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IT security is a concern for organizations in any industry. While the issue is often discussed in the context of governments and private-sector companies, all businesses need to be just as vigilant when it comes to understanding the importance of data privacy and implementing solutions to keep critical information safe.

5 IT security best practices for your company

When it comes to security concerns, it’s important to think differently, which is easier said than done. We explain five areas of focus to help frame your future strategy.

1. Ensure that stakeholders understand how to update or transform their approach

For business leaders and stakeholders, the message could not be clearer: transform your thinking. This sounds like a tall order for organizations that typically do not have large technology budgets. However, it’s important to let the strategy — not budget concerns — lead the conversation. There are plenty of good security options that will not break the bank — you just need to find them.

2. Discuss modern methods of managing patching, updates, vulnerabilities and exploits

It is easy to get caught in a loop when it comes to IT, where the goal is to use every possible dollar to support bigger applications. But a big budget should not create a blind spot when it comes to data security. Make sure that your IT team or external consultant is up to speed on the latest methods hackers are using to access information and disrupt operations.

3. Assess your environment – do not just guess

We need facts to make smart decisions. Look at how your servers, networks and databases are running or being maintained, and see how they are protected. Test the process a bit from the “inside in” and the “outside in,” so you can know exactly what is going on and make sure that everything is properly configured for efficiency and security.

4. Document your current security landscape

Once you know what your security situation is, be sure to formally document it. Not only does this help with continuity, but it also prevents misunderstandings and disconnects that can create chaos — or worse. Retention is key to long-term visibility and needs to be part of any meaningful approach to security.

5. Roadmap future states and check in often

Chances are that you will find things in your current security setup that you’ll want to address. The next step is to document them so that you have a clear roadmap to get from Point A to Point B. However, that is not the end of the journey — it is just the beginning. You should have regular check-ins to ensure that you are pointing in the right direction and are meeting your interim goals.

How BPM can help with IT Security

When setting the agenda for your organization’s IT security framework, perhaps the most important question to start with is: “What is your most valuable asset?”

Is it intellectual property? A database? A tangible asset or item? Whatever your answer to that question is, that is the North Star of your IT security investment. That’s what you are working to protect — and that end goal should always be at the forefront of your work in this space. As Steven Covey, author of The 7 Habits of Highly Effective People, said, “If we all started with the end in mind, we would likely pick the best tools, processes and people — and build an easy-to-use Fort Knox.”

BPM can help your organization strengthen its IT security through better technology. Learn more about how to leverage BPM’s managed services to realize your organization’s vision.

Cost segregation studies have increased in popularity with middle market companies and small business owners who own real estate. We explore the potential benefits and risks of this tax planning tool.

What is a cost segregation study and how does it work?

Cost segregation (“cost seg”) studies are analyses of building costs for the purpose of identifying and quantifying business property eligible for accelerated depreciation for tax reporting purposes. They are essentially a tax savings and cash flow planning tool, typically utilized by businesses that acquire or construct commercial buildings and other real estate property.

Although these studies have existed for more than three decades, the passage of recent tax legislation has helped to further enhance the benefits associated with them. As a result, there has been an industry-wide surge in their popularity, especially as smaller businesses, owners of rental properties and their tax advisors become increasingly savvy about the power of this tax planning tool.

Tax legislation affecting cost segregation benefits

Tax legislation passed recently has included several provisions that have been particularly beneficial to taxpayers who invest in commercial real estate and rental properties. For example, the Protecting Americans from Tax Hikes (PATH) Act of 2015 created a new category of property, Qualified Improvement Property or “QIP,” to apply bonus depreciation eligibility to a category of property that is especially meaningful to small business owners, tenants and landlords.

Shortly thereafter, the Tax Cuts and Jobs Act (TCJA) of 2017 increased first-year bonus depreciation to 100%, but inadvertently included a technical error that made QIP ineligible for bonus depreciation. In 2020, Congress passed the Coronavirus Aid, Relief and Economic Security (CARES) Act, correcting the error and making QIP eligible for 100% bonus depreciation.

Taxpayers are also realizing that cost segregation can be utilized in tandem with other tax planning strategies. For example, these studies can be completed on property acquired as part of a Sec. 1031 like-kind exchange. There are also synergies between cost seg studies and Historic Rehabilitation Tax Credits analyses that can translate into meaningful efficiencies. For newly constructed properties, taxpayers are increasingly looking to enhance the benefits of cost seg studies by simultaneously including work to secure the Sec. 179D tax deduction related to energy-efficient commercial buildings.

Evolving regulations on cost segregation

The IRS has taken notice of the increasing popularity of cost seg studies and is beginning to issue more guardrails around their use. It initially issued its first Audit Techniques Guide (ATG) for cost segregation almost 20 years ago in response to the increased application of these studies and to also acknowledge the seminal Healthcare Corporation of America (HCA) v. (IRS) Commissioner case. At the time, the published ATG represented a formal acknowledgment of the legitimacy of cost seg while simultaneously laying the groundwork for future rules for the studies.

In its most recent 2022 update, in response to the expansion and changes in this practice area, the IRS put taxpayers on notice that they should expect added scrutiny when it comes to cost segregation studies. Additionally, the IRS has established a “more likely than not” standard as it applies to tax positions relied upon in these studies – suggesting that consultants issuing these studies and CPAs signing off on the tax positions may be subject to “preparer” penalties if their work does not measure up.

Navigating cost segregation with professional support

As cost segregation continues to grow in popularity among real estate owners and investors, the IRS is responding with increased scrutiny and evolving regulations. To maximize benefits while managing potential risks, working with knowledgeable professionals is essential.

BPM’s team can advise on the use of cost segregation studies and help mitigate future risks as new rules related to this planning tool are released by the IRS. With experienced guidance, real estate owners can confidently explore how cost segregation might enhance their tax strategy.

Ready to optimize your real estate tax strategy?

Contact BPM today to learn how our professionals can help you navigate the complexities of cost segregation for your property investments.

Business leaders are constantly seeking new ways to gain competitive advantages while reducing operational costs. NetSuite, a leading cloud-based ERP solution, has responded to this challenge by weaving artificial intelligence throughout its platform, helping businesses work smarter rather than harder.

With smart automation and machine learning capabilities, organizations can now streamline routine tasks and uncover valuable insights hidden within their data. This article explores how AI is revolutionizing NetSuite’s functionality and delivering tangible benefits to organizations of all sizes.

In the following sections, we will examine the key AI features in NetSuite, their impact on various business functions and how partnering with the right implementation team can maximize your AI investment.

Built-in AI capabilities driving productivity

NetSuite’s approach to AI stands out in the enterprise software market through its embedded integration strategy. The AI capabilities in NetSuite use data and automation from the suite to handle repetitive tasks, which helps increase accuracy, speed up work and free up employees to focus on other work.

Rather than offering AI as a separate module or add-on, NetSuite has woven intelligent features throughout the platform, making advanced technology accessible without requiring specialized skills. This approach delivers immediate value to businesses that might otherwise find AI implementation costly or complex.

