It is a well-known fact that best in class contractors prepare a work in progress (WIP) schedule on a regular basis. Not only does this practice allow the users of the financials, such as lenders and bonding companies, identify early warning signs, it enables contractors to better measure their progress on jobs and be proactive in seeking change orders and contract revisions. As a constant reviewer of contractor financials, I have found the following most common red flags on WIP schedules that are worth mentioning: (more…)
In October, 2017, Gov. Brown signed Assembly Bill 1701 modifying the California Labor Code. The bill requires contractors to assume liability for any unpaid wages or fringe benefits owed to employees of their subcontractors. This provision applies to all nonpublic construction contracts entered into on or after January 1, 2018. The new law requires diligent contractors to now monitor the payroll functions of their subcontractors and any subcontractors used by their subcontractors. (more…)
It is not unusual for contractors to go through an entire fiscal year anticipating healthy profits only to end the year in a significant loss position. Here are some tips to identify and correct potential issues before they derail the Company’s financial performance: (more…)
Sometimes the hardest part of any major implementation project is figuring out where to start.
How about we start with trying to identify the most appropriate implementation method for your construction company. One of the questions we get all the time is: Which implementation method is best for my company? Unfortunately, there is no universal answer, but we will give you some insights into what we are hearing within the industry. (more…)
In December, the Republican led Congress enacted the most wide ranging tax reform legislation since 1986. Provisions will impact both personal and business tax liabilities beginning in 2018. The legislation contains changes that can both help and hurt a contractor’s bottom line. Significant provisions include: (more…)
By Deepa Bhat, CPA, Audit Principal
ASL Construction Group
These days, a lot of our business gets done on mobile devices, whether we are checking e-mail, tracking appointments or even reviewing plans and paperwork. Smartphones and tablets have given us the ability to accomplish as much in the field as we would at our desk. This is especially true if you are working in the construction industry as you are likely always on the go and moving from site to site.
Being able to manage your people and projects from the field may be convenient, but it also introduces new security concerns. Malware and viruses designed to steal information and, in some cases, your money are becoming more prevalent on mobile devices. Distractions at the job site can also cause you to let your guard down, leaving you vulnerable to scams and other attacks. (more…)
The issue of roof repairs and replacement presents an age-old dilemma for tax professionals and our clients. Generally (and most often optimally), one hopes that such repair, or even replacement costs, can be expensed in the year incurred. But the analysis required to determine what should be done is not so simple, especially with the recent issuance of the Tangible Property Regulations by the IRS.
To get to the best outcome, we need to raise insightful questions with our clients regarding their roofing system.
The issues related to proper worker classification impact many businesses, including contractors. The rules are often unclear and their application is based on each employer’s specific facts and circumstances. An Internal Revenue Service or California Employment Development Department audit resulting in the reclassification of workers can have a significant bottom line impact. As a result, it is important to correctly determine if your workers are employees or independent contractors. (more…)
When surety underwriters review your financial statements, they are looking for evidence of sound financial condition. Every underwriter has its own standards and expectations, but here are five key performance indicators (KPIs) many bonding companies look at closely: (more…)