What’s Brewing with AI?

What’s Brewing with AI?

Artificial Intelligence – a.k.a. AI – has taken the world by storm, especially with certain apps making their way to the mainstream in the last year. World leaders are trying to figure out how to govern it. Large companies are looking for ways to maximize it. Discussions about the impact on jobs and industries – from law and accounting to teaching, medicine, marketing, and everything in between – continue. This leads to the question: What role will AI play in the brewing industry?

While images of robots serving customers may come to mind, most of the potential uses aren’t that obvious. As we began researching the topic, numerous technical terms kept coming up, prompting us to take a step back and start with some basics. AI is technology that performs cognitive functions typically associated with human intelligence. It can incorporate visual perception, speech recognition, learning, language processing, decision-making and more, and bases its output on an abundance of data. All of this comes together in smart machines and computer programs.

When it comes to brewing, I came across many stories about brewers at locations across the globe playing with AI to create new recipes; brainstorm and tweak existing recipes; and explore which brews are most likely to be a hit based on taste and consumer data. Some brewers are extending their venture into AI beyond recipes and using it for package and bottle designs, labeling, press releases, social media content, and marketing.

In numerous cases, brewers are engaging customers in the novelty of the potential role of AI in brewing by holding contests where customers get to vote on whether they like a non-AI or an AI-generated brew better; where they can give product feedback, and more. No doubt the trend of exploring the role of AI in creating brews and marketing to engage customers in the process will continue to grow.

Beyond recipes, there are AI solutions that are helping brewers with multiple locations adjust for variables like water or altitude so the final brew tastes the same no matter where it is produced. There’s a robot in Australia producing consistent foam with each pour. Systems and sensors are being used to promote quality; identify leaks and reduce waste; monitor variables that can impact quality (i.e., temperature of a shipping container and transit time); and conduct predictive maintenance to keep production moving.

Predictive analytics powered by AI help analyze data about market trends, consumer preferences, buying, and more to help brewers make informed decisions about everything from product development and pricing to marketing and sales.

When it comes to supply chain management, AI algorithms are being used to forecast demand, improve inventory management and production schedules, and cut costs. There are even AI-based tools that use data about production costs, competitors, consumer demand, and buying to create pricing strategies that can be adjusted in real-time to promote sales.

Whether you’re looking to shorten development time, hasten go-to-market time, reduce costs, increase output, promote compliance, standardize quality, boost sustainability, or strengthen marketing and sales, based on what other brewers are doing, it appears there’s a role for AI. Still, there is another side to the story…I’ll use my mom’s banana bread to illustrate the point I want to make.

Personally, if I had to choose a banana bread baked by my mother or one from a robot, I’d choose my mom’s every time. There’s just something about it being made by mom, using my grandmother’s recipe, that makes it taste better than any other banana bread out there. I don’t think this will ever change and I hope this isn’t completely lost as the role of AI in our daily lives evolves.

If you need time to learn more about AI in brewing, you can count on RBT CPAs for your accounting, tax, audit, and advisory needs. We’ve been proudly serving municipalities, businesses, non-profits, and individuals in the Hudson Valley for over 50 years. Please don’t hesitate to give us a call and find out how we can be Remarkably Better Together.

 

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

Why Estate Planning Should Take Center Stage in 2024/2025

Why Estate Planning Should Take Center Stage in 2024/2025

You’ve worked hard to build your wealth. Protect it by resolving to make gift and estate tax planning a priority in the New Year.

This is especially important in 2024 and 2025 since, without legislative action, the valuable Tax Cuts and Jobs Act’s (TCJA’s) gift and estate tax exemption is set to revert to pre-2018 levels starting in 2026, significantly increasing the amount of an estate subject to Federal taxes. Add to that New York’s estate tax rules and planning becomes paramount.