Key AI features revolutionizing business processes

NetSuite’s recent releases have introduced several groundbreaking AI features designed to transform everyday business tasks.

Text Enhance

Text Enhance, a generative AI tool, automates content creation for customer service, HR and marketing, improving productivity and consistency. This tool helps draft everything from product descriptions to customer communications, significantly reducing the time needed for content creation.

Bill Capture

Another standout feature is Bill Capture, which uses AI to quickly extract and input data from scanned invoices into NetSuite, further streamlining operations by verifying invoices against purchase orders and delivery documents. This automation dramatically reduces manual data entry and minimizes errors in financial workflows.

Intelligent Performance Management (IPM)

For finance teams, IPM for NetSuite Planning and Budgeting leverages AI for continuous monitoring and analysis, offering real-time insights and improving forecasting accuracy. This capability helps businesses make more informed decisions based on data-driven insights rather than intuition.

AI across business functions

The impact of NetSuite’s AI capabilities extends across multiple business functions. In financial management, AI-powered tools automate invoice processing, detect anomalies in financial data and recommend corrective actions.

NetSuite Financial Exception Management helps to increase efficiency and mitigate risk by continuously scanning financial data to identify and flag anomalies and recommends corrective actions.
For sales and marketing teams, AI enhances customer relationship management by analyzing customer behavior patterns and providing insights that help personalize communications and improve engagement.
Supply chain operations benefit from AI through improved inventory forecasting and automated location assignment for fulfillment.
Fulfillment automation can now automate multi-location fulfillment based on warehouse proximity, ranking or other rules input by the user.

Future of AI in NetSuite

NetSuite continues to expand its AI capabilities with each release. The 2025.1 release introduces domain-specific GenAI assistants, a new search tool to answer questions about NetSuite and tools that automatically write reports and analysis. These innovations will further enhance productivity and decision-making across organizations.

Additionally, SuiteScript developers can now access large language models (LLMs) powered by Oracle Cloud Infrastructure (OCI) Generative AI services, allowing for integration of generative AI models into NetSuite customizations and SuiteApps. This opens new possibilities for businesses to tailor AI functionality to their specific needs.

Maximizing your NetSuite AI investment

Implementing and optimizing NetSuite’s AI capabilities requires strategic planning and technical knowledge. BPM brings deep understanding of both NetSuite’s platform and AI technologies to help your organization maximize the return on your investment.

Our team works closely with you to identify the most impactful AI applications for your specific business challenges, ensure data quality for optimal AI performance and develop implementation strategies that align with your business goals. Ready to harness the power of AI in NetSuite? For a consultation to discover how our tailored approach can transform your business operations through intelligent automation and data-driven insights, contact us.

When it comes to securing your financial future, both financial planning and estate planning can be essential. While these terms are often used interchangeably, they serve distinct yet complementary purposes in your overall wealth management strategy.

At BPM, we understand that navigating these two areas can seem overwhelming. That’s why we’re breaking down the key differences between estate and financial planning, while showing you how they work together to protect your assets now and for generations to come.

Understanding financial planning: Building wealth during your lifetime

Financial planning is essentially a strategic roadmap for managing your money throughout your life. It’s about understanding where you are today financially and creating a clear path to reach your short and long-term goals.

A comprehensive financial plan typically includes:

Budgeting strategies to manage everyday expenses and save effectively
Investment planning tailored to your risk tolerance and time horizon
Tax planning techniques to minimize your tax burden
Insurance planning to protect against unexpected financial setbacks
Retirement planning that allows you to maintain your lifestyle after you stop working

For example, if you’re dreaming of purchasing a home in the next few years, a well-structured financial plan can help you get there. Creating a comprehensive financial plan helps to assess your current situation, develop a savings strategy for your down payment, and optimize your credit profile to secure favorable mortgage terms.

Financial planning is about making your money work for you during your lifetime, helping you build wealth while maintaining financial security along the way.

Understanding estate planning: Preserving wealth beyond your lifetime

While financial planning focuses on growing and managing your wealth during your life, estate planning addresses what happens to your assets after you’re gone. It’s about ensuring your hard-earned wealth benefits the people and causes you care about most.

Estate planning isn’t just for the ultra-wealthy. Everyone has an “estate” – whether it’s a family home, retirement accounts, investments, or personal possessions with sentimental value.

A well-crafted estate plan typically includes:

A will that outlines how you want your assets distributed
Powers of attorney that designate someone to make financial and medical decisions if you’re unable to
Trusts that can help avoid probate and potentially reduce estate taxes
Healthcare directives that specify your wishes for end-of-life care
Guardianship designations for minor children

Beyond simply distributing assets, estate planning helps minimize taxes, protect assets from potential creditors, and create a smooth transition of wealth—especially important if you own a business or have complex family dynamics.

Why you can’t have one without the other

The debate between estate planning vs. financial planning misses an important point: these strategies work best when implemented together as part of a holistic approach to wealth management.

Think of financial planning as building and growing your wealth, while estate planning helps ensure that wealth is preserved and distributed according to your wishes. They’re two sides of the same coin.

Here’s how they complement each other:

Tax efficiency: Financial planning helps minimize your tax burden during your lifetime, while estate planning works to reduce potential estate and inheritance taxes after you’re gone.

Asset protection: Financial planning helps you build assets, while estate planning helps shield those assets from potential creditors or legal claims.

Business succession: If you own a business, financial planning helps you grow and manage the business, while estate planning helps ensure a smooth transition of ownership.

Family security: Financial planning helps provide for your family while you’re alive, and estate planning is designed to continue that security after you’re no longer here.

When do you need to start planning?

Many people put off financial and estate planning, believing it’s something to worry about later in life. However, certain life events should trigger you to revisit both your financial and estate plans:

Receiving a significant inheritance or selling a business
Getting a substantial promotion or increase in income
Approaching retirement
Marriage, divorce, or having children
Purchasing major assets like a home
Changes in tax laws that may affect your wealth

The truth is, it’s never too early to start planning. Young professionals can benefit from basic financial and estate planning just as much as those approaching retirement. The sooner you start, the more options you’ll have to grow and protect your wealth.

How BPM can help with your integrated planning needs

At BPM, we believe in taking a holistic approach to your financial life. Our team of experienced advisors can help you develop both financial and estate plans that work together seamlessly.

We understand that every client’s situation is unique. Whether you’re just starting your career, growing your family, approaching retirement, or thinking about your legacy, we can create customized strategies that align with your specific goals and circumstances.

Our integrated approach is designed to manage your wealth effectively during your lifetime while creating a thoughtful plan for how it will be preserved and distributed according to your wishes after you’re gone.

Ready to start securing your financial future?

Don’t wait until a major life event forces you to think about your financial and estate plans. Being proactive now can save you and your loved ones significant stress and potential financial loss in the future.

Contact BPM today to schedule a consultation with one of our advisors. We’ll help you create a comprehensive strategy that addresses both your financial planning and estate planning needs.

Let us help you build, protect, and pass on your wealth in the most effective way possible. Your future self (and your loved ones) will thank you.

