A potential client needed audited financial statements that they could provide to their lender to obtain additional financing that would allow the company to expand its current operations.  The potential client needed the audit completed in a cost effective manner and in a short time frame.

KBA was engaged and completed the audit on time and within budget with little burden on the client's staff.  This was possible largely because our team is highly experienced and efficient and our audit partners are actively involved and available for every client.

The client was able to present the audited financial statements to the lender and obtain the much needed additional financing. This allowed the company to continue its growth and achieve its business goals.

A public company client had a division they thought could operate more efficiently if it were a separate public entity.  The management team was concerned that the entity’s current operating status would hinder the company’s ability to obtain additional funding for the division.  Additionally, the management team was frustrated with the drain the inefficient division represented and the concern it caused stockholders.  The company was working with a large international accounting firm.  In seeking advice they discovered that their company’s needs could not be met in a timely manner, nor could the company justify the fees while already facing financial constraints.

KBA was engaged and started by prioritizing action steps.  First, the company had filings that needed immediate completion.  Then, working closely with the SEC, the team assisted in obtaining SEC approval of the process for the spin off of the division in a significantly reduced timeline.

KBA’s high level of technical skill and service resolved the management team’s challenges, resulted in significant cost savings, an increased stock price for the spun off division, and enhanced additional funding opportunities.

KBA performed an audit for a privately held distribution company.  The company carried inventory of $25 million that was comprised of a large quantity of SKU numbers.  Each SKU number was comprised of many units of inventory.  During the audit, KBA noted a lack of inventory count procedures and certain related inventory control processes.

Management was alerted to the fact that this issue could significantly affect accuracy of year-end inventory amounts and gross margins.  The company was planning to get a line of credit for expansion into another state and was anxious to resolve the physical inventory procedures and controls in connection with obtaining the line of credit, and to develop appropriate inventory controls in the new location.  Our team developed and assisted in the implementation of inventory procedures as well as procedures for cycle counts. 

These procedures produced accurate inventory counts and a reduced number of discrepancies in reconciling to the inventory detail.  The client was pleased to have these new procedures in place and has continued to experience growth.

A publicly held, Dallas-based holding company was implementing a plan to grow through acquisitions.  The company had targeted a very large Chinese entity.  The company’s accounting team faced a myriad of complex issues with regard to the transaction and related accounting treatments.  KBA’s audit team was engaged to ensure that complex accounting matters were properly dealt with on a GAAP basis.

KBA utilized its depth of experience with the SEC to clearly determine the appropriate steps to be taken to complete the transaction.  The process involved a series of discussions with the SEC followed by close work with the client’s accounting team to complete the necessary process and to ensure that GAAP accounting principles were properly followed.

The client was able to complete the acquisition with the knowledge that the transaction and resulting financial statements were completed with accuracy and in accordance with generally accepted accounting principals.  The completion of this process resulted in a company with assets in excess of $100 million.

KBA was engaged by a mid sized manufacturing company that was burdened with high expenses, one of which was its large franchise tax liability.

KBA’s tax professionals reviewed the company’s tax and financial situation and determined that restructuring the S-corporation into a limited partnership for Texas purposes while retaining S status for Federal purposes would be beneficial.  To achieve results, KBA’s professionals restructured the S-corporation into a limited partnership, and prepared and filed the necessary franchise returns and supporting documents with both state and federal taxing authorities in compliance with regulations for the completion of an entity conversion.

KBA’s efforts for this client resulted in an annual savings to the client of more than $400,000.  This reduction of expenses resulted in tremendous profit enhancement.

A client was ready to sell his $20,000,000 business but was concerned both about the tax consequences and that he might be audited by the tax authorities.

Working with his attorney, KBA worked through issues related to the sales price to insure that the maximum amount was being obtained and to avoid seller’s remorse. 
Moving beyond the sales price, KBA analyzed all of the relevant federal and state income tax strategies.  This phase addressed multiple complex issues including: allocation of the sales price among the assets sold, timing the receipt of the sales price, insuring that any future payments are secured and will be received, providing for a continuing relationship with the buyer, and utilizing the most effective tax reduction strategies legally available.

The business owner successfully completed the sale of his company obtaining the most favorable tax outcome allowable.

A manufacturing and distribution company believed that the sales of their manufactured products in other states were sales of tangible personal property that were shipped by common carrier, and therefore were not subject to income and sales taxes in the other states.

KBA noted the sales in the process of preparing the company’s tax returns and notified the owners of the possibility of potential tax issues.  KBA was engaged to determine the taxability of our client in the multiple states involved, both for income and sales taxes.  After gathering all facts and researching the specific statutes in each state, it was determined that our client was actually performing construction contracts in these multiple states through the use of subcontractors.    Since the subcontractors’ activities were attributable to our client, it was determined that they were in fact doing business in approximately 35 states.

As a result of our attention to detail in discovering the oversight, we were able to determine the true nature of our client’s tax liability.  While clearly, the client would have preferred for the law to be such that their previous treatment was in compliance, the company primarily desired to be in a position to continue to grow and achieve its goals.  Had the individual states discovered these issues, the company could have faced severe penalties and interest charges that could have been detrimental to the company.  By discovering and addressing the problem in a straightforward manner, the client, in partnership with KBA, was able to negotiate the settlement of the tax liabilities and come into compliance with a minimal cash outlay.

