Spring 2009

Key Financial Ratios
Sureties, banks and other creditors measure your business's financial strength by reviewing financial trends and numerical relationships using the information presented on your financial statements. To do this, they typically calculate a variety of financial ratios. Comparing ratios from current periods to ratios from prior periods and to industry standards provides insight into your company's financial health and the potential risk of extending or guaranteeing credit. Read more...

Before Accepting "Takeover" Work
Takeover work can be a good opportunity, but there are several issues you should examine before agreeing to step in and complete a project. If a takeover project has been offered to your firm, here are some things you'll want to investigate. Find out why the owner and the original contractor parted ways. Was it for cause? If so, can you avoid the same issue? Did the owner have difficulties paying the contractor on time? If this was the case, can you say for sure that it will be different for you if you take on the project? Read more...

Know the Rules on Independent Contractors
Outsourcing work to independent contractors is probably more common in construction than in many other industries. After all, bringing in qualified independent contractors to handle various aspects of a project with tight deadlines makes perfect sense. It also makes financial sense. However, don't let the financial advantages of hiring independent contractors blind you to the need to consistently treat them as independent contractors. You must familiarize yourself with the factors that the IRS uses to help differentiate an independent contractor from an employee. If you misclassify an employee as an independent contractor, the IRS will seek unpaid payroll taxes--and possibly penalties and interest on that amount--from your firm. Read more...

Verifying the Legal Status of Employees
A Presidential Executive Order issued last year requires contractors who perform work for the federal government to verify their employees' eligibility to legally work in the United States using the U.S. Citizenship and Immigration Services' E-Verify system. The new rule was originally scheduled to take effect on January 15, 2009. However, implementation of the rule has been delayed until May 21, 2009. E-Verify is a free Internet-based system operated by the Department of Homeland Security in partnership with the Social Security Administration that allows participating employers to electronically verify the employment eligibility of their existing employees and new hires. Read more...

National Economic Outlook
Winter's gloom continues to settle in on the non-residential construction market nationally. Bank lending for commercial construction remains restricted. Secondary financing vehicles, like REITs or commercial mortgage-backed securities, remain closed down markets. Compounding the financial issues, widespread downsizing has elevated unemployment to levels not seen since the early 1980s, further suppressing demand. Read More...

Developments in Tax and Business
Electronic Filing Required - Contractors with 25 or more trucks, tractors or other heavy vehicles used on highways must now file their excise tax, Form 2290 (Heavy Highway Vehicle Use Tax Return) electronically with the IRS. Contractors can choose to file Forms 720 (Quarterly Federal Excise Tax Return) and 8849 (Claim for Refund of Excise Taxes) electronically also. Read more...

Timberline Reports and Consulting Services
Are you getting the management reports that you need out of your Timberline Office system? Somerset can help you modify standard reports or custom tailor new reports to help you streamline your business processes. Some of the unique reports and financial statements we can provide you with include AP transaction audit, cash flow variance, fade gain, net cash (integrated into WIP), ROI and ratios. We also provide a wide-range of Timberline consulting services, including data archiving and retrieval. Contact us to discuss these services.

Somerset Construction & A/E Team News

Speaking Engagements. Ken Hedlund will present "Top Ten Services Contractors Need" on May 19 to BDO Seidman Alliance members. On May 20, Ken will present "Financial Power Tools for Contractors" to ABC Indiana members in Muncie. "Surviving the Economic Downturn" will be the topic of Ken's presentation to ISA members on May 27. Ken will then be traveling to Las Vegas on June 1 to participate in the BDO Seidman Alliance conference as an executive member of the Construction Industry Group. To learn more about our Financial Power Tools for Contractors and our Financial Power Tools for A/E Firms, please visit us online.

Equipment Today Article. Ken Hedlund was recently interviewed for the article, "Three Options to Achieve Profits," that was published in Equipment Today magazine this month. Click here to read the full article.

Somerset Practical MBA Program. Our popular MBA program is scheduled through 2010. Steve Riddle will present the next session on May 20, 2009, and the topic will be "The Role of Management and Cost Behavior." Ken Hedlund will be presenting the MBA session on June 24, 2009, on the topic of "Key Performance Indicators." Click the image to the right see the full schedule and details. Please join us in person or via webinar.

In Other News...

2009 Seminars. Our seminars calendar for 2009 keeps expanding--please go online to see the current schedule and register.

Somerset Client Satisfaction Survey. If you are a Somerset client, please take our survey concerning the services we have provided to you. Our goal is to improve our overall relationship and better serve you. Go to survey.

Somerset Newsletters. Somerset publishes a variety of newsletters in addition to Work-In-Process--such as Wherewithal, Real Estate Focus, Tax Times and several others. Please visit the Newsletters page of our web site to read the archives and sign up to have new issues delivered to your email inbox.

Work-In-Process is provided by Somerset CPAs for our clients and other interested persons upon request. For additional information on the issues discussed, please contact Ken Hedlund, Jay Feller, Steve George, Chris Mayfield or Rebecca Ogle of our Construction & A/E Team. Learn more about our Construction & A/E Team by clicking the photo to the left to watch our video. Since technical information is presented in generalized fashion, no final conclusion on these topics should be made without further review. This document is not intended or written to be used, and cannot be used, for the purpose of avoiding tax penalties that may be imposed on the taxpayer.