Protect Business Continuity with an Emergency Succession Plan

Unanticipated crises can threaten even the most well-run company. And the risk is often greater for small to midsize businesses where the owner wears many hats. That’s why your company needs an emergency succession plan.

Unlike a traditional succession plan — which focuses on the long-term and is certainly important, too — an emergency succession plan addresses who’d take the helm tomorrow if you’re suddenly unable to run the business. Its purpose is to clarify responsibilities, preserve operational continuity and reassure key stakeholders.

Naming the right person

When preparing for potential disasters in the past, you’ve probably been urged to devise contingency plans to stay operational. In the case of an emergency succession plan, you need to identify contingency people.

Larger organizations may have an advantage here. After all, a CFO or COO may be able to temporarily or even permanently replace a CEO relatively easily. For small to midsize companies, the challenge can be greater — particularly if the owner is heavily involved in retaining key customers or bringing in new business.

For this reason, an emergency succession plan should name someone who can credibly step into the leadership role if you become seriously ill or otherwise incapacitated. Look to a trusted individual whom you expect to retain long-term and who has the skills and personality to stabilize the company during a difficult time.

After you identify this person, consider the “domino effect.” That is, who’ll take on your emergency successor’s role when that individual is busy running the company?

Empowering your pick

After choosing an emergency successor, meet with the person to discuss the role in depth. Listen to any concerns and take steps to alleviate them. For instance, you may need to train the individual on certain duties or allow the person to participate in executive-level decisions to get a feel for running the business.

Just as important, ensure your emergency successor has the power and access to act quickly. This includes:

• Signatory authority for bank accounts,

• Access to accounting and payroll systems, and

• The ability to execute contracts and approve expenditures.

Updating company governance documents to reflect temporary leadership authority is a key step. Be sure to ask your attorney for guidance.

Centralizing key information

It’s also critical to document the financial, operational and administrative information your emergency successor will rely on. This includes maintaining a secure, centralized location for key records such as:

• Banking credentials,

• Vendor and customer contracts,

• Payroll records and procedures,

• Human resources data,

• Tax filings and financial statements, and

• Login details for essential systems.

Without this documentation, even the most capable interim leader may struggle to keep the business functioning smoothly.

Also, ensure your successor will have access to insurance records. Review your coverage to verify it protects the company financially in the event of a sudden transition. Key person insurance, disability buyout policies, and the structure of ownership or buy-sell agreements should align with your emergency succession plan’s objectives.

Getting the word out

A traditional succession plan is usually kept close to the vest until it’s fully formulated and nearing execution. An emergency succession plan, however, must be transparent and communicated as soon as possible.

When ready, inform your team about the plan and how it will affect everyone’s day-to-day duties if executed. In addition, develop a strategy for communicating with customers, vendors, lenders, investors and other stakeholders.

Acting now

If you haven’t created an emergency succession plan, year end may be a good time to get started. Already have one? Be sure to review it at least annually or whenever there are significant changes to the business. FMD would be happy to help you evaluate areas of financial risk, better document internal controls and strengthen the processes that will keep your company moving forward — even in the face of the unexpected.

Is it Time for Your Business to Start Outsourcing?

As a small to midsize business grows, demands on its time, talent and resources inevitably expand right along with it. Many business owners reach a point where continuing to do everything in-house — or even themselves — begins to slow progress or expose the company to unnecessary risk. Have you reached this point yet? If so, or even if you’re getting close, outsourcing could be a smart move.

Common candidates

Many business activities can be outsourced. The key is identifying functions that, if handled by an external provider, would improve efficiency, strengthen compliance, and give you and your team more time to focus on revenue-generating work. Here are some common candidates:

Accounting and financial reporting. A reputable provider can manage your books, collect payments, pay invoices and keep accounting technology up to date. It should also be able to prepare financial statements that meet the standards expected by lenders, investors and other outside parties.

Customer service. This may seem an unlikely candidate because you might believe that someone must work for your business to truly represent it. But that’s not necessarily true. Internal customer service departments often have high turnover rates, which drives up costs and reduces service quality. Outsourcing to a provider with a more stable, well-trained team can improve both customer satisfaction and operational consistency.

Information technology (IT). Bringing in an outside firm or consultant to manage your IT needs can provide significant benefits. For starters, you’ll be able to better focus on your mission without the constant distraction of changing technology. Also, a provider will stay current on the best hardware and software for your business, as well as help you securely access, store and protect your data.

Payroll and human resources (HR). These functions are governed by complex regulations that change frequently — as does the necessary software. A qualified vendor can help your business comply with current legal requirements while giving you and your employees a better, more secure platform for accessing payroll and HR information.

Downsides to watch out for

Naturally, outsourcing comes with potential downsides. You’ll need to spend time and resources researching and vetting providers. Then each engagement will involve substantial ongoing expenses.

You’ll also have to place considerable trust in providers — especially in today’s environment, where data breaches are common and cybersecurity is critical. Finally, even a solid outsourcing arrangement requires ongoing communication and management to maintain a productive relationship.

Not a one-size-fits-all solution

Every business owner must carefully consider when to outsource, which services are worth the money and how to measure return on investment over time. If you’d like help evaluating your options or better understanding the financial and tax implications of outsourcing, contact FMD.

Businesses that Sponsor a 401(k) Must Stay on Top of It

If your business sponsors a 401(k) plan for employees, you know it’s a lot to manage. But manage it you must: Under the Employee Retirement Income Security Act (ERISA), you have a fiduciary duty to act prudently and solely in participants’ interests.

Once a plan is launched and operational, it may seem to run itself. However, problems can arise if you fail to actively oversee administration — even when a third-party administrator is involved. With 2025 winding down and a new year on the horizon, now may be a good time to review your plan’s administrative processes and fiduciary procedures.

Investment selection and management

Study your plan’s investment choices to determine whether the selections available to participants are appropriate. Does the lineup offer options along the risk-and-return spectrum for workers of all ages? Are any premixed funds, which are based on age or expected retirement date, appropriate for your employee population?

If the plan includes a default investment for participants who haven’t directed their investment contributions, look into whether that option remains appropriate. In the event your plan doesn’t have a written investment policy or doesn’t use an independent investment manager to help select and monitor investments, consider incorporating these risk management measures.

Should you decide to engage an investment manager, however, first implement formally documented procedures for selecting and monitoring this advisor. Consult an attorney for assistance. If you’re already using an investment manager, reread the engagement documentation to make sure it’s still accurate and comprehensive.

Fee structure

The fee structures of 401(k) plans sometimes draw media scrutiny and often aggravate employees who closely follow their accounts. Calculate the amount of current participant fees associated with your plan’s investments and benchmark them against industry standards.

In addition, examine the plan’s administrative, recordkeeping and advisory fees to understand how these costs are allocated between the business and participants. Establish whether any revenue-sharing arrangements are in place and, if so, assess their transparency and oversight.

It’s also a good idea to compare your total plan costs to those of similarly sized plans. This way, you can determine whether your overall fee structure remains competitive and reasonable under current market conditions.

Third-party administrator

Even if your third-party administrator handles day-to-day tasks, it’s important to periodically verify that their internal controls, cybersecurity practices and data-handling procedures meet current standards. Confirm that the administrator:

• Maintains proper documentation,

• Follows timely and accurate reporting practices, and

• Provides adequate support when compliance questions arise.

A proactive review of their service model can help ensure your business isn’t unknowingly exposed to risks from operational errors, data breaches or outdated administrative practices.

Overall compliance

Some critical compliance questions to consider are:

• Do your plan’s administrative procedures comply with current regulations?

• If you intend it to be a participant-directed individual account plan, does it follow all the provisions of ERISA Section 404(c)?