When the TCJA took effect on January 1, 2018, certain provisions increased the amount of assets individuals and married couples may gift annually and over a lifetime (as well as leave as part of an estate), with no federal taxes owed. Each year, exemption amounts are adjusted for inflation. For 2024:

  • The annual gift exclusion limit is $18,000 (or $36,000 for a married couple) per person. You do not have to pay taxes on gifts up to the limit. Also, amounts up to the annual limit do not count toward the gift and estate tax lifetime exemption. So, let’s say you are married and have two children. You and your spouse may each gift $18,000 to each child, for a total combined gift of $36,000/child in 2024. You won’t have to pay taxes on the gift and the gift won’t apply toward your lifetime gift and estate tax exemption. (There is an exception: if you are married and your spouse is a U.S. citizen, you can gift an unlimited amount to your spouse tax-free. If your spouse is not a U.S. citizen, there is an annually adjusted limit on tax-free gifts. For 2024, that amount is $185,000.) To qualify for the annual gift exclusion, the gift must be a present interest gift.
  • The gift and estate tax lifetime exemption is $13.61 million (or $27.22 million/married couple). Amounts above the lifetime exemption are taxable. Even though the exemption is scheduled to decrease starting January 1, 2026, any exemptions for 2018 through 2025 will be honored at the higher exemption amounts in effect at the time. The Federal tax law has a portability provision that provides for the unused exemption of the first spouse to die to be available to the surviving spouse if an estate tax return is filed when the first spouse passes away and the surviving spouse is a U.S. citizen.

Both the annual limit and lifetime exemption will be adjusted for inflation again at the start of 2025. Then, on January 1, 2026, the gift and estate lifetime exemption goes back to its pre-2018 level of $5 million, adjusted for inflation (so it’s expected to be in the $7 million to $8 million range). This will significantly reduce the amount of assets that can be gifted over a lifetime and passed on as part of an estate tax-free. In New York, it’s a bit more complicated.

New York does not have a gift tax; however, it does have different rules for estate taxes. Key differences include:

  • An estate tax exclusion is tied to federal tax laws from 2014 and gradually indexed for inflation. For 2024, the New York estate tax exclusion amount is $6,940,000.
  • However, there is a “cliff” built into the calculation. If a decedent’s taxable estate is between 100% and 105% of the exclusion amount as of the date of death, exclusion benefits phase out. There is no exclusion benefit if a taxable estate is more than 105% of the exclusion amount as of the date of death. This means New York State estate taxes are due starting with the first dollar of assets.
  • Gifts made within three years of death are not excluded and are “clawed back” to be included in the calculation of New York estate taxes.
  • New York does not have a portability provision and, thus, does not allow an unused exclusion amount to transfer to a surviving spouse.

There are actions New Yorkers can take to stay within the state’s exclusion amount while avoiding the “cliff” and maximize opportunities under Federal estate tax laws. If you’re interested in learning about your options, contact RBT CPA Trust, Estate and Gift Practice professionals by emailing Ita Rahilly, CPA, at irahilly@rbtcpas.com. Your RBT CPA client manager is also available to help start the discussion, in addition to handling your accounting, tax, audit, and business advisory needs. Give us a call today.

 

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

Improve Your Bidding Process Before You Make a Bid

Improve Your Bidding Process Before You Make a Bid

Creating winning project bids is a science onto itself. Do it right and you end up profitable and productive. The secret is to invest the time and attention to show the buyer why your business is the best for the job. In truth, that’s easier said than done, but there is some work you can complete before ever submitting one bid to promote your chance at success.

Define your business goals.

A commonly cited statistic asserts that your bidding process can be considered successful if you receive at least one job for every five bids submitted. As an accountant and a business advisor that feels random. To add structure, consider the big picture. What are your overall sales, profit, and cash flow goals for the year, quarter, and month? Can your answers guide your bidding activities, pointing to when you need to make more bids or set goals for improving your hit (win) rate?

Develop your brand.

A brand reflects your business’ identity or reputation. It’s what distinguishes your business from your competitors’, and it sums up the experience a client can expect when he/she awards you a job. Are you known for professionalism, quality, financial stability, safety, customer satisfaction, project management, environmental awareness, or something else? If so, you should be saying that, consistently, every time you submit a bid. If you need help, consider engaging a marketing firm or freelancer to summarize your brand and provide standard language you can use for bids (as well as marketing channels like your website, social media, and more).

Know your strengths and weaknesses.

