A few days ago I shared the possibility of the WOTC for employees that you rehire as your business recovers.

The traditional WOTC regulations prohibit the WOTC for previous employees however there is strong and growing indication in Washington that WOTC may be temporarily approved to incent employers to hire back employees asap.  At this point, WOTC relief is not approved but the point of the message was to make you aware and to have you consider applying for WOTC for each employee that you rehire and bring back to work from furlough.  It may be a waste of time but there is no cost to do the application and the application must be processed promptly.  Harrisburg may reject it but there is a 28 timeline from the date of rehire.

Alternatively, if you did not receive PPP, the ECR (Employee Retention Credit) credit is approved and ready for your application.   Read the summary here.

Many thanks to HIREtech for keeping us informed on these types of best practices.  Work through Mike McCorkle at HIREtech to get the preferred pricing.

All    This may be very valuable to your firm especially if your firm furloughed employees and are now hiring them back.

There are tax credits for hiring new employees-known as the Work Opportunity Tax Credit (WOTC) and worth $1,000 to $2,450 for each qualifying new hire.  A candidate will likely qualify if they have been eligible or received state unemployment compensation in the last year, been on Food Stamps, been on a similar welfare or welfare to work program or a recently Veteran.  There are some other possible qualifying factors-such as working part time jobs with no career future or no healthcare.

One SME partner is HireTECH-a Texas based firm that is leader in the firm for these services AND they work on a contingency/success fee basis.   As a referral of CFO Solution, their fee is capped at 15% and it is payable ONLY if your firm receives a tax credit.

I just spoke to our contact, a Director with HireTECH, and they advise that all employers register anyone they hire OR REHIRE from furlough.   Each state will make the decision is a rehire is eligible-current thinking is that states are doing whatever they can to incent employers to hire and rehire so there is a fair probability that the states will approve the application.

Contact me and I will introduce you to our contact (so your firm receives the rate discount).

Process is fairly simple-an engagement letter explaining roles and the 15% success fee paid out of the approved credit.

Each employee is registered with two weeks of rehire-they answer a few questions-on line (phone, tablet or computer) and the application is processed to the corresponding state office SO this works for multi location employers. HireTECH takes care of the getting the application to the right state office and expediting review and approval, and in some cases, arguing for approval if the credit is denied.   Credit letter authorization, or denial, is sent to company contact and to HireTECH and the credit, if approved, is processed.   Then the firm is invoiced for the 15% payment.

Some of our firms have praised HireTECH for efficiency, professionalism and intervention assistance.

IF you want to know more, let me know.  THIS IS VERY TIME SENSTIVE-TAKE ABOUT A WEEK TO GET COMPANY ENGAGED AND ACTIVE AND THEN EACH EMPLOYEE APPLICATION MUST BE RECEIVED IN THE CORRESPONDING STATE OFFICE WITHIN 28 DAYS OF THEIR START DATE.  NO TIME TO WASTE AND HIRETECH IS VERY BUSY.

Honestly an HR department can apply for WOTC credit on their own but it is easy to mess it up and really easy to allow the state office to find an error or reject it.  Miss the deadline and the application is rejected.   For 15% success fee, use the expert! (obviously the best practice)

This can work for one employee hire (I just enrolled my engineering firm) or for hundreds across the country.   These are for full time positions with reasonable minimum wage requirements-generally 12 dollars or higher so worth applying.

Let me know your interest.  We did a zoom call two years ago on this topic and some of you engaged. Slides can be found HERE. Now everyone needs to consider it.

Let me connect you as Tim is no longer with HireTECH and you will get charged 25 or 30% fee.

SHARE THIS ACCORDINGLY with other employers-in any state.

PS   Some states have state or local credits for new hires that HireTECH will also file for.  New York does and I am trying to get a list of the other states that have additional credits.

Our friend, Steve Gergar, asked if I would share this request.    I can think of no better “give” right now.   Please consider if you or one of your organizations can assist Miller Blood Bank.

Please do what you can to assist this sincere request.  Feel free to share this request.

Thank you from me and Steve.

You may have seen our Miller-Keystone Blood Center appeals lately for blood donations throughout the Lehigh Valley.  The effect of the Coronavirus combined with our hospitals reopening to do elective surgeries has caused our blood supply to drop to dangerously low levels at Miller-Keystone, as well as across the country.

I attached a couple of recent press releases above and a short YouTube video below that describes the current environment and issues we are facing. We have 4 local Donor Centers located in Bethlehem, Allentown, Easton, and Reading.