Securities offered through Valmark Securities, Inc. Member FINRA, SIPC | Investment Advisory services offered through BPM Wealth Advisors, LLC and/or Valmark Advisers, Inc. a SEC Registered Investment Advisor. BPM LLP and BPM Wealth Advisors, LLC are entities separate from Valmark Securities, Inc. and Valmark Advisers, Inc.

Recent data shows that roughly two-thirds of Americans are unsure about their retirement readiness. While this statistic is concerning, proper financial planning can help bridge the gap between uncertainty and confidence in your retirement journey.

If You Fail to Plan, You Are Planning to Fail” – Benjamin Franklin

Let’s explore the key elements of creating a robust retirement plan that can help secure your financial future.

Understanding your retirement needs

Planning for retirement requires a clear understanding of your future financial needs. Most financial professionals suggest aiming to replace 70-85% of your pre-retirement income to maintain your standard of living. This includes accounting for essential expenses like housing and utilities, as well as discretionary spending for the lifestyle you envision.

Your retirement budget should factor in both predictable costs and potential variables. Essential expenses will include housing, utilities, and day-to-day living costs, while discretionary spending might cover travel, hobbies, and entertainment. It’s also crucial to consider healthcare costs, which typically increase as you age, and maintain emergency funds for unexpected expenses. The tax implications of different retirement income sources will also play a significant role in your planning.

Building your retirement income strategy

A successful retirement plan typically draws from multiple income sources, creating a diversified income stream that can help ensure financial stability. Social Security benefits form a foundation for most retirees— depending on your income level during your working years, Social Security benefits may replace 40% of an annual worker’s income. But understanding when to claim these benefits is crucial – the longer you wait (up to age 70), the higher your monthly payments will be.

Employer-sponsored retirement plans like 401(k)s and individual retirement accounts (IRAs) often form the backbone of retirement savings. These accounts offer tax advantages and, in many cases, employer matching contributions that can significantly boost your retirement savings. Personal savings and investments can provide additional flexibility, while those with pension benefits need to carefully consider their options for maximizing this guaranteed income source.

7 key steps in retirement planning

Creating a reliable retirement strategy requires a systematic approach that addresses every aspect of your financial future. By breaking down the planning process into manageable steps, you can build a comprehensive plan that evolves with your needs. Here’s how to get started:

1. Assess your current financial situation

Before you can plan for tomorrow, you need a clear picture of where you stand today. Begin by taking a comprehensive inventory of your financial life, including all retirement accounts, personal savings, investments, expected Social Security benefits, and current debts.

2. Define your retirement goals

Your retirement plan should reflect your personal vision for the future. Consider not just when you want to retire, but what kind of lifestyle you want to maintain, where you plan to live, and whether you might want to continue working part-time.

3. Calculate expected retirement expenses

Understanding your future financial needs is crucial for effective planning. Start with your current monthly expenses as a baseline, then adjust for anticipated lifestyle changes, healthcare costs, and inflation over time. For many, this may also include the cost of caring for a loved one.

4. Evaluate your retirement savings

Once you’ve defined your goals and expected expenses, it’s time to determine if your current savings strategy will get you there. Review your retirement account balances, savings rate, savings type (pre-tax vs. after tax), and whether you’re taking full advantage of employer matching programs. You should also evaluate how your portfolio is allocated, and whether your current allocation is suitable for your risk tolerance and time horizon.

5. Develop a tax-efficient withdrawal strategy

Smart tax planning now can help your retirement savings last longer. Create a coordinated withdrawal strategy that considers the tax implications of different account types – from tax-deferred 401(k)s to tax-free Roth IRAs and taxable investment accounts.

6. Create a debt management plan

Entering retirement with minimal debt gives you more flexibility and security. Focus on paying down high-interest debt first, then develop a strategy for handling longer-term obligations like mortgages.

7. Establish regular review schedule

Your retirement plan isn’t a static document – it should evolve as your life changes. Schedule annual reviews of your plan and make adjustments following major life events or changes in your financial situation.

Remember, while these steps provide a framework for retirement planning, each person’s journey is unique. At BPM, we can help you navigate this process and create a personalized strategy that aligns with your specific goals and circumstances.

Working with financial professionals

Professional guidance can provide invaluable insights and help ensure your retirement planning addresses all crucial aspects of your financial future. A qualified advisor can help develop a comprehensive retirement strategy that aligns with your goals and circumstances. This includes optimizing your investment portfolio, navigating tax implications, and adjusting your plan as circumstances change.

Your advisor can also provide objective advice during market volatility, helping you maintain a long-term perspective and avoid emotional decision-making that could impact your retirement security. Regular reviews with your advisor ensure your plan remains on track and adapts to changing market conditions and personal circumstances.

Taking action with BPM

Regardless of your age or career stage, the time to start planning for retirement is now. Building a secure retirement requires consistent effort and regular review of your progress. Start by maximizing contributions to retirement accounts where possible and create a realistic budget that balances current needs with future goals.

You should review and adjust your retirement strategy regularly to ensure it continues to align with your objectives. This includes addressing any gaps in your retirement savings and adjusting your investment strategy as needed. Remember that retirement planning isn’t just about reaching a certain age – it’s about ensuring your finances can support your desired lifestyle after you stop working.

By taking a proactive approach to retirement planning today, you can work toward the confident, secure retirement you envision. At BPM, our financial advisory team is ready to help you create and implement a personalized strategy for your retirement future. Contact us to begin building your path to a confident retirement.

If you run a startup, you probably know that financial management sometimes takes a backseat to other priorities like product development, customer acquisition, and scaling operations, especially when you’re lean and fast-growing. However, solid financial practices are crucial for long-term success and sustainability and neglecting it can have consequences.

For fast-growing startups with limited resources, implementing and managing those financial practices can be challenging, but it’s worth the effort in the long run. This is where outsourced accounting comes in—it can inject your startup with the expertise and resources needed to lay a firm financial foundation without the overhead of creating or expanding an in-house team.

Learn to make financial management a breeze in our outsourcing your accounting free guide.

Key financial challenges startups face

Startups operate in a high-pressure environment, meaning that every decision can have significant implications for the company’s future. The financial landscape for startups is particularly challenging, with unique obstacles that can impede growth and sustainability if not properly managed.

Here are three common financial challenges faced by startups:

Challenge 1: Cash flow management

For many startups, maintaining a healthy cash flow is a constant struggle. The irregular nature of startup finances, characterized by sporadic revenue streams and often unpredictable expenses, can be difficult to manage at the best of times.

Let’s explore some of the issues at play:

Irregular revenue streams: Many startups face fluctuating income, especially in their early stages or if they operate in seasonal industries.
Delayed customer payments: B2B startups, in particular, may experience long payment cycles that can strain working capital.
Unexpected expenses: Rapid growth often brings unforeseen costs, from emergency equipment repairs to sudden scaling needs.
Investment timing: Balancing the timing of funding rounds with operational expenses can be tricky.

