Best Practices to Easily Evaluate Accounting’s Performance

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Quarterly payments are overdue, books are behind, financial data is unavailable, taxes are in arrears and penalties are looming. Many builders and investors do not commit the time to review their accountant’s performance until after their business is negatively impacted. However, routinely evaluating your accounting is the best way to protect your business. And doing so doesn’t need to be a lengthy, time-consuming process.

Bad accountants cost time and money. Good accountants are typically helpful and worth their fee. Meanwhile, great accountants actively improve a business’ financial performance. Determining which bucket your accountant falls into comes down to the following factors:


Builders know the costs of missing deadlines all too well. But with an endless to-do list and vendors and contractors to keep on schedule, no builder should have to waste time keeping accountants on task. Missing deadlines over the last three quarters is an indicator that an accountant is unfocused, distracted or simply doesn’t value their client.

This goes for reporting as well. Construction businesses run on accurate, up-to-date reporting. Having to constantly issue reminders to an accountant is tedious but having to apologize to stakeholders for tardy financial reporting slows projects down and, worse, erodes trust.

Great accountants, however, plan for deadlines, automate reporting ahead of time and proactively provide confirmations of hitting critical deadlines so builders can stay focused.


There’s no expectation that a builder should pour through their accountant’s work line by line. Reports and outputs should pass the “sniff test,” though. No one knows your business better than you and, while some surprises are to be expected as part of business, it’s worth taking a closer look at numbers that don’t seem to stack up.

Reviewing the last few P&L and balance sheet reports is a good place to start. Often issues will jump out, such as high retirement plan expenses when the organization doesn’t offer a retirement plan, or revenue attributed to the wrong month or simply not recorded. An accountant’s business value is rooted in accuracy, so struggles with accuracy are a significant red flag that can put a builder’s business at risk.

A characteristic builders should look for is an accountant who proactively offers advice and guidance to improve the business. Seasoned and specialized CPAs can see where a business is heading and offer advice resulting in tax savings, more efficient operations and reduced expenses. And an accountant who can double as a CFO provides significant value to any business.


Accountants with poor and inconsistent communication can cause frustration for the builder. If it typically takes longer than 48 hours to receive a response, it’s not just an indicator that an accountant struggles with time management; it also signals the accountant is too overburdened to provide helpful or even accurate information. Likewise, consistently receiving generalized answers to specific questions is another indicator that the accountant isn’t prioritizing the account or, in some cases, doesn’t know the answer.

Another common practice of overburdened accountants is pushing work and communications to junior staffers. Not all work needs to go through the head accountant, but builders should have the majority of conversations with the CPA they hired, not a junior accountant.

Conversely, a great CPA may quickly respond but request additional time to review the business’ financial data before answering questions. CPAs who first take the necessary time to understand questions in the context of the business, its financials, and its overall strategy often provide better answers and more value.


Beyond the challenges of communication, timeliness and accuracy, the biggest red flags come when an accountant can’t provide their primary service due to lack of knowledge. It’s fast and easy to check whether an accountant has their CPA license and if it’s current (this tool will help). Surprisingly many accountants either aren’t certified or have let their certifications lapse.

Another red flag for builders are accountants who overly reference Google. If an accountant shows more search skills than accounting knowledge when responding to questions, they are likely doing the same thing when it comes time to processing financials and prepping taxes. Trusting taxes to Google carries significant risk and undermines the significant expense of a CPA.

Great accountants, however, are in sync with their clients and understand their businesses. Real estate expertise is a tremendous advantage for a CPA with a builder client. Serving a majority of real estate accounts gives a CPA a much greater understanding of the industry and the inner workings of a builder’s business. Additionally, that extra understanding should translate into multiple ideas to improve the business every few quarters.

Bottom Line

The cost of poor accounting is more than inconvenience for a builder. Negligent and ineffective financial management comes with sizeable risk and can cost builders significant time, money, and project opportunities. Putting together a scorecard with these red and green flags gives builders a fast and consistent way to regularly assess an accountant’s performance. This helps identify potential risks before they become issues and builds trust with stakeholders.

NAHB members can access a free Accountant Scorecard here.

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