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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…
When trying to learn about an individual, many companies turn to online background checks. However, this could be a mistake as much of the available information may not be fully verified, which is why many businesses turn to a licensed investigator to help provide a more complete and accurate picture. Smart Business spoke with Theresa Mack, CPA, CFF, CAMS, CFCI, PI, a senior manager at Cendrowski Corporate Advisors LLC, about working with a licensed investigator to help your business uncover the information you need.Why hire a licensed investigator? Most online or database-driven background checks are actually ‘record checks.’ In other…
When all the dollars and cents were added up for 2012, cleverbridge’s revenue topped $363.5 million — and co-founder Craig Vodnik realized the company had come a long way from when he answered phone calls in his Chicago basement. “I was also out prospecting for new leads and new business, so I would do that when I wasn’t answering the phone,” Vodnik says. “We didn’t have venture capital or angel investors, so we bootstrapped it ourselves.” Cleverbridge is a full-service e-commerce provider for companies that sell software and software as a service. “Cleverbridge was launched because my partners and I…
With increased regulatory demands and constant threats of fraud and misconduct, businesses have to watch their backs, especially when it comes to finances. In many cases, having a traditional accountant is not enough. Instead, you may need someone who has not only accounting skills, but investigative and analytical skills as well. In other words, you need a forensic accountant. “Forensic accounting enables business owners to get control over possible financial fraud and mismanagement and, more importantly, to deter it before it occurs,” says James P. Martin, CMA, CIA, CFE, managing director at Cendrowski Corporate Advisors LLC. He says forensic accountants…
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 process involves identifying risks relative to an organization’s objectives, assessing them for likelihood and impact, developing a response strategy and monitoring progress,” says John T. Alfonsi, managing director at Cendrowski Corporate Advisors.A well-defined enterprise management process (ERM) framework can protect and create value for organizations and their owners, he says.Smart Business spoke with Alfonsi about ERM to better…
One of the primary functions of management is to understand what is actually going on in an organization, as opposed to what is supposed to be happening. However, for monitoring to be truly effective, there must first be good communication, a culture that promotes ethical behavior and a solid understanding of the particular organization’s risk factors.“Organizational monitoring is not just about protecting a company from fraud,” says James P. Martin, CMA, CIA, CFE, managing director at Cendrowski Corporate Advisors LLC. “Monitoring systems can help ensure quality, that customer needs are being met and that the company is doing everything else…
Can you imagine a world without Oreo cookies? Anyone who has taken one and dipped it into a glass of milk before popping it into his or her mouth to savor the flavor would shudder at the thought of such a scenario. But when Irene Rosenfeld returned to Kraft Foods in 2006, she found that the company was on verge of delisting the Oreo brand in China. “We took a U.S. product and jammed it down the throats of the Chinese consumer,” Rosenfeld says. “We were losing money, and it was a very unattractive proposition. We had a $60 million…
Many employers feel they have no control over the health care events of their employee population, seeing themselves as victims rather than informed consumers. However, it’s important to understand there are alternative solutions outside of the “insurance” box options when choosing a health plan for employees.“As an employer, whether you have 10 employees or 500 employees, there is a whole host of new products and concepts that may make some sense for you — that you really need to explore,” says Mark Haegele, director, sales and account management, at HealthLink.These options, including small group self-funding, captives, exchanges and co-ops, are…
It is widely understood that organizing a business as a corporation or a limited liability company insulates its owners from personal liability for the debts of the company. What is less well appreciated is that, under certain circumstances, such protection can be lost.“When a creditor of a corporation or limited liability company is unable to collect from the company itself, it is not unusual for it to try to circumvent the corporate shield and recover the amount owed from the individual, or parent company, which owns the debtor entity,” says Michael A. Weinberg, a partner with the business litigation specialty…
A significant part of the risk management process for any business enterprise is the proper classification of its work force for federal employment tax purposes as either employees or independent contractors.“The risks from misclassification are a potentially significant underpayment of employer Social Security, Medicare and unemployment taxes, as well as the interest and penalty from failure to pay such employer taxes and for failure to withhold income taxes,” says Walter McGrail, senior manager, Cendrowski Corporate Advisors LLC.Employers, he says, are responsible for withholding taxes for employees, but they are not responsible for such taxes on independent contractors.Smart Business spoke with…
Some employers have focused on employee wellness for years, but others aren’t convinced it is to their benefit to get on board. Companies may fear that creating a wellness program will be complicated or expensive, but it doesn’t have to be either. Simple steps such as setting up walking groups or offering annual biometric screenings can yield significant results in health and productivity, says Daniel Meracle, an Employee Benefits Consultant and Wellness Adviser with Benefitdecisions, Inc.“If you haven’t started, now is the time,” says Meracle. “Creating wellness programs can be easy, inexpensive and have a major impact on employee satisfaction,…
To attract and retain top talent, it is critical for a company to have a strong benefits plan in place. In today’s uncertain environment, employee benefits represent a significant portion of the financial security employees are seeking, and they are demanding jobs in which those benefits meet their needs.To ensure that employees are satisfied with your company’s current health care plan, it is important to solicit their feedback. Then, based on your findings, it may be time to consider searching for a plan that is a better fit for your employees.“Companies should look at a number of benefit plans to…
On July 30, 2012, the National Labor Relations Board (“NLRB”) reached a decision ruling that Banner Health Systems non-union employer’s system of advising its employees to refrain from discussing ongoing internal investigation matters with fellow co-workers violated Section (a)(1) of the National Labor Relations Act. Prior to the Banner Health System decision, businesses had a certain level of discretion in implementing confidentiality requests. However, the freedom to make such requests may no longer be exclusively in the hands of management and may even no longer be permitted without special justification. Companies should take notice.Courts and administrative agencies are cracking down…
Many employers are beginning to cope with the realities of the Patient Protection and Affordable Care Act as its mandates, confirmed as constitutional by the Supreme Court, begin to take effect. Still, many questions exist, as some of the law’s major provisions have yet to apply.“Complying with the new regulations might be frustrating and confusing for the first few years and employers will have to rely on their trusted advisers and insurance carriers for assistance and guidance,” says Paul Baranowski, Director of Account Management at Benefitdecisions, Inc.Smart Business spoke with Baranowski about the impending reforms and the effects they will…
Saturday, 30 June 2012 21:01

