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Construction CPAs are a team of knowledgeable and experienced professionals who provide superior accounting and tax services to construction contractors in Southern California.

Stopping the scourge of profit fade

Profit fade — a gradual decline in expected gross profits over the course of a project — can be the bane of many contractors’ existences. This scourge may not only hurt your financial performance, but also may raise a red flag with sureties and lenders. To avoid profit fade, you’ll need to identify its causes, [...]

Succession planning: Looking at things from a surety’s perspective

A well-designed succession plan is critical to the long-term survival of a construction business. In developing one, it’s important to consider the objectives and needs of your company’s owners as well as their family members. But it’s equally important to examine your plan from the perspective of your surety. Bonding obligations typically last for several [...]

Sec. 199 deduction looking better for contractors

For many years, contractors have been advised to look into the Section 199 tax deduction for “domestic production activities.” Although the deduction focuses on manufacturing, it’s also available for “construction of real property performed in the United States” by companies “engaged in the active conduct of a construction trade or business.” Recently, the IRS clarified [...]

Take Action to Control Workers’ Comp AFTER an Accident

No matter how careful your company is, accidents and injuries can still happen. When they do, responding properly is an important factor in keeping your Workers' Compensation insurance costs under control. Here are six steps to take in the event an injury occurs: AFTER AN ACCIDENT 1. Make sure the injured person gets immediate medical [...]

The WIP is good: A valuable management tool

          Financial statements are an indispensable tool for gauging your construction company's historical results and financial health. But relying on them alone is like driving a car by looking in the rear view mirror. To see the road ahead, you need a work-in-progress (WIP) report for every job. Too often, contractors [...]

Third-party funding helps contractors pursue claims

Like it or not, disputes are an inevitable part of the construction process. Unfortunately, to avoid the high cost of litigation, many contractors fail to pursue even strong claims or settle for far less than they deserve. An increasingly popular option that may help with this dilemma is third-party funding of construction disputes. How does [...]

Looking for skilled workers in all the right places

The problem isn’t going away. The construction industry has long faced a shortage of skilled labor. One might hope a new year would bring good news, but statistics and general sentiment indicate that there will be no breakthrough anytime soon. Construction businesses currently employ 1.6 million fewer workers than they did in 2007, according to [...]

Taking Advantage of the Research and Development (R&D) Tax Credit

U.S. taxpayers claim nearly $10 billion in R&D tax credits each year. Many people assume that these credits are going only to the large companies that are revolutionizing the world. That’s not true. In fact, R&D tax credits are available for companies of all sizes, particularly because of new legislation enacted in December 2015.   In [...]

Boost retirement benefits with a cash balance plan

Construction business owners may not be able to set aside as much as they’d like in tax-advantaged retirement plans. Typically, they’re older and more highly compensated than their employees, but restrictions on contributions to 401(k) and profit-sharing plans can hamper retirement-planning efforts. One solution may be a cash balance plan. Defined benefits with a twist [...]

Pay attention to “no damages for delay” clause

Construction contracts often contain “no damages for delay” clauses, which prevent a contractor or subcontractor from recovering delay damages from a property owner or general contractor. Whether, and to what extent, parties to a contract can enforce these clauses depends on the contract’s language and state law. Limited remedies for delays By denying a contractor [...]

Soggy numbers – 6 common accounting mistakes to avoid

You’re probably familiar with the term “crunch the numbers.” Well, in a tumultuous industry like construction, it’s all too easy to let crisp, timely financials go soggy with outdated data and flat-out mistakes. Here are six common accounting errors to avoid. Inaccurate allocation of overhead To develop a realistic picture of your job costs — [...]

Show me the money: Ways to keep your profits on track

While the U.S. economy continues to improve, contractors must carefully watch their bottom lines. This means keeping track of how increases — or decreases — in profitability can affect your construction company. The following are ways for your company to maintain its profitability. Review your overhead “Overhead” or “indirect costs” — expenses that aren’t directly [...]

Four ways contractors are using RFID technology

Radio frequency identification (RFID) technology has proven to be a powerful tool that can help contractors manage equipment and materials, reduce theft, enhance efficiency, and improve safety. Electromagnetic fields identify and track RFID tags — tiny computer chips with attached antennas — affixed to various objects. Contractors can read these tags remotely on a laptop [...]

Zero net energy building: Hot trend getting hotter

Zero net energy (ZNE) buildings — both residential and commercial — are a sustainable construction approach in which the building has a much smaller energy impact. ZNEs have continued to show significant growth in recent years. In fact, the increase prompted the U.S. Department of Energy (DOE) to release a common definition for ZNEs in [...]

Get ready for new lease accounting rules

Earlier this year, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, the FASB’s long-awaited overhaul of its lease accounting rules. The ASU makes extensive changes to the treatment of lease transactions, particularly for lessees. What do the new rules require? The most significant change involves operating leases. Under current Generally [...]

How to self-insure your construction business

With all of the risks inherent in a construction business, it’s important that you have sufficient insurance coverage. But you also need to keep policy costs under control. Captive insurance can be a great way to do both. The benefits With captive insurance, you establish a subsidiary company to self-insure your business. Bigger companies may [...]

Important things to know about the Nevada Commerce Tax

On June 10, 2015, Nevada Governor Sandoval signed a bill enacting a new annual commerce tax (which became effective July 1, 2015) applicable to each business entity engaged in business in Nevada with Nevada-sitused gross revenue exceeding $4,000,000 in a taxable year. If a business entity’s Nevada gross revenue exceeds $4,000,000, the excess is subject [...]

Cybersecurity: How is the construction industry vulnerable to data breaches?

It seems that hardly a day goes by without a cyberattack making headlines. And if you think your company isn’t a likely target, think again. Increasing reliance on cloud computing and mobile devices makes the construction industry particularly vulnerable to data breaches. Risks abound Consider the many ways construction companies are using the Internet today: [...]

Pursuing and Defending Construction Claims

Perhaps your construction company wants to defend against a claim for damages involving a project delay. Or maybe your company wants to pursue a claim against a construction company for defects in one of its buildings. Construction disputes that go to court, arbitration or mediation are extremely complex and require the assistance of experts. Click [...]

Why you should keep an eagle eye on your estimates

As a contractor, it’s critical that you keep an eagle eye on a multitude of tasks. But, one task in particular that’s susceptible to being overlooked is how you handle your estimates. If you aren’t careful, you might just find yourself digging a hole into your profits. Fixed price or approximate estimates? The first thing [...]