CASH IS KING: EFFECTIVELY MANAGING CASH FLOW FOR … 2014... · management and ownership of a...

RetailPracticeGroup

CASH IS KING: EFFECTIVELY MANAGING CASH FLOW FOR RETAILERS

Authors

John Mellage, CPA David Calotta, CPA Harold sobel, cpa Summer 2014

Abstract

The goals of the authors of this white paper are to define cash flow and then specificallyaddress its impact on retailers of all sizes. Using accounting principles as a basis for thediscussion, they use real world examples and relevant situations to demonstrate theimportanceofpredictingandmanagingtheflowofcash,mostspecificallyforretailers.

CashisKing:EffectivelyManagingCashFlowforRetailers

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TableofContents

1. WhatisCashFlowandWhyDoesItMatter?..................................1-2

2. HowDoYouMeasureandManageCashFlow?..............……………..3-7

3. ThreeTypesofCashFlow…………………………….……………………………..8-10

4. WhataretheImplicationsofCashFlowonRetailers?……………….11-12

5. Citations……………………………..…………………………………………………….13-14

6. AbouttheRetailTeam………………………………………………………………15-17

7. AboutSobel&Co.’sRetailPracticeGroup………………………………….18


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1. What is Cash flow and why does it matter?

“Cash is king” – we have all heard this maximmany times. But what does itmean, and howdoes it apply tomodern retailers? In short, itmeans that themostimportantfinancialquestionsaboutabusinessallstartandendwithcash.

Cash in a business is considered in the framework of three questions: 1) howmuchcashdowehave,2)where isourcashcomingfrom,and3)where isourcash going. The answer to each of these questions underpins the financialmanagement of a retail business. A retail operator will ignore the firm’s cashpositionathisperil.Thefirstquestion,howmuchcashdowehave, ismoreproperlyphrased“howmuchcashisonhand?”Theanswerisverystraightforward:$100,$20,000,etc.We all intrinsically understand this from our personal lives – we check ourwalletsandbankaccountstoseeifwecanaffordtobuysomethingorifweareable to pay our mortgage this month. A business must go throughmuch thesameprocess, instead consideringwhether there is sufficient cash on hand tocoverpayroll,vendorpayments,andotherobligations.Thesecondtwoquestionsconsider“cashflow”–thatis,themovementoffundsintoandoutofthebusiness.Inaretailsetting,“Whereisourcashcomingfrom”isreallyaskingaboutcustomerpayments–aretheypayingwithcashorcreditcard, and when are they paying on their accounts. In other words, when dorevenuesbecomecashonhand?Incertainothersettings,itcanalsomeandrawsonarevolvinglineofcredit,equityinvestments,ormortgagestobuyequipmentorproperty.Thesearealternatively termed“cash inflows.”“Where isourcashgoing”looksatthepaymentsthatthebusinessmakes.Therearemanytypesofpayments – purchasing inventory, paying employees, maintaining commonareas, paying down debt, tax payments, and distributions to owners, forexample.Thesepaymentsarealsocalled“cashoutflows.”Attheintersectionofcash inflows and cash outflows lies the business’s cash on hand –what is leftafterallmoniesarecollectedandobligationsarepaid.


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Cashflowcanbeverydifferentfromprofit,andassuch,measuringthesuccessorfinancialpositionofafirmsolelyonprofitsandlossescanbemisleading.Forexample,considerabusinessthatisprofitable,collectsfromitscustomersin90days,andhastopayitsvendorsin30days.Thiscompanycouldearnaprofit,butmayfinditunabletomeet its liabilitiesbecauseofa longcashcollectioncycle.Therefore, the information in a profit and loss statement doesn’t portray theentire picture, even though many owners prefer to measure their success bytheirprofits.

Academic studies over the years support what common sense tells us:insufficientcashflowcanbeoneoftheleadingcausesofabusiness’failure.Equifax, the credit-reporting agency, found that bankruptcies among thenation’s27millionsmallbusinessesleapedbyawhopping81%betweenJune2008andJune2009whentheeconomyplungedandcashdriedup.Similarly,the U.S. Small Business Administrations’ (SBA) statistics indicate thatalthough about 600,000 new small businesses are launched, on average,everyyear,onlyabout66%willsurvivethefirsttwoyears,44%willsurvivefour years and 31% are likely to survive for seven years or more. Themanagement and ownership of a business can work to effectively andefficientlymanage the company’s cash position and project its future cashflows; doing so is a highly effective management tool that can act as aleading indicator of a liquidity crunch, allowing for time to address thesituationbeforeitbecomesdire.


