A national leader in food and agriculture consulting, KCoe Isom, is writing a new chapter. This ‘U.S. Top 100’ accounting firm is rebranding as Pinion to encompass a more forward-thinking, proactive and global approach to business.

“This is a deliberate and proactive move to accelerate our mission, which is to continue to make a difference in the world we live in by using robust resources to help guide, strengthen and secure the future of agriculture operations and production,” said Jeff Wald, Pinion CEO.

With the advantage of a firm that has been dedicated to the success of farms and ranches for 90 years, Pinion’s global cache of diverse ag production resources can help agriculturalists achieve a more fruitful production through holistic decision making.

Pinion also serves manufacturing, distribution and community organizations of all sizes with these and other offerings, including specialized tax, auditing and accounting services; consulting on legislative policies and public affairs; leadership development; strategic planning and ag marketing, and sustainability.

Learn more about the Pinion team who is dedicated to helping businesses succeed well into the future at .Ěý

The list of challenges facing Association members is long: inflation, supply chain, and labor, to name a few. It is understandable that circumstances like these could lead you to operate in survival mode and abandon the long-term goals upon which your business is built. 

Understandable, yes, but wise? No.  

“Business owners and managers are telling us they’re just trying to get through these next three, six, or nine months,” said Travis Free, manufacturing business advisor at KCoe Isom.  “And that is understandable. But it also impacts the long-term strategies for manufacturers, which can ultimately deliver a negative setback to their profitability.”

While shifting to short-term strategy can feel more stable and set up the possibility of a quick win, Free cautions that it could cause “massive problems in the long run.” 

Short-term planning should align with long-term goals—not the other way around. Companies that have a strategic plan in place that aligns with their vision and long-term goals are the companies that thrive for the long haul, Free said. He recommends manufacturers seek to re-strategize the way they operate to adjust to the demands of the current economy, but “take into account its effect on the long-term strategy.”

The Reality of the Bottom Line

Ask any owner or manager in the industry what their biggest short-term goal is right now, and they’ll respond immediately and in unison: staying profitable. 

Over the last 18 months, Free and his colleagues have heard a resounding battle cry from manufacturers: We need to maintain profitability to keep the doors open. This mindset often leads to finding more affordable ways to manufacture the product or sourcing less expensive materials.  

“If your long-term strategy is to gain market share by having the highest quality products on the market, while you just solved staying profitable with a short-term plan, you are now risking increased warranty claims and customer complaints on product functionality down the road,” Free said. “And, you have also abandoned the long-term strategy that has brought you so much success.”

Another area of short-term strategy with long-term impacts: labor. With companies facing a backlog of orders stacking up and a shortage of people on the shop floor, desperate times can resort to desperate-feeling measures. The labor demand in manufacturing companies today is pressuring companies to lower their hiring standards.

“A long-term strategy doesn’t always have to be monetary,” Free said. “One of your long-term strategies could be around the culture within the company. If you tailor your hiring methods to sustain short-term success, you may see down the road the company culture that attracted top talent has diminished. You now have high turnover and low morale within the workforce.”

A Case for Marrying Short- and Long-Term Goals

Amazon is perhaps the best example of aligning short-term goals with long-term strategy. Amazon did not profit—or showed only minimal profit—for years in its beginning. It was focused on its long-term growth strategy. 

Amazon assigned greater importance to growth and customer acquisition than short-term profits. They kept their prices low, sometimes to the point of losing money, but these short-term
tactics aligned with their long-term strategy to own a huge portion of the online sales market. This strategy paid huge dividends in the long run. 

From 2005 to 2015, Amazon’s net income averaged $500 million with multiple years of losses. That 10-year span during which the company implemented short-term goals that aligned with their long-term strategy led to their success over the following five years. From 2016 to 2020, net incomes soared in consecutive years from $2 billion, to $3 billion, then $10 billion, $11 billion, and $21 billion.

Had Amazon chosen profits over growth, they may not be the disruptive and industry-redefining force of the online age that they have become.

Fluidity and Alignment are Essential in Planning

The key takeaway for businesses: Review your company’s strategic plan annually, especially in volatile climates like this one.

