CONSTRUCTION RELATED ACCOUNTING AND CONSULTING SERVICES:
As you know, in the construction industry experience is crucial. For example, our Managing Member, Joseph W. Ferira, Jr., CPA, CCIFP, has over thirty-five years experience in the highly specialized rules for accounting and taxation of construction contractors. All combined our firm offers nearly 100 years of experience in these complex matters. That is why we limit our practice to serving these and other construction related needs of the contracting industry.
- Financial Statements (Audited, Reviewed or Compiled)
- Bonding and Surety Assistance
- Large Network of Qualified Referrals (Attorneys, Insurance, Financial and Bank Representatives)
- Assistance in Obtaining Lines of Working Capital and Long-Term Financing
- Recruiting of Competent Construction Accounting Personnel
- Construction Specific Accounting Software evaluation, selection and implementation
- Internal Control and Operational Audits
- Business Plan Preparation
- Break-Even and Overhead Analysis and Applied Overhead Percentage Development
- Bookkeeping Assistance
- Design of Job and Equipment Costing Systems
- Organizational Chart, Job Description and Internal Process Re-engineering and Documentation
- Design of Incentive Pay Systems for Project Superintendents
- Controller in a box ( external CFO for non attest clients)
The construction contracting industry is currently under increased scrutiny by the Internal Revenue Service. This is not a good thing. The IRS has begun a “market segment specialization program”, which includes the construction industry. IRS agents are now being indoctrinated in audit techniques especially for construction contractors. These agents have recently been issued a special Audit Technique Guide to help them on their mission. You can expect in the future that the IRS agents appearing at your front door will be much more familiar with your business than ever before! We have copies of these guides, and we are experienced in representing contractors before the IRS.
In fact on January 11, 2001, the IRS issued the final regulations to IRS Code Section 460, which governs construction contracts. We regularly scrutinize the Internal Revenue Code and how it affects our client base, which is entirely construction contractors. Our mission is to help our client base pay the lowest tax permitted under the law.
In case you didn’t know, the Internal Revenue Code is very, very complicated to say the least! For example, under IRS Code Sections 451 and 460, there can be as many as seven different allowable methods of determining contract income for construction contractors:
- Cash basis
- Completed contract method
- Percentage-of-completion method
- Regular accrual method
- Accrual method without retainage
- Simplified percentage-of-completion method
- Percentage-of-completion ten percent (10%) method
Our goal is to help you make the best decision from the various tax methods available for you to be certain that your income tax bill is minimized. By reviewing your results of operations prior to year end, we can often help you reduce this income tax burden so you can keep this money to help grow your business. We have found however, that many contractors who wait to contact us until they are facing an IRS audit, are usually not in full compliance with this complex maze of rules and regulations.
There are other areas of the tax law we can help you with which may be important to you. For example...
Do you know when to capitalize repairs and maintenance costs versus expensing them?
Do you know when you should treat a lease as “operating” versus “capital”?
Do you know the appropriate type of legal entity you should be operating as - “C” Corporation, “S” Corporation, LLC, Partnership, Joint Venture, etc.?
Have you considered an ESOP as an exit vehicle?
What are the reasons for a family limited partnership, and how can one help you transfer and protect your accumulated wealth?
How do the Alternative Minimum Tax laws affect you and your business?
Are you aware of the “look-back” rules and how they impact your contracting business?
If you are planning to sell your business in the next five years, how can you minimize the income tax effect in doing so? Succession Planning? What is this and have you considered the tax implications of doing so?
Paying way too much tax? Let us help you create a “captive” under South Carolina’s new insurance law.
We regularly advise our construction clients on these and many other tax matters. Give us a call if you want to discuss any of these or other issues affecting you or your business.
FERIRA, AINSWORTH & COMPANY, LLC, CPA'S MAKES IT HAPPEN
Following are just a few of the many ways we have helped our clients recently:
- Installed Windows NT based construction specific accounting software for an underground utilities contractor, trained all appropriate personnel (project managers, estimators, accounting and general management) in its use and re-engineered processes feeding into and fed by the system,
Recommended and assisted in the creation of a captive insurance company saving our contractor client millions of dollars in federal and state income taxes,
- Obtained bonding for an electrical contractor over the telephone, due to strength of relationship with surety company,
- Negotiated $5 million equipment financing arrangement,
- Arranged for the sale of a heavy/highway contractor to a large regional company.
Ferira, Ainsworth & Company, LLC, CPA's serves over fifty contractors in South Carolina with a high level of personal service. Our firm has been built on our reputation. Consequently, we take our reputation very seriously. We want our name to be synonymous with integrity, competence and independence. Without these qualities, an accounting firm will have no future in a profession whose very reason for existence derives from these qualities.
To ensure that our standards are maintained on the highest level, our firm is a member of the American Institute of Certified Public Accountants. By doing so we have agreed to be reviewed (very much like audited) by our peers in public accounting every three years. To continue our practice, we must pass this review. We have just again completed this process with flying colors.