A review of a construction company's records revealed that contract accounting had not been applied correctly for several years — we corrected the treatment and restored timely reporting.
The Challenge
A construction company approached us after experiencing persistent delays from its outsourced accounting provider. Financial records were frequently completed well behind schedule, resulting in repeated late statutory filings and regulatory penalties. While the company initially sought a more reliable accounting service, a review of its financial records revealed a more significant issue.
Our assessment identified that contract accounting had not been appropriately applied over several financial years. As a result, revenue and costs were not recognised in accordance with the applicable accounting standards, affecting the accuracy of the company's financial reporting and creating potential compliance risks.
Our Solution
Following our appointment, we took over the company's accounting function and implemented disciplined monthly reporting processes to ensure statutory deadlines could be met consistently.
We worked closely with management to assess the historical accounting treatment, explained the implications of the issues identified, and developed a practical plan to correct the accounting records and future reporting. In addition to restoring timely compliance, we introduced stronger accounting procedures and reporting controls to improve the reliability of the company's financial information.
The Outcome
The company successfully resolved its historical accounting issues and restored confidence in its financial reporting. More importantly, it established processes that significantly reduced the risk of future compliance breaches, regulatory penalties and reporting errors.
Although our professional fees were higher than those of the previous outsourced bookkeeping provider, the engagement demonstrated that the lowest-cost option is not always the most economical. By delivering technically sound advice, accurate financial reporting and proactive compliance support, we helped the client avoid far greater costs arising from penalties, corrective work and potential regulatory issues.
