Small Business Workshop

Transcription

1 Small Business Workshop Baton Rouge August 18, 2017 assurance - consulting - tax - technology - pncpa.com Postlethwaite & Netterville, A Professional Accounting Corporation

2 2 Agenda

3 Human Resources: A Big Deal for Small Business Helene Wall, SHRM-SCP, Associate Director assurance - consulting - tax - technology - pncpa.com Postlethwaite & Netterville, A Professional Accounting Corporation

4 4 Agenda

5 HR as a Strategic Partner Information Technology Sales and Service Human Resources Finance, Accounting & Payroll Marketing & Development Operations Administration

6 Understand Your Obligations

7 Employment Law & Other Governance

8 Federal: Common Areas of High Risk

9 See Exhibit A

10 Louisiana: Common Areas of High Risk

11 See Exhibit A

12 Evaluate the Risk of Non-Compliance

13 Common Worker Definitions

14 Common Worker Definitions

15 Federal: FLSA

16 Federal: FLSA

17 Federal: FLSA changes are pending DOL Rule Injunction

18 Federal: FLSA Step 3. Many employers DO NOT comply with Office Manager With no supervisory authority VP of Sales Who cold calls from the office all day Director of Marketing Who answers phones and updates the website periodically

19 Federal: FLSA Fines & Penalties Back Wage$$ Employer paid $20K in back wages to a nursing home employee; Additional civil penalties incurred for repeat and willful violations. 1099$$ Employer paid $200K in back wages to 57 employees misclassified as independent contractors.

20 Federal: I-9 Employment Verification Since 1986, required by Employers with as few as ONE employee. NEW FORM 20

21 Federal: I-9 High Risk / High Fines Incorrect or Missing I-9 Forms Failure to Re- Verify Supporting Documents Failure to Comply with 3-Day Rule 21 Source: HR Insights and Hire Right

22 Examples:I-9 Fines & Penalties Employer/State # Employees Issue Penalty Assessed GA/CA events 350+ I-9 Errors $605,250 GA construction 24 Started with taped conversation re: hiring illegals + errors $228,000 MN temp staffing Not stated I-9 errors $210,000 National-staffing 243 Improper Sec 2 authorization, $935+/-per form CA/East Coast -fast food) violations $227,000 Unauthorized workers Fined $42,000 dropped to $18, Source: EEIHR.com and LawLogix.com

23 23 Louisiana: Common Risk Area

24 Employment Life Cycle Challenges

25 Who Are These People? 25 Source: progressiveae.com/wp-content/uploads/2016/03/generation-gap

26 26 How Do I Manage Them?

27 27 Other Concerns

28 28 Hot Topics

29 Polices & Procedures

30 Job Based

31 Operations Based

32 Employment Based

33 Dependent Relationship (Example) Calculates Overtime Collects Time Records (Job Description) (Employee Handbook) Processes Payroll (JD/EH/OM) Approves Payroll (Operations Manual Employee 2) Payroll Coordinator (Employee 1) 33

34 34 Record Retention

35 Self-Check

36 36 Identify Risk in HR Administration

37 Identify Risk in Accounting/Payroll

38 38 Develop Improvement Plan

39 Don t Do This American Dental Association to pay American $1.9MM to Dental resolve Association EEOC discrimination to pay $1.9MM to case resolve related EEOC to discrimination firing an Executive case related and to firing HR Director an Executive who advised and HR Director them of who advised them of non-compliance issues. non-compliance issues. 39

40 40 Questions and Comments

41 Thank You! Helene Wall, Associate Director, SHRM-SCP Bill Spann, Associate Director

42 Succession Discussion Benjamin Vance, CPA/ABV assurance - consulting - tax - technology - pncpa.com Postlethwaite & Netterville, A Professional Accounting Corporation

43 43 A Global Crisis

44 44 A Global Crisis

45 45 A Global Crisis

46 46 A Global Crisis

47 47 A Global Crisis

48 48 A Global Crisis

49 Why We Avoid Succession

50 83% No Formal Succession Plan State of Owner Readiness Exit Planning Institute 50