Not every bidding opportunity is going to be a good fit. Consider creating a checklist – based on past work – to identify the types of projects that are worth your time and align with your business goals and outcomes. Similarly, a checklist of attributes to avoid can help you quickly decide whether it’s better for your business to forgo a bid.

Evaluate software, online tools, and services that can boost accuracy and productivity.

At the very least, an online search can help you find a variety of free construction bid proposal templates. If you’re looking for more, software and services are available to support the entire bidding process, cost estimations, work breakdowns, project management, proposal generation, takeoff accuracy, and more.

Prequalify subcontractors.

Since you should submit bids by the deadline, if not sooner, prequalifying subcontractors you may use on jobs can save you time and promote peace of mind that the people you’re engaging align with your brand, as well as your quality and performance standards. You may also review licenses and certificates of insurance to make sure the subcontractors have what you need when the time for a bid/job comes.

Expand your pipeline for learning about bids.

In addition to getting leads on projects from trade organizations, referrals, and suppliers, consider subscribing to a lead generation service. Evaluate which markets are served, client size, geography covered, success statistics, service options, and prices. Also look for features that would be of value to you – like getting an email when a new bid is opened.

By putting the time and effort in before ever making a bid, you are in a better position to choose and submit bids – and win projects – when the opportunity arises.

To free you up to focus on bids and all other aspects of running your business, please remember RBT CPAs is here to help with your accounting, tax, audit, or business advisory needs. Interested in learning more? Give us a call today.

 

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

What Tax-Related Questions Should You Be Asking Before Year-End?

What Tax-Related Questions Should You Be Asking Before Year-End?

In the blink of an eye, we’re in the last quarter of 2023. Don’t blink again or you’ll miss the three months remaining in 2023 to make decisions that can impact how much you’ll pay in taxes come April. Here are a few questions to consider and possible tax deductions and credits that may help you reach your goals.

What goals did you set at the start of 2023 and how close are you to reaching them? Are there tax moves that can help you cross the finish line?

Did you have a goal to increase the number of customers you serve?

Whether you want to build awareness of the value your business delivers or offer special deals and incentives at year-end, marketing is key, and related costs are deductible. Expenses can include digital or traditional marketing, website work, professional conference attendance, business cards, marketing professionals and services, and more.

Are you trying to upgrade operations for the future?

Under Internal Revenue Code Section 179, if you buy or lease (with qualified financing) appreciable business equipment, you can deduct the full purchase price (or lease amount) from your gross income. Equipment can include office machinery, furniture, vehicles, computers, and more. The item must be new to your business, used for business purposes, and put in service the year that you take the deduction. The most you can deduct under Section 179 for 2023 is $1,160,000. There’s also an 80% first-year bonus depreciation for 2023, so you can reduce your tax liability even more.

Are you looking to operate more effectively and efficiently? Do you have or do you need any project management software, cloud storage, accounting software, or other software subscriptions?

Depending on a number of variables, you may be able to amortize the cost over three years or expense the cost under Section 179 and 168k provisions. (On a side note: Whether you’re implementing for the first time or changing software providers, it can take several weeks to get things up and running. Now is the perfect time to get started if you are looking for a January 1 go-live date. Plus, transitioning January 1 makes your accounting a lot easier.)

Are you struggling to attract or keep talent?

Bonuses and pay are 100% deductible. As for healthcare, if you pay at least 50% of the cost of coverage (a.k.a. premiums) for employees, you can deduct the cost. If you are self-employed and buy health insurance for yourself and your family, 100% of the cost is deductible. Also, If eligible, you can claim a tax credit of up to $5,000 for three years for the costs to start and administer a SEP, Simple IRA, or other qualified plan. Finally, if you plan an employee celebration, it’s 100% deductible. Plus you can claim up to $25 per employee for a gift.

Are you looking to reduce your carbon footprint and increase sustainability?

Receive a tax credit for 30% of the cost of switching to solar power. For energy efficiency improvements (i.e., install interior lighting, a new building envelope, or an HVAC or hot water system that reduce energy and power costs by at least 50%), receive a tax credit up to $5/square foot. When it comes to commercial clean vehicles, the credit can be up to $40,000 under IRC 45W.