• Have there been any major changes to other 401(k) regulations recently?

Along with testing the current state of your plan against ERISA requirements, evaluate whether your operational practices align with your plan document — an area where many sponsors stumble. Double-check key items such as contribution timelines, eligibility determinations, vesting schedules and loan administration. Verify that procedures precisely follow the terms of your plan document.

Conducting periodic internal audits can help identify inconsistencies and operational errors before they become costly compliance failures. You might even discover fraudulent activities.

Great power, great responsibility

A 401(k) plan is a highly valuable benefit that can attract job candidates, retain employees and demonstrate your business’s commitment to participants’ financial well-being. However, with this great power comes great responsibility on your part as plan sponsor.

If your leadership team and key staff haven’t reviewed your company’s oversight practices recently, year end may be an ideal time to take stock. FMD can help you identify plan costs and fees, spot potential compliance gaps, and tighten internal controls.

Productivity Metrics Can Help Business Owners See Reality

As a business owner, your eyes may tell you that your employees are working hard. But discerning whether their efforts are truly contributing to the bottom line might be a bit hazy. The solution: Track productivity metrics. When calculated correctly and consistently, quantitative measures can help you see business reality much more clearly.

Why the numbers matter

No matter how big or small, every company has three primary resources: time, talent and capital. Productivity metrics help you understand how effectively you’re using them.

Rather than relying on assumptions or gut feelings, running the numbers sheds light on whether productivity is booming, adequate or falling short. In turn, you’ll be able to more confidently improve workflows and align employee performance with strategic objectives.

Examples to consider

The right productivity metrics for any company vary depending on factors such as industry, mission and size. Nonetheless, here are some examples to consider:

Revenue per employee. This foundational metric equals total revenue divided by the average number of employees over a given period. It offers a quick snapshot of how efficiently the company converts labor into goods or services. A rising number signals increasing productivity, while a declining figure may indicate inefficiencies, such as operational bottlenecks, overstaffing or stagnant sales.

Output per hour worked. This metric goes a step further by dividing total output (in dollars or units) by total labor hours worked. It can highlight whether productivity issues are tied to work habits, staffing levels or operational processes.

Utilization rate. Many companies — particularly professional services firms — track this metric. It’s calculated by dividing billable or productive work hours by total available hours and multiplying by 100. Utilization rate contrasts with output per hour worked by measuring activity rather than results. Low rates may signal overstaffing or excessive administrative tasks.

Customer satisfaction scores. Sometimes considered a “soft” measure, these scores provide essential context. They’re typically derived from structured feedback and converted into quantifiable insights. While a team may produce high volumes of work, consistently low satisfaction scores can reveal underlying issues in service quality or communication. On the other hand, strong scores reflect a team that’s attentive, responsive and aligned with customer expectations — key traits of sustainable productivity.

Data in action

Choosing your productivity metrics is only the first step. The second is tracking them over time. The right interval depends on the metric. For example, revenue per employee and output per hour worked, which reflect broader operational efficiency, are typically best reviewed monthly or quarterly. Utilization rate may be worth tracking weekly because even small inefficiencies can add up quickly. And customer satisfaction scores often benefit from continuous tracking, which is then summarized monthly or quarterly for trend analysis.

The third and trickiest step is interpreting and acting on the data. For instance, suppose revenue per employee is flat while sales are growing. This might indicate the need to downsize or provide better onboarding and training to new hires. If you notice a decline in output per hour worked or utilization rate, you may want to reallocate workloads, streamline administrative duties or use artificial intelligence for repetitive tasks.

Now let’s say customer satisfaction scores drop — never a good thing. In this case, you could formally review communication processes and response times. And if you haven’t already, consider implementing customer relationship management software to better track interactions.

Consistency, technology and culture

Consistency is key. Track the same productivity metrics over carefully chosen periods to spot trends and measure operational impact. If you determine that any metric isn’t adequately insightful, you can make a change. But gather an adequate sample size.

Furthermore, leverage technology. For small businesses, simple spreadsheets may be adequate. However, don’t hesitate to explore more sophisticated solutions, such as digital dashboards and project management platforms.

Finally, productivity metrics are most effective when they’re part of a culture of accountability and high performance. Inform employees of what’s being measured and why. Stress that it’s not about surveillance; it’s about meeting strategic objectives. Integrate metrics into job reviews and team meetings.

Optimal approach

The optimal approach to productivity metrics combines strong quantitative data with objective observations and qualitative insight. To that end, contact FMD. We’d be happy to help you identify and calculate relevant metrics, analyze them in the context of your financial statements, and use the knowledge gained to make better business decisions.

Businesses should Review their Key Payroll Tax Responsibilities

As a business owner, you know that running payroll involves much more than just compensating employees. Every paycheck represents a complex web of tax obligations that your company must handle accurately and consistently.

Indeed, staying compliant with payroll tax rules is essential to maintaining your business’s reputation and avoiding costly penalties. That’s why it’s essential to regularly review your key payroll tax responsibilities to ensure nothing falls through the cracks.

Federal, state and local

Let’s start with the big ones. As you’re well aware, employers must withhold federal income tax from employees’ paychecks. The amount withheld from each person’s pay depends on two factors: 1) the wage amount, and 2) information provided on the employee’s Form W-4, “Employee’s Withholding Certificate.” Additional withholding rules may apply to commissions and other forms of compensation.

Be sure to stay apprised of your non-federal payroll tax obligations. State income tax withholding rules, for example, apply to many employers. However, nine states have no income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming.

Certain localities also impose income taxes. And in some places, withholding is required to cover short-term disability, paid family leave or unemployment benefits.

FICA and FUTA

Many an accounting or HR staffer has had to repeatedly explain what these two abbreviations mean. The first one stands for the Federal Insurance Contributions Act (FICA). Under this law, payroll taxes consist of two individual taxes.

First is Social Security tax, which is 6.2% of wages up to an annually inflation-adjusted wage base limit. For 2025, that limit is $176,100 (up from $168,600 in 2024). Both the employee and employer pay 6.2% up to that amount, meaning the business withholds the employee’s share and contributes a matching amount for a total of 12.4%. The second is Medicare tax, which is 1.45% of all wages, with no wage base cap. Again, both the employee and employer pay the percentage for a total of 2.9%.

The other abbreviation stands for the Federal Unemployment Tax Act (FUTA). Under it, employers must pay 6% on the first $7,000 of each employee’s annual wages, before any credit. In many cases, if state unemployment taxes are paid fully and on time, the business can receive a credit of up to 5.4%, yielding an effective rate of 0.6%.

Be aware that certain states with outstanding federal unemployment-trust-fund loans may not qualify for the full credit, so employers could face higher effective FUTA rates in those jurisdictions. FUTA taxes are paid only by the employer, so you shouldn’t withhold them from employees’ wages.

Additional Medicare tax

This payroll tax often flies under the radar. Under a provision of the Affordable Care Act, an additional Medicare tax of 0.9% applies to employee wages above:

• $200,000 for single filers,

• $250,000 for married couples filing jointly, and

• $125,000 for married couples filing separately.

Only employees pay this tax. However, employers are responsible for withholding it once an employee’s wages exceed $200,000 — even if the employee ultimately may not owe it (for example, for joint filers).

State unemployment insurance

Every state also runs its own unemployment insurance program to provide benefits to eligible workers who are involuntarily terminated. State unemployment obligations vary widely in terms of wage base, rate and employer vs. employee contributions.

Generally, the rate employers must pay is based on their experience rating. The more claims made by former employees, the higher the tax rate. States update these rates annually.

