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Ten Ways to Save Money on Insurance

Best practices for containing insurance costs are critical because insurance is one of the biggest costs in the dangerous construction environment. Here are 10 ways contractors may be able to save money on insurance: 1. Know Your Policy, Know Your Needs Insurance agents are salespeople. They may not be as concerned with trimming your company's costs [...]

Effectively Use Credit to Finance Controlled Revenue Growth

If you find your company gaining a large influx of projects, the biggest problem will be the boost in the amount of capital you will need in comparison with your cash flow. A jump in new jobs can strain your firm's resources, challenging the firm's capacity to hire field crews, its technology infrastructure and its cash [...]

Waivers of subrogation: Are you really protected?

It’s common for a construction contract to contain a “waiver of subrogation” provision under “insurance requirements.” Unfortunately, these provisions are widely misunderstood. Although they’re designed to shield owners, contractors and subcontractors against lawsuits by insurers covering project-related claims, the protection offered may not be as extensive as you might think. Understanding the concept                                                                                                  Subrogation is [...]

Looking for a succession strategy? Consider an ESOP

For construction company owners, succession planning can be a challenge. Some owners give the business to their children, but that may not be an option for owners who don't have children working in the company or who need to "cash out" to fund their retirement. Others may sell the business, either to their children or [...]

How to Hold a Successful Project Close-Out Meeting

They say hindsight is 20/20. You can take advantage of that hindsight by holding regular project closeout meetings to find nuggets of truth about how the project went and learn from them. Not every project makes money for your firm. You can find ways to improve project and accounting management if you set a tone [...]

Cross-training can help mitigate the labor shortage

It’s an unfortunate fact of life that shows no signs of diminishing soon. The construction industry continues to struggle with a shortage of skilled labor. Many contractors find themselves sorely limited in the size and number of projects they can take on because they simply don’t have the workforce to deploy. One way to mitigate [...]

Consider a different route: 4 accounting alternatives that may reduce financial reporting costs

Many privately held construction companies prepare audited financial statements that comply with Generally Accepted Accounting Principles (GAAP) as established by the Financial Accounting Standards Board (FASB). They do so, at least in part, to satisfy the requirements of lenders, sureties and other business partners. Many of GAAP's requirements benefit private businesses and their financial statement [...]

Beware: CGL Policies Don’t Cover Faulty Work

Builders and contractors who buy commercial general liability (CGL) insurance policies with the impression that they will keep them safe from allegations of inadequate or faulty work must be aware of what their policies cover. It's important to know that a CGL policy does not provide coverage for work that is faulty. Some Questions to [...]

6 tips for more effective change orders

In the construction industry, change orders are a fact of life. The trick is making them a profitable one! Managing change orders wisely can make the difference between a successful job and a losing one. Here are six tips to better managing the process: Read the contract. This may sound obvious, but contractors often assume [...]

Is a joint venture the right choice for your company?

They say two heads are better than one. This can sometimes be the case for construction projects when, whether because of difficult logistics or challenging technical aspects of a job, two contractors team up under a joint venture to give themselves the best odds of success. It's an excellent solution when the circumstances are right. [...]

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 [...]

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 [...]

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 [...]