These cash flow challenges can quickly derail even the most promising ventures. Without proper management, startups may find themselves unable to meet payroll, pay vendors, or invest in critical growth opportunities.

Outsourced accounting teams like BPM can implement robust cash flow forecasting and management systems to help startups address these issues. They also often have access to advanced tools to track incoming and outgoing cash, identify potential shortfalls, and can develop strategies to optimize working capital. This level of planning and visibility into the startup’s financial position can help the team make informed decisions about spending, investment, and fundraising.

For example, an outsourced accounting team might implement a rolling 13-week cash flow forecast for a client, updating the forecast weekly to provide a clear picture of upcoming cash needs. They might also set up automated invoicing systems to reduce payment delays and negotiate better terms with vendors to improve cash flow timing. These types of systems and processes would make it easier for the startup to establish healthy financial practices and keep their finger on the pulse of their financial health.

Challenge 2: Financial reporting and compliance

As startups grow, they often struggle to produce accurate and timely financial reports. This is made even more difficult when they’re subject to complex regulations and reporting standards, which can vary by industry and jurisdiction. The consequences of inadequate financial reporting can be severe, potentially leading to issues with investors, regulatory bodies, and potential acquirers.

Key challenges in this area include:

Lack of standardized reporting processes
Limited understanding of industry-specific reporting requirements
Difficulty in tracking and categorizing expenses accurately
Insufficient resources to keep up with changing regulations

Outsourced accounting teams can help startups ensure that financial statements are prepared accurately and in accordance with relevant standards such as GAAP or IFRS.

For example, they might implement a monthly closing process that includes reconciliations, variance analysis, and the production of a standard financial package. They could also provide guidance on industry-specific metrics that investors expect to see, such as Monthly Recurring Revenue (MRR) for SaaS companies or Customer Acquisition Cost (CAC) for e-commerce businesses.

Challenge 3: Scaling financial operations

Rapid growth is a hallmark of successful startups, but it often outpaces the development of internal financial systems and processes. What works for a small team quickly becomes inadequate as the company expands, leading to inefficiencies, errors, and potential compliance issues.

Common scaling challenges include:

Outgrowing basic accounting software
Difficulty in managing an increasing volume of transactions
Lack of standardized processes across growing teams or departments
Inability to produce timely financial reports as complexity increases

Outsourced accounting firms can provide scalable solutions that grow with the startup. They can implement robust financial systems and processes that can handle increased transaction volumes and more complex financial scenarios. This scalability ensures that the startup’s financial operations can keep pace with its growth, preventing bottlenecks and maintaining accuracy as the business expands.

For example, an outsourced accounting partner might help a startup transition from basic bookkeeping software to a more robust ERP system as the company grows. They could also implement automated expense management systems to handle a growing number of employee expenses efficiently.

Key benefits of outsourced accounting for startups

Outsourced accounting offers a range of benefits that can significantly impact a startup’s financial management and overall performance. From enhancing financial accuracy to supporting growth and compliance, these services provide solutions to many common challenges startups face. Let’s explore some of the most crucial advantages:

Enhanced financial reporting and analysis

Accurate and timely financial reporting is crucial for startups, especially when seeking investment or making strategic decisions.

Outsourced accounting firms often have more resources, and access to advanced tools and methodologies to provide:

Detailed financial statements that offer a clear picture of the company’s financial health
Key performance indicator (KPI) tracking to measure progress against strategic goals
Customized reports tailored to startup needs, such as burn rate analysis or customer acquisition cost metrics

This level of financial insight enables founders to make data-driven decisions and present a clear financial picture to potential investors. It also helps in identifying trends and patterns that might not be apparent without professional analysis, giving startups a competitive edge in their market.

Improved compliance and risk management

Navigating financial regulations can be daunting for startup founders. Outsourced accounting firms stay up-to-date with the latest compliance requirements, helping startups:

Maintain accurate books and records that meet regulatory standards
Prepare for audits and due diligence processes, which are often required for funding rounds
Mitigate financial risks through proper controls and procedures

This proactive approach to compliance can save startups from costly penalties and legal issues down the road. It also builds credibility with investors and stakeholders, demonstrating that the startup takes its financial responsibilities seriously.

How to choose the right outsourced accountant for your startup

Your choice of accounting provider can have an enormous impact on your startup’s financial health and growth potential. Ideally, they should be more than a service provider, and act as a strategic ally in achieving your growth goals through sound financial management.

Here are a few of the most important qualities to look for.

Evaluate industry-specific expertise

When considering potential outsourced accounting partners, look for firms with a proven track record in working with startups, particularly ones in your industry. This way, they can provide insights and tailored solutions to your unique financial challenges.

For example, if you’re a SaaS startup, you’ll want a partner who understands the nuances of recurring revenue models, customer churn calculations, and SaaS-specific valuation metrics. They should be able to provide examples of how they’ve helped similar companies optimize their financial operations and prepare for funding rounds.

Here are a few tips to evaluate their relevant expertise:

Ask about their experience with startups at various growth stages, from seed to Series B and beyond.
Inquire about their familiarity with industry-specific financial metrics and reporting standards.
Request case studies or success stories of how they’ve helped startups overcome common financial challenges.

After discussing their experience, ask for references from current or past clients in your industry. Speaking with these references can provide valuable insights into the firm’s performance and how they handle industry-specific challenges.

Assess cash flow management capabilities

Given how important cash flow is for startups, prioritize firms with strong cash management skills. Effective cash flow management can mean the difference between success and failure for a startup, so this capability should be a key factor in your decision.

When evaluating a firm’s cash flow management capabilities:

Ask about their strategies for optimizing working capital and managing burn rate.
Inquire about their experience in financial modeling and forecasting for high-growth scenarios.
Discuss their approach to helping startups prepare for and navigate funding rounds.

The right outsourced accounting partner should be able to show how they’ve helped other startups improve their cash position. For instance, they might share how they implemented a daily cash flow tracking system for a client, which helped the startup extend its runway by three months without additional funding.

You might also ask about their experience in creating financial projections for investor presentations. A firm with strong cash flow management skills should be able to create realistic, defensible projections that instill confidence in potential investors.

Examine scalability and flexibility

Startups often experience rapid growth or sudden changes in direction. Your outsourced accounting partner should be able to adapt to these changes quickly and efficiently. Ensure the firm can scale its services to match your startup’s evolving needs.

When assessing scalability and flexibility:

Discuss how they handle clients experiencing exponential growth.
Ask about their capacity to quickly ramp up services during critical periods (e.g., fundraising, audits).
Ask about their experience in supporting startups through different growth stages and pivots.

Don’t be afraid to get specific to your anticipated needs. For example, you might ask how they would handle a scenario where your startup doubles its revenue and employee count in a three-month period. A capable firm should be able to describe how they would scale their services, potentially by adding team members with specific expertise or implementing more advanced financial systems.

By thoroughly evaluating potential outsourced accounting partners based on these criteria, you can select a firm that not only meets your current needs but can also support your startup’s long-term growth objectives.

