When it comes to accounting in 2019, it’s important to move away from the “this is the way it’s always been done” mentality. Also, perhaps nowhere is that philosophy more prevalent than in the construction industry.
I chatted with someone who knows this better than anyone – Owen Wyss, the Financial Controller at Thompson Concrete Construction, as well as the Vice-Chair of Finance for the Ohio Society of CPAs. Part of Wyss’ job is getting people within the industry to think outside the box and find new, more efficient ways of working with the numbers than how it’s “always been done.”
“It’s a different world,” Wyss said. “And a lot of people when they’re interviewing an accountant for a construction business, nobody can figure out the debits and credits. There are still debits and credits. That’s just a given. Anyone can pick it up that’s got a good accounting background, but it’s a different world from the perspective that it’s a different way of doing business. There’s not much planning. There is a lot of, ‘That’s always the way we’ve done it.’”
The different managerial levels within the construction industry are partially to blame for why accounting within the industry requires a different way of thinking. With owners, contractors, and sub-contractors, there are various self-interests all vying for priority. This can complicate everything, especially within the finance department.
According to Wyss, aligning all these self-interests is the only way to move the industry forward, and to cut costs. For as long as different self-interests are pitted against one another, construction companies are going to struggle with efficiency.
“Owners are pushing margins lower, you know, which obviously should drive the general contractors to push costs lower, which ultimately should drive the sub-contractors to push costs lower,” Wyss said. “But I believe what you’re seeing is just shrinking margins because there’s not a great effort to look at how we can make construction more efficient.”
To increase profitability within the construction industry, Wyss said it’s helpful to take a look at a couple of examples in other industries.
“I’ve been talking to our guys, our leadership here locally, just about the Toyota way and Honda way a lot, and how they worked with their manufacturers and subcontractors that weren’t within their plants and forced down their ways to realize better margins and more profitability,” Wyss said.
Wyss also floats his ideas about how to streamline accounting within the construction industry from his other leadership positions: He is on the board of the Construction Financial Management Association and is the Vice-Chair of Finance for the Ohio Society of CPAs.
Just like he does from within his industry, Wyss pushes his professional organizations to step outside of the way things have “always been done.”
He’s active in trying to transition organizations he’s a part of away from the standard individual “membership” model and more towards an organizational membership model.
“I think the other big change and evolution that we’re going through, and this is going to take years to perfect… moving from compliance-based learning to a place where we’re working and consulting with organizations on their training needs and bringing customized learning solutions to them. From that perspective, you can see us moving slightly away from our membership model and even more towards mainly an industry or business model.”
Transitioning any organization from the way things have “always” been done to how they will be done in the future can be a process – whether you’re part of a construction company, or on a board of a professional organization. However, starting that process sooner rather than later – and having someone like Wyss on board who’s pushing change from the beginning – can be hugely helpful.
Click here to listen to the entire podcast interview with Owen Wyss.