How to prepare for a deposition

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Although depositions may seem like they are less formal than a trial, they are a critical part of a lawsuit. The answers given at a deposition are legal testimony and, in essence, it is no different from testifying in court.“A lawyer is entitled to depose an opposing party and all witnesses with knowledge relevant to the lawsuit,” says Andrew Fleming, a partner at Novack and Macey LLP. “Typically, depositions are conducted at the office of the attorney taking the deposition, and the witness is placed under oath to answer questions.”Smart Business spoke with Fleming about how to properly prepare for…
The cost for work-related injuries in the U.S. in 2011 was $192 billion, with 60 percent of that directly related to medical treatment for injured workers, according to a recent UCLA-Davis study.As a result, it is paramount that businesses get a handle on their workers’ compensation expenses, says Jeffery Hey, director, Anthem Workers’ Compensation.“The best way to do that is to work with a managed care organization that has experience with, and knowledge of workers’ compensation and that has relationships with employers in order to mitigate risks for the company and reduce expenses, while ensuring that the injured worker gets…
When trying to learn information about an individual, many companies turn to online background checks to uncover or confirm information. However, doing so could prove a mistake if this is the primary step taken to understand an individual’s background, as relied upon information may not be fully verified.Hiring a licensed investigator can not only help ensure high-quality information is obtained, it can also facilitate the analysis of this information to provide a complete picture of an individual, says Theresa Mack, CPA, CFF, CAMS, CFCI, PI, a senior manager with Cendrowski Corporate Advisors.“A simple background check may provide an incomplete picture…
Saturday, 31 March 2012 20:01

How network discounts can impact stop loss pricing

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When third-party administrators (TPAs) solicit quotes for stop loss insurance for their client companies that self-insure, they may not be getting the maximum discounts available from stop loss carriers if the carriers don’t receive transparent data from the provider network.That’s why it’s so important to make sure the network is sharing data at every level, says Brian Fallon, director, payor relations and new business development and data analytics at HealthLink.“TPAs are now asking the carriers about the network ratings and the frequency of their evaluation,” says Fallon.Smart Business spoke with Fallon about network discounts and how they may impact stop…
In this country, unlike many others, litigants — win or lose — generally pay the attorneys’ fees they incurred in litigation. This rule, known as the “American Rule,” can be frustrating for the winner. After all, if you have won the case, why shouldn’t the loser pay? Nevertheless, the American Rule is the default rule in our legal system.As with most rules, there are exceptions. Some contracts, statutes or codes of civil procedure trump the American Rule and provide that the loser is obligated to pay the winner’s reasonable legal fees. Given the American Rule’s sting, lawyers keep a keen…
Thursday, 19 January 2012 09:10

