In today’s world, analytics and technology are essential tools in winning over customers. Time and time again, we hear about “big data” and how analytics are playing an important role for organization. But it is often unclear how businesses are supposed to be using “big data” technologies.

Big Data Takeaways

Here are three takeaways on how your business can stay ahead of the competition:

  1. Data is everywhere. The amount of data is not important, however what matters is what organizations do with the data. Organizations that appropriately use big data will thrive in our ever changing technological world.
  2. Big data can be analyzed by organizations to provide insight into better decision making and improved strategic business moves.
  3. Organizations that analyze data properly gain real-time visibility into:
    1. Transactions – Improves internal efficiencies and new product development.
    2. Customer experience – Improves the customer’s experience. Molds the company’s products to better suit the customer needs.
    3. Customer behaviors – Gain better understanding of customers. Offers organizations valuable real-time customer input and allows for more efficiency in marketing strategies.
    4. Business operations – Cut costs with improved decision making and decreased time management.

See the story below on how UPS, the world’s largest package delivery company, properly managed its big data to gain real-time visibility into its business operations.

As a company with many pieces and parts constantly in motion, UPS stores a large amount of data – much of which comes from sensors in its vehicles. That data not only monitored daily performance, but also triggered a major redesign of UPS drivers’ route structures. The initiative was called ORION (On-Road Integration Optimization and Navigation), and was arguably the world’s largest operation research project. It relied heavily on online map data to reconfigure driver’s pickups and drop-offs in real time. The project led to savings of more than 8.4 million gallons of fuel by cutting 85 million miles off of daily routes. UPS estimates that saving only one daily mile per driver saves the company $30 million, so the overall dollar savings are substantial.

Remember in today’s world, no matter how big or small your business is, everyone has access to data. As interpretation of this data becomes more readily available, it can help assist businesses with customers and everyday business operations. But, most importantly, a well-designed strategy of data analytics can keep your company one step ahead of the competition!

Contact Us

If you have questions regarding big data or how your company can take advantage of big data trends, please contact a member from Barnes Dennig by calling 513.241.8313 or filling out this contact form.

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Barnes Dennig would like to congratulate client STOBER Drives on their well-earned recognition. STOBER Drives was recently the focus of IndustryWeek’s Manufacturing Leader of the Week. IndustryWeek’s Manufacturing Leader of the Week highlights manufacturing leaders, executives, and stars who are driving growth in today’s industry and helping to shape the future of manufacturing.

Peter Feil, Vice President and General Manager of STOBER Drives discussed their apprenticeship program and how the company is focusing on developing their workforce with an eye on the future.

As the rural based company started seeing a trend of skilled labor looking for jobs closer to urban areas, STOBER Drives created their apprenticeship program to invest in their employees. The apprenticeship program has become a key part of their employee development program to hire and retain top talent within the community.

To read the full article:

If you have questions regarding this article, and wish to speak with a member of the Barnes Dennig team, please fill out a brief form here or call 513.241.8313.

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SOC Audit Preparation Steps

by Robert Ramsay | on September 2, 2016

Over the past few years more and more companies are becoming familiar with the new Service Organization Control audits. This audit (sometimes referred to by its AICPA standard “SSAE 16” which replaces the dated SAS 70 standard) is a more detailed analysis of a company’s internal controls and processes, depending on the type of Service Organization Control (SOC) report required. A SOC audit is often requested by clients of companies that handle sensitive financial information including payroll, cloud computing and loan servicing. A SOC audit provides assurance to clients that the proper internal controls exist to address information security and compliance issues. To help demystify the process and prepare the company, Barnes Dennig has provided a list of preparation steps that can be undertaken prior to the audit.

  • Document Core Practices – The type of organization and customer served will dictate which practices need to be identified and documented prior to the audit. Since a main goal of the SOC audit is to provide assurance that risk and compliance controls are functioning properly, it’s necessary to identify those which are of greatest importance to customers.
  • For example, if a cloud service company is conducting a SOC audit, then it makes sense that they would test the IT security, authentication and risk management procedures. This might include password updating policies, VPN access procedures, disaster recovery plans and physical security procedures. Attention will also be paid to companywide policies that may not be directly related to the service offering. Before the audit begins, it’s essential for the company to document and identify the key processes to be tested. If you would like assistance with this phase, Barnes Dennig offers a Policies and Procedures Bolstering service that assists with documentation and identifying best practices.
  • Conduct an Internal Review – This is often the most useful step a company can take when undergoing a SOC audit for the first time. Check supporting forms and documents to ensure they can be tied to a stated policy as well. If anything is outdated, make sure it’s updated and that the proper documentation, including forms, exists to support essential policies. An internal review will help catch these weaknesses before the formal audit. To assist with this process Barnes Dennig offers a Readiness Assessment. This involves drafting the controls and language necessary to complete the audit. We call this an open book test. We are able to assist with this readiness assessment until you are ready for an audit. When you are ready, we will discontinue the Readiness Phase and begin the actual audit.
  • By closely reviewing the core processes and controls identified in the prior step, it will be easier to identify gaps with policies, procedures, practices, documentation and workflow. As part of the process, be sure to review employee manuals making sure they are up to date and provide specific information about policies.
  • Document, Document – It’s important to note that all key controls should be documented. Not only should a company have every key process documented and offer supporting materials to ensure the facilitation, but there should be evidence that these are being followed. Although most companies know what needs to be done and how, SOC audits require written documentation to prove there is a process, that employees know when they should be followed, how the process should be implemented and offer a resource for assistance when needed.

