The honest answer is that a good general accountant will serve a small construction business perfectly well. Below a certain size and complexity, paying for a specialist is paying for capability you are not using.
The question is where that line sits, and what it costs you to be on the wrong side of it.
What a general accountant does well
Statutory accounts, corporation tax, Self Assessment, VAT returns and payroll. That is most of what most businesses need, and a competent general practice does all of it properly.
If you are a sole trader subcontractor with a van, some tools and one contractor paying you, a general accountant is the right answer. Do not let anyone tell you otherwise.
Where construction breaks the general model
| Thing | General practice | Construction specialist |
|---|---|---|
| CIS returns | Can file them. Often monthly, often late, usually charged as an extra | Filed as routine, materials split checked every month |
| CIS suffered | Claimed off your records | Reconciled against what HMRC actually holds, which is often different |
| VAT reverse charge | Knows it exists | Checks end user notifications and the 5% rate as a matter of course |
| Retentions | Frequently netted off or ignored | On the balance sheet, tracked by release date, chased |
| Work in progress | Often left out | Valued and evidenced, because lenders read it |
| Job level profit | Rarely offered | Monthly, while the job is live |
| Applications for payment | Usually treated as invoices | Treated as what they are, which changes your VAT and your turnover |
What the gap actually costs
Not theoretical. These are the things we find on new clients, more often than not.
Unclaimed CIS. Nobody reconciled what was suffered against what HMRC recorded, so some of it was never claimed and nobody knew.
Retention written off in someone’s head. Money earned, never chased, quietly gone.
The 5% VAT rate missed on conversions. Which means quoting 15% higher than the firm down the road who knew about it.
No idea which jobs made money. So the pricing never improves, because there is nothing to learn from.
Where the line sits
A general accountant is fine if you are a subcontractor, working for a handful of contractors, not paying subbies yourself, and turning over less than a few hundred thousand.
A specialist starts paying for itself once you are paying subcontractors and filing CIS monthly, running more than one job at a time, dealing with retentions and applications, or trying to work out why a busy year did not leave any money behind.
The trigger is usually the first one. The month you start paying subbies, your accounting stops being general.
What to ask whoever you are talking to
These separate the two quickly, and you do not need to know the answers yourself to hear whether they do.
- How many CIS returns do you file a month?
- How do you treat retention on the balance sheet?
- What do you do when a customer says they are an end user for the reverse charge?
- Will I get job level profitability, and how often?
- When do my management accounts arrive after month end?
A general practice will answer the first three honestly and vaguely. That is not a failing. It is just not their work.
Being straight about the trade off
A specialist usually costs more per month than a general practice. That is real and you should weigh it.
What you are buying is not compliance, because both of us do that. It is the difference between finding out a job lost money now rather than in eighteen months.
If that difference is not worth anything to you yet, stay where you are. It usually becomes worth something the year you grow.
Where we sit
Construction is the only sector we work in. Have a look at whether we are a fit, what we do, or book a call.