Buy-Sell Agreements and Their Role in Succession Planning

Buy-Sell Agreements and Their Role in Succession Planning

As many know, a succession plan is a critical component of any business owner’s long-term business and financial strategy. Succession plans help to ensure the continuation of your business even after you leave your role as owner. If your company has multiple owners, you may benefit from establishing a buy-sell agreement as a part of your overall succession plan. This article will discuss buy-sell agreements along with other possible options for succession planning.

Buy-Sell Agreements

An important question that you will face when developing a succession plan is how ownership of the business will be transferred when the time comes for you to leave your role as owner. One option for transferring ownership is through a buy-sell agreement. Buy-sell agreements are typically implemented by companies with multiple owners to guarantee business continuity in the event that one owner leaves the business for reasons such as retirement, voluntary exit, disability, or death. Buy-sell agreements help to protect the business by allowing a smooth transition of ownership, preventing owners from selling interests to outside parties, providing a method for assessing the value of company interests, and avoiding certain tax consequences of transferring ownership.

There are two main types of buy-sell agreements: cross-purchase agreements and entity-purchase (redemption) agreements. Under a cross-purchase agreement, the interests of the departing owner are purchased by the remaining owners. In the event of an owner’s death, tax-free life insurance policies (taken out by all owners on each other) are often used to fund this purchase. Under an entity-purchase agreement, the business entity itself purchases the interests of the departing owner, also commonly using tax-free life insurance benefits to fund the purchase. The establishment of buy-sell agreements is merely one component of a comprehensive business succession plan.

Other Options for Succession Planning

Besides buy-sell agreements, other methods of transferring ownership include gifting or selling your business to a family member, selling to management, transferring ownership to your employees, selling to an outside party, or closing the business. Each of these options comes with its own implications, which is why it is important to consult with a knowledgeable advisor when deciding which succession options work best for your unique needs. RBT CPAs’ professionals in our Trust, Estate, and Gift Practice can help you create and update a succession plan that gives you peace of mind in knowing that you, your loved ones, and your business will be taken care of according to your wishes.

RBT’s experts can help you form a succession plan, refer you to an attorney who can draw up the necessary legal documents (or work with your attorney if you already have one), and review legal documents to ensure they accurately reflect your wishes. We are also available to review and update your plan annually to ensure it continues to reflect your wishes and is adapted due to any tax law changes.

If you are interested in learning more, getting started on a succession plan, or reviewing plans you already have in place, please don’t hesitate to give RBT CPAs a call to find out how we can be Remarkably Better Together.

Is Additive Manufacturing the Right Choice for Your Business?

Is Additive Manufacturing the Right Choice for Your Business?

MIT defines additive manufacturing—often referred to as 3-D printing—as the process of creating an object by building it one layer at a time. Additive manufacturing has risen to the forefront of discussions in the manufacturing world over the last several decades. Many types of materials can be used in additive manufacturing, including polymers, metals, concrete, plastics, ceramics, gels, and even biological materials. This innovative technology has been used to create a wide range of products, including furniture, airplane parts, hearing aids, medical prosthetics, and even human organs (yes, organs!).

While you may not be in the business of 3-D printing organs, your company may still stand to benefit from the ever-evolving potential of additive manufacturing. There are many advantages associated with the adoption of additive manufacturing technology, such as increased customizability, cost-saving potential, simplified supply chains, the ability to create lightweight products, and sustainability. However, the cost of additive manufacturing equipment has long been an issue for small and medium-sized manufacturers. Let’s take a look at some of the benefits of adopting additive manufacturing, as well as the problem of affordability facing many small and medium-sized businesses.

