Game 1 of the NBA Finals, a rematch of last year’s duel between the Golden State Warriors and the Cleveland Cavaliers, kicked off Thursday night with the Warriors coming away with a decisive 104-89 at-home victory over the Cavs.
While the league’s two most popular players, Lebron James and Stephen Curry, battle it out on the biggest stage in the post season, not making it to the finals isn’t the only thing that is causing some elite NBA athletes to feel excluded.  Case in point: New Orleans Pelicans forward Anthony Davis is widely recognized as an elite rising star in the NBA, yet last Thursday the NBA announced Davis would not be selected on any of the three All-NBA teams. His pride was probably wounded by the news, but his wallet took the biggest hit.
Davis had a clause in his contract that would award him $24.8 million as part of a requirement for the “Rose Rule.” Davis needed to make one of the All-NBA teams in order to complete requirements for a big bonus.
The Rose Rule stipulates that a player coming off his rookie contract is eligible for a higher raise structure if he accomplishes two of the following: wins MVP, is selected as an All-Star starter, or is selected for All-NBA. Earlier this year Davis was not selected as an All-Star starter after an injury-plagued season with the Pelicans, and was questionable to make the All-NBA team. Now that the NBA announced the official rosters for the three All-NBA teams, which did not include Davis, he will not earn that extra $24.8 million.
Davis’ five-year deal is now worth $121 million, instead of a possible $145 million. Davis, the No. 1 pick in the 2012 NBA Draft, was a member of the 2014-2015 First-Team All-NBA squad. Had his rookie contract been up last year he would have earned the $24.8 million he missed this year.
While the devil is always in the details, what a missed opportunity for Davis!
Whether a player contract or an M&A transaction, every negotiation is unique and needs to be approached with the proper strategy and insight. Talley & Company is uniquely equipped to provide the technical and managerial expertise to help you plan, negotiate, structure and execute on your acquisition strategy.

Tesla’s CEO Elon Musk is one of the more ambitious entrepreneurs the world has ever seen, routinely drawing comparisons to Steve Jobs, with some even putting him ahead of the late Apple co-founder and CEO. Now Musk is trying to accomplish something few manufacturing companies could ever dream of: Musk recently announced plans to ramp up capital expenditures to support an incredibly aggressive plan to increase the current production capacity of 20,000 vehicles in the current quarter to 500,000 per year by 2018.

“It’s not a question of demand,” Musk said. “Demand is not our issue, production is our issue. We have more demand than we can address and levers we can pull to increase demand, and we’re not doing it.”

Musk’s point was that if Tesla engaged in conventional advertising (they do very little advertising outside of PR events), it could increase demand, but its more prevalent issue now is being able to produce its cars, and build them well.

“It’s worth saying that making one of something is quite easy,” Musk said. “Making lots of something consistently that’s going to last a long time is extremely hard. In fact, it is way harder to make the machine that makes the machine that it is to make the machine in the first place.”

From his perspective, Tesla has people lining up around the block to buy its cars and is far more worried about being able to build the vehicles and properly support them than it is about seeing demand drop off.

Scaling is hard. As many seasoned entrepreneurs will tell you, once you’ve achieved a certain level of success (it might take form of earning a few million in revenue, hiring more than 10-20 employees, etc.), the hard work really begins. A business in growth or scale mode faces a whole new set of different challenges and opportunities that may require a change in attitude and approach. Your ability to recognize this can mean the difference between spinning your wheels and achieving your next milestone.

Talley & Company understands the challenges facing entrepreneurs with generating and protecting income. Whether you’re looking to improve your profitability, build your brand through a business transaction or capital raise, Talley & Company is the consulting and financial services firm dedicated to strategic business solutions that deliver meaningful results.

Forget spending hours laboring over a task you despise month after month, these days there’s hardly anything you can’t outsource online. Call it a by-product of modern technology, or a result of people’s penchant to work smarter not harder…either way this trend will continue.  Here are a few of our favorite examples where ingenuity and effective outsourcing came together.

Customer Service Calls

While many companies are familiar with outsourcing their own customer service, this was a service lacking outside of the corporate world, until now. A Boston-based startup called GetHuman is offering to handle your most-dreaded customer service calls for $5-$25 each. They provide you with a “problem solver” who will call a company’s customer service line on your behalf to resolve issues. Fighting for your airline refund, dealing with the cable company, or cancelling your gym membership just got a whole lot easier.

