Tag: Construction

The U.S. Department of Labor’s (DOL’s) test for determining whether a worker should be classified as an independent contractor or an employee for purposes of the federal Fair Labor Standards Act (FLSA) has been revised several times over the past decade. Now, the DOL is implementing a new final rule rescinding the employer-friendly test that was developed under the Trump administration. The new, more employee-friendly rule takes effect March 11, 2024. Role of the New Final Rule Even though the DOL’s final… Read more ›

Cost overruns have continuously presented a burden on earning profit for construction companies. They lead to delays, heavy financial strain and sometimes even project failures. Cost overruns coupled with pressing economic challenges the construction industry’s shrinking profit margins are making it harder to stay in business. There may still be something businesses can do to save themselves from this trouble. Cost reporting and audits are two fantastic methods of effectively managing overruns and preventing future financial threats. The role of… Read more ›

At some time or another, construction company owners must hang up their hard hats. But what will happen to your business when you retire or move on to the next professional opportunity? And what if you suddenly can’t work for an extended period, because of illness or injury? Having a succession plan in place is key to ensuring business continuity. Even if you’re nowhere near retirement, it’s a good idea to start work on a succession plan early. The best ones… Read more ›

Section 263A is an often misunderstood and misapplied part of the Internal Revenue Code. And it’s one that many construction businesses — particularly homebuilders — should get a handle on to avoid unexpected tax issues and unwanted attention from the IRS. Let’s review the basics. UNICAP Rules Sec. 263A, also referred to as uniform capitalization or UNICAP, requires eligible businesses to capitalize — rather than currently deduct — certain direct and indirect costs related to producing, acquiring, improving and holding property… Read more ›

In a perfect world, initial project estimates would match actual costs at the end of every job — with no hint of cost overruns or profit fade. But, let’s be honest, that hardly ever happens. Fortunately, there are ways contractors can tighten up estimates so they’re as close as possible to final job costs. Here are 10 to consider: 1. Leverage software and digital tools.  Be sure you’re using carefully chosen, up-to-date and construction-specific accounting software and digital tools to ensure accuracy and… Read more ›

A business valuation report is the complex process of and set of procedures used to estimate the economic value of a business. This economic value can be used to make financial decisions or determine the outcome of a major business event. In industries subject to constant change, such as construction, this can be a life saver for the company’s economic wellbeing. Ideally, an industry-recognized valuation expert—such as a certified valuation analyst—who has experience working with construction businesses with their taxes,… Read more ›

In the construction industry, supply-chain challenges are nothing new. They’ve just gotten much more media attention over the last few years. Increased globalization, a pandemic and geopolitical strife have all contributed to some notable slowdowns, though things have generally been better lately. One way that construction companies can mitigate supply-chain problems is to maintain their own inventories of various building materials, products and supplies. However, an inventory can also complicate tax planning. Here are three big issues to consider. 1…. Read more ›

“I’ll do your family’s dental work for free if you build a deck onto my house.” If you’re in the construction industry, you’ve probably received an offer like this or made a similar offer to someone else in a different line of business. It’s a modern variation of the age-old practice of barter. What makes it especially intriguing in this day and age is the idea that you can exchange services or products with someone without exchanging money. Keep in… 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 ›