Gorfine, Schiller & Gardyn, P.A. will be an exhibitor at the Maryland State Bar Association 2011 Annual Meeting. The event takes place in Ocean City, MD. We will be in the exhibit hall June 13th through 16th. Stop by our booth to visit Ronald Rudich, , CPA/ABV/CFF, MS, CVA, CBA/BVAL/ABAR, CM&AA, CMEA, SBA, Director of Business Valuation and Litigation Support Services, and to learn about our Business Valuation and Litigation Support Services.
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May 18, 2012April 25, 2012You Are So Transparent: Or Are You?Transparency in Reporting The call for the transparency in financial reporting has been loud and long. It found its roots and gained momentum through the Dot.com implosion and the subsequent proliferation of corporate scandals. Additional focus was placed on transparent financial reporting during the financial collapse (and subsequent bailout) of the financial markets resulting in the House agreeing to / passing the Promoting Transparency in Financial Reporting Act of 2009 (PTFRA). OK, so we should all fee better now – right? Well, not exactly. While this was a step in the right direction, it only covers FINANCIAL REPORTING! While transparent financial reporting is critical for investors and regulators, it does not address the important requirements of MANAGEMENT REPORTING! While financial results are reported in an accurate and timely manner, I believe that most organizations lack the internal management reports needed to support critical decisions around the deployment of its scarce resources on a day to day, week to week, month to month, and year to year basis. We simply need to do better. Why Management Reporting? In theory, the effective implementation and use of a comprehensive Management Reporting environment establishes the infrastructure necessary to effectively manage operations and drive shareholder value. These reports should provide a cross functional / integrated view of how an organization is managing its most valuable, and costly, resources: people, processes, and technologies. While Financial Reporting focuses on the results of operations, Management Reporting focuses on operational processes providing an opportunity to maximize the organizations return on its significant investment in its infrastructure. Too often, “C” level executives focus on financial results and do not drill deep into the operational aspects of the organization. In practice, we find that while many organizations believe that they have a Management Reporting program, they in fact do not. What they have is typically a combination of standard application based reports that capture raw statistics for a specific functional area of the organization; however, they do not provide much in the way of value added / actionable information on the efficiency and effectiveness of that specific organization. Let’s look at an example for sales management reporting in a standard environment versus an enhanced, cross-functional “Transparent” environment. Standard Management Reporting Data: Historically, most organizations will measure gross sales (dollars & volumes), cost of sales (dollars & volumes), bad debt (dollars & volumes), sales channels ($ and volumes), and days sales outstanding receivables. In addition, most organizations will seek comfort in reviewing sales by product group or major client in order to establish high level trends. Enhanced “Transparent” Management Reporting Data: An organization with access to cross functional / integrated Management Reporting information will look at the end to end impact of their sales environment. For example, these organizations will analyze Product Profitability, Client Profitability, Fulfillment Turn-Times, Supply Chain Support Costs, Direct Indirect Sales Support Costs, and Client / Product trends. As can be seen in the example above, having visibility / transparency in cross functional Management Reporting data / information will provide “C” level executives with the decision support tools necessary to function / divisional management accountable in order to maximize earnings and drive shareholder value. So What Now? As a best practice, the “C” level team should challenge themselves to challenge their management team to develop and report key operational metrics to be used to better manage their respective organizations. You will not need to make a major investment in technology to start moving forward, simply ask some key / fundamental questions; or, for some value added Management Reports (i.e. Product / Client profitability statistics) and listen to the response. If the reports do not exist; or, if the preparation is manual, you have an opportunity for improvement. So, the message is: determine where you are today, and commit to being in a better place tomorrow. Transparency in Reporting is not measured in a point in time; it is a perpetual process of assessing and enhancing. So, is your reporting transparent? If you find that it is not, it is time to take action! Best Regards, Mark T. Warren, M.S.
