Surety Bond Quarterly published an article by Construction Leader Joseph Natarelli and Assurance Partner James Miller, about increasing bonding capacity and maximizing surety credit.
Surety Bond Quarterly
In order to maximize surety credit, a contractor must show it is a secure financial risk; and proper planning is critical. Prior to the close of the contractor’s year-end, the company and its CPA should meet to work out a plan for the following year. Planning should include reviewing interim financial information, including ratios and metrics relevant to the contractor’s bonding program, tax planning, and modeling out the results for the end of the year. The plan should also include any recommendations from the CPA that would help strengthen the contractor’s financial statement. Finally, it should cover budgeting for future project bids and identify the bonding requirement needed to facilitate each bid.