Get stronger

Managing payroll taxes can be complex — especially as rates and rules may change from year to year. But you can confidently meet your compliance requirements with the right system, procedures, employees and professional guidance in place. We’d be happy to review your current approach, flag potential risks and recommend ways to strengthen your payroll tax processes. Contact FMD for more information.

Writing an AI Governance Policy for Your Business

Artificial intelligence (AI) is changing the way businesses operate. Its capacity to gather and process data, as well as to mimic human interactions, offers remarkable potential to streamline operations and boost productivity.

But AI presents considerable challenges and concerns, too. With so many tools available, employees may inadvertently or purposely misuse the technology in ways that are unethical or even illegal. Compounding the problem is that many companies lack a formal AI governance policy.

Few in place

In August 2025, software platform provider Genesys released the results of an independent survey of 4,000 consumers and 1,600 enterprise customer experience and information technology (IT) leaders in more than 10 countries. It found that over a third (35%) of tech-leader respondents said their organizations have “little to no formal [AI] governance policies in place.”

This is a pointed problem, the survey notes, because many businesses are gearing up to deploy agentic AI. This is the latest iteration of the technology that can make decisions autonomously and act independently to achieve specific goals without depending on user commands or predefined inputs. The survey found that while 81% of tech leaders trust agentic AI with sensitive customer data, only 36% of consumers do.

7 steps to consider

Whether or not you’re eyeing agentic AI, its growing popularity is creating a trust-building imperative for today’s businesses. That’s why you should consider writing and implementing an AI governance policy.

Formally defined, an AI governance policy is a written framework that establishes how a company may use AI responsibly, transparently, ethically and legally. It outlines the decision-making processes, accountability measures, ethical standards and legal requirements that must guide the development, purchase and deployment of AI tools.

Creating an AI governance policy should be a collaborative effort involving your company’s leadership team, knowledgeable employees (such as IT staff) and professional advisors (such as a technology consultant and attorney). Here are seven steps your team should consider:

1. Audit usage. Identify where and how your business is using AI. For instance, do you use automated tools in marketing or when screening job applicants, auto-generated financial reports, or customer service chatbots? Inventory everything and note who’s using it, what data it relies on and which decisions it influences.

2. Assign ownership for AI oversight. This may mean appointing a small internal team or naming (or hiring) an AI compliance manager or executive. Your oversight team or compliance leader will be responsible for maintaining the policy, reviewing new tools and handling concerns that arise.

3. Establish core principles. Ground your policy in ethical and legal principles — such as fairness, transparency, accountability, privacy and safety. The policy should reflect your company’s mission, vision and values.

4. Set standards for data and vendor use. Include guidelines on how data used by AI tools is collected, stored and shared. Pay particular attention to intellectual property issues. If you use third-party vendors, define review and approval steps to verify that their systems meet your privacy and compliance standards.

5. Require human oversight. Clearly state that employees must remain in control of AI-assisted work. Human judgment should always be part of the process, including approving AI-generated content and reviewing automated financial reports.

6. Include a mandatory review-and-update clause. Schedule regular reviews — at least annually — to assess whether your policy remains relevant. This is especially important as innovations, such as agentic AI, come online and new regulations emerge.

7. Communicate with and train staff. Incorporate AI governance into onboarding for new employees and follow up with regular training and reminder sessions thereafter. Ask staff members to sign an acknowledgment that they’ve read the policy and perhaps another to confirm they’ve completed the required training. Encourage everyone to ask questions and report potential issues.

Financial impact

Writing an AI governance policy is just one part of preparing your business for the future. Understanding its financial impact is another. Let FMD help you analyze the costs, tax implications and return on investment of AI tools so you can make informed decisions that balance innovation with sound financial management and robust compliance practices.

Fundamental Building Blocks of an Employee Wellness Program

In a business context, a wellness program is an employer-sponsored initiative designed to promote employees’ physical, mental and emotional well-being. These programs can take many forms, but their underlying goal is generally the same: to foster a healthier, more productive workplace.

A well-structured wellness program can also help companies manage health care benefits costs, reduce absenteeism, improve employee retention and enhance company culture. Whether your business has a program in place or is considering rolling one out, here are some fundamental building blocks to help ensure your approach is effective, practical and sustainable.

Straightforward design

Imagine a company introducing its new employee wellness program with an email that reads, “Welcome aboard! Attached is a 200-page guide, featuring a complex point system that will determine whether you qualify for incentives and a lengthy glossary of medical terminology.”

See the problem? The quickest way to derail participation is by overcomplicating the rollout. Granted, any type of wellness program will inevitably have a learning curve. But the simpler the design, the easier it will be to explain and implement. Remember that you can update and increase a program’s complexity as it becomes more ingrained in your business’s culture.

Clear communication

Strong program communication is also paramount. Write, format and organize materials clearly and concisely. Be creative with the design and language to capture employees’ interest. Just keep in mind that the content must be sensitive to the fact that the program addresses inherently personal issues of health and well-being.

If you don’t have anyone in-house who can handle these criteria, consider engaging a consultant. In addition, ask your attorney to review all program materials for compliance purposes.

Well-vetted vendors

For most companies, outside vendors provide the bulk of wellness program services and activities. These may include:

• Seminars on healthy life and work habits,

• Smoking cessation workshops,

• Fitness coaching,

• Healthful food options in the break room and cafeteria, and

• Runs, walks or other friendly competitive or charitable events.

It’s critical to thoroughly vet providers and engage only those that are skilled and qualified. Neglecting to do so could mean that, even if you create and communicate a solid program, it will likely fail once employees show up to participate and are disappointed by the experience. Quality partnerships build credibility — and lasting engagement.

A strategic investment

Developing a wellness program may be a wise decision for both your employees and business. If you’re just getting started, build it on the fundamentals mentioned. And if you already have a program up and running, closely monitor participation and outcomes so you can make informed adjustments that enhance its long-term value. FMD would be happy to help you establish a realistic budget, identify potential tax advantages and measure the financial return on your investment.

Why Start-ups should Consider Launching as S corporations

Launching a new business brings tough decisions. And that holds true whether you’re a fledgling entrepreneur starting your first company or an experienced businessperson expanding into a second or third enterprise.

Among the most important calls you’ll need to make is how to structure the start-up for tax purposes. For many business owners, electing S corporation status is a savvy move. But it’s not right for everyone. Here are some important points to consider before you decide.

What’s it all about?

An S corporation is a tax election available only to certain U.S. companies. To make the election, you’ll need to file IRS Form 2553, “Election by a Small Business Corporation,” typically within 75 days of forming the business or the start of the tax year to which you want the election to apply.

If you elect S corporation status, the IRS will treat your start-up as a “pass-through” entity. This means the business generally won’t pay federal income taxes. Instead, profits and losses will pass through to your individual tax return and those of other shareholders.

As a result, you’ll avoid the “double taxation” faced by shareholders of C corporations — whereby the company pays taxes on the business’s income and then shareholders pay tax on any dividends received. In addition, S corporation shareholders may be eligible for the Section 199A qualified business income deduction for pass-through entity owners. It was recently made permanent under the One Big Beautiful Bill Act.

Which businesses qualify?

IRS rules limit which companies can elect S corporation status. To qualify, your start-up must:

• Be an eligible domestic corporation or limited liability company (LLC),

• Have no more than 100 shareholders who must be U.S. citizens or residents (certain trusts and estates may also be eligible), and

• Offer only one class of stock.

Insurance companies, financial institutions using the reserve method of accounting and domestic international sales corporations are generally ineligible.

Why do it?

As mentioned above, the main advantage of electing S corporation vs. C corporation status is avoiding double taxation. But there are other reasons to do it.

For example, many start-ups incur losses in their first few years. S corporation status allows owners to offset other income with those losses, a tax benefit that’s unavailable to C corporation shareholders.

