The Problem With Non Construction Accountants

95% of accountants in Australia do not understand how to prepare financial statements for a construction company…
However, it’s not entirely their fault…

It’s because of the jargon we use in the construction industry, and it’s been confusing the bean counters for far too long now.

The issue centre’s around the term ‘Work In Progress’ which means different things to different people.

In simple terms, the construction industry acknowledges that work in progress can be an asset or a liability.

However, non-construction accountants that are not familiar with the specifics of preparing financial reports for a building company believe that work in progress can only ever be an asset because they believe the calculation is the same in construction as it is in manufacturing.

This results in work in progress being a liability for those building companies rather than the asset that non-construction accountants are expecting.