If you’re in commercial construction, you already know this:
You can’t grow without bonding.
And you can’t get bonding without solid financials.
In our work with contractors across the country, we’ve seen time and again that a company’s ability to land bigger jobs (and more of them) comes down to one thing: how well they manage and present their financial information.
Here’s how your financial statements directly impact bonding capacity—and what you can do to improve your numbers and your next bond request.
1. A Strong Balance Sheet Builds Trust
Your balance sheet tells a story.
To bonding companies, it answers these questions:
- Can this contractor weather a cash crunch?
- Do they have enough working capital to support the jobs on hand?
- How leveraged are they?
Key metrics sureties look for:
- Working capital (current assets – current liabilities)
- Equity (the owner’s stake in the business)
- Current ratio (a measure of liquidity)
If your current ratio is low, your equity is thin, or your AR is old, you’re going to raise some red flags.
How to improve:
Make sure your balance sheet is clean, current, and reconciled monthly. Be ready to explain any big swings or aged receivables.
2. Consistent Profitability Builds Confidence
Bonding companies want to see that your company is consistently making money—not just busy.
That’s where your income statement comes in. It shows your ability to:
- Produce gross profit
- Manage overhead
- Maintain positive net income
Sureties know that profit is what funds the business, not revenue.
How to improve:
Track job profitability through accurate WIP reporting. Watch for overhead creep. Adjust quickly when margins dip.
3. WIP Reporting Shows Financial Maturity
Your Work-in-Progress (WIP) schedule is the bridge between your jobs and your financials.
It shows how you:
- Recognize revenue (percentage-of-completion)
- Manage cost estimates
- Track over- and underbillings
- Handle backlog and job fade/gain
Bonding agents love WIP schedules because they show how well you understand your business.
How to improve:
Build your WIP schedule monthly. Tie it to your balance sheet and income statement profitability. Use it to manage—not just report.
4. Clean, Timely Financials Signal Operational Strength
Even if your financials look okay, sureties will pay attention to:
- How fast you close the books
- Whether your reports reconcile
- If numbers change each month without explanation
Sloppy reporting says “this company might not be ready for the big leagues.”
How to improve:
Close your books by the 15th of each month. Reconcile all major accounts. Include notes or explanations when submitting financials.
5. Forward-Looking Financials Set You Apart
Most contractors give their bonding agent a rearview mirror.
But if you can also show them where you’re headed—through financial projections—you’ll stand out.
A forecast shows your expected revenue, profit, cash flow, and working capital. It demonstrates:
- You’re planning, not reacting
- You understand your cost structure
- You know your break-even and growth targets
How to improve:
Build a projection using your WIP, backlog, overhead budget, and goals. Update it monthly or quarterly to stay ahead of issues.
Bonding Is More Than a Form—It’s a Financial Conversation
Surety companies don’t just want paperwork. They want to understand your story.
Your financial statements are the narrative. Clean, consistent, accurate reporting makes you easier to trust—and easier to bond.
Want Help Building Financials That Get You More Bonding?
At Atlas CFO, we’ve worked with contractors to clean up their reporting, build bulletproof WIP schedules, and prepare for bonding conversations.
Whether you need:
- A financial statement rebuild
- Ongoing quarterly financial analysis
- Or full Virtual CFO services…
We help construction companies improve their financial health—and tell a stronger story.
Want to talk about your bonding readiness? Schedule a quick chat with us here.