How has COVID-19 affected the construction industry?

Practice Management Construction industry

Timothy Wingate, EAThere’s no doubt COVID-19 has disrupted many industries. Take, for example, construction. To find out more about the state of the industry, and how tax professionals can advise and better serve these clients, I visited with Timothy Wingate Jr., EA, who niches in construction. Tim is owner of G+F Business & Financial Consulting LLC, and a member of the Intuit® Tax Customer Council. He was recently profiled in an article on the Intuit Tax Pro Center.

Scott Cytron: It seems construction is still happening during the nationwide quarantine. Is it considered an essential service?

Tim Wingate: All construction is considered essential. If there is a construction emergency, for example, when your house catches on fire or a tornado rips the roof off your office building, you will need a company you can call to come out and fix it fast. It’s good to know that construction is essential when you think about these possibilities.

Scott Cytron: For those businesses affected by COVID-19, what are the biggest effects?

Tim Wingate: Businesses are trying to figure out how to stay organized and relevant in this environment. Cash flow is a concern; a lot of the general contractors have slowed down payment to the smaller subcontractors because it’s been difficult to get workers to come to work because of COVID-19 health concerns. Residential construction has also slowed down because most homeowners are working from home and can’t have a lot of construction going on in the background.

Many construction firm owners realize that if they don’t have their tax and accounting together, it’s tough or impossible to apply for many of the provisions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Since applying for any loan is done online, all businesses that were reluctant to adopt new technology are finding themselves behind the eight ball. Now, they are scrambling to figure out how to implement all this technology into their organization.

This is a great time to get the company’s administration staff in the cloud if they are working remotely. Doing this will allow companies to hire replacement admins anywhere in the country if necessary, and with unemployment on the rise, they can get the cream of the crop. Remember, there is always opportunity in the midst of unfortunate events.

I’m also advising my construction clients to make sure that all worker’s compensation and general liability policies are up to date for them and their subcontractors, ensure they are providing safety training that includes COVID-19 safety protocols, and have signed documentation from all employees who were trained. Then, place the signed documents in their employee files.

Scott Cytron: How can tax professionals help these clients?

Tim Wingate: First, we have to assess where they are on a tax and accounting perspective. Then, we can get them organized, and advise them on how to take advantage of some of the tax credits and loans available to them. They also need our help to implement a sound strategy to get them through these uncharted paths.

Scott Cytron: Beyond tax, how can tax pros advise construction industry clients?

Tim Wingate: Right now, I’m advising on technology that makes sense for the way they are going to need to do business. It’s our job to help our clients weigh the cost of the technology investment against the revenue gained back because of it. Here are a few examples:

  • Paying employees, independent contractors, and subcontractors by direct deposit to comply with social distancing guidelines, and save money and time handing out checks.
  • Using video conferencing to remotely review estimates and proposals.
  • Booking appointments with a booking application instead of calling into the office or playing email tennis.

Implementing these and other processes shows you’re a trusted advisor and a true partner to your clients.

Scott Cytron: Thanks, Tim. I hope you and your family stay well.

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