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Construction News & Updates |
| Offices in Ohio, Florida & Pennsylvania | | | (800) 733-8613 | | | www.hbkcpa.com |
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Forklift Fuel Credit
One of the most commonly missed tax credits for Construction and warehouse activities is the "Alternative Fuel Tax Credit" for taxpayers that use propane powered forklifts. Full Article & Example Application for Registration
How Reliable Are Your Job Estimates? How accurately are your construction jobs being estimated? A gain/fade analysis is one device that contractors can use to help determine the accuracy of job estimates of a single contract or multiple contracts on a combined basis. This important tool is used by sureties and bankers to analyze the contractor's estimating ability and to measure performance.
Making Working Capital Work for You If you are a general contractor working (or planning to work) on federal or state projects, you are required to purchase a construction bond. Additionally, state projects require your company to be prequalified for a capacity over and above the contract price.
The hard road ahead — Managing the costs and risks of long-term contracts
No shortcuts: Quick fixes won’t solve money problems
How do you look to your surety? — A key question in today’s economy
Construction Success Story — Beware the downside to downsizing
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Long-term contracts (those exceeding a 12-month period) can be tempting for contractors, as they’re typically associated with lower levels of competition and higher revenue. But because these arrangements transfer the risks from owners to contractors, many sureties hesitate to bond them. Even if bonding is obtainable, escalating costs and unforeseen glitches are a special concern in these types of jobs. But there are steps that contractors can take to become more bondable. A sidebar discusses tax and accounting considerations of long-term projects. 
In response to dire times, many construction company owners may look for quick fixes to tide them over until the economy recovers or at least until the next big project comes along. Yet this thought process can be extremely dangerous; amending and extending loan terms, for example, can become a vicious cycle in which interest rates increase and debts become insurmountable. Long-term thinking will include asking specific questions about the business to reassess overall strategy and implement system fixes. 
Recently, bonding firms have been extra cautious because of the difficulties that so many construction companies have had in staying solvent. That’s why, now more than ever, it’s important for contractors to determine just how their business looks to their surety. Working capital and tangible net worth will likely sit near the top of any surety’s list of critical attributes, as will receivables and debt, performance consistency, and work in progress. 
In this issue’s “Construction Success Story,” we look at a struggling general contractor who asked his financial advisor about the potential downside to layoffs. She pointed out reasons that layoffs might hurt him in the long term, and discussed ways the contractor could retain his best employees.