Benefits of Additive Manufacturing (AM)

  • With AM, designs can be sent directly to 3-D printers for production, cutting out several steps along the supply chain. This can significantly reduce time spent on product development and production.
  • AM can reduce operating costs by accelerating the design process, decreasing labor costs, and cutting down on wasted materials.
  • With AM, companies are able to produce only the amount of product that they need, reducing waste and improving sustainability.
  • With AM, products can be manufactured in small batches, which cannot be done as cost-effectively through traditional manufacturing methods.
  • Products become easier to customize (for example, medical prosthetics) when produced in small batches using AM.
  • AM gives manufacturers the ability to create products with different materials on the inside and the outside, something that is difficult to accomplish in conventional manufacturing.
  • AM allows companies to create lightweight products, an especially useful capability for the aerospace and automobile industries.

The Downside: Cost

Despite its potential benefits, additive manufacturing is not without its flaws and challenges. One of the most significant issues with additive manufacturing is its high cost, a factor that has long acted as a barrier to entry for small and medium-sized manufacturing businesses. Not only are 3-D printing machines typically very expensive, but the raw materials required for 3-D printing can also be highly specific and costly. Staff also need to be trained on the new technology, requiring an additional investment of resources. However, over the last several years, additive manufacturing equipment has become significantly more affordable. Additionally, the cost savings associated with additive manufacturing can help small businesses achieve a high return on investment, potentially making up for high startup costs. In the end, the potential benefit of adopting additive manufacturing depends largely on a company’s individual goals and products. Businesses with specific goals, such as creating lightweight or highly customized products, likely stand to benefit the most from investing in 3-D printing technology.

Conclusion

Additive manufacturing isn’t for every business. Certain manufacturers will benefit more than others from investment in AM. The cost of equipment and materials can be a barrier for smaller companies, though the technology is becoming more affordable with time. While you decide whether additive manufacturing is a worthwhile investment for your business, you can depend on RBT CPAs to support all of your tax, audit, accounting, and advisory needs. Contact us today to find out how we can be Remarkably Better Together.

Embracing the Potential of AI in the Construction Industry

Embracing the Potential of AI in the Construction Industry

Artificial intelligence is taking the world by storm. AI is at the center of some of the most cutting-edge technologies developed in recent years, but what exactly is AI? IBM defines artificial intelligence (AI) as “technology that enables computers and machines to simulate human learning, comprehension, problem-solving, decision making, creativity, and autonomy.” AI technology is constantly developing and expanding into new areas. As individuals, we rely on AI technology every day, whether using facial recognition tools to unlock our phones, asking Alexa to play a song, tracking our health data using smartwatches, or using Google Maps to navigate while driving.

But AI’s impact extends far beyond our everyday individual experience. Industries across the board are turning to AI technologies to streamline processes, tackle everyday issues, improve productivity, and implement data-driven solutions. And the construction industry is no exception. Construction-specific AI tools are more widely accessible than ever before. These constantly evolving technologies are transforming the construction industry altogether, offering solutions to some of the industry’s most pressing issues and opening the door to new opportunities. Let’s take a look at some of the most notable benefits of artificial intelligence for construction businesses.