51 51

52 52 A Different Perspective

53 53 A Different Perspective

54 54 Application to Succession

55 55 Application to Succession

56 56 Cost Factor

57 Cost Factor (example) No Investment Investment Professional fees $0 Professional fees $100,000 Capital investments 0 Capital investments 500,000 People investments 0 People investments 250,000 Cost efficiencies Cost efficiencies (100,000) Total Investment 0 Total Investment 750, EBITDA $1,000,000 EBITDA $1,000,000 Exit Multiple 4.00x Exit Multiple 6.00x Value $4,000,000 Value 6,000,000 Less: Investment 0 Less: Investment (750,000) Net Proceeds $4,000,000 Net Proceeds $5,250,000 ROI 0% ROI 67%

58 58 Time Factor

59 59 Time Factor

60 60 Fear Factor

61 Creating Healthy Succession Plans

62 62 Creating Healthy Succession Plans

63 63 A Different Perspective

64 64 Creating Healthy Business

65 65 Creating Healthy Business

66 66 Healthy Growth

67 67 Healthy Margins

68 68 Healthy Processes

69 69 Healthy People

70 Conclusion

71 71 A Call to Action

72 72 Questions and Discussion

73 Securing the Small Business Jacob Goodson, CISA CISM assurance - consulting - tax - technology - pncpa.com Postlethwaite & Netterville, A Professional Accounting Corporation

74 74 Agenda

75 75 Defining Cybersecurity

76 76 Trends and Statistics

77 77 Makes me WannaCry!

78 78 Impact of the World s Largest Ransomware Attack

79 79 Where do I Start?

80 80 Risk Assessment

81 81 How To: I.E. Self Assessments

82 Models for a Cybersecurity Program Identify Protect Detect Respond Recover 82

83 83 Asset Valuation

84 84 People - Policies

85 85 People - Policies

86 86 People - Security Awareness and Training

87 87 Processes

88 88 Technology

89 89 Where to Focus Resources?

90 90 Contact Information

91 Protecting Business Assets: Tax Risks Gary Dressler, Associate Director assurance - consulting - tax - technology - pncpa.com Postlethwaite & Netterville, A Professional Accounting Corporation

92 92 Agenda

93 Overview of Nexus

94 94 Overview of Nexus

95 95 Overview of Nexus

96 96 Overview of Nexus

97 97 Overview of Nexus

98 98 Overview of Nexus

99 99 Overview of Nexus

100 100 Overview of Nexus

101 101 Overview of Nexus

102 102 Overview of Nexus

103 103 Overview of Nexus

104 104 Overview of Nexus

105 105 Overview of Nexus

106 106 Importance for Louisiana Taxpayers

107 Record Keeping

108 108 Record Keeping for Audit Defense

109 Receiving Audit Notice

110 Receiving Audit Notice

111 The Audit Findings

112 112 The Audit Findings

113 113 The Audit Findings

114 Thank You 114

115 Private Company Financial Reporting Bob Brickman, Director assurance - consulting - tax - technology - pncpa.com Postlethwaite & Netterville, A Professional Accounting Corporation

116 116 Agenda

117 PCC role, function and actions

118 118 Private Company Council (PCC)

119 Private Company Council (PCC) FAF oversight Private company practitioners (4), users (3), preparers (3) Identifies, deliberates & votes on proposed GAAP alternatives for private companies Advisory body to FASB 119

120 Decision Making Framework Differential Factors Number of primary users and their access to management Investment Strategies Ownership and Capital Structure Accounting Resources Learning about new financial reporting Modules Recognition & Measurement Display (Presentation) Disclosures Effective Date Transition Method Principle: Consider cost and complexity but focus on user relevance 120

121 121 Communication methods

122 122 Definition: Private Business Entity

123 123 PCC Key Decisions and Actions

124 124 PCC Key Decisions and Actions (cont d)

125 125 PCC Key Decisions and Actions (cont d)

126 Further simplification projects

127 127 Projects in process/issued

128 128 Consolidations: VIEs Under Common Control

129 VIE Guidance for Entities Under Common Control Does VIE Guidance Apply? Legal Entity? Scope Exception? Variable Interest? Variable Interest Entity? Who has Controlling Financial Interest? Primary Beneficiary Related Party Tie-breaker? 129

