Look into my eyes! Deeper! I see….. that your fiscal year-end… is December 31st!
OK, that’s a pretty safe guess. Most construction companies have a 12/31 year-end, and 6/30 is their mid-year date. It is the time for interim financial reporting to the bonding company.
Here are six tips to help contractors survive and thrive in this process:
- Don’t delay: If mid-year info is not readily available, it makes the contractor look disorganized, or like they are hiding poor results.
- Cash Method: No good for banks or bonding companies. Accounting should be set for the “Accrual Method.”
- A CPA statement is often not required at mid-year. In house, such as Quick Books, is the alternative. Check with the underwriter and maybe you can save some dollars.
- Maximize billings prior to the reporting date.
- Retain Cash prior to the reporting date.
- Delay distribution of profits to owners until after the reporting date.
7. Bonus Tip!!! Compare this mid-year to last mid-year. The underwriters will!
Are results are better or worse? Company on track for a profitable year-end at 12 months? If results are weak, prepare a written explanation regarding the influencing factors, and management’s response.
FIA Surety is a NJ based bonding company (carrier) that has specialized in Site, Subdivision, Bid and Performance Bonds since 1979 – we’re good at it! Call us with your next one.
Steve Golia, Marketing Mgr.: 856-304-7348