“Your plan should be dynamic and fluid to change,” Free said. “If you are trying to acquire top talent, then remote work opportunities might be part of your strategic plan. If you are trying to reduce cost, then investing in technology and new machinery can be part of the plan.”

Above all, he said, you must make sure that the current strategy in place aligns with the vision and mission that your company has defined and not just a plan to weather the storm. 

KCoe Isom works with manufacturing plants across the United States. Travis Free, CPA, is a financial business advisor that helps manufacturers evaluate short-term solutions and align them with long-term strategies to overcome challenges and capture opportunities. Article originally appeared in our AgInnovator magazine

Biden’s plan to fund his infrastructure package and spending plan for education, childcare and health insurance is tied to tax proposals that would all but double the capital gains rate from 20 percent to 39.6 percent, topping 43.4 percent when the Medicare surcharge is added.

The plan would exclude the first $1 million in assets for an individual.
In a move that has set off alarm in farm groups, Biden’s plan also eliminates stepped-up basis for inherited assets beyond $1 million per individual or $2 million per couple. The White House states its proposal would not affect inherited family farms or small businesses that remain in those families.

The group of 13 Democrats, mostly members of the House Agriculture Committee, sent a joint letter to Democratic leaders raising their concerns about how the repeal of stepped-up basis could hurt family farms. They called for full exemptions for family farms and small businesses. The Democratic lawmakers want to ensure the exemptions for farms and businesses are written into any tax bill that passes.

The House Democrats added in their letter the challenges of administering changes to taxing basis for farm machinery and other business equipment. They called on “strong protections” to ensure that farms do not have to be sold or liquidated.

Brian Kuehl, a principal at member company K-Coe Isom, said accountants at the firm who work heavily with farm families have been providing members of Congress some details about how various proposals could affect farmers.

Still, Kuehl said the Biden administration provided a starting point on the taxes by saying they did not want the changes to affect family farmers or small businesses. Before the American Family Plan was announced, accountants for farmers and other businesspeople were working off the assumption that the Biden administration would propose eliminating all stepped-up basis.

“I think we were pleasantly surprised to see the language exempting farms and family-owned businesses, and that’s a good thing,” Kuehl said. “We’re happy the administration laid down the marker, and that gives a lot of leverage in the context of what Congress does here.”

Beyond the sale of real estate, other assets such as combines, tractors, other large assets and even grain inventory could be affected. Real estate could be taxed under capital gains, but other business property could be taxed as ordinary income as well.

“I wouldn’t go so far as to say that if you’re a family owned business, you’re off the hook. There are still some hooks that could get you,” said Brad Palen, a CPA for K-Coe Isom in Kansas.

Source: DTN

We kick off 2021 with a new stimulus package of benefits for American businesses. President Trump signed the latest stimulus bill Dec. 27. In its more than 5,500 pages, the bill offers tools to support your business, including changes to deductibility and employee tax credits.

Among the most notable pieces of the bill is the creation of a second round of Paycheck Protection Program (PPP) and Congress’s action to allow expenses used for PPP forgiveness to be tax deductible. (At press time, however, states may not have come out with their individual stances on deductibility of PPP forgiveness expenses. You may still have to pay state taxes.)

A business is eligible for the second round of PPP if they do not have more than 300 employees and can show a more than 25 percent reduction in gross receipts for any quarter in 2020. The loans are capped at $2 million.

The bill also added four groups of eligible expenses that are allowed in forgiveness, the most notable to manufacturers being worker-protection costs. These costs include operating or capital expenses made to adapt the business to COVID protocols and personal protection equipment (PPE) costs. In addition, PPP loans less than $150,000 will now be allowed to apply for forgiveness with a much more simplified application.

Another significant change for manufacturers is modifications made to the Employee Retention Tax Credit (ERTC). This is a credit reported on payroll tax form 941 or 943 for qualified wages paid by eligible businesses. For 2020, an eligible business is one that either had operations partially or fully suspended or saw revenues decrease by at least 50 percent for a quarter in 2020 compared to the same quarter in 2019.

