The CPA Desk

A Thought Leader Production by PKFTexas

Sales Forecasting for Your Business Plan

Hi, my name is Byron Hebert and this is another quick tool time update brought to you by the Entrepreneur’s Playbook and your friends at PKF Texas. This time of year a good thing to be doing is getting your budgets together for your organization for the upcoming year, getting a sales forecast in place, maybe having a workshop with your key management team to make sure that you’re all on the same page and the company’s moving the right direction. As simple as this seems to be I get a lot of push back from my clients sometimes about putting together budgets and forecasts and the argument is that there’s too many scenarios in play that could affect that budget. So to them I say, “Well let’s put a scenario planning process in place.”

So that’s what I’ve done here. Let’s assume that this company’s very heavily dependent on the price of crude, the success of their company. Maybe they’ve experienced some turnover in their organization in the last several years. So we put that on an axis like this and for each one of these quadrants we think about, “What would our strategy be if either one of these happen?” So let’s assume that our turnover goes down and the price of crude goes up. So we’ve got good people and the price of crude goes up. We want to have a growth strategy. We want to take advantage of that, that we’ve got good people in place and the price of crude has gone up.

So let’s assume over here that our turnover has gone up. We’ve lost some people but the price of crude is going up and we want to take advantage of that. We need to have an H.R. strategy to get people in place, get them assimilated into the organization and get them trained. Down here let’s assume turnover’s gone up but the price of crude has gone down. So here we want to get rid of our waste. We have a waste reduction program in the mine shop tools. We want to go through that program and make sure that we’ve eliminated waste.

Let’s say turnover goes down. We’ve got good people but the price of crude has gone down as well. Again, we want to become efficient. We want to get a waste program in place. We want to become very efficient and maybe technology added so we can become very streamlined in our processes. Again, this is Byron Hebert. This is a quick tool time update brought to you by the Entrepreneur’s Playbook and your friends at PKF Texas.

Strategic Planning Using Sustainable Competitive Advantage

Does your company have a sustainable competitive advantage? It should! Byron Hebert, director of Entrepreneurial Advisory Services at PKF Texas, offers another Tool Time Update.

Hi, my name is Byron Hebert, and this is another quick Tool Time update by PKF Entrepreneur Playbook. What I want to talk to you today about is the sustainable competitive advantage and strategic planning.

A lot of people talk about strategic planning but they really don’t know where to start. Where you start is with your sustainable competitive advantage. What is that one thing about your company that separates you from your competition? That’s what you want to focus on. That will drive your marketing; the promise that you’re going to make to the marketplace about what your company can do.

That, in turn, will drive your operations so that you can deliver on the promise you’ve made to the marketplace. Now what drives that? That’s driven by your people, your innovation, and money.

Let me give you an example right here in town. Mattress Mack, a great entrepreneur. His sustainable competitive advantage is if you buy today he delivers tonight. Well, that is his marketing. That is the promise he makes. Everybody’s heard that. His operations have to support that. You go to his business, you buy a mattress today, he’s going to deliver it that very day. I assure you he will do that. So as soon as that purchase goes in, someone is loading that on a truck and trying to figure out the logistics of how to get to that to you by the end of the day.

So think about that, how that, that will operate in your business. Use your sustainable competitive advantage to drive your marketing, your operations, and then people, innovation, and money to drive your operations as well.

All right? Thank you. This is Byron Hebert. This has been another quick Tool Time update brought to you by PKF Texas Entrepreneur Playbook. If you’d like to learn more about the Mind Shop Tools and how we can help you in your business, please call PKF Texas.

PKF Texas Hosts Dean Latha Ramchand from University of Houston, College of Business

Dean Ramchand stressed the importance of remaining innovative, engaging and impacting to the business students. She believes the community and those around business students should engage with them. She stated this can be done by providing students with internship and job opportunities.

PKF Texas has a strong alliance with University of Houston. We often recruit team members from University of Houston and Kenneth Guidry, our President is a University of Houston alumni. Kenneth also serves on the Bauer College Board.

PKF Texas is also the official accounting firm for the Cougar 100, the 100 fastest growing University of Houston alumni led or owned companies. Nominations are open until August 30th. Click here for nomination criteria and to nominate your company. Cougar 100 will be announced in Houston Business Journal on October 30, 2015.