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2. How Do you measure and manage cash flow?

Understanding the definition of cash flow is the first step in recognizing howessential it is toanybusiness.Thegoodnews is thattherearemanymeasuresthatcanbeimplementedtoanticipate,address,andultimatelyplanandmanageforpositivecashflow.

For a retail business owner or CEO, the most important advice on how toproperlymanagementcashflowistoengageinupfrontplanning.Failuretoplanisaleadingcauseofanybusiness’demise.Younotonlyneedtoknowhowmuchyouwillbespending,butonwhat. It isnosurprisethatstatisticsfromtheSBAshow that a high percentage of small businesses that file for bankruptcy haveengagedinpoor,orno,cashflowplanning.Youneedcashtomeetthedemandsofthecompany–soitislittlewonderthatpreparationandplanningcanmakeamajordifferenceinsuccessratesforentrepreneurs.This isespecially truewhenabusiness is inarobustgrowthmode.Acompanyrequires positive cash flow when it expands capacity, increases inventory,extends its product lineor penetrates additionalmarkets. The results of thesenewefforts,intheformofmoresales,willmostlikelynotbefeltimmediately,sothereneeds tobesufficientcashonhand–basedoncredible forecasting– tosustainthecompanywhiletheseinitiativesgainmomentum.Anotherwordofcautionasyoubeginmeasuringandmanagingyourcashflow:don’tbeunrealistic inyourpredictions. Ifyouplanforunreachablesalesgoals,orminimizeyourexpensesandotherliabilities,youwillfindyourselfcaughtinadangerous situation. Be honest with yourself. Hiding from reality will notimprove your cash flow, but understanding itwill help youwhen dealingwithyourvendors,customersandemployees.


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Herearesomeideasthatcanhaveanimportantinfluenceontheavailabilityofcashinthebusiness:

• Followabudget.Ifyoudonothaveaclearandcompleteunderstanding

of every expense you need to address, you cannot manage your cashflow.Toassistwiththis,writeandadheretoabudget.Thisprocesskeepsyou focused and structured regarding the true costs of operating thecompany. If the budget is complete and accurate it enables you toaccount for everything, with few surprises, so you won’t be caughtsaying, “where’s my cash?” at the end of the month. Seasonalityadjustmentsshouldbeconsidered,especiallyintheretailworld.Cyclicalpurchasing (brought on by holidays, for example) is expected, but youmust also realize there will be situations beyond your control.Unpredictable weather, catastrophic emergencies, even economicdownturns may be beyond your purview to anticipate, but with goodplanningyoucansoftentheimpact.

• Encourage repeat business by rewarding loyalty. In the retail world,

customer loyalty is one keyway to ensure positive cash flow. To start,reviewyourcustomerservicepolicies.Next,investintrainingyourstaff,particularly the employees on the front line who must be customer-centric. Finally, reward repeat buyerswith added value. Themore youcan provide incentives for them to return, themore often theywill bebackandthemoreoftentheywilltelltheirfriendsaboutyouastheyhelpspreadyourreputationbywordofmouth.

• Collectreceivablespromptly.Youdonothavecashuntilyourcustomerspay you. Few reports are as discouraging as an aging analysis thatdemonstrates 90-150 days of receivables on your books. GeorgiaSolotoff, owner of PIP Printing in Livingston bills her customers twicemonthly. Inadditiontoattachingthe invoiceto the finishedproductondelivery, shesendsacopyof the invoice twoweeks later.Thisnotonlyhasreallyacceleratedcollectionsbutitkeepsthecompanynameinfrontof customers withmore frequency.What started as a way to improvecashflowalsohasamarketingcomponenttoit.Asthebusinessmatured,Georgia worried about how long it was taking to collect on her creditsales.Todayshereviewstheaccountsreceivableagingtwicepermonthsoshehasabetterhandleonthedetailsandisabletostayontopofhercollections.Unlikemostbusinessownerswhoareuncomfortablemakingcollectionscalls,Georgiaknowssheneedstobeproactiveonthephone,


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keepingafterthecustomerswhoareholdinguphercashflow. If this isdifficult for you, there are reputable companies that specialize inhandlingcollectionscallsprofessionallyandsensitivelyonyourbehalf.

