Archive for the ‘Construction’ Category
by Tim Ayler, CPA, Partner, Director of the Construction Services Group and Brian Enright, CPA, Member of Construction Services Group
In general, contractors’ financial statements and job schedules look very different than they did a few years ago. Few contractors came away from the initial downturn in the economy unscathed, and are now feeling the effects of the ‘new’ normal. In most cases, all components of the balance sheet have declined as contract volume has declined and margins have been squeezed.
by Tim Ayler, CPA, Partner, Director of the Construction Services Group | Shaun King, Member of the Construction Services Group
Every day people make plans that don’t go exactly as planned. For those in the construction business, adjustments to plans aren’t always as simple as making a phone call or switching a schedule. Many times, for a contractor to get paid there needs to be a change order issued. As with any adjustment in plans, there are many items to consider.
by Brandon Cook, CPA | Partner, Tax Services Group and Member of the Construction Services Group
In all businesses everyone knows that cash is king. This is especially true in the construction industry. In the new reality of tight margins, high retainage percentages, and slow-paying contracts, every bit of cash a contractor can get their hands on can be vital to a company’s operations. The look-back calculation, which is required for many contractors, could put more cash into your pocket.
by Tim Ayler, CPA and Alicia Rader, CPA | Team Members of the Construction Services Group
Many contractors equate success to winning bids. While that certainly is partially true, there are several other factors which determine how successful the bidding process really is. As of late, many contractors are putting less markup in their bids in order to be more competitive and to increase their chances of winning the work. Others are struggling to win bids so they are expanding their geographic boundaries or bidding on types of work that they have not successfully completed in the past. Whatever your construction company is doing to win bids, we hope it has contributed to your company’s profitability.
by Brandon Cook, CPA | Partner, Tax Services Group and Member of the Construction Services Group
The IRS has once again postponed the effective date on the implementation of mandatory 3% withholding on payments to businesses that contract with the federal, state, and/or local government entities. The effective date is now for payments made after December 31, 2012.
by Brian Enright, CPA and Tim Ayler, CPA | Team Members of the Construction Services Group
By most accounts an iPad (or any PC tablet) is considered an entertainment device or simply a convenient, portable way to check email on a business trip. However, with new construction-based applications and tough protection cases, the iPad is showing that it too belongs on the jobsite.
by Tim Ayler, CPA
Partner, Director of the Construction Services Group
How did this happen? Average Builder, Inc. just wrapped up a $1,000,000 construction job, and realized that their job netted a profit of just $10,000, or 1%! While this may seem out of the ordinary, we have seen far too many real situations like this during reviews of various client job schedules for the year ended 2010.
Brandon Cook, CPA | Manager, Tax Services Group and Team Member of the Construction Services Group
317.241.2999 | bcook@greenwaltcpas.com
Back in March of 2009 I wrote my first article on this topic. At that time, not very many professionals or clients were aware of a tiny inclusion buried in the Tax Prevention and Reconciliation Act of 2005. Section 511 of this tax act will require Federal, State, and Local governments with total expenditures of $100 million or more to withhold 3% of a contract’s total payments for goods or services provided to the governmental body to guard against possible business tax evasion. This withholding provision originally was supposed to take effect on payments received on or after January 1, 2011, however, the American Recovery & Reinvestment Act of 2009 delayed the effective date until January 1, 2012.
by Alicia Rader, CPA and Tim Ayler, CPA | Team Members of the Construction Services Group
Many contractors’ balance sheets will be changing in the next few years due to proposed changes that are anticipated to be made to the way leases are treated for accounting purposes. Currently, many companies lease their building, or large pieces of equipment, under operating leases. Operating leases allow for only the current year expense to be recorded on the income statement, without an impact on the balance sheet. The rules will likely be finalized in 2011, with implementation set to happen sometime later, probably January 1, 2013 or after. Companies may find their assets and liabilities being “grossed up” to account for the changes. This may require some negotiations between contractors and their bank related to their bank covenants, or discussions with their bonding company related to their bonding capacity.
by Brandon Cook, CPA
Team Member of the Construction Services Group
Business owners and contractors may be reluctant when it comes to the idea of building green. After all, the initial costs of going green are certainly higher than traditional construction costs, and the whole concept of going green may seem to be little more than a sales gimmick to entice environmentally conscious customers. However, there are some clear tangible benefits, both financial and non-financial, to building green.