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The Benefits of Six Sigma

The benefits of Six Sigma GJMImplementing Lean Six Sigma management principles in your operations can benefit your company by utilizing data, statistics, and measurements to eliminate defects in your processes. Once inefficiencies in your business’ processes have been identified, the Six Sigma methodology applies the use of proper tools to decrease defects and anything that doesn’t fit client specifications. 

Part two of our three-part series on Lean Six Sigma will focus on why your company might pursue the methodology and what will you and your staff get out of it. We’ll also share how Gilmore Jasion Mahler has embraced Lean Six Sigma and some of the benefits we have seen in our own firm.

Lean Six Sigma’s goal is pretty simple: to improve efficiency and eliminate waste. What type of improvements might you see?

  • Reduced Cycle Time. If you have experienced missed deadlines due to unexpected delays in projects or shifts in management policy, Six Sigma can help by setting up a team that can identify the reasons for long cycle times and find solutions to these problems. Lean Six Sigma says in many cases, cycle times are reduced by up to 35%.
  • Motivated Employees. Employees need their companies to fully engage with them to keep them on task. Six Sigma problem solving tools improve employee development and create the proper environment to keep workers motivated. Properly motivated employees experience a 25-50% increase in productivity.
  • Improved Customer Loyalty. Better quality control and improved processes through Six Sigma result in a consistently better product and more satisfied clients. It’s no secret that when your customers are happy with your product, they return to you for future needs and recommend your company to others.
  • Help With Time Management. The principles of Lean Six Sigma involve looking at learning, performance, and fulfillment. Having employees set goals and apply these principles to their work ethic leads to more effectively managed time. The action plan that Six Sigma helps employees to develop is said to increase efficiency by up to 30%.
  • Better Managed Supply Chain. Reducing the number of suppliers your company uses is a key component of the Six Sigma methodology. Changes and variations in the supply chain have an effect on the defect rate of your product, so reducing the number of suppliers reduces the chance of defects in your products.
  • Improved Bottom Line. The customer loyalty mentioned above directly affects your profits in a very basic way. Your happy customers continue to buy from you and will likely recommend your company to others who are looking for a similar product. This leads to increased revenues for your company.

For several years Gilmore Jasion Mahler has been engaged with the Lean Six Sigma methodology. The firm currently has six green belts who have conducted various projects throughout our firm. We’ve embraced the mind-set and applied Lean to all facets of our business: from employee expense account reimbursement to the client experience.

“We’ve learned that sometimes we had to ‘fail forward,’ in other words, we needed to learn that not every project was going to be a success, but we learned something from every project that we implemented,” says GJM Partner Deanna Hall, who is a Six Sigma green belt.

Here are five critical factors that led to GJM’s success with Lean Six Sigma:

  1. Buy-in from the top
  2. Change in mindset across the firm – needed to change to a mindset of continuous improvement, always “hungry” for improvement
  3. Adopted the motto:  Strive for Excellence, Not Perfection
  4. Get all levels in the firm involved – could not just be at the management level
  5. Understand that change is hard for most people  

Change may be hard, but it isn’t impossible. Sometimes starting with smaller changes can demonstrate the ability to improve processes and encourage staff to embrace larger Lean initiatives moving forward.

Part one of our series on Lean Six Sigma offers some basic information, including the basic principles and definitions of the methodology. Be sure to watch for the next part in our series, which will cover what’s involved in acquiring Lean Six Sigma certification.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business advisory, tax, risk advisory, healthcare management and outsourced accounting. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.


Link to blog post #1

Why a Quality of Earnings Report is So Important

Ask any business owner and they’ll no doubt tell you there’s much to consider when contemplating either buying or selling a business. The process can last months or even years as the owner pulls in experts, reviews reports and considers all the facts before signing on the dotted line. A critical piece of this due diligence is the quality of earnings report (Q of E) that provides a detailed analysis of how a company records its revenues, such as cash or non-cash, recurring or nonrecurring. The Q of E report’s goal is to provide assurance that earnings are sustainable and will also translate into cash flows. Reports are usually focused on sustainable earnings before interest, taxes, depreciation and amortization (EBITDA) or free cash flow (FCF). FCF performs an analysis of working capital needs for the business as well as capital expenditures that are needed. Q of E reports are prepared by independent third parties and usually by the buyer or their representative. The seller may also have an independent third party prepare a Q of E report in preparation for a sale. 

In this blog we will further define the quality of earnings report, examine why this is a critical report to review during the buy/sell process, and offer a list of the most important components of a reliable Q of E report. You’ll also hear from the CEO of a global manufacturer about what he views as the most crucial takeaways.

Quality of Earnings: What is it?

