Ripple Effects of COVID-19 on the Construction Industry

October 5, 2020

Fluor Hits the Floor – $1.7B Loss: A Wakeup Call for the Construction Industry

The Texas-based construction company Fluor recently announced its 2019 financial results, revealing staggering figures brought on by the COVID-19 pandemic. This case sheds light on harsh truths and the new reality for the construction industry. Here’s what else you need to know:

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Lowering the Bar on Performance and Payment Bonding

June 23, 2020

Acquiring or increasing your firm’s bonding capacity can open a whole new market of jobs. It can allow you to take on a multitude of public works projects or larger, more profitable, higher-profile private jobs that require a more hearty bonding capacity than what you, or your agent, are used to.

The traditional method of laying out up to 20% of the bond value in cash collateral may be uncalled for if you approach your agent in the right way with the following cash-saving opportunities.

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Crunching Numbers for Multiple Corporations

June 23, 2020

It might be advantageous from a tax standpoint to run a business through multiple entities. For example, a construction company might form a separate company to own and lease its trucks and equipment back to its related entities. Or a corporation might transfer appreciated property to an affiliated corporation in order to limit risk in case it is sued.

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Use Financial Statements to Make a Solid First Impression

June 23, 2020

Financial statements are a must-have for any organization. The balance sheet reveals how much its assets and liabilities are worth based on historic costs. The income statement tells investors and lenders how profitably and efficiently the company has performed during the accounting period. The statement of cash flows details sources and uses of cash from operating, investing and financing activities. All this is relevant information for company insiders, as well as for lenders, bonding companies and other stakeholders.

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Take Control of Your Firm’s Debt

June 8, 2020

Creating a formal debt management plan, rather than borrowing haphazardly, can save your firm thousands or even tens of thousands of dollars in interest.

Following certain best practices and using a structured approach to your company’s debt plan is part of an effective construction finance, accounting and tax strategy. First, create a table that lists all current debt, including working capital lines of credit, loans of any kind, any interest bearing notes or other financial obligations. Don’t include Accounts Payable.

Here is an example

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Four Ways to Keep Cash Flow High During Busy Season

February 4, 2020

Everyone struggles to keep up when business really takes off. Projects come all at once. You may hire additional field workers to meet the demand. Payroll is stretched because payments which come in on your new projects lag months behind the large sums you lay out weekly to pay your workers.

This type of project financing concern is not yours alone. All construction contractors face this type of project financing snafu to some degree. The basic problem is your firm gets paid months after you need the money to run your projects.

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Joint Ventures – How They Can Open Doors

February 4, 2020

Joint ventures are common in the construction industry, especially with large long-term projects. These collaborative arrangements allow construction firms to work together, for a limited time period, on one or more construction projects.

The upsides include pooling of expertise and resources, broader geographic reach, reduced risk, and enhanced financing and bonding capacity. But joint ventures also have potential pitfalls, so they need to be set up and managed with care.

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TCJA Depreciation and Other Deduction Changes

February 12, 2019

By Jason Dudas, CPA

Under the Tax Cuts and Jobs Act, contractors are now able to take a deduction for the full cost of machinery and equipment purchase made each year. This new provision is referred to as 100% bonus depreciation and there is no limitation on the amount of purchases. The provision is available for assets acquired and placed-in-service after September 27, 2017.

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Fight Back Against Internal Fraud

October 12, 2018
Internal Fraud

Internal fraud can take a toll on your operation. Here are some tips to fight against it.

Internal fraud drains approximately $4 trillion annually from global businesses, according to an estimate by the Association of Certified Fraud Examiners (ACFE).

The median loss from internal fraud at companies in the construction industry is $227,000, according to ACFE’s latest Report to the Nations. Read more