Construction & Real Estate

jones-roth-construction-real-estateOur team helps you run your business in a more efficient way and maximize your ability to make a profit doing what you do best.

Our Construction and Real Estate Team focuses on family-owned and closely held construction businesses in the construction and real estate development industries. Our goal is to provide accounting, advisory and tax guidance that allows our construction clients to achieve maximum profitability.

  • Strategic planning & consulting
  • Tax planning & preparation
  • Compliance and bonding
  • Operational reviews
  • Financial controls
  • Benchmarking & financial ratios
  • Personal financial advice
  • Computer system & software evaluation
  • Cost segregation studies
  • Employee benefit services
  • Business succession planning

“We are focused on providing guidance and tools to Contractors that results in maximum profitability and superior business decisions”

— Jim Christian, CPA

Construction & Real Estate Team


Jim Christian, CPA

Jim Christian, CPA

Partner and Shareholder

BIO

Jon Newport, CPA

Jon Newport, CPA

Partner and Shareholder

BIO

Evan Dickens, CPA

Evan Dickens, CPA

Partner and Shareholder

BIO

Carrie Fortier, CPA

Carrie Fortier, CPA

Senior Manager

BIO

Michael Moomaw, CPA

Michael Moomaw, CPA

Senior Manager

BIO

Colleen Kronebusch, CPA

Colleen Kronebusch, CPA

Senior Accountant

BIO

Sarah Shaw-Stahlke, CPA

Sarah Shaw-Stahlke, CPA

Senior Accountant

BIO

Kori Kapihe

Kori Kapihe

Staff Accountant

BIO


Construction News

Top Benefits of Working with a Construction CPA

Top Benefits of Working with a Construction CPA

Not all CPAs are created equal when it comes to the construction industry. Did you know that the construction industry is unique in that it has its own Internal Revenue Code section?  In our profession we regularly see financial statements that don’t make sense because a generalist CPA didn’t understand the complex requirements of construction accounting. In fact, frequently a lack of industry specific knowledge can actually harm a company — from understating bonding capacity and working capital, improper indirect cost allocation, or miscalculated bank covenant ratios. These inquiries can result in increased credit costs and lost opportunities. Here are some of the top reasons you should be utilizing a CPA team that specializes in construction accounting and reporting:

  1. Income is correctly calculated on the percentage-of-completion method, which is mandated as a generally accepted accounting principle.
  1. The financial statements include required contract schedules as supplementary information.
  1. The contract schedules appropriately tie to the balance sheet and income statement. Financial statements must show completed job revenue and work in process revenue that ties to total contract revenue on the face of the income statement. The same goes for costs.
  1. Correct terminology and classifications are used throughout the financial statements, much of which is unique to the industry, such as billings in excess of costs and estimated earnings (overbillings), and costs and estimated earnings in excess of billings (underbillings).
  1. Losses on uncompleted contracts are recognized in full at the time it is determined there will be a loss on a job. This is, again, mandated by generally accepted accounting principles.  It also means that the financial pain of a loss is over and done with all at once, and not spread over the life of the contract, thereby prolonging further damage to financial ratios in future periods.
  1. Unique contractor disclosures are included with the financial statements, such as backlog, retentions receivable, contract billing status, significant profit fade or gain, contract claims, etc.
  1. An appropriate accounting method for tax purposes is selected to match the cash flow of the business. There can be many different tax accounting methods available to a contractor.

How do you evaluate a construction CPA?  A good construction-focused CPA firm should have a dedicated team that specializes in the industry led by a partner or shareholder with a Certified Construction Industry Financial Professionals (CCIFP) credential.  The firm should be a member of respected industry trade organizations, such as Associated Builders & Contractors (ABC), Associated General Contractors (AGC), and the Construction Financial Management Association (CFMA), just to name a few.   And lastly, the firm should have a large construction industry client base and provide value-added offerings in addition to tax and assurance services, such as benchmarking, financial ratio assessment, and succession planning.

Locating and identifying a construction CPA is one of the most crucial and rewarding decisions you can make for your business.  Once found, they should not only work with you to improve your business, but to improve the quality of financial information produced. A qualified construction CPA should support your ability to run a more profitable contracting business.

 

Sarah Shaw-Stahlke, CPA is a member leader of the Jones & Roth Construction TeamShe has expert knowledge in the construction industry and assists clients with financial reporting for bonding and banking purposes, job costing, financial ratios and benchmarking and tax planning. 

Prevailing Wage Seminar Recap

Prevailing Wage Seminar Recap

A week ago I attended a prevailing wage educational event hosted by the Pacific Northwest Chapter of Associated Builders and Contractors.  Susan Wooley, a Prevailing Wage Rate Technical Assistance Coordinator at the Oregon Bureau of Labor and Industry, brought her 18 years of experience to the table to address common prevailing wage law compliance issues.

The event was well attended and gave small business owners an open forum to ask questions about the interplay of state prevailing wage and federal Davis Bacon regulations, required job site postings, calculating overtime, compensating drive time to and from job sites, and filling out certified payroll reports.  I certainly learned a great deal and would encourage any ABC members, and even curious nonmembers, to attend future events.  See the ABC Pacific Northwest Chapter event calendar at: http://www.abcpnw.org/en-us/events.aspx#.

 

Sarah Shaw-Stahlke, CPA is a member leader of the Jones & Roth Construction Team. She has expert knowledge in the construction industry and assists clients with financial reporting for bonding and banking purposes, job costing, financial ratios and benchmarking and tax planning. 

Top 4 Benefits of Understanding Costs – Part 1

Top 4 Benefits of Understanding Costs – Part 1

With contractors operating on smaller and smaller margins, it’s vital to be aware of your costs.  In this 4-part blog series, we’ll discuss the top four benefits of understanding costs.

#1. Successful Bids

Construction contracting’s life blood is based on successful bidding.  A successful bid is one that helps sustain cash flow, is profitable and helps win future business—and it is by understanding the company’s cost structure that a contractor will be able to accomplish this.

The process begins with an analysis of costs that are not specifically related to one project.  Direct costs such as materials and labor are easily traceable to specific jobs, but the allocation of equipment operation and storage, or a general liability insurance policy, or the purchasing function are much more difficult costs to trace.

To begin, examine the company’s past five years of financial statements to identify the major costs.  Accumulate them into costs pools such as labor burden, equipment operation, shop and yard costs, vehicle costs, insurance costs, procurement costs, and estimating and project management costs.

Once the cost pools are identified, then come up with a rational allocation method for each.  This will differ depending on the size of the company and whether the contractor is a general contractor or a subcontractor, but some common allocation methods are based on labor hours, equipment hours, or total material costs on a given job in relation to all jobs.

Apply the allocation methods to jobs in progress and, once complete, evaluate the results with the understanding that the very nature of the process is based on estimates, which result in a cost being either over or under applied.  The reason for such an over or under allocation should be carefully analyzed and identified.  If appropriate, assumptions should then be updated and incorporated into all future bidding.

If these steps are applied carefully and methodically, they will yield the real cost of performing a job, which ultimately results in more successful bidding and profitability.  Then when tight economic times do come, as is the nature of the industry, your company will be much more likely to weather the storm.

 

jones-roth-sarah-shaw-stahlkeThis post is written by Sarah Shaw-Stahlke, Senior Accountant in the Jones & Roth Hillsboro office. Sarah specializes in the construction, manufacturing, and commercial real estate industries and enjoys applying her experience by preparing audited, reviewed and compiled financial statements, as well as corporate and partnership tax returns.


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