Contact Us

The first time a company undergoes a SOC audit can be a challenging process. There are many steps that need to be considered and addressed, thus the more preparation that can be completed beforehand the better. If your company is considering a SOC audit or would like assistance with a readiness assessment, Barnes Dennig wants to help. For additional information, please contact us at 513-241-8313, or click here to contact us. We look forward to speaking with you soon.

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In early August 2016, the IRS released proposed regulations regarding the valuation of interests in family-controlled entities. Specifically, the Proposed “2704” Regulations focus on the elimination of most discounts when ownership interests are transferred between family members. Aside from that, let’s not forget that it’s an election year! Leading Democrats, including Secretary Clinton, believe the federal estate tax exemption should decrease from $5.45 million (as of 2016) to $3.5 million, and support federal estate tax rates increasing from 40% to 45%.  If combined, how many (millions?) more estates will need a new strategy to soften the tax bite. Talk about an imperfect storm!

By way of background, valuations of interests in corporations and partnerships for estate, gift, and generation-skipping transfer tax purposes can currently be discounted for minority ownership, lack of marketability, and lack of control. This allows a taxpayer to transfer family owned entities to the next generation at a discount from what the underlying value is. The new rules would eliminate the lack of control discount and suppress the lack of marketability discounts that are typically available.

The main points of the proposed regulations are as follows:

    • Transfers within three years rule (“deemed death bed planning”) – The proposed regulations have added a bright line test for lapsing rights. If transfers within three years of death result in a lapse of a liquidation right for the transferor, the transferred shares will be included in the transferor’s gross estate for Federal estate tax purposes. Per the IRS, this bright line test will avoid the fact-intensive inquiry which both the IRS and the taxpayer must go through to determine a donor’s subjective motive.

We personally believe that this is a gross over-reach by the IRS.  Three years is a long time, and a company’s strategic plan may be updated several times within that time-frame.

  • Disregarded restrictions – This is the most far reaching aspect of the proposed regulations, which essentially values transfers of interests in family-controlled companies as if the holder has a put right to sell the interest within six months. They will allow the holder to be paid by a note as long as the note is at market rates (no AFR) and the term is no longer than six months.

How many companies operate in such a manner where all shareholders can (in theory) take their share at any time? Is every company now required to keep cash on hand or maintain enough unused credit to fund the liquidation events when requested?  Don’t get overly excited my banker friends – I sense a strong challenge coming from this section…

  • Definition of family control – The regulations have tightened the definition of family control of an entity. The IRS concluded that the grant of an insubstantial interest in the entity to a nonfamily member should not preclude the application of 2704(b), because such nonfamily member interest generally does not constrain the family’s ability to remove a restriction on the liquidation of an individual interest. The IRS concluded that the presence of a nonfamily-member interest should only be recognized where the interest is economically substantial and longstanding, thus likely to have a more substantive effect.

In essence, no inviting the neighbors to join the family business to circumvent the rules.

To date, the regulations are proposed, and are not effective until made final and promulgated.  Let’s not forget that most proposed regulations, even non-controversial ones, are generally not finalized for two or more years.  Controversy is prevalent in these proposed regulations, and the IRS will no doubt receive many comments at its hearing on December 1, 2016.  If adopted in their current form, they only apply to transfers made at least 30 days after the restrictions become final (December 30, 2016 would be the earliest “worst case scenario” possibility). Even if the proposed regulations become final in their current form, there are several strategies still available to minimize transfer tax, like freezing the value of appreciating assets through a Grantor Retained Annuity Trust (GRAT). We encourage you to discuss with your team of advisors, which should include your estate attorney, CPA and valuation experts.

If you have questions regarding this legislation, and wish to speak with a member of the Barnes Dennig consulting team, please fill out a brief form here or call 513.241.8313.



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Major Revision to Not-for-Profit Financial Reporting

by Patrick Frambes | August 30, 2016

The Financial Accounting Standards Board (FASB) recently issued Accounting Standards Update 2016-14, providing changes to the financial reporting framework for not-for-profit organizations.

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Tax Court Issues Taxpayer-Favorable Opinion Regarding Like Kind Exchanges

by Laura Hunter | August 18, 2016

After deliberating for a decade, in the case G.H. Bartell, Jr. Est., U.S. Tax Court (August 11, 2016), the Tax Court has held that an intermediary with no benefits…

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The Perfect Order

by Tony Lane | August 10, 2016

Many distributors are looking for ways to increase client satisfaction while also managing costs associated with their supply chain. One of the best ways that a distributor can accomplish the two is by…

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Ohio Sales Tax Holiday Starts Today

by Emily Hinton | August 5, 2016

Friday, August 5th marks the beginning of a one-time sales tax holiday in Ohio, and you can save between 6.5% and 8% in state and county sales tax. The holiday begins on Friday, August 5, 2016 at midnight and concludes on Sunday, August 7, 2016 at 11:59pm. During the period, the following items are exempt […]

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