Bulletin Board Magazine 2022 Volume 2

What new opportunities have arisen and how are we planning on capturing them? We identify goals at the start of the year and should not wait for the year to expire without checking in on their progress. Being constructively critical of our own results improves the chances of success. Labor shortages and out of stock materials currently frustrate the contractor the most. There are no easy or cheap answers for either problem. When you have identified good employees make sure they know it. Do what you can to reward them and not just annually. Pay attention to your employee morale, your workplace culture has a big impact on employee satisfaction. While money is a driver, the average employee considers changing jobs when they first begin to dread coming to work. That’s even true for a remote employee’s feelings. Train, cross train, and challenge, three principles which will keep those employees with skills satisfied. Investing back into an employee provides a tangible mark of value and belief in them. Cross training allows them to become more diverse and ignites a sense of ownership in what they are held responsible for. Challenging an employee to rise to a goal or develop a new course of action gets critical buy in. They want the company to succeed because of their developed sense of investment. The supply chain issues are demonstrating cycler tendencies and when one is corrected another raw material becomes scarce. The need to be sure we have future pricing in check is to be sure we are adding cost escalation clauses to our contracts. Surcharges are becoming more common place in this economy and should be a significant discussion point in any negotiations of the job bid. Speak with your own estimators and make sure they have current pricing and information. Review these critical calculations before submission, there should be at least two sets of eyes on all these inputs.

Capital acquisitions are also a critical piece for year-end planning. They are a component of growth, tax planning, and in many cases a cost reducer. The benefit of having the right tool for the job is efficiency. We operate more efficiently when equipment repairs are not impacting the project timeline. We operate more efficiently when normal tasks are completed on time and resources are not diverted from other directions. It allows us to deploy both human and equipment resources with confidence and execute at the most beneficial capability. Evaluating our equipment needs is an on-going task but should be coordinated with year end tax planning. The tax code still allows the accelerated depreciation of equipment placed in service which provides a great first year return on the investment. A traditional C-Corporation saves 21% off the original cost of the asset when calculating the after-tax purchase cost of just one new asset. Think of that discount when shopping and investing back into your business. We do all these great things and then the bill comes! Yes, the tax man needs to be paid. But does it have to sting? No, if as part of your review and planning you considering techniques that allow deferral of income to later periods or accelerate expenses into the current tax period. We discussed accelerated depreciation benefits, but we can also highlight items like profit sharing contributions, R&D tax credits and 179D deductions.

All are tools available to defer taxes due into future tax periods. At the start of the year, many tax professionals were concerned about tax law changes and their impacts. World developments have shifted focus by leadership of our government, but undoubtable return their attention at some point to the topic. For now, we have these favorable tax treatment items at our side. Tax reform as its touted, may not appear in the headlines until after mid term elections or maybe starting Quarter One of 2023. We can end the year confidently using the rules and strategies we followed in 2020 and 2021. We should have a blueprint from those periods that can be dusted off, updated, and built upon. The world has proven to be not just complicated but rapidly changing and challenging. By stepping back and measuring the basics we can stay business healthy. Its important to be prepared and flexible to change and adapt. It’s also important to stay fresh with your trusted advisors, bankers, lawyers, insurance agents, and accountants. If they have not already scheduled with you, schedule them to visit today.

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