Characteristics of the Building and Public Works sector (BTP)
Your activity is subject to significant variations depending on fluctuations in economic growth and the impact of government incentive or regulatory measures. As a building professional, whether you are an entrepreneur or head of a significant-sized company, you must be involved in the daily management of your business, preparing responses to bids, monitoring construction sites, and maintaining relationships with your clients.
You also assume employer responsibilities and manage the professional risks inherent in your activity.
From an accounting perspective, you may be concerned with issues related to long-term contracts and the need for rigor in the monitoring of your analytical accounting to maintain an accurate view of the anticipated results at completion of each of your construction works.
Finally, the Building and Public Works (BTP) sector is subject to numerous tax complexities, particularly regarding VAT. The VAT reverse charge scheme applies when work is carried out by a subcontractor on behalf of a contractor subject to VAT, according to Article 283-2 nonies of the CGI. In addition, the applicable VAT rate varies depending on the nature of the work and the building to which it relates. The 10% VAT rate provided for in Article 279-0 bis of the CGI applies to improvement, transformation, development, and maintenance work. Construction or reconstruction and enlargement work are subject to the normal rate of 20%. Energy efficiency improvement work is subject to the reduced VAT rate of 5.5% provided for in Article 278-0 bis A of the CGI.
Based on our knowledge of your business sector, as a chartered accountant, we anticipate your needs and are responsive in informing you about evolutions of the social and tax regulations that affect your industry, in order to implement tailored solutions and provide you with quality advice.
We also have statutory auditing mandates in significant-sized companies in the building sector.
We work extensively on the basis of your cost accounting to ensure consistency in margin per worksite.
The tools used to produce financial information must allow a sufficiently detailed analysis to understand the composition of the cost price and the evolution of the margin per site. The establishment of regular reports or intermediate statements can be useful for financial supervision.
In the field of accounting or auditing, a range of skills at the service of your building and public works (CPW) company.
Beyond our accounting and auditing missions, as a chartered accountant, we offer a personalized service, anticipate your needs, and keep you informed about the evolutions of the social and fiscal regulations related to your business sector in order to implement adapted solutions.
As statutory auditors, we adopte a constructive and flexible approach, relying on substantive testing but also, and above all, on the review of your various processes in collaboration with your teams, in order to build a trusted relationship with them and be a source of recommendations for continuous process improvement.
The development of our accounting and auditing firm relies on the technical support of a versatile and regularly trained team, the proximity and availability of associates and expert chartered accountants and auditors available and attentive to your needs.
Supporting the company and its executives as the accountant of your building and public works company.
Our mission of bookkeeping or auditing for building and public works companies primarily involves:
- Creating or taking over a building company,
- Securing your margins through regular and accurate accounting monitoring,
- Analyzing your performance by implementing cost accounting if necessary,
- Optimizing your financial resources, especially your external funding.
To ensure the reliability of the established financial information, we help you to set up an effective internal control system as well as appropriate tools for monitoring the margin per project.
If your construction and public works company is a subsidiary of a foreign group or a company held by venture capital firms, as a chatered accountant, we produce periodic reports intended for the fund providers.
We take care of the preparation of both recurring and occasional tax returns. We assess your eligibility for potential tax credits that may apply to your building company. We assist you in tax audits and carry out for you a monitoring of the tax legislation as different finance Acts evolve.
Within the social field, Houdart A&C has extensive knowledge of the collective agreements applicable to the activities of the building and public works sector, thanks to many companies working in this field of activity among its clientele, including structural works, renovation, building construction on behalf of real-estate developers or communities, road works, etc.
We process payroll for our clients’ employees in this sector of activity and assist with Social Security Contribution Collection Office (URSSAF) audits, establish DSN reports, and can handle salary transfers for employees.
We handle the affiliations to the competent provident organizations according to the business sector of your company.
In case of disputes with one or more employees, we provide you with advice and connect you with a lawyer that we are ready to recommend in case of labor court disputes.
Our legal service offers support in the current and extraordinary legal tasks of a company’s life. We also are available to provide you with all the advice you may need as a construction company executive in the conduct of your business.
Our legal mission includes: the annual legal secretariat, the drafting of certain acts, the drafting of minutes of ordinary and extraordinary general meetings, convocations, statutory amendments (transfer of company registered office, legal name, etc.), formalities at the registry office of the competent commercial court, etc.
Finally, we support you in carrying out the operations of contribution, transformation, company merger and demerger.
Our mission is not limited to establishing the balance sheet of your company. For family businesses that are part of our clients, we assist the entrepreneur in their estate assets planning so that his decisions related to the company having an impact on his assets are optimal for him and his family.
The diversity of our skills allows us to assist you primarily in the context of your personal tax returns. We prepare your income tax returns in France, as well as your possible real estate wealth tax returns.
We assist you in the choice of your individual and collective health and heavy provident insurance contracts. We ensure that the formalities for setting up contracts cover the risk of tax and social security adjustments.
We support you if necessary in the context of your personal tax audits.
Acquiring real estate for one’s business is often an interesting way for the entrepreneur, an interesting way of reconciling the interests of his company with the development of his personal assets.
We stand alongside the entrepreneur from the initiation of the project, the investment decision-making process, the choice of investment structuring, until the preparation of the necessary documents to request the funds from from financing institutions.