Brian Baumler Discusses 13th Annual Houston CPA Society Energy Conference

Russ: Hi, I’m Russ Capper with The BusinessMakers Show and we’re here to talk about the 13th Annual Houston CPA Society Energy Conference and I’m here with Brian Baumler, Audit Director and head of the Energy Practice at PKF Texas and also Chairman of the conference; Brian, welcome.

Brian: Thank you Russ, appreciate it very much.

Russ: You bet, and I’m also here with David Butler, Manager of the Energy Valuations at HSSK and Vice Chairman of the conference; David, good to see you too.

David: Good to be here Russ.

Russ: Okay, tell us what the conference is all about.

Brian: Really appreciate that Russ. Well it’s the 13th annual conference, I’m very excited about it. It’s in the rows of coming together and being organized. It’s really intended to be an opportunity for putting the industry together but also to talk about trends and techniques and where things are going in the industry in both the upstream, midstream, and downstream space. It’s also intended to bring together a lot of thought provoking thought leaders in the organizations of which they represent to talk about what’s going on in the industry.

Russ: Okay, so who should attend and why should they attend?

David: Well I think if you’re involved in the energy space and accounting, finance, investment banking, operations this probably will be a good conference for you. You know one of the things that we pride ourselves on is that this is a conference for grownups; we’re not going to tell you that everything’s going to be okay. We’re not going to give you a crystal ball with rosy predictions, we’re going to tell you where things are; we’re going to tell you how companies in the entire energy spectrum space are adjusting. And hopefully people will walk away with some ideas they can take back to their organizations on a daily basis.

Russ: Okay, when is it and where is it?

Brian: Well it’s actually going to be on August 25th, 2015 it’s held at the Norris Conference Center. We’ve had it there now for the last 3 years, it’s a great venue; it holds about 350, almost 400 people. Comes with 9 ½ hours of CPE which is great for the accountants that’ll be attending and also you’re going to get an opportunity to mix and mingle with your peers and also professionals in the industry.

Russ: Okay, that’s Norris Conference Center, out at City Centre, right?

Brian: Yes it is.

Russ: Okay and how do you register?

Brian: Well I think you can register by a couple of ways; one, you can go to the Houston chapter’s website at and you can register online. Or you can download and print the form and you can mail that in. Registration fees are $250.00 for members of the chapter, $300.00 for non-members; really anyone and attend. Also we’re providing some group discounts in case you want to send a small group of 4 or more from you organization.

Russ: Okay, really cool. That’s August what?

Brian: August 25th, 2015.

Russ: August 25th, all right, the 13th annual Houston CPA Society Energy Conference.

Tax impact of the Supreme Court’s same-sex marriage decision

Tax impact of the Supreme Court’s same-sex marriage decision On June 26, the U.S. Supreme Court ruled that same-sex couples have a constitutional right to marry, making same-sex marriage legal in all 50 states. For federal tax purposes, same-sex married couples were already considered married, under the Court’s 2013 decision in United States v. Windsor and subsequent IRS guidance — even if their state of residence didn’t recognize their marriage.

From a tax planning perspective, the latest ruling means that, in states where same-sex marriage hadn’t been recognized, same-sex married couples no longer will need to deal with the complications of being treated as married for federal tax purposes but not married for state tax purposes. So their tax and estate planning will be simplified and they can take advantage of state-level tax benefits for married couples. But in some cases, these couples will also be subject to some tax burdens, such as the “marriage penalty.”

Same-sex married couples should review their tax planning strategies and estate plans to determine what new opportunities may be available to them and whether there are any new burdens they should plan for. Employers will need to keep a close eye on how these developments will affect their tax obligations in relation to employees who have same-sex spouses. Please contact us if you have questions.

Learning More About Joint Venture Strategic Advisors (JVSA) Part II


Russ: This is the PKF Texas Entrepreneur’s Handbook. I’m Russ Capper, this week’s guest host. I’m here once again with Kenneth Guidry, President of PKF Texas; welcome back to the Playbook Kenneth.