I was wondering if I (or you) could forward this email to our CFO Forum members to help reach potential blood donors at this critical time.

Thanks

Stephen A. Gergar
Vice President, Finance and CFO
Hospital Central Services, Inc./Miller-Keystone Blood Center
2171 28th Street S.W.
Allentown, PA 18103
Office (Direct):     610-295-1637
Fax:                       610-791-2919
Cell:                       484-357-0460

We are all getting back to work and dealing with reduced demand, delayed or cancelled projects and supply chain issues in the event your demand has remained strong.

As one of our elected officials once said “Never waste a crisis” and now could be the time to analyze every dime of spending and make some changes that typically you would not have made.

It is not unrealistic to change some travel policies, benefit policies, demand price reductions from suppliers and change work rules(whether unionized or not) or anything else you have been dying to change!  Change can be good IF you are managing it and the CFO should be the Chief Change Officer!

It is now crucial to save every dime and dollar and, as usual, anyone you ask in Procurement is going to tell you that we are getting the best prices and terms from our suppliers and there is nothing more that they can do.

Realistically-how would they know if they are getting the best price and terms on everything that they buy ?

Procurement usually spends 95% of their time on the key and strategic materials, components and services and the rest of the spend, typically 35 to 40% of the spend, is subject to subtle price increases, shorter terms, evergreen and automatic renewals-with an increase, insertion of adders for delivery, packaging or special orders.

We have several best practices to offer AND they can make the CFO and Procurement heroes in the battle to save money.

We have partners who can provide focused review of “almost any line item or purchase” and they provide their assessment on a performance based cost sharing model.

The “worst” case is that our experts can find zero savings.   IF that was ever determined, Procurement would be one less thing that the CFO has to worry about.

The best case, and what we normally find, is that Procurement does a great job on the key purchases and we find savings of 15 to 20% on a lot of the other purchases.   That is found money and although CFOs hate to write the check (out of the savings) to the contingency experts, smart CFOs realize they just found savings that will continue AND probably learned a bit about spending analysis, cost stacks and opportunities for savings.

We are glad to chat with you to determine if you want specialists or a sourcing expert to do a strategic sourcing analysis.    You determine the scope and they report back to you.

Many of the expense reduction franchise guy are sharks and to a degree unethical (as most of us know).

We have vetted our partners and they realize they work for the CFO and have to provide real savings AND that the decisions remain with the client.   No phantom or “could have saved more” savings calculations and invoices!

Couple of points for you to consider:

• Does procurement know that certain costs are semi regulated AND that price increases over a baseline could result in 36 months of savings?  Telecom, certain utilities, trash hauling, haz mat disposal are semi regulated and I suspect that Procurement does not know that and does not track increases versus the baseline.
• Do you have a comprehensive spend analysis and a process to review increases, vendor performance (quality, on time delivery, product development, pricing, shipping terms, payment terms) that you can review?  I suspect Procurement and Finance are focused on watching a few key items and that the others don’t get much attention (or you don’t have a lot of knowledge on pricing in those items and services).   We are glad to offer a strategic assessment.
• An example-we all have software annual or multi year agreements and we are conditioned to 4 or 5% increases per year, perhaps more.  IF IT needs it, they will approve the renewal and not challenge the increase or negotiate.  It is not their responsibility and Procurement rarely understands software and service agreement pricing.  Our experience has shown that you can negotiate decreases on these IT spends.   Same applies to hardware purchases.   One of our experts focuses on this and his savings will startle you.  His expertise has saved our engineering firm significantly in the last two years since he opened my eyes!
• Let us know how we can help you reduce your expenses.  We can help on:
  • Benefit costs—25% savings have been realized.
  • Hiring costs-10 to 20% savings have been realized
  • Operating costs-material, components, shipping, services, utilities (cost and efficiency best practices), property taxes (in some cases) as well as insurances, legal fees, bank fees, etc.
  • IT spend-software, service agreements, hardware, line costs (and capacity design/ utilization reviews), etc.
• Cap ex-equipment, installation, and related costs are purchases that Procurement rarely makes and the savings can be really significant also.

Give me a call and we can discuss your concerns and outline a plan.   Then I will handle the introductions.  You have nothing to lose!

As we all yearn to get back to work, many practical questions that we never had to think about now have to be dealt with.

Thanks to Scott Palochik of ESPI for sharing these blueprint to get back to work.   IT is worth reviewing.

