Contractors (both public and private companies) are required to obtain a Surety bond before undertaking certain contracted work for the Government in order to manage risk on construction projects. Before issuing Surety bond, Surety companies review contractors’ financial position to identify risks and determine eligibility for bonds. Also, Surety companies periodically review contractors’ financial position and as part of this process, contractors must submit financial statements and a Work in Process (WIP) report to the Surety companies. A WIP is a detailed schedule that ideally includes information on both in-process and completed contracts for the current period.
Pre-qualification process to obtain Surety bond
To minimize the risk of contract defaults, Surety companies follow a thorough, rigorous and professional pre-qualification process. This includes an in-depth review of the contractor’s financial strength, qualifications and business operation.
Drawbacks of the current process
Under the current way of working, Surety companies need to rekey the information from the WIP report submitted by contractors into the system. This is problematic because it is:
DataTracks can help streamline the process by automating the creation of XBRL-formatted WIP reports and submitting the data directly to the Surety company, thereby reducing the manual rekeying of data. The DataTracks tool uses eXtensible Business Reporting Language (XBRL), which is a structured data standard that makes business and financial information computer-readable and easier to process. The result is that surety underwriting data processing is streamlined, therefore reducing costs and increasing timeliness and consistency.
Using the DataTracks software, contractors can create XBRL-formatted WIP reports and financial statements by linking their financial systems to the software or through using pre-formatted spreadsheets.
How does it work?
Why use the DataTracks software?