The end of the year is coming fast and with it comes the requirement to adopt FASB ASC Topic 606 Revenue from Contracts with Customers by all calendar year-end private companies (this standard was applicable to public companies for calendar year 2018). If you have not yet implemented the new accounting standard, here are a few items to consider. (more…)
As we were wrapping up the reviewed financials for my General Contractor client, I asked the Controller, “what are some of the issues often overlooked by contractors as it relates to accounting?” And she was happy to oblige me with her top three issues for contractors to consider for better reporting: (more…)
Are you a construction industry company utilizing all your local resources here in Silicon Valley? Most of you probably are, but some of you… perhaps not. I’m thinking about the Construction Financial Management Association of Silicon Valley (CFMA), Builders’ Exchange of Santa Clara County (Builders’ Exchange), and the Construction Group here at Abbott, Stringham & Lynch (ASL). (more…)
As we head into another busy tax season, I am mentally preparing myself to answer questions from my contractor clients on how they stack up within their industry and against their peers. Lucky for me, I have access to industry benchmarking data that makes my client conversations productive and informative. In addition, as a bonus, the benchmarking reports provide a deep insight into the Company’s present and, often, their future. (more…)
When you see a cement mixer going down the street, or at a site getting ready to pour, do you think immediately of the effects upon our environment? I must confess, I have not. Until recently.
Cement is a major component of concrete. Cement is often referred to as the glue that holds concrete together. But cement is very harmful to our environment. One ton of cement production releases one ton of carbon dioxide (CO2) into the atmosphere. With cement production currently at 2.8 billion tons per year, and expected to only increase, that is a lot of CO2 released into our already fragile atmosphere. (more…)
It is a well-known fact that best in class contractors prepare a work in progress (WIP) schedule on a regular basis. Not only does this practice allow the users of the financials, such as lenders and bonding companies, identify early warning signs, it enables contractors to better measure their progress on jobs and be proactive in seeking change orders and contract revisions. As a constant reviewer of contractor financials, I have found the following most common red flags on WIP schedules that are worth mentioning: (more…)
In October, 2017, Gov. Brown signed Assembly Bill 1701 modifying the California Labor Code. The bill requires contractors to assume liability for any unpaid wages or fringe benefits owed to employees of their subcontractors. This provision applies to all nonpublic construction contracts entered into on or after January 1, 2018. The new law requires diligent contractors to now monitor the payroll functions of their subcontractors and any subcontractors used by their subcontractors. (more…)
It is not unusual for contractors to go through an entire fiscal year anticipating healthy profits only to end the year in a significant loss position. Here are some tips to identify and correct potential issues before they derail the Company’s financial performance: (more…)
Sometimes the hardest part of any major implementation project is figuring out where to start.
How about we start with trying to identify the most appropriate implementation method for your construction company. One of the questions we get all the time is: Which implementation method is best for my company? Unfortunately, there is no universal answer, but we will give you some insights into what we are hearing within the industry. (more…)