Secrets of Bonding

Look into my eyes!  Deeper!  I see….. that your fiscal year-end… is December 31^st!

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:

1. Don’t delay: If mid-year info is not readily available, it makes the contractor look disorganized, or like they are hiding poor results.
2. Cash Method: No good for banks or bonding companies. Accounting should be set for the “Accrual Method.”
3. 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.
4. Maximize billings prior to the reporting date.
5. Retain Cash prior to the reporting date.
6. 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

First Indemnity of America Ins. Co.