While not all retailersmaintain customer accounts in this day and age,many retailers maintain a different type of account receivable:credit/debit cards. Electronic payments are a great tool to acceleratecash collection, but like any other facet of a business, they must bereviewed periodically. Because not all credit card processors are thesame, it is important to ensure that your business has the bestagreementpossiblewiththevendor.Themostcrucialfeaturesofacreditcard processing agreement are the fees charged on each transaction(whichcanrangefrom1%to4%)andhowquicklyafter thetransactionoccurs the business receives its cash. Some payment processors offerdepositsasquicklyasthenextday.Despitetheemphasisongeneratingcash,yourcustomersmayaskyoutoextend payment terms to them in much the same way that you mayattempttoworkwithyoursupplierstodeferyourpayments.Whenthisoccurs, spend time with the customers who you trust and value; helpthem, if you can, by agreeing to make arrangements for delayedpayments. The problemwith these types of accommodations is that itslowsdowntheflowofcashintoyourcompany.Butjustassomeofyourvendorswillmakespecialarrangementsforyou–becauseitisasensiblebusinessdecision–youcanofferspecialtermstoyourcustomersundertheappropriate conditions.However,overall, yourgoal is toencouragecustomers to pay as quickly as possible. One popular idea is to offerdiscountstorewardearlypaymentorofferprepaytermsonpreorderedproducts,therebygivingthemadiscountthatyoucanaffordinordertoincreasecashonhand.

• Manage inventorycarefully.AstheretiredCEOofagrocerystorechainnoted recently, “Imagine the impact on our cash flowwhen the goodswe’vepaidthesupplierforremainsittingontheshelves.”Inotherwords,understandingandmanagingyour inventory iscritical toyourcashflowand, ultimately, to your company’s profitability. When all is said anddone, you need to invest in products that your customers want topurchase.Withperhaps70%ormoreofyourcash tiedup in inventory,youneedtomakecarefulchoicesabouthowtostockyourshelves.Thereis always anewproduct, anexciting innovativeoffering, andabroader


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assortment, but, if you are not careful, you will quickly acquire excessinventory. This can lead to markdowns and deep discounts as youstruggletocleartheshelves,regardlessofthecosttoyou,tomakeroomforthenextshipmentandtogeneratesomecashflow.

Accurate and insightful planning is an important ingredient for goodinventory control as is studying reports on inventory movement frompreviousmonthsoryearsandremainingalerttotrendsintheindustrybyattending trade association meetings or reading trade publications. Allthesecanhelpyoumakeeducateddecisions.Payingattentiontoevolvingchanges in your niche can keep you at the cutting edge and keep yourcashflowhealthy.

• Manage payables. To use your cash wisely, you may want to takeadvantage of payment terms offered by your vendors, as long as theymake sense for your company. However, use caution. Don’t makedecisions in a vacuum; don’t let the immediate benefit of deferringpayments be your only concern. Take into consideration the impact ofmissing out on quick-pay discounts if you choose to delay payments.Makedecisions thatwill bemost beneficial for the short- and long-runwheneverpossible.No matter what, talk to your vendors, concentrating your efforts onbuilding meaningful relationships rather than being caught up in thedetailsofthetransaction.Askthemwhattheyareseeingintheindustry,talktothemaboutyoursituation.Don’tconsidertheirpricingastheonlyfactorinusingtheirproducts.Identifywaysthatyoucanhelpeachotheras‘partners’andexploreflexibleandinnovativeoptionsthatmakesenseforbothofyou.

• Encourageelectronicpayments.Considerencouragingyourcustomersto

payusinga credit card.Thisbenefits youbydramatically reducingcashcollectiontime(sometimesasquicklyasthenextbusinessday)whilestillallowingyourcustomertimebeforetheirbillcomesdue.Technologyhasmadeacceptingcreditcardstrivial;someofthenewcreditcardreaders,whicheasilyattachtoiPhonesandiPads,enablecustomerstoquicklyandeffortlessly pay for items without requiring a significant, upfrontinvestment from your business. However, be cognizant of the cost ofaccepting credit cards beforemaking this decision; processing fees canrangefrom1%to4%ofthetransaction.


