Industry Category: Construction, Real Estate & Minerals

Vice President Greg Elpers, CPA, has been named to lead the Accounting & Auditing Department for Harding, Shymanski & Company, PSC effective January 1, 2020. Elpers assumes responsibility for the department from Vice President Dave Papariella, CPA, as part of the firm’s internal succession plan.

“The A&A Department has an experienced, strong group of leaders that have and will continue to provide excellent service to our clients,” said Papariella. “They embrace the continuing changes in the landscape of the profession ranging from new accounting standards to ever-evolving technology. Greg has great relationships with his peers and brings a collaborative approach that will serve our clients and our team well. It has been a privilege to work with and lead this group for the past 12 years.”

A Vice President in our Accounting & Auditing Department, Elpers has been with the firm since 1996. He works closely with and provides accounting, auditing, and consulting services primarily for clients in the construction, manufacturing, and non-profit industries as well as in the firm’s employee benefit audit niche. Elpers also serves as co-leader of the firm’s Construction Team.

“I’m both honored and excited to have the opportunity to step into this new role and continue the high level of quality Dave has instilled throughout our department these past 12 years,” Elpers said. “We have a tremendous amount of talent and a strong group of leaders within our department. I look forward to working with our team as we position ourselves to meet the challenges that face our industry, continue to grow the department, and to provide excellent client service through our long-standing one-firm, one-team culture.”

Elpers is a graduate of the University of Evansville with a Bachelor of Science degree in accounting. He is a member of the American Institute of Certified Public Accountants and the Indiana CPA Society and has obtained the Certified Construction Auditor (CCA) designation. He currently serves as an Advisory Board Member for The Salvation Army and is a past Chairman of the Advisory Board. In addition, he has previously served as a board member for the Evansville Redevelopment Commission and the Legal Aid Society. He has previously been a featured speaker and panelist at the national RSM construction accounting conference and has authored an article published by the national CFMA Building Profits construction magazine.

Harding, Shymanski & Company’s Construction Team is proud to be ranked #24 in the nation in Construction Executive’s Top 50 Construction Accounting Firms.

CE reached out to hundreds of accounting firms in the U.S. who have dedicated construction industry practices to learn more about both their practices and their clients’ biggest concerns.

Overall, the 2019 Ohio Valley Construction Market Outlook Survey respondents reported a mostly positive outlook with workforce issues and increasing competition ranking high on their list of concerns. In addition, the industry faces two accounting changes that could significantly impact their financial performance metrics: revenue recognition and lease accounting.

For more information about our construction industry services, contact Greg Elpers, CPA, CCA or Andrea Strange, CPA.

Contractors take on tremendous risk when they perform work. However, more contractors go out of business due to poor cash flow than from lack of profitability. This is mostly due to the lack of emphasis on billing and collections in the daily environment of construction operations, where most companies in the industry could largely benefit by developing processes to efficiently collect their full revenue on a timely basis. A contractor’s cash flow is largely driven by individual projects; therefore, it is crucial for Project Managers to monitor their jobs closely in order to detect the warning signs of poor cash flow. Luckily, there are several ways to analyze financial data to detect a weakness in cash flow and provide a general overview of the company’s health. These can include comparing financial ratios, cash position, and turnover to other companies in the industry by using information from available resources such as the CFMA’s Financial Benchmarker.

These processes can help construction companies maintain a positive cash position, drive metrics, and incentivize the right behaviors to keep cash flow positive for each project and the company as a whole.

If you would like to participate in CFMA’s Financial Benchmarker, please contact Greg Elpers, CPA at gelpers@hsccpa.com or 800.880.7800 ext.1352.

Construction company owners may need a business valuation for a variety of reasons, a possible transaction being the most common. Determining the appropriate value of a construction business is not an exact science and can be difficult, especially for the actual owners. Owners who started their businesses from scratch may value the company beyond its monetary worth. Accordingly, owners commonly benefit from the services of an independent appraiser in determining the true value of their businesses. Additionally, a valuation can be difficult due to the various approaches and factors that need to be considered before coming to a realistic conclusion. Some of the different approaches to valuation include: liquidation value (the value if sold for the quick liquidation of assets to exit a business), fair market value (the value compared to a similar transaction in the market with a willing buyer and seller), and investment value (the value assigned by a particular investor, which is not necessarily what others would pay).

In addition, there are three primary approaches that appraisers take when valuing a business, which include: income-based (assess value based on expected cash flows), market-based (comparing company value based on similar companies within the industry), and asset-based (the company’s estimated equity equals the assessed value of assets minus liabilities). Appraisers should be mindful of the industry and any changes that may affect operations. For
example, the construction industry is greatly affected by fluctuations in lending rates, labor rates, and material prices.

The industry was also affected by the introduction of the Tax Cuts and Jobs Act (TCJA) that was passed at the end of 2017. The law’s primary changes include: reduced corporate tax rates, limitations on deductibility of interest expense, limitations on net operating losses, and accelerated depreciation. Each of these can greatly impact valuation, so a business owner’s best response would be to consult with their tax advisor on how the TJCA could affect the valuation of their business.
To find out more about the various valuation methods for companies, click here. For additional information and answers to your questions, please contact a member of your client service team Greg Elpers, CPA 800.880.7800.