Kenneth: Always good to be here Russ.

Russ: You bet. So last time I was here I heard stories about this a couple of times, real exciting, the new JVSA which stands for what?

Kenneth: Joint Venture Strategic Advisors.

Russ: Okay, but weren’t you doing joint venture advising and auditing before this?

Kenneth: Yeah, we’ve had a long history of service to the energy industry and this service has a long standing history in that industry in particular. We’ve seen an increase in the opportunities that are coming our way, hearing about the level of activity – the level of investment in the drilling and exploration programs that we started to see more opportunities come our way. JVSA was really purposefully founded by ourselves, by Catalyst, our PKF North America affiliate firm in Calgary in the principles of JVMI that has a 20 year history of targeted services for this purpose, joint venture, auditing joint venture management; really an opportunity for us to add some great talent to our mix and approach the market in a much more targeted way.

Russ: Cool, I guess you sort of have your foot in Calgary too, I mean that was probably happening anyway.

Kenneth: We’ve got a great relationship, again a long standing history through our PKF International relationship to service cross border operations; the opportunity to work reference from Calgary is bringing together two of the premier energy markets in North America.

Russ: Great. To learn more about JVSA visit This has been another Thought Leader production brought to you by PKF Texas Entrepreneur’s Playbook.

Joint Venture Strategic Advisors (JVSA) Launched by PKF Texas and Catalyst


Russ: This is the PKF Texas Entrepreneur’s Playbook. I’m Russ Capper, this week’s guest host, and I’m here with Kenneth Guidry, President of PKF Texas. Kenneth, welcome to your playbook.

Kenneth: Good to be here Russ.

Russ: You bet. So I recently had the opportunity to interview you for The BusinessMakers Show and we talked about JVSA; tell us about that, what is JVSA?

Kenneth: Well JVSA stands for Joint Venture Strategic Advisors and it is a newly formed entity, collaboration and affiliation with our PKF North America affiliated firm located in Calgary – the firm’s name is Catalyst – along with one of their long-standing relationships – JBMI – and its principals and specialists, focused don services to the energy industry, specifically around joint venture auditing and management.

Russ: Oh, wow, okay so that’s probably a hot item these days I would assume.

Kenneth: There’s been an unprecedented amount of spending in drilling programs over the last several years. That’s been the target of this entity – of the historical services of JBMI – we intend to continue that tradition with this team of specialists and experts but also expand on that to other industries. Kind of agnostic in that respect as long as they have multiple parties to an agreement around a joint venture relationship that it is an opportunity for us.

Russ: Okay, really cool; appreciate you sharing that with us.

Kenneth: My pleasure, thank you.

Russ: You bet, you bet. And to learn more about the JVSA visit This has been another Thought Leader Production brought to you by PKF Texas Entrepreneur’s Playbook.

Opening the “back door” to a Roth IRA

A potential downside of tax-deferred saving through a traditional retirement plan is that you’ll have to pay taxes when you make withdrawals at retirement. Roth plans, on the other hand, allow tax-free distributions; the tradeoff is that contributions to these plans don’t reduce your current-year taxable income.

Unfortunately, modified adjusted gross income (MAGI)-based phaseouts may reduce or eliminate your ability to contribute:

  • For married taxpayers filing jointly, the 2015 phaseout range is $183,000–$193,000.
  • For single and head-of-household taxpayers, the 2015 phaseout range is $116,000–$131,000.

You can make a partial contribution if your MAGI falls within the applicable range, but no contribution if it exceeds the top of the range.

If the income-based phaseout prevents you from making Roth IRA contributions and you don’t already have a traditional IRA, a “back door” IRA might be right for you. How does it work? You set up a traditional account and make a nondeductible contribution to it. You then wait until the transaction clears and convert the traditional account to a Roth account. The only tax due will be on any growth in the account between the time you made the contribution and the date of conversion.

Detecting Risk Areas In Your Business Processess

Byron: Hi, my name is Byron Hebert, and this is a quick Tool Time Update brought to you by PKF Texas and The Entrepreneur’s Playbook. What I want to talk to you today about is FMEA, Failure Mode Effect Analysis. And the purpose of this tool is to help you detect risk areas in your processes in your business, and then maybe if you can detect where the risk areas are you can do something to reduce those risks. So let’s talk about how we would use this tool.

