That’s a lot of hay or, in Ohio’s case, soybeans and corn.
For the most part, these aren’t little red barns with a cow or two on a hill, but large agricultural businesses. Some are highly successful, while others have abandoned fields. When owned and operated by families, financial and legal complications can arise when the scenario changes on a farm. That’s where HW&Co.’s Private Business Advisory (PBA) services can help with family farm succession and estate planning.
“These are large complex structures with a lot of people involved,” says CPA Kim Zagar, a principal with HW&Co., an accounting and assurance, tax planning/strategies and consulting firm. “These agribusiness clients really came in with our Mansfield office. Before that, we had only one farm. But several of the accountants in that office are part of a family farm business. They grew up on farms and this is near and dear to their hearts. These are close-knit communities, and this has become a niche for us.”
Additional HW&Co. offices include Cleveland East (Beachwood), Cleveland West (Middleburg Heights), Columbus and Willoughby.
Zagar says her firm’s formal PBA services department, which she heads, was partially established to help in situations that initially required a great deal of general knowledge and the ability to connect clients with the right advisers in the firm.
Technology experts, agribusiness leaders and nursing home operators/owners — all important niche clients for HW&Co. — can sit down with HW&Co. to begin their collaboration on the road to success and growth. Other clients represent additional health care services and the construction and real estate industries, as well as professional service firms. The companies are almost all sizes and types and are looking for the right direction. Zagar says the in-house joke is that her department consists of the “kind of people who know a guy.”
“We were doing all of these things before the PBA department was formally created in 2022, but more as an ancillary position instead of one with its own focus,” explains Zagar.
The PBA department generally assists privately held, private-equity funded or nonprofit organizations.
“We were formed to backfill the gap, especially for small or midsize companies. They don’t have a full bench of accounting team members. They may have a couple people in their accounting department, but they don’t have 10 or 12. We can fill in where there are holes. We also do a lot of startups because they don’t have the internal resources.
“With larger companies, we find they just want to outsource certain things because of a labor shortage or they have a special project that requires a skill set they don’t have in-house. Or maybe their internal people just don’t have the time to do it,” explains Zagar, who has been with HW&Co. for two years.
Advisory services “seem to be the fastest growing area in accounting right now,” according to Zagar. Startups, particularly new technology endeavors, have seen a “big burst in the world of COVID-19” and HW&Co. is there with its PBA services.
“Those companies tend to be owner-managed. A lot don’t even have any employees yet. So, they come in, and we advise them about the tools and skills and help them get started. We can help with initial cash flow forecasting and budgeting. If they have to hire, they will have the money they need,” says Zagar. “A lot of these clients are either going for bank financing or some sort of investment. Sometimes, they will have seed funding so they need to know how to budget their money when it runs out.”
In addition, the PBA department can help with basic compliance. For example, a newly founded company may have a lawyer, but not a designated banker. Or the amount and kinds of insurance they need to protect themselves and satisfy their business needs must be determined. Also, payroll regulations must be followed.
“Tax changes are also coming. During the past few years, we have been helping clients on the business side deal with the Paycheck Protection Program and the Employee Retention Tax Credit,” says Zagar. “On the personal side, there are child tax credits and other things that came about as a result of COVID-19. We helped clients apply for refunds. But, at the same time, we made sure they didn’t run into a situation where something that was to be forgiven or tax-free wasn’t.”
Zagar and her colleagues watch developments in the tax world and translate the speculation and fear some clients experience into advantageous information.
“We watch tax bills coming up before they become law,” she says. “That way, we can prepare our clients ahead of time and tell them they have options. We say, ‘Here’s what you might want to do. We have plan A, plan B and maybe plan C. So depending on what happens to that bill or law, we will be prepared for it.’
“Everything we do is to help people sleep better at night by eliminating some of their pain points. Uncertainty is as bad as change for some people.”
Ultimately, Zagar says the PBA department’s mission is to understand the business owner’s goals. What are the long-range plans? Who do you need to hire and when? How do you identify and capitalize on opportunities? Do you want to pass the business on to a family member or sell to an outside investor? Do you need to upgrade your company’s financial system and processes? Is a merger the best move? How much is the company really worth?
“Our goal is to look at all of the moving pieces. We are like a quarterback or a general contractor, pulling in other resources someone might need,” says Zagar.
But that doesn’t necessarily mean more cost to the client. Because of HW&Co.’s impressive resource network, it can suggest level-based services. If a company needs basic bookkeeping help, that can be handled by one of the firm’s general bookkeepers.
Those services can save a client, especially a nonprofit, a significant amount of money. But if the bookkeeping situation is complex or specific to a particular type of business, a specialized accountant can be deployed. Letting a specialized individual handle the situation from the beginning can save clients from a more complicated and expensive fix down the line.
Above all, Zagar says a holistic approach is imperative when working with clients. Each company is unique, and each business owner and CEO deserves personalized attention. The PBA’s holistic philosophy and attention to detail allow it to stand apart.
HW&Co. was founded in 1990 by Mel Howard and Harvey Wershbale and others as Howard, Wershbale & Co. in Beachwood. Today, HW&Co. is a “Top 300” CPA firm with 120 employees.