Year-end for construction finance professionals: the bane of our existence. Trying to complete all of the year end tasks along with all of our day-to-day responsibilities can make this time of year very difficult. 40 to 50-hour work weeks become 50 to even 70-hour weeks almost overnight. The stress of the extra responsibilities and time involved become a constant source of complaints, and excuses, for missed deadlines and oversights – both professional and personal, as extra time in the office can cause friction at home.
Of course “year-end” is sort of a misnomer – the activity around closing out the books easily extends well into the first quarter of the New Year. In the construction industry, with percent complete accounting, over and under billings to reconcile, work-in-place adjustments, and late costs creeping into the accounting system, this time period may extend even longer. Which begs the question: can I still use the “year end” excuse in June when I miss a deadline or forget my kid’s birthday?
Much of our activity here in the Finance Department at New England Construction is geared around preparing for the year-end audit. We have to compile all the data, reports and documents so that our CPA’s can verify earnings, produce audited financial statements and prepare tax returns. Some of what we have to provide is pretty straight forward: bank statements, copies of contracts, cash reconciliations, deposits, lists of outstanding payments and receivables, etc. If a Finance Director has kept up with the basics throughout the year, then this is pretty simple exercise. If not, it can be a painful time.
Other items may become more involved: verifying and updating depreciation schedules, reconciling pre-paid expenses and professional retainer agreements, and of course finalizing the work-in-progress schedule. The relative time and difficulty of these tasks all depend upon the strength of the organizational systems, and the Finance Director’s prior adherence to those systems. At New England Construction, we work to save ourselves a lot of time by the smart use of systems and technology throughout the year.
Even a well-organized Finance Director runs into the unexpected at year-end. Most of the time we are discovering and fixing simple clerical mistakes or coding errors, but sometimes we find something more significant. It is not always bad, however. We can also uncover revenue that was overlooked, which makes everyone happy and makes the effort worthwhile!
So while all of you non-finance construction professionals are on the ski mountains on a long weekend, or flying down to Palm Beach for a round of golf, please say a prayer for your poor lowly Finance Director back in the office, who will be trudging away, picking through old invoices, trying to determine if our framing subcontractor paid sales tax on the lumber he bought in Connecticut for our project in Rhode Island. Good times indeed!