Should Predictive Maintenance Be Part of Your 2023 Strategy?

Should Predictive Maintenance Be Part of Your 2023 Strategy?

As you work on your strategic plans for 2023, is predictive maintenance on your radar? If not, perhaps it should be.

Entering another year of economic uncertainty, business leaders are coming together to define their overall strategy and goals to maximize potential and results in the next year, the next five years, and over the long-haul. At the same time, they have a keen eye on spending and investments – what’s worth it and what can wait.

While equipment and machine maintenance may seem too tactical for an overall business plan, it does fall under a few key strategies that are shaping the future of manufacturing and setting the stage to distinguish between those operations that will survive versus thrive – namely, digitalization and operational excellence – both of which are at the heart of predictive maintenance.

According to BusinessNewsDaily, “Predictive maintenance is the practice of monitoring equipment via sensors, software and data feedback to prioritize equipment for proactive maintenance. It takes preventive maintenance one step further by streamlining the process of identifying which equipment (or even which components) is showing signs of needing attention.”

To put it another way, you use technology and data to more accurately learn when equipment or machinery isn’t performing up to par and needs to be fixed or replaced – before it causes issues or, even worse, a shutdown. It sounds like current preventive maintenance strategies. The difference? With predictive maintenance, you know something is not performing on par and needs to be addressed. With preventive maintenance, you’re investing time, resources, and money in something that may or may not be needed.

Predictive maintenance uses Internet of Things (IoT) devices and sensors to collect data – like vibrations, temperature, and lubrication — from equipment.

The data is fed to a central place where algorithms are used to help machines learn to identify if maintenance is needed or a breakdown is coming. That way, maintenance work can be prioritized and resources dispatched where and when they can make the biggest impact.

According to Due.com, “Research shows that the average manufacturer deals with 800 hours of downtime per year – or more than 15 hours per week – and the costs can be outrageous. Just for perspective, consider that the average automotive manufacturer loses $22,000 per minute of downtime. While your costs likely don’t come anywhere close to this, even losing a few hundred dollars per hour can have a significant impact on your bottom line.” 

There’s a lot of potential to use maintenance for a strategic and competitive advantage.

ChiefExecutive.net notes, “81 percent of manufacturers are aware of the potential for machine learning to enhance maintenance, but only 17 percent have implemented programs to put those principles into action.”

The impact is far-reaching. It can help increase productivity, increase the longevity of machines and equipment, and decrease shutdowns and resulting impacts on customer relations. Still, it’s hard to justify investing in a new approach to maintenance given current economic uncertainties; on the other hand, can you afford not to?

Look at your current maintenance, supply chain (for equipment and parts), and talent challenges and costs.

Are they increasing? Will designating more money solve the issues at hand or is there a more balanced way to manage these issues in the short-term while setting the stage for a more successful long term?

For example, we know the global talent shortage is not going away. In fact, it’s only going to get worse. As reported in CFO.com, “Korn Ferry estimates the global human talent shortage will reach 85 million people by 2030. Private organizations and governments will be challenged like never before to help find ways to accelerate their development processes and build expanded talent acquisition capabilities.”

While increasing pay rates, enhancing benefits packages, and investing in retention can help, they still don’t address the long-term issue.

There are not going to be enough people to do all the work required. The solution? Change how work gets done through digital solutions, like predictive maintenance.

Although we can’t tell you which predictive maintenance solutions to use – we’re accountants, tax experts, and auditors, we can help you understand the financial benefits, opportunities, and impact of investing in predictive maintenance as part of your organization’s digitalization strategy in 2023 and beyond. Interested? Contact RBT CPAs today.

The Clock Is Ticking on Obligating State & Local Fiscal Recovery Funds (SLFRF)

The Clock Is Ticking on Obligating State & Local Fiscal Recovery Funds (SLFRF)

It’s hard to believe we’re just a about three months shy of the second anniversary of the American Rescue Plan Act, otherwise known as ARPA. In two more years, or on December 31, 2024, State and Local Fiscal Recovery Funds or SLFRF – a part of ARPA – must be obligated. Then, two years later – by December 31, 2026 – SLFRF must be fully spent. Are you on track to meet these deadlines?

A report entitled, A Comparison of Fiscal Recovery Funds Utilization, notes: “The eligible uses of SLFRF  are intentionally broad to provide state and local governments with substantial flexibility to respond to pandemic impacts in their community, including general operating support to offset revenue losses while also encouraging them to make investments that support long-term growth, opportunity, and equity.”

