Improving Your Bottom Line!

Tallahassee MatchMaker ConferenceMay 2012

Gregg Patterson

Where’s your Money!

4 Point Plan

1. Finding Your Money! - Tips for Positive Cash Flow

2. Keeping Your Money! – Tips for Saving Money

3. Keeping Track of Your Money! - Keeping Good Records

4. Making a plan to make it happen!

Here Is Your Money

Two major elements in the business cycle that absorb cash –

1. Inventory (stocks and work-in-progress)

2. Receivables (debtors owing you money).

Finding Your MoneyTips for Positive Cash Flow

Accounts Receivable – it is your cash that is sitting in your customers bank account. Tips for quicker collection.

1. Immediate billings for your goods or services2. Design of the invoice – Due Date3. Relationship - Develop a positive relationship with customer and

A/P personnel. Always call, thank and communicate.4. If past due; regular communications5. Consider accepting Credit or Debit Cards.

Remember – profits are generated from Paid Sales

Finding Your MoneyTips for Positive Cash Flow

Inventory – it is your cash sitting in your stockroom.

1. Know stock turns for each SKU2. JIT - Just in time Inventory3. Outsource - buy from 3rd party4. 20/80 Rule5. Review your security procedures so inventory is

not walking out the back door.

The longer an item is in stock the lower its value

Finding Your MoneyTips for Positive Cash Flow

Insurance – First you need to know the basics1. Property 2. Liability3. Workers Compensation4. Directors and Officers5. Errors and Omissions6. Health Insurance7. EPL/Product Liability

Tips to save Money8. Buy for Catastrophic Loss only9. High Deductibles10.Shop or get 3 quotes every 2 – 3 years11.Compare apples with apples.

Keeping Your Money! Tips for Saving Money

Other Cost Savings Considerations

1. Technology

2. Rents/Fixed Costs – A fancy office does not necessarily make you more money.

3. TelephoneCell PhonesLand LinesYellow Pages

4. Pinch Pennies

Keeping Your Money! Tips for Saving Money

Good records will save you money and can improve your cash flow.

Keeping good records is a good investment 1. Software programs are inexpensive2. Hire a part time retired accountant or

student

Keep Good Records

Good records will save you money and can improve your cash flow.

Keep Good Records

Advantages1. Taxes – Documentation – save on taxes2. Scorecard

For management of your company Bankers Customers and Vendors

3. Internal controls – protection of your assets4. Real time financial information –

Dashboards.

Develop a plan that includes these tips 1. Set a goal

A. SimpleB. Or Strategic PlanC. Include a budget

2. Revise or revisit your goals on a regular basis

3. Make certain your goals adapt to an ever changing environment.

4. Measure your results.

Make a Plan

4 Point Plan

1. Finding Your Money! - Tips for Positive Cash Flow

2. Keeping Your Money! – Tips for Saving Money

3. Keeping Track of Your Money! - Keeping Good Records

4. Making a plan to make it happen!

Action Plan If You Incorporate this

You Can Change Your Business Management

Motto From

“Where” is your Money to

“Here” is My Money

Improving Your Bottom Line!

Tallahassee MatchMaker ConferenceMay 2012

Paul Grzebielucha

Show me the money!

Get going in the “Right Direction”

Getting Focused- Process to get results!

Eliminating Waste

Pricing to WIN!

What’s it feel and look like?

Agenda:

Decision◦ Not Always “your direction”- NO EGO◦ Not Always Comfortable◦ It Takes Research & Analysis-WORK to figure this

out!

Must be good for:◦ Customers◦ You & your team◦ Business- Does it make money?◦ Sustainable Competitive Advantage

Get going in the “Right Direction”

Continuous Process of Improvement- Culture

Vision…………. Where you want to go? Current State ……… Identify Gap! Projects & Process to Close Gap….. Focus! Measure where you’ve been and are….

Targets! Review Process…. Formal… how are we

doing? Celebrate!!!! Identify the next Continuous Improvement!

Getting Focused- Process to get results!

Waste comes in many forms!

◦ Mostly defined by what your customer is NOT willing to pay for…….

