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Testimonial - Supremesoft Corporation - Jun 28, 2011

Posted by: Gene M. Wilhoite in Testimonials

Gene's expertise in accounting, finance, risk management, work process, and commercial lending have been real benefits to Supremesoft. His experience in IT Staffing and Services has combined with the aforementioned skills, to effectively support our strategic planning effort. In a nutshell, Gene is a great addition for our team who is contributing to our success. Siva Ravi Co-Founder

www.supremesoft.net

Government Contracting Naics Codes size Standards And Appeal Processes - Oct 31, 2009

Posted by: Gene M. Wilhoite in Articles

The majority of Metro DC small business owners and the businesses that support these, are more often than not, influenced by issues in the federal government contracting area. This article's intention is to bring attention to a subjective metric that is used day end and day out to measure businesses that offer contracting services to the federal government ...the North American Industry Classification System (NAICS) code.

If your business is interested in obtaining small business set-aside work, your eligibility to compete may hinge on which NAICS code the procuring agency designates for the solicitation. By law, the agency is required to select the NAICS code which best describes the principal purpose of the solicitation. But agencies do not always designate the appropriate NAICS code. I'm bringing attention to this issue because many of today's newly trained agency procurement representatives are under trained in this area. If you feel like your firm has been improperly classified or that the designated NAICS for solicitation is improperly stated, you have recourse as a business owner for appeal.

Because NAICS codes play such a critical role in determining who can be awarded a small business set-aside contract, it is important for any contractor interested in small business set-aside work to know and understand the key principles of NAICS code appeals. The following four important considerations were noted in a recent article posting by Steven J. Koprince of PilieroMazza PLLC:

1.Which procurements are subject to NAICS code appeals? To date, the SBA has declined to hear NAICS code appeals on unrestricted procurements. Therefore, as a practical matter, NAICS code appeals are currently limited to small business set-aside procurements or procurements in which price adjustments or other considerations are offered to small businesses.

2.Who can appeal? To have your NAICS code appeal considered by the SBA, you must explain how your business was "adversely impacted" by the contracting officer's designation. Usually, this is done by demonstrating that either your business does not meet the size standard applicable to the NAICS code selected by the agency, or that the NAICS code selected by the agency improperly allows businesses much larger than yours to compete for award.

3.When must a NAICS code appeal be filed? If you wish to appeal the agency's NAICS code designation, you must file your appeal within ten days of the date the solicitation was issued (unless the tenth day falls on a weekend or legal holiday, in which case, the appeal must be filed on the next business day). The SBA is very strict about the timeliness requirement and will dismiss an appeal if it is not filed within the ten-day window. A NAICS code appeal cannot be filed before a solicitation is officially issued (such as after the publication of a pre-solicitation notice). However, pre-solicitation notices and draft solicitations can help alert you of a possible NAICS code problem in an upcoming procurement, giving you the opportunity to attempt to convince the agency to adopt a different code in the final solicitation, or to begin preparing your NAICS code appeal in anticipation of the solicitation's issuance.

4.What is SBA's standard of review for NAICS code appeals? The SBA will not reverse an agency's designation of a NAICS code unless the agency committed a "clear error" of fact or law in designating the code. This standard of review gives contracting officers considerable discretion to assign NAICS codes, but that discretion is not unlimited. In fact, the "clear error" standard is less deferential to the contracting officer's decision than the "abuse of discretion" standard frequently employed by the Government Accountability Office in reviewing bid protests. A review of the SBA's NAICS code decisions bears this out.

Although the SBA does defer to agencies' NAICS code designations in close cases, it has not hesitated to overturn erroneous designations. NAICS code designations are a key component of small business set-aside work. By knowing how the NAICS code appeals process works, small business contractors can ensure that they are not caught off guard by an unexpectedly large or small competitive playing field, and can increase their chances of obtaining set-aside contracts.

