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A better approach to your financial statements provides credibility Have you been asked to send internally prepared interim financial statements to your banker or bonding agent? Many of you have. With the recent trends of watching financial information closer to prevent losses, the financial industry is requesting interim internal financial statements on a more frequent basis. Usually a work in progress (WIP) schedule is requested with the financial statements. These WIP schedules can get you in a lot of hot water if you are not careful and looking at them closely. Once your financial advisors have a WIP schedule showing a job’s profitability, none of us like to see the job fade (profit margin go down). A more conservative approach to your WIP schedule and therefore to your financial statements can gain you a lot of credibility in the industry for being able to finish jobs on budget and producing accurate internal financial statements. Wouldn’t you rather have your financial professionals look at the internal financial statements thinking “this Company is doing well and probably even better since they usually finish jobs better than projected on this schedule” than “I wonder how bad things really are since they never hit the budgets on this WIP schedule”. Please keep this in mind as you setup jobs in your accounting system. On construction specific accounting systems that produce the WIP report, there are usually ways to keep the target budget setup for comparison and for your Project Managers to strive for but a conservative budget for the WIP report for financial reporting. If you need assistance with this or any other financial matters, please don’t hesitate to call. Sincerely, - Contact Us -
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