Many companies provide their financial statements, along with a CPA’s report, to lenders, investors, suppliers and customers. Informed readers of the report will gain varied levels of comfort based on the type of financial statement provided
While bonding companies will also be looking at the above financial statements and footnotes, they will also be focused on Supplemental Schedules. These include:
SUMMARY OF EARNINGS
This is a snapshot of completed contracts, jobs in progress and indirect costs. This summary of earnings should paint a picture of the margin the contractors are making and should also give an accurate picture of how well jobs are being estimated. For example, if a contractor is routinely estimating to make 30% on projects and most completed projects come in at 20%, the reason for the profit fade may need to be addressed. It could indicate that projects are being aggressively estimated that project managers are fading on the job or that indirect costs are not being allocated correctly.
SCHEDULE OF CONTRACTS IN PROGRESS
This gives the details on the margins a company is expected to make, how far along in the process jobs are and billing to date. Bonding companies are looking to make sure contractors are up-to-date on billing jobs and are again making sure estimated margins and actual margins are consistent. This detail on a job by job basis is an important feature to bonding agents. Here at Mildrid Esua, CPA, PLLC, we know what the banks, bonding and insurance agents are looking for and can help you prepare financials that follow GAAP standards and present your company in the best possible light. Preparing these financial statements can also help us get an accurate picture of the health of your construction company and identify red flags before they become emergencies. If you have questions about preparing GAAP financial statements or other accounting questions, please feel free to call Mildrid Esua at 336 825 7994.