at Valoon GmbH for easy data capture) and GoBD compliance.
How can digitization improve my financial accounting in the construction company?
Digitization, e.g., through automated receipt recognition (OCR), electronic bank reconciliation, and digital document archives, significantly reduces manual effort. This can reduce the processing time for documents by up to 95%, minimize errors, and accelerate the entire booking process.
What advantages does integrating financial accounting into an ERP system offer?
An ERP integration creates a central data base, avoids duplicate entries, and allows for real-time data access. This leads to improved decision-making, more accurate project costing, and efficient cost and performance accounting.
How does Valoon GmbH specifically help me with financial accounting in construction?
Valoon GmbH optimizes your financial processes by simplifying data capture directly from the construction site via common messenger services. We transform unstructured communication into valuable project data , which eliminates the need for complex software training and sustainably improves the flow of information between field staff and the office. nachhaltig verbessert.