Say, in a sales process you’re going to change your sales process, and what are some of the ways that you could fail in that? Look at what could go wrong. We’re looking at the downside. So maybe we lose customers. They’ll be several of them. You would want to write down all of them, all of them you can think of. What would the effect of that be? Well, sales down. Potentially, sales down unless you lose the right kind of customers that are not good margin customers, and that’s maybe what you want to do.

So in this we want to say what’s the severity of that? Well, let’s just say, for instance, that we’ve got some large customers. If we lose those large customers, the severity could be pretty high. It could be an eight out of ten. The occurrence of that, maybe the occurrence isn’t so much so we’ll give that a five. And would we be able to detect that? Well, the detection on that, we weight that. If it’s easy to detect, we’re going to give it a low number. If it’s hard to detect something, we would give it a higher number. We would probably easily detect that. So we’ll give that, say, a three.

So then we want to multiply these across, give you your RPN number, which is your Risk Priority Number. Okay? So eight times five is 40 times three would be 120. Anything over a hundred, I’m concerned about. I want to get that risk factor down to a hundred. So what could we do?

If they’re an eight, we want to get that maybe to a six. How could we do that? Well, if we’ve got one large customer, we probably want to diversify. Maybe we could get a contract in place with that large customer to secure our position with them for the next few years. So we start thinking of some ideas, some things that we could do to get this severity down.

The occurrence? Well, maybe if we’re working with several departments within that large organization the effect of that occurrence would go down. Get some ideas how we could reduce the occurrence maybe down to a four. Okay? And then the detection of it. If we did customer surveys, things like that, maybe we could get it down to a two.

So then we’ve got four times two is four times four, 48. We’ve gotten that down below a hundred. So Failure Mode Effect Analysis is a good tool for you to use to go through a process, any process within your business to detect risk and maybe reduce the probability of those risks having a negative effect on your business. FMEA, Failure Mode Effect Analysis.

Thank you. My name is Byron Hebert. This has been another quick Tool Time Update brought to you by PKF Texas and the Entrepreneur’s Playbook.

For those of you who are listening in on the radio and would like to see the graphic form of this tool being demonstrated, you can go to and look for the videos under Entrepreneur’s Playbook.

Eight Week Project Implementation Teams

Byron: Hi, my name is Byron Hebert and this is another Tool Time update brought to you by PKF and the Entrepreneurs Playbook. What I want to talk to you about today is a eight week project team. With many of the mine shop tools, if you’ve been watching these videos, you see we have a way to come up with great ideas. But what we really need after that is to have a project team implement those ideas. Good ideas are no good without some implementation.

And so an eight week project team is a good way to keep a team focused. It doesn’t take too long to get the project done, but then again, it doesn’t drag on for months at a time.

Week one, you want to project brief. Make sure we understand the problem, we framed it correctly. Second week ___ analysis. Where is the company now with this particular issue? Let’s just say it’s sales. We’re at 4 million in sales with a 30 percent margin. Here are our customers. Here’s a breakdown of that. So we want to know where we are now with this issue. Where we want to be. Maybe by the end of the year, next 18 months we want to be at 5 million in sales with a 35 percent profit margin.

We analyze the data in week four. We start drafting the plan in week five. And you may say that seems early to be drafting a plan, but later we’re in week seven and eight we’re gonna selling our plan. It does no good to go through all this work if you can’t sell it effectively. We start developing solutions, start looking for other ideas that we may have missed when we draft the plan. And in week seven we design the presentation. We may go to the CEO with our program and say, here’s where we are, can you give us some feedback? And start pre-selling our plan.

By week eight we’re doing a dry run. Now imagine if every eight weeks you were fixing an issue in your business. How much better your business would be, how much more profitable and effective your business would be by the end of the year. Again, my name’s Byron Hebert. This has been a 90 second Tool Time Update brought to you by PKF Texas and the Entrepreneurs Playbook.

For those of you that are listening in on the radio and would like to see the graphic form of this tool being demonstrated, you can go to and look for the videos under Entrepreneurs Playbook.