◦ Inventory Paperwork◦ Inefficiencies Extra People ◦ Product extras Computer Systems◦ Extra Steps Building◦ Time Wasted movement◦ …. AND …..More!!!!!

Eliminating Waste

Many are Scared!... Say it can’t be done!

But…. There are many ways to raise a price!

◦ General Market ◦ Differentiation via Product or Service◦ Finding Solutions to Customers Problems◦ Technical Advances◦ New & Improved Products◦ Target Growth Areas…

Customers you make the most money on!!! Separate those who “have to buy” vs. “want to

buy” Differentiation of Customers

Pricing to WIN!

CANNOT SKIP THIS STEP!... ◦ Sometime we are uncomfortable with this!

A Winning Culture!!!◦ Having Fun at being “The Best!”

Challenging & Open Environment

Constructive Conflict…. Right isn’t important- effective is!

Accountable Team Environment….

What’s it feel and look like?

Accountability ChartWhere are you?

Make I t Happen

Find Solutions

Take Ownership

Acknowledge Reality

Wait & Hope - Maybe

“I Can’t Excuses”

Blame Others

Unaware Paul G

Check List for Being an excellent Team Member!

Creates “Wow” Experiences to set them apart- customers and inside company You need to be passionate about Customer Service and Culture You & the company invest in your personnel and professional development You embrace fun as a part of our culture- “having fun while being the best!” You embrace doing “more with less” in all you do You are humble and open that “you don’t know it all and need help!!!!” You value very open and honest information flow and relationship building You believe in …. Servant Leadership You understand the need to take ownership, when you see something that

needs to be done- you have a DO IT! Approach You help create harmony and remove cynicism and negative interactions. You

consider yourself more than just a team member – but part of “a family”- you look out for other family members

As a team member ….you are inspired because you believe in what you are doing- or you leave the team

You don't take “no” or “that’ll never work” as an answer You believe that having a positive and optimistic (yet realistic) attitude about

everything you do You believe in collaborative relationships and seek them out! You accept that change is a part of Culture- and

that “there is always room to improve everything we do!”

Remember: You can make a decision today to move in

the right direction so you-

“Show me you the money!”

There are many ways to get to the destination- “Enjoy the journey!”

Thank you for your time!

Summary:

Improve and Maintain Your Bottom Line While Managing

State and Local Taxes

23

3 Key Concepts

1) Know the sales tax exemptions and credits your business may be eligible to receive;

2) Be prepared if you are selected for a sales tax compliance audit by the Florida Department of Revenue; and

3) Know your options in the event you are issued a tax assessment or alternatively denied issuance of a refund claim you have filed.

24

Chapter 212, F.S., governs Florida’s sales and use tax laws. Tax exemptions are generally located within s. 212.08, F.S. of Chapter 212.

If the state’s sales tax does not apply, any local surtax otherwise applicable will likewise not apply.

Sales Tax Exemptions

25

New and Expanding Businesses (212.08(5)(b), F.S.)

Research and Development (materials – 212.052) and machinery and equipment – 212.08(18)

Pollution Control (212.051, F.S.)

Purchases of Electricity or Steam (212.008(7)(ff), F.S.) SIC driven.

Repair and Labor Charges (212.08(7)(xx), F.S. SIC driven.

Enterprise Zone Job Credits, Refunds and Exemptions. Various statutes within Chapter 212 and Chapter 220, F.S.

Some Frequently Claimed Exemptions and Credits

26

New and Expanding Businesses – Exempts purchases of M&E that is at least 3 year depreciable and used to produce TPP for sale at a fixed location. Exemption is obtained through the required filing of an application (Application for Temporary Tax Exemption Permit, Form DR-1214). It requires a 10% increase in productive output if the business is expanding. The increase can be measured based on overall facility output or a specific product line. Effective January 1, 2013, the required increase is reduced to 5%.

Overview of Exemptions

27

Research and Development – Two exemptions are available for purposes of R&D. An exemption on purchases of materials for sole use in R&D and the other for machinery and equipment used predominantly in R&D.