 

That’s just a sampling of the questions you should be asking now. There are a lot more: Should you take a class to learn something new to help your business? Should you start that research and development project? Is it time to evaluate insurance and bank costs? Should you consider a new business structure? How can you reduce your tax liability? Is it time to update your home office? The list goes on…

If you’re interested in discussing year-end tax planning with an RBT CPAs professional, send an email to Marketing@rbtcpas.com or give us a call.

 

RBT CPAs is proud to say all our work is prepared in the U.S.A. – we never offshore. As a result, you get peace of mind that your operation’s financial and confidential information is handled by full-time, local staff who have met our high standards for quality, ethics, and professionalism.

 

NOTE! Tax laws and codes are very complex. While we’ve tried to ensure the accuracy of all the information presented herein, the actual tax laws and codes as presented on IRS.gov govern. What’s more, this article provides highlights about tax deductions and credits and should not be considered advice. Your best bet to ensure accuracy and completeness is to talk directly to a CPA.

Fortifying Construction Sites: Tips for Preventing Equipment Theft

Fortifying Construction Sites: Tips for Preventing Equipment Theft

The National Equipment Register (NER) places the annual cost of losses due to equipment theft at up to $300 million for residential construction sites and $1 billion for commercial sites, with a $30,000 average price tag per theft. Beyond the actual cost, equipment theft can significantly add to the challenge of completing a project on time and in budget; hurt your reputation; drive up insurance; tie up cash and credit renting or buying replacements; and cause you to miss out on future business opportunities. While there are no guarantees, having a comprehensive anti-theft plan can turn the odds in your favor.

According to TheRepublic.com, “The people who do the stealing range from individuals committing small-time, spur-of-the-moment thefts to organized crews who go from state to state, hitting construction sites and then blowing town.” Top heavy equipment thefts according to Tenna.com include skid steers; wheeled and tracked loaders; towables; backhoes; tractors; wheel loaders; utility vehicles; UTVs; excavators; forklifts; bulldozers; rollers; generators; welders; and compressors.

Especially if the work site is in a remote location or the job timeframe includes extended periods of inactivity (i.e., a long holiday weekend), a comprehensive strategy can help reduce the chance of equipment theft. Here are some tips to consider:

  • Create a job site security plan and assign security-related responsibilities. Have your team spend time at the start of a project identifying and addressing potential security weaknesses.
  • Prequalify contractors before hiring them. According to LevelSet, most theft happens internally and subcontractors can easily identify your weak spots.
  • Have a system to ensure only approved personnel enter the work site (i.e., photo ID badges).
  • “Mark your equipment with an identification system, such as a driver’s license number (state initials, number, followed by DL). This is the only traceable number in all 50 states. Put numbers in two spots: one that’s obvious and one that’s hidden.” (Source: Great American Insurance Group.)
  • Take inventory. For all equipment and tools that will be used at a site, create an inventory including a photo, name, description, serial number/VIN, date of purchase, worksite, and who is approved to use it.
  • Invest in equipment-related technology. GPS asset tracking hardware, operating systems, video telematics (with forward and rear-looking dash cams), and geolocation technology as a standard feature on new equipment (OEMs are increasingly offering it) can help you see where equipment is, get alerts when it turns on or moves, and more.
  • Register heavy equipment with the National Equipment Register (NER), an organization that manages a database with detailed information about equipment ownership and potential matches with theft reports to help facilitate information sharing with insurers, equipment owners, and law enforcement.
  • For smaller equipment, create a storage area. Assign and label a space for each piece so you can quickly and easily see when something is missing.
  • Disable or make large equipment difficult to remove from a site. ConExpoConAgg suggests removing fuses and circuit breakers; and installing fuel shut-off equipment, wheel locks, battery switches, ignition locks and other deactivation devices. Also park equipment in a wagon-train circle and place easier to move pieces like generators in the middle.
  • Create a check-in/check-out procedure. Have workers sign out equipment as they use it and sign it back in when finished.
  • Set a policy to report any theft or vandalism to management immediately, so there’s a greater chance of recovery (which is said to happen only 25% of the time).
  • Adopt additional security measures. Security cameras, fencing and access control systems, lighting and security guards help deter theft and can provide proof should a theft occur. Engaging local law enforcement and crime stopper groups to report anything suspicious outside of normal hours of operation can also help.
  • Create an end of day security checklist. Is all equipment properly locked away/secured? Are lights, motion sensors, and security equipment turned on and working? Is the perimeter fence solid and secured? Have all entryway locks been closed and double-checked?
  • Train employees and contractors on your equipment management plan and security protocols.

