Electrical Contractor CPA Services

Subcontract work is billed against a schedule of values, paid when the general contractor is paid, and closed out long after the crew has left. That gap is where electrical subs get into trouble: the profit is recognized on paper well before the money arrives, so a strong year on the return and a tight year in the bank account are the same year. Lien rights and the notices that preserve them are the practical protection, and they are calendar items, not legal abstractions.

Panel changes, troubleshooting and repair collect immediately and carry no retainage, which makes them the part of the business that funds the other part. They also have a different tax profile: less work in progress, more small-dollar material purchases, and a much higher share of revenue passing through card processing with fees netted out before the deposit lands. If your books record the deposit rather than the gross sale, revenue and expenses are both understated.

Whether you buy the material or the general contractor furnishes it changes both the size of your revenue and where South Carolina sales and use tax falls. Material bought for a job and material bought for stock are not automatically treated the same way, and tax paid at the counter on one job type but not another is a pattern that surfaces in an audit. It is a question worth answering once for each way you contract rather than job by job.

Public work, and private work with federal funding attached, generally carries prevailing wage requirements and weekly certified payroll reporting. That reporting has to agree with what the payroll records and the tax filings say, because it is the one place a third party reads your payroll in detail. Fringe benefits paid in cash and fringe benefits paid into a plan are reported differently and taxed differently, which is the part most often got wrong. We do not process payroll, but the return has to reconcile to whatever the payroll provider filed, and we will tell you when it does not.

An apprentice is an employee. So, in almost every case, is a helper who works only for you, uses your van and follows your schedule. South Carolina licenses electrical contractors by tier and by the value of work undertaken, and a business licensed for one tier that regularly bids above it has a problem that is not a tax problem but will eventually become one. Apprenticeship programs can carry state credits, which are worth checking for the current year rather than assuming.

The annual comp audit reprices your policy from your actual payroll, and it draws on the same records the tax return does. Two things drive bills nobody budgeted for: employees classified in the wrong code, and subcontractors who could not produce a certificate of insurance, whose payments get added to your payroll base. Collecting certificates as work is awarded rather than as the audit approaches is the cheapest control in the business.