Contractor licensing
Financial statements for a Florida contractor licence
Florida's Construction Industry Licensing Board requires evidence of financial responsibility, and for some licences that evidence includes financial statements prepared to a defined standard. Whichever standard applies to you, it starts with books that can produce them.
I prepare the books. A CPA issues the report.
This needs saying before anything else on this page, because it is the thing most likely to be misread.
Diane Claus is a QuickBooks Online Certified ProAdvisor. She is not a CPA.
Where the Board requires a compilation, a review or an audit, that report is issued by a licensed CPA. It cannot be issued by a bookkeeper, and anyone who tells you otherwise is going to cost you a renewal.
What happens here is the part that comes first and takes the longest
Accounts reconciled, job costs and retainage stated correctly, balance sheet and income statement built from records that tie. The CPA then issues the report from books that are already right, which is faster and cheaper than a CPA reconstructing your year before they can start.
The requirement is annual, and it arrives with a deadline attached
Nobody researches this casually. You are here because a renewal is due, a bond is blocked, or a qualifying-agent change has put your financial responsibility back in front of the Board.
The problem is almost never the statements. It is what sits under them.
A CPA cannot compile or review a set of books that don’t reconcile, and the first thing they find is usually the same list: bank accounts unreconciled for months, owner draws sitting in expense accounts, retainage buried inside receivables, and job costs that cannot be substantiated.
At that point you are paying CPA rates for bookkeeping
You have a bookkeeping project with a licensing deadline on it. That is the expensive version. The cheap version is books that are current before the request arrives.
What gets prepared
Accounts reconciled through the period
Every account, month by month, tying to the statements.
A balance sheet that holds up
Assets, liabilities and equity stated properly, from records that support every line rather than from a trial balance that has been forced to agree.
Retainage stated separately
Receivable and payable retainage broken out rather than folded into ordinary receivables and payables, because that distinction is what a reader outside your company is looking for.
A work in progress schedule
Costs to date against contract value, over- and under-billings identified. This is the schedule that makes a construction balance sheet readable, and it is the one that takes weeks to reconstruct if it was never kept.
Owner compensation separated from business spending
Draws, personal charges and owner pay treated consistently, so the equity section means what it says.
A clean package handed to your CPA
Trial balance, supporting schedules, and a written note of every assumption made, so the CPA’s work starts at the report rather than at the cleanup.
The same books carried forward monthly
So next year’s renewal is a request rather than a project. That is monthly bookkeeping, and it is the reason this only has to hurt once.
Which level of report applies to you is not your choice to make
A compilation, a review and an audit are three different levels of CPA work at three very different prices, and submitting the wrong one wastes the fee and the deadline together.
The level is set by the Board, not chosen by you
Find out which level applies to your licence class before you commission anything. If you are not certain, ask the Board or your CPA rather than a forum, and take the answer from the current rule rather than from what applied the last time you renewed.
The books have to support it either way
Whichever level you are asked for, the CPA works from your records. That part does not change with the class, the limit or the report level, and it is the part that takes the time.
How it runs
- 1
Free file review
Send me your QuickBooks file, or read-only access to it. I tell you what shape it is in, what it takes to get statements out of it, and whether your deadline is realistic.
A couple of days, no charge, no obligation.
- 2
The books brought current
Reconciliations, retainage broken out, owner pay separated, job costs substantiated. If the file is months or years behind this is a cleanup, quoted as one flat number before any work starts.
- 3
A package your CPA can work from
Trial balance, supporting schedules, the WIP schedule, and a written note of the assumptions. Handed over ready, not as a pile to be sorted.
- 4
Your CPA issues the report
The compilation, review or audit is theirs to issue, and it is theirs alone. Working from books that are already right is what makes that step short.
- 5
Carried forward monthly
So the next renewal is a request you answer in a week rather than a project you start from scratch.
Questions I get asked
Can you issue the financial statements?
No. A compilation, review or audit is a CPA engagement. I prepare the books the statements are built from, and I work alongside your CPA so they are not rebuilding your year before they can issue anything.
My renewal is close. How late is too late?
Call today rather than next week. How long the bookkeeping takes depends on how far behind the file is, and the CPA needs time after I finish. The free file review tells you within a couple of days whether the timeline is realistic, which is better than finding out in three weeks.
My books are years behind. Is this still possible?
Usually, yes. It becomes a cleanup first. See QuickBooks cleanup and catch-up, which is quoted as one flat number after I look at the file.
Why does retainage matter so much to this?
Because it moves the numbers the statements are read on. Retainage folded into ordinary receivables overstates what you can collect and misstates the position a reviewer is assessing. Broken out, the statements describe your business accurately, which is the whole object. It is one of the things construction books have to do that ordinary books don’t.
Find out whether your books can produce them
Send me the file. I will tell you what shape it is in, what it takes to get statements out of it, and whether your deadline is realistic. If it isn't, you will hear that now rather than the week before.