While developing a plan to keep an eye on your worksite equipment and machinery, you can count on RBT CPAs to keep an eye on your accounting, tax, audit, and business advisory needs. Interested in learning more? Give us a call.

 

RBT CPAs is proud to say all of our work is prepared in the U.S.A. – we never offshore. As a result, you get peace of mind that your operation’s financial and confidential information is handled by full-time, local staff who have met our high standards for quality, ethics, and professionalism.

Seven Tips to Recruit and Retain Drivers

Seven Tips to Recruit and Retain Drivers

What is it that makes a driver choose to apply to and work at one employer over another?

Find the right answers and you’ll be better to compete for and win this highly sought-after talent despite the shrinking talent pool and tight labor market.

  1. Create a culture people want to be part of. Whether you have 1 driver or 100, creating a work environment that shows you value input; care about safety; respect individuals; uphold high ethical standards; recognize employees; and more can earn your business a reputation as a place people want to work for.
  2. Offer competitive wages. Go onto any job board and search for driver positions to see how much others are willing to pay for the same talent you’re trying to attract. Search for other hourly positions (i.e., warehouse or restaurant worker) in your area to see how your pay scale compares, as you may be competing with these employers as well. Remember, the pay scale you adopt will send a message. If you can’t afford to sweeten hourly pay, consider exploring periodic payroll incentives, whether that’s in the form of a sign-on bonus or based on meeting quarterly or annual performance expectations.
  3. Offer benefits that matter. Medical, dental, vision, and mental health coverage are commonplace, as are plans to build income for retirement and even tuition reimbursement. In addition, to look at how you can build flexibility into scheduling (i.e., home daily or four days on/three days off) and consider including paid time off, especially if you’re looking to hire female drivers (a valuable talent pool worth considering).
  4. Formalize training and career development. Younger generations want more than a job – they want opportunities to grow and make a difference. Meet these needs by formalizing driver training and career development If you don’t have the bandwidth in-house, consider partnering with a local driving school or providing online training (by doing this, you may also be able to access new talent pools like students graduating from these schools).
  5. Be honest and transparent in your job description and posting. How much does the job pay? What benefits are offered? What does the job involve (i.e., activities and hours)? Even if you don’t get many responses, at least you’ll know the ones that applied are genuinely interested in moving forward.
  6. Keep the recruiting and hiring process moving. If you take too long, someone else may beat you to the finish line, and you will have to start all over again.
  7. Put equal effort into Once you find and hire the right employee, keep the momentum going. Maintain open and frequent communications. Ask for employee feedback, input, and ideas. Look for opportunities to recognize and reward stellar performance. Give professional growth assignments (i.e., driver representation on a task force or at important meetings). Check in periodically to make sure all is good. Go back to the first point on this list.

One last tip: know when to ask for help. RBT CPAs affiliate, Visions Human Resource Services, helps clients fill open positions or enhance their internal recruiting, hiring and retention processes. Give them a call. At the same time, remember, RBT CPAs is here to handle your accounting, tax, audit, and business advisory needs. Let us know what we can do to help your business succeed.

 

RBT CPAs is proud to say all of its work is prepared in the U.S.A.  We never outsource outside the U.S.A.  To learn more about the accounting, tax, audit, and business advisory services our local team members can provide for your business, give us a call.

Show Me the Money! IIJA, NY Budget & Funding Updates

Show Me the Money! IIJA, NY Budget & Funding Updates

With less than 20% of the Infrastructure Investment and Jobs Act (IIJA) funds being allocated since the $1.2 trillion legislation was signed into law on November 15, 2021 (according to ConstructionDive.com), some of the novelty about potential construction opportunities has waned. However, a renewed effort to hasten IIJA funding, the newly approved NYS 2023 Fiscal Budget, and upcoming funding opportunities may be just what’s needed to get projects off the ground.