Benefits of AI for Construction Companies

  • Enhanced Data Analysis: Among the tasks that AI technology can carry at a much faster rate than humans is the collection and analysis of large amounts of data. Not only can AI gather vast amounts of data, but it can also extract useful information, identify patterns, make predictions, and provide valuable insights based on that data. Many key processes within the construction industry rely on data analytics, including planning, design, and risk assessment. With the help of AI, these operations can be carried out much more accurately and efficiently, reducing both the time spent on these tasks and the opportunity for human error.
  • Streamlined Preconstruction and Design Processes: In the preconstruction and design phases of projects, AI can assist with project scheduling, work in conjunction with Building Information Modeling (BIM) programs, identify and assess potential contractors, create 3-D models, accelerate the bidding process, and provide design options and solutions.
  • Accelerated Bidding and Negotiation Processes: Automated systems accelerate the time-consuming bidding and negotiation processes by evaluating and comparing bids, estimating project costs, identifying profitable jobs, and providing accurate and objective data for use in negotiations.
  • Automated Supply Chain Management: AI can be used to assess options for suppliers, manage inventory and orders, forecast material needs, optimize transportation routes and methods, and identify potential disruptions or delays.
  • Improved Project Management: AI can help project managers allocate labor and materials, schedule construction tasks, assess site safety, and monitor project quality and progress. AI-powered drones can capture aerial images of project sites and analyze the data to identify issues and assess progress.
  • Better Site Safety: AI systems can be used to conduct detailed risk assessments and to monitor compliance with safety regulations. AI-powered cameras are able to evaluate project sites and identify potential safety risks.
  • Quality Control: AI technology, such as cameras and drones, can monitor a building site for errors or inconsistencies. AI tools can also predict when maintenance is needed for equipment and building systems (such as HVAC and electrical systems).
  • Improved Financial Management: AI tools can generate cost estimates and cost analyses, as well as identify opportunities for cost reduction.
  • Use of Robotics Technology: In addition to AI-powered drones, other AI-driven robots can perform a range of construction tasks, including bricklaying, welding, and moving heavy materials.
  • Reduced Costs: AI can aid in resource allocation, track energy usage, reduce waste, and minimize delays, all leading to increased efficiency and reduced costs.
  • Transparency and Fraud Prevention: Access to real-time project data (generated by AI) enhances transparency for stakeholders. AI tools can also help to detect suspicious activity, such as bid rigging.
  • Potential Solution to Staffing Challenges: AI technologies can help to address the labor shortage in the construction industry by automating repetitive and time-consuming tasks.
  • Time Saved: Automated systems free up time for employees and management to focus on other tasks and goals.

Let Us Help

The vast possibilities presented by artificial intelligence have the potential to transform the way construction companies operate completely. While you consider ways to utilize AI for your business, you can depend on RBT CPAs to take care of your tax, audit, accounting, and advisory needs. Contact us to find out how we can be Remarkably Better Together.

Popular SLA Permits (and Caveats)

Popular SLA Permits (and Caveats)

Over thirty different permits are available through the New York State Liquor Authority (SLA) for various purposes, including special events, transportation, and marketing. Applications for some of these permits can be completed online, while others must be mailed in. Each permit bears its own stipulations and conditions. This article will highlight some of the most popular permits issued the by the NYS Liquor Authority along with their provisions.

Following are three popular permits that are available online. To apply for online permits, you will need to log in to or create a NY.gov account.

One-Day Alcohol Event Permit

This permit, also known as the Temporary Alcohol permit, allows the sale and service of alcoholic beverages for consumption at an event for a period of 24 hours. The fee for the One-Day Alcohol Event Permit is $36 per point of sale, per day. Both licensees and members of the public can apply for this permit.

Caveats: Alcoholic beverages sold by the permit-holder must be consumed within the licensed area only. Under the ABC Law, no more than four permits may be issued for one location within a 12-month period (with the exception of certain Not-for-Profits). However, the NYS Liquor Authority may consider additional permits if provided with a letter of no objection by the municipality and police department.

Apply for the One-Day Alcohol Event Permit here.

Catering Permit

This one-day permit (valid for 24 hours) allows currently licensed on-premises retailers to provide alcohol at certain private events located off-premises. The applicant must provide food in addition to alcohol. The fee for the Catering Permit is $48 per point of sale, per day. Only active on-premises retail licensees can apply for this permit.

Caveats: The application for this permit must be submitted at least 15 business days prior to the event. Applicants cannot cater for themselves (they must be hired by a third party to cater the event). The food provided must meet the requirements of the ABC law.

Apply for a Catering Permit here.

Marketing Permit

The NYS Liquor Authority website states the following regarding the Marketing Permit:

A Marketing Permit authorizes a licensed manufacturer or wholesaler, or an unlicensed out-of-state supplier, or a licensed in-state supplier to:

  • Conduct tastings and provide samples of the permit holders’ products to consumers;
  • Accept orders from licensed retailers on behalf of a wholesaler licensed in NYS authorized to sell such products at wholesale; and
  • Sell their products by the bottle to consumers during tastings

A Marketing Permit can be used at the following events/locations:

  • An establishment licensed to sell at retail the alcoholic beverages that will be tasted (i.e. liquor store, bar, restaurant);
  • The State Fair, recognized county fairs and farmers markets operated on a not-for-profit basis; and
  • Outdoor and indoor gatherings, functions, occasions or events sponsored by a bona fide charitable organization

One-Time Tasting Permits cost $25, and Three-Year Tasting Permits cost $395.

