Now that the annual tax deadlines have passed, it’s important for businesses to take a step back and review their total tax situation. It’s a crucial time to improve operations in your current operation and for future plans. Here three strategies to consider when reviewing your company’s total tax: Identify areas for improvement By reviewing your total tax situation, you can identify areas where you may be overpaying or underpaying taxes. This can help you adjust operations and financial planning to improve your tax situation to help your overall operational efficiency. Plan for the future Pos ..read more

High interest rates can have a significant impact on private equity strategy, particularly when it comes to driving efficiency. Let’s explore why high interest rates matter to private equity firms and how they can use this environment to their advantage. The impact of high interest rates on private equity firms Interest rates are the cost of borrowing money, and they are set by central banks in response to economic conditions. When interest rates are high, borrowing money is more expensive, which can have a ripple effect throughout the economy. For private equity firms, high interest rates can ..read more

In the fast-paced world of business, efficiency and accuracy are paramount. For portfolio companies looking to streamline operations, accounts receivable (AR) and accounts payable (AP) automation offer a powerful option. By leveraging automation technology, businesses may improve their financial processes, saving time, reducing errors, and improving overall productivity. AR/AP automation uses software to digitize and streamline invoicing, payment, and reconciliation processes. This technology not only eliminates manual data entry tasks but also enhances data accuracy and provides real-time ins ..read more

President Biden has released his 2025 budget and supporting tax revenue proposals, commonly known as the Green Book. While the Green Book serves as a conceptual starting point for discussions with Congress, it provides insight into Democratic tax policy. These proposals are subject to legislative approval (which may be unlikely in the Republican controlled House) and may evolve during the legislative process. A few of the more significant proposals applicable to private equity include: Corporate income tax rate increase Biden proposes raising the corporate income tax rate from 21% to 28%. If ..read more

As a grandparent, the joy of watching grandchildren grow and succeed is unparalleled. Through this rewarding journey, valuable lessons emerge that can be applied to nurturing and improving portfolio companies. Here are some key insights: Patience and long-term vision Just like raising children, fostering portfolio companies requires patience and a long-term vision. Building a solid foundation, providing support through challenges, and celebrating milestones are essential for both grandchildren and businesses. As a grandparent, you understand the importance of investing time and effort for sust ..read more

Selling a business to a private equity firm can be a complex and strategic process. Private equity investors look for specific criteria when evaluating potential acquisitions. Learn the top three critical factors to consider when selling a business to private equity: Valuation and deal structure One of the most crucial aspects of selling a business to private equity is determining the company’s valuation. Private equity investors will conduct thorough due diligence to assess a business’s financial health, growth potential, and market position. It’s essential for the seller to have a clear unde ..read more

When it comes to managing a portfolio company, tax strategies play a crucial role in boosting returns and financial performance. Implementing effective tax planning can significantly impact the bottom line and enhance overall profitability. Here are five top tax strategies portfolio companies can use to their advantage: 1. Use tax-efficient structures Choosing the right business structure can have a significant impact on tax liabilities. Portfolio companies should consider options such as limited liability companies (LLCs), S Corporations, or partnerships, which offer various tax advantages, i ..read more

Investing in an operating company can be complex and requires careful structuring to improve returns. One strategy gaining traction within the realm of buy-side private equity investments is leveraging Internal Revenue Code Section 1202. This provision offers a range of benefits that may significantly enhance the overall profitability of investments in portfolio companies. Understanding Section 1202 Section 1202 — also known as the Qualified Small Business Stock (QSBS) provision — was introduced to incentivize investment in small businesses. Under this provision, eligible investors can potenti ..read more

As we reflect on 2023, it will be remembered for some economic uncertainty and slower pace of deals than we’ve experienced since the onset of the COVID pandemic. Despite the uncertainty, the CLA transaction advisory services (TAS) team demonstrated resilience, innovation, and adaptability to continue to provide exceptional service to our clients. Here are some of 2023 highlights: Record deal volume Despite the uncertainty, TAS had a record year of deal volume. Our team was involved in a wide range of transactions, from small acquisitions to large-scale mergers. Expansion of services In respons ..read more

Looking to enhance financial performance? A key strategy for improving EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) at a portfolio company is by effectively handling and controlling expenses. Review tips to help you achieve this goal: Expense analysis and benchmarking Conduct a thorough analysis of company expenses. Compare expenses against industry benchmarks and historical data to identify excessive spending or inefficiencies. Cost reduction initiatives Implement cost reduction initiatives across various categories such as overhead costs, operational expenses, and ..read more