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YEAR-END THOUGHTS

As we approach the end of another year, stakeholders and companies are busy with the usual
year-end planning and forecasting for next year. The following is your brief checklist of items
to be reviewed this quarter:

1. As you review your 3rd quarter financials with an eye towards year-end (for most
companies), formulate accurate projections for your 4th quarter.  You’ll need these for
many reasons.   Pull out your bank agreements and review your covenants to be sure 
you can meet them.  Adjust your planning as necessary in the 4th quarter to give 
yourself a chance of achieving these covenants.  If it appears you will not make them, 
now is the time to meet with your lender to negotiate covenants you can make or
request waivers early.
2. Hopefully, your management team is well on their way planning for next year, including
forecasting operations, balance sheets and cash flow.  Project a couple of scenarios; 
one being your best estimate for next year and another at a very conservative level.
 On the first projection, create a list of things you need to drive the numbers and 
regularly monitor, to be sure you achieve your results.  Looking at the second 
projection, what will you change and when, if you see results falling short?  Generate 
that list of action steps now.
3. With the recent tax law changes, planning is even more crucial and existing plans need
   
to be revisited.  The good news is that there are some very favorable business tax 
incentives which should reduce taxes or, in some cases, provide refunds of previous
years’ taxes paid.  Counterbalancing this is expected tax increases in 2011.  Planning is 
crucial!    Please see the special “Tax Brief” e-mailed to you a few weeks ago or contact
us to have another one sent to you.

There will still be changes coming over the next 3-6 months including several in the tax area
(estate tax will be one). We will keep you updated as circumstances develop. In the
meantime, contact us with any questions you may have.

David Krajanowski, CPA

Managing Partner