Employee Fraud Prevention - May 29, 2009

Posted by: Gene M. Wilhoite in Articles

Employee fraud is a problem that statistically increases in tough economic environments. Despite the economic environment though, fraud is always lurching in the back-office background, even in good times. All business owners and managers like to think they can successfully vet out honest and skilled employees. The majority of the employees we hire are in this category, but people change with time. Financial, medical and emotional traumas can turn an honest staff accountant into an individual that channels his organizational skills and internal understanding of a successful business into his/her personal ATM. B2BCFO woks closely with a number of fraud prevention groups. Among these is the Association for Certified Fraud Examiners (ACFE). All of the indicators shared by groups like ACFE unfortunately point to significant increases in employee fraud over the past 2 years.

Small businesses are more likely to become the victims of fraud than larger businesses. According to the Association for Certified Fraud Examiners (ACFE) 2008 Report to the Nation on Occupational Fraud and Abuse, ACFE cites that the smallest organizations, 100 employees or fewer, suffered higher median losses than did the largest organizations (10,000 employees or more). While the largest companies suffered losses of $97,000 on average, small businesses' losses averaged $127,500 based on its survey, which was conducted between April 2007 and February 2008.

Considering the potential losses, it behooves small-business owners to make the prevention of fraud a priority in their businesses. Though no business owner wants to feel it employees unscrupulous people, sometimes temptation or personal financial pressures can push even the hardest working, most trusted employee into perpetrating fraud.

The first step in preventing employee fraud is letting employees know you're watching for it. "Perception of detection is a very powerful deterrent," says John Gill, a certified fraud examiner and general council and director of self-study publications for the ACFE.

Second, hire the right employees. Conduct background checks for people handling inventory and money. Check past employment, criminal convictions, references, and education and certifications. Also, conduct drug screening since often, according to Gill, employees will steal from a business to support an addiction. Remember, however, to always get the written consent of candidates before doing research since many federal and state laws govern the gathering of such information.

Third, maintain strong internal controls. Have checks and balances in place. For example, you don't want a signatory on the bank account balancing the check book. If I can write checks on the account and I reconcile the bank book, I'm free to manipulate the check register.

Fourth, make sure expenditures are approved. For every expense, have a manager and someone in accounting approve it. The supervisor will ensure that the expenses are valid, while accounting will run the math.

Fifth, monitor cash situations. In a retail situation, Gill suggests having security cameras monitor activity at registers and storage areas where inventory is kept. "People are less likely to do it if someone is watching them," he says. Conduct surprise audits. Catching an employee off guard could be your best bet in discovering fraud.

This is a simple overview. I personally have supported firms in both the preventive and evidence collection phases of employee fraud management, and I much prefer the former. Please give this topic strong consideration and truly look hard at your prevention. If you have additional questions or concerns about fraud in your workplace feel free to contact me by phone or e-mail.

The Newly Legislated Cobra Premium Subsidy Frequently Asked Questions Faq - Apr 21, 2009

Posted by: Gene M. Wilhoite in Articles

Employee lay-offs are always difficult for business owners. Today's current environment has unfortunately made this a reality, as firms pare resources to survive for the next challenge. The federal government has enacted legislation that was effective March 1, 2009, to help involuntarily terminated employees continue their benefits during their search for employment. Over the past month I have encountered numerous questions relative to this topic so I am focusing this post on the COBRA Premium Subsidy.

The new COBRA Premium Subsidy is now in effect for employees who were involuntarily terminated from September 1, 2008 through December 31, 2009. If you provide COBRA coverage on a monthly basis, the subsidy will start on or after March 1, 2009. Simply stated the employee will only be responsible for 35% of the monthly medical insurance premium, versus 100% prior to the new law. The federal government will fund the 65% balance. A siginificant savings to a laid-off employee in search of work.

This is a simple overview, Keller Benefit Services (Keller) of Bethesda MD (www.kellerbenefit.com) has created a list of FAQs to address the most common questions that arise in planning for the new COBRA Premium Subsidy. They have been kind enough to share excerpts from their recent article titled "The New COBRA Premium Subsidy, Frequently Asked Questions (FAQ)". These shared excerpts follow below.

1. How does the subsidy work?
Involuntarily terminated employees and their family members who lose group health coverage on or after September 1, 2008 and by December 31, 2009 will pay a reduced rate for COBRA continuation coverage, for a limited period of time. Employers or COBRA administrators will start charging these "assistance eligible individuals" an amount equal to 35% of the COBRA premium. The employer will recoup 65% of the COBRA premium from the federal government.

