Below are examples of some of the work we perform on behalf of clients:
A retail company wished to pursue financing for additional investments and growth in its business. Skoda Minotti’s assurance work was the initial step in creating reliable financial statements for banks and potential investors to review and bid on such work.
The client had a complex business architecture due to the number of entities it owned, managed and controlled. Its books were structured on an accrual tax basis rather than on a GAAP basis, and it had never had any assurance work performed prior to its engagement with Skoda Minotti. This made it a challenging first-year engagement for our team as we worked with the client to get the accounting cleaned up.
We provided guidance on entries necessary to adjust the client’s books from an accrual tax basis to a GAAP basis. The entries were discussed with the business owner and management team at length to ensure they understood and agreed with the adjustments being made. We produced reviewed financial statements the client was able to present to financial institutions and potential investors to aid in getting additional financing for their future projects.
From our network, we made introductions and connected the client with potential financial institutions that may be able to finance their future needs.
As an add-on project, we performed internal control walk-throughs of the client’s accounting processes and procedures and developed a document to protect the company in the event the Controller was unable to perform his duties or train a replacement.
Prior to her involvement with our team, the business owner had never been able to view the big picture of all business activity on a consolidated level. After receiving the draft financial statements and listening to our professionals walk her through them step by step, she was extremely appreciative—and it was immediately clear to us that she understood how these statements could open new doors of opportunity for her business.
In addition to performing accounting services for this client, we have also continued to gain an understanding of the client’s business processes, which, in turn, allowed us to document them and ultimately help the owner understand what occurs in the business on a daily basis.
Finally, the client has historically relied upon revenue-driven data from the various entities’ operations. Based upon our review of that current year’s activity, we noted certain fluctuations and relationships in the entities’ sales and cost of sales that didn’t make sense relative to prior years. The client wasn’t immediately able to explain these variances, so we worked collaboratively with its leadership to figure out the best way to view the business’ operations and understand the origin of such variances. In doing so, we drew attention to the importance of understanding these aspects of the client’s businesses in making decisions and operating those businesses on a daily basis.
In many instances, clients can feel that audits, reviews and compilations comprise only compliance work—i.e., something that’s required and doesn’t necessarily add tangible value to the business. This engagement enabled us to demonstrate such value by highlighting items that the client hadn’t previously noticed. We believe having an unbiased party examine a company’s performance, challenge the numbers and provide insights offers businesses great value.
Our firm has grown to encompass approximately 297 staff, over half of whom are millennials. This evolution in majority generation has placed a new set of demands on our leadership and business practices. For the human resources realm, the most pressing of these is the demand by millennials for more immediate feedback and one-on-one/small group interaction. Through research, interviews and real-world experience, we have found that collaboration, feedback and goal-setting have emerged as key necessities to a millennial's successful performance in the workplace. In order for our firm to continue thriving, we needed to make a strategic decision to engage millennials for greater performance and success.
Our human resources leader made the strategic decision to create a new position that would serve as a liaison between business needs and staff. The person in this position must be dedicated to the practices of continuous feedback and career coaching. We call this position the talent advisor.
Our biggest obstacle in recruiting and hiring a talent advisor was the simple truth that the position is a new invention in the modern workplace. As a result, it was challenging to define the requisite skill set and then match candidates’ current experience with future expectations. In fact, the person who would be selected would ultimately have a blank canvas on which to help us create a shared vision. For this challenge, it was necessary to think outside the box and recruit candidates with extensive experience making true connections with others, then using those connections to enhance performance and help guide them in their career journey. We chose to look for people who had talent development and talent management experience, as well as some background in psychology. This position called for someone who understands people at a fundamental level, knows how to motivate them, and has achieved success helping others achieve their career goals.
We hired one talent advisor who has been working diligently with our staff and senior staff on their personal, professional and career goals. Although the talent advisor has only been on board for eight months, successful outcomes already are being achieved through meaningful conversations with staff and performance coaches. This, in turn, has led to the development of stronger goals and clearer expectations about how to achieve them. Additionally, this has allowed our human resources leadership to more effectively calibrate the talent in our organization by more accurately identifying middle and top performers.
Ultimately, our talent advisor has created a more engaging atmosphere for our organization and has set us up for success in our next performance year. Owing to the success of this individual, we currently seek to add a second talent advisor to work with our managers and senior managers.
A business with multiple entities had worked with Skoda Minotti for many years. During the course of the relationship, we performed accounting and tax work, estate planning and acted as a full-service business advisor.
One of its holdings was a family-owned public golf course, in which the owners sought to exit the business. They had several exit options, including selling the land to a commercial developer, non-profit entity or another golf course operator.
The business representatives consulted with Skoda Minotti to assist. Through our expertise in real estate, we were able to develop a plan to manage all financial aspects of the commercial sale, from pricing, review of the contracts and negotiations of the final terms of the deal.
