Construction Financial Statements & Financial Statements for Surety Bonds Preparation
in Austin, Dallas, San Antonio, Fort Worth, Plano, Houston & more
Construction Financial Statements
As a construction company that relies on surety bonds, you require CPA-prepared construction financial statements. Contractors need various statements, including:
- Balance sheet
- Income statement
- Profit and loss statement
- Cash flow statement
- Job Schedule
Your company’s financial statements are critical sources of information to private investors, stockholders, and creditors. For example, stakeholders can review gross profit, receivables, and payables to predict profitability. Lenders use financial statements to assess your creditworthiness when determining lines of credit and loan terms.
At the S|CPA Group, a member of the S|CPA Network, we compile, review, and audit construction financial statements. Learn more below about these services and their value for your business.
Review of Construction Financial Statements
The three levels of CPA-prepared financial statements are:
- 1. Compilation
- 2. Review
- 3. Audit
The compilation level summarizes your financial statements and doesn’t provide any assurance. However, this level is the most affordable and is often suitable for small contractors.
A review is a limited financial statement examination to report your statements’ plausibility. This level provides limited assurance that the statements will undergo no material changes.
An audit involves extensive testing and the implementation of analytical procedures to provide the highest level of financial assurance.
To find out which basis of presentation is the right option for your construction company, contact us and consult with one of our certified professional accountants.
Financial Statements for Surety Bonds
The surety bonding market is increasingly tightening, with high rates and strict conditions making it difficult for contractors to manage these programs. Reinsurers and underwriting guidelines also require surety companies to conservatively evaluate existing clients and prospective accounts.
Obtaining review- or audit-quality financial statements containing the necessary cost information and schedules are a critical requirement contractors must meet if they want to bid for larger jobs. If you are a contractor who does large one-time jobs of $10,000,000 or higher, or if you carry a substantial backlog, you likely need to present audit-level financial statements.
Surety companies generally require a percentage of completion (PoC) accounting for the preparation of financial accounting. This approach recognizes cost and revenue through each contract’s life, painting an accurate picture of your financial position. The surety company can also review the sales, administrative expenses, gross profits, and payables relating to each project.
Investing in the services of a CPA for the preparation and review of construction financial statements will increase your bonding capacity while reducing rates. At the S|CPA Group, we can help. Our services are available to contractors in Austin, Dallas, Fort Worth, Plano, San Antonio, Central Texas, and the surrounding areas.
Contact Us today to schedule an initial consultation.