130 Consolidations: Private Company Alternative (March 8 TBD) Policy Election Criteria to Qualify Private company and legal entity under common control Common control parent is not a PBE Legal Entity is not a PBE Required disclosures to understand involvement and exposure to legal entity under common control Propose to remove Accounting Alternative for Leasing Arrangements under common control (ASU ) Combined statements still permitted if entities are under common control 130

131 Current Status Consolidations April 12, PCC agreed that applying VIE guidance to private companies under common control is a pervasive issue and recommended the Board address this comprehensively November 2, 2016 and December 16, the Board decided to host a Consolidations Roundtable to discuss a staff draft of proposed amendments March 8, 2017 Board tentatively decided to provide a private company accounting alternative May 18, 2017 Board addressed remaining issues with private company accounting alternative and directed the staff to draft a proposed Update (Exposure Draft) for vote by written ballot 131

132 132 Consolidations Private Company Disclosures

133 Simplifying the Test for Goodwill Impairment (ASU ) and not

134 Goodwill Effective Date (ASU ) SEC Filers Annual periods beginning after December 15, 2019, for public business entities that are SEC filers All other entities (including private companies and NFPs) Annual periods beginning after December 15, 2020 and interim periods beginning after December 15, 2019 Early Application Early adoption would be allowed for all entities as of January 1,

135 Simplifying the Balance Sheet Classification of Debt (Exposure Draft Comment Period Ended May 2017) What? Current Guidance Narrow-scope rules on specific types of debt arrangements Proposed Change Overriding principle for the classification of debt that can apply to all arrangements* How? Mix of guidance using contractual maturity and management judgments Increase focus on contractual maturity and borrower s rights less focus on judgment or intent When? Some circumstances considered as of the financial statement issuance date, while others use the reporting date Criteria considered as of the reporting date This proposed change is simpler and more transparent than current GAAP. * Includes convertible debt and liability classified mandatorily redeemable instruments. * Waivers of debt covenant violations are an exception to the proposed principle. 135

136 Simplifying the Balance Sheet Classification of Debt Users are supportive of a contractual approach to debt classification. 136

137 Waivers of Debt Covenant Violations Current Guidance Debt is classified as noncurrent unless: A violation that gives the lender the ability to call the debt has occurred at the balance sheet date or would have occurred absent a loan modification. It is probable that the borrower will not be able to cure the default at measurement dates within the next 12 months. Proposed Guidance Debt would be classified as noncurrent if: The liability is contractually due to be settled or can be deferred for at least a year after the balance sheet date. A waiver of the violation has been obtained before financial statement issuance. The waiver does not result in an extinguishment or a troubled debt restructuring. It is not probable that any other covenants will be violated within 12 months of the balance sheet date. There is currently an exception in GAAP for waivers, and there will still be an exception in GAAP under the proposal with some differences. 137

138 Simplifying the Measurement of Inventory (ASU ) Current GAAP Solution Lower of cost or market Measures for market value include: Replacement cost Net realizable value Net realizable value less a normal profit margin Inventory will be measured at the lower of cost or net realizable value Reduce cost and complexity of the subsequent measurement Maintain or improve the usefulness of the information required to be reported by an entity Effective Date and Transition: Public business entities: fiscal years beginning after December 15, 2016, and interim periods within those fiscal years All other entities: fiscal years beginning after December 15, 2016, and interim periods after December 15, 2017 Early adoption permitted; Prospective application 138

139 Income Taxes: Classify Deferred Taxes (ASU ) Current GAAP Solution Deferred taxes classified as current or noncurrent based on classification of related asset or liability (if there is one) Classify all deferred tax assets and liabilities as noncurrent Effective Date and Transition: Public business entities: annual periods beginning after December 15, 2016, and interim periods within those annual years All other entities: annual periods beginning after December 15, 2017, and interim periods after December 15, 2018 Early adoption permitted; Prospective or Retrospective application 139

140 A Professional Accounting Corporation