A high bonding capacity is a strategic objective of many construction businesses. How do you build it? With a solid foundation. For starters, ensure your financial statements are complete, accurate and timely. One critical indicator is profitability. Projects that suffer from “profit fade,” when gross profits shrink over the course of a job, often indicate weaknesses such as inaccurate estimating and sloppy management. Sureties also want to see strong working capital, which is defined as current assets minus current liabilities. To improve this, consider deferring year-end bonuses or refinancing short-term debt with long-term debt.
Pandemic-related lockdowns have forced auditors to conduct many procedures off-site. That change may not necessarily be temporary. After realizing the potential benefits, remote audit procedures may be part of the “new normal” going forward.
Ignore Generation Z at your peril. The latest cohort of young adults is socially conscious, financially generous and hands on. These individuals are more likely to donate to charity at an early age, participate in crowdfunding and contribute on Giving Tuesday. As digital natives, they prefer social media platforms such as TikTok and Snapchat, which may require your organization to create new, narrowly tailored content to get their attention. They’re also more receptive to digital ads than their parents. But they expect outreach to be narrowly tailored to their interests, so be sure you rely on good data to engage them.
Private companies: Have you implemented the new lease accounting rules? If not, you can’t afford to procrastinate any longer. Here’s what you’ll need to do before year end and how it may impact your financials.
Your not-for-profit likely follows a spending policy to determine how much of the value of your investments to tap each year for operating costs and capital projects. Although it’s usually a good idea to stick with an established spending policy, circumstances may warrant changes. There are several types of policies, including fixed rate, rolling average, inflation-based, geometric and hybrid, all with pros and cons. When selecting a model, you should consider how that method potentially could cause you to increase spending and undermine your investments’ long-term growth.
If your business sponsors a qualified retirement plan, such as a 401(k), we have good news: The IRS has extended relief from the “physical presence” requirement related to signatures.
External auditors are supposed to be public watchdogs who are “independent” of their audit clients, both in appearance and in fact. This may seem like common sense, but independence issues remain at the forefront of stakeholder concerns today.