A Q of E report offers a close examination of company finances. Unlike an audit, Q of E reports typically focus on trailing 12 months (TTM) and usually a few historic periods as well. They are also more focused than an audit. It typically can take anywhere from three to four weeks to complete a Q of E report depending upon the availability of data and management’s responsiveness.

Components: What’s in a Q of E Report?

Q of E reports usually include but are not limited to:

  • Executive Summary including a business overview and the transaction overview (if known)
  • Income statement section that may include the following:
    • Breakdown of revenue by components such as customer/product lines/service lines
    • Historical revenue trends
    • Determination of one-time income/expenses vs recurring expenses
    • Management EBITDA adjustments are analyzed
    • Diligence adjustments to EBITDA suggested by the preparer
  • Balance Sheet is disclosed and analyzed
  • Working capital is analyzed in detail and normalized
  • Recommendations and findings by the preparer of the report

Gilmore Jasion Mahler (GJM) consulting and assurance partner Greg Taylor leads the GJM Private Equity Advisory practice and advises many businesses. He views the quality of earnings report as an opportunity to discover any “skeletons in the closet” before due diligence is performed by a potential buyer. Taylor says in the past most Q of E reports were strictly buy-side but in the past few years, he says he’s seen more companies also performing sell-side in preparation for a sale. Many investment bankers are also strongly recommending a Q of E report be performed before they will take the company to market. One thing that hasn’t changed: Q of E reports are frequently prepared by an independent third-party firm.

“Buyers usually want independent parties to perform this analysis for a couple of reasons,” says Taylor. “One: another party is taking an independent look and two: these reports can also be provided to third parties for funding or investment reasons.”

Key Questions

Taylor says there are three key questions business owners should ask themselves when reviewing a Q of E with their financial team and advisors:

  1. How accurate are the management proposed addbacks? 
  2. How sustainable are the numbers? 
  3. What are other factors that are not just in the numbers, but the intangibles? For example: the management team, market trends and operational expertise.

CEO Perspective

Findlay-based Rowmark is a leading global manufacturer of sheet plastic for many uses, including signage, awards and other applications. President and CEO Jim Ellward says the company continues to stay active in many acquisitions, and a Q of E report is an important component when exploring any potential acquisition. He has worked with GJM to provide the report to Rowmark when needed.

“You have to have confidence in that third-party advisor that they are going to focus on the details, point out the positive and negative aspects of the business through their findings and truly be that advisor,” says Ellward. “GJM has earned our confidence and we view them as a trusted partner with our business.”

In fact, selecting a professional or firm to provide a quality of earnings report may be equally as important as the report itself. Many firms provide Q of Es, but not all are experts. Ellward says GJM is the right partner for Rowmark.

“Gilmore Jasion Mahler understands our business,” he says.  “They have taken the time to learn our business and understand our long-term strategy. This, coupled with their accuracy, attentive service and fact-based assessments, allows us to feel confident with the information and guidance we are able to attain from the Q of E reports.”

Sometimes a Q of E report brings answers a business owner may not be hoping for, but they wind up being the answers that will guide the business in the right direction. Ellward described once such scenario for Rowmark.

“GJM helped us assess a recent potential acquisition that we ultimately decided to pass on as we moved deeper through diligence. Our decision to exit was based on multiple factors regarding the overall health of the business. The Q of E provided the basis of additional questions that we wanted to dive deeper into understanding and in turn allowed us to identify areas of concern and focus on making the right decision for the business.”

Here’s what Ellward says he looks for in a Q of E report:

  • A more detailed picture of just how well the business is really doing and whether or not it is worth the price negotiated
  • The analysis of customer sales and accounts
  • The identification of any significant or unusual accounting adjustments or policies that need explanation
  • The ability to see an independent, non-biased view evaluating the on-going operations and cash flows  

As this information bubbles up in a Q of E report, the answer often becomes very clear whether it is wise to move forward with the transaction or to walk away and wait for the next opportunity to arise.  

Established in 1996, GJM is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business advisory, tax, risk advisory, healthcare management and outsourced accounting. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.

Is Telemedicine the Way to Move Forward in a Pandemic (and Beyond)?

During the COVID-19 pandemic, we've seen an unprecedented number of doctors and nurses turn to telemedicine for the first time. While in this case necessity is the mother of invention, the convenience and efficiency of telemedicine have made it truly invaluable to medical professionals around the globe in these unprecedented times. With people realizing how easy and often straightforward it is to telecommute in the medical field, its use will surely continue far into the post-COVID-19 era.

Many patients find the use of telemedicine to be convenient, as they get to avoid traveling long distances, or sitting in waiting rooms rather than in their favorite chair. This also helps homebound patients and those who can’t take significant time off work for an in-person appointment. In many cases, it’s also more effective for the medical professionals who care for patients.