We then reached out to our contacts to gauge potential interest in the property. Through these connections, we quickly engaged in negotiations with a non-profit entity who had significant interest due to the size and location of the property. In less than two months, a contract was put in place for one of the largest purchases ever funded by the buyer.
Our expertise saved the client considerable time, offered an objective point of view and represented the buyer’s interest in every facet of this transaction.
Owing to the fee arrangement, we saved the client over $150,000 in fees from what would have been paid to a traditional broker.
We can help clients who need guidance when buying, building or selling commercial property. We manage transactions of all shapes and sizes.
An existing client continually sought investment opportunities and leveraged Skoda Minotti’s expertise in reviewing financial information before finalizing any deals. In this particular situation, we helped the client decide between three deals.
One of our partners reviewed each of the deals and met with each prospective company to get a better understanding of the people behind the numbers. During one of the visits with a real estate developer, we advised about an opportunity that could add an additional 10% return on equity to this current project. The opportunity was a state program that potentially offered a 10% income tax credit based on the amount of equity invested. That credit was available through a state-sponsored program, InvestOhio.
InvestOhio is a tax credit program for the purchase of fixed assets, hiring of new employees or expanding a business. The InvestOhio tax credit provides a 10% non-refundable personal income tax credit of up to $1 million to offset Ohio income taxes for investors who put new equity (i.e., cash) into Ohio small businesses and use the funds for certain qualifying expenditures, including the purchase and development of real estate.
Skoda Minotti assisted the developer with the entire InvestOhio process to ensure full compliance. Up to $4 million of the total project qualified for the InvestOhio credit, since it was new money invested in Ohio for a qualified small business, thus resulting in a $400,000 savings. Due to Skoda Minotti’s industry and regulatory knowledge, not only did we advise our current client on the deal, but now the developer will be using Skoda Minotti for future projects.
The Real Estate and Construction Group at Skoda Minotti was introduced to a commercial realty company. During the meeting, we discovered the realty company had recently designed and developed a very large warehouse to serve a tenants' brick and mortar locations by serving as a distribution center. We asked if they were taking full advantage of several different tax deductions, which lead to the firm proposing 179D and cost segregation studies on the new building.
Skoda Minotti proceeded with the studies and validated that the building would qualify for the both of the national tax savings incentives.
The section 179D tax deduction was originally passed by Congress as part of the Energy Policy Act of 2005 in direct response to broader energy usage and independence concerns. Section 179D allows qualifying building owners and businesses to receive an up to a $1.80-per-square-foot tax deduction for their energy-efficient buildings placed into service during all open tax years. For a building to qualify, the energy-based improvements must be made to the HVAC system, interior lighting systems, or to the building’s envelope.
The element that qualified for a maximum deduction was the interim lighting rule, which resulted in a total maximum allowable deduction of over $400,000. The total cost of the study was less than $5,000.
Normally, the entire building price would depreciate over 39 years. Skoda Minotti performed a cost segregation study which involves reviewing the architectural drawings, inspecting the facility and identifying support costs that qualify for shorter recovery period depreciation.
The cost segregation study broke down the costs into shorter tax lives to increase depreciation sooner and create more of a tax deduction. After the study, we were able to classify that approximately 20% of the building qualified for faster depreciation, allowing the client to have the tax deductions in an expedited time frame. Based on projected tax rates, first-year after-tax savings would be approximately $1.6 million with savings of almost $2 million in years one through five.
The surgeon/owner of a successful plastic surgery practice sought to build on positive growth achieved over the preceding six years. He came to Skoda Minotti seeking answers to grow his bottom line.
Along with several nurses on staff, the surgeon /owner employed one bookkeeper responsible for generating new patients. Given that this employee’s time was split between growing the practice’s bottom line and managing the office’s finances, neither job was performed to its fullest potential.
Skoda Minotti developed a fully optimized and responsive website, which resulted in a significant increase in qualified leads. However, the bookkeeper had neither the time nor the focus to convert those leads into new patients.
Skoda Minotti’s accounting team transitioned the practice from a QuickBooks desktop solution, which required the bookkeeper to manually enter all of the office’s and surgeon’s receipts, to a QuickBooks online solution. This new solution also integrated a scanning system to eliminate time-consuming data entry of receipts, and it linked to the office’s bank and credit card accounts as well. The transition occurred over a six-week period.
The new website continues to generate an unprecedented number of qualified leads. Equally important, the practice is now equipped to convert those leads into satisfied patients at a much higher percentage. The streamlined QuickBooks online solution implemented by Skoda Minotti frees up valuable time and resources that are now redirected toward maximizing patient satisfaction and revenue-producing activities. It also provides the practice with valuable real-time information about all aspects of its finances.
