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In February, the IRS issued some final regulations relating to the Affordable Care Act (ACA), basically delaying full implementation. One major change was allowing employers with 50 to 99 employees until Jan. 1, 2016, to comply with the mandate to either provide health insurance or pay excise taxes in certain circumstances. “In effect, smaller employers have another year to determine how they are going to approach this,” says Ted Ginsburg, CPA, J.D., a principal at Skoda Minotti. Smart Business spoke with Ginsburg about the recent changes to the ACA regulations and how they affect small and midsize companies. What significant…
Tax planning is a key component of mergers and acquisitions for both buyers and sellers. It can impact the deal price and play a role in the post-transaction integration. Tax issues are probably more stressful for sellers, because if there are tax exposures they may need to make representations and warranties. It also can have a bigger impact on the seller’s individual taxes. However, from a buying standpoint, if you want management to stay on but there’s a tax problem, say with executive compensation plans, that can have an adverse effect on operations prospectively. “It’s one of those things where…
Entrepreneurs who have built growing, profitable businesses know how to overcome enormous obstacles. Along the way, they have accumulated deep knowledge of their end-markets and make decisions based on decades of experience. Nonetheless, I hear a common line when speaking with entrepreneurs about ownership changes for their long-term transition: “I’ve never done this before.” Even confident entrepreneurs procrastinate when it comes to planning that involves changes in ownership. Make this critical event go well by considering some dos and don’ts. Don’t: Wait for retirement to be the prompt for succession planning. Do: Consider selling a portion of equity in your…
Top-quality health care procedures are readily available in the United States, but disruptive trends are challenging health care businesses. Renewed attacks on health care costs, demands for greater access, exciting research on personalized medicine, evidence-based medicine and medical tourism are transforming health care businesses. Remarkably, these disruptive challenges are less about medicine and more about evidence-based management of health care organizations. They are disruptive challenges that demand a business solution.Why business? Why now?The country began grappling with the need for health care reform and searching for potential solutions well before the advent of the Affordable Care Act. Health care organizations…
Companies update their systems to replace outdated software and to modernize or streamline supporting IT resources. They also implement new systems in hopes of benefitting from internal efficiencies through added features, better workflow, etc. The problem is most companies that implement a new system do not achieve all of their objectives, and many fail miserably.“Ultimately, the new system may be better, but if executives listed the top things they wanted to accomplish by implementing the new system, many times they don’t achieve those things,” says Brian Thomas, partner in IT Advisory Services at Weaver. Smart Business spoke with Thomas about…
“HR bytes” refers to human resources technologies being developed, deployed and adopted at a breakneck pace. New and innovative software applications are making the delivery of HR services better, faster and simpler. For years now, large Fortune 500 companies have invested in HR technology that streamlines back office processes, enhances learning opportunities and simplifies employee procedures. Now, though, progressive HR service providers are expanding their service offering beyond mere administrative and tactical HR to include more strategic services and the systems to support them, giving smaller companies access to these tools as well. Time and labor management Automated Web-based time…
More midsize companies are seeking to do something extra for a select group of employees, usually executive-level staff. Nonqualified deferred compensation plans, which are not subject to the Employee Retirement Income Security Act of 1974, have no discrimination restrictions, so employers can choose to whom they offer the plan. The plans also have no restrictions on deferral amounts, unlike qualified retirement plans. “The economy has been getting a little better, and top talent is very valuable,” says John Carey, CPA, J.D., associate director of tax at SS&G. “Companies want to take that extra step to keep people and offer them…
PANELISTS: Laura Bennett, Sheila Dunn, Kristen Morris and Lindsay Sims Anthem Blue Cross and Blue Shield is proud to sponsor the Perspectives 2014 Women Who Excel Conference, and over the past several years, the pace of change has certainly increased, especially in health care. In my 30 years in the industry, I’ve never experienced so much change in such a short period of time. Women business leaders are facing important and increasingly complex decisions about the health care coverage they offer to their associates. Not only is health care coverage one of the biggest expenses in many companies’ budgets, it…
