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Look into my eyes! Deeper! I see….. that your fiscal year-end… is December 31st!
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.
- Don’t delay: If mid-year info is not readily available, it makes the contractor look disorganized, or like they are hiding poor results.
- Cash Method: No good for banks or bonding companies. Accounting should be set for the “Accrual Method.”
- 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.
- Maximize billings prior to the reporting date.
- Retain Cash prior to the reporting date.
- 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.
A message from Bonding Pros: We have the strong relationships that enable your deals to get done. Call us when you need a bid, performance, site or subdivision bond. We have the markets and the relationships that matter on tough cases. 856-304-7348
Book a time to speak with us: Click!