You may know your firm’s financial health better than anyone, but when your business is being evaluated by a surety company in New Jersey, they only have the hard data to look at. Here are four aspects of your company’s financial fitness that you should be paying attention to now:
- Balance sheets. By looking at your company’s assets, liabilities and net worth, an underwriter gets a good picture of your business’ ability to handle larger, more complicated projects.
- Income statements. Here revenue is shown in relation to expenses, giving an outsider insight regarding your company’s expenses, overhead costs and profitability.
- Cash flow statements. Construction relies on healthy cash flow because of the nature of the business. Separated into operating, investing and financing activities, this report gives an indication of how liquid funds are managed.
- Accounting schedules. When you provide current records of accounts payable and accounts receivable, you show that your company has a good handle on its transactions. Conversely, outdated accounting schedules can be a red flag for a surety company in New Jersey.
Your evaluation is likely to be thorough because surety bonds are really a form of unsecured credit. However, if your business is well-managed and keeps good records, you’ll have a good chance at getting the bond you need to win that big bid.