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.