Accounting plays a crucial role in the success of any business, but it is particularly vital in the construction industry, a complex field that typically requires the coordination of multiple subcontractors and multiple jobs in any given year. Although small-volume home builders make up 70 percent of the membership of the National Association of Home Builders (NAHB), a trade association of the home building industry, little is known about the accounting practices of these builders. This thesis undertook to study the accounting practices of small-volume home builders. Small-volume home builders were defined as those producing 25 homes or fewer in a given year. A 20-question questionnaire was sent to 750 small-volume home builders, 141 of which responded for a 20-percent response rate. The names were taken from a sampling of an NAHB membership list. Respondents were asked about their accounting practices, including what type of accounting method they used, whether they employed an outside certified public accountant, and what types of accounting software they used. Respondents were asked to give specifics about their accounting system, such as how their chart of accounts was developed and how they viewed different accounting tools. Collected data was run through the data-analysis program SPSS for Windows. The results gave a picture of the accounting practices of these small-volume home builders. There was a fairly even split between cash and accrual methods of accounting. Most owners or managers did their own day-to-day accounting, and most employed an outside CPA. Most used Quickbooks computer software for every accounting function, and most reviewed financial statements monthly. Most respondents were satisfied with their accounting system. Reasons for this satisfaction included ease of use, simplicity, accuracy, and the ability to job cost. On the other hand, dissatisfaction with an accounting system was often tied to expense of software, complexity, and the need for frequent updating of software programs. These responses give an important first look at what kinds of accounting methods small-volume homebuilders are using.
College and Department
Ira A. Fulton College of Engineering and Technology; Technology
BYU ScholarsArchive Citation
Andrus, David, "An Analysis of the Accounting Methods Used by Builders Producing Twenty-Five or Fewer Homes per Year" (2006). All Theses and Dissertations. 1028.
accounting, methods, small-volume, builders