In a press release issued on May 19th, the New York Building Congress launched the Infrastructure Action Council (IAC) to drive infrastructure advocacy by meeting with government leaders in Albany and Washington D.C. to get shovels in the ground.

According to Carlo A. Scissura, Esq., President and CEO of the New York Building Congress, “More than a year and a half since President Biden’s signing of the historic $1.2 trillion Infrastructure Investment and Jobs Act, we’re still sitting on billions of unspent federal dollars that we can use to improve the lives of millions of Americans.” He continues, “The Infrastructure Action Council unites leading voices in our nation’s building industry to advance our ongoing efforts to fund transformative projects across the state.”

Just a few weeks earlier, New York’s 2024 Fiscal Year budget was approved and although a proposed housing compact didn’t make it in, there is $23.2 billion allocated for key capital projects across the state, including:

  • $1.3 billion for road and bridge projects
  • $417 billion for Bronx River Parkway upgrades and bridge replacements
  • $43 million to replace the US Route 20 bridge over Cazenovia Creek
  • $51 million for rehabilitation and replacement of Hudson Valley Bridge
  • $2.4 billion to maintain and upgrade SUNY/CUNY campuses
  • $1.7 billion towards the Wadsworth health facility – a new public health lab on the Harriman State Office Campus Complex in Albany
  • $890 million for expanding mental health housing
  • $500 million to help deliver clean water to NY communities
  • $455 million for the Belmont Redevelopment Project
  • $400 million to the Environmental Protection Fund
  • $224 million for the South Shore Staten Island Seawall
  • $150 million to Regional Economic Development Councils
  • $135 for NYC’s Housing Authority
  • $105 million for State Emergency Operations Center upgrades
  • $100 million to buy and renovate a new State Police satellite crime lab
  • $50 million to fund a Homeowner Stabilization Fund for home repairs in 10 low-income communities
  • $30 million towards NY aquaria, botanical gardens, and zoos
  • $17.5 million for the Mamaroneck/Sheldrake River Flood Risk Management Project

(Source: MacLennan, Robin. FY 2024 budget includes $23.2 billion for capital projects across NY. May 5, 2023. NewYorkConstructionReport.com.)

Concurrently, NY funding opportunities have been announced for the Mid-Hudson Momentum Fund (here are the guidelines and application) and Round XIII of the Regional Economic Development Council initiative. The consolidated funding application for 30 different programs is available here; the deadline is July 28 @ 4 p.m. Be sure to visit the Mid-Hudson Regional Economic Development Council webpage for more information and resources, and to sign up for informational webinars underway.

While you’re identifying and evaluating opportunities for your construction company, remember, RBT CPAs is here to lighten your load by providing accounting, tax, audit, and advisory services. We’ve been proudly serving the Hudson Valley (and beyond) for over 55 years and complete all work locally – we never outsource or offshore. To learn more about how RBT CPAs can support and contribute to your success, give us a call.

Construction Opportunities in the NYS Budget and Federal Acts

Construction Opportunities in the NYS Budget and Federal Acts

The New York Fiscal Year 2024 budget was worth the wait for construction businesses thanks to over $23 billion for infrastructure and capital projects across the state. At the same time, the budget makes history with the most progressive legislation on building decarbonization, continuing to incentivize the move to sustainable buildings with climate-friendly, clean, and affordable energy and complimenting certain Inflation Reduction Act tax deductions and credits.

On May 2, New York’s Fiscal Year budget was approved. While a housing compact that would have resulted in 800,000 housing units being built didn’t make it across the finish line, the budget does include $23.2 billion for capital projects that touch a variety of industries and fields.

The New York Department of Transportation’s five-year plan enters its second year with more than $7 billion budgeted for road and bridge projects.

State and City University of New York (SUNY and CUNY) campuses will see $2.4 billion in transformations, preservation and upgrades including building envelope, interior, electrical, HVAC and utility projects.

Design options for a new Wadsworth Public Health Laboratory for research in Albany will be funded with $1.7 billion so lab operations currently handled in several locations can be consolidated into one.