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April 16, 2012Be smart with your tax refundAre you receiving a tax refund this year? No doubt you’ve already heard the standard admonishment about why you should not be giving the government an interest-free loan. Maybe you’ve decided to “do better” during 2012 by revising your withholding or estimated tax payments to reduce the amount of next year’s refund — or maybe you haven’t. Either way, set aside your guilt. Financial planning means creating effective strategies that work for you — which can include forcing yourself to save by overpaying your income tax during the year. The more important consideration is what you do with the money you get back. Here are ideas for making the most of your refund. * Save. The unexpected happens. The question is, how do you pay the resulting bills? Parking part of your refund in a readily accessible location, such as a bank checking, savings, or money market account, will help you weather short-term, temporary setbacks without incurring penalties or transaction fees. * Spend. Spending your refund wisely can get your finances in shape and pay off over the long run. For instance, home improvements like energy-efficient windows or a new water heater may result in lower electric and insurance bills. Refinancing your mortgage reduces your monthly cash outlay, freeing money for investing or saving. Ditto for paying down high-interest credit cards — so long as you resist the urge to reload them. * Self-invest. Using your refund to refresh your current career-related skills or to learn new ones can provide a double benefit: more employment opportunities and tax savings. Unsure of your job security? Put your refund to work by financing a home-based business and creating a second stream of income. Give us a call for assistance related to your tax withholding, estimated tax payments, or tax refund.
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March 20, 2012Does this April 2 deadline apply to you?If you reached age 70½ last year, April 2, 2012, could be an important deadline. That’s the last day you can take your required minimum distribution (RMD) for 2011 from your traditional IRAs. If you miss that deadline, the penalty could be a 50% excise tax on the amount you should have withdrawn. Here’s how the rules work. Once you reach age 70½, you must start taking annual distributions from your traditional IRAs. Normally these distributions must occur by December 31 of each year. But a special rule lets you defer the first distribution until April of the year after you reach age 70½. So if you turned 70½ last year, April 2 is the deadline for your 2011 distribution. Be aware that you’ll still need to take your 2012 RMD before the end of this year. Generally, the amount of the RMD for any year is based on your age. You take the balance in all your traditional IRAs as of the last day of the previous year, and divide by a factor representing your life expectancy. The IRS has published a standard life expectancy table to use in the calculation. Special rules might apply if your spouse is more than ten years younger than you are. Because all or part of your distribution may be taxable income, it is important to include RMDs in your tax planning. Ideally you should start planning for RMDs several years before you reach age 70½. But whether you’re planning in advance or looking at a distribution on April 2, contact our office for more detailed advice. The RMD rules don’t apply to Roth IRAs. Unless you’re still working, this deadline also applies to your other retirement accounts.
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February 21, 2012Payroll tax cut extended through 2012Congress passed an extension of the 2% payroll tax cut that had been scheduled to expire at the end of February. The extension means 160 million working Americans will continue to pay social security tax on their wages at a 4.2% rate for the rest of 2012, rather than at a 6.2% rate.
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February 20, 2012If you have foreign investments, you may have a new filing obligationIf you own foreign investments, you may have an additional federal tax filing requirement this year. Form 8938, “Statement of Specified Foreign Financial Assets,” is due April 17, 2012, and is filed as part of your individual tax return. You’ll use Form 8938 to disclose interests in certain foreign financial accounts when your ownership exceeds the reporting requirements. What are the reporting requirements? They vary depending on where you live and your filing status. For example, say you’re married and live in the United States, and you’ll file a joint tax return for 2011. You’ll include Form 8938 with your tax return when the total value of your reportable assets on the last day of 2011 is more than $100,000, or if the value exceeds $150,000 at any time during the year. Tip: In some cases, you may also need to file Form 8938 for tax year 2010. Reportable assets include investment accounts you own that are held in foreign financial institutions, interests in foreign entities, and stocks or securities issued by foreign individuals or companies. You’ve probably noticed the reporting requirements are similar to the “Report of Foreign Bank and Financial Accounts” (FBAR), a separate return you may already be filing. Be aware the new Form 8938 does not replace the FBAR, which you’ll still need to complete by June 30. Penalties for failure to file Form 8938 start at $10,000. We urge you to contact us so we can help you evaluate your filing requirements for foreign investments.
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February 6, 2012Meetings underway on payroll tax cut extensionLast December, the 4.2% social security tax rate that workers pay on wages was extended through February 29, 2012. Now a Congressional conference is being held to find a way to extend the lower tax rate through the end of 2012. The sticking point is lack of agreement between Republicans and Democrats on how to pay for the extension, estimated to cost $100 billion. House Democrats have expressed the hope that the conference will be completed by the Presidents’ Day recess scheduled for the week of February 20. The legislation would extend the current 4.2% payroll tax rate through December 31, extend unemployment insurance benefits, and prevent cuts in reimbursements to Medicare providers. Several legislators want to include tax extenders in the payroll tax cut legislation. These “extenders” include such provisions as the research and development credit for businesses, the optional deduction for state and local sales taxes, and the $250 deduction for school supplies purchased by teachers. Though these tax breaks appear to be universally popular, finding a way to pay for them remains the big issue. As you do your 2012 tax planning, keep the uncertain legislative picture in mind.