S corporations also have advantages over other types of pass-through entities. Generally, all trade or business income that flows through to sole proprietors and partners in partnerships is subject to self-employment taxes — even if the income isn’t actually distributed to the owners. S corporations can divide their income into shareholder-employee salaries and distributions. The salary portion is subject to payroll taxes, but distributions aren’t. So, by drawing a smaller salary (but one that’s reasonable in the eyes of the IRS) and taking the remainder as distributions, S corporation shareholder-employees can reduce their overall tax burden.

Liability protection is another advantage S corporations have over sole proprietorships and partnerships. S corporation status shields shareholders’ personal assets from business debts and legal claims, provided applicable rules are followed. Operating as an S corporation can also make your new business appear more credible to lenders, investors and customers because of its formalized, protective framework.

What are the drawbacks?

Electing to be treated as an S corporation has its drawbacks. Your start-up will have to follow strict IRS rules, which include keeping up with filing requirements and maintaining accurate financial records. Failure to comply could lead to back taxes, interest and penalties. It could even mean losing your S corporation status in a worst-case scenario.

Indeed, S corporations tend to incur higher administrative expenses than other pass-through entities. You’ll need to file corporate tax returns and meet state-level requirements. The extra complexity may outweigh the tax advantages — especially for newly launched companies with little to no profits.

Finally, it bears repeating: Although the salary/distributions income-splitting strategy mentioned above is advantageous, it can draw IRS scrutiny. Paying shareholder-employees an unreasonably low salary to avoid payroll taxes could trigger an audit with negative consequences.

Who can help?

Congratulations and best wishes on your forthcoming start-up! Electing S corporation status may be the right way to go. However, you’ll need to assess a wide variety of factors, including projected profits, the number of shareholders and your comfort level with the administrative requirements.

Before you do anything, contact us. FMD can help you evaluate whether operating as an S corporation aligns with your strategic and financial goals. If it does, we’d be happy to assist you with the filing process and compliance going forward.

Designing the Right Bonus Plan for Your Business

Today’s employees have a wealth of information at their fingertips and many distractions competing for their attention. Maintaining focus and productivity can be challenging.

One proven lever for promoting engagement is a performance-based bonus plan. When carefully structured, these plans acknowledge individual contributions while accelerating the company toward its strategic goals. However, if not optimally designed, bonuses can backfire — feeding worker frustration and wasting resources. That’s why the right approach is essential.

What are the goals?

The first step in creating an effective employee bonus plan is to set specific and reasonable strategic goals that inspire employees and improve your business’s financial performance. They should be tied to metrics that describe intended operational improvements, such as:

• Increased sales or profits,

• Enhanced customer retention, or

• Reduced waste.

Structure the bonus plan so that staff members’ priorities and performance goals align with the company’s strategic goals, as well as the purpose of their respective positions. Employee goals must also be specific and measurable. You may allow some workers to set “stretch” goals that require them to exceed normally expected performance levels. But don’t permit anything so difficult that an employee will likely get discouraged and give up.

It often makes sense to also set departmental goals. This way, team members can better see how their work, both individually and as a group, propels progress toward company goals. For example, the bonuses of assembly line workers at a manufacturing plant could be tied to limiting unit rejects to no more than 1%. This, in turn, would directly relate to the business’s strategic goal of reducing overall waste by 5%.

How can you do it right?

A well-structured bonus plan should do more than set employees on a “side quest” to earn more money. Ideally, it needs to educate and inspire them to think more like business owners seeking to grow the company rather than workers earning a paycheck.

For starters, keep it simple. Sometimes, bonus plans get so complicated that employees struggle to understand what they must do to receive their awards. Design a straightforward plan that clearly explains all the details. Write it in plain language so both leadership and staff have something to refer to if confusion arises.

Also, seek balance when calculating bonus amounts. This can be tricky: A bonus that’s too small won’t provide adequate motivation, while an amount that’s too large could cause cash flow issues or even jeopardize the bottom line. Many businesses structure their incentive arrangements as profit-sharing plans, so payouts are based directly on the company’s profitability.

Make the plan flexible, too, by adjusting it as business conditions change. For instance, you might tweak your bonus plan when you update your company’s strategic goals at year end. But don’t set goals that are too open-ended. Measure both strategic and individual goals on a consistent schedule with firm starting and ending dates. Companies generally track goals quarterly or annually.

Finally, consider allowing the highest achievers to reap the biggest rewards. In many businesses, salespeople have the biggest impact on the company’s overall performance. If that’s the case for your business, perhaps your sales team should be able to earn the highest amounts.

Who can help?

A thoughtfully designed bonus plan can align employee efforts with company priorities while supporting long-term growth. Let FMD help you create one that motivates employees, safeguards your bottom line, and keeps your business in full compliance with the tax and accounting rules.

Is your Company’s Pricing Strategy still Viable?

Pricing is among the most powerful levers for business owners to calibrate their companies’ profitability. Set prices too low and you risk leaving money on the table. Set them too high and customers may pass you by for cheaper competitors.

Your continuous objective should be to find that sweet spot where prices are competitive while supporting your profit margins and long-term growth. Trouble is, that sweet spot tends to move around a lot — so you must regularly reevaluate your pricing strategy.

Crunching the numbers

To get started, crunch some numbers. Use your financial statements to determine whether your current prices cover both direct costs (such as labor and materials) and indirect costs (such as overhead and administrative expenses).

Monitoring costs is critical — especially given today’s economic volatility. Rising expenses related to suppliers, vendors or labor can quickly erode margins if prices remain static. Regularly reviewing the relationship between expenses and pricing helps ensure adjustments are proactive rather than reactive.

Another useful step is calculating your breakeven point. This metric tells you how many units you must sell at a given price to cover all costs without incurring a loss. Sales beyond the breakeven point will generate a profit. It’s a good starting point for assessing whether current sales volumes align with your existing pricing strategy.

Also, benchmark pricing in relation to your industry and market. Monitor what competitors are charging and compare their prices to yours. A major differential, whether higher or lower, could hurt sales and your business’s reputation if you can’t reasonably rationalize the difference.

Listening to customers

Negative customer behavior is another indication that your pricing strategy may be suboptimal. Are customers constantly pushing back on price, whether during the sales process or when interacting with customer service? If so, you might want to modulate prices slightly lower. On the other hand, if sales are flowing through the pipeline unusually fast, with little resistance, it could mean your prices are too low.

Consider customer segmentation as well. This is a process by which you divide your customer base into smaller groups with common characteristics, allowing you to tailor pricing to each group. For example, some customers might be willing to pay a premium for faster service or customized solutions. Customer segmentation can provide cleaner, more useful data that fuels better decision-making.

Adjusting cautiously

If a thorough analysis reveals your profit margins are too thin, you may want to raise prices. But proceed with caution. Perhaps increase the price of one or two strong sellers and closely monitor the impact. If sales remain steady, you’re probably on the right track — remember, even a subtle price increase can boost profitability. Conversely, if sales suffer, you may need to rethink your pricing strategy.

When raising prices, it’s imperative to communicate clearly with customers. Explain why you’re doing it in plain language, focusing on value. Highlight what makes your business different and better than the competition in areas such as quality, expertise and service. Customers are often willing to pay more provided they understand the value they’re getting for their money.

Of course, there may also be instances when you choose to lower prices — perhaps for a limited time or even indefinitely. In such cases, customer communication is equally important. More than likely, you’ll want to “shout from the rooftops” that you’re lowering prices. Develop a marketing initiative that effectively communicates this message while covering the details.