Pollution Control – Exempts purchases required as a condition of a permit issued by DEP or a law administered by DEP. Pollution must result from the actions of the business when it produce TPP for sale at a fixed location. Also applies to privately owned/operated landfills and construction and demolition debris disposal facilities who do not produce a product.

Overview cont’d……

28

Purchases of Electricity or Steam – Allows a 50% to 100% exemption from sales tax on purchases of electricity or steam to operate M&E used to produce TPP for sale or prepare it for shipment. Exemption is limited to businesses classified under certain Standard Industry Classification (SIC) Major Group Numbers.

Repair and Labor Charges – Exempts sales tax on purchases of labor and repair parts for industrial machinery that is used to produce TPP for sale or prepare it for shipment. Exemption limited to businesses classified under certain SIC Industry Major Group Numbers.

Overview cont’d……

29

Florida’s Enterprise Zone Program offers financial incentives to businesses located in designated areas in urban and rural communities. These zones are areas targeted for economic revitalization.

There are 62 Enterprise Zones in Florida.

The incentives are offered to all types of businesses to encourage private investment in the zones as a means to rehabilitate real property in the zone as well as provide employment opportunities for persons residing in the area.

Enterprise Zones

30

Enterprise Zone Jobs Tax Credit (Sales and Use Tax or Corporate Income Tax);

Enterprise Zone Property Tax Credit (Corporate Income Tax);

Sales tax refund for purchases of building materials used in

rehabilitation of real property;certain business property (office and warehouse equipment and some

industrial machinery); Sales tax exemption for electrical energy; Community Contribution Tax Credit

Program. (Corporate Income Tax or Sales Tax Refund)

Enterprise Zone Financial Incentives

31

Each enterprise zone has a zone coordinator who is responsible for the administration of that zone.

This person can provide the location (and map) of the designated area, required forms, as well as any assistance that a business may need in completing forms.

The Florida Enterprise Zone Web Portal is also a comprehensive source of information and it also includes enterprise zone maps and required forms. It is available at: www.floridaenterprisezones.com

Enterprise Zone Guidance

32

Disallowed Exempt sales Resale, Consumer Certificates, and PermitsExport Non-resident Dealer

Deficiencies in Discretionary Sales Surtax CollectionsWrong county surtax rate applied

Untaxed Rental or License to Use Real PropertyGranting related entity or 3rd party right to use real

propertyPayment of Ad Valorem Property Tax as condition of rentalTax not separately stated on rental agreement

Discrepancy Between Federal Returns & State Sales Tax Returns

Inability to Demonstrate Tax Paid or an Exemption Applies

Internet purchasesExpensed purchasesFixed assets

Common Audit Issues

33

You have the right to file a written protest for an informal independent review within the Department of Revenue or for formal review outside the Department. The latter is the filing for a Chapter 120 administrative hearing or judicially within circuit or appellate court.

A written protest can be filed if you disagree with any portion of or issue within the assessment, However, you must exercise your protest rights within the allotted time from the date of issuance of the Department’s Notice of Proposed Assessment. (Within 60 days for informal protests, 120 days for formal protests).

What are Your Options if Your Business is Issued an Assessment or Denied a Refund

34

• Protested audit assessments, and denied refund claims, are forwarded to Technical Assistance and Dispute Resolution for review.

• TADR will act as an impartial body and provide a thorough review of any disputed matters comprising the assessment or denied refund claim.

• Following intake of the protest, it is assigned to a tax conferee. TADR conferees include attorneys, CPAs, and former tax auditors.

• You will be afforded the opportunity to submit additional docs and have a protest conference.

• Once review is complete, any warranted adjustment(s) will be made by TADR.

• Stipulated payment plans are an option for a determined liabilities.

I Filed an Informal Protest, What Now?

35

Taxpayer Services: Florida Department of RevenueTaxpayer Services5050 W Tennessee St., Mail Stop 3-2000Tallahassee, FL 32399-012(800) 352-3671

Technical Assistance & Dispute Resolution:

Florida Department of RevenueTechnical Assistance & Dispute Resolution P. O. Box 7443Tallahassee, Fl. 32314(850) 617-8346

How To Get information on Exemptions Credits and Other Tax Questions?

36