Written by Accounting Matters – specialists in construction accounting, CIS compliance, and proactive financial support.
Introduction
Most construction business owners assume that if their accountant files the accounts on time and keeps HMRC happy, they’re doing a good job.
And on paper, that might be true.
But in reality, construction is one of the most complex industries in the UK, and “compliance-only” accounting often leaves directors exposed to cash flow problems, tax shocks, CIS penalties, and missed opportunities.
At Accounting Matters, we regularly meet construction businesses who are frustrated, stressed, and confused — not because they’ve done anything wrong, but because their accountant hasn’t been telling them what they actually need to know.
This blog covers the things your accountant should be telling you — but most don’t — and why hearing them early can make the difference between surviving and thriving in construction.
1. “Profit Doesn’t Mean Cash”
This is the number one misunderstanding in construction — and many accountants never spell it out clearly enough.
Your accounts might show a healthy profit, but your bank balance tells a different story.
Why?
- Retentions held back
- Stage payments delayed
- CIS deductions reducing cash received
- VAT due before you’ve been paid
- Large upfront material costs
What your accountant should be telling you:
“Your business is profitable, but your cash flow is under pressure — and here’s why.”
At Accounting Matters, we focus on cash flow first, not just profit. Because in construction, cash is what pays wages, subcontractors, suppliers, and HMRC — not profit on a report.
2. “You’re Paying Too Much Tax — And You Don’t Know It”
Many construction business owners only find out their tax bill after the year has ended.
By then:
- Planning opportunities are gone
- Cash hasn’t been set aside
- Stress levels spike
What your accountant should be telling you:
“Based on your numbers so far, this is your likely tax bill — and here’s what we can still do to reduce it.”
At Accounting Matters, we hold Month-9 tax planning meetings, allowing construction clients to:
- Forecast corporation tax early
- Plan dividends properly
- Time equipment purchases
- Avoid nasty surprises
Tax should be planned, not endured.
3. “This Job Isn’t Actually Making You Money”
Construction businesses often stay busy while quietly losing margin.
Why?
- Poor job costing
- Labour overruns
- Material price increases
- Under-pricing work to win contracts
Annual accounts don’t tell you which jobs are profitable — just whether the business made money overall.
What your accountant should be telling you:
“These projects are driving profit — these ones are draining it.”
At Accounting Matters, we use job-level reporting and quarterly management accounts to show:
- Gross margin by project
- Cost overruns early
- Trends in labour and materials
- Where pricing needs adjusting
Without this insight, mistakes repeat — and margins disappear quietly.
4. “CIS Is a Risk Area for You”
The Construction Industry Scheme (CIS) is one of the most common sources of penalties we see.
Yet many accountants:
- File CIS returns late
- Don’t reconcile deductions properly
- Don’t explain the risks
- Only react once HMRC gets involved
What your accountant should be telling you:
“This is where your CIS exposure is — and here’s how we keep it under control.”
At Accounting Matters, CIS isn’t an afterthought. We:
- Verify subcontractors properly
- Automate deductions
- File returns on time
- Issue accurate statements
- Reconcile CIS monthly
That’s how penalties and subcontractor disputes are avoided.
5. “Reverse Charge VAT Is Affecting Your Cash Flow”
The Domestic Reverse Charge caught many construction businesses off guard.
VAT that used to create a short-term cash buffer is no longer received — and that has a direct impact on working capital.
What your accountant should be telling you:
“Reverse charge VAT has changed your cash flow — here’s how we adapt.”
Instead, many construction firms are left wondering why cash feels tighter despite strong turnover.
We help clients:
- Apply reverse charge VAT correctly
- Invoice properly
- Plan VAT quarters realistically
- Adjust pricing and cash flow expectations
VAT isn’t just a compliance issue — it’s a cash flow issue.
6. “Once-a-Year Accounting Isn’t Enough for Your Business Now”
This is a big one.
Many construction firms continue with annual accounting long after they’ve outgrown it — especially when:
- Turnover exceeds £250k
- They move from sole trader to limited company
- They employ staff and subcontractors
- Cash flow becomes unpredictable
What your accountant should be telling you:
“Your business has grown — your accounting support needs to grow with it.”
At Accounting Matters, we move growing construction businesses onto:
- Quarterly management accounts
- Regular reviews
- Proactive planning
- Ongoing compliance support
Growth needs visibility, not hindsight.
7. “You Don’t Actually Know Your Numbers — And That’s Risky”
Many directors feel busy and assume that means things are going well.
But without up-to-date numbers, decisions are often based on:
- Gut instinct
- Bank balance snapshots
- Last year’s results
What your accountant should be telling you:
“You need live information to make confident decisions.”
We use cloud accounting systems (Xero, Dext, BrightPay) to give clients:
- Real-time access to cash position
- Up-to-date debtor and creditor lists
- Accurate tax forecasts
- Clean CIS and payroll data
This removes guesswork and stress.
8. “Your Business Is Carrying More Risk Than You Realise”
Construction businesses carry hidden risks:
- HMRC penalties
- Payroll non-compliance
- Cash shortages
- Subcontractor disputes
- Poor record keeping
- Over-reliance on a few clients
What your accountant should be telling you:
“Here’s where the risks are — and here’s how we reduce them.”
At Accounting Matters, we see our role as risk management, not just reporting.
Why Most Accountants Don’t Say These Things
It’s not always because they don’t care.
Often it’s because:
- They’re focused purely on compliance
- They don’t specialise in construction
- They don’t have regular contact with clients
- They’re working with historic data only
Construction businesses don’t need silence — they need guidance.
What Makes Accounting Matters Different
Construction clients choose Accounting Matters because we:
- Understand the construction industry
- Speak plainly and honestly
- Highlight issues early
- Use technology properly
- Focus on cash flow, not just profit
- Offer proactive advice year-round
- Act as a partner, not just a service provider
We tell clients what they need to hear — not just what’s easy to say.
A Real-World Example
A construction company came to us frustrated:
- Profitable on paper
- Constant cash pressure
- CIS penalties piling up
- No idea what tax was coming
Within months:
- Cash flow was stabilised
- CIS issues resolved
- Tax planned early
- Management accounts introduced
- Director stress reduced significantly
The difference wasn’t the business — it was the advice.
Conclusion: Good Accounting Is About Conversation, Not Just Compliance
Your accountant should be talking to you about:
- Cash flow
- Risk
- Profitability
- Tax planning
- Growth
- Systems
- Decisions
If the only time you hear from your accountant is at year-end, you’re missing opportunities — and exposing your business to unnecessary risk.
At Accounting Matters, we believe construction businesses deserve better than silence.
You build the projects.
We help you understand the numbers behind them.
Want an accountant who actually tells you what matters?
📩 welcome@accountingmatters.co.uk
📞 01773 747990
🌐 www.accountingmatters.co.uk