Getting some help

In today’s roller coaster economy, a viable pricing strategy requires ongoing analysis. Regularly review your margins, assess the market, and align prices with your business’s strategic objectives and customer values. Interested in some objective guidance? FMD can help you analyze costs, apply the right metrics and optimize prices based on current market dynamics.

What Every Business Owner Should Know About Data Hygiene

When you read the word “hygiene,” you may immediately think about the importance of washing your hands or brushing your teeth. But there’s another use of the term that every business owner should know: data hygiene.

This refers to the ongoing process of ensuring that the information your company relies on is accurate, complete, consistent and up to date. Whether customer contact info, financial records or vendor agreements, data that isn’t wholly clean puts your business at risk of making poor decisions and costly mistakes.

Specific harms

How can dirty data harm your company? For starters, inaccurate or outdated information can lead to billing mistakes and delays, ineffective marketing campaigns, missed or mishandled sales opportunities, and compliance troubles. When employees must constantly question the validity of data and fix errors, productivity falls and costs rise. Over time, lack of reliable information can erode trust with customers, vendors, lenders and investors — all while lowering staff morale.

And now that many businesses widely use artificial intelligence (AI), there’s a cybersecurity angle. Among the many threats currently evolving is “data poisoning.” It occurs when bad actors, either internal or external, intentionally corrupt the information that an AI model relies on to operate. The objective is to manipulate the model’s behavior by introducing malicious, biased or inaccurate data during the “training phase.” Without strong data hygiene safeguards in place, these cyberattacks can compromise an AI system and ruin the reputation of the company using it.

Best practices

The good news is your business can significantly improve its data hygiene by adhering to certain best practices. Begin by setting clear standards for data entry. Employees should input information the same way every time, according to a well-defined process. Train staff members on the definition and importance of data hygiene. Ask them to routinely verify critical details related to financial transactions, such as customer contact info and vendor payment instructions.

From a broader perspective, set up regular audits of your databases to remove duplicate items, catch and correct inaccuracies, and archive outdated information. Consider investing in software tools that flag inconsistencies and prompt updates to key systems.

Above all, assign the responsibility to promote and oversee data hygiene to someone within your company. If you run a small business, you may have to do it. But many companies assign this job duty to the chief data officer or data quality manager.

Financial performance benefits

Robust data hygiene can translate directly to stronger financial performance. As the accuracy and reliability of information are continuously improved, your company will be able to generate more dependable financial records and reports. In turn, you’ll have the tools to make better-informed decisions about budgeting, cash flow management and strategic planning. Clean data benefits sales and marketing as well. For example, it helps you target the right audience, reducing wasted efforts and improving return on investment.

Of course, there are costs associated with data hygiene. You’ll likely have to spend money on software, training, and potentially engaging consultants to audit your systems and upgrade your technological infrastructure. However, handled carefully, such costs will probably be far less than those associated with lost sales, compliance penalties and reputational damage.

More important than ever

Data hygiene may not be top of mind for business owners dealing with hectic schedules and complex operational challenges. However, the quality and quantity of information are critical to running a competitive company in today’s fast-paced, data-driven economy. FMD can help you and your leadership team understand the cost implications of data hygiene and budget for it appropriately.

Occupational Fraud Still Affects Many Businesses

The more things change, the more they stay the same. This age-old saying applies to many things, and one of them is fraud perpetrated against businesses by their employees.

In fact, occupational fraud cost organizations about 5% of their revenue on average last year, according to the Association of Certified Fraud Examiners’ Occupational Fraud 2024: A Report to the Nations. Let’s review its three basic categories.

Misappropriating assets

The first category is asset misappropriation. It comprises theft or misuse of any business asset, but related schemes often involve cash. These types of scams are the most common type of occupational fraud, though they’re typically less costly than crimes committed under the other two categories.

One classic example is the “ghost” employee ploy, where a staff member with payroll access channels funds to a nonexistent worker. Naturally, those funds end up in the real employee’s pocket.

There are plenty of others. Asset misappropriation has long involved check tampering, whereby an employee steals, forges or alters company checks to reap ill-gotten financial rewards. Now that midsize and larger businesses rely more on electronic transactions, these companies are relatively less susceptible to check schemes. However, many small companies are still at risk.

If you run a cash-intensive business, be on the lookout for dishonest workers skimming funds before they’re recorded. And if your company maintains inventory or supplies, safeguard these carefully to avoid theft.

Engaging in corrupt activities

The second category of occupational fraud is corruption. Dishonest employees in positions of influence may commit crimes for personal gain and the company’s loss. These types of schemes are rarely simple and may go on for months — or even years — without anyone noticing.

For instance, a corrupt staffer may work with a vendor rep to inflate prices on the vendor’s goods and services. The two then split the difference when the business pays the bill. Collusion like this can hurt your company’s financial performance and business reputation. Leadership teams that fail to prevent such schemes risk losing the confidence and support of lenders and investors.

Don’t ignore the possibility of kickback schemes either. Here, a person of influence in the company uses a vendor or other provider, not because they’re the best choice, but because the employee involved gets a personal benefit. Examples might include cash, a valuable gift or free services.

Falsifying financial statements

The third category is financial statement fraud. In these schemes, perpetrators falsify financial statements to either hide poor performance or commit outright theft. On the upside, this category is generally the least prevalent of the three. The downside? It’s often the costliest — with such crimes costing companies many hundreds of thousands of dollars on average.

One example to watch out for is inflated revenue. A manager, perhaps angling for a promotion or fearful of termination, records sales that never actually occurred to make the business appear more profitable. On a similar tack, a dishonest employee may hide or delay recording legitimate expenses or debts to make financial results look stronger.

Fraudulent manipulation of financial statements can be particularly dangerous. These crimes are often sophisticated, hard to detect and damaging to a company’s reputation at the highest levels.

Common thread

As you can see, occupational fraud can take many forms. But the common thread is the financial and reputational damage to affected businesses. And the threat level is often higher for smaller companies because they may have fewer resources to fight back. Let FMD help you spot vulnerabilities in your operations, strengthen internal controls, and devise tailored fraud prevention and detection strategies.

Businesses Strive for Balance in Hybrid Work Models

If your business allows employees to perform their jobs under a hybrid work model, it’s not alone. Ever since the pandemic, many companies have sought to strike a balance between permitting some remote work while also requiring staff to come into the office (or another type of facility).

Data released this year shows that, by and large, businesses seem to have found a certain equilibrium regarding hybrid work. However, maintaining the right balance for your company will require a careful eye going forward.

Schedule control

Just this month, Gallup published survey results showing that, as of May 2025, 51% of remote-capable employees in the United States are working under a hybrid model. That’s a slight decrease from 55% in November 2024. Interestingly, during the same period, the percentage of fully remote workers rose 2% — but fully on-site employees also increased by the same percentage.

One particularly important issue brought up by the research is how much control a business asserts over its hybrid workers’ schedules. The data showed that the percentage of employees who describe their schedules as “entirely up to me” fell from 37% in 2024 to 34% this year.

How do most companies establish hybrid schedules? Gallup found that three main groups typically make the call:

1. Employees themselves,

2. Managers or teams, or

3. Leadership.

The second option generally comes out on top, according to Gallup. More specifically, 91% of hybrid workers whose teams established their schedules described their employers’ policies as “fair.” That’s the same rate as employees who determined their own schedules. When leadership mandated schedules, the fairness rate reported by hybrid workers fell to only 73%.

Policy enforcement

Another recent report on hybrid work models is the 2025 Americas Office Occupier Sentiment Survey by commercial real estate services and investment consultancy CBRE. It polled companies across the United States, Canada and Latin America on topics that included “efforts to align workspaces with hybrid work models while meeting business objectives.”

