Introduction
For many construction businesses, “once-a-year accounting” feels like the natural starting point. You work hard all year, keep hold of your invoices and receipts, then hand everything to your accountant after the year-end and wait for your accounts and tax bill.
When you’re a small sole trader turning over £50k–£100k, that approach can work.
But once your construction business starts growing — taking on bigger jobs, more subcontractors, or hitting £250,000+ turnover — once-a-year accounting quickly becomes a problem rather than a solution.
At Accounting Matters, we see this transition all the time. Businesses don’t fail because they’re unprofitable — they fail because they don’t have timely financial information to support growth.
This blog explains why growing construction businesses outgrow annual accounting, the warning signs to watch for, and what to do instead.
What Is “Once-a-Year” Accounting?
Once-a-year accounting is exactly what it sounds like:
- Your accountant prepares your accounts after the year has ended
- Tax is calculated retrospectively
- Decisions are based on historic information
- Little to no financial insight is provided during the year
This approach focuses on compliance, not control.
It tells HMRC what happened last year — but it doesn’t help you manage what’s happening right now.
For growing construction businesses, that lack of insight becomes risky.
Why Once-a-Year Accounting Stops Working as You Grow
1. Construction Cash Flow Becomes Too Complex
Growth in construction rarely means smoother cash flow.
Instead, you deal with:
- Larger contract values
- Stage payments
- Retentions
- CIS deductions
- Reverse charge VAT
- Rising material and labour costs
Once-a-year accounting cannot:
- Forecast cash shortages
- Highlight slow-paying clients
- Show retention exposure
- Help plan VAT and tax payments
Without real-time visibility, directors make decisions based on invoices raised — not cash available.
That’s when profitable businesses start to struggle.
2. Tax Surprises Become Bigger and More Dangerous
At £250k+ turnover, tax bills are no longer manageable “after the event”.
Corporation tax, VAT, PAYE and CIS all start to stack up.
With once-a-year accounting:
- Tax planning opportunities are missed
- Bills arrive months after the year ends
- Cash hasn’t been set aside
- Directors are forced into last-minute decisions
At Accounting Matters, we regularly see construction clients shocked by tax bills that could have been reduced or planned for if the numbers had been reviewed during the year.
3. You Lose Control of Profitability
As construction businesses grow, margins tighten.
Without regular reporting:
- You don’t know which jobs make money
- Loss-making projects go unnoticed
- Costs creep up quietly
- Pricing decisions are made blindly
Annual accounts confirm profit — but they don’t explain where it came from or how to repeat it.
Growing construction firms need job-level visibility, not just an annual profit figure.
4. CIS and Payroll Risks Increase
As turnover grows, so does your workforce.
You move from:
- Occasional subcontractors
to
- Regular CIS labour
- PAYE employees
- Apprentices
Once-a-year accounting offers no protection against:
- Late CIS returns
- Incorrect deductions
- Subcontractor disputes
- HMRC penalties
Construction firms at this stage need ongoing compliance support, not retrospective fixes.
5. Sole Trader → Limited Company Changes Everything
Many construction businesses outgrow annual accounting at the point of incorporation.
Becoming a limited company brings:
- Corporation tax
- Director salary and dividends
- Payroll compliance
- Increased HMRC scrutiny
- Legal responsibilities
Yet many new directors still receive the same annual service they had as sole traders — which is no longer fit for purpose.
At this stage, businesses need regular advice, not just annual filings.
Warning Signs You’ve Outgrown Once-a-Year Accounting
If any of these sound familiar, your business has outgrown annual accounting:
✔ You’re unsure how much tax to set aside
✔ Cash flow feels tight despite strong sales
✔ CIS penalties or payroll issues are creeping in
✔ You can’t see job-level profitability
✔ You’re spending evenings on admin
✔ Decisions are made on instinct, not numbers
✔ Your accountant only contacts you at year-end
Growth demands visibility — not guesswork.
What Growing Construction Businesses Need Instead
Once-a-year accounting should be replaced with a proactive financial framework, including:
Quarterly Management Accounts
- Regular insight into profit, cash flow and costs
- Early identification of issues
- Clear understanding of performance
Month-9 Tax Planning
- Forecasting corporation tax before year-end
- Planning dividends and purchases
- Avoiding surprise bills
Cash Flow Forecasting
- Knowing when pressure points are coming
- Planning around VAT, payroll and suppliers
Ongoing CIS & Payroll Support
- Monthly compliance
- Accurate subcontractor payments
- Reduced HMRC risk
Cloud Accounting Systems
- Real-time access to numbers
- Integrated CIS, payroll and VAT
- Less admin, more clarity
How Accounting Matters Supports Growing Construction Businesses
At Accounting Matters, we specialise in supporting construction firms through this growth phase.
Our approach includes:
- Cloud accounting setup using Xero, Dext and BrightPay
- Monthly or quarterly bookkeeping reviews
- Quarterly management accounts
- Month-9 tax planning meetings
- Ongoing CIS and payroll management
- Straight-talking advice tailored to construction
We don’t just file accounts — we help you understand and control your business.
Real-World Example
A construction client came to us turning over £300k, still on annual accounting.
They had:
- No idea of their tax exposure
- Regular cash flow stress
- Retentions not tracked
- CIS submissions rushed each month
Within six months of moving to quarterly reporting:
- Cash flow stabilised
- Tax was planned, not panicked
- Profit margins improved
- Admin time reduced significantly
The numbers didn’t change — the visibility did.
Why This Matters More in Construction Than Any Other Industry
Construction is:
- Cash-intensive
- Labour-heavy
- Compliance-driven
- Low-margin
Small mistakes scale quickly as turnover grows.
Once-a-year accounting simply doesn’t provide the support needed to manage these risks.
Conclusion: Growth Needs More Than Compliance
Once-a-year accounting is fine for small, stable businesses.
But if your construction business is growing, incorporating, or hitting £250k+ turnover, it’s no longer enough.
Growth requires:
- Timely information
- Proactive planning
- Specialist knowledge
- Ongoing support
At Accounting Matters, we help construction businesses move beyond annual accounting and into a structure that supports sustainable growth.
You build the business.
We help you build the financial control behind it.
Thinking of moving beyond once-a-year accounting?
📩 welcome@accountingmatters.co.uk
📞 01773 747990
🌐 www.accountingmatters.co.uk