Caveats: To use a Marketing permit for events not listed above, you must contact the Liquor Authority at least 15 days prior to the event to receive permission. The supplier or wholesaler cannot charge a fee to consumers attending the event. Samples cannot exceed 3 ounces for beer, wine products, and cider, 2 ounces for wine, and 1/4 ounce for liquor. Liquor and wine sold by the bottle must be price posted. The supplier must obtain a Transportation Permit to transport alcoholic beverages to the event location (or use a company with a Transportation Permit). Manufacturers may use a company-owned car.

Apply for a One-time Tasting Permit here.

Apply for a Three-year Tasting Permit here.

Other Permits

Many other permits are available online, including Bottling Permits, Brewer Tasting Permits, Trucking Permits, and Warehouse Permits, to name a few. A complete list of online permits, along with their descriptions and fees, can be found here. Some permits are not available online, including the Temporary Operating Permit, the Liquidator’s Permit, the Solicitor Permit, the Sunday On-Premises Sales Permit, the Wine/Liquor Auction Permit, and others. Applications for these permits must be printed, completed manually, and mailed to the New York State Liquor Authority. Visit this page to see a full list of these permits and to download applications.

Contact Us

While you focus on permit applications for your business, you can depend on RBT CPAs to focus on your business’ accounting, advisory, audit, and tax needs. Give us a call today to find out how we can be Remarkably Better Together.

Is It Time to Update Your PHA’s Software? Outdated Housing Software Hinders Financial Operations

Is It Time to Update Your PHA’s Software? Outdated Housing Software Hinders Financial Operations

Like many organizations, Public Housing Authorities rely on online systems to carry out a wide range of essential operations. However, PHAs using antiquated software often face a multitude of challenges and frustrations. Outdated software impedes operations, leads to delays, hinders financial processes, and increases the PHA’s susceptibility to cyber threats.

Issues Posed by Outdated Software

PHAs rely on IT systems for many crucial processes, including inspections, application management, reporting, and other necessary functions. These online processes are essential for maintaining the safety, security, and everyday operations of PHAs. However, HUD has long experienced issues due to software complications, with IT failures causing major disruptions in PHAs across the country. Reliance on outdated information technology (IT) systems and software not only causes delays and disorganization in PHAs but can also increase the risk of cyber threats and serious data breaches. For the last several years, HUD has been working towards technology modernization and increased cybersecurity.

In a report entitled “Top Management Challenges Facing the U.S. Department of Housing and Urban Development,”  The Office of Inspector General summarized the most pressing issues facing HUD in fiscal year 2025. The report discussed HUD’s continued efforts to improve cybersecurity, but also spoke about the ongoing challenges related to the use of “legacy systems.” Legacy systems refer to older or outdated hardware, software, and programs. The report states, “These legacy systems and processes present elevated risks to HUD’s IT environment and increase risk in the functionality of HUD’s key programs. Managing cybersecurity risks for legacy systems is resource-intensive and limits OCIO’s capacity to acquire and deploy the technology necessary to implement or improve critical security controls.” The report points to the difficulties HUD programs face in attempting to modernize a large number of legacy systems while operating within a limited budget.

Impact on Financial Processes and Reporting

Among the operations negatively impacted by the use of outdated software are critical financial processes. Antiquated manual processes leave more room for error and inaccuracy than modern online systems. The use of outdated software impedes budgeting and financial reporting processes, impacts the efficiency of audits, and prohibits auditors from running certain reports.

