The construction contract documents published by the American Institute of Architects (AIA) are among the most commonly used forms on both commercial and residential projects in the United States. Although parties are free to modify these forms to suit their needs, it’s important to understand what the standard documents contain in order to negotiate appropriate [...]
Even the simplest construction project involves some degree of risk. Because of this, and the obviously higher degree of risk applicable to more complex jobs, owners will always seek to protect themselves financially. One way they continue to do so is through retainage. As you’re no doubt aware, under the concept of retainage, an owner [...]
The construction industry is characterized by tight profit margins and significant cash flow challenges. Your company’s success depends on strong financial leadership. To meet this need, many contractors reach a point where they should either appoint or hire a controller or Chief Financial Officer (CFO). But the differences between these two roles are often misunderstood. [...]
As we approach the end of 2017, it’s once again time to explore strategies for reducing your construction company’s tax bill. Because every business is different, it’s important to work directly with your CPA to determine the right moves for you. Nonetheless, here are some key areas to explore when looking for savings. Deferrals and [...]
Released: 9/28/2017 President Trump, along with Republican leaders of Congress, released an outline of the President Tax Plan named “Unified Framework for Fixing Our Broken Tax Code.” The intended effective date of the tax plan has not been mentioned; but It is intended to be enacted before the end of this year. The Plan is short [...]
In the construction industry, change orders are a fact of life. The trick is making them a profitable one! Here are 6 tips for effectively managing the change order process. Managing change orders wisely can make the difference between a successful job and a losing one. Read the contract. This may sound obvious, but contractors often assume things about approval [...]
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 [...]
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 [...]
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 [...]
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 [...]