In addition, $1 billion is budgeted for healthcare capital projects; $890 million for mental health housing; $500 million for clean water projects; $446 million for the third phase of the Hunts Point Interstate Access Improvement project; $224 million for a seawall project on the South Shore of Staten Island; $135 million for New York City Housing Authority projects; $105 million for State Emergency Operations Center upgrades; $100 million for a State Police satellite crime lab; $51 million for Hudson Valley bridge replacements and rehabilitations; $50 million for a Homeowner Stabilization Fund to finance home repairs in 10 communities; $17.5 million to design and construct the Mamaroneck and Sheldrake River Flood Risk Management project; and more.

The new budget also makes New York the first state to advance comprehensive legislation for zero-emissions for new buildings and homes seven stories and under starting December 31, 2025, and all new buildings by December 31, 2028 (there are some exceptions and exemptions).

What’s more, $200 million is allocated to the NYSERDA EmPower Plus Home Retrofits Program to help 20,000 low-income families retrofit homes with insulation, energy efficient appliances, and clean energy solutions. Another $200 million is set aside for critical infrastructure projects at New York Parks.

This comes on the heels of the Inflation Reduction Act’s January 1, 2023 effective date for 179D Commercial Buildings Energy Efficiency Tax Deduction enhancements and new 45L tax credits for homebuilders.

For 179D, when prevailing wage and apprenticeship requirements are met and a building reduces annual energy and power costs by at least 25%, there is a $2.50 square foot deduction. For each additional percentage that annual energy and power costs are reduced, the deduction increases by $.10, up to $5.00/square foot (up from $1.88/square foot in 2022). The deduction is available every three years for commercial buildings; every four for municipalities, tribal governments, and non-profits. What’s more, municipalities, tribal governments, and non-profits can allocate to the deduction to the person/people who create the energy-efficient commercial building property installation technical specifications.

For IRC Sec 45L, there are two tiers of credits – $1,000 or $5,000 – for eligible new or substantially reconstructed homes and dwelling units (that are part of a building) that meet certain ENERGY STAR and Department of Energy Zero Energy Ready Home (ZERH) program requirements. The credit is available for homes/dwellings acquired after December 31, 2022 through December 31, 2033. (For details, visit 45L Tax Credits for Zero Energy Ready Homes at Energy.gov.)

Between state and Federal efforts, one thing is clear: a lot of opportunities exist – and undoubtedly there will be more to come – for construction companies and builders that embrace clean energy and climate-friendly practices and materials.

Succession Plan: What’s Yours?

Succession Plan: What’s Yours?

As counter-intuitive as it may seem, at the same time that you’re developing and executing plans to grow your business, you should also be working on your exit plan, which can impact business decisions today and be a make-or-break factor in achieving your long-term goals.

According to Investopedia.com, “Data from the Bureau of Labor Statistics (BLS) shows that approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses make it to 15 years or more.”

At the same time that you’re striving to pass these milestones, there are more hurdles ahead. According to Score.org, as family businesses are handed down, 30% survive the transition from first to second generation; 12% survive from second generation to third; and just 13% of family businesses are still in the family after 60 years. That may not be bad news – if transitioning ownership outside the family was your plan all along. The important word here is “plan.”

Succession planning is a critical business owner responsibility that helps ensure your legacy continues the way you want. Even if you are not sure what that legacy is just yet, succession planning can help you figure that out, too. Then, as situations change and evolve, you can adjust succession plans accordingly.

There are two types of succession plans: one focuses on what will happen to your business and the other focuses on the talent you need to lead your business. They are closely inter-related – what you do with one has a big impact on the other, and vice-versa.

Business succession plan options are pretty straight forward: close it; sell it to outsiders or to your employees; or transition it to the next generation of your family. That doesn’t mean it’s easy to decide – each has its pros and cons, and each will enable a different legacy over time.

Talent succession plans can be a bit more complicated. You need one as a contingency should a leader (including you) or hard-to-find talent leaves unexpectedly (or even dies). You also need one for the long-term to ensure the next generation of leaders and talent are ready, willing, and able to take the reins once you are ready to pass them on. (When done correctly, long-term succession plans have the added benefit of driving employee engagement by showing employees someone at work cares about them; someone is encouraging their long-term development; and someone is providing them with opportunities to learn and grow.)