Software Options and Benefits

Modern IT systems significantly enhance efficiency and organization across financial processes and other PHA functions. A variety of software options are available to PHAs for use in both tenant accounting and financial accounting. Some commonly used programs include PHA-Web, Yardi PHA Suite, MRI Software (HAPPY and Lindsey), AppFolio, and RealPage. These platforms offer a range of benefits such as electronic document storage, paperless processing, streamlined workflows, automated processes, routine maintenance, and other features. PHAs should use the most recent, up-to-date version of the program available.

Additional Guidance

Up-to-date technology, reliable operations, and effective financial processes are all necessary for your PHA to function optimally and provide the critical services relied on by so many. For more guidance on improving financial processes within your PHA, please don’t hesitate to reach out to RBT CPAs. RBT CPAs proudly provides our accounting, audit, tax, and advisory services to HUD programs in the Hudson Valley and beyond. At RBT CPAs, we believe we succeed when our clients succeed. Give us a call today to find out how we can be Remarkably Better Together.

Is Your School District Audit-ready?

Is Your School District Audit-ready?

Financial statement audits are crucial to any organization’s financial health, and school districts are no exception. A financial statement audit provides an independent assessment of an organization’s financial statements, which in turn ensures transparency, accountability, and a strong foundation for future planning. Preparation is key to ensuring a smooth audit process and avoiding delays. Here are some ways school districts can prepare for a financial statement audit.

  1. Educate your audit committee.

Audit committees are required under NYS Education Law. Audit committees oversee the audit process. The committee acts as the primary point of contact between the auditor and the appropriate staff or departments. The committee also reviews audit findings and assists in recommendations for improvement. The Government Finance Officers Association (GFOA) makes certain recommendations for the establishment of audit committees, which can be found under the “Best Practices” section of their website.

  1. Know the regulations and requirements.

The audit committee should be familiar with the various regulations governing financial reporting for school districts set forth by the Generally Accepted Accounting Principles (GAAP) and Governmental Accounting Standards Board (GASB) guidelines. This guidance is frequently updated, so districts must stay up to date with the latest updates and revisions to these standards.

  1. Understand the audit process.

The audit committee should understand the scope of the audit (what will be assessed), the timeline, and the roles and responsibilities of everyone involved. The audit committee should also understand that audit-ready means that all supporting documentation should reconcile to the trial balance before the auditor’s review. The auditor’s role is to verify accuracy, not to make adjustments. Any corrections should be identified and addressed before the audit begins to ensure a smooth and efficient process.

  1. Gather all necessary documentation.

The school district must request, collect, and organize documentation and information from the appropriate departments and staff, per the audit requirements. This includes general ledgers, detailed schedules of account balances, bank statements, invoices, receipts, payroll records, purchase orders, contracts, and other financial documents. The documentation should be easily accessible for the auditor, and all financial records should be reviewed for accuracy prior to an audit.

  1. Review internal controls.

Regular internal control assessments help to strengthen the mechanisms for preventing fraud and abuse within an organization. Internal controls include procedures for authorization, record keeping, reconciliations, and auditing. These processes must be periodically reviewed to ensure that they are achieving their objectives in preventing risk to the school district.

  1. Review prior years’ audit findings.

Ensure that corrective actions have been taken for any deficiencies identified in the prior year’s audit. This will not only reduce the likelihood of repeated findings but also demonstrate your commitment to improving your financial management practices.

  1. Communicate with your auditor and prepare for questions.

It’s important to keep an open line of communication with your auditor, maintaining transparency throughout the audit process. Make sure you disclose any changes to your financial systems or operations. Be prepared to answer questions regarding your school district’s financial procedures and processes, internal controls, documentation, operations, and personnel.

Further guidance

A financial statement audit can be a daunting and sometimes stressful event, but proper preparation can reduce the opportunity for error and disorganization. If you have any questions about the audit process for school districts, or if you need any other audit, accounting, tax, or advisory support, please know RBT CPAs is here for you. We’ve been proudly serving school districts, municipalities, businesses, non-profits, and individuals in the Hudson Valley for over 55 years. Please don’t hesitate to give us a call and find out how we can be Remarkably Better Together.