If you own or manage a construction company, there’s more behind-the-scenes work than building or repairing beautiful buildings. You’ll need an audit firm well-versed in contractor accounting that can stay on top of your finances to maximize your bottom line.

Plus, if you need bond surety, you must ensure your audited financial statements are correct and up-to-date. That’s why hiring an audit team that understands construction accounting and the industry is essential. 

Let’s take a look at why you need an audited financial statement and why working with an experienced auditing team is critical for your construction business. 

 

Contractor Accounting: Audits and Surety Bonds

Construction projects, no matter how big or small, are only possible with funding– whether from your own pockets or a surety bond. If you opt to fund your projects through surety bonds, you’ll want to understand your bonding capacity. 

Bonding capacity refers to the maximum bond surety a lending institution can provide for a contractor. In other words, it’s the highest amount of money you can borrow to complete your most extensive building project. 

 

Why is an audit important for bonding?

For a lending institution to determine your bonding capacity or issue a surety bond, you’ll need to provide an audited financial statement to your lending officer. Your financial statements indicate your total revenue, cash flows, and operating expenses. While your in-house accountant likely has these statements up-to-date, you’ll need to partner with an auditing firm to prepare and review your statements. Doing so will provide a high level of assurance regarding the accuracy of your documents.

 

Why Working with an Experienced Auditor Matters

You know this better than anyone: there are unique nuances related to the construction industry that only people who work in it daily will understand. While you could use any auditor services that provide private company audits, there is a level of industry expertise you’ll get when you work with an audit firm that specializes in contractor accounting. 

An auditor with experience in contractor accounting will:

  • Ensure compliance with industry-specific regulations.
  • Review and prepare your financial statements according to Generally Accepted Accounting Principles.
  • Ensure you’re aware of and meeting the reporting requirements as required by your lending institution. 

If you’re unsure if your auditing team has the appropriate industry experience, take the time to ask about their credentials and knowledge before agreeing to work with them. An experienced team with construction knowledge can help you secure a surety bond for your company. 

 

Partner with Assurance Dimensions for Your Contractor Accounting Needs

At Assurance Dimensions, we have over 75 years of industry experience and are dedicated to staying up-to-date with trends and changes within the construction industry. Our team of auditing professionals understands the nuances of your business. It can provide assurance services in a way that is convenient for you—whether in person or virtually- through our secure cloud-based system.

If you’re ready to apply for a surety bond and need audited financial statements, contact us today to learn more about our assurance services.