2. How long does the subsidy last?
The subsidy may continue for an assistance eligible individual for up to 9 months, starting on or after February 17, 2009, which is the effective date of ARRA.

3. How will the federal government reimburse employers for the subsidy?
When employers make federal payroll tax (FICA) deposits to the IRS, they will take a credit for the subsidy owed back to them. The IRS has issued a 2009 Form 941 with a line for "COBRA premium assistance payments", which you can download at www.irs.gov.

You cannot take the credit until you have received the 35% COBRA premium from the COBRA participant. Employers will need to maintain documentation to be provided to the IRS upon request, including attestations of involuntary terminations, amounts of subsidy provided, subsidy participant names and Social Security Numbers.

4. Is the subsidy available for medical, dental, vision and EAP plans?
Yes, if you have determined they are group health plans subject to COBRA. Although health care flexible spending accounts can be subject to COBRA, they are specifically excluded from the subsidy rules.

5. Is the subsidy available for self-insured health plans?
Self-insured medical plans, including Health Reimbursement Accounts (HRAs), are subject to COBRA and therefore are also subject to the subsidy rules.

Health Savings Accounts (HSAs), which are bank accounts, are not subject to COBRA or the subsidy. The underlying high-deductible health plan is subject to COBRA and therefore the subsidy rules.

6. When does it take affect?
The subsidy begins on or after February 17, 2009, which is the date the law was enacted. If your COBRA period of coverage is monthly (which is typical), it will go into effect March 1, 2009. For purposes of this FAQ, we generally refer to March 1, 2009 as the effective date.

7. We don't have time to amend the costs and procedures by March 1, 2009. What can we do about complying with the subsidy?
You need to notify assistance-eligible individuals by April 18, 2009, preferably using DOL model notice language. You have a 60-day billing grace period to provide the subsidy. Assuming your COBRA coverage is on a monthly basis, you can charge the full COBRA rate on March 1 and April 1. By May 1, you should be charging the subsidized rate, with a credit towards coverage or refund back to March 1 for anyone who was assistance-eligible on that date. You have up to 180 days to provide a credit for excess premiums paid during the individual's subsidy period. If you believe it is not reasonable for the credits to be applied towards the COBRA premium for that individual, you must refund the ....

The Receivables Exchange..Raising Cash Without The Banks - Mar 25, 2009

Posted by: Gene M. Wilhoite in Articles

In today's tough business environment, every avenue for raising cash for working capital has to be considered. The selling of a business's Accounts Receivables on a publically traded exchange is definitely an avenue that needs examining. The Receivables Exchange (TRE), which opened for business in November of 2008 and is based in New Orleans, has had a strong volume following in its first five months. The TRE is a good source for supplementing a current bank relationship, as it auctions individual invoices that can be subordinated to a bank's first position on assets. It can also act as a primary funding source.

How it works:

It has a sell side and buy side. The sell side (companies looking for capital) has the ability to post a receivable to the exchange in an auction style format for the buy side ( capital providers) to bid on their receivable. Here's where it gets really cool. When the sellers post an auction, they have the ability to set parameters to this auction (when they want money, how much advance they would accept, and the most they'd be willing to pay for it). If for whatever reason, the buyers do not meet parameters, the sellers are not obligated to trade and walk away. When an invoice auction is closed, funds are wired the working day after closing from the Exchange to the seller. The Exchange brings Wall Street to Main Street.

Things that separate the Exchange from other financing :

It works complimentary to any financing option businesses currently have. The lien right would only encumber the individual invoice auctioned, as opposed to all assets of the business. You are never obligated to trade. The Exchange will allow a minimum invoice or invoice bundle of $10,000 for auction. The only requirements for a seller firm are as follows: 1) Two years in existence. 2)Annual revenues of $1.5M. 3) US based. The only fee for a seller to sign up is a $500 one-time registration fee.

This is definitely a concept to consider in today's tough cash environment. For more info link to TRE at WWW.RECEIVABLESXCHANGE.COM . You can also call or e-mail if you would like to discuss TRE in greater detail.

