It’s time to get your financial statements in shape. It’s important to not just view you company’s financial statements as a historical document, but as a tool you have influence over with your actions and its presentation.

In connection with year-end tax planning, also do some financial statement planning. Banks and sureties always look at the fundamentals: working capital, leverage, owners’ equity. Before your year-end, use interim financial statements to project what your year-end financial statement will look like.   Use this projected information to:

• - Compare to prior year financial statements: Your bank and surety will do this eventually. Benchmark against yourself to identify trends in your performance or possible errors in your accounting.
• - Compare to industry data: Benchmarking data based on contractor type, revenue size and region are available through a variety of sources. Use this information to see how your performance and balance sheet health compares to your competition.
• - Calculate any financial loan covenants: It is better to know early if your company may violate a covenant so there is time to cure it or obtain a waiver from your bank.  

Knowing what your financial statement will report at year-end will give you time to do something about it. Increasing efforts to speed up billings and collections, refinancing current debt to long-term, selling excess equipment, renegotiating with vendors to defer expenses, and reevaluating job profitability can be done with enough lead time.

What does this mean for your bank or surety? Download our complimentary ebook, What Story Does Your Financial Statement Tell About Your Construction Business?: The Top Three Improvements Your Bank and Surety Want to See, and find out.

You’ll also learn how to make sure your financial statements tells the whole story about your business and give your bank and surety what they want to see.