Financial Controls, Fraud Prevention & Your CPA

Welcome

Hello, and welcome. This is Super Structures General Contractors — a national general contractor headquartered in Powhatan, Virginia — here to help you and your clients build something that lasts. We're glad you're with us, and we look forward to connecting with you.

Alright, Financial Controls, Fraud Prevention & Your CPA. Don't let the plain title fool you. Cut through everything, and it's this: Protect the numbers with internal controls — segregation of duties, owner-reviewed bank reconciliations, approvals/POs — because small contractors are most exposed to fraud; and build the right team (bookkeeper → controller → construction CPA), knowing higher bonding requires reviewed or audited statements. Do this right and it shows up in your work, your reputation, and your paycheck.

Good numbers require good controls. Construction is especially vulnerable to fraud and error — cash, materials, payroll, and billing all offer opportunities, and many contractors hand everything to one trusted bookkeeper.

The basics that protect you

• Segregation of duties — the person who writes checks shouldn't also reconcile the bank.
• Approvals, documentation, and purchase orders.
• Monthly bank reconciliations the owner actually reviews.

Going Deeper (Intermediate)

The fraud triangle — pressure, opportunity, rationalization — explains most cases, and small contractors are most exposed because one person controls money in, money out, and the reconciliation (pure opportunity). Concrete controls: dual signatures over a threshold, the owner receives the bank statement directly, surprise spot-checks, and a PO system. Weak controls cost contractors real money every year.

Advanced / Pro-Level

Build the right team for your size: a bookkeeper (daily entry), a controller (oversight and reporting), and a construction-experienced CPA (tax, financial statements, advisory). Know the levels of CPA financial statements — compilation < review < audit — because higher bonding levels require a review or audit. Separate tax planning (entity choice, depreciation/Section 179, accounting method, timing) from evasion, and upgrade your accounting function as you grow rather than scaling a shoebox.

Practice Challenge

Your bookkeeper does the invoicing, pays the bills, AND reconciles the bank — alone. Why is that a problem, and what's the fix? (Answer: there's no segregation of duties — one person controlling money in, out, and the reconciliation can hide fraud or errors with no independent check (the "opportunity" leg of the fraud triangle). The fix: separate those duties, or at minimum have the owner review the bank statements and reconciliations directly, require approvals/POs, and get periodic CPA review.)

Takeaway: Protect the numbers with internal controls — segregation of duties, owner-reviewed bank reconciliations, approvals/POs — because small contractors are most exposed to fraud; and build the right team (bookkeeper → controller → construction CPA), knowing higher bonding requires reviewed or audited statements.

Educational overview — not accounting, tax, or legal advice. Work with a qualified construction CPA for your business.