Creative Cashflow Raising In A Difficult Environment. - Feb 28, 2009

Posted by: Gene M. Wilhoite in Articles

This month I want to share a creative approach to raising cash if you own a business in need. This approach doesn't fit every business owner's scenario, but a few of you may be pleasantly surprised. This approach, which uses personal real estate eguity to raise cash without borrowing money or selling the property, is called a Reverse Equity Exchange (REX) .

An example of a REX transaction is as follows. A typical REX provider will offer $70,000 cash to the owner of a $900,000 house who is willing to share 30 percent of future appreciation, based on an appraisal at transaction date. That rises to $117,000 in exchange for a 50 percent share. Existing equity in the home -- and future value growth attributable to capital improvements -- are not affected. There are no interest rates or monthly payments, and the timing of the end of the agreement usually is up to the property owner, although it's generally tied to a sale. Unlike a reverse mortgage, where interest charges accrue and are added to the debt that must eventually be repaid, the REX provider makes its profit or takes its loss when the house is sold or the agreement otherwise ends. At that point, the owner repays the cash he was advanced. If values remain flat, the homeowner repays that amount, without interest, out of the sales proceeds. If values go down, the REX provider takes a loss equal to the percentage of the value change it shared in the agreement, thus reducing but not eliminating the homeowner's loss.

What's in the fine print of these cash-for-appreciation deals, and why are they not for everybody?

No. 1: All the programs to date are highly targeted toward specific property types. For example, the REX does not allow condos, duplexes, townhouses, rental real estate, tenant-in-common dwellings, or houses that are not single-family, detached dwellings that are "typical" for their area.

No. 2: Typically REX providers require at least a 25% equity stake by homeowners, based on a current appraisal.

No. 3: Although sponsors bend over backward to emphasize that these transactions are not "mortgage debt," the fact is that they are real estate transactions that give REX sponsors the legal right to a portion of an owner's future market value. At the extreme, owners who take the money but do not abide by the contract agreements can face legal remedies ranging all the way to foreclosure.

I have greatly simplified the REX transaction. Hopefully this approach will spur some creative thinking during this tough economic climate. For more info click WWW.REXAGREEMENT.COM a REX industry leader. Additionally call me or e-mail if you would like to discuss the REX further.

Testimonial - Datacom Connections Inc. - Feb 24, 2009

Posted by: Gene M. Wilhoite in Testimonials

Gene's work as a part-time CFO for my firm truly helped bolster our accounting and finance functions. He established a GAAP based accounting process that accurately reflects our transactions and worth on a job, office, and overall basis. He created a standardized operating procedure that ensures accurate, compliant accounting, managed risk, and effective, timely reporting. Additionally Gene's work with our Bank and CPA optimized our ability to finance our business and minimize our tax burden. Gene continues currently as a trusted advisor to my firm. His guidance during a difficult period at Datacom has been greatly appreciated.

Sincerely

Scott Stewart

Principal

Datacom Connections, Inc

www.datacomconnections.com

Testimonial - Edj Associates - Nov 20, 2008

Posted by: Gene M. Wilhoite in Testimonials

Gene Wilhoite consulted my firm as CFO over a multiple year period. His ability to create effective operating processes that merged effectively with our accounting platform, significantly improved my ability to perform my functions as firm Controller. Additionally, his background in financing emerging growth firms, was very benefical in supporting our banking relationship. As relates to our principals, his guidance relative to exit strategy was incredibly helpful in strategic business planning.

Lance Brantley

Controller, EDJ Associates

www.edjassociates.com

Testimonial - Vistarms Inc. - Oct 29, 2008

Posted by: Gene M. Wilhoite in Testimonials

Gene Wilhoite supported my firm as CFO over a seven year period. During that period Gene successfully engineered our operating infrastructure to support a firm that doubled revenues each year over a four year period. His ability to manage our strategic support vendors, i.e. banking, auditing, legal,and insurance was paramount to our success. His guidance in process management, government contracting, and external/internal accounting was also extremely beneficial. Last but not least, Gene lead our M&A team in the successful sale of my company to a public firm. Gene was truly an asset as a financial advisor.

Don Harvey

CEO, VistaRMS Inc.