From the category archives: Business

Business

Retiring? Consider an Employee Stock Ownership Plan

While employee stock ownership plans (ESOPs) function to reward employees with an ownership stake in the business they helped build, they can also offer tax advantages as an ownership-transition vehicle. Yet only about 11 percent of construction companies had ESOPs in 2016, according to research by the National Center for Employee Ownership. Further research shows that companies that set up an ESOP tend to increase annual sales, employment and productivity an average of 2.5 percent.

Reduce the Stress of Implementing ASC 606

There is no time to waste in beginning the implementation process for the Financial Accounting Standards Board’s (FASB) new revenue recognition standard, Accounting Standards Codification (ASC) 606. Companies will find differences in some of the methods of recognizing revenue in the future, so taking a proactive approach to ASC 606 can help reduce the stress of implementation.

Exploring Self-funded Health Care Plans

While it’s important to keep up with the news surrounding legislation to repeal and replace The Affordable Care Act, many contractors would be well served to consider another insurance strategy right now: partially self-funded health insurance plans. The bottom line is that the company is going to pay for a lot of employees’ medical care, so it’s important for staff to be mindful of costs because they drive premiums. This conversation alone—that employers and employees shoulder the cost of care together, and that both must be better stewards of those assets—can be a major driver of reduced costs. Aligning the interests of employees and their employers is critical in all aspects of profitability and success. 

Achieve a Well-oiled Machine With Modern Materials Management

Construction projects are often compared to manufacturing assembly line operations—insomuch that they are nothing alike. The typical construction project has so many moving pieces being assembled in unique ways and in varied locations, making no two projects exactly the same.

The Why and How of Computing POC

The percentage of completion (POC) calculation has traditionally been considered the best recognition of progress toward completion of a contract. The POC can be computed with factors other than costs, such as labor hours or labor costs or machine hours. Also, the costs can be total contract costs or a specific limited type of costs, such as direct costs only. 

Executive Insights

"Contractors must up their game when it comes to cybersecurity’s role in protecting them from financial fraud. Ransomware became the tool of choice for a $1 billion crime with the recent attack through WannaCry/ WannaCrypt. This exploitation impacted more than 200,000 computers in more than 150 countries. Additionally, with the proliferation of the internet of things, cloud storage and electronic banking, the risks of wire fraud and cyber breach continue to rise."

Before Employees Leave, Protect Your Assets

A review of most construction companies’ financial records reveals their primary value is their owners and employees. Thus, firms have a compelling interest in attracting and retaining skilled and professional labor, as well as avoiding the devastating loss of talent and know-how when they leave or engage in competing businesses. Construction companies that cater to the demands unique to each type of employee will find an edge in the employment marketplace. For instance, to attract older employees, construction companies could consider offering a wide array of tax-advantaged savings and retirement incentives, including health savings accounts, college savings accounts, 401(k) accounts, simplified employee pensions, IRAs and qualified and non-qualified deferred compensation plans. 

Survey Finds Growing Appetite for P3 Projects

  In the next three years, 85 percent of public sector respondents to Husch Blackwell’s third annual Public-Private Partnership (P3) Conference Survey stated they are planning for multiple P3 projects. On the private side, 93 percent of respondents from AEC and financial firms affirmed the same.

Majority of Florida Contractors Plan to Hire in 2017

  Eighty-eight percent of Florida construction firms plan to increase hiring during the next six months and 84 percent anticipate experiencing more difficulty finding appropriately skilled labor, according to a report released by Associated Builders and Contractors (ABC) of Florida. The inaugural Florida Contractor Confidence Index (CCI) showed a statewide reading of 81 for improving sales, indicating the typical Florida contractor expects to be much busier in 2017.

Avoiding the Big Spend: Tracking and Caring for Rental Equipment

Sometimes, renting equipment makes perfect sense. In this still-tight credit environment, some lenders aren't willing to finance a large piece of equipment, or an outright purchase might not add up financially if the equipment is only needed for a short duration. For contractors on a budget, rental companies usually have the latest models in their inventories, a luxury that is out of reach for many smaller firms. Plus, renting equipment is convenient, with the duty of maintenance, set up and transportation being someone else's problem. 

Nevertheless, there are still ways contractors can end up paying more than they planned for that rented backhoe or core driller. The good news is that there are strategies to prevent that extra spend. 
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