As noted by the Treasury Department, “Recipients may use SLFRF funds to:

  • Replace lost public sector revenue, using this funding to provide government services up to the amount of revenue lost due to the pandemic
  • Respond to the far-reaching public health and negative economic impacts of the pandemic, by supporting the health of communities, and helping households, small businesses, impacted industries, nonprofits, and the public sector recover from economic impacts
  • Provide premium pay for essential workers, offering additional support to those who have and will bear the greatest health risks because of their service in critical sectors
  • Invest in water, sewer, and broadband infrastructure, making necessary investments to improve access to clean drinking water, to support vital wastewater and stormwater infrastructure, and to expand affordable access to broadband internet.”

You can find more details about categories and definitions on the National Conference of State Legislatures website. For information on how states are using funds, visit the Center on Budget and Policy Priorities. For information on allocations for cities and counties or how they are using funds, click here.

While you’re finalizing plans to ensure funds are obligated by the deadline, be sure to update your calendar with these quarterly Project and Expenditure Report deadlines: January 31, 2023 (for the period October 1 – December 31, 2022); April 30, 2023 (for January 1 – March 31); July 31, 2023 (for April 1 through June 30); and October 31, 2023 (for July 1 – September 30).

If you’re only required to submit an annual project and expenditure report, the next deadline is April 30, 2023. This covers the period from April 1, 2022 through March 31, 2023. An annual report is required from Tribal governments allocated less than $30 million; metropolitan cities and counties with less than 250,000 residents and less than $10 million in funding; and Non-Entitlement Units (NEUs) with less than $10 million in funding.

For additional information, refer to these resources:

You can find additional resources on our website (go to the right of the screen and click “ARPA Downloads.”)

If you need any accounting, tax, or audit assistance with your SLFRF or other funds, please give RBT CPAs a call. We’re a leader in the Hudson Valley and beyond, known for our professionalism and integrity. We believe we succeed when we help you succeed. Contact us today.

Is That Fundraiser Legal?

Is That Fundraiser Legal?

What was once a rite of passage and learning experience for children moving through elementary, middle, and high school has transformed into highly regulated, adult-driven activities for extra-curricular program funding.

I remember the days of selling boxes of candy bars for our school fundraisers and proudly handing in my envelop full of sales each year. I had done my part all while trying to earn the biggest prizes available based on sales. I can remember how it sparked a sense of competition and drive that stayed with me, well, until today.

Fast forward to today’s school fundraising environment, and you find parent committees and meetings, policy handbooks, approval protocols, laws, and rarely a student in sight.  Instead of student government brainstorming ideas to help fund a special class trip or outing, booster clubs, parent associations and others have taken over raising what amounts to some big money for some school districts and clubs. This is accompanied by a variety of laws and accounting requirements.

Here are a few fundraising rules and laws district and school leadership should be aware of and, when appropriate, communicate to broader parent and community audiences via policies, handbooks, etc.:

  • Regents Rule 19.6 According to the rule, direct solicitation of charitable donations (goods or funds) from children in public schools on school property during regular school hours is not permitted. There are some exceptions – for example, the sale of tickets to an upcoming school event is permitted, as is signing up students to participate in a fundraiser. Collection boxes for money, food or donations are also permitted. (For details, visit the New York State Education Department Question & Answers on Solicitation of Charitable Donations from New York School Children.)
  • Title IX Services, opportunities, and benefits in a school district’s programs must be provided equally regardless of the source of the benefit. This includes donations, fundraising, and organizations that raise funds on behalf of a school district.
  • New York State Gaming Commission An organization – like a booster club – may need a permit to hold a raffle depending on the county it resides within and local rules. There are limits on raffle values and content (i.e., no alcohol allowed). Tickets can only be purchased with cash, check, or credit card – no online payment methods can be used. There’s more – a lot more – find details starting on page 562 of the New York Gaming Commission Guidelines.

Remember, RBT CPAs is an accounting firm – we are not attorneys and the information presented herein should not be construed as advice (impressive use of “herein,” right?). You should consult legal counsel for answers to questions, advice, and direction regarding fundraising. That said, we at RBT CPAs are very smart about accounting, tax, and audits. Our firm has been doing it for over 50 years and we’ve earned a reputation for professional, ethical, and dependable service. Should your school district or one of its fundraising bodies need financial advice or support, we are available to help. Just give us a call and we can explore how we can be remarkably better together.

Why It’s Important to Know Your Limits for 2023 Benefit Plans

Why It’s Important to Know Your Limits for 2023 Benefit Plans

At various times of the year, the IRS announces benefit plan limits for the following year. It’s important to understand these limits – and make sure your benefit-eligible employees do, too – in order to maximize what your company and employees get out of the benefit plans you invest in and offer.

Benefit plans are a great way to enhance your company’s employee value proposition and support your attraction, recruitment, and retention efforts. To maximize the investment you and your employees make in benefit plans, it’s important to provide clear and frequent communication explaining how benefits work and what employees can do to get the most from them. This is especially true when a communication can help an employee gain tax advantages and avoid losing money – this is where plan limits come in.