Personalized Birthday Videos

Stuck for a birthday gift for your best friend or relative? Head to Fiverr, “the world’s largest marketplace for creative and professional services”, where you can pay $5 for videos of people singing happy birthday in random and funny ways — you are only limited by your imagination— all recorded for your special someone.

Your Own Job

One day, “Bob” (his real name has never been disclosed), a software coder, realized that his job could effectively be outsourced to a developer overseas. And he did exactly that. He partnered up with a Chinese firm based in Shenyang (a locality that is known for a rich talent pool in software) and paid it less than one-fifth of his six-figure salary to develop his code write-ups, which he reviewed and handed off to management every day, on time and with high marks in quality. With all of his new free time, Bob engaged in more fulfilling activities, such as watching YouTube cat videos and surfing Ebay (that is…until he was discovered and outed by his employer, yikes).

Thinking of how you might enhance the day-to-day operations of your business?

If bookkeeping, timesheet or payroll technologies are on your list of productivity tools to investigate, Talley & Company can provide you with the assistance necessary to choose the right tool for your business.

For more information on how Talley & Company can help grow your business, give us call today.

The death of Grammy award-winning artist Prince last week ignited worldwide disbelief and mourning for the enigmatic star, but it’s also raised an important issue many people don’t want to think about: estate planning. Prince had 16 platinum albums to his name and tight control over his brand, yet it’s still unclear if he had a will. In the latest turn of events, Prince’s sister, Tyka Nelson, filed paperwork in court saying that Prince, who died on Thursday at age 57, did not leave a will.

On Tuesday, Tyka Nelson filed court documents to open a probate case in Minnesota’s Carver County, which is where her brother’s Paisley Park estate is located. Tyka Nelson is the only full sibling of the late musician. Prince was not married and had no living children or parents who could potentially inherit the millions from his estate.

Prince’s sister has requested a special administrator be appointed to deal with the late singer’s assets. Prince was worth up to $300 million according to various estimates and his estate is expected to grow as sales of his music have grown rapidly since his death.

Without a will, Minnesota law states that his estate would go to his sister and his half-siblings. They would control his brand, including Prince’s NPG record label and thousands of unreleased songs.

While there’s also the possibility that Prince did determine what he wanted to do with his estate in the event of his death by establishing a trust, it is likely a lawyer would have come forward by now if Prince had in fact drafted a trust.

You don’t have to a part of the “Millionaires Club” to face estate planning challenges. Any individual or family with a business, real estate holdings, household property, liquid savings, or stock investments will want to establish a thorough estate plan before unforeseen circumstances intervene. The only way to make sure more of your money is transferred to the people and causes you care about (over the IRS) is to plan for it with your advisors. Talley & Company is here to help.

While it’s nice to get a few extra days to file your taxes this year, the annual chore of handing over money to the government can get people a little grouchy. Businesses have a long-standing tradition of using tax day as a marketing opportunity in hopes of trying to capture some of the refund money tax payers receive each year, with this year being no different. If you’re looking for a distraction from filing your taxes at the last minute, here’s a fun roundup of the best deals and freebies celebrating the end of the tax season on Monday, April 18.
Food and drink
  • Boston Market: On Tax Day, guests can get a half-chicken individual meal with two sides, cornbread, a regular fountain drink, and a cookie1 for $10.40, in honor of the awesome form.
  • Outback Steakhouse: Diners can get 15 percent off their check on April 18 if they go to the web site’s Offers section and sign up for emails to receive a coupon.
  • Hard Rock Cafe: Sing your favorite song on stage on April 18 and your reward is a free Legendary Burger.
  • Bruegger’s Bagels: From April 15 to 18, a bundle including 13 bagels and two tubs of cream cheese costs $10.40, a savings of about $3.50 off the normal price.
  • Sonic Drive-In: Cheeseburgers are half-price on Tax Day.
Services
  • Office Depot & Office Max: At Office Depot and Office Max, download a coupon from their website and get five pounds of bulk bin shredding now through April 23. Staples is offering the same deal, but on April 18 only.
  • Planet Fitness: Guests 18 or older qualify for a free HydroMassage from April 18 to 22 at more than 1,000 of the fitness chain’s locations. Coupons can be downloaded from the Planet Fitness web site starting April 18.