Among the survey’s key findings is an uptick in the enforcement of hybrid work policies. In fact, 85% of responding businesses reported communicating an attendance policy to hybrid workers. What’s more:

• 69% of respondents measured compliance with their policies (up from 45% in 2024), and

• 37% of respondents took enforcement actions (up from 17% in 2024).

And those enforcement measures seem to be working. The survey found that 72% of respondents achieved their attendance goals in 2025 (up from 61% in 2024). Overall, the data indicates that employees averaged 2.9 days a week on-site, which is close to businesses’ reported expectations of 3.2 days on average.

Cost considerations

Along with determining and refining how you establish workers’ schedules and enforce your policies, you should carefully identify all the costs that accompany hybrid work. For example, even with fewer employees on-site, your business still needs to maintain office space.

Some companies are downsizing, while others are redesigning their layouts to accommodate shared desks and collaborative spaces. If you choose these alternatives, be aware of your lease commitments, maintenance and utility expenses, and renovation costs.

Supporting a hybrid workforce also requires secure and reliable technology. This typically includes video conferencing tools, cloud-based software, cybersecurity measures, and internet and networking systems. These expenses often extend to both office and home setups.

Beware of hidden costs, too. For instance, policy enforcement may cause your business to spend more on compliance-related technology, as well as training for HR staff and supervisors.

Clear and constant view

The surveys mentioned above, as well as other indicators, show that hybrid work is here to stay. Finding the optimal balance for your business depends on savvy scheduling, judicious policy enforcement, and a clear and constant view of the financial implications. FMD can help you assess all the expenses involved and align spending with productivity goals to ensure your hybrid model remains sustainable.

5 Ways Your Business Can Build a Stronger Annual Budget

As summer gives way to fall, many businesses begin their budget-setting processes for the upcoming year. This annual rite of passage can be stressful, contentious and, perhaps worst of all, disappointing if your budgets often fail to achieve their objectives.

The good news is that there are many ways to enhance your company’s budgeting process and improve the likelihood that you’ll get good results. Here are five to consider.

1. Optimize data

It’s not uncommon for a business to create its budget by applying an across-the-board percentage increase to the previous year’s actual results. However, this approach may be too simplistic in today’s uncertain economy and ever-changing marketplace.

That’s not to say historical results aren’t a good starting point. But keep in mind that some costs are fixed rather than variable. And certain assets, such as equipment and employees, have capacity limitations. What troubles many companies is the presence of confusing or conflicting information, which eventually hampers their budget’s efficacy.

The solution is data optimization. This is the process of refining how data is collected, stored, managed and applied to maximize efficiency and value. In the context of budgeting, data optimization involves steps such as removing duplicate entries, correcting errors and applying a standard format to strengthen accuracy.

2. Involve the entire organization

Traditionally, many businesses rely only on their accounting departments to devise a budget. However, this approach often “puts blinders” on a company, leaving it at a disadvantage. When creating your budget, seek input from the entire organization.

For example, your sales department may be in the best position to help you accurately estimate future revenue. Meanwhile, your operations or production managers can offer insights into potential staffing adjustments and expenses related to equipment maintenance or replacement.

Soliciting broad participation also gives departments a greater sense of involvement in the budgeting process. In turn, this can help enhance employee engagement and improve your odds of achieving budgeted results.

3. “Sell” it to staff

Good budgets encourage the hard work needed to grow revenue and cut costs. But targets must be attainable. Employees will likely become discouraged if they view a budget as unattainable or out of touch with current market trends — or reality in general. After years of failed attempts to meet budgets, workers may start to ignore them altogether.

If this has been an issue for your business, you might need to “sell” your budget to staff. Doing so centers on devising and executing a communication strategy that clearly explains each budget’s rationale and objectives. Tying annual bonuses to achieving specific targets may encourage greater buy-in as well.

4. Monitor cash flow

Even if expected revenue is forecast to cover expenses for the year, unexpected fluctuations in production costs can lead to temporary cash shortages. Slow-paying customers and uncollectible accounts may also inhibit cash flow.

The truth is, any unanticipated cash shortfall can seriously derail your budget. So, once yours is set, monitor all your cash flows weekly or monthly. Then, create a plan for managing any major shortfalls that may occur.

For instance, you and other owners may need to contribute extra capital. Or you might need to apply for a line of credit at your current bank or another one. Additionally, you might consider:

• Buying materials on consignment,

• Delaying payments to vendors (as long as you don’t incur penalties), or

• Tightening terms with slow-paying customers.

Bottom line: Don’t put a budget in place and expect it to run on autopilot. Keep a close eye on cash flow and make adjustments as necessary.

5. Get an objective opinion

Many companies’ budgets suffer from the old “because we’ve always done it that way” mentality. For a fresh perspective and an objective opinion on your budgeting process, please keep our firm in mind. FMD can help your business strengthen its budget by showing you how to better analyze historical financial data, forecast future performance, identify cost-saving opportunities, integrate tax planning and more.

Shining a Light on Your Business’s Brand

Your business’s brand is more than just a logo or tagline. It represents the culmination of everything you’ve accomplished to date, as well as a promise to uphold the reputation you’ve established.

But that doesn’t mean your brand has to remain static. In fact, it may need a refresh as your company grows, markets evolve and customer expectations change. The only way to know for sure is to occasionally shine a light on your brand to determine whether it’s still optimally visible to the people you want to reach.

Locate yourself

When reassessing your brand, first locate where your company stands today. Consider its strengths and how they’ve evolved over time — or very recently. Maybe you’ve pivoted over the last several years to address changing economic or market conditions. Look for strong suits such as:

• Notable excellence in product or service design,

• Exceptional customer service,

• Providing superior value for your price points, and

• Innovation in your industry.

You need to match your business’s mission, vision and strengths to the needs and wants of the market you serve — and express that through your brand. To that end, ask current customers what they like about doing business with you. And survey both customers and prospects about what they consider when making buying decisions.

Pinpoint your personality

If you look at any widely known brand, you’ll see a logo and broader branding effort that conveys a certain personality. Some companies want to appear creative and playful; others want to communicate stability and security.

What personality will draw customers to your business? You may think every company in your industry has the same target audience. If that’s true, you must come up with an edge that differentiates your business from its rivals.

Your company may have various points of contact with customers, such as business cards, print advertisements and catalogs, and your website’s home page and social media accounts. All play a role in your brand’s personality.

Review what your company does at each contact point, considering whether and how these efforts accurately and effectively represent the business’s core values and emphasize its strengths. Doing so will give you more insight into the best way to portray your personality through your brand.

Check up on the competition

Of course, competitors have brands all their own — and they’re after your target audience. So, in creating or refining your brand, you’ll need to identify their tactics and develop countermeasures.

To do so, engage in competitive intelligence. This simply means ethically and legally gathering information on their latest products or services, pricing and special offers, marketing and advertising methods, and social media activities.

In some cases, you may discover that a full rebranding campaign is necessary to differentiate your business from the competition. For example, let’s say a major player has entered your market and you’re worried about visibility, or perhaps your brand is blurring with another company’s.

Stand out

Branding is an ongoing process of reflecting on your company’s identity and refining how you present it to the world. By building on your strengths, expressing a clear and consistent personality, and keeping a close eye on competitors, your business can stand out in a crowded marketplace. Let FMD help you evaluate branding from a cost-planning perspective to ensure that any chosen strategy aligns with your budget and strategic goals.

How Businesses Can Fund a Buy-Sell Agreement

Businesses with more than one owner benefit from having multiple viewpoints and varying skill sets. However, they also face serious risks of uncertainty and conflict if one of the owners suddenly departs or undergoes a major life change. A carefully crafted buy-sell agreement can guard against these risks — if it’s securely funded.

