Area experts offer tips and suggestions
for companies who are considering turning to outside
firms for their accounting needs.
Q: How should businesses address recent legislative changes in benefits planning?
A: 'Most businesses should be reviewing their retirement benefits both for
the business owners and the employees due to the changes that the Economic Growth
Tax Relief Reconciliation Act created,' says Rick Maloyan, district manager
of Paychex Human Resource Services. 'Many of these improvements will need to
be implemented prior to Jan. 1, 2002, for existing plans. Businesses who have
no plans could actually qualify for tax credit to establish a new plan. A benefits
consultant can now design plans for virtually any business situation.'
Q: What are the biggest challenges a small business faces when trying to implement a new accounting software system?
A: 'One such issue is properly communicating to each of the system's users
within the company that they should not try to make the new accounting software
package perform like the old software package,' says Craig Benjamin, president
of Future Insite Inc. 'Another critical issue focuses on receiving the commitment
from the company's top management to dedicate the necessary resources to effectively
implement the new system. All too often, the key resources are told to implement
the new system when they find the time.' '
Q: How does an outside firm help an owner select the most profitable business model?
A: 'So many compa- nies are responding frantically to the pressures of the
economy and their respective industries — as well as their customers — [that]
they may not see problem areas that need to be assessed,' says Craig Thornton,
managing partner of the Cleveland office of Plante & Moran LLP. 'We help
them understand where in the marketplace they should play and then how they
can play and win. We help build a strategy around that and then approach it
from a tactical perspective. We try to help them step back and look at issues
such as [which] customers add real value and which allow them to add profit,
and ultimately, which customer they want to serve.'
Q: How can an outside consultant help improve areas of operational performance?
A: 'The focus is on reducing costs and leveraging technology,' says Elaine
Volarich, senior manager in Ernst & Young LLP's tax consulting group. 'Specific
topics we look at are tax and internal audit efficiency — reviewing their department
to see where they can do better, or evaluating outsourcing as an option. We
also look at working-capital efficiency, with a focus on reducing accounts receivable
and extending accounts payable. A third major category is human-resources management
— focusing on retaining key talent while managing a potential work-force reduction.'
Q: In what ways can an outside consulting firm help clients through an economic downturn?
A: 'Most businesses do not have the time or expertise to focus on state and
local tax issues despite the fact that this is a very high-cost area for them,'
says Drew Sparacia, director of Cohen & Co.'s state and local tax group.
'This is understandable given the number, complexity and frequency of change
in the state and local tax laws. An outside tax consultant can perform a review
to determine how to reduce the cost of state and local taxes. Additionally,
consultants can look at the tax records from past years to determine if potential
refund opportunities exist.'
Q: Has the economic downturn forced companies to reassess their financial operations?
A: 'During the good financial times, entrepreneurs are generally focused on
serving customers and growing their business,' says James Carulas, vice president
of Meaden & Moore Ltd. 'Paying attention to slowing down growth or evaluating
their customer base isn't necessarily at the top of their to-do list, because
everyone is focused on keeping the business moving. However, over the last year
most manufacturing companies in Northeast Ohio have suffered from some sort
of economic challenge, and accounting and consulting firms can be a great source
for guidance in financial restructuring to help position companies to face future
challenges.'