Position your startup for financial health with BPM

For startups navigating the complex world of finance, BPM’s outsourced accounting services can be a strategic advantage. Our team provides comprehensive financial expertise across industries like technology, consumer products and more.

By partnering with BPM, you gain more than just accounting services—you receive a strategic ally committed to transforming financial data into actionable insights that drive sustainable growth. Take the next step in optimizing your financial operations. Contact BPM’s outsourced accounting team today and discover how we can support your startup’s financial success.

Imagine being in the midst of a busy quarter, only to find yourself bogged down by payroll issues. Delays in processing, payment errors and the constant worry about compliance with ever-changing regulations can be overwhelming.

These challenges consume valuable time and divert attention away from core business activities. However, there’s a solution that can alleviate these headaches: outsourcing payroll.

“A competent outsourced payroll provider can bring specialized expertise and focus that reduces the risk of errors, ensures greater accuracy in routine processing, and fewer last-minute corrections. Outsourcing frees up your internal team to focus on strategic work instead of getting lost in the weeds fixing discrepancies under tight deadlines.” Crista Gallagher, Payroll Consulting Manager

By partnering with a professional payroll service, businesses can offload these administrative burdens, ensuring timely and accurate payments while benefiting from enhanced compliance and security measures. Today, we’ll explore the key benefits of outsourcing payroll, from operational efficiencies to strategic advantages, and how these can transform your business operations.

1. Strategic and operational benefits of outsourcing payroll

Outsourcing payroll offers numerous operational advantages, significantly enhancing a company’s efficiency and adaptability.

Improve efficiency

Outsourcing payroll reduces the time spent on administrative tasks, allowing internal staff to focus on core business activities. This efficiency gain is crucial because payroll processing involves many tasks, from calculating wages and managing tax withholdings to ensuring compliance with labor laws.

By offloading these responsibilities, companies can redirect their resources toward strategic initiatives that drive growth.

For example, outsourcing payroll can transform complex tasks into simplified workflows, freeing internal teams to concentrate on strategic planning and business development. This shift in focus can lead to improved productivity and better decision-making across the organization.

Reduce administrative burden

By offloading payroll processing, companies can decrease the workload on their HR and finance teams, enabling these departments to focus on other activities like employee development or recruitment.

For instance, HR teams can redirect their efforts towards creating employee engagement programs or improving talent acquisition strategies, which are critical for long-term success.

Enhance scalability

Outsourced payroll services can quickly adapt to company size or structure changes without requiring new systems or personnel. This scalability is particularly beneficial for businesses experiencing rapid growth or downsizing, as they can adjust their payroll operations without significant internal investments.

For example, a company expanding into new markets might need to onboard many new employees quickly. An outsourced payroll service can handle this increase seamlessly, ensuring that all new hires are processed efficiently and accurately without the company needing additional payroll staff or infrastructure.

Gain access to specialized knowledge

Companies gain access to specialized payroll knowledge without having to develop it internally. Imagine a mid-sized tech firm expanding rapidly across multiple states in the U.S. This expansion involves hiring employees in different regions, each with its own set of tax laws and regulations.

For instance, the outsourced service can guide how to manage different state income tax withholding rates, handle local tax compliance, and ensure that all payroll processes align with federal and state regulations.

By outsourcing payroll to a professional service, the company gains access to specialized knowledge without investing in training or hiring additional staff.

Decrease payroll errors

Outsourcing payroll can significantly reduce the occurrence of errors in payroll processing. Payroll involves intricate calculations for wages, taxes, deductions, and benefits, and even minor mistakes can lead to compliance issues, employee dissatisfaction, and potential financial penalties.

For instance, a company with a complex payroll structure involving multiple pay rates and deductions can rely on an outsourced service to handle these calculations accurately, reducing the likelihood of errors that might occur with in-house management.

2. Compliance benefits of outsourcing payroll

Outsourcing payroll can significantly reduce the risk of non-compliance with ever-changing tax regulations and labor laws. By leveraging professional payroll services, businesses ensure their payroll processes are always up-to-date and compliant.

Assurance of regulatory and legal compliance

Payroll compliance is a vital component of your payroll process. Outsourced payroll services ensure adherence to evolving tax regulations and labor laws, reducing the risk of non-compliance penalties.

For instance, a company operating across multiple states can rely on an outsourced service to navigate complex state-specific tax laws, ensuring compliance and avoiding costly fines.

Provide audit support

Outsourced services can provide necessary documentation and support during audits. This support is invaluable in ensuring that all payroll records are accurate and readily available, making the audit process smoother.

For example, companies preparing for an IPO require rigorous audits of existing financial infrastructure. An outsourced payroll team can provide all the data required for key regulatory bodies and audits like SOX, PCAOB audits, and more.

Handle complex systems

Professional payroll services can manage complex payroll systems with ease, ensuring accuracy and compliance. These systems often involve intricate calculations, multiple pay rates and various deductions, which can be challenging for internal teams to manage, especially if they lack specialized experience.

3. Financial benefits of outsourcing payroll

Outsourcing payroll offers several financial advantages, like reducing overhead costs and providing predictable expenses, helping companies better allocate their resources.

Cost savings

Outsourcing payroll can reduce overhead costs associated with maintaining internal payroll systems and personnel. For example, a small business might save significantly by avoiding hiring a dedicated payroll specialist or investing in payroll software.

Predictable expenses

Companies can budget more effectively with fixed costs for payroll services. This predictability helps in financial planning, as businesses know exactly what to expect each month, reducing the risk of unexpected expenses.

Reduced overhead

No need to invest in payroll software, training, or equipment. This reduction in overhead allows companies to allocate resources to more strategic areas, such as business or product development.

4. Security and data management benefits of outsourcing payroll

Professional payroll services provide robust security measures to protect sensitive employee data, ensuring compliance with data protection regulations.

Enhanced security measures

Professional payroll services implement robust security protocols to protect sensitive employee data. These measures often include encryption, secure servers, and access controls, safeguarding against data breaches.

Better data protection

Outsourced payroll providers ensure compliance with data protection regulations, safeguarding personal and financial information. This compliance is crucial in maintaining trust with employees and avoiding legal repercussions.

Robust disaster recovery

Many outsourced services offer disaster recovery plans to ensure payroll continuity in case of data loss or system failure. This ensures that payroll operations remain uninterrupted, even in the face of unexpected disruptions.

5. Employee experience benefits of outsourcing payroll

Outsourcing payroll can significantly improve employee satisfaction by ensuring accurate and timely payments. This reliability contributes to a positive work environment and higher employee retention rates.

Accurate and timely payments

Outsourced payroll ensures that employees receive their paychecks on time and accurately, improving trust and satisfaction. For instance, a company with a remote workforce can rely on outsourced payroll to ensure that all employees, regardless of location, receive their payments correctly and on schedule.

Improved employee morale

Reliable payroll processing contributes to a positive work environment and employee retention. When employees feel confident in the accuracy and timeliness of their pay, they are more likely to be engaged and committed to their roles.