We have a significant network of professionals specialized in insurance brokerage, notary, lawyer specialized in social or tax matters, that we can mobilize to complete our support.
Finally, we assist and study with our clients the different possibilities of social security regimes and remuneration methods in order to optimize on the tax and social level the remuneration of the manager of a building company.
MyUnisoft, a digital, collaborative and innovative accounting software
We have an innovative, high-performing and collaborative accounting production tool, a true marketplace with an open API, which can connect to most common apps used by entrepreneurs, such as digital neobanks, revenue tracking tools, EDM, CRM, data analysis or payroll software.
Thanks to the agreements concluded with most banking establishments, we can set up with your bank an automatic recovery of your banking flows in EBICS format.
We can provide your accounting teams with our software, in order to work collaboratively on your financial data in real time. We can also fully take care of your bookeeping if you do not have an accounting service.
Frequently asked questions about the building and public works sector
What are the VAT rates applicable in the building and public works sector?
The 10% VAT rate provided for in article 279-0 bis of the French Tax Code applies to improvement, transformation, layout and maintenance works. Construction or reconstruction and enlargement works are subject to the standard 20% rate. Works to improve energy efficiency are subject to the 5.5% VAT rate provided for in article 278-0 bis A of the French Tax Code.
What is the VAT regime applicable in case of intra-community services provided by a building and public works company?
As a supply of service related to a building, which can be by nature or by destination, the VAT territoriality for a building and public works company’s service depends on the location of the building, regardless of the quality of the customer, according to article 259 A, 2° of the French Tax Code.
Is it necessary to keep a cost accounting in a construction company?
Cost accounting allows the company’s income and expenses to be allocated by function or site, whereas general accounting is based on a classification by nature. This allows the company to record the profit and loss by project, by breaking down the products but also the purchases of materials, the direct and indirect labor costs, whether this result is recognized by progress or by completion.
The building and public works (BTP) sector is characterized by projects that may potentially exceed one fiscal year, long-term contracts. In this context, cost accounting is a useful tool for economic monitoring and company management, but it requires implementation time and ongoing follow-up as well as procedures involving the building site supervisors, which represents an additional management cost.
What are long-term contracts in accounting?
Long-term contracts are generally lengthy contracts specifically negotiated as part of a unique project involving the building, realization, or, where applicable, participation, as a subcontractor, in the realization of a frequently complex set of goods and services, the execution of which extends over at least two fiscal years. The entity’s right to receive contractual revenues depends on compliance with the executed work contract..
Long-term contracts are generally found in the following sectors: building and public works, engineering, information technology, shipbuilding, aerospace industry, etc.
For long-term contracts, there are two methods of turnover recognition: on progress or on completion.
What is the method of recognition of the result on completion?
The completion method is a method of accounting for turnover associated to a long-term contract. It consists in recording turnover only when the contract is fully executed. Work in progress is valued and recognized in inventory at the amount of the expenses incurred in the project during the year. No turnover is therefore recognized as and when work-in-progress is recorded. However, a provision is made for any losses on completion as soon as they become probable and can be estimated with sufficient precision.
What is the method of recognition of the result in progress?
This method consists of recording partial turnover at the end of the fiscal year by means of invoices to be issued, depending on the progress of the contract, whether the forecast margin is profit or loss.
At the end of each fiscal year, a fraction of the turnover related to the contract is recorded according to the percentage of completion of the work. The percentage of completion is determined by reference to the total estimated cost of the work. The percentage of completion at the end of N is determined as follows: cost of work completed at the end of N / total estimated cost.
What are the collective agreements applicable to Building and Public Works companies (BTP)?
There are several collective agreements applicable to construction companies, depending on their size and the classification of the employees concerned. In addition, there are many regional agreements with complementary or supplementary provisions, which only apply if they are more favorable than the national agreements;
- National Collective Agreement for Workers Employed by Building Enterprises Covered by the Decree of 1 March 1962 (that is to say, Employing up to 10 Employees) of 8 October 1990, extended by Decree of 12 February 1991,
- National collective agreement for workers employed by building companies not covered by the decree of March 1, 1962 (i.e., employing more than 10 employees) dated October 8, 1990, extended by order of February 8, 1991,
- National Collective Agreement for Building Supervisors, Technicians and Employees dated July 12, 2006,
- National collective agreement for executives in the building sector of November 20, 2015 es’ collective agreement of June 1st, 2004,
- National collective agreement for public works workers of December 15, 1992, extended by order of May 27,
- National collective agreement for public works employees, technicians and supervisors of July 12, 2006 ,
- National collective agreement for executives in public works of November 20, 2015
Why call on a firm specialized in building and public works industry?
Whether you are an artisan, a building contractor of an individual enterprise, or the head of a significant building and public works structure, seeking the advice of an accounting firm specialized in building and public works to assist you in the management of your company, for its creation or its development, guarantees you a technical expertise in addressing the inherent issues of the building and public works sector. Such a firm will be able to anticipate the risks related to taxation, social regulations, and social security contributions for the self-employed. We will also be able to assist you in producing high-quality annual legal elements.
The choice of an auditor specialized in building and public works activity ensures a constructive risk-based approach that adds value to your teams, beyond the substantive tests conducted, and recommendations for the implementation of processes intended to improve your internal control and the reliability of your financial statements.