Architecture & Engineering

Grassi & Co. offers accounting and business consulting services for the Architecture & Engineering industry throughout the New York Metro area, including NYC, New Jersey, Long Island, Connecticut, and Pennsylvania. Read our Architecture & Engineering blog posts to learn more about Architecture & Engineering accounting in New York.

The 2017 Building & Design Symposium in Review

DPAD, Succession Planning and Other Key Trends Every year, Grassi & Co. produces a Construction Industry Market Outlook Survey followed by a Symposium made up of executives within the construction industry to comment on the results of the survey. This year’s panel was comprised of: James C. Bifulco, Managing Member of TSC North America/Total Safety Consulting, LLC; Matthew Schimenti, President of Schimenti Construction Company; Michael J. Buoncore, Executive Vice President of GPI; Michele O’Connor, Principal at Langan; and Susan Hayes, Managing Partner of Susan Hayes Enterprises. The 2017 Construction Market Outlook Survey reflects the responses of executives from a cross section of the Construction Industry within the New York regional area. DPAD-Why Are You throwing Money Aside? A very important statistic came out of that survey regarding the Domestic Production Activities Deduction (DPAD), which was enacted as part of the American Jobs Creation Act of 2004 with the purpose of providing a deduction for U.S. businesses allowed for both regular tax and alternative minimum tax (AMT) purposes. The DPAD is available to all taxpayers who do not export goods including individuals, C and S corporations, cooperatives, estates and trusts. One of the many activities eligible for the DPAD are U.S. construction services, which include building and renovation of residential as well as commercial real estate. Based on the results of our survey, what was both surprising and disturbing was the low percentage of construction company owners who actually took advantage of this tax benefit. (Only 19% of those surveyed) It provides a federal income tax deduction equal to 9% of the lesser of taxable income or qualified production activities...

If You Build It, Use Technology

There’s a famous movie instantly recognized by its tagline, “if you build it, they will come”. That’s exactly what Kevin Costner did—he built a farm land baseball stadium and the great players of the past came. In the movie Field of Dreams the construction process lasted a few frames and was executed with nothing more than a hammer, a saw, and some nails. We all suspend belief for the sake of the story being told, but once we snap back to reality, the truth is any construction, regardless of size, cannot be properly executed without the right technology in place. The advances in construction technology are real, they are here, and they aren’t going away. If construction contractors are not already implementing these new ways to build, they’ll be as obsolete as the dot matrix printer.  Grassi & Co. recently completed our 2017 Construction Industry Market Outlook Survey and the results, when it came to technology, were thought-provoking—of the responding companies, 53% reported their technology investment would increase in 2017. However, the overall revenue percent spent on new technology to improve project construction/delivery is minor as the participants plan to spend less than 1%. One could read the message being sent by the thin technology budgets as these advances, which cost money, are still viewed as overhead with a still undefined return. The reality is that when properly utilized by everyone in the organization, technology will increase productivity and profitability. Most contractors’ work on-site is enhanced by mobile devices. Integrated with the company’s ERP, these platforms are designed to increase communication between the field and home office—fostering real time...

Rebuilding NYC Construction Safety Standards

New safety standards, the STEP program and digital learning, are impacting construction companies, their personnel, engineering and design firms, and all others along the supply chain in the NYC construction industry. The financial and operational implications of these changes are worthy of consideration. NYC Construction Safety Reform Reform would typically originate from OSHA and the District Attorney’s office, the entities who govern safety standards for the industry. These agencies hold the General Contractor and Construction Management accountable, especially in the prequalification of subcontractors. Amongst their recommendations, increased safety planning prior to stepping onto jobs sites including higher certifications and law enforcement for work done involving scaffolding and elevator structures, better overall enforcement of laws,  and expansion of training and monitoring processes. Prevention As the saying goes, the best cure is prevention. Proper planning of not only how job sites operate but also how they are designed will make a world of difference. The Associated Builders and Contractors Inc. Safety Training Evaluation Process (STEP) program, is a leading set of safety best practices for the NYC construction industry. Initiatives such as cocooning an entire building during construction to protect from falling debris, advances in tethering to guarantee 100% fall protection, and digital innovations can shorten the learning curve and shield both workers and employers from costly and devastating accidents. Technological advancements from virtual reality training—which will reinforce key concepts to e-learning through mobile devices to deliver just-in-time safety tips to workers—will be at the forefront of these safety measures. Additional technological enhancements would also include the use of GPS tracking systems to keep abreast of everything and everyone on the...