The main modification made through this bill is that businesses can use PPP and ERTC together, but they cannot use the same payroll for both programs. This is significant because businesses will want to evaluate the benefit of applying for forgiveness for PPP loans with payroll and foregoing the possible ERTC, or if they should apply for forgiveness utilizing other eligible expenses and utilize the ERTC credits.

ERTC is also extended through July 1. Other applicable changes to the program in 2021 are:

• The eligible business determination is expanded by the decreased receipts requirement (reduced from a 50 percent threshold to 20 percent). Also, with comparing the decrease in revenues, the bill provides a safe harbor allowing employers to use prior quarter gross receipts in addition to the same quarter in the prior year.
• The relevant qualified wage base determination increases from 100 employees to 500 or fewer employees.
• The credit rate increases from 50 percent to 70 percent of qualifying wages.
• The maximum qualifying wage eligible for the credit increases from $10,000 per employee to $10,000 per employee, per quarter.

Finally, within this bill, there are a number of tax credits that were extended. Knowing these will allow you to make decisions for your company in the most tax-efficient way.

The following credits were extended through Dec. 31, 2025:
• Work Opportunity Tax Credit
• Empowerment Zone Tax Credit
• New Markets Tax Credit

In addition, this package also extends the carbon oxide sequestration credit, a credit for electricity produced from renewable sources, mortgage interest premiums deductible as qualified resident interest, and the second generation biofuels producer credit. Notably, the employer credit for paid family and medical leave is extended an additional year.

The new stimulus package is a boost to businesses across the U.S., but it is complex to understand how to maximize those benefits. Please work with a qualified advisor to fully maximize the stimulus support for your specific business needs.

Mentele is principal and CPA for member company KCoe Isom. Members of this Association are entitled to no-cost, confidential, 60-minute consultations with KCoe to discuss the impact of the stimulus bill on their business. To schedule a consultation, contact Jason Southard at Jason.southard@kcoe.com.

The Small Business Administration has received more than 1,000 reports that business owners are fighting fraudulent Economic Injury Disaster Loan (EIDL) applications taken out in their name based on information that hackers pulled from PPP applications. The hackers have obtained information through other avenues as well.

A few of the firm’s clients who have been scammed realized it only after receiving a document by mail from the Small Business Administration informing them of a revised repayment schedule that the businesses did not request. Some business owners also have learned their information was stolen after performing new lien searches with lenders.

KCoe advises companies to take these steps to detect fraud.

Stay Alert. Pay close attention to your mail, emails, and lender communications. If anything seems suspicious, or you receive an official notice regarding EIDL and you did not apply for it, report it immediately.

Notify Lenders. Inform your lender (whether you participated in the EIDL program or not) so that they are aware of potentially fraudulent loans. Should the lender identify liens that shouldn’t have been filed, the owner will need to report the fraudulent loan to the SBA.

Be Proactive. Closely monitor personal credit reports. Put a hold/freeze on your credit to help monitor any authorized activity.

Report Immediately. With the uptick in fraudulent activity, it’s important to report your case immediately to SBA to start an investigation and address the business fraud. Contact the SBA Customer Service Center  at (800) 659-2955.

KCoe Isom will host a webinar next week: “How to Build a Post-pandemic Plan for Financial Resilience.”

In this no-cost webinar, participants will learn:

• Best practices to assess your financial situation;
• How to better manage cash flow;
• Tips to work with lenders; and
• Advice from our experts on building good financial health in an uncertain economy.

The hour-long webinar is Tuesday, June 23 at 1 p.m. To register, go to . If you have questions, send them to Jen.Hertzig@kcoe.com.

As a benefit of membership, companies also can reach out to Justin Mentele at KCoe Isom for no-cost advice on the Paycheck Protection Program. Contact him at jmentele@kcoe.com.

With additional regulatory guidance on this implementation yet to be announced, many businesses are raising concerns about their justification and/or risk for audit.

If your business is unable to provide rationale and meet the certification criteria, there is a safe harbor period until Thursday that allows borrowers to repay the loan without repercussion.

