Hands-On Accounting Firm Focuses on DealersBy Mary Sedor
Article Date: 08-01-2008
Copyright(C) 2008 Associated Equipment Distributors. All Rights Reserved.
Taxes, valuations, depreciations and more - BDO Seidman can address the full gamut of dealer-related financial needs.
Whether you require an explanation of the depreciation bonus or need help determining how to depreciate your rent-to-sell assets, BDO Seidman is a professional services firm that equipment dealers can turn to for assistance. For almost 100 years, BDO Seidman has been providing assurance, tax, financial advisory and consulting services to a range of public and private companies. BDO Seidman was founded in 1910 by Maximillian L. Seidman, as Seidman and Seidman in New York City. In 1913, the 16th amendment of the Constitution allowed income tax to be levied on individual Americans for the first time. Seidman quickly recognized the accountant’s role in providing comprehensive tax planning to individuals. By 1917, Congress enacted the first revenue bills, and U.S. entry into World War I created the need for corporate income and excess profit taxes. At the same time, federal spending rose to $18.9 billion – with 58 percent of the federal revenues provided from income taxes. Seidman and his siblings, who joined him in his new accounting firm, seized the opportunity to provide comprehensive tax planning not only to individuals but now also to businesses.Over the years the firm grew and by the 1960s, BDO Seidman was a truly national firm. In 1963, the firm joined other accounting firms from Canada, the United Kingdom, the Netherlands and Germany into a movement to create an international organization under the name of Binder Seidman International Group (BSIG), the predecessor to BDO International. The international organization has since expanded into today’s BDO International, the world’s fifth largest international accounting and consulting network, with 626 Member Firm offices in 110 countries. BDO Seidman, the U.S. member firm of BDO International has 35 offices and more than 300 independent alliance locations nationwide. An In-Depth Understanding of Dealers
Through all its growth, BDO Seidman has remained true to its roots and has prided itself on values such as competence, honesty, integrity, professionalism, responsibility, accountability and dedication – values that have been critical to the company’s continued growth and success. “Although BDO is a national firm, the company still has a hands-on approach to doing business,” said Garry Bartecki, director of distributor services for BDO Seidman’s Chicago office as well as AED’s vice president of finance. BDO Seidman’s niche dealership group provides services to automobile dealers, construction equipment dealers, industrial equipment dealers, equipment rental companies, as well as marine and RV dealers. In addition to traditional audit, accounting and tax services, BDO and BDO Alliance members have worked on ownership transition, dealer valuations, due diligence reports, financing projects, dealer consolidation, as well as audits, reviews, compilations, tax planning and tax compliance services.Through the company’s National Tax Office, BDO is also on the leading edge of tax legislation that may have an effect on AED members. BDO has worked on many tax projects in which the company’s personnel collaborated with AED on tax issues. For example, over the years the IRS has proposed changes or initiated discussion on LIFO, depreciation methods and investment and other tax credits. These areas are analyzed by BDO specialists and discussed with AED, which often results in explanatory white papers and tax comment letters that are prepared to respond to these discussions or proposals.“There aren’t a lot of companies that know the construction equipment industry like we do,” said Bartecki. “There isn’t a tax issue, accounting issue or operational issue that we’re not going to be able to address. We’re proactive on the accounting side with changes and how to handle those situations, and we’re also proactive on the tax side. We work to deal with IRS issues, as well as address any new tax laws or changes in tax laws that would be detrimental to dealers.”In an effort to further expand their knowledge about the issues facing dealers, BDO created a Dealer Industry Group (DIG) comprised of approximately 190 firms with 260 offices in the U.S. While BDO’s alliance members have access to BDO’s technical and consulting expertise and work with BDO clients located in their region, BDO gains the ability to consult on technical and audit issues and assists these alliance members with foreign services and those requiring SEC input. To expand the collective knowledge of the group, DIG members communicate via webinars and conference calls, an annual meeting and a two-day conference. This collective knowledge is available to any BDO/Alliance member or their individual client. “It’s a way to share information and prevent reinventing the wheel,” said Bartecki. “Anyone who has a question can run it by the group and get cost effective answers.” Working with AED Members
BDO has a long association with equipment distributors, and is able to provide AED members with thoughtful industry knowledge and insight.“Few national or international accounting firms have the same focus that BDO does regarding the equipment distributor industry,” said Howard Blumstein, CPA and partner with BDO Seidman.One area in which BDO works with AED members is in determining the valuation of AED member businesses.“These valuations are critical to AED members so they can understand their net worth, plan for company sales and estate and gift planning. BDO is one of the few national firms that understands the unique nature of distributor businesses and is therefore able to provide a meaningful and appropriate valuation for the purpose requested,” said Blumstein. In addition, BDO employees attend AED functions, and BDO often supports AED events through sponsorships, including the CFO Conference that was held in April and is repeated again in September.
“Quite naturally, it is important for BDO employees at many different experience levels to work with AED and attend conferences and workshops,” said Blumstein. “This participation allows us to share information with members and learn of new ideas affecting the industry. As to sponsoring events such as the CFO Conference right here in Chicago, we are honored to work with the members as well as other practitioners to share critical information in the accounting and tax areas that impact this industry. I personally have been afforded the opportunity to lead some of these discussions and I find it very rewarding.” Bartecki says the CFO Conference was started to provide CFOs with a space to share thoughts. “It seems the CEOs get out and the management teams do, but there wasn’t ever anything from the financial standpoint,” said Bartecki. “The construction equipment industry is a unique industry from an accounting and cash flow standpoint, so the more CFOs can talk together, the better they will be able to do their jobs.” Future Issues
The biggest area for growth moving forward for BDO is in the company’s alliance network of firms. Currently the company has over 150 accounting firm alliances in their network, many of which are involved with dealers. “As this group matures and works more effectively under the DIG initiative, we expect the Accounting Firm alliances to be even more successful in serving the industry,” said Blumstein. “In addition, we have Alliance relationships outside of accounting firms through our Business Resource Network (BRN). The BRN was established several years ago to provide assistance to our clients beyond accounting firm matters, such as business operations and profitability, systems consulting and even assistance with sales and marketing. The BRN now has over 60 participating companies able to provide a wide variety of solutions to complex issues.”BDO will also continue to be on the cutting edge of the issues that most directly affect equipment dealers. “We’re looking to do more work with AED and its members,” said Bartecki. “We’re going to continue to stay on top of valuations, tax and operational issues, seek sources for funding ownership transition, and we will continue to create a new menu of services to reduce expenses for equipment dealers across the board.”
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