Our client is a manufacturer of concrete products with revenues in excess of $100 million. They were looking for an opportunity to grow the company through acquisition to expand their current footprint and shipping territory. The manufacturer was in the process of making a strategic acquisition in a different state. With revenues of approximately $10 million and multiple locations, the target company has an owner who wanted to take some chips off the table by selling a majority ownership.
Our client had been working with the seller for about a year before we got involved and was having difficulties closing the transaction. The information they were receiving from the seller was subpar at best, and the transaction was initially structured as a stock transaction, which can be complex. Our client primarily engaged our Transaction Advisory Services Group to complete financial due diligence, negotiate with the seller and help close the transaction.
Through our due diligence procedures, we uncovered some discrepancies between the inventory information and what was represented to our client. Based on our findings, we negotiated with the seller to reduce the purchase price by over $100,000.
The transaction was initially a stock transaction, which is more advantageous for the seller than the buyer. We completed a thorough tax structuring analysis providing a structure (purchase price allocation and different types of consideration) that did not change the tax exposure for the seller but greatly increased the tax deductibility of the purchase price for the buyer. The new structure was presented and agreed to by the seller and their advisors, which resulted in excess of $500,000 of additional tax deductions the buyer would receive compared to the initial stock deal.
Once the transaction closed, we worked with the buyer to ensure post-closing transactions were recorded in the appropriate time period. This included making sure liabilities incurred before the transaction closed were the responsibility of the seller. We completed extensive work around the collectability of receivables and finding unrecorded liabilities.
The work we successfully performed gave the buyer comfort that the balance sheet they were receiving was what they initially negotiated for, and that the unrecorded liabilities that we found were the responsibility of the seller (resulting in a reduction of the purchase price).
Skoda Minotti served a financial advisory firm that had locations in multiple states. As part of our normal review of the client’s activities, we discovered an exceptionally high percentage of receipts to Ohio as part of its Commercial Activity Tax.
Commercial activity is based on where the benefit is received—in this case, where the client resided. We discovered that the client was reporting approximately 95% of its receipts to Ohio for the Commercial Activity Tax. In reality, the actual percentage was about 50%.
We were able to assist the client in filing refund claims with the state of Ohio. The client was able to secure a refund of approximately $60,000. We also assisted the client in developing new reports to help in pulling future receipts for the Ohio Commercial Activity Tax return. This, in turn, helped the client avoid the same error going forward.
A client had been self-identified as a manufacturer and was undergoing an Ohio use tax audit. This client was never registered for Ohio use tax, so as a result, the audit period was six years. There were potentially substantial penalties that could have come into play, so the client’s leadership asked Skoda Minotti to assist them with the company’s audit.
The client’s previous CPA firm never toured its facility, so its providers never questioned the classification. Why is that important? When Skoda Minotti toured the plant, our professionals concluded that the client’s business should not have been considered a manufacturer, but rather a printer. This distinction had enormous implications.
As a result of our efforts, we informed our client that the printing exemption in Ohio was much broader than the manufacturing exemption. This printing exception is unique; even the state auditor wasn’t aware of the details.
In the context of the Ohio audit, we were successful in arguing that our client was, in fact, a printer, not a manufacturer. Accordingly, items that would have been listed for a manufacturer, such as shelving, forklifts and cranes, were now considered exempt since they were being used by a printer. This netted our client an audit-related savings of over $100,000. The audit assessment was approximately $30,000, and we successfully secured a $30,000 refund. Additionally, the state agreed to abate any penalty.
Skoda Minotti consistently consults with our clients, challenges current thinking and leverages deep expertise and experience for the benefit of our clients.
The average person updates their estate planning documents only about every 20 years. Family circumstances can obviously change dramatically over that long a time period, and – at the same time – the estate tax landscape has also changed dramatically.
The family highlighted in this case study fits that mold. They provided copies of wills and revocable living trusts that were dated and asked for our thoughts and recommendations.
To evaluate the client’s situation, Skoda Minotti completed a thorough review of the existing estate and irrevocable trust documents, assets making up the client’s estates and his life insurance policies. We also discussed the goals of the estate plan and reviewed the family dynamics with the client. This was a second marriage situation with children from prior marriages on both sides, so it was a bit more complex than the average estate.
Based on these inputs, Skoda Minotti prepared an estate flowchart demonstrating how the assets of the estate would ultimately flow to family members based on the existing trust terms. The client was surprised to learn that the step-children, who were not active in the business, were set to inherit significantly more assets than his children, who were active in the business. The trust documents worked well when they were drafted, but the growth in value of his family business over the years, coupled with changes in the estate tax law, had created a very different result than what was intended.
The documents were brought back in line with the current intentions of the client and his spouse for passing assets to their heirs on a more equivalent basis, and to better reflect charitable intentions. Additional provision changes were made to maintain the assets in trust for the lives of the children, providing creditor/divorce protection for the assets left to them.
Going forward, we will revisit the estate documents with the client every two to three years in order to verify that the end results of the estate plan continue to match up with the goals of the client.