6. Technology and innovation benefits of outsourcing payroll

Outsourced payroll services often leverage the latest technology and innovations, providing access to advanced tools that might be costly for companies to implement internally.

Access to advanced tools and payroll software

Outsourced payroll services often utilize the latest payroll software and technology which might be costly for companies to implement internally.

For instance, a small business can benefit from cloud-based payroll systems that offer real-time reporting and automated compliance checks without the need for significant upfront investment.

Leverage innovative processes

Professional providers continuously update their processes to leverage the latest innovations in payroll management. This ensures businesses can benefit from streamlined workflows and improved efficiency, even as payroll regulations and technologies evolve.

Integrated data management

Outsourced payroll solutions have powerful integration capabilities with systems like HR management, time tracking, and benefits data, enhancing the overall efficiency and accuracy of HR operations.

For example, a company can use an outsourced service to link payroll data with health insurance benefits, ensuring that employee deductions are accurate and compliant with company policies. This integration reduces errors and improves the overall employee experience by providing seamless access to benefits information.

By integrating payroll and benefits data, companies can also enhance their reporting capabilities, allowing for better insights into employee compensation and benefits packages. This can be particularly useful for strategic planning and decision-making related to employee benefits and compensation strategies.

Discover the benefits of outsourcing payroll with BPM

Outsourcing payroll can transform a company’s operations by enhancing efficiency, reducing errors, and ensuring compliance.

At BPM, our approach to payroll services is centered around providing accurate, timely, and compliant payroll processing that supports business stability and growth. We understand that payroll is crucial to employee morale and retention, and our consultants work closely with clients to simplify compliance and streamline processes.

“At BPM, we provide outsourced payroll services that meet our clients where they are—offering flexible tools and processes that integrate seamlessly with their existing workflows. Whether adapting to client-preferred systems or introducing solutions to streamline communication and full-cycle payroll processing, our approach is always tailored and collaborative. Backed by a team of experienced professionals with deep and diverse expertise, our clients benefit not just from one consultant, but the strength and support of our entire team.” – Crista Gallagher

By leveraging our experience, businesses can focus on their core activities while ensuring that their most valuable asset—their people—is well-supported. Contact us today to explore how our personalized support can help you achieve your business goals.

Are your profit margins slipping through the cracks?

Standard cost accounting might be your missing piece. This powerful approach doesn’t just track where your money went—it predicts where it should go, giving you the insight to spot inefficiencies before they drain your profits and the clarity to make decisions with confidence.

Today, we’ll review what standard costing is and if it’s right for your business.

What is standard costing?

Standard costing is a cost accounting method where predetermined estimated costs are used instead of actual costs in the accounting records.

Rather than tracking every penny as it’s spent, this approach establishes target costs for materials, labor, and overhead before production begins.

At its core, standard costing creates a financial “blueprint”; a benchmark against which actual performance can be measured. It’s like setting a budget for each unit you produce, then comparing what you actually spent to identify where you’re over or under your targets.

Basic principles of standard costing

The fundamental principles of standard costing include:

Predetermined cost estimation: Standard costs are educated estimates of what each component of production should cost under normal capacity.
Variance analysis: The difference between standard and actual costs (called a variance) is calculated, analyzed, and used to identify inefficiencies and opportunities for improvement.
Performance measurement: Standard costs provide a baseline for evaluating operational efficiency and management performance.
Cost control: By highlighting deviations from expected costs, standard costing helps managers identify areas that need attention before they significantly impact profitability.
Simplified inventory valuation: Standard costs streamline the valuation of raw materials, work-in-progress, and finished goods inventory, offering an alternative to more complex cost layering systems like FIFO and LIFO.

Standard costs can be established at different levels depending on your business goals. These include basic standards (long-term benchmarks), ideal standards (perfect operating conditions), attainable standards (efficient but realistic conditions), and current standards (based on existing performance levels).

How does standard cost accounting work?

At its core, standard cost accounting creates a financial prediction for production costs (materials, labor, and overhead) before manufacturing begins. These costs are used to benchmark performance.

The process works through four fundamental steps:

Setting standards – Management establishes target costs for each component of production based on historical data, engineering studies, and market conditions.

Recording at standard – As production occurs, inventory and cost of goods sold are recorded using these predetermined standard costs, not actual costs.

Tracking variances – The differences between standard and actual costs (called variances) are calculated and analyzed to identify inefficiencies or cost savings.

Taking action – Management uses variance analysis to make informed decisions about pricing, production methods, and purchasing strategies.

This system creates a continuous improvement cycle where standards are periodically reviewed and updated based on actual performance, helping businesses progressively optimize their operations and costs.

Variables (and variances) in standard costing

Standard cost accounting relies on several key components that work together to create a comprehensive cost management system.

Direct materials

Direct materials represent all raw materials that become part of the finished product. For standard costing purposes, two key variables are established:

Standard quantity: The predetermined amount of materials needed to produce one unit
Standard price: The expected cost per unit of material

When actual production occurs, two types of variances may arise:

Material price variance: Occurs when you pay more or less than the standard price
Material usage variance: Happens when you use more or less than the standard quantity

For example, if a furniture manufacturer sets standards of 10 board feet of oak at $5 per board foot for a chair, but actually uses 11 board feet at $5.20, both price and usage variances would occur.

Direct labor

Direct labor includes wages and benefits for workers directly involved in production. Similar to materials, labor standards include:

Standard hours: The predetermined time required to complete one unit
Standard rate: The expected hourly wage rate

Labor variances include:

Labor rate variance: Difference between standard and actual wage rates
Labor efficiency variance: Difference between standard and actual hours worked

These variances help identify issues with labor scheduling, training needs, or process inefficiencies.

Say a winery establishes standard costs for labor where each case of wine should require 0.5 hours of direct labor at a standard rate of $20 per hour. During the harvest season, the winery produced 10,000 cases of wine. The actual labor used was 5,200 hours at an average rate of $21 per hour.

The standard labor cost should have been:
10,000 cases × 0.5 hours × $20 = $100,000
The actual labor cost was:
5,200 hours × $21 = $109,200

This creates two variances:

Labor rate variance = (Actual rate – Standard rate) × Actual hours
= ($21 – $20) × 5,200 = $5,200 unfavorable
Labor efficiency variance = (Actual hours – Standard hours) × Standard rate
= (5,200 – 5,000) × $20 = $4,000 unfavorable

For wineries, these variances are particularly important as labor costs significantly impact the final cost per bottle.

Manufacturing overhead

Manufacturing overhead encompasses all indirect production costs that can’t be directly traced to specific products. Overhead is typically divided into:

Variable overhead: Costs that change with production volume (utilities, supplies)
Fixed overhead: Costs that remain constant regardless of production level (rent, depreciation)

Standard overhead costs are typically applied using predetermined rates based on a cost driver like direct labor hours or machine hours.