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December 5, 2011How does your organization view technology?The Mind of Mark For the last 20 years, I have focused on designing, developing and implementing world-class finance, process and technology solutions for clients ranging from Mom & Pop Start-ups to Fortune 500 corporations. What I have recognized during this time is that regardless of the organizations size and focus, issues and opportunities seem to be pretty consistent. This blog focuses on the good, the bad, and the ugly of what our clients face on a day to day basis. How does your organization view technology? This is a relatively simple question; however, its answer may have profound impact to your organization! An organization’s IT capability correlates to how its leadership perceives the importance of IT in achieving its long-term strategy. This perception may fluctuate dramatically across organizations. One organization may view IT as a “necessary evil” with no strategic value, while another organization may view their IT team as critical to maintaining or achieving a competitive edge in the marketplace. Each of these perceptions of IT carries with it an investment cost. Below are the levels normally associated with perceived IT value:
So, how do YOU view your IT resources and have you made the necessary investment for success? Do YOUR expectations match YOUR investment? If not, the resulting expectations / investment gap may result in an inefficient / ineffective IT operations environment. It is now time to take a deep breath, outline your expectations, look at your investment to date, and determine if your level of investment is aligned with your IT goals and objectives! If you find that it is not, it is time to take action! Best Regards, Mark T. Warren, M.S. Mark Warren has over 20 years experience in business consulting, including business performance management, contract management and strategic sourcing. He works with clients of all sizes in greater Baltimore, Maryland and throughout the Mid-Atlantic.
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May 25, 2011Scott Rodgville Re-Elected Treasurer of Board of Directors of Paul’s Place, Inc.Scott D. Rodgville, CPA, Officer at Gorfine, Schiller & Gardyn, P.A., has been re-elected Treasurer of the Board of Directors of Paul’s Place, Inc. This will be his second three-year term as Treasurer for the organization’s Board of Directors. Paul’s Place, Inc. advocates change and improvement of quality of life for residents of Washington Village/ Pigtown and the surrounding neighborhoods in Southwest Baltimore. The organization has served the community for over twenty years and offers more than a dozen services and programs to low-income individuals and families. Such programs and services include providing hot lunch five days a week, an adult basic literacy program, a nurses’ clinic and an affordable housing program. Scott leads the firm’s Not-for-Profit service area and focuses on not-for-profit and employee benefit plan clients. In 2006, he was named one of the “Top 40 Accountants” in Maryland by SmartCEO Magazine. Scott received his CPA certification in 1998 and his M.S. in Taxation from the University of Baltimore in 2001. Additionally, he is on the Board of Directors of the American Health Assistance Foundation (AHAF).
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May 13, 2011Ronald D. Rudich Appointed to the Institute of Business Appraisers’ Board of GovernorsRonald D. Rudich, CPA/ABV/CFF, Director of Business Valuation and Litigation Support Services at Gorfine, Schiller & Gardyn, P.A. has been appointed to the Board of Governors of the Institute of Business Appraisers (IBA). His three year term begins on June 11, 2011. The IBA’s Board of Governors is comprised of ten individuals from across the country whose responsibilities include course and product development, research, authorship and the organization’s mentor program. Additionally, the Board provides leadership, supports innovative services and promotes a high level of proficiency and professionalism among its members. The IBA was established in 1978 and is the oldest professional society devoted to the appraisal of closely-held businesses. It is a nationally recognized membership organization that provides professional accreditation and business appraisal education. Ronald has over 30 years of experience in business valuation. He is Accredited in Business Valuation (ABV) and Certified in Financial Forensics (CFF) accredited by the American Institute of CPAs. Ronald’s expertise includes forensic accounting, strategic business planning, business consulting, and forecasting services. He is a Certified Business Appraiser (CBA), Business Valuator Accredited for Litigation (BVAL) and Accredited in Business Appraisal Review (ABAR) accredited by The Institute of Business Appraisers, a Certified Valuation Analyst (CVA) accredited by the National Association of Certified Valuation Analysts, a Certified Machinery & Equipment Appraiser (CMEA) accredited by the NEBB Institute, a Senior Business Analyst (SBA) accredited by The Society if Business Analysts, and a Certified Merger & Acquisition Advisor (CM&AA) accredited by the Alliance of Merger & Acquisition Advisors.
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