construction bldg from website
Improve Your Company's Billing & Collections 
 
Contractors take on tremendous risk when they perform work. However, more contractors go out of business due to poor cash flow than from lack of profitability. This is mostly due to the lack of emphasis on billing and collections in the daily environment of construction operations, where most companies in the industry could largely benefit by developing processes to efficiently collect their full revenue on a timely basis. A contractor's cash flow is largely driven by individual projects; therefore, it is crucial for Project Managers to monitor their jobs closely in order to detect the warning signs of poor cash flow. Luckily, there are several ways to analyze financial data to detect a weakness in cash flow and provide a general overview of the company's health. These can include comparing financial ratios, cash position, and turnover to other companies in the industry by using information from available  resources such as the CFMA's Financial Benchmarker.

These processes can help construction companies maintain a positive cash position, drive metrics, and incentivize the right behaviors to keep cash flow positive for each project and the company as a whole.
If you would like to participate in CFMA's Financial Benchmarker, please contact 
Greg Elpers, CPA at  gelpers@hsccpa.com  or 800.880.7800 ext.1352.
Determining the Value of Your Construction Company 
   
Construction company owners may need a business valuation for a variety of reasons, a possible transaction being the most common. Determining the appropriate value of a construction business is not an exact science and can be difficult, especially for the actual owners. Owners who started their businesses from scratch may value the company beyond its monetary worth. Accordingly, owners commonly benefit from the services of an  independent appraiser in determining the true value of their businesses. Additionally, a valuation can be difficult due to the various approaches and factors that need to be considered before coming to a realistic conclusion. Some of the different approaches to valuation include: liquidation value (the value if sold for the quick liquidation of assets to exit a business), fair market value (the value compared to a similar transaction in the market with a willing buyer and seller), and investment value (the value assigned by a particular investor, which is not necessarily what others would pay).

In addition, there are three primary approaches that appraisers take when valuing a business, which include: income-based (assess value based on expected cash flows), market-based (comparing company value based on similar companies within the industry), and asset-based (the company's estimated equity equals the assessed value of assets minus liabilities). Appraisers  should be mindful of the industry and any changes that may affect operations. For
example, the construction industry is greatly affected by fluctuations in lending rates, labor rates, and material prices.

The industry was also affected by the introduction of the Tax Cuts and Jobs Act (TCJA) that was passed at the end of 2017. The law's primary changes include: reduced corporate tax rates, limitations on deductibility of interest expense, limitations on net operating losses, and accelerated depreciation. Each of these can greatly impact valuation, so a business owner's best response would be to consult with their tax advisor on how the TJCA could affect the valuation of their business.
To find out more about the various valuation methods for companies, click here.  For additional information and answers to your questions, please contact a member of your client service team or Paul Esche, CPA, CCIFP, CCA at pesche@hsccpa.com or 800.880.7800 ext.1335.  
New Year, New Law, New Challenges  
 
The recent one-year anniversary of the Tax Cuts and Jobs Act (TCJA) brought with it a plethora of challenges as the IRS has fallen behind on necessary forms, procedures, and guidance for taxpayers to file their 2018 taxes, according to a report from the Treasury Inspector General for Tax Administration (TIGTA). These delays coupled with the complexity of tax law changes will create difficulty for taxpayers and their advisors, suggesting that taxpayers should at minimum be prepared for filing an extension, even if they have previously filed by the March or April 15th deadlines.

The TCJA introduced sweeping changes, including several new code sections and major tax technical concepts, requiring the IRS to develop new forms and make meaningful revisions to others. Each new or redesigned form requires developing associated instructions, publications, and updating the IRS' aging technology to accommodate the changes and new forms. The IRS has estimated that the TCJA will require creating or revising 450 forms, instructions, and other publications; as well as modifying 140 information technology systems.

While some taxpayers benefit from simplified filings and a higher standard deduction, eliminating the need to itemize their deductions, the significant tax law changes, and challenges facing the IRS will increase the amount of time required to prepare returns for many.
For more information about the impact of recent tax law change, click here or contact  Mike Cameron, CPA at mcameron@hsccpa.com  or 800.880.7800 ext.1394.
Upcoming Events   
 
ESOP Roundtable

We are proud to host ESOP Roundtable events for ESOP companies and those companies who are exploring the ESOP opportunity. As you might expect, the ESOP Roundtable agenda is member-driven and provides a place to share experiences, questions, best practices, lessons learned and successes.
   
 
This program qualifies for up to 1 hour of A&A and 1 hour of Tax CPE credit for CPAs. Choose a location and register today!
 
Evansville, IN
Tuesday, March 19, 2019
11:30 a.m. - 1:30 p.m. CST
Harding, Shymanski & Company, P.S.C.
21 SE Third Street (4T Training Room)
Evansville, IN 47708 
Louisville, KY
Wednesday, March 20, 2019
11:30 a.m.- 1:30 p.m. EST
Madrid Building Conference Center
545 S Third Street
Louisville, KY 40202
 
  
ABOUT OUR CONSTRUCTION, REAL ESTATE, AND MINERALS ACCOUNTING INDUSTRY TEAM
  
Because Harding, Shymanski & Company, P.S.C. is committed to providing quality service to our construction, real estate, and mineral industry clients, we have selected a team of dedicated professionals to serve as your industry's consultants. These individuals understand the language and key issues unique to your industry and possess the drive and determination to help you manage your company on a proactive basis. 

If you are interested in additional news or event information, stay connected through our website and industry newsletters or follow our LinkedIn Company page.
 
 
 
 
 
 
 
SEE WHAT OUR CLIENTS ARE SAYING...
 
Inefficiencies and roadblocks were preventing our company from moving to the next level of success. We had tried working through various issues on our own, but found that day-to-day operations and other pressing matters took precedence over planning for our own future success. We found ourselves at a cross-roads of trying to determine a successful strategy for the business and finding ways to build upon the many successes we had already experienced...we knew we needed guidance to achieve future success. We have even switched our audit and tax services to HSC! I would highly recommend HSC for all your consulting, audit and tax needs. 
 
~Greg Koberstein, CEO, Koberstein Contracting, Inc. 
Disclaimer: The information contained in this email is for general guidance on matters of interest only. The publication does not, and is not intended to provide legal, tax or accounting advice.
 
Internal Revenue Service rules require us to inform you that this communication may be deemed a solicitation to provide tax services. This communication is being sent to individuals who have subscribed to receive it or who we believe would have an interest in the topics discussed. 

Harding, Shymanski & Company, P.S.C.
800.880.7800 | info@hsccpa.com  | www.hsccpa.com