Search

This article provides ideas for contractors on renewing their insurance policies in the U.S. It expects commercial and liability insurance to be more expensive for contractors operating in Florida, Nevada, California, North Carolina and Arizona. It advises contractors to review policies that reflect realities, including overpayment of insurance coverage and rising insurance rates. The article also stresses the need of contractors to compile their annual workers' compensation experience rating sheets.

The article discusses the increasing use of consolidated insurance programs (CIP) by small and mid-size contractors for projects that have a higher-than-normal liability. Also called wrap-up insurance, CIP plans may include workers' compensation, employers' liability, commercial general liability and excess/umbrella liability. The popularity of CIP is attributed to the ability of such plans to provide better coverage for general contractors and owners.

The article focuses on the amendment issued by the Civilian Agency Acquisition Council and Defense Acquisition Regulations Council to the U.S. Federal Acquisition Regulation. The amendment, which took effect in December 2008, required the disclosure of certain violations of federal criminal law, such as fraud, conflict of interest and bribery, and contract overpayments. In addition, the change mandated contractor to establish internal controls to detect, prevent and disclose improper conduct linked to the awarding of government contract or subcontract.

The article on selecting between using a cash or accrual accounting method for construction contractors. Method selection is deemed crucial both processes entail special tax rules. In order to ensure that the method the contractor currently uses accurately reflects its financial condition and helps it comply with tax laws, the firm should reassess the process at the end of each year. Among the factors considered when selecting a method are types of contracts, annual gross receipts and the status of contracts at the end of the tax year.

The article discusses options contractors should consider before acquiring equipment during times of economic recovery. When upgrading equipment, contractors have the option to purchase, lease or rent equipment. One key consideration in determining which option to take is the nature and length of a construction project.

The article presents answers to questions posed by Supreme Roofing Systems co-owner and vice president Jeff Sterrett about taxation issues facing contractors in Texas in 2009 which include the new tax changes that his firm should be aware of, write-offs available to a contractor, and tax incentives being planned for renewable energy for Texas.

The author emphasizes the significance of early preparation to contractors. She stresses the need for business owners to be as flexible as possible in order to manage the difficulties associated with economic downturn. She offers ideas on how contractors can prepare for the negative impact of financial challenges. The author argues that companies should retain key managers during economic decline.

The article announces that Children's Medical Center at Legacy, Texas is a recipient of the Award of Merit for health care design at the Best of 2008 Construction Awards by "Texas Construction."

The article explores the importance of auditing in the successful completion of projects in the construction industry. Project auditing reviews the four phases in most construction projects including project definition, planning, execution and completion. It describes the role of auditing in each phase of the construction project. It describes the role of auditing in documenting the highs and lows of a project.

This article describes how Texas contractors can benefit from U.S. Internal Revenue Service (IRS) exceptions on long-term contracts. When it comes to long-term contracts, most contractors understand that they are required under General Accepted Accounting Principles (GAAP) to base their financial statements on the percentage-of-completion method (PCM) of accounting. A discussion on Section 460 of the tax code that provides an exception to the PCM requirement is given.

The article focuses on the importance of internal controls to contractors in the construction sector. It mentions that fraud exists in the industry even during the best of economic conditions which grows worse during recessions. It cites the benefits of internal controls which go beyond fraud prevention which include the streamlining of processes, waste reduction and improvement in accounting functions. Accounting areas that require close monitoring by any control system are given such as accounts receivable and accounts payable.

The author focuses on the need for contractors to provide sureties and lenders with regular financial report. Aside from occasional proof of profitability, she notes that lenders and sureties need an understanding of a contractor's financial management systems and plans for the future. Accurate forecasts of cash flow are needed by banks and sureties for them to continue issuing loans, lines of credit ad bonding. She also offers tips for contractors on preparing current balance sheets and future cash projections.

The article argues that an effective accounts receivable system is relevant to the success of contractors. The author notes that accounts receivable systems, along with the cash flow it generates, are the best measure of the overall efficiency of a contractor. He also offers ideas on billing and payment.

The article suggests options of sales-leaseback agreements for contractors. In Fair Market Value Lease, the lessee is allowed to buy the leased equipment at the end of the lease term for the fair market value or the equipment can be returned. The lessee in the 10% purchase option can buy the equipment at the end of the lease term for 10% of the original fair market value or purchase price. In Equipment Finance Agreement, the contractor will own the equipment and the investor will release the security interest at the end of the lease.

The article presents questions and answers related to tax changes brought by the American Recovery and Reinvestment Act (ARRA) in the construction industry, including rules for U.S. Internal Revenue Service reporting of net operating losses, amendment of the return for the earliest tax year of the carry-back period selected, and the eligibility for the five-year carry back.

The article focuses on the benefits of cost-plus contracting amid economic crisis. Cost-plus contracts involve paying fixed amount to a contractor based on the cost of the material and labor, plus an agreed upon percentage in profits. A cost-plus-incentive fee set up is about giving a specific fee that will be paid if the contractor's final cost becomes equal to the negotiated target cost. However, cost-plus contracts values trust since owners expect contractors to act in their best interest and charge reasonable cost.

The article explains the importance of job costing in improving construction operations. Experts recommend that job costing involves a management group and background knowledge of accounting applications used by contractors, where the software can monitor the expenditures of contractors. Contractors can also attend job-costing programs, which can provide benefits including financial forecasting, job management, and claims support costing.