Establishing a strong, long-term relationship with your surety is critical for maximizing your bonding capacity, obtaining great bonding terms, and achieving long-term business success. Whether you are in expansion mode or an established business looking to strengthen your financial position, your surety views you as a business partner, not just a customer.

A winning relationship is built on trust, open communication, financial discipline, and having a strategic approach to operational efficiency, effectiveness, productivity, and profitability with a focus on overall risk management.

Fostering a profitable, trustworthy alliance

Here are three key strategies to build a winning relationship with your surety that is built on trust, confidence, stability, and growth.

1. Master your financial reporting and internal accounting system process.

   Prioritize financial strength, transparency, and world-class financial reporting. Your financial statements are the “report card” of your company and will let you know if you are “on-target” or “off-target” with your strategic goals. Start with your formal accounting and reporting closing process that will produce a complete set of financial statements which includes a work-in-progress schedule and a schedule of earnings from contracts. Consult with a CPA who specializes in the construction industry to assist you with this process.

2. Achieve operational efficiency, effectiveness, productivity and profitability focused on the following:

   • Generating consistent value in the marketplace by completing profitable and successful projects.
   • Creating career opportunities and development for your people.
   • Achieving consistent profitable growth over time by bringing the field leadership into the office and bringing the office leadership into the field to align both operations and the key executives behind the company’s strategic business plan. This establishes that everyone from project managers and superintendents to the executive and finance team members are all aligned and working toward the same strategic goals.
   • Establishing a focused risk-mitigated environment that safeguards the interests of everyone involved, internally as well as externally.

3. Collaborate with your surety for a successful long-term relationship.

   Develop an attitude of transparency, open communication, and trust with your surety creating a low-risk and long-term relationship. Communicate and discuss your current financial position, status of work-in-progress, and any upcoming projects and plans. Discuss any major operational changes and expansion plans with your surety. Always be transparent with your surety about risks or concerns such as potential disputes, payment delays that could cause financial challenges, or liquidity concerns and management’s plans to mitigate these risks. Being transparent about these items builds trust, credibility, and avoids surprises.

Incorporating these items into your strategic business plan will set your company up for success, allowing you to strengthen your working capital and achieve consistent and repeatable profitability over time. As a result, you will develop a strong, well-capitalized balance sheet and optimize and maximize the overall value of one of your greatest assets – your business.

_{Any advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues. Nor is it sufficient to avoid tax-related penalties. This has been prepared for information purposes and general guidance only and does not constitute legal or professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice specific to, among other things, your individual facts, circumstances and jurisdiction. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its partners, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.}