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How Important is it to Work with a CPA Who is Well Versed in Surety?

Your financial statements are only as accurate as the accountant who prepares them. It’s important to work with a CPA who is construction-savvy and knowledgeable about construction accounting.

What Interview Questions Can Be Used to Make Sure A CPA Is Construction-Savvy?

Joseph Catania, President of Anderson & Catania Surety Services, LLC (jcatania@acsurety.com), suggests that you find out how many contractors the CPA currently provides services for, specifically annual and semi-annual reviews.

“I would ask, ‘What are some tax strategies you may implement? How often do you come in to review my internal bookkeeping?’” he adds.

How Much Should I Budget Annually to Work with A Construction-Savvy CPA?

This does depend on the state/metro area you may be in.

“Budgeting for CPAs definitely can range from rural areas to metro areas,” Joe says. “CPA audits, semi-annual reviews, and tax returns could cost a little more than $25,000. These CPA services are generally for contractors that are over $25,000,000 in revenues.”

Joe breaks down approximate CPA engagement costs as follows:

·         CPA reviewed financials, including annual and semiannual: $15-$20k with a tax return

·         CPA review financials with no tax return: $8-$10k

·         CPA compilation: under $2,500

How Often Are CPA Financial Statements Needed?

“This really depends on the size of your company,” Joe explains. “Typically, as you get near the $10,000,000 threshold and obviously beyond it, it’s twice a year.”

What Type of Financial Statement Is Needed to Obtain Bonding?

You will need to provide a CPA review if your single-size project exceeds $1,000,000.

If you do not have many bonding requirements annually, you may be able to get away with a CPA compilation for projects under $1,000,000.

Contact our surety bond specialists at bondrequest@acsurety.com, or give us a call to learn more!

(video transcript)

It is very important to have a construction-oriented CPA. Like contractors, they’re looking, their spec book…that’s what an underwriter’s spec book is: The contractor’s financial statement.

Underwriters also look for the corresponding schedule for the work on hand. Presentation is very key because that says a lot about the contractor and what their CPA provides in the presentation.

Categories: Contract Bonds | Authored by: acsurety | Posted: 08/13/2020