Overhead variances are more complex and may include:

Spending variance: Difference between actual and budgeted overhead costs
Efficiency variance: Related to how efficiently the cost driver (like labor hours) was used
Volume variance: Occurs when actual production differs from the planned level used to set fixed overhead rates

Understanding variance relationships

Variances don’t exist in isolation—they often influence each other. For instance, purchasing lower-quality materials (favorable price variance) might lead to more waste (unfavorable usage variance) or more labor hours (unfavorable labor efficiency variance).

Effective standard costing requires analyzing these relationships to understand the true causes of cost deviations and make informed decisions about process improvements.

By tracking and analyzing these variables and their variances, businesses gain valuable insights into their operations, enabling more effective cost control and better decision-making.

Financial statement impacts of standard costing

Standard costing significantly influences how your financial statements represent business performance. When you implement this system, it affects several key financial elements:

Inventory valuation on your balance sheet typically reflects standard costs rather than actual costs incurred. This creates consistency in your inventory reporting but requires decisions about how to handle variances.
Cost of goods sold on your income statement incorporates standard costs plus or minus applicable variances. How you allocate these variances can meaningfully impact your reported profitability.
Variance accounts in your general ledger track differences between standard and actual costs. These accounts must be analyzed and properly disposed of during each accounting close process.

While standard costing is an acceptable costing method under Generally Accepted Accounting Principles (GAAP), your implementation should include processes for periodic updates to standards to reasonably approximate actual costs computed under recognized inventory costing methods to maintain compliance.

Understanding these impacts helps you interpret financial statements more accurately, make informed decisions about inventory and pricing, communicate effectively with stakeholders about cost variances, and maintain compliance with accounting standards.

7 benefits of standard cost accounting

Standard cost accounting offers businesses numerous advantages that support financial management and operational efficiency.

Improved cost control stands at the heart of standard costing benefits. By establishing clear benchmarks, companies can quickly identify when actual costs deviate from expectations, allowing for timely corrective actions before small issues become major problems.

Decision-making support becomes more robust as management gains clear visibility into costs. This transparency helps leaders make informed choices about production methods, resource allocation, and business practices based on reliable cost data rather than guesswork.

Performance evaluation becomes more objective when standard costs are in place. Managers can assess how well departments, products, or processes are performing by comparing actual results against predetermined standards, creating accountability throughout the organization.

More accurate budgeting naturally follows from a standard costing system. As managers gain better control over costs and understand cost behaviors, the gap between budgeted and actual costs typically narrows over time.

Simplified inventory valuation represents another significant advantage. Standard costing provides a consistent method for valuing identical products, eliminating the complications that arise when trying to track varying actual costs for identical items.

Standardization of activities helps employees work more efficiently as clear expectations are established for various tasks. This consistency can lead to improved quality and productivity across operations.

Pricing decisions become more strategic with standard costing. With clear insight into production costs, businesses can set appropriate selling prices that balance competitiveness with profitability.

Does standard costing make sense for your business?

Standard costing can be a powerful tool for many businesses, but it’s not universally applicable.

Understanding when and where it’s most effective can help you decide if it’s right for your organization.

When standard costing makes sense

Standard costing is typically most beneficial for:

Businesses with repetitive manufacturing processes
Companies producing homogeneous products in large quantities
Organizations with stable production methods and predictable cost structures
Industries where direct material and labor costs are significant

When standard costing doesn’t make sense

Standard costing may not be suitable for:

Businesses operating in volatile environments with frequent fluctuations in material prices, labor rates, or production volumes
Companies with long production cycles or slow inventory throughput, as standards can become outdated during extended manufacturing periods
Smaller businesses with limited resources, as implementation requires significant skill and ongoing maintenance

In these situations, alternative costing methods like actual costing might be more appropriate, though transitioning between systems requires careful planning and may necessitate changes to accounting processes and systems.

Standard cost accounting industry examples

Here are some ways standard cost accounting can be beneficial across industries.

Manufacturing: A furniture manufacturer can use standard costing to set expected costs for wood, labor, and overhead for each chair produced. This allows them to quickly identify inefficiencies in production or unexpected price increases in materials.

Food: A large-scale bakery might implement standard costing for its bread production. By establishing standard costs for flour, yeast, labor, and baking time, they can easily track variances and optimize their processes.

Wine: Wineries can benefit from standard costing by setting standards for grape costs, bottling materials, labor for harvesting and production, and overhead costs like barrel aging. This helps manage the long production cycles typical in winemaking.

Build a cost accounting model that works for your business

Standard cost accounting offers a structured approach to understanding, controlling, and optimizing your business costs. When implemented in the right context, it provides valuable insights that can drive more informed decision-making and improved profitability.

Remember that standard costing is a tool, not a solution in itself. Its effectiveness depends on how well you implement it, how regularly you update your standards, and how thoughtfully you analyze the resulting variances.

If you’re considering implementing standard costing or refining your existing cost accounting approach, BPM can help. Our team of accounting professionals can assess your specific situation, recommend the most appropriate costing method, and support you through implementation and beyond.

Take the first step toward better cost management by contacting BPM today.

Performance reviews are an important step when measuring and improving employee effectiveness. When conducted thoughtfully, ongoing dialogue between managers and team members leads to enhanced productivity and clearer alignment.

In recent years, traditional “annual performance reviews” have been replaced by “conversations” or “check-ins” as these interactions should be ongoing and not limited to once a year.

This guide explores the essential components of effective performance conversations, from fundamental concepts and best practices to implementation strategies and measuring success.

Understanding the fundamentals

While traditional performance reviews evaluated an employee’s work output at fixed intervals, modern performance conversations continuously assess behaviors and contributions to the organization.

Managers and employees regularly discuss various aspects including work quality, productivity levels, teamwork capabilities and alignment with company values. These structured yet agile interactions provide a framework for discussing achievements and areas for growth.

“Regular performance conversations are the compass guiding employees towards growth, ensuring alignment with organizational goals while fostering a culture of continuous improvement and mutual feedback.” – Jill Pappenheimer, Partner – HR Consulting

Types of employee performance conversations that drive results

Organizations can implement several formats to gather comprehensive feedback:

360-degree feedback conversations gather input from multiple sources, including managers, peers and direct reports. This approach provides a well-rounded view of an employee’s impact across the organization and highlights both strengths and growth opportunities.
Self-assessment discussions encourage employees to reflect on their own performance and identify areas where they excel or need improvement. This format promotes accountability and helps prepare employees for meaningful ongoing dialogues with their managers.
Team performance discussions focus on how effectively groups collaborate and achieve shared objectives. These conversations help identify communication barriers and optimize team dynamics.

Establishing the right frequency

The timing of performance conversations significantly impacts their effectiveness. While traditional annual reviews were once standard, the modern approach emphasizes regular touchpoints:

Monthly check-ins work well for new employees or teams in fast-paced environments where regular guidance benefits productivity. These brief sessions maintain momentum and address concerns before they escalate.
Quarterly conversations strike an optimal balance between providing timely feedback and allowing enough time to demonstrate improvement. This cadence keeps goals fresh while avoiding conversation fatigue.

