When a construction business passes £1 million in turnover, “cheap accounting” stops being a bargain. It hides cashflow risks, margin leaks, and missed opportunities. Here’s what smart construction leaders do instead.
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The Illusion of a Good Deal
It’s a familiar sight.
A construction company turning over more than £1 million a year. On the surface, everything looks fine — the tax returns are filed, deadlines met, and the accountant’s invoice is pleasantly low.
But when the handover arrives, the truth surfaces:
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Messy bookkeeping
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No management accounts
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No visibility on job margins
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No cashflow forecasting
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No control over who owes what
The result? Decisions based on guesswork, not facts.
What Is “Cheap” Accounting, Really?
Cheap accounting is compliance-only accounting. It ticks the boxes HMRC cares about — but not the ones you should.
When you only pay enough for compliance, you only get:
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Annual accounts and tax returns
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Maybe a few payroll runs
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Occasional email replies
What you don’t get are the insights that actually protect and grow your business.
Why It Hurts £1m+ Construction Firms
For a £1m+ construction business, the finance function becomes strategic — not administrative. At that scale, every percentage point of margin, every delayed payment, and every underpriced job matters.
A cheap accountant won’t:
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Spot when labour or material costs are eating your profit
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Help you forecast cashflow for the next quarter
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Track retention payments or CIS deductions
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Flag the jobs that look busy but bleed margin
That’s where most construction firms start to stall. You can’t manage what you can’t measure — and without accurate data, growth simply means bigger risks.
How to Tell If Your Accountant Is Holding You Back
Ask yourself:
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Do I get monthly or quarterly management accounts — or just year-end figures?
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Can I see job-by-job profitability at a glance?
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Do I have a 90-day cashflow forecast I trust?
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Does my accountant understand retention, CIS, and site cost structures?
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Do they help me make strategic decisions, not just file paperwork?
If you answered no to most of these, it’s time to upgrade.
A Real-World Example (Anonymised)
One firm we took on recently was turning over just over £2 million.
Their previous accountant had done everything “by the book”: VAT, payroll, tax returns.
But there were no management accounts, no margin tracking, and no cashflow planning. The directors couldn’t tell which projects were profitable — they just hoped the bank balance stayed positive.
Within six months of moving to our Virtual Finance Office model:
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They had monthly management reports on margins, overheads, and cashflow
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Supplier and subcontractor payments were systemised
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A simple forecast showed they were overspending on materials by 8 % — something previously invisible
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Profit margins rose by 3 points, purely from better visibility
That’s the difference between filing numbers and using numbers.
How to Choose the Right Accountant for a £1m+ Construction Firm
Look for someone who:
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Understands your industry — CIS, retentions, stage payments, and site costs are not optional knowledge.
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Offers management reporting — not just accounts.
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Helps you plan — forecasting, KPI tracking, and performance meetings.
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Uses modern systems — integrated with Xero, Simpro, or project management tools.
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Talks strategy, not spreadsheets.
At this level, your accountant should be a Virtual Finance Office (VFO) — a partner who helps you lead with numbers, not just record them.
Why Paying More Saves You More
If you spend £500 a month on compliance accounting and make £1 million a year, you’re trusting your biggest asset — your financial health — to a 0.6 % investment.
A proper Virtual Finance Office might cost double or triple that, but if it helps you recover even 1 % of lost margin, it’s already paid for itself many times over.
Cheap accounting feels frugal. In reality, it’s expensive.
Final Thought
If your construction business has broken the £1 million barrier, it’s time to think bigger.
You don’t just need an accountant — you need a finance partner who helps you build profit, not just record it.
Because in construction, as in finance, what you can’t see can — and will — cost you.
Thomas Emlyn Ltd
Stronger Margins – Healthier Cashflow – Sustainable Growth
