Surety Bond Financial Statement Specialists — Virginia, Maryland & DC

Surety Bond Financial Statement Audit & Review — Virginia, Maryland & DC Contractors

Quick Answer: What financial statements do surety companies require for contractor bonds?

Most sureties ask for CPA-prepared statements; larger programs usually require a review or audit — ask your surety for its requirement in writing. Each surety sets its own thresholds, and no surety association publishes a standard dollar table. A typical package includes a balance sheet, income statement, a work-in-progress (WIP) schedule, and AR/AP agings — see the checklist below.

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Surety Financial Statement Package Checklist

What contractors commonly send their surety or bond agent. Your surety's list controls.

Balance sheet
Income statement
Statement of cash flows and notes (for reviewed or audited statements)
Work-in-progress (WIP) schedule that ties to the general ledger
Completed (closed) contracts schedule for the year
Backlog schedule of signed work not yet complete
Accounts receivable aging, including retainage
Accounts payable aging
General and administrative expense detail
Bank line of credit details and debt schedule
Personal financial statements for owners, if your surety asks
The CPA's report letter (compilation, review or audit)

Key Surety Bonding Terms

Work-in-Progress (WIP) Schedule

A schedule showing the status of all current construction contracts — including contract amount, revenue earned to date, costs incurred, estimated costs to complete, and over/underbillings. The WIP schedule is critical to bonding because it shows the surety the contractor's current financial exposure on active projects.

Percentage-of-Completion Method

The accounting method required by GAAP for long-term construction contracts. Revenue is recognized proportionally as work progresses, based on costs incurred to total estimated costs. This method is what sureties need to see on bonded contractor financial statements.

Bonding Capacity

The maximum dollar amount of bonds a surety company will write for a contractor. Sureties look at working capital, net worth and job history from the contractor's financial statements — reliable CPA-reported numbers support the conversation about capacity.

Common Surety Bond Financial Statement Problems We Solve

Won a $3M project but the surety rejected your financial statements — they were prepared as a compilation instead of a CPA audit

Surety reduced your bonding line because your WIP schedule shows underbillings on three projects — no one flagged the issue

New to bonding — don't know the difference between a tax return and the financial statements sureties actually require

Prior CPA retired — no one prepared the WIP schedule correctly and the surety is questioning the numbers

Percentage-of-completion method not applied — surety flagged cash-basis accounting as unacceptable

Surety Bond Financial Statement Services

From WIP schedule preparation to full CPA audit, we handle the financial statement requirements that unlock your bonding capacity.

Contractor Financial Statement Audit

Full GAAS audit of construction contractor financial statements including percentage-of-completion revenue recognition, WIP schedule, and backlog disclosure. Larger bond programs usually call for an audit — confirm with your surety.

CPA Review for Mid-Size Bonding

SSARS review engagement for contractors whose surety accepts reviewed statements. Provides limited assurance and involves less work than a full audit, with proper WIP schedule preparation.

WIP Schedule Preparation and Review

Preparation or review of the work-in-progress schedule reconciling to your general ledger. The WIP schedule shows contract amounts, revenue earned, costs incurred, estimated cost to complete, and over/underbillings.

Percentage-of-Completion Analysis and Correction

Review and correction of revenue recognition methodology. Many contractors use completed-contract or cash-basis accounting — we convert to percentage-of-completion as required by GAAP and sureties.

Prequalification Financial Statement Package

Complete financial statement package for contractor prequalification submissions — financial statements, WIP, backlog schedule, and supporting notes formatted to surety and public agency requirements.

Personal Financial Statement for Principals

Balance sheet format personal financial statements for contractor owners. Many sureties ask for these alongside the company financial statements, especially from owners who sign the indemnity agreement.

How the Level of CPA Work Usually Scales

General pattern only. Each surety sets its own thresholds — get your surety's requirement in writing.

Bond Program	Typical Requirement	CPA Engagement	Key Schedules
Smaller or first bond program	CPA-prepared statements; some sureties accept a compilation	Compilation (sometimes a review)	Balance sheet, income statement, WIP schedule
Growing program	Often a CPA review	CPA Review	F/S with notes + WIP + AR/AP aging
Larger program	Usually a CPA audit	Full CPA Audit	F/S with notes + WIP + backlog + closed jobs
Any size, between year-ends	Interim statements on request	Varies by surety	Interim F/S + updated WIP

Our Surety Financial Statement Process

A 4-step process from surety requirements review to CPA report issuance.