As a part of understanding the business of a client involved in the sales and distribution of a proprietary software package, KBA recognized a tax savings minimization opportunity. Because the company had developed the software, they were likely eligible for tax savings through the expanded Research and Development tax credit passed in 2004 and expanded in 2006.

KBA introduced the client to a firm specializing in the R&D Tax Credit to perform a study. The study identified and documented the company’s software development activities and expenses and led the way to reduce taxes over a multi-year period.

KBA amended the company’s prior year tax returns to take advantage of the R&D Tax Credit. The tax refund was in the range of $200,000. The client will continue to reap the tax benefits over the next several years as it incurs R & D expenditures.

A Dallas-based private equity firm came to KBA with a signed letter of intent to purchase a middle-market manufacturer of industrial supply goods, and was in need of a partner to conduct financial due diligence. KBA was retained to provide both a technical and business operations review to support the financing of the transaction.

KBA assembled a responsive team of professionals to not only conduct traditional due diligence, but also to provide tax planning advice, a comprehensive business review and risk analysis of the intended transaction.

The private equity firm was able to raise over $60 million from capital partners. KBA identified a number of weaknesses in the transaction that ultimately positioned our client to negotiate favorable terms for the transaction with the seller and assisted in the successful completion of the transaction.

A publicly held, national manufacturing company was performing a SOX implementation; however, due to the recent turnover in executive management lacked the experience and knowledge to complete the project.

A risk assessment approach was utilized to determine the appropriate steps to be taken to complete the implementation.  In-house training was developed for the CFO and company controllers on the Sarbanes-Oxley methodology; including process flow / program development, exception monitoring, and report development.

As a result, the implementation was completed ahead of schedule, which directly resulted in the manufacturing company’s timely compliance with Sarbanes-Oxley Section 404.

A national financial services company needed help with the formation of its internal audit department.  The internal audit function had been outsourced in previous years; however, the end results were not satisfactory. The challenge to was build the internal audit department and establish effective lines of communication with executive management and the audit committee.

Through diligent work, an internal audit department was created, which included the following:

• Evaluating manning issues
• Hiring audit professionals
• Selecting audit tools and applications
• Developing high-level risk assessments and models
• Developing audit plans and formalizing budget requirements

As a result, the internal audit department was up and operating three months prior to the initial time-frame requested by executive management, which allowed them to effectively risk assess and plan audits for the next calendar year.

A manufacturing and distribution company believed that their profit for certain periods should have been greater based on their current volume and budgeted information.  They thought the problem might be related to certain policies and procedures for disbursements and accounts payable.

KBA was engaged to determine the source of the problem and recommend a solution.  Review of vendor invoices for goods and services revealed that invoices were being recorded inaccurately and in an untimely manner.  It was also discovered that vendor statements were not being properly reconciled to the company's internal records.  This had resulted in over payment of invoices to vendors.  Without correction, the situation had the potential to slowly drain cash from the company.  KBA designed and implemented, with the accounting department, an effective accounts payable disbursement process and developed appropriate policies, procedures and control measures.

As a result the client has informed us that the accounts payable department is now functioning very efficiently and they are confident that the record keeping process is accurate.  Profits are now aligned with budgets and the company has assurance that its cash is now being spent for actual expense amounts and goods purchased.

A family owned business needed to resolve issues surrounding the transition of ownership and management from father to son. This benchmark in the life of a family business can be the pivotal moment of either success or failure of both the business and the relationship.

Father and son met with KBA’s professionals and addressed their financial, tax, succession, and estate planning issues.  The son decided to arrange quarterly meetings with KBA to review the company’s financial reports and increase his knowledge of the company’s financial status in order to better maintain the company’s bottom line. Additionally, he requested KBA’s involvement to make sure the company’s financial statements are current, correct and strong in order to be in top financial condition should the company seek new lines of credit.  KBA also assisted the father and son design and implement the business succession transaction, working through the ownership issues and taking into account both personal and business financial issues related to the transaction.

The client said, “I want to express my appreciation for the plan you put together for our company.  It looks like the best possible scenario and I trust that much of your motivation comes from your experience with family businesses and dealing with the emotional and personal ramifications.  It appears the plan is not only well laid out for financial, tax and estate planning, but is also set up to help prevent future personal issues in our family.  I am very thankful we got in touch with someone of your expertise to do this.  I can’t imagine trying to do it any other way.”

A KBA client was interested in engaging KBA to review their sales tax expenditures to determine if they had mistakenly overpaid sales tax on purchases from their suppliers.  Like many clients, they had assumed that their vendors were correctly charging sales tax to them..  Because sales tax rules are complex, differing by industry and jurisdiction, special knowledge and expertise is required to ensure there are no overpayments.

KBA conducted a thorough review of the client’s tax expenditures for the past four years to verify if the client  was taking advantage of all the exemptions available to them.  With minimal assistance from the client, KBA was able to schedule the client’s overpayments and submit these to the State of Texas for refund.

The client received a $160,000 sales tax refund. KBA communicated the reasons for the overpayments to the client so that they could implement procedures to reduce future overpayments.