Effective January 22, 2017, employers must use the revised form I-9, Employment Eligibility Verification Form.
December and January are undoubtedly busy times for businesses with closing out their calendar years, gathering documentation for their accountants, tax preparers, and auditors, and filing wage and income information returns to taxing authorities for their employees and contractors. Unfortunately, adding to this year’s stress and complexities are some accelerated due dates for certain information returns. Below are those changes and some important reminders.
In today’s competitive market place, its expansion into international markets has made the potential for and/or the existence of fraud, a risk that is being addressed by both large and small contractors alike.
Large companies have the resources available to identify and reduce fraud risk. Establishing an ethics program which satisfies the requirements of FAR 3.1002, which requires a written code of business conduct, FAR 52.203-13, Contractor Code of Business Ethics and Conduct, development of comprehensive policies and procedures, the segregation of critical duties within the organization, the existence of internal/external audit functions and extensive employee training programs, all contribute to a fraud-resistant environment.
Even in today’s economic environment there are many companies, both start-up and established, that are looking to do business with the Federal government and its various agencies. To be successful it is essential that these companies recognize that contracting with the Federal government requires more of their accounting system and associated internal controls than those companies dealing only in the commercial marketplace.
One of the least appreciated and most maligned tools in management’s toolbox is the indirect expense or overhead rate structure. The indirect expense rate structure of an organization, whether for-profit or not-for-profit, whether service-oriented or a manufacturer or some combination of both should mirror the operational organization. A company’s indirect rates have a pervasive effect on all of their contracts, on the level of revenue and profit realized and on the volume of cash flow. For these reasons indirect expense rates should be considered both a strategic and a tactical element of your business plan. It is more than just a by-product of the accounting and budgeting system. Your indirect rate structure must play a major role in supporting your strategic business goals and must not be inconsistent with your business’ operating model.
On May 28, 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers.
This significant undertaking – which resulted from a joint task force between the FASB and the International Accounting Standards Boards (IASB) – affects every entity across all industries.
So what does ASU 2014-09 mean for construction contractors?
As many in the construction business know, you go where the work is. That often means traveling significant distances in and out of other cities, counties, and states. When that happens, the rules of contract, business, and taxes can change quite a bit. A contractor who is unfamiliar with multistate tax differences can get into trouble quickly. To make matters worse, state governments can be aggressive in identifying out of state contractors who might be potential taxpayers. Multistate tax issues can be expensive when your bid proposals or budgets fail to take into account these potential taxes.
Government contracting is a very complex industry with a myriad of rules and regulations to follow. Add to that the several years of dealing with reducing the federal deficit and attempts to manage this, which have led to ongoing threats of sequestration, continuing resolutions, decreased budgets and increased demand. Priorities are changing and funding is often delayed. This means that we are seeing fewer contracts being issued and more competition. When faced with these additional challenges, it can seem like government contractors are facing an uphill battle. Contractors are being forced to make more aggressive offers with smaller margins. This is where knowledge becomes invaluable. If you want to be successful, you need to know the rules so you can respond to them appropriately.