In today’s construction industry, bonding capacity for contractors is more than a compliance requirement. It directly affects which projects you can pursue, how much work you can take on, and how sureties evaluate your financial strength. It’s a competitive advantage.
Whether you’re pursuing larger projects or entering new markets, your ability to secure performance and payment bonds can determine which opportunities are within reach. For many contractors, a financial statement review is a key step toward meeting or increasing bonding limits.
How Contractors Can Increase Bonding Capacity With a CPA Financial Review
Contractors increase bonding capacity when sureties gain confidence in the accuracy, consistency, and reliability of their financial information. A CPA-prepared financial statement review strengthens that confidence by demonstrating that reported results have been independently evaluated using professional standards.
For many contractors, this level of assurance is enough to move from a compilation to a review, satisfy surety requirements, and support higher bonding limits without the time and cost of a full audit.
How a Financial Review Supports Your Bonding Goals
A review-level financial statement prepared by an independent CPA provides a higher level of assurance than a compilation while requiring fewer resources than a full audit, making it a practical option for contractors looking to increase bonding capacity. Through analytical procedures and inquiries, a review provides credible financial information that sureties value.
Key benefits include:
- Increased credibility with bonding agents and surety underwriters.
- Improved positioning for higher bonding limits and expanded bonding capacity.
- Stronger insights into cash flow, job profitability, and overall financial management.
- A cost-effective, scalable upgrade from a compilation.
Not sure how a review compares to other financial reporting options? Learn more about audit vs review vs compilation and which approach best fits your business needs.
Before You Begin: Accrual-Basis Requirements & Key Items to Prepare
Meeting accrual-basis reporting standards is one of the most common prerequisites sureties evaluate when determining bonding capacity for contractors.
Most bonding companies require accrual-basis financial statements because they provide a more accurate depiction of financial condition and job performance. Preparing the following items before your review begins will streamline the process and help produce stronger, more reliable statements:
- Job costing and work-in-progress (WIP) schedules
- Accounts receivable and retainage
- Accounts payable and subcontractors payable
- Accrued payroll, benefits, and taxes
- Equipment listings and depreciation schedules
- Loans, lines of credit, and debt agreements
- Inventory and materials on hand
- Corporate records, ownership information, and entity documentation
Partnering With the Right CPA Makes a Difference
Construction contractors face unique financial and operational challenges. Partnering with a CPA firm that understands contract accounting, WIP reporting, retainage, and industry-specific financial ratios is one of the key benefits of hiring a CPA, it ensures your financial review does more than satisfy bonding requirements; it provides actionable insights that support long-term stability and growth.
At CMP, our team conducts accounting and bonding-related financial reporting. We work closely with contractors to strengthen financial systems, improve reporting, and prepare packages that instill confidence with sureties.
Ready to Build Your Capacity?
If you’re looking to increase bonding capacity for upcoming projects in the next year, now is the ideal time to assess whether a financial statement review can support your goals. Start by discussing anticipated financial reporting requirements with your bonding agent, then contact us to review your needs and outline the next steps.
