What challenges have you overcome that you could attribute to knowledge gained from the CCIFP designation?

Construction accounting is full of complexities and specialized rules for financial statements and taxes, which are rarely covered in school or CPA exam preparation.  

There is also a lot of emphasis on work-in-progress (WIP) and the revenue recognition calculation when preparing for the CCIFP exam. Having a strong understanding of the red flags associated with large underbilled contracts, change order management, and the difference between billings and recognized revenue has given me stronger tools to help contractors better understand their finances.  

Having my CCIFP gives me additional credibility when interacting with clients’ bankers, bonding agents, and shareholders. Not only does it show that I met the criteria and passed the exam, but also that I receive regular construction-specific CPE and maintain ethical business practices to remain credentialed. This increased credibility brings more trust in the financial statements when internally prepared, which benefits my clients and their advisors.  

Can you share a particular situation?

A client was having issues getting bonding on a much-needed project. While my client understood the nature of their business, they didn’t have a strong understanding of how their financial statements were representing their business. Without applying the right GAAP principles, my client was not putting their best foot forward.  

Using my CCIFP knowledge, I was able to think like a bonding agent and interpret what their financial statements were showing. I was also able to identify areas where GAAP was not being consistently applied and communicate how better revenue recognition policies would help bridge the gap between the success the business was experiencing and what was presented in their financial statements.  

With an understanding that percentage-of-completion accounting requires proper recognition of expenses to recognize revenue, we were able to realign their financials to present their business in a more appropriate way. Once these GAAP principles were consistently applied, the client was able to secure the bond they needed.  

What has been the most obvious advantage from becoming a CCIFP?

Being able to deeply understand the WIP schedule allows me to look at financial data differently. I am able to separate re-venues earned from billings and identify red flags quickly. Having construction-specific expertise differentiates me from others who may understand accounting but not necessarily the niche complexities of construction.  

Why is it important to have a CCIFP in your organization?

Being a CCIFP is key to differentiating myself as a construction specialist; it shows my commitment to and additional credibility in the industry.

More than that, though, is the value I provide through my ability to interpret financial data and KPIs. Understanding the WIP schedule on a deeper level is a primary way for me to provide insight that clients may not have noticed using typical KPIs.  

Why would you recommend the CCIFP designation to another person/business?

Even if you have many years of accounting experience, it may not translate as well if that experience isn’t within construction, as construction has different rules for recognizing revenue than other industries. Financial statements are the basis for very important decisions and potential prequalification purposes. In this industry, it’s critical to understand what a company’s financial statements are communicating to key decision-makers.  

As a consultant and CFO, I can’t emphasize enough how important it is to differentiate yourself. Having an independent third-party credential helps to further demonstrate your construction finance skills. Potential clients or employers can feel more comfortable that you understand construction finance and its applications and are keeping your skills relevant.  

Is there anything else you’d like to share about becoming a CCIFP?

My CCIFP credential goes beyond the exam and has been a key element in maintaining my skill set. To maintain

my CPA license, I have to earn CPE credit, but it doesn’t have to be construction specific. While it’s important to stay up to date with new accounting pronouncements or best practices, having my CCIFP means that I am taking it a step further in selecting CPE that is relevant to contractors. 

If you have your CCIFP designation and would like to share your experiences, please reach out to Veronica Whitehead at vwhitehead@cfma.org.

Copyright © 2023 by the Construction Financial Management Association (CFMA). All rights reserved. This article first appeared in January/February 2023 CFMA Building Profits magazine.