We’ve all heard stories — many of which have taken on legendary proportions — about extraordinary service provided by the likes of Nordstrom, Disney and Ritz-Carlton employees. The luxury retail and hospitality industries have elevated customer service expectations in every business category, from fast food to financial, and yes, even pediatric hospital services. The difference is that at the Children’s Hospital of Orange County, nothing less than children’s lives are at stake, and it’s our honor, privilege and sacred obligation to serve. The prospect of entering a children’s hospital can be terrifying. A parent’s most precious gift, his or her…
Working capital. Every business needs it, but at what cost? One path to obtaining affordable working capital is through factoring, a simple and easy concept to understand. Factoring companies provide businesses with working capital by purchasing their client’s outstanding receivables. Typically, a factoring transaction is an arrangement between three parties (client, factor and vendor) all of which are businesses. The business owner understands his or her profit margins and the expense associated with factoring while the factor evaluates the risk. In most cases, the increase in cash flow will not only justify the cost, but actually lower operating margins by…
Gary Schottenstein learned from his father, Irving Schottenstein, to treat your customer right and fairly. And after more than 35 years in the real estate business, he still holds true to that — and tries to treat everyone that way, from customers to employees. In fact, the chairman and CEO of Schottenstein Real Estate Group keeps a voicemail to remind him, and because it makes him feel good. Bruce Heine was trying to buy one of the company’s condominiums for himself and his wife. The two had a lot of health problems. Schottenstein says Heine couldn’t qualify for a mortgage.…
Business operations are subject to a number of internal and external risks, as are ownership interests in businesses. How organizations and their owners address these risks can have a significant impact on the value of businesses and interests therein. An enterprise risk management (ERM) process involves identifying risks relative to an organization’s objectives, assessing them for likelihood and impact, developing a response strategy and monitoring progress. A well-defined ERM process framework can protect and create value for organizations and their owners. Smart Business spoke with John T. Alfonsi, managing director at Cendrowski Corporate Advisors LLC, about how ERM precesses can…
Year-end audits can be headaches for companies, as management takes time from busy schedules to gather information required by auditors. But a little preparation can make for a much smoother audit process. “The first quarter is as busy for management as it is for us,” says Kami Refa, a partner at Moss Adams LLP. “But if the right control processes are in place throughout the year, the preparation for year-end audits become relatively easier, since the majority of the auditor’s requests should already be prepared as part of the company’s annual closing process.” Smart Business spoke with Refa about year-end …
The Small Business Investor Tax Deduction, new this tax season, allows individuals to save thousands of dollars in taxes on business income — if their tax preparer knows it’s available. “Your CPA can help you with this deduction, but they may need to do some research since it’s new. The software used by many tax preparers is not yet fully functional in terms of this deduction, so it’s more dependent on what individual CPAs know,” says Joseph Popp, J.D., LLM, manager of tax at Rea & Associates. Smart Business spoke with Popp about the purpose of the deduction and who…
As the economy moves away from recession, many privately held companies are finding themselves with available cash and are deciding how it can be best utilized. “They’re calling and asking, ‘Do I acquire a business, or start a new product line? Or do we further incentivize our top performers?’” says Tyler A. Ridgeway, director of Human Capital Resources at Kreischer Miller. Many companies are aggressively looking for top talent, and you need to act quickly to attract ‘A’ players and ensure your best performers don’t leave. Top executives are landing jobs more quickly than ever, Ridgeway says. Smart Business spoke…
Information and data are critical to the operation of every business. Whether running a local law firm or a multinational manufacturing operation, information technology systems are essential to your ongoing success. As data and technology become more and more entrenched in business operations, they can also represent a serious vulnerability. Data connects, facilitates and supports every part of most organizations. What happens if disaster strikes and critical information is suddenly unavailable? For many businesses, a loss of data or system functionality would be a catastrophic event. Every second without working technology systems may lead to a significant loss in revenue.…
Monday, 10 March 2014 01:46