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• Understand financing needs. It is nearly impossible to run a retailoperationwithoutsomeformoffinancingarrangementinplace.Atypicalfinancingarrangementthatmanyretailersmaintainisacreditline.Thereare going to be timeswhen there are seasonal dips where direct cashflowfromcollectionsmaynotbeenough.And inorder tocoverpayrolland other related operational costs, it is necessary to have short-termdebtarrangementinplace.Butdrawingonacreditlineshouldgenerallybe a short-term need. Businesses need to be careful about financinggrowthandconsiderinterestratesandbankfeeswhenforecastingbothshort-andlong-termcashflowpositions.Thisleadsintothenexttypesoffinancing arrangements - mortgage and notes payable. Generallyspeaking,businessesdonothavetheupfrontcashtopurchaseinventoryaswellastheequipmentandfixedassetsneededtoruntheoperation.Asaresult,enteringintomortgageandnotepayablearrangements,duetopurchasesof fixedassets, is almostanecessity to sustainoperationsand/orcontinueincreasedgrowth.

Themessage here is clear: the ability to manage cash flow is significantlyimprovedwhenyouhaveaplan.Themoreaccuratelyyoucanpredictyourcircumstances, themorepreparedyouwillbeand thebetteryourpositionforsuccess.Byhavingtimelyaccess to financial reports,youwillquicklybemade aware of any problems or trouble areas. This allows you to putproceduresinplacethatcanaverttroubleor,attheveryleast,havetimetoreactbeforethesituationgetscompletelyoutofhand.Allofthesuggestionslistedherearebasedonimplementingthemintandemwithothercritical informationyouhaveavailable.Youneedtoworkcloselywith your business advisors, talk to trusted suppliers and other businesscolleaguesaswellsothatyoucancreatethebestsolutionsand implementthose initiatives that will be effective for your unique situation given yourcompany’s life cycle phase, resources, philosophy and history. Seamlesslyintegrating all the data should help you arrive at good business decisionsregardingpositivecashflow.


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3. Three types of cash flow

There are three different types of cash flow: operating, investing, andfinancing.Operatingcashflowrepresentsthecashgeneratedorexpendedinpursuitof abusiness’smission; fora retailer, it is theamountof cash flowthat comes from buying and selling inventory. Investing cash flow is theamountofcashspenttosupportthebusiness;the largestcomponentforaretaileristhepurchaseofequipment.Finally,financingcashflowisthecashflowresultofborrowingarrangementsortransactionswithowners;that is,the receipt of cash from a loan, payments on a loan, or distributions toownership.When managing cash flow, it is important to recognize the differencebetween the different types of cash flow. For instance, while it may befeasible to improve the cash position by delaying expenditures for newequipment,itmaynotbefeasibletodelaypaymenttovendorstoaccomplishthesamegoal.The financial statements of a business reflect the company’s cash flowsthrough thecash flowsstatement.Thecash flowsstatement isbroken intooperating, investing, and financing sections and shows, in detail, whatoccurredthataffectedthecompany’scashposition.The statement itself is only as helpful as the interpretation behind thenumbers. While the cash flow statement provides an overview of thechangesincashforaspecifiedperiod,therearemanycashflowfactorsthatwillnotbeimmediatelydiscernablethroughitsreview.Keepinmindthatitisahistoricaloverviewandnota forecastof futurecashflows.Thereviewofthe cash flows statementmay show key indicators of cash flow factors tofocusonwhentakingaproactiveapproachforabetterfuture.Someofthefollowing factors typically need to be addressed when looking to improvecashflows:

• Fixed and variable costs. Fixed costs are those not associatedwith the

salesorproductionoftheproducts.Thesetypicallyincluderent,utilities,insurance, real estate taxes, and administrative salaries. Variable costsinclude thosecostsdirectlyassociatedwith the salesandproductionoftheproducts.These typically includecostsdirectly related to inventory,shipping, and direct labor.When looking to improve overall cash flow,questionscanberaisedinordertocontrolthesecostsincluding:


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Ø Arewemaximizing capacity at our locations?Doweneed all ofthespacethatwecurrentlyown/rent?Theremaybeopportunitytorenegotiateleasetermsand/ordownsizebasedonthecurrentneedsofthecompany.