Succession planning may require anywhere from five to seven years lead time to develop and execute, as you may need to recruit, hire and acclimate new talent or ensure existing talent has the runway to learn everything needed before take-off. Once you have plans, make sure they stay relevant to changing business decisions and environment by reviewing them and making changes at least once a quarter. Perhaps most important is to get started on your plans now. Not having one has brought big name brands and family relationships to the brink of extinction, while strong, well-thought-out plans have led to success for generations.

One more thought: at the same time that you commit to develop succession plans, also consider getting your estate planning in order. As reported by Craft Brewing Business, “The federal estate tax, which applies to large estates at a rate of 40%, can have a crippling effect on businesses given to heirs without any kind of protections put in place. (Beals, Michael. “How Retiring Brewery Owners Can Protect Their Legacy.” December 2022. CraftBrewingBusiness.com)

RBT CPAs has resources that can help you on all fronts. Our advisory services professionals can help you think through succession plan options for your business. Our Vision Human Resource Services affiliate can help you with talent succession planning, a succession planning process, and recruiting. Plus, our Trust, Estate & Gift experts can help make sure the legacy you’ve worked so hard to build endures according to your wishes.

As always, our tax, accounting, and audit professionals are here to help free you up to focus on other aspects of your business – like succession plans.  To learn more, give us a call.

Are You Using the Right KPIs for Your Brewery?

Are You Using the Right KPIs for Your Brewery?

How do you know if your brewery is performing well, where there may be opportunities for improvement or fixes required, and whether it’s positioned to survive these financially uncertain times? Tracking the right Key Performance Indicators or KPIs can help keep growth and performance on track.

Perhaps one of the biggest challenges is deciding which KPIs will prove most valuable to your business.  There are KPIs that can apply to all businesses and industries; to the food and beverage industry; to specific brewing processes like fermentation; and to breweries in general.

Selecting KPIs that give you insights into big picture performance as a business along with KPIs specific to breweries may provide you the most valuable insights to help you track progress, analyze performance, and make decisions in today’s uncertain economic environment.

Financial KPIs to consider:

  • Cash flow reveals how much cash your business generates and how much money is flowing through your business. It’s calculated by subtracting cash outflow (i.e., taxes, rent, supplier payments, etc.) from cash inflow from customer payments.
  • EBITDA per unit measures profitability over longer periods of time like a month, quarter, or year (rather than a day or week). EBITDA stands for earnings before interest, taxes, depreciation, and amortization. In addition to cost of goods sold (COGS), which reflects the cost of raw materials and packaging, it accounts for all operating expenses (i.e., rent, marketing, salary, benefits, etc.).
  • Gross margin per unit helps measure profitability by determining the percentage margin of a single unit after subtracting total COGS.
  • Break-even point gives insight to profitability, by helping you understand the minimum number of units you need to sell in a time period to be profitable.
  • Days inventory reveals the number of days inventory is in stock before it is transformed and sold as a finished product, which provides insight into your working capital. A significant decrease may point to pending cash flow issues.

Production KPIs to consider:

  • Utilization rate is your brewery’s total production capacity measured as a percentage. When it decreases, production system issues or low orders may be to blame. It can also inform your decisions about scaling production.
  • Cycle time is the average amount of time it takes to produce your product, from start until it is shipped. This KPI gives insight into how efficiently your machines are operating by showing how many days it takes to produce your product from start to finish.
  • Throughput is the average number of units produced within a defined time period (i.e., day, week, month, etc.). This KPI gives insight into your production line’s efficiency. When it decreases, evaluate why and make needed adjustments.

Sales KPIs to consider:

  • Average order value reveals how much each customer typically spends per order, which helps with sales projections, production plans and run rate. If you notice this KPI decreasing, evaluate whether there are improvement opportunities within your sales process.
  • Fill rate measures how quickly total orders are filled and reach a customer’s destination. It provides insight into working capital efficiency and customer satisfaction, while also helping to identify the need for improvements.

For more insights, contact RBT CPAs’ advisory services team. As always, we’re also here to partner on all your tax, audit, and accounting needs so you’re freed up to focus on your business success. Give us a call today.