Pain-free payroll

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Business owners have many choices when it comes to how to pay their employees. Some handle the payroll process internally, and spend a great deal of time managing all the paperwork of federal and state taxes, Social Security, Medicare, union dues, 401(k) contributions and more.Some use payroll software, which allows accurate recordkeeping, but often has a long learning curve. Some hire a local accountant, or a professional tax lawyer/CPA.Others outsource these tasks to companies that provide automated payroll services.Smart Business spoke with Jim Geuther, Director of Business Banking at FirstMerit Bank, about what services to expect from payroll providers and…
Venture capital (VC) backed portfolio companies are highly susceptible to macroeconomic, industry and unique risks. In addition, VC fund ownership interests in portfolio companies are subject to risks, including market factors. How these parties address risks can significantly impact the value of companies and fund 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 framework can protect and create value for the portfolio company and its parent VC fund.“How a portfolio company addresses risk can have a…
Just when many investors were expecting the market to return to a steady growth cycle, they were caught off guard by an unexpected leap in market volatility, accompanied by a substantial decline in interest rates.The dramatic swings in the marketplace seen over the last few months have been fueled by a variety of factors. The political system has been in turmoil as differing factions in Congress and the White House have gone toe to toe on whether to raise the debt ceiling. And, the recent first-ever downgrade of the United States government debt rating resulted in even more uncertainty for…
Once strategic objectives are set by a company’s executive team and its board of directors, managers must move to enable the business’s operations to achieve these goals.All businesses face risks in pursuing objectives. Operational assessments assist businesses in mitigating process design and execution risks associated with the achievement of the operational objectives.“Operational assessments assist organizations in achieving their objectives by ensuring that strategic goals are appropriately translated into process design and execution objectives, and that the risks associated with the achievement of these operational objectives are mitigated,” says James P. Martin, CMA, CIA, CFE, managing director of Cendrowski Corporate Advisors.…
Tuesday, 17 April 2012 12:00

Retirement gap analysis

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With the current interest rate environment and the influx of baby boomers continuing to move into retirement, more people will benefit from a personal retirement gap analysis than ever, says Gregg DiGeronimo, President, for FirstMerit Financial Services, Inc.Even those who don’t expect a gap between their income and their expenses in retirement can gain from such an analysis. “You will feel better knowing you have a plan in place and can see what options you have down the road,” DiGeronimo says. “We take into account considerations you might not have today, such as healthcare costs.A retirement gap analysis investigates an…
If one of your key employees suffered a disability or died suddenly, what would it mean for your business?A death or disability can signal disaster for many companies, especially if there has been no planning. This is especially true for smaller businesses that don’t have a large pool of employees from which to name a successor.But organizations can protect themselves from the economic losses that could result from such an event through the purchase of key person life or disability insurance, says John Woloschek, vice president, director of advanced insurance planning at Associated Financial Group.“Most business owners are aware of…
In last month’s article, the concept of Tax Risk Management (TaxRM) was introduced. TaxRM is an enterprisewide process that is affected by a company’s board of directors, management and/or other personnel, and is designed to minimize tax liabilities and maximize compliance, each within the guidelines of tax laws.Having provided a definition of TaxRM, this article focuses on elements of TaxRM processes and how they can identify opportunities associated with an organization’s strategy, operations and processes.“TaxRM is most effective when it is treated as a component of the organization’s overall enterprise risk management (ERM) process,” says Walter M. McGrail, JD, CPA,…
Tuesday, 01 March 2011 11:45

Bringing chocolate back

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David Taiclet wasn’t ready for the scene at the Fannie May store in Oak Lawn, Ill., when he showed up around 7 a.m. that day in November 2004. He was there to prepare for the chocolate maker’s first soft launch, scheduled two hours from then, that would set off a chain of reopenings and reignite the brand.“When a retailer does a soft launch, it means we don’t do a lot of publicity about it, because we’re just trying to get organized to open the store, and then we’ll do a grand opening maybe a couple of days later,” Taiclet says.…