By Steven J. Platzer, CPA, CCIFP, MAcc

At Platzer & Company we work every day with GCs and Specialty Trade Subs. Our team of CPAs and CCIFPs know the construction industry inside and out. Accounting and taxation are unique and complex. We deliver industry-specific business insights and have deep expertise in best practices and financial metrics. Our flagship service is the role of Most Trusted Business Advisor.

Did you know the properly advised construction contractor should have 2 sets of books? Yes, really! We can show you where it says this in the IRS Construction Industry Audit Technique Guide. Revenue recognition and depreciation methods should always be different for financial statements and tax returns.
Did you know that the financial statement formats for bonding or for prequalification are very different? We work regularly with bonding agents and surety underwriters and know exactly what job schedules and accounting disclosures are required. Substandard work is no longer acceptable and a waste of your money.

We are experts in the Construction Industry because we know…

• Cash is King. That it really is all about cash.

• You should be reviewing Cash Flow from two perspectives every quarter: for the entire company (Statement of Cash Flows) and by Job & PM (Project Cash Flow Analysis).
• How to improve your company’s Billing and Collection processes. It’s all about standardized systems and practices.

• What an AIA G-702 is. And the importance of pay-when-paid, retainage reduction, and stored material clauses.

• You should be preparing a Contracts in Progress (WIP) Schedule every quarter.

• Underbilling is VERY BAD. It’s a sign of poor project management, poor change order management, profit fade, or worse.

• A properly crafted Schedule of Values is critical to creating Overbilling and positive Project Cash Flow.

• Job Costing is very different for a GC that Subs everything, a Labor-intensive Electrical Sub, and an Equipment-intensive Sitework Sub.

• You should have a Strategic Plan. You should know how much you need to bill quarterly & annually to achieve Breakeven, Target Net Income, and most importantly, a compensation level to justify your hard work and the risks you take.

• Volume kills and profit thrills. And other warning signs of trouble: owners working for no pay, company not making a profit, running things by the seat of your pants with no or late financial management info.

• It’s critical for us to understand your estimating and bidding process so we can verify inclusion of all costs to complete. You’re great with direct costs. But we all too often see money left on table due to incorrect labor burdens, equipment rates, omission of indirect costs (a black hole), and incorrect overhead and profit markups.
• The difference between a Bonding Agent and Surety Underwriter. And what’s required to obtain and increase bonding capacity.

• The latest: construction accounting Revenue Recognition and Lease rules; 8 recent Tax Acts; and IRS Construction Industry Audit Technique Guide (revised on 4/19/21).

About PlatzerCPA:

We are not a typical CPA Firm. Our flagship service is the role of Most Trusted Business Advisor. We find this future-focused service is sorely needed in the construction industry. This is critical to your future success!