Find the PDF HERE.

Some other back to work, PPP, business insurance savings and unemployment info will be shared in the next day or two.

Remember our May face to face sessions are cancelled.  R&D tax credit session via ZOOM next Friday.   June sessions to be determined.

I have to share a couple of comments.

1—“I never had the time to do the R&D tax credit but I decided I will never have more time than right now!”.   I was really surprised to learn that your partner Mike has a process that makes gathering all the data very organized and much easier than I envisioned.   That is why I “never had the time” and now I am kicking myself.   The other great news is that we can capture 2019 and FOUR previous years by using your partner firms (most firms can only look back three years).    I owe you at least two beers for your insight.  Reminds me that we will schedule a happy hour as soon as we are allowed to collapse the social distancing 6 foot rule!

2-Another CFO reported, after reading your update, I thought of using ADP to do the R&D credit since they advertise that they do R&D Credits since they have all of our payroll info.  When I looked into using them, after reading your blast last week, I realized all they do is take payroll and use parameters that are acceptable to the IRS to “not trigger and audit” and that all documentation, submission and audit liability would be mine.  I would be crazy to use ADP and not a best in class partner.   Thanks for the introduction.    He added “  I guess I could do my own root canals since I could look them up on You Tube but I wouldn’t do that myself so why should I do an IRS version of a root canal by myself!”   (Nice to find a CFO who is smart and has a sense of humor) –but he should have done this credit a few years ago but better now than never doing it!

3-On cost seg, we just did an estimate for a guy with a little building-bought a small office building last year for one million dollars.   “don’t think it is worth it but give me an estimate-he was stunned that his first year (2019) benefit is over 100k and that we can do the analysis within 4 or 5 weeks so his CPA can file the 2019 without a payment due to the credit.   When we told him the cost, he was stunned,KPMG charged him 4 times more!   That was why he didn’t think it was worth it.  Now he wants us to look at his commercial businesses and review the work that KPMG did.

4-A major local employer, with a great CFO and a great Tax department does their own R&D credit work.  They asked us to take a quick look at it and we discovered they missed 50% of the qualifying expenses.   They don’t want to amend their previous work but going forward they now know what qualifies.   They paid a small consulting fee to double their R&D tax credit.  Frankly, not sure if the tax guy keeps his job!  He was doing the right thing BUT doing it poorly!

5-Finally, another R&D credit quip.   A client who does the R&D credit updated 2019 but didn’t want to bother the CEO and staff to update their time spent on qualifying work so he told us to eliminate the exec portion.    We showed him that they would lose 25% of their credit and he made a few phone calls, decided to keep the allocation the same as 2018-which was a bit conservative but a hell of a lot better than ZERO.   Their credit increased over 2018 and all it took was a phone call with Mike and with me to figure out a reasonable path forward to get the 2019 credit done.

Just thought I would share these comments.     IF you are sitting at home and wondering how to pay taxes and still conserve your taxes, these tax best practices are NOT intimidating if you use a best in class partner! Mike D’Alessandro has been a frequent speaker to our group and his firm are experts in this so reach out to him (on the cc line above).

Same for cost reductions and a lot of other improvements.  You have the time, we have the best practices and partners who can make you look like a genius!

CFO Solution – Best Practices – Taxes Presentation

Just a quick sharing of a best practice.

My insurance provider (a fee based advisor NOT a broker) called me today to assist me to update our revenue and labor cost estimates used for our general liability and work comp coverage since our revenue and wage and salary costs will certainly be below our forecast which was used to calculate our premiums.

Obviously I could wait and get a credit after the year end audit but I would rather have lower costs (and keep my cash) now instead.

If your broker did not make the same suggestion and assist you, ask yourself if your broker works for you OR the carrier (who pays them!) that is why we recommend fee based advisors for business insurance and healthcare instead of brokers who work for their respective carriers.

Keep in mind, your employees working from home will likely be classified at a much lower rate-especially if they are field sales people, people associated with engineering, research or factory overhead since they all carry a higher cost risk category rating.

Make sense?  If not, give me a call.

We will be sharing other best practices on cost reductions as we all prepare to get back to “normal”-whatever that is!

We will keep you advised on our CFO Forum meeting schedule.   At this point, we are assuming that face to face meetings will NOT be held in May.  Zoom is a possibility-especially for the R&D tax credit meeting planned for Friday May 15.   I just reviewed the list of firms applying for the credit and a lot of you appear to be leaving an opportunity untapped.