Ø Are all of the functions of each employee being utilizedproductively? Are multiple employees performing the job thatoneemployeecancomplete?

• Equipmentpurchasing.Dependinguponthetypeofretailoperationthatyouarerunning,equipmentpurchasingmaybeasignificantpartofyourbusiness. This is especially evident in the supermarket arena. Whilemakinglargecapitalpurchasestoinvestinthebusinessmayseemlikeanecessary step, it takescareful consideration inanalyzing the returnoninvestment that is expected to be generated from thepurchase.Majorconsiderationsincludethefollowing:

Ø HowmuchfinancingwillIneed,ifany?Ø Whatarefuturecashflowimplicationsbasedonthelengthofthe

financingagreementandapplicableinterestrate?Ø Iffinanced,willtherebecovenantsthatthecompanywillneedto

complywith?Depreciation isanothercritical factor toconsider.Over thepastseveralyears, there have been several changes to allowable depreciation thathave been favorable to the taxpayer. These include allowable bonusdepreciationandhigherIRSsection179deductionlimits.Ifyouknowthattaxratesaregoingupinthefollowingyear,itmaymakesensetodelayalargepurchaseinordertoapplytherelateddepreciationexpenseagainstahighertaxrate,effectivelyresultinginabetterbenefit.The same is true for taking advantage of allowable bonus depreciationand section179deduction limits. If there areexpiringprovisions in thefollowingyear, itmaymake sense tomake thepurchase in the currentyear. Each and every scenario is going to be unique, and current cashflowwillbethecriticaldriver.Timingyourcapitalpurchasescantranslateintoverysignificanttaxsavingsandpositivefuturecashflows.


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Money float. As noted previously, the overall strategy for nearly allcompanies is toeffectivelydelaypaymentsonyourpayablesandspeedupcollectionsonyourreceivables.Byextendingthesetwoperiodsout,youarenotonlyabletomaintainmorecashonhand,butcontinuetoearninterestonthatmoneyaswell.Weallknowthatthisisnotalwaysaneasytask,butwhen you consider the significant dollars being collected and paid on aregular basis, the interest that can be accumulated by extending payablesandspeedingupreceivablesbyafewdaysonaconsistentbasisthroughoutagivenyearcanbecomesubstantial.


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4. What are the implication of cash flow on retailers?

Retailers,whetherbrickandmortaroronline,knowthatcashisking.Cashflowis at the heart of the retailworld.Without cash, there can be nothing on theshelves, no advertising, no facility, and no employees. Without cash, as TedHurlbutwroteinhisblog,CashFlow,theLifebloodofEveryIndependentRetailer,“When cash flow is positive, there is a tomorrow.When cash flow is negativethere’sanabyss.”Cashflowisessentialtoanybusiness.Butitisevenmoreimportantforretailersbecauseof their relianceonmajorexpenditures, suchas inventory,employeesand operations as well as the impact of both planned and unexpectedfluctuations. For instance, a building contractor can prepare for a decrease incashflowduringthewintermonthswhenconstructionslows,findingotherwaystomanageandspreadoutexpenses.Butanunusualandunexpectedwarmspellduring Christmaswhen the stores are stockedwith cashmere sweaters can allbutdestroytheretailerwhohasnochancetoreact.Thesamethingcanhappenif a sudden prolonged cold snap forces people indoors and, therefore, out ofrestaurants,malls andmovie theaters.Ormaybe the retailer didnothave thevisiontopurchaseenoughofthatnewproductthatissuddenlyinhighdemand.Unsatisfied customersmay go elsewhere tomake the purchase. Any of thesethingscan,anddo,happenwithgreatfrequency,creatingcashflowchallengesforeveryretailer.Retail owners need to recognize that 80% of sales generate from 20% ofinventory.Itisgreattoexperiencehighsalesvolumethatoccursfromthe20%ofinventorythatis“hot”today.Buttheimportantquestionis,whyistheremaining80%ofinventory,whichiscloggingtheshelvesandracks,onlyproducing20%ofthestore’ssales?In“TalkingCashFlowBlues,”Inc.Magazinewarnsretailerstoavoidwhat itcallsassortmentcreep,thedesiretooffereverypossibleproductthat thecustomermightwant. Instead, theexpertssay,guardyourcash–buyandshipinventoryasclosetothetimeofsaleaspossible-andkeepacloseeyeonyourownsalesforecast.Thisquantitativereportcanmakeorbreakyou,sobesuretheforecastisrealisticandrelevant.Gatherdatabylisteningcarefullytoyoursalesstaffandtoyourcustomersbeforeyoubuildupyourinventory.