“While most borrowers will easily be able to provide proper rationale for a PPP loan, it is still important for all businesses to both reevaluate and document why their PPP loan was necessary,” says Brian Kuehl, director of government and public affairs at K·Coe Isom. “We recommend that every PPP loan applicant takes the time to gather written documentation to show why they applied, and to demonstrate that the loan was needed for hardship due to the impact of COVID-19.”

Every PPP borrower should answer—and document responses—to these questions.

Was I eligible to receive a PPP loan?

The PPP program requires all borrowers to certify that “current economic uncertainty makes this PPP loan request necessary to support the ongoing operations of the applicant.”

You should be able to show that the loans helped to cover immediate losses, business disruption, avoid employee layoffs, avert uncertainty around consumers or suppliers, etc.

Should I keep the PPP loan?

For borrowers who took the PPP loan as a hedge against economic fallout, evaluate how your business has been affected, do you need to keep the loan and, if so, for how long?

Remember that there is no pre-payment penalty if you elect to pay your loan back early, but it is also OK to hold onto the loan for up to two years, assuming you were eligible to participate.

If I keep the loan, should I convert it into a forgivable loan?

Loan amounts can be forgiven if they are used for payroll costs, rent, mortgage interest, and other specified expenses during the eight weeks following receipt.

While we await clarity on whether the SBA will issue new guidance for loan forgiveness, including financial hardship criteria, we do know that borrowers are not required to ask for forgiveness for the entire loan.

Wholly apart from the forgiveness criteria that the SBA may release, you should evaluate whether it is necessary for you to seek forgiveness on all or part of the loan, or whether you would rather keep the loan as a loan.

Each business is different, but it is beneficial for all businesses to thoroughly evaluate and document its reasons for applying for the PPP loan and for asking for loan forgiveness.

If you have questions about the Paycheck Protection Program, member companies are entitled to a 60-minute, confidential, no-cost consultation with KCoe Isom, provided as a service of Association membership.
Contact Justin Mentele at jmentele@kcoe.com or (463) 209-7606.

KCoe Isom is a member company that offers tax services and business growth strategies to the farm equipment industry. As the nation has responded to the pandemic, KCoe has developed related to the Payroll Protection Program, including strategies to maximize forgiveness, as well as the broader CARES Act, and the Families First Conoravirus Response Act.

The company wants to support the shortline industry and has partnered with the Association.

Justin Mentele, a CPA who focuses on agriculture manufacturers and family-run businesses, is available to field your questions. Contact him at jmentele@kcoe.com or call (463) 209-7606. Most questions likely can be resolved in the no-cost, 60-minute window. This benefit is for a limited time and is specific to questions related to COVID-19.

In addition to tools and advice on the KCoe website, the Association continues to build its resource page for members. Go to to find these resources and much more:

• Information on proper use of PPP funds and debt forgiveness.
• State legislative actions.
• Tips and tools from Association partner Sentry Insurance.
• Employee application for leave under the Families First Coronavirus Response Act.
• Additional options for funding and grants for small businesses.
• Sample of an announcement of a positive test in your workplace.
• List of disinfectants approved as effective cleaning agents against the coronavirus.

Their support also sent a clear message. It reinforced that these companies value the work of this Association and see outstanding potential in connecting with other member companies.

We offer this special thanks to KCoe Isom, Myers Spring, Accuride, BTM Manufacturing, Sentry, YRC, Foley & Lardner, and Nilan Johnson Lewis.

An announcement from K¡Coe Isom said the addition bolsters its dedicated ag solutions with grain merchandising, customized farm marketing, and ag risk management plans to increase profitability for farming operations and producers throughout the United States.

Commenting on the acquisition, K·Coe Isom CEO Jeff Wald said: “This strategic move to add expert grain and livestock marketing advisory to K·Coe’s diverse ag consulting portfolio rounds out our full-service offering for producers. Not only does Paragon have nationally recognized expertise in their field, they share our vision aimed at improving and securing the future of America’s farmers.”

K¡Coe Isom has also purchased Paragon Investments Inc., the commodity futures brokerage arm.
Source: K¡Coe Isom | Member Since 2014 |