 

Founded in 1989, Talley & Company is the premier consulting and financial services firm dedicated to advising high net worth individuals and their closely held entities with the strategic business solutions that deliver meaningful results.

 

The Association of Certified Fraud Examiners (ACFE) released its biannual 2016 report last week.  According to the report, the typical organization loses 5 percent of its revenue to fraud each year.  The losses caused by fraud reported in the study found an average loss of $2.7 million per case, with $150,000 being the median loss. We’ve compiled a shortlist of their findings focused on small to medium sized businesses.

The most common form of occupational fraud found was asset misappropriation, which occurred in more than 83% of cases and caused a median loss of $125,000.  Financial statement fraud was much less common (less than 10% of cases reported) but caused the most damage, with a median loss of $975,000.

While corruption was more a common fraud risk in large organizations, check tampering, skimming, payroll and cash larceny schemes were twice as prevalent in small organizations as in larger organizations.

Small Organizations are at the most risk. Organizations with fewer than 100 employees were the most likely to suffer from fraud in the study, representing about 30% of the cases reported. The median loss suffered by those firms was $150,000, the same as those suffered by large organizations (10,000+ employees) and more than organizations with 1,000-10,000 employees.

Small organizations are particularly vulnerable to fraud because they a significantly lower implementation rate of anti-fraud controls and have fewer resources to withstand losses. Small organizations also are much less likely to have anti-fraud controls in place than larger organizations.

For the full ACFE executive summary, go here.

While no company, even with the most robust internal controls, is completely protected from fraud, it’s important that entrepreneurs put measures in place that protect their company’s financial and management data.  Internal controls are critical in the process of setting and achieving operational objectives, accurate and reliable financial reports, and compliance with applicable laws and regulations.

For more information, contact Talley & Company today.

If you’re planning to do some egg-dyeing or egg-hiding for Easter, prepare to spend a little more for a carton than you did last year. In February 2016, the average retail price of eggs was $2.27 per dozen, which is considerably higher than the $2.07 per dozen last Easter. Grocery-store prices are still showing the effects of the avian influenza outbreak that hit the U.S. last year, which drove prices up almost 18% nationwide in 2015, when nearly 40 million egg-laying chickens died. While that won’t stop Americans from spending $17.3 billion on Easter this year, here’s what you can learn from it.
Costs of eggs not your problem? If you are a business owner, you most likely know just how much cost increases outpacing revenue gains can affect your profitability. Even if you’re in a field as remote from food as the semi-conductor business, changes in your supply chain, production process, logistics or distribution system, and any number of additional forces can have a major impact on your profitability. While there’s little anyone can do about sudden disasters like the Avian flu outbreak last year in the egg industry, there are plenty of warning signs that come with more everyday events impacting your business.
With the right advisors working with you to set up and analyze your financial data, you can effectively ascertain many negative and positive trends affecting your bottom line well before they hit mainstream news. Knowing where to look and having it at your fingertips can help you develop solutions before experiencing deep cuts into your bottom line.
Talley & Company has helped clients find best practice solutions to implement systems and controls that identify leading & lagging indicators, allowing them to capitalize on growth trends in their product lines while maximizing profits. From inventory controls that help monitor and actively increase cash flow on a day-to-day basis, to budgeting & forecasting tools to see both where you’ve been and where you are going, Talley & Company has your business’ profitability covered.

The professionals at Talley & Company are here to help monitor, protect, and put to work your hard-earned money in the most profitable way possible. Call Talley & Company today.