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Inc.Magazine also reminds readers how important it is to stay focused. Youknowyourcoremission.Donotbetemptedtostraytoofarfromwhatyoudowell, fromwhatyouareknownfor,andfromdoingwhat ismostprofitableforyou.Financial discipline is of great importance to retailers. Successful owners andmanagersrelyonreturnoninvestment(ROI)toremainhealthy,andexpansionisa component of growth, as is return on total assets and return on investedcapital.Butpositivecash flow is the foundation that supportsandsustains theretailer.Ifthebusinessrunsoutofcashandcannotsecurenewfinancing,itwilldissolve.


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5. Citations

Some of the information shared in this white paper was drawn frominformationresearchedatthefollowingsites:

“ExampleofaRetailStoreCashFlowStatement.”ChirantanBasu,DemandMedia.Smallbusiness.chron.com

“HowtoManageCashFlow.”http://www.inc.com/encyclopedia/cashflow.html.“ManagingYourCashFlowasanOnlineRetailer.”SirenaBergman,TheGuardian.com.October22,2013.“InnovationinManagingCashFlow.”MatthewJenkin,GuardianProfessional.August15,2013.“FiveWaystoKeepCashFlowPumping.”BradSugars,Entrepreneur.com.“CashFlow:ItsEffectsonBusinessandDifferentSectorsoftheEconomy.”www.finpacific.com/statisticsforcashflowmanagement.“CopingwithaCashCrunch:HowtoPutYourRetailBusinessonSoundFinancialFooting.”Outcalt&Johnson:RetailStrategists,LLC.“TalkingCashFlowBlues:InventoryManagement.”Inc.Magazine.http://www.Inc.com/resources/retail/articles/cashflow.“CashFlowForecasting.”www.business.vic.gov.au.“SixTipsforManagingRetailBusinessExpenses.”TedHurlbut,AllThingsRetail.Sept.2013.“CashFlow,theLifebloodofEveryIndependentRetailer.”TedHurlbut,AllThingsRetail.May2010.


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“CashFlowStatement.”SmallBusinessEncyclopedia.http://www.entrepreneur.com/encyclopedia/cash-flow-statement“CashFlowIndicatorRatios:OperatingCashFlow/SalesRatio.”RichardLoth,www.invetsopedia.com.“HowtoBetterManageYourCashFlow.”www.entrepreneur.com.“FinancialAccounting-ADecision-MakingApproach,2ndEdition.”JohnWileyandSons,Inc.SpecialthankstoGeorgiaSolotoff,owner,PIPPrintingandEileenScottforsharingtheirinsightsandideas.

EffectivelyLeveragingInternsInTheNonprofitCommunity


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6. About the retail team members

JohnR.Mellage,CPA,AuditManagerJohn Mellage, an Audit Manager at Sobel & Co., brings extensive experienceworkingwithmiddlemarket familyownedandprivatelyheldbusinesses in theareas of audit, taxation, financial statement analysis, as well as businessconsulting. While specializing in the areas of retail, manufacturing anddistributionandnot-for-profit,Johnhasexpertiseacrossavarietyof industries.His real-world knowledge helps clients ensure they are in compliance withrelatedindustryrequirements.Healsoperformshighlyspecializednot-for-profitengagementsincludingYellowbookandA-133auditsOver the years John’s clients have valued his guidance and counsel as he hasassumed the role of their trusted business advisor. As such, he is activelyinvolved in helping his clients with short and long term strategic businessplanning, taxplanningandcompliance,successionandtransitionplanningcashflowmanagement, and budgeting to name a few areaswhere his insights aremostneeded.John is a Certified Public Accountant in New Jersey, and holds a Bachelor ofScience of degree from Fordham University. He is also a member of theAmerican Instituteof CertifiedPublicAccountants (AICPA) and theNew JerseySocietyofCertifiedPublicAccountants(NJCPA).



