Surety Bond Accounting

Surety bonding for contractors involves a detailed analysis of their financial and operational health. Surety underwriters use several key ratios to evaluate a contractor’s ability to complete projects successfully and meet their financial obligations. These ratios provide insight into the company’s liquidity, profitability, and overall financial strength. Here are the most common ratios assessed: 1. Working Capital Ratio 2. Current Ratio 3. Debt-to-Equity Ratio 4. Profitability Ratios 5. Leverage Ratios… Read More

Introduction Many minority-owned contracting businesses face unique challenges in securing surety bonds, such as limited access to capital, smaller networks, or lack of familiarity with bonding processes. However, effective bookkeeping can bridge these gaps by demonstrating financial reliability and readiness to surety bond underwriters. Why Bookkeeping is Key to Surety Bonds Surety bond providers evaluate a contractor’s financial health to determine their ability to complete projects successfully. For minority-owned businesses,… Read More

Bookkeeping plays a critical role in the success of any construction business. Managing finances effectively ensures profitability, helps track project costs, and keeps operations compliant with tax regulations. However, the complexity of construction accounting often leads to mistakes that can hurt your bottom line. Below, we discuss the most common bookkeeping errors in the construction industry and how to avoid them. 1. Failing to Track Job Costs Properly Problem: Many… Read More

Cash flow management is one of the most significant challenges faced by construction businesses. The industry operates within a complex ecosystem where payments, costs, and timelines are often misaligned, resulting in frequent cash flow difficulties. Below is an expanded and detailed exploration of the various complications construction businesses face, along with their underlying causes, consequences, and strategies for mitigation. 1. Delayed Payments Delayed payments are a pervasive issue in the… Read More

In the construction industry, success hinges on more than just completing projects on time and within scope. Behind every successful project is a foundation of solid financial management. Yet, many contractors overlook the importance of accounting and job costing, which can have serious consequences for their businesses. If you’ve been focusing solely on building projects and neglecting your numbers, here’s why it’s time to rethink your approach. The Risks of… Read More

The construction industry operates within a complex financial framework, and recent accounting changes like ASC 606 (Revenue from Contracts with Customers) have introduced significant implications for contractors, particularly in the realm of surety bonding. Surety providers rely heavily on accurate financial reporting to assess a contractor’s financial health and bonding capacity. This blog explores how new accounting standards impact contractors and their ability to secure surety bonds. Overview of ASC… Read More