New York Construction Report special feature
Over its more than 60-year history, Sax LLP has grown into a leading accounting, tax and advisory firm serving the needs of closely-held companies, family-owned businesses, high-net-worth individuals and not-for-profit organizations throughout New York and New Jersey. The firm has developed specialized knowledge in the construction, real estate, manufacturing and distribution, healthcare and not-for-profit sectors.
Partner-in-charge Michael Curry says Sax was initially a generalist firm providing a wide range of tax and accounting services to clients from a variety of industries, but in the mid-80s, switched its focus to the specific industries it now serves.
“The result was the creation of niche groups within the firm that focused on thoroughly understanding the nuances of each specific sector and the unique rules and challenges that apply to each. This allows our industry advisors to effectively identify solutions and proactively capture growth opportunities so our clients can be high performing in their respective markets.”
Curry says Sax’s rapidly growing construction practice, initiated in 1984, is one of the firm’s largest groups. Most firms at the time, he says, serviced their contractor clients as they would any other client, and there was no deep dive into the specific tax and accounting rules, and/or thorough understanding of the challenges companies in the construction industry faced.
“Sax realized that the construction market is unique and there is no one-size fits all model for servicing the market. We also understood the needs of sureties who rely heavily on a CPA’s work product to ensure their client’s success, and recognized the necessity in fostering those partnerships.”
Consolidating its construction clients into Sax’s Construction Practice, the firm then dedicated advisors and developed a consistent approach to servicing the industry. The construction practice’s advisors supported industry associations like the AICPA (Association of International Certified Professional Accountants), the CFMA (Construction Financial Management Association) and CICPAC (Construction Industry CPAs/Consultants Association). This, he says, helps to help increase their all-around industry knowledge and keep their pulse on the market to identify trends and foresee upcoming challenges.
In 1993, Sax moved to expand the construction practice’s reach to New York after receiving an influx of referrals in the city. He said this was largely due to the reputation the firm built on all sides of the industry with contractors, surety agents, bankers and attorneys that carried over to other states. However, the firm initially faced challenges with the expansion as it found that many New York contractors were more comfortable working with NYC accountants instead of firms headquartered in New Jersey.
Curry says the firm persevered and eventually broke through that barrier. “New York City’s construction market was quite robust while New Jersey had been slower to recover from the 2008 economic downturn. Sax maximized on every opportunity given in the New York market and demonstrated results and expertise right out of the gate. Today, the practice sees most new growth coming in from Manhattan and the boroughs.”
Today Sax’s Construction Practice assists emerging market, large ENR 400, specialty, general and heavy/highway contractors effectively minimize tax liability and maximize their bonding capacity. The firm’s construction services include traditional tax and accounting services like audit, review and compilation of financial statements and tax preparation and planning to meet client’s financial objectives. “What sets Sax apart from many other accounting firms is the construction practice’s specialized services that include internal control and organizational analysis; surety consulting, benchmark studies, profit enhancement; state and local tax advisory; business succession; and wealth preservation planning.”
“Advisors also expanded their presence in surety and contractor specific associations which helped to develop professional relationships in the industry that offered value-added resources to their service offerings and became the backbone of the practice,” he said.
He says Sax’s construction advisors took on speaking engagements at industry associations and built programs to benefit the industry from all sides, including “How to Read a Contractor’s Financial Statement” tailored to bankers, and “How to Increase Bonding Capacity”, specific to contractors.
Each year, the practice also holds “Industry Update” events where industry professionals are invited to hear from experts on relevant topics impacting the construction market. “Sax truly emerged as a thought leader in the sector, and built a reputation as more than average accountants, but as construction industry experts.”
He says Sax aims to be its clients’ most trusted advisors, not just on the tax and accounting side but in all areas of business. “Strong client relationships are built on trust, a demonstrated understanding of clients’ businesses, and proven results through customized solutions to meet their goals and objectives. Our advisors take pride in being the first call their client’s make when weighing an important decision, and they work to enhance their client’s growth and limit their risk at every turn. This is an inherent mindset for the firm.”
The construction industry is very unique compared to other industries, Curry says, and has specific accounting rules that must be followed. Revenue is recognized in a specific way, surety bonds is a component, and there is a need for working relationships with surety agents, bankers and attorneys.
“Our advisors are well equipped and informed on the specific nuances that apply to the construction industry, and has formed long lasting relationships with industry professionals to best leverage resources and opportunities.”
Today, there is much change pending in the construction industry, and Sax’s construction advisors are assisting clients in addressing the new revenue recognition procedures and planning for the impacts of the new tax legislation introduced at the end of 2017. When ripples to the market like this occur, Sax’s main objective is to get out in front of the new changes to best inform and guide clients with the best measures forward, while identifying new opportunities that may arise.
“Economic cycles significantly impact the surety and banking markets, and there have been ups and downs through the decades that effect contractors. Our advisors have their feet firmly planted in the industry, and are able to foresee potential obstacles and guide clients in planning for downturns.”
Curry says Sax has a strong emphasis on education and consistently provides team members with the opportunities to increase their expertise and focus on the construction industry’s main issues such as project management, risk management, strategic success planning. “Younger practice members are involved in the industry associations from the bottom-up, and several advisors have held leadership positions within the leading New York construction associations which has allowed the firm to leverage relationships while gaining access to valuable resources that propel clients forward.”
In 2016, Sax celebrated its sixtieth anniversary and in 2017, Sax LLP and Sax Wealth Advisors – Sax’s wealth management arm – completed three acquisitions that allowed the firm to expand to four offices between New York and New Jersey. Curry says Sax Wealth Advisors also hit more than $1 billion in assets under management (AUM).
In 2018, Sax’s Construction Practice will see some exciting changes as the firm continues to expand its New York presence and will be moving to a larger office space in February: 551 Madison Ave.
For more information, visit https://www.saxllp.com.