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DavidCalotta,CPA,ManagerDavid Calotta joined Sobel & Co. in July 2011, after graduating from RamapoCollegeinNewJerseyin2008whereheearnedaBachelorofSciencedegreeinAccounting. He went through the ranks at the firm, quickly advancing fromsenior level tomanagerbecauseofhisknowledgeandtechnicalcompetencies,hisvalues,andhisstrongsenseofresponsibilityandaccountability.Hisproactiveapproachtoclientcareandhistechnicalskillsinaccountingmakehimafavoriteatthefirmandwiththeclients.Dave works across a range of industry sectors but has begun to develop aspecialtyintheretailsector,servingasoneofthementorsinthispracticegroupwhileworking toeducateother staffmemberson theconstantlychangingandevolvingtrendsinthisniche.

HedrawsonhisindustryexperiencetoaddvalueforSobel&Co.’sretailclientsin areas including financial statement audits, tax returnpreparation, cash flowprojections,taxprojections,andinternalcontrols.Daveleadsthefirm’snewhiretrainingprogramandheisactivelybuildingmeaningfulrelationshipsintheNewJerseybusinesscommunity.

AmemberoftheNewJerseyCPASociety(NJSCPA)andtheAmericanInstituteofCPAs,DaveearnedhisCPA license inMay2011.HehaswrittenarticlesfortheNJSCPA Newsletter, Tomorrows CPA, and over the last five years hiscontributionstothefirmandtothebusinesscommunityhavebeenrecognized,resulting in his being includedon the prestigiousNJSCPA “30 under 30” list in2011.Outside of work, Dave enjoys spending time training for endurance events aswellashikingandkayakingwithhiswife,Danielle,andhisdog,Tucker.


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HaroldR.Sobel,CPA,MemberofFirmHaroldSobel,MemberoftheFirmofSobel&Co.,ishighlyregardedforhisskillsasabusinessadvisor.Haroldhasdevelopedexpertiseintheareaofcloselyheldbusinessplanning,includingbudgeting,cashflowmanagement,forecastingandsuccessionplanning.Haroldalsohasconsiderableexperienceadvisingclientsonpersonalfinancialplanning.Haroldisactivelyinvolvedinconsultingtotheretailindustry,especiallytoretailchains inthesupermarketnicheoncashmanagement, inventorymanagement,budgeting,LIFOAccounting,andspecialdepreciationissues.HaroldSobelisaCertifiedPublicAccountantintheStateofNewJersey.HeisamemberoftheAmericanInstituteofCertifiedPublicAccountantsandtheNewJerseySocietyofCertifiedPublicAccountants.HaroldisanactivememberoftheNewJerseyRetailMerchantsAssociationandtheNewJerseyFoodCouncil.Heisalsoa frequent speakeronvariousaspectsof financial reportingandhasbeeninterviewedseveraltimesfornationalsupermarketmagazines.Inaddition,HaroldservesastreasurerofHilltopCountryDaySchool,anon-profitindependentschool.HaroldisagraduateofBentleyUniversityinMassachusetts,wherehereceivedaBachelorofScienceDegreeinAccountancy.



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7. About sobel & co.’s retail practice group

Sobel & Co., a regional public accounting and consulting firm located inLivingston, NJ, has been adding value to the area’s business community since1956!Ourretailclientsbenefitfromthedepthofexperienceoftheprofessionalsin the Retail Industry Services Group. This team offers real world experiencegained fromworking with clients who’s assets range from $5million to $350million, across a range of sub-niches from grocery store chains to drug storechainstoapparelstores.

This expertise enables us to work closely with clients, earning their trust anddeliveringexactlythescopeofservicesthattheyfindmostrelevant.Ourteamisinvolved in several industry tradeassociationsand is knowledgeableabout thetrendsandchangesthatareimpactingourclientsinthissector.

Atourclients’suggestion,andworkingintandemwiththem,ourRetailIndustryServices Group offers traditional auditing, accounting, tax and businessconsultingalongwith:

• Cashflowmanagement• Consultingservices• Financingalternatives• Forensicaccounting/Litigationsupport• Fraudvulnerabilitystudies• LIFOinventory• Newsitevaluation• Costsegregationanalyses

For more than 55 years Sobel & Co. has served the retail sector withexperience, business acumen, technical skills and a dedication tounderstandingtheuniquesituationsfacingretailersinaconstantlychangingbusinessclimate.

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