Erin Andrews recently was awarded a $55 million verdict in her peephole lawsuit, but unsurprisingly, the IRS may be the real winner in the case. The perpetrator, Michael Barrett is on the hook for $28 million whereas the Marriot franchisee and operator, West End Hotel Partners LLC and Windsor Capital Group Inc., face the remaining balance of $27 million.  Though the verdict will likely face an appeal by the hotel franchisee and operator and the perpetrator will unlikely have the funds to pay up, taxes may be the biggest thing standing between her and a big pay day.
The IRS treats damages for physical injuries (e.g. broken bones from an auto accident) as tax-free. So are damages for physical sickness. But since 1996, your injury must be “physical” to be tax-free. The IRS says your injuries must be visible, so Ms. Andrews may have trouble treating the damages awarded to her as tax-free. She was understandably humiliated and clearly suffered emotional distress. But without being able to argue something considerably more ‘physical,’ it is all subject to tax.
Ms. Andrews may have more tax-mitigating options available by choosing to settle out of court. In a settlement both parties can attempt to iron out the tax issues and tax reporting, with varying amounts of success. 
Attorney fees can be a tax trap, too. If you are the plaintiff and use a contingent fee lawyer, you’ll usually be treated (for tax purposes) as receiving 100% of the money recovered by you and your attorney, even if the defendant pays your lawyer directly.
Ms. Andrews did the right thing and showed an enormous amount of courage by standing up for herself in court. From a financial viewpoint, her case presents an excellent example of the significant tax implications revolving around settlements/judgments that not everyone is aware of.
If you’re planning on doing estate planning for the first time in 2016, or want to make sure your current planning documents aren’t out of date, staying on top of the latest changes is important. Here are several updates to keep in mind if you need to establish or revisit your estate plan in 2016:
The estate-tax exemption. For 2016 you can leave bequests (gifts to other individuals upon your death) worth up to $5.45 million (up from $5.43M last year) free of any federal estate tax. If you’re married, both you and your spouse are entitled to separate $5.45 million exemptions. If one spouse dies and does not use up his or her full exemption, the leftover exemption amount can be transferred to the surviving spouse.
The gift-tax exemption. You can also give away a cumulative total of up to $5.45 million to whomever during your life without owing any federal gift tax. If you’re married, both you and your spouse are entitled to separate $5.45 million gift-tax exemptions. If one spouse dies and does not use up his or her full exemption, the leftover exemption amount can be transferred to the surviving spouse.
The $14,000 annual gift tax exclusion remains the same. For those with large estates, the $5.45 million estate-tax exemption isn’t enough. That’s where the $14,000 annual gift tax exclusion rule can help. Gifts made under the $14,000 annual gift tax exclusion rule (more on that below) will not trigger any federal gift taxes, nor will they reduce your federal gift-tax or estate-tax exemptions. However, gifts in excess of the $14,000 will reduce both your federal gift-tax or estate-tax exemptions dollar for dollar.
The benefit of making gifts up to the exclusion amount: they reduce your taxable estate, and they shift any taxable income generated by the gifted money to your kids, who are probably taxed at a lower rate than you. Gifts under the annual gift tax exclusion rule don’t cut into your $5.45 million gift-tax or estate-tax exemptions, but they chip away at your taxable estate. So your estate tax exposure can over time be reduced by taking advantage of the annual gift tax exclusion.
For a full list of the must-know facts that will affect estate planning in 2016, contact Talley & Company today.
Last week the IRS warned that email and texting scams aiming to trick U.S. taxpayers into providing personal data have surged 400% in 2016 so far. The schemes involve phishing (“fishing” for information and “hooking” victims) messages designed to trick taxpayers into believing the emails and texts represent official communications from the IRS, tax software companies or others in the tax industry. Here’s what you need to know.
What to Look For in These Scams
You may receive an official-looking email or text message from what appears to be an official source, whether the IRS or someone in the tax industry. The messages typically ask for data related to tax refunds, filing status, or seek confirmation of personal information, including ordering IRS transcripts or verification of IRS Personal Identification Numbers.
When you click on the links (which you shouldn’t be doing), you are sent to what appear to be government websites that ask for Social Security numbers and other personal information that identity thieves can profit from filing false tax returns. The sites may also contain malware that infect taxpayers’ computers and enable cyber-thieves to gain access to files or track consumers’ keystrokes to get personal data.
It is important to keep in mind the IRS generally does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.
Also Note That the IRS Will Never:
  • text/email you demanding immediate payment, nor will the agency call about taxes owed without first having mailed you a bill;
  • demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe;
  • require you to use a specific payment method for your taxes, such as a prepaid debit card;
  • ask for credit or debit card numbers over email/text/phone; or
  • threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.
Accounting Today recently released a summary of the IRS’ “Dirty Dozen” list of the top tax scams for 2016. You can view it here.

 

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