Here are just some of the benefits being observed in recent months:

  • Triage for patients can be done virtually. Telemedicine offers a more efficient way to screen who needs to physically visit the office versus those who are able to teleconference into their physician's office. Waiting rooms can be used for the more critical patients who require in-person care. This instantly streamlines the entire intake process for any medical facility. Additionally, it requires fewer staff members to be on duty at any given time, simpler payroll, and simpler accounting across the board.
  • Once successfully implemented, telemedicine saves time. Virtual care can take less time for medical professionals and patients alike, so it can often be a fast and effective way to provide care. It also reduces the impact of no-show patients significantly. This allows professionals to treat more patients in a given day, which is good for any practice, along with the communities they serve.
  • The potential savings for medical practices are huge. For one, virtual care can have far less overhead than in-person care and potentially much less environmental impact. Billing can be done both automatically and virtually, with the click of a button. HIPAA-compliant billing and electronic data storage also reduce costs for providers. Telemedicine also provides savings opportunities for patients and insurance companies alike, as it could cut down on unnecessary emergency room visits and transportation costs, among other expenses.
  • Telemedicine increases the potential reach for patients.  In most places, rural patients experience longer wait times for appointments and longer commutes, both of which create a disparity in care that can even be life-threatening. The ability to serve rural communities remotely not only allows you to expand your patient base, but also provides an important service to those underserved communities.

Gilmore Jasion Mahler’s Healthcare Specialist Team assists many medical practices with their accounting needs, including practice management, outsourced accounting, and other advisory services, such as the rapid transition to telemedicine during the COVID-19 pandemic. One such practice, Sylvan Lakes Family Physicians in Sylvania, had GJM in their corner as they moved quickly to adapt to the telemedicine environment during the COVID-19 pandemic and stay at home orders in Ohio and Michigan. They knew patients weren’t going to be able to come to them, so telemedicine was a necessity.

“Our GJM team was right there with us giving suggestions and providing support, says Sylvan Lakes practice manager Sandy Johnson, MA. “GJM is not just our accountant, they’re more than that to us. In fact, probably the most critical role they played during this pandemic was getting our Small Business Administration Paycheck Protection Program (PPP) loan secured. They did all the work to make it happen and we know they’re here to guide us through the entire process. It’s a great relationship.”   

The COVID-19 pandemic has brought about many changes. Working from home and the use of technology to stay connected, both personally and professionally, is now the norm. We may find that we’re not going back to the “old” way of doing things. Sometimes an in-person doctor’s appointment is appropriate, but we may find that moving forward telemedicine becomes the standard practice in many instances.  

Johnson says she can see that there’s a role for telemedicine, but she’s not sure every situation is appropriate for telehealth. For example, she says, caring for a diabetic patient via telemedicine would be difficult. It’s tough, she says, to replace that in-person contact. At Sylvan Lakes Family Physicians, she says their bottom line is important, as with any medical practice, but when it comes down to it, their mantra is: “Patients first, financial second.”

Learn more about GJM’s Healthcare Specialist Team and how they can help your medical practice grow. You can also sign up to receive GJM’s quarterly newsletter Practice Management Advisor to stay on top of issues impacting healthcare practices.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business advisory, tax, risk advisory, healthcare management and outsourced accounting. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.    

Jamie Dixon Takes on New Role With GJM

Gilmore Jasion Mahler (GJM) is pleased to announce that Jamie Dixon, CPA has been named as firm administrator. 

Already a member of the firm’s leadership team and Healthcare Specialist Team, Jamie’s new management role will include oversight of GJM firm operations, management reports and budgets as a critical member of the executive team for both the Maumee and Findlay offices. He joined GJM in April of 2013. 

Jamie’s professional expertise as a CPA is home health and long-term care. He has over thirty years of experience in both private and public accounting, providing consulting services to home health, hospice, skilled nursing facilities, intermediate care facilities for individuals with intellectual disabilities (ICFIID), federally qualified health centers (FQHCs) and other healthcare entities. He consults frequently on Medicare and Medicaid reimbursement and cost report issues. Jamie will continue his client work in addition to his new leadership role.  

“I’m excited to take on this new challenge and expand my leadership role with the firm,” says Dixon. “I’ve developed strong relationships with many of my clients and am pleased to be able to continue to be there for them as well.”

GJM Managing Partner Kevin Gilmore says he’s confident Dixon will excel in his new position.

“No question, it’s an unusual time to take on a new role, as we all struggle with the pandemic and its impact on all of our lives, both personally and professionally. Jamie is a calm, capable leader and I have no doubt he will do an outstanding job as GJM’s new firm administrator.”   

Dixon has already assumed his new duties.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business advisory, tax, risk advisory, healthcare management and outsourced accounting. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.