Years of Success
Norman G. Grill Jr., the founder of Grill & Partners, LLC, a certified public accounting and business advisory firm, is marking the firm’s 20th anniversary knowing full well that he and his staff of 20 can anticipate a 30 percent increase in the work volume.
And Grill wouldn’t be surprised if his staff increases by 20 percent by the end of the year to meet the challenges, resulting from tax law changes and a rise in audit regulations, coupled with the tax, operational and financial growth needs of its clients, who are business owners with revenues from $5 million to $50 million and high net-worth individuals.
During an interview in his office at 111 Beach Road, Grill reflected upon the changes his company has undertaken during the course of two decades. It evolved from a basic tax return and bookkeeping firm to one in which its clients depend upon Grill and Partners for its expertise in not only navigating through the tax law changes and audit regulations, but also in assessing their operation and forecasting their financial future.
In layman’s terms, Grill succinctly summed up what he and his professional staff does: “We show our clients how to minimize their taxes and maximize their wealth,” said Grill, noting that his staff members are primarily consultants to their clients with the focus on how businesses are run and how they will do in the future.
“Some of the hot topics now are fraud and forensic services. People want to make sure that the Enrons of the world are not happening inside their companies,” Grill said. “We do a lot of going into businesses and looking at their systems and help them with budgeting and forecasting.” His firm also is often called upon to assist a chief financial officer in preparing reports to meet government regulations.
From the tax side, the long-term capital gain rates were dropped considerably resulting in lower capital gains taxes for individuals. In terms of businesses, the government wanted to spur on capital spending. It liberalized the amounts a business could deduct for items that had depreciated. Clients needed advice on whether or not it was worth making the capital expenditure based upon the tax benefits they would receive.
For example, a large fitness center with eight locations had a need to acquire another facility, renovate two others and purchase equipment. The tax benefits allowed them to get positive financing and Grill and Partners was able to do both tax and operational projections thus showing the result of the tax benefit on the business. In other words, the fitness owner was able to get what wanted by “a proper balance of utilizing the tax law and operational planning,” Grill said.
How does something like this come about?
“Our relationship with our clients, in many cases, is a weekly event,” said Grill. “Since most of our clients are in our geographical area, we may run into them, or they may call or e-mail us. We have an understanding of what our clients want to accomplish. They share their goals with us. We think about those goals as there are tax law changes, and we think about what clients would benefit from these changes. We’ll contact the client and say, ‘This is great for you.’ “
“We’re very proactive in our approach. We encourage communication. If we’re involved in the monthly closing of their financial statements, that gives us reason to be involved with them every month and see the changes in their business. The entrepreneurs out there are always thinking about their business and will contact us. They’ll fax us an article they saw. They will e-mail us. The success of our business is dependent upon the success of our clients. We want to see them do well.”
Grill recalled the “recessionary” period a few years ago when clients complained that it was getting difficult to collect money. Receivables were getting older. Business owners didn’t want to let anyone go. How does the firm deal with these kinds of problems? “You talk to them about their credit standards. Maybe they are selling services to someone having trouble themselves,” Grill said. “You have to tighten up your credit standards. In some cases it’s an operational problem. Some clients aren’t good in following up with phone calls to say, ‘Your account is 60 days overdue.’ We try to help them through good times and bad.”
In terms of homeowners, Grill and Partners gets a lot of questions about real estate because that is a major asset. There have been tax law changes in real estate and financial opportunities with mortgage rates decreasing. Questions deal with whether to have a fixed or variable mortgage rate; whether to have a 15- or 30-year mortgage; or is it better to pay off a mortgage or to have a mortgage, if the funds are available to do that?
Eighty percent of Grill and Partners’ work deals with consulting as opposed to tax preparation or financial statement preparation. “Many clients’ accounting systems are not adequate to give them clear indications on a real time basis of how they are doing,” Grill said. “Therefore, clients will find out they lost money six months after they lost it. If they had an accounting system that told them immediately or while the project was going on where they stood, they might be able to make strategic moves to turn it around.”
For example, if a client’s revenues are declining because of competition, through accounting-based consulting Grill and Partners can assist the client in determining where to cut back in order to bring the company back to profitability. “We’ll ask a client operational questions about how they see something. Then we can create a financial model to illustrate the probable outcomes of the scenario.”
Grill and Partners has tax attorneys on staff to assist clients audited by the Internal Revenue Service. The attorneys also evaluate how to sell a business with the most tax-advantaged methods. “It’s unusual for a firm of our size to have two or three tax attorneys on staff.”
Summing up the firm’s objectives, Grill said, “For the individual, it’s helping them solve their financial and tax issues and for the businesses, it’s helping them become more successful.
“We view the coming year optimistically: Change always offers opportunities for those who seek them.”