How to keep the 'family' in a family business

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Some firms owned or dominated by family have achieved monumental success. Others have found the transition process to be more difficult. Relentless competition and struggle for customer loyalty, combined with the thorny issues of family dynamics, prove challenging.When preparing to transfer a family business, the first step is making certain each successor is fully committed. Talk to them well in advance and explain the benefits and pitfalls from the perspective of an owner.Prior to joining the family business, outside employment in a related field is beneficial. “Working for an accounting, finance or legal firm can help a member of the…
For most company buyers, taxes are a priority when negotiating a purchase price. However, if tax issues are neglected during the integration phase, the negative consequences can be serious. To improve the likelihood of a successful merger, it’s important to devote resources to intensive tax planning before — and after — your deal closes. During deal negotiations, you and the seller will likely discuss issues such as deductibility of transaction costs and the amount of local, state and federal tax obligations the parties will owe upon signing the deal. Often, deal structures such as asset sales can benefit one party…
Many people join a nonprofit board of directors because they are passionate about the organization’s mission. What they really want to do is to help the organization accomplish it, but there is a host of governance responsibilities that go along with that.Marie Brilmyer, CPA, M.Acc., a director of assurance services at SS&G, says nonprofit boards need to think about strategy, monitoring, oversight, compliance and financial health like a corporate board.“A board needs to think ahead,” she says. “It needs to be sure that the organization can fulfill the mission today and tomorrow. It can’t be uncomfortable with profit because a…
The duty of leadership to effectively reward is essential to the survival and prosperity of any organization. Issues between the leader and his or her people regarding incentive compensation can undermine the entire motivation process. We really are in the “timely rewards” business as company leaders. Here are four principles for successfully rewarding your people for a job well-done: Deploy your people to maximize the use of their unique gifts and talents When we have people working in areas where their individual gifts and talents don’t match the position well, employee satisfaction and employee performance suffer. Why? Because expressions of…
Thursday, 27 February 2014 19:17

How companies can improve security of sensitive data

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It’s difficult to protect your data when you don’t know where it is and who has access. “Most companies don’t go through a data classification process. The No. 1 thing businesses can do to protect their data is to know where it is and the value it has,” says Joe Compton, CISSP, CISA, a principal with the Skoda Minotti Risk Advisory Services Group. Smart Business spoke with Compton about actions companies can take to improve information security. How do you go about finding and classifying data? There are many different models you can use, including a simple checklist of three…
Baby boomers are a big reason why the franchise industry is bouncing back, but their vast experience in the working world does not guarantee profitability. “They’ve totally changed what they are,” says Thomas Leaper, partner in-charge of the Franchise Services Group at RBZ, LLP. “The ones who are successful know what they don’t know.” The franchise model allows frustrated baby boomers — not yet ready to retire — the chance for a fresh start. But as they take on this new opportunity, it’s easy to lose sight of the financial details that are the lifeblood of any solid organization. “The…
Investing some time and money when setting up a business can help you avoid more expensive problems down the line. “Clients will want to form a corporation in Nevada because someone told them there’s no tax there. But if they’re doing business in California or elsewhere, generally they have to qualify as a foreign corporation and pay taxes and regulatory fees when they could have just incorporated in California,” says Tim M. Agajanian, a partner at Ropers, Majeski, Kohn & Bentley PC. “It’s important to know what your personal and business goals are and where the best location is for…
Thursday, 27 February 2014 14:39

How to transition your small business to an ESOP

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Having a sound exit strategy in place with respect to departing shareholders is imperative for any company. This is especially true for small businesses in which the departing shareholder is a key cog in the company’s management and day-to-day operations. A departing shareholder also faces the issue of finding a market to be adequately compensated for his shares. “Companies and individuals are faced with the daunting task of finding a market for the shares being sold, the fear of a targeted acquisition in which the purchaser would drastically alter the landscape of the company, and the various costs and time…
Big data can reveal many opportunities for improving your business, but extracting the precise information you need can be a struggle.“Some companies today have more than 30 years worth of data. Their databases are so large that it’s difficult to get a handle on them,” says Joe Welker, CISA, IT audit manager at Rea & Associates.Using data analytics software, auditors can analyze the data and prepare reports that enable companies to improve inventory, billing and other processes.“It allows us to be more efficient, which means lower cost for companies because less time is spent on the audit,” says Michaela McGinn,…
Companies are valued based on a formula that takes into account cash flow and the multiple that a buyer would be willing to pay. Increasing the value of a business amounts to finding ways to affect those two factors. “Certain businesses, like a developer investing in land, are valued based on how much their assets are worth. But 90 percent of companies are valued based on their cash flow. So you need to increase cash flow if you want to increase the value of the business,” says Mario O. Vicari, a director at Kreischer Miller. Smart Business spoke with Vicari…
To provide or not to provide? That is the most pressing health insurance question facing companies across the country this year. As implementation of the Affordable Care Act moves forward, many businesses are making strategic decisions regarding health care benefits. Those that have sponsored health insurance for years are now considering dropping coverage and reallocating resources. But what are the true costs of dropping coverage? While the questions may be simple, the analysis can get fairly complex and extend beyond easily identifiable costs. Smart Business spoke with Sholly Nicholson, human resources manager at Sensiba San Filippo LLP, to examine some…
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