For example, earlier this year the IRS announced 2023 health care flexible spending account (FSA) limits are increasing to $3,050 (from $2,850 this year). That’s good news, as it helps employees put aside more tax-free money to pay for eligible out-of-pocket health care expenses, while reducing their taxable income – both of which will no doubt be welcomed given inflation and the current economic environment.

There are three caveats:

  1. Employees need to know about changes to limits and what it could mean to them.
  2. Employees need to know how to change their benefit elections to take advantage of new limits.
  3. Employees need to know what happens if they don’t use health care FSA funds and file claims by IRS deadlines (they lose the money). Extended grace periods for using the money in 2020 and 2021 due to federal stimulus packages are not available in 2023.

The important phrase here is “employees need to know.” If you also offer a high deductible health plan with a health savings account (HSA), things get even more complicated. Employees need to know whether an FSA or HSA is best for their situation.

See how complicated it can get? That doesn’t even get into defined benefit, defined contribution, compensation, and other IRS limits that will apply in 2023.

Since you have a business to run and may or may not have the resources who can spend the time educating your employees about all of the ins and outs of benefits, you may want to reach out to your benefits administrator for help.

RBT CPA’s affiliate — Spectrum Pension and Compensation – offers third party administration and related services (including communication) for clients in the Hudson Valley and beyond. While you won’t be competing with Fortune 100 companies for attention, you will get customized, personalized services to ensure compliance while promoting the value your plans deliver to your company and team.

Interested in learning more? Click here to see the summary of 2023 limits Spectrum shared with its clients and prospects just a few weeks ago and here to learn what Spectrum can do for your business and employees in 2023 and beyond.

How Drones Are Changing Construction

How Drones Are Changing Construction

What’s keeping you up at night?

If you’re like most construction company owners, the following are probably somewhere on your list: labor shortage, financial environment, procurement and the supply chain, project progress, worker safety, managing cash flow and costs, and more. Have you ever considered that drones – yes, drones – may help address your biggest concerns?

Drones can do a lot for your construction business.

The growth of their use is skyrocketing. They save time and money; keep projects on track; get certain jobs done faster; increase productivity; decrease on-the-job injuries; promote security of work sites, supplies and equipment; identify issues and course correct opportunities quickly; free up talent to focus on other tasks; possibly provide a competitive and service advantage; and more.

How?

Drone photos, videos and other images help scope out projects, track progress and provide real-time updates that can be viewed remotely. More specifically, drones are used to:

  • Map, survey and project plan According to com, “Drones survey vast acres of land in just 15 to 30 minutes, saving up to 20x the cost of creating topographic maps” and “Teams can use drone software to stitch maps into 3D models for analysis and project planning.” Ultimately, they can help with feasibility, design, course corrections, and project timelines, and budgets.
  • Manage projects and clients Is the project progressing according to plan? Have you identified issues that can be rectified to stay on track? Are designers, engineers, and construction staff able to access data in real-time to collaborate and problem-solve? Will providing images of progress offer additional peace of mind to clients, especially if they’re at a remote location?
  • Monitor supplies How much gravel is left? What about lumber? A drone can help you get images to keep track and order accordingly.
  • Manage equipment Where is the equipment? Is it operating effectively and, if not, what’s going wrong? Is it secure and protected from potential theft? Are you done with it/should it be returned to avoid additional charges? Drones can get you the answers in real-time.
  • Promote safety Drones help capture measurements and images in high and hard to reach places in lieu of risking worker falls and other injuries. They can also help identify and fix potential risks – like loose or unstable equipment.
  • Conduct inspections View and analyze images without the safety risks. Heat leaks, cold spots, and electrical images can be identified with thermal sensors.

As noted on ForConstructionPros.com, “Think of a modern drone as a flying rack onto which you can attach or swap the latest technologies — multispectral sensors, high-definition cameras, and machine learning software capable of creating 3D maps from topographical data, able to be captured from virtually anywhere…By using drones and sophisticated software, planners can combine, match, and overlay their own data vis-a-vis terrain and property lines. Third-party software can then do much of the grunt work, taking advantage of existing data and resources, utilizing these most efficiently while avoiding pitfalls.”

Interested in learning more about how drones can help your construction business, not to mention help you get a better night’s sleep? Check out these resources:

If you’re interested in learning how to account for drone training, licensing, and equipment, give RBT CPAs a call. We’re a leading accounting, tax, and audit firm in the Hudson Valley and beyond, and believe we succeed when we help you succeed. Give us a call today.

If you’re interested in learning how to get a drone program off the ground in 2023, watch for our next thought leadership article coming in January.