Transfer guidelines

A “buy-sell” (as it’s often called) is a legally enforceable contract among a company’s owners that sets guidelines for transferring ownership interests. It gives the remaining owners or the business itself the right — or, in some cases, the responsibility — to buy an exiting owner’s interest if a “triggering event” occurs. Such events may include an owner’s death, disability, divorce, retirement, voluntary departure, and loss of professional license or certification.

Essentially, the buy-sell creates a market for a withdrawing owner’s interest. It also defines how the price of an ownership interest will be determined, including identifying a valuation method and standard of value. By outlining when and to whom interests can be sold — and for how much — the agreement ultimately helps prevent conflicts among remaining owners or with the withdrawing owner’s family.

Popular choice

When a triggering event occurs, a substantial amount of money is typically needed to buy the departing owner’s interests. So, it’s critical to properly fund a buy-sell.

One popular choice is life insurance. Although such coverage might seem useful only to provide liquidity in the event of an owner’s death, it’s not limited to such situations.

The right policy, sometimes combined with riders or other types of coverage, can help ensure that departing owners or their beneficiaries efficiently receive the agreed-upon price for ownership interests following eligible triggering events. Meanwhile, it can ease the strain on the company’s cash flow and reduce the likelihood that the business will have to sell assets to fund an ownership interest buyout.

Various structures

Buy-sells can be structured to use life insurance in various ways. One option is a cross-purchase agreement, where each owner takes out a policy on each of the other owners.

For example, let’s say you buy coverage for your business partner. If that individual dies, triggering the buy-sell, you’ll collect the death benefit and use it to buy the ownership interest from your partner’s estate.

Assuming it’s large enough, the policy should guarantee you’ll have the funding to fulfill your obligations under the agreement. Other benefits include:

• The insurance proceeds won’t be taxable as long as you plan properly, and

• Your tax basis in the newly acquired interests will equal the purchase price.

On the downside, a cross-purchase agreement can be cumbersome if there are more than a few owners because of the number of policies required. It can also be unfair if there’s a significant disparity in owners’ ages or health, causing the policy premiums to vary substantially.

One alternative is establishing a trust or separate partnership to buy a policy on each owner. If an owner dies, the trust or partnership collects the death benefits on behalf of the remaining owners and pays each one’s share of the ownership interest buyout.

Another option is a redemption agreement. Under this approach, the business — not the individual owners — buys a policy on each owner’s life. The company holds the insurance and receives the proceeds following a qualifying triggering event, which it then uses to buy a departing owner’s interest.

A disadvantage of a redemption agreement is that the remaining owners won’t receive a step-up in basis when the company buys the departing owner’s interest. This can result in higher capital gains taxes.

Additionally, in the 2024 case of Connelly v. United States, the U.S. Supreme Court held that the value of corporate-owned life insurance used to meet a redemption agreement should be included in the value of a deceased owner’s business interest for federal estate tax purposes. And that doesn’t include any offsetting reduction for the company’s obligation to redeem the deceased owner’s interest.

The ruling may have adverse consequences for estates subject to the federal estate tax. Under current law, the unified federal estate and gift tax exemption is $13.99 million for 2025 and $15 million for 2026.

Bottom line

The bottom line is, if not properly funded, a buy-sell agreement won’t likely benefit anyone. Work with your attorney to create and occasionally review yours. Meanwhile, FMD can help you choose an optimal funding strategy and advise you on the tax implications.

5 Ways Businesses Can Assess Health Care Benefits Spending

If your business sponsors health care benefits for its employees, you know the costs of doing so are hardly stable. And unfortunately, the numbers tend to rise much more often than they fall. According to global consultancy Mercer’s Survey on Health & Benefit Strategies for 2026, 51% of large organizations surveyed said they’re likely to make plan design changes to shift more costs to employees next year — presumably in response to price increases.

Small to midsize companies face much the same dilemma. With costs widely anticipated to rise, should you cut benefits, increase the cost-sharing burden on employees or hold steady? There’s no way to know for sure until you assess your current health benefit costs. Here are five ways to ascertain whether you’re spending wisely:

1. Choose and calculate metrics. Business owners can apply analytics to just about everything these days, including health care coverage. For example, you might use benefits utilization rate to identify the percentage of employees who actively use their benefits. Low usage may indicate your benefits aren’t aligned with the particular needs of your workforce.

Another metric is cost per participant, which is generally calculated by dividing total health care spend by number of covered employees. The result can help you judge the efficiency of your budget and potentially allow you to identify cost-saving opportunities.

2. Audit medical claims payments and pharmacy benefits management services. Mistakes happen — and fraud is always a possibility. By regularly re-evaluating claims and pharmacy services, you can identify whether you’re losing money to inaccuracies or even wrongdoing. Your business may need to engage a third-party consultant for this purpose, though some companies might be able to leverage training and specialized software to conduct internal reviews.

3. Scrutinize your pharmacy benefits contract. As the old saying goes, “Everything is negotiable.” Conduct a benchmarking study to see how your business’s pharmacy benefits costs stack up to similarly sized and situated companies. If you believe there’s room for negotiation, ask your vendor for a better deal. Meanwhile, look around the marketplace for other providers. One of them may be able to make a more economical offer.

4. Interact with employees to compare cost to value. The ideal size and shape of your plan depend on the wants and needs of your workforce. Rather than relying on vendor-provided materials, actively manage communications with employees regarding the design of your health care plan and its costs. Determine which benefits are truly valued and which ones aren’t.

Ultimately, your goal is to measure the financial impacts of gaps between benefits offered and those employees actually use. Then, explore feasible ways to adjust your plan design to close these costly gaps.

5. Get input from professional advisors. Particularly for smaller businesses, internal knowledge of health care benefits may be limited. Don’t get locked into the idea that you and your leadership team must go it alone.

Consider engaging a qualified consultant to help you better understand the full range of health care benefits available to your company. Ask your attorney to review your plan for potential compliance violations, as well as to check your contracts for negotiable items. Last, keep our firm in mind. FMD can perform financial analyses, audit claims, and offer strategic guidance to optimize spending and improve plan efficiency.

Is your Business Ready for Digital Documents and e-Signatures?

Whether signing a vendor agreement, approving a repair estimate or applying for a loan, chances are you’ve signed something digitally in recent months. In 2025, digital documents and e-signatures are no longer just a convenience — they’re fast becoming the standard.

Businesses of all types and sizes are embracing digital workflows to improve efficiency, reduce turnaround times and meet customer expectations. If your company is still relying on paper documents and manual signatures, now may be the time to take a fresh look at what you might be missing.

Potential advantages

For small to midsize businesses, there are generally three reasons to use digital documents with e-signatures. First, of course, it’s faster. When you can review and sign a business document electronically, it can be transmitted instantly and approved much more quickly.

And this works both ways: your customers can sign contracts or submit orders for your products or services, and you can sign similar documents with vendors, partners or consultants. What used to take days or even weeks, as delivery services carried out their duties or paper envelopes crisscrossed in the mail, can now occur in a matter of hours.

Second, it’s a strong safeguard against disaster, theft and mishandling. Paper is all too easily destroyed, damaged, lost or stolen. That’s not to say digital documents are impervious to thievery, corruption and deletion. However, a trusted provider should be able to outfit you with software that not only allows you to use digital documents with e-signatures, but also keeps those files encrypted and safe.

Third, as mentioned, more and more customers want it. In fact, this may be the most important reason to incorporate digital documents and e-signatures into your business. Younger generations have come of age using digitized business services. They expect this functionality and may prefer a company that offers it to one that still requires them to put pen to paper.

