New York Construction Report special feature
Castellano, Korenberg & Co. opened in 1991 with a vision to serve the diverse and underserved financial needs of the construction industry. Today, the specialized niche firm works with contractors of all sizes to provide accounting and auditing, business advisory, cost segregation, forensic accounting, litigation support, and tax services.
Founding partners Daniel Castellano, managing partner, and Neal Korenberg, partner, said the firm’s presence in bonding and construction and working with larger and more sophisticated contractors has supported its growth from four, to a team of 35. “Through our varied services, we have helped our clients grow and profit and we are now working on succession planning with many of our original clients, ensuring their futures. Many of our clients are closely held businesses which have been passed down from one generation to the next and we have been there every step of the way.”
Over the years, Castellano says, the firm has also dedicated time and training to servicing clients in additional industries such as real estate, not-for-profit and manufacturing/distribution.
Castellano, Korenberg & Co.’s niche market includes the architect/engineering, construction and real estate industries. Castellano says these are quite distinct yet related and that each requires specific training and experience. Frank Scala, partner, says: “We have developed specialized financial statements to satisfy our clients’ banking and surety requirements while assisting in their growth and success.”
Castellano and Korenberg said their team understands the unique challenges of the industry and works with clients to mitigate them. That can mean helping clients by challenging their estimates in some cases, comparing their quotes against others in the industry to enlighten them on issues and to help them operate more profitably.
Supporting clients can also mean meeting with supervisors and project managers to review original contract takeoffs and bids. “We learn about direct and indirect costs and ensure everything is covered so that the contractor won’t be caught short.”
The firm’s professional relationships with bankers, sureties and other industry professionals, he says, allows the team to provide clients with another level of service aside from general accounting services. “Additionally, our experienced professionals can help clients take advantage of certain tax incentives and cost saving opportunities which are available only to these specific industries.”
The team at Castellano, Korenberg & Co. understands contractor tax credits available from federal, state and city governments, for instance, to ensure clients take advantage of all possible opportunities. The firm has also helped clients form micro captive insurance companies to take advantage of reduced insurance costs and to create a retirement vehicle for the company’s owner.
Other niche services include year-end tax planning that can include calculating contractor run-off and the projection of overhead expenses to help manage a client’s cash flow.
All of these specialized services and unique understanding of the industry are crucial to serving clients’ best interests.
“Construction accounting and taxation are unique,” Castellano says. “There are different methods of reporting income for tax purposes that are available to contractors. It is important that CPA firms understand the complex accounting and tax issues required of contractors. A CPA firm that does not focus on contractors may not fully recognize all of the tax implications to a construction company, or the strategies to mitigate taxes that are available to a contractor.”
He says this understanding also stretches to include knowledge of current and future trends. In the current business environment, he says, many contractors are looking to do bonded projects. “Maximizing bonding capacity allows a contractor to consider large, more lucrative projects and usually requires independent CPA involvement.”
Banks and sureties, he says, want to see solid earnings retained in the business together with ample working capital and liquidity. An owner’s instinct might be to minimize or defer profits in order to reduce the tax burden. A knowledgeable construction CPA can work with the contractor to manage this delicate balance.
Castellano says the firm takes pride in the relationships it has built. “We continue to grow with our clients and other service professionals. They are the cornerstones to the success of Castellano, Korenberg & Co.”
He says partners are directly involved in all client interactions and engagements and keep clients informed of financial and tax policy law changes.
The firm is also dedicated to its professional team. “Our commitment to professional growth allows us to address the ever growing needs of today’s marketplace, sustain low employee turnover and more importantly, provide our clients with uninterrupted professional expertise and personalized service year after year.”
Castellano, Korenberg & Co. actively donates time, money and items to a variety of charitable organizations including Contractors for Kids, which helps families with sick children. Other organizations the firm supports include Cooley’s Anemia Foundation, The Interfaith Nutrition Network, Long Island Cares, Inc., The Mary Brennan Inn, Movember USA, Nontraditional Employment for Women, Wounded Warrior Project, and Homecoming Farm.
Castellano, Korenberg & Co. is a member of Construction Financial Management Association (CFMA), Regional Alliance for Small Contractors, Long Island Contractors’ Association (LICA), Long Island Builders Institute (LIBI), General Contractors Association (GCA), Mechanical Contractors Association (MCA), New York City Surety Association, Queens and Bronx Building Association (QBBA), Association of Wall Ceiling & Carpentry Industries of New York, Inc. (WC&C), Subcontractors Trade Association (STA), Women’s Builders Council, Concrete Industry Board, as well as a number of accounting and business associations.
For more information, visit http://www.castellanokorenberg.com.