“Performance conversations are essential touchpoints that help ensure everyone is on the right path, fostering accountability, recognizing achievements and identifying areas for growth.” – Jill Pappenheimer

4 best practices for meaningful employee performance conversations

To maximize the impact of performance conversations, managers should:

Prepare thoroughly by gathering specific examples of employee performance and behavior. Document both achievements and areas needing improvement throughout the conversation cycle.

Create a comfortable environment that encourages open dialogue. Schedule adequate time in a private setting where both parties can speak freely without interruptions.

Focus on observable behaviors rather than personal characteristics. Provide concrete examples that illustrate performance patterns and their impact on the organization.

Set clear expectations and measurable goals for ongoing development. Work collaboratively with employees to establish objectives that align with both individual career aspirations and organizational needs.

Leveraging technology for effective performance conversations

Performance management software has become an essential tool for organizations looking to strengthen their conversation processes. These platforms help maintain consistent evaluation practices while facilitating meaningful dialogues between managers and employees.

Modern performance management solutions, such as BPM Link, enable organizations to streamline the entire performance conversation cycle. They provide structured frameworks for conducting one-on-one discussions, gathering self-assessments and facilitating 360-degree feedback. This technology helps ensure all team members understand their responsibilities and performance expectations clearly.

With automated reminders, goal-tracking capabilities and real-time feedback tools, these platforms promote regular performance discussions throughout the year rather than relying on outdated annual reviews. This ongoing dialogue helps organizations maintain employee engagement while providing managers with timely insights for more effective team development.

Common pitfalls to avoid

Successfully managing performance conversations requires steering clear of several common mistakes:

Delivering surprise feedback during formal discussions instead of addressing issues as they arise. Regular communication throughout the year prevents this situation.
Rushing through conversations without allowing time for meaningful discussion. Quality interactions require adequate preparation and engagement from both parties.
Making comparisons between employees instead of focusing on individual performance against established standards. Each team member deserves evaluation based on their unique role and objectives.

Measuring conversation effectiveness

Organizations should evaluate their performance conversation process regularly to ensure it delivers meaningful results. Track key metrics such as employee engagement scores before and after conversations, goal completion rates and the percentage of employees receiving timely feedback.

Monitor how often managers conduct follow-up discussions and whether performance improves after conversations. These measurements help refine the process and demonstrate its value to the organization.

Working with BPM

BPM understands that effective performance conversations drive organizational success. Our experienced HR professionals help companies develop and implement dialogue processes that align with their specific needs and culture. We provide comprehensive support, from creating customized conversation frameworks to training managers on effective communication techniques.

Our partnership approach ensures that your performance conversation system reflects industry best practices while adapting to your organization’s evolving needs. Through strategic ongoing performance dialogues and BPM proven methodologies, companies can build stronger teams, improve communication and achieve their business objectives in today’s competitive environment. To find out more, contact us.

The wine industry is experiencing significant transformation as consumer preferences evolve and new demographic groups reshape the market. These changes are not only affecting sales patterns but are altering how wineries are valued in today’s economy.

From younger consumers with different purchasing habits to shifting preferences across wine categories, these demographic trends are creating both challenges and opportunities for winery owners and investors.

This article explores how these demographic shifts are influencing winery valuations and what industry stakeholders should consider when assessing a winery’s worth.

The changing face of wine consumers

Today’s wine market looks dramatically different than it did just a decade ago. The traditional image of the wine consumer—predominantly older, affluent individuals—is rapidly evolving as younger generations enter the market.

“We’re seeing a generational shift in the wine industry, where younger consumers — Millennials and Gen Z—are beginning to remake the market, and an increase in direct-to-consumer sales in these groups.”

This generational change brings different values and priorities. Young wine drinkers are reshaping the industry with their distinctive preferences:

More adventurous palates and willingness to experiment
Preference for unique varietals and production methods over established labels
Greater concern for sustainability practices and authentic brand stories

These factors increasingly affect brand loyalty and premium pricing potential.

Premium shifts driving valuation changes

The premiumization trend continues to reshape winery valuations, particularly as consumers drink less but spend more on higher-quality options. The sub-$10 wine segment faces significant challenges, while wines in the $15-30 range show resilience and growth potential.

Data from industry analysts shows that the “sweet spot” for growth now centers around the $13-$20 price range, creating a new definition of what constitutes an entry-level wine. This shift directly impacts how wineries position their portfolios and, consequently, how investors value production capabilities and brand positioning.

Wineries with established premium and super-premium offerings now command higher multiples during acquisition talks, while those heavily dependent on lower-priced products often struggle to maintain valuations.

The sparkling wine advantage

Sparkling wine continues to outperform the broader category, creating premium valuation opportunities for producers specializing in this segment. While still wines experienced volume declines, sparkling varieties have demonstrated remarkable resilience.

This trend reflects changing consumption patterns, with younger consumers embracing sparkling wine beyond special occasions. Producers able to deliver quality sparkling options at accessible price points—particularly in the growing prosecco and domestic sparkling categories—position themselves advantageously for stronger valuations.

Direct-to-consumer relationships as valuation drivers

Perhaps no demographic shift has more dramatically affected winery valuations than the growing importance of direct-to-consumer (DTC) relationships. As younger consumers seek authentic connections with brands, wineries that build robust DTC channels create significant value.

Wineries with sophisticated e-commerce platforms, engaging digital content and effective loyalty programs demonstrate higher customer lifetime values—a metric increasingly factored into valuation models. These direct relationships reduce dependency on traditional distribution channels while improving margins and providing valuable consumer data.

The most successful wineries now leverage technology to personalize recommendations and create virtual tasting experiences that resonate with digitally-native consumers, further enhancing their valuation potential.

Geographic diversification responding to climate concerns

Climate change awareness among younger demographics is influencing how wineries approach geographic diversification—another factor affecting valuations. Forward-thinking operations now invest in vineyards across multiple regions to mitigate climate risks and appeal to environmentally conscious consumers.

This strategy, while capital-intensive, can significantly boost valuations by demonstrating resilience against weather-related disruptions and commitment to sustainability principles valued by younger consumers.

Health consciousness driving product innovation

The rise of health-conscious consumers across all demographics has accelerated demand for low-alcohol and alcohol-free wine options. Wineries developing quality offerings in this category are seeing valuation premiums as they capture this growing market segment.

This trend represents a fundamental shift in how consumers approach wine consumption, potentially creating entirely new revenue streams for adaptive producers.

Working with BPM for accurate winery valuations

As these demographic shifts continue to reshape the wine industry, obtaining accurate and forward-looking valuations becomes increasingly complex. BPM brings deep industry knowledge and specialized valuation methodologies that account for these evolving demographic trends. Working with BPM ensures your winery valuation reflects not just current performance but also positions relative to these shifting demographic patterns that will define future growth.

BPM’s team analyzes how your winery connects with emerging consumer segments, assesses your direct-to-consumer capabilities and evaluates your product portfolio against evolving preferences. By partnering with BPM, winery owners receive valuations that capture the impact of these demographic shifts on their operations, positioning them for strategic decisions that maximize long-term value in this dynamic market. To find out more, contact us.