Valid concerns

Many business owners continue to have valid concerns about digital documents and e-signatures. For example, you may worry about how legally binding a digitized contract or other important document may be. However, e-signatures are now widely used and generally considered lawful under two statutes: 1) the Electronic Signatures in Global and National Commerce Act of 2000, a federal law, and 2) the Uniform Electronic Transactions Act, which governs each state unless a comparable law is in place.

Indeed, every state has legislation in place legalizing e-signatures. There may be some limited exceptions in certain cases, so check with your attorney for specifics if you decide to transition to using the technology.

Another concern you might have is cybersecurity. And there’s no doubt that data breaches are now so common that business owners must expect hacking attempts rather than hope they never happen.

As mentioned, a reputable provider of digital document technology should be able to equip your company with the necessary tools to defend itself. But don’t stop there. If you haven’t already, establish a sound, regularly updated cybersecurity strategy that encompasses every aspect of your business — including when and how digital documents and e-signatures are used.

Strategic move

Implementing this increasingly used technology is a strategic move. As such, it will likely involve costs related to vetting software providers, training your team, and updating internal assets and processes. But it also may be a wise investment in faster transactions, improved security and a better customer experience. Plus, you’ll pay less in express delivery fees. FMD can help you evaluate the idea, forecast your return on investment, and, if appropriate, build a smooth transition plan that fits your budget and goals.

Businesses can still Choose to Address Sustainability

For many years, businesses of all shapes and sizes have at least considered sustainability when running their operations. Many people — including customers, investors, employees and job candidates — care about how a company impacts the environment. And reducing energy use, water consumption and waste generally lowers operational costs.

However, the current “environment regarding the environment,” has changed. With the passage of the One, Big, Beautiful Bill Act (OBBBA), the federal government has disincentivized businesses from taking certain green measures. So, you may be reevaluating your company’s stance on sustainability.

Apparent interest

According to one survey, a serious interest in sustainability remains present among many businesses. In February, management consultancy Kearney, in association with climate action media platform We Don’t Have Time, released the results of a survey of more than 500 finance executives from companies in the United States, United Kingdom, United Arab Emirates and India.

Of those respondents, 93% said they saw a clear business case for sustainability. Meanwhile, 92% expected to invest more in sustainability this year — with 62% of respondents saying they planned to allocate more than 2.1% of revenue to sustainability in 2025.

Now whether and how fully these investments come to fruition this year is hard to say. However, the fact remains that sustainability has been and will likely continue to be a strategically significant factor in many industries.

Vanishing tax breaks

As mentioned, the OBBBA has thrown a wrench into tax relief related to certain sustainable measures.

For example, the Section 179D Energy Efficient Commercial Buildings Deduction has been around since 2006. It got a big boost from the Inflation Reduction Act (IRA) of 2022, which increased the potential size of the deduction and expanded the pool of eligible taxpayers. However, the OBBBA permanently eliminates this tax break for buildings or systems on which construction begins after June 30, 2026.

The OBBBA also nixes an incentive for the business use of “clean” vehicles. The Qualified Commercial Clean Vehicle Credit, under Sec. 45W of the tax code, hadn’t been previously scheduled to expire until after 2032. However, it’s now available only for vehicles acquired on or before September 30, 2025. Depending on vehicle weight, the maximum credit is up to $7,500 or $40,000.

Has your company installed an electric vehicle charger or another qualified dispenser of or storage facility for clean-burning fuel? If so, you may be able to claim the Alternative Fuel Vehicle Refueling Property Credit under Sec. 30C of the tax code. The IRA had scheduled the credit — which is worth up to $100,000 per item — to sunset after 2032. But under the OBBBA, eligible property must be placed in service on or before June 30, 2026, to qualify.

Tailored strategy

Where does all this leave your business? Well, naturally, it’s up to you and your leadership team whether you want to address sustainability and, if you decide to do so, precisely how. Typically, when devising or revising a strategy in this area, your company should:

• Conduct an up-to-date baseline assessment of energy use, water consumption, waste generation and your business’s overall carbon footprint,

• Set clear goals and metrics based on reliable data and the input of professional advisors,

• Address the impact of logistics, your supply chain and employee transportation, and

• Communicate effectively with staff to gather feedback and build buy-in.

And don’t necessarily give up on tax incentives. Although some federal tax breaks may be going away in the near future, state and local ones might exist that could benefit your business.

Your call

Again, as a business owner, you get to make the call regarding your company’s philosophy and approach to sustainability. If it’s something you intend to prioritize, FMD can help you review your operations and identify cost-effective and possibly tax-saving ways to make a positive environmental impact.

Developing A Comprehensive AI Strategy for Your Business

We’ve reached a point where artificial intelligence (AI) offers functionality and enhancements to most businesses. Yours may be able to use it to streamline operations, improve customer interactions or uncover growth opportunities.

However, getting the max benefit calls for doing much more than jumping on the bandwagon. To make this technology truly work for your company, you’ve got to develop a comprehensive AI strategy that aligns with your overall strategic plan.

Identify your needs

Many businesses waste resources, both financial and otherwise, by hastily investing in AI without thoroughly considering whether and how the tools they purchase effectively address specific needs. Before spending anything — or any more — sit down with your leadership team and ask key questions such as:

• What strategic problems are we trying to solve?

• Are there repetitive tasks draining employees’ time and energy?

• Could we use data more effectively to guide business decisions?

The key is to narrow down specific challenges or goals to actionable ways that AI can help. For example, if your staff spends too much time manually sorting and answering relatively straightforward customer inquiries, a simple AI chatbot might ease their workload and free them up for more productive activities. Or if forecasting demand is a struggle, AI-driven analytics may help you develop a clearer picture of future sales opportunities.

Be strategic

As you develop an AI strategy, insist on targeted and scalable investments. In other words, as mentioned, prospective solutions must fulfill specified needs. However, they also need to be able to grow with your business.

In addition, consider whether the AI tools you’re evaluating suit your budget, have reliable support and will integrate well with your current systems. Don’t ignore the tax implications either. The recently passed One, Big, Beautiful Bill Act has enhanced depreciation-related tax breaks that AI software may qualify for if you buy it outright.

Provide proper training

Training is another piece of the puzzle that often goes missing when businesses try to implement AI. Earlier this year, the Pew Research Center published the results of an October 2024 survey of more than 5,200 employed U.S. adults. Although 51% of respondents reported they’d received extra training at work, only 24% of that group said the training was related to AI.

This would seem to indicate that AI-specific training isn’t exactly commonplace. Make sure to build this component into your strategy. Proper training will help ensure a smoother adoption of each tool and increase your odds of a solid return on investment.

As you provide it, also ease employee concerns about job loss or disruption. That same Pew Research Center survey found that 52% of workers who responded are worried about the future impact of AI in the workplace. You may want to help your staff understand how the technology will support their work, not replace it.

Measure and adjust

As is the case with any investment, every AI tool you procure — whether buying it or signing up for a subscription — should deliver results that justify its expense. While shopping for and rolling out a new solution, clearly establish how you’ll measure success. Major factors may include time saved, customer satisfaction and revenue growth.

Once a solution is in place, don’t hesitate to make adjustments if something isn’t working. This may involve providing further training to users or limiting the use of an AI tool until you gain a better understanding of it.

If you’re using a subscription-based solution, you may be able to cancel it early. However, first check the contract terms to determine whether you’d suffer negative consequences such as a substantial termination fee or immediate loss of data.

Account for everything

There’s no doubt that AI has a lot to offer today’s small to midsize businesses. Unfortunately, it can also be overwhelming and financially costly if you’re not careful about choosing and implementing solutions. FMD can help you develop an AI strategy that accounts for costs, tax impact and return on investment.