Construction growth continues to be strong in 2017 in most sectors.
This growth is spurring the expansion of surety programs for healthy contractors who want to take on larger projects. One critical component in the surety – contractor relationship is the need for service specialists who know the construction industry. This includes CPAs and attorneys.
Sureties want to work with contractors who have a healthy financial base and who are working within their proven comfort zones. They want to see:
- Projects that make operational and financial sense for the contractor.
- Experienced people working in the highest risk areas.
- Contractors closely managing overhead costs. It is very easy for non-project related costs to rise unnoticed. A healthy firm will know its overhead costs and manage them closely.
- Financial decisions that are well thought out. A healthy contractor will have solid financial information available before making any major decisions.
- Scrutiny of all legal matters. Building projects come with many legal risks. Having an experienced, qualified attorney scrutinizing all contracts and being available for consultation is important.
The Importance of Having a CPA and Lawyer That Specializes in Construction
As you see above, surety firms want to see contractors who make decisions based on solid information.
CPAs who specialize in the building industry can advise their clients on how to keep their business healthy and strong. They analyze the financial information for the firm and advise where changes need to be made to strengthen the company’s financial footing. They advise on keeping:
- significant cash balances available
- credit use to a minimum
- profits retained to grow equity
- contract fade to a minimum.
- draft every contract
- handle insurance, labor, and damage disputes
- ensure government and environmental regulations are met
- deal with any claims or liens against a project or the company
- provide legal counsel as needed