Money for Nothing: 3 Ways to Reduce Contractor Insurance Premiums

Insurance costs can be daunting for any contractor, but what if there was a way to reduce premiums without affecting coverage?  Here are three tips that can have a large impact on insurance premiums. The New York Construction Classification Premium Adjustment Program (CPAP) is a credit on insurance policies for contractors who pay above average rates to employees in specific contracting class codes.  The discount was enacted to help bridge the gap between high and low-wage paying contractors operating in the construction industry.  Although both high and low paying contractors perform comparable work, high paying contractors were paying higher insurance premiums simply due to their higher wages.  The increased costs made it difficult for higher paying contractors to compete with lower wage-paying contractors despite having comparable risk of injury on the job.  The higher the wage paid, the higher the credit.  (For more information and frequently asked questions visit the New York Compensation Insurance Review Board at www.nycirb.com). Frequently overlooked are classification codes for employees.  Are executives, project accountants or clerical workers included in field classification codes?  Are all employees grouped under one category?  If any of those situations apply it could be costing you.  Often times employees are misclassified in field codes and the difference in premium among and between field codes and clerical codes can be drastic.  There can also be differences in premiums for similar but different field classifications.  A review of the classification codes should be performed annually before renewal and adjusted for new hires and or promotions. Finally, employers should make sure overtime and payroll limitations are reported and accounted for properly.  For insurance audits...

The Blueprint to Building a Successful Construction Succession Plan

Over the past few months, there have been at least three construction companies who have celebrated big anniversaries: one celebrated 75 years, the second 125 years and the third 130 years. It is not by luck or by accident that these companies have endured and continue on their trajectory with no signs of slowing down. While they are different in terms of building type and market specialties, there is one thing they do have in common; a well-designed, actionable succession plan. While there are many ways to develop succession, the most common are generally: familial ownership transfers, giving key employees the opportunity to buy–in, or selling to a third party. Familial Ownership Transfers Typically, a successful construction company is built with the vision of indoctrinating offspring and other family members. It is generally the most popular and easiest transition plan, especially when offspring are involved in operations, are market facing, and are driving growth. The first step in a gifting plan is to have the company valued, inclusive of appropriate discounts. Once a valuation method is selected and performed, the owner has a multitude of options from gifting ownership interests to transferring  interests into a variety of trusts (which, if used correctly, serve as  great tax-saving-vehicles designed to get appreciated assets out of the owner’s estate), to outright selling their interests. Matters of family are generally messy with many potholes to consider—especially when dealing with working and non-working family members. For parent-owners with multiple offspring, some active within the company and the others inactive, the succession plan must address how to transfer ownership to the next generation in a...

Maximizing Your ERP Investment

In the world of Architecture and Engineering, many CEO’s and CFO’s are convinced they are simply too busy managing daily business operations and finance to find the time to critically review their firm’s day-to-day ERP system processes. While it’s a fact they are busy, there also tends to be a vague resistance to initiate this study, as if it is too big of an initiative for them to successfully manage. Nothing can be of greater value to your firm to save time, work more efficiently and put you on a path to greater profitability than to increase the firm-wide utilization level of your technology investment.  Higher efficiencies lead to reduced costs, higher profitability, greater client satisfaction, increased internal controls and a happier staff. You may feel there is never a good time for this review, but the perfect time to assess whether or not you are taking advantage of all the features relevant to your business (many just a mouse click away), and learning how to utilize these features, only occurs when you make it your high priority. Deltek, the leading enterprise software and information solution for A&E firms, and their products are packed with features right out of the box. Unfortunately, many users are simply unaware of these tools and/or have not received adequate training on how to use them. Hidden features are currently available at no additional cost. To unleash the functionality of these features, it is often a simple matter of learning that they exist and how they work. Other times, a configuration can be changed so that these features become available. The result is a...