And Reduce Taxable Income Through Strategic Accounting and Real Estate Integration
Construction contractors working on large-scale, multiyear projects often face serious
challenges when it comes to understanding their financial health. Revenue might not arrive for
months—or even years—after the costs are incurred, making it nearly impossible to track job
profitability or manage cash flow using basic bookkeeping methods.
That was exactly the case for one of our clients, a growing electrical contracting business
handling multi-phase commercial and industrial projects. They had strong client demand and
solid work in the pipeline—but their financials told them very little about the true health of the business.
They partnered with Solutions Group Accounting Firm (SGAF) and our team of CPAs to bring structure, strategy, and long-term tax planning to their operations.
The Challenge: Delayed Revenue and No Visibility Into Job Profitability
Our Solution: Accrual Accounting, Job Profitability Tracking, and Strategic Tax Planning
The Challenge: Delayed Revenue and No Visibility Into Job Profitability
The client had been operating on a cash basis, booking revenue only when payments arrived—
which, in some cases, was two or three years after a project began. Meanwhile, costs were being incurred in real time, from labor and materials to subcontractors and project management overhead.
This mismatch created several major problems:
This mismatch created several major problems:
- Inaccurate financial statements that didn’t reflect reality
- No visibility into which projects were profitable or bleeding cash
- Delayed payments creating cash flow strain and budgeting challenges
- A growing tax liability from sudden spikes in income years after costs were incurred
- No method for measuring productivity of the internal team or sales reps
Despite having solid gross revenues, the owners had no true understanding of what jobs were
profitable, which team members were contributing to results, or how to plan around incoming
revenue.
Our Solution: Accrual Accounting, Job Profitability Tracking, and Strategic Tax Planning
SGAF initiated a complete financial overhaul to bring this contractor’s accounting and tax
processes in line with their operational complexity.
Implemented Accrual Accounting to Match Revenue and Costs
Implemented Accrual Accounting to Match Revenue and Costs
We converted the business from cash to accrual basis accounting, allowing revenue to be
matched to expenses when work was performed—not just when the check arrived. This gave
the owners accurate profit-and-loss reporting and real clarity into the financial performance of
each project, even if collections came later.
Set Up Job-Level Profitability Tracking
Set Up Job-Level Profitability Tracking
We worked with their internal operations team to implement job costing procedures within
QuickBooks Online, allocating labor, materials, subcontractor fees, and overhead to each active
project. Over time, we built dashboards showing project-level profitability and gross margins,
enabling leadership to course-correct early if costs got out of hand.
Trained Staff to Track Internal Productivity and Sales Output
Trained Staff to Track Internal Productivity and Sales Output
We helped implement internal tracking systems for field staff productivity and sales team
conversion rates, creating better accountability and informing bonus and compensation models.
Productivity tracking became central to the firm’s operational decision-making.
Reduced Taxable Income Through Income Shifting and Entity Optimization
Reduced Taxable Income Through Income Shifting and Entity Optimization
SGAF conducted a full review of the company’s structure, realigning certain revenue streams
across multiple entities. Through income shifting, compensation restructuring, and S-Corp
strategy, we reduced the owner’s annual tax liability significantly. Quarterly tax planning now
ensures alignment between profitability and estimated payments.
Integrated Real Estate into the Long-Term Wealth Strategy
Integrated Real Estate into the Long-Term Wealth Strategy
The business owner expressed a long-term goal of building wealth through real estate. SGAF
advised on the purchase of commercial property, structured through a separate entity and
leased back to the operating business. We executed cost segregation studies to accelerate
depreciation, reduce taxable income, and create long-term passive income—while turning the
business into a real estate-backed investment platform.
The Result: Financial Control, Tax Savings, and Long-Term Investment Strategy
With SGAF’s support, the electrical contracting firm achieved:
The Result: Financial Control, Tax Savings, and Long-Term Investment Strategy
With SGAF’s support, the electrical contracting firm achieved:
- Full visibility into job-level financial performance
- Accurate monthly financial statements under accrual basis
- Streamlined tax structure and proactive income deferral strategies
- A structured productivity system for both field teams and sales personnel
- Over $150,000 in first-year tax savings
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A long-term real estate investment framework that supports both personal and businesswealth-building goals
Today, the owners no longer operate on financial guesswork. Instead, they make hiring, pricing,
and investment decisions based on reliable data—supported by a trusted accounting partner
who understands the construction industry inside and out.
If You’re an Electrical or Home Services Business Owner, It’s Time to Upgrade Your Financial
Systems
At Solutions Group Accounting Firm, we help electrical, plumbing, and construction contractors
move beyond reactive bookkeeping to strategic financial management. Whether you’re scaling
up, planning for succession, or building long-term wealth through real estate, our team is here
to help.
Build smarter. Pay less in taxes. Make confident decisions.
Schedule a Free Contractor Strategy Session Today
Schedule a Free Contractor Strategy Session Today