NO CFO Forum session tomorrow.   Until we get face to face, we are going to reschedule our sessions.  Feedback from many of you was to continue face to face and not ZOOM if we don’t have to.  I guess we have come to value the discussions that we share in addition to the best practices from our speakers.

Remember, we have the following planned to address what you asked for:

Legal services alternatives that are best for your company

Preparing to sell your company – a panel discussion led by three CFOs who have been involved in a sale in the last year and what they learned!

Special meeting-understanding the changes in the R&D Tax Credit and sort of the last call to implement this great tax saving action!

Stay safe and I look forward to seeing each of you at our next session.   IN the meantime, we are posting our COVID comments on the CFO Solution website and sharing your best practices.

We have access to great webinars and many are archived.   Many thanks to Ami Kassar of Multifunding, Susan McDonald of CCI Consulting and the access to the Fox Rothschild webinars on the HR and IT impacts of COVID and all the good thoughts shared by all of you.

Hopefully those who applied for their PPP got their approval before Phase One funds ran out.

Ms Pelosi says Phase Two is close – I hate to count on her forecast!

There is a great webinar planned at 11 on Monday () by our partner and favorite speaker – Keith Campagna. He will spend 30 minutes piecing together conversations I have had these past few weeks with amazing thought leaders, CEOs, and a range of business leaders from across the globe.  Topics will include the death of work-life balance, organizational transformation basics, and time permitting, a sales methodology that is helping sales organizations grow revenue these next few quarters.

Click here and join me for a special LinkedIn Live session or Watch on Facebook or Watch on YouTube. For those finance leaders not able to join but interested in a one-on-one, they can contact me at keithcampagna@gmail.com or go to www.keithcampagna.com for more information.

For those looking for thoughts on working from home and the impacts on HR and IT, remember the access to the Fox Rothschild webinar that I offered a week ago.  From 1 to 2 on MWF.

For those looking for PPP and EIDL info, remember that Ami Kassar’s webinar are probably the best.

Finally, Eisner Ampner has offered us access to their daily PPP webinars.

I got  lots of thanks for the note (below) on healthcare a few days ago. Some of you thought it “Is too good to be true”. Remember we vet our best practices before we share them.

Please read below and share with those who would benefit from more affordable healthcare.

Two comments:
 1 – If you believe everything a broker, insurance salesman, Blue Cross or Aetna is telling you, I have a book you need to read! (and a horse to sell to you!)  Breaking through the Status Quo is the name of the book.   Written primarily for small and large company plans but the same facts pertain to all healthcare insurance (facts you will NOT read anywhere else).

2 –  Here are two real-life recent examples:
– Husband and wife, John and Carla, aged 58 and 55, were paying $1820 a month.   Replaced it with a better plan, same deductible and copays for $950 per month- a 50% reduction worth 10k a year.
– Husband and wife, Ed and Sue, aged 62 and 60, were paying $1975 and are now paying $1025 for the same coverage, etc.  $11k savings per year, almost a 50% reduction.
PS – These folks were not on COBRA plans. Compared to COBRA plans, their savings would have been greater.

Conclusions:

Not only for couples or folks over 55.  It can work for kids out of college, one person consulting firms, entrepreneurs starting a company, singles, families, or parents with kids.  It can also work for companies with 20 employees.   Worth talking to our SME partner-Patrick.   I am glad to introduce you.  His email address is above. Local Pa guy who can help.

This will work for over 90% of folks.   If you are hard to insure because of history or current medical conditions, then a group plan that gives you the ability to get insured is where you need to get your insurance (and probably cheaper if you are one of those unlucky folks with 25 to 50k of expenses per year).

These customized programs are available in most states however certain states where the insurance commissioner appears to work for the large carriers (NY, NJ for example). They may not be available for someone in that state but worth a look since there are some workarounds.

Another example of truth in healthcare.  Once you have the facts and understand how the money flows you can reduce costs without reducing quality.   We have solutions for individuals, small/ medium and large private companies AND we have best practices that can save corporations, cities, universities and some nonprofits millions per year.

In EVERY CASE, your broker will NEVER tell you what we can teach you (or you can read a lot of it in the book-Breaking Through the Status Quo-an Amazon best seller-on the topic.   I think the book is about ten bucks on amazon.

If not worth the ten bucks and your time, I will buy you lunch or a drink!   IF it is, you can buy me lunch or a drink.