The CPA Desk

A Thought Leader Production by PKFTexas

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.

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.

Upcoming June Events in Houston

Our friends and clients look to us, as accountants and business advisors, to formulate ideas and facilitate solutions for your business. With this in mind, we are supporting several upcoming events we think may be of interest to you.

  • Doing Business Over Coffee – Radical Impact
  • Turnaround Management Association
  • District Export Council
  • Houston Interactive Marketing Association
  • Houston Energy Breakfast
  • National Association of Corporate Directors and Greater Houston Women’s Chamber of Commerce

If you have questions about any event details or registration information, the organization-specific contacts are below. We hope to see you at any or all of these events!
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Before donating a vehicle, find out the charity’s intent

If you donate your vehicle, the value of your deduction can vary greatly depending on what the charity does with it. You can deduct the vehicle’s fair market value (FMV) if the charity:

  • Uses the vehicle for a significant charitable purpose (such as delivering meals-on-wheels to the elderly),
  • Sells the vehicle for substantially less than FMV in furtherance of a charitable purpose (such as a sale to a low-income person needing transportation), or
  • Makes “material improvements” to the vehicle.

But in most other circumstances, if the charity sells the vehicle, your deduction is limited to the amount of the sales proceeds.

You also must obtain proper substantiation from the charity, including a written acknowledgment that:

  • Certifies whether the charity sold the vehicle or retained it for use for a charitable purpose,
  • Includes your name and tax identification number and the vehicle identification number, and
  • Reports, if applicable, details concerning the sale of the vehicle within 30 days of the sale.

For more information on these and other rules that apply to vehicle donation deductions, please contact us.

Port of Houston Addresses Import Challenges

Karen: This is PKF Texas Entrepreneur’s Playbook, I’m Karen Love, Host and Founder. Today I’m here once again with Frances Castañeda-Dyess; she’s the president of the Houston East End Chamber of Commerce. Welcome back once again.

Frances: Thank you Karen for having me back.

Karen: Well, you know I found it really cool that Houston may benefit from shipments that are coming directly here and I would like to know about another business disruption where Houston’s going to win.

Frances: Absolutely. Well you know flowers are abundant, you see them everywhere here in the city of Houston, but did you know that they actually go somewhere else and then they’re flown into Houston?

Karen: No I didn’t.

Frances: It would be wonderful if they would come directly here so I do know that the port is working with Colombia. There was a test program where flowers came on a shipment, however there were some complications and due to government agencies they arrived and they weren’t in the best quality, so the tests are going to continue. And wouldn’t it be wonderful once that that test has been resolved all these flowers would come here immediately? New businesses can open around the port and then everyone else will benefit from it.

Karen: That would be fantastic. I had no idea so thank you for sharing that with us and our audience.

Frances: You’re very welcome, thank you.

Karen: So for other port related topics visit because this has been another Thought Leader production brought to you by PKF Texas Entrepreneur’s Playbook.

Spring 2015 Leading Edge Magazine Now Available

The newest ideas, insights and perspectives you’ve come to rely on for your business are ready to be accessed any time, anywhere at
If you have topics you would like us to cover, please connect with us. As always, we enjoy receiving comments and feedback from our clients and the friends for our firm.

Spring Issue Highlights:

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Texas Business to Benefit From Panama Canal Expansion

The Panama Canal is undergoing a $5.25 billion expansion, and as the leading goods export state and metropolitan region in the US, Texas and Houston are well positioned to take advantage of the expansion. More…

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What You Need to Know About Compilations, Reviews and Audits to Obtain a Loan or Line of Credit

Many new or existing business owners seeking a loan or line of credit face may be required by the issuing financial institution to have a compilation, a financial review or an audit. We look at the differences between the three. More…
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Empowering Middle Management to Achieve Success

PKF Texas’ newest team member Andy Ray shares how he works with middle managers in order to allow C-level executives to focus is on the next big thing, instead of day-to-day operations and continuous improvement. More…

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Cubester® Chat: The Challenges Companies Face When They Recruit Young Professionals

“Mentor” is a popular buzzword in any business environment, and as an action and a title, it conveys a sense of trust and knowledge. Our Cubesters® take a look at the role of a mentor early in a career. More…

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Team First: The ingredients for building and maintaining winning teams in business   

No matter what industry you’re in or how your organization is set up, effective team-building is among the most important skills that any manager or executive can possess. More…

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Tips for Doing Business in Portugal

Portugal is a stable, developed country, but with recent economic upheaval. If you’re thinking about conducting business or running a company in Portugal, here are some things to remember. More…

Creating a Radical Impact on Your Business

Russ: This is the PKF Texas Entrepreneur’s Playbook. I’m Russ Capper, this week’s guest host, and I’m here with Andy Ray, a Principal at PKF Texas and the author of Radical Impact: A Manager’s Playbook to Achieve Meaningful Results. Andy, welcome to the Playbook.

Andy: Thank you Russ.

Russ: You bet. Tell us about Radical Impact.

Andy: Radical Impact is written for middle managers. It’s been an under-served market in the business literature world; a lot of books written to CEOs, a lot of books written for technical folks. Middle managers are where everything happens in a business and so I wanted to write a book that would teach them how to create a result that mattered in their business and the first part of the book really kind of blows up some status quo conventional myths that may have them kind of trapped in a cycle of under performance. And then it walks them through how to actually create that result and that has real career game-changing impact for these guys and gals out there that are managing companies.

Russ: Sounds right on but let’s say somebody’s watching and they want to know more about it.

Andy: Love to invite them to our June 2nd Business Over Coffee event, 7:30 here at PKF Texas. At that event we’re going to be talking about the book, we’re going to be talking to some folks that have used some of the tools and rigor that are in the book. We’ll have a book signing and then we’ll be talking about some new service offerings around the book that we’ll be offering in the fall, specifically our Radical Impact Academy for managers where they can actually come get some guidance and practice on the tools that we talk about in the book.

Russ: Well Andy it sounds real neat and I’m going to be here for sure.

Andy: Thank you Russ.

Russ: You bet. For more on Middle Manager development visit This has been a Thought Leader production brought to you by PKF Texas Entrepreneur’s Playbook.

Got ISOs? You need to understand their tax treatment

Incentive stock options allow you to buy company stock in the future at a fixed price equal to or greater than the stock’s fair market value on the grant date. If the stock appreciates, you can buy shares at a price below what they’re then trading for.

ISOs must comply with many rules but receive tax-favored treatment:

  • You owe no tax when ISOs are granted.
  • You owe no regular income tax when you exercise ISOs.
  • If you sell the stock after holding the shares at least one year from the exercise date and two years from the grant date, you pay tax on the sale at your long-term capital gains rate. You also may owe the 3.8% net investment income tax.
  • If you sell the stock before long-term capital gains treatment applies, a “disqualifying disposition” occurs and any gain is taxed as compensation at ordinary-income rates.

There also might be alternative minimum tax consequences in certain situations. If you’ve received ISOs, contact us. We can help you determine when to exercise them and whether to immediately sell shares received from an exercise or to hold them.