What Is the Deadline for Reporting My CPA Financial Statement to My Bond Company?

Joe Catania, President of Anderson & Catania Surety Services, explains the importance of sharing year-end financial statements with your bond company.

Has COVID-19 impacted the timeframes for delivery of 2020 CPA financial statements?

Yes, we’ve seen late statements since the CPAs have helped clients with SBA PPP loan forgiveness and due to the extended 2020 IRS tax filing deadline.  We’re typically receiving year-end financial statements no later than 120 days following year-end. 

Is it advisable to share a DRAFT version of the CPA financial statements with the bonding agent prior to the CPA finalizing the financial statements?

Yes, absolutely.  We keep a line of communication open with our clients and their CPAs to talk about projected year-end results, the impact of tax strategies, and the retention of earnings to maximize surety program capacity.

Does the type of CPA financial statement impact a contractor’s ability to increase bonding capacity?

Yes, the type of CPA financial statement directly impacts a contractor’s ability to maximize bonding capacity.  CPA “Compilation” reports may be satisfactory for aggregate bonding programs up to $5 million. CPA “Reviewed” financial statements are generally required for aggregate bonding programs up to $30 million.  “Audited” year-end financial statements will be required for aggregate bonding programs greater than $30 million. The surety company may also require June 30th CPA financials for programs greater than $30 million.

Contact our surety bond specialists at bondrequest@acsurety.com or give us a call to learn more!

(video transcript)

So, we’re in May now. This is the primary bid season. Typically, the majority of our clients, we’ve already received the year-rend statements for March and April so we already have bond lines secured and it’s available. So, this is critical to know what your program is so you can go after the work you want to be able to perform and to succeed.