Category: Contractors/sub-contractors

Many people invest in marketable securities, including stocks, bonds, money market funds and real estate investment trusts (REITs). But a less conventional investment option that’s historically paid off for many investors is purchasing a home or condo to rent out to third parties. This alternative may help diversify your existing portfolio and hedge against public market trends. With any investment, there are no guarantees of success, especially if you have a short time horizon. But rental properties may be a… Read more ›

If you’re operating a small construction firm, you may be working on a razor-thin margin to stay competitive. That means you can’t afford additional costs or drags on your time without being compensated. All too often, construction firms lose both time and money when they became embroiled in disputes over projects. Worse, a dispute could ultimately damage a firm’s reputation. Fortunately, however, there are several steps you can take that may help avoid potential disputes and quickly resolve any that… Read more ›

When was the last time you reviewed the insurance coverage on your business property? If you have an insurance agent who works closely with your company, you may be accustomed to periodic reviews to keep your insurance up to date. However, if you bought insurance based primarily on price, these reviews might be left up to you. Some business owners learn the hard way that they didn’t buy enough coverage after suffering losses from floods, fires, thefts, vandalism, lightning, hurricanes,… Read more ›

  The IRS continues to zero in on what it calls the “tax gap” — the amount between the taxes that are voluntarily paid and the amount the tax agency believes is actually due. To this end, the IRS has issued a series of documents to provide better understanding of the tax code. One example is specifically directed at the construction industry. The tax agency emphasizes instances where taxpayers failed to report, or under-reported, income from construction activities. This applies… Read more ›

  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. Whether… Read more ›

  Builder’s risk insurance provides protection for a structure that is damaged during construction. These policies are usually broad. In fact, the coverage is generally extensive enough to include construction equipment and machinery, as well as materials, fixtures and appliances – all vital parts of a completed structure. It can also cover temporary structures, such as office trailers, on a project site. If a loss occurs, the insurance company will pay to repair the damaged property. However, keep in mind… Read more ›

  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. However, the IRS may look twice at an operation if it includes multiple business entities — especially if recordkeeping and… Read more ›

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… Read more ›

  Processing payroll is a critical administrative task that directly ties to your construction company’s labor costs, profits, and ability to comply with labor laws. Yet staying on top of payroll can be daunting. Depending on the job, your payroll staff may have to account for union requirements, prevailing wage rates, and certified payroll — not to mention various tax rates and rules of multiple jurisdictions. Because of such complexities, mistakes are common. Making payroll processes more accurate and efficient… Read more ›

“Why Effective Cash Flow Management is Crucial for Subcontractors” was originally published in the April 2021 issue of The Contractors Compass (American Subcontractors Association). Click here to view.  A good way to think about cash flow is to see it as your business’ wallet. Cash flow reports are crucial tools for business owners and managers to help them understand where their business’ money is coming and going, and when. Making decisions based on that information is key. Establishing good accounting… Read more ›