Surety Requirements Review

Confirm the specific financial statement package your surety requires for your bond amount and type — different sureties have different thresholds and packaging requirements.

Financial Statement Preparation

Prepare GAAP-compliant financial statements with proper percentage-of-completion accounting, correctly reflecting all active contracts.

WIP Schedule Preparation

Build a comprehensive WIP schedule reconciling to the general ledger and showing all active contracts with revenue earned, costs incurred, and estimated cost to complete.

CPA Audit or Review

Perform audit or review procedures and issue the appropriate CPA report; coordinate directly with your surety agent on submission timing and format.

Virginia, Maryland & DC Construction Markets

Virginia

Significant I-66 and I-95 corridor infrastructure work plus VDOT projects across Northern Virginia. Federal construction including GSA projects in the DC metro. Active commercial construction in Tysons, Reston, and Arlington.

Maryland

State procurement with major Prince George's and Montgomery County projects. Port of Baltimore infrastructure, MDOT projects, and growing commercial development in Bethesda and Silver Spring.

Washington DC

Major federal construction including General Services Administration (GSA), DC DOT infrastructure, and institutional projects. All federal construction requires bonded contractors under the Miller Act.

Virginia, Maryland, and DC each have active commercial and government construction markets requiring bonded contractors. Your Virtual CPA understands the WIP schedule and percentage-of-completion accounting requirements that regional sureties expect.

Related Services

General Contractor Audit

Full audit services for general contractors and construction companies.

Small Business Audit

Financial statement audits for growing small businesses.

Attestation Services

Compilations, reviews, and agreed-upon procedures for contractors.

Government Contractor Audit (DCAA)

DCAA compliance for construction companies with federal contracts.

Virtual CFO Services

Strategic financial oversight to improve bonding capacity and working capital.

Free consultation

Talk to a specialist about your surety bond financial requirements.

Surety Bond Financial Statement FAQs

Common questions from Virginia, Maryland & DC contractors about surety bond financial statement requirements.

A performance bond protects the project owner if the contractor does not complete the work under the contract. A payment bond protects subcontractors and suppliers if the contractor does not pay them. Most public projects (Miller Act for federal, Little Miller Acts for state) require both.

Sureties are taking on the contractor's financial risk. Audited statements provide the highest level of assurance that the contractor's financial position is accurately represented — allowing the surety to properly assess risk and set bonding limits.

The WIP (work-in-progress) schedule shows the financial status of all current contracts. Sureties analyze WIP for job profitability, over/underbillings, and estimated project losses — it often reveals financial problems before the income statement does.

Construction contractor financials require percentage-of-completion revenue recognition for long-term contracts, a WIP schedule, backlog disclosure, and notes explaining the contractor's accounting policies. Standard small business financials often use completed-contract or cash-basis accounting, which many sureties will not accept from a bonded contractor.

A backlog schedule lists all contracts under contract but not yet started or not yet complete, showing the remaining work to be performed. Sureties use backlog to assess future revenue and workload capacity.

Usually not on its own. Most sureties ask for CPA-prepared financial statements, and larger programs usually require a review or audit. Cash-basis tax returns do not show the WIP position, underbillings, or percentage-of-completion results that sureties look at. Ask your surety for its requirement in writing.

Timing depends on whether you need a review or an audit, the condition of your records and job cost schedules, and when your surety needs the statements. Tell us your bonding deadline and we will agree on a schedule with you before work starts.

Many sureties ask for personal financial statements (balance sheet format) from the owners, especially those who sign the indemnity agreement. Some also ask for personal tax returns to check income and liquidity. The exact list varies by surety, so ask your agent for it in writing.

There is no single industry table. Most sureties ask for CPA-prepared statements; larger programs usually require a review or audit. The threshold is set by each surety and underwriter, so ask your surety or bond agent for its requirement in writing before you engage a CPA.

Bonding Requires the Right Financials. We'll Get Them Right.

Whether you need a WIP schedule review, CPA-reviewed statements, or a full audit for large bonding, we build the package around your surety's written requirement and your deadline.