PRODUCT. . .”LE$$”
|Announcement of LE$$ services|
|Document production differences reduces cost|
|Differences between a LE$$ engagement and a regular valuation engagement|
|LE$$ also = Less time|
|MIOD AND COMPANY, LLP announces
“Limited Evaluation Solution Service”………”LE$$”
Meeting the need for some smaller cases
Donald John Miod, CPA, ABV, CVA, CBA
Founding Senior Partner
Often a case comes to an attorney because of financial problems in the marriage. These financial problems only get worse because you now have two households trying to live on the same income that the one household could not live on before. An additional problem is that there is not enough money in the marital estate to pay for a full-blown appraisal of the business. You have clients who are getting along but just don’t want to be married to each other anymore. You can’t help but think about that pie chart Judge Black has drawn for you and your past clients a hundred times before. You start to sketch one yourself, but the pie is so small you can’t read it. What are your options? Well, you can call your local forensic accountant and call in a favor to help you out and hope that they don’t get hurt too badly. You can try and do the business valuation yourself and hope you can sleep at night. You can take advantage of the LE$$ product.
The Limited Evaluation Solution Service is just like it sounds, a service that is a solution to those cases that cannot afford to do an in-depth analysis. Also, like the name implies, it is more limited in scope than a regular valuation. The scope of work means the parameters or boundaries the work is being performed in. In this service the client is limiting the scope in an effort to save money. You are not going to get a shovel stuck into the business, by the forensic, to uncover perquisites. You are going to ask us to assume what they are based on information from your client.
What you will get is a cost-effective analysis of historical earnings of the business, together with market research for that particular industry. This, together with certain assumptions you will be asked to supply, will enable us to supply an estimate of the value of the business.
In order to make this cost effective solution work, we need to be supplied certain bits of information about the earnings of the business which may not be stated in the financial documentation you and your client will supply. This will include information about cash taken from the business, if any, which is not reported anywhere, perquisites that are run through the business expenses, and any other benefits. In order for this to work your clients should be knowledgeable about the business and the benefits just described. This will permit us to use these assumptions, in performing our work, and thus save a lot of money.
The clients that can benefit from this service have the following characteristics:
1. Has knowledge of the business
2. Seeks only a reasonable estimate
3. Has knowledge of the “extra benefits” derived from the business
4. This service is also a good choice when cooperation is excellent between the parties and they wish to retain us jointly.
The cost to your client is a flat fee of $1,500 and can be credited towards a full service business valuation if the case needs to go further. See ” Testimony in Court” for more information.
Naturally you and your client will need to sign an engagement letter so that everyone understands the level of work being performed. One of the frustrating things a client can experience is the difference between expectation and reality. This engagement letter, properly explained by the attorney should help keep this from happening. Should the case not settle, and you need to have a regular valuation service, we will need to execute another engagement letter.
The type of client this service does not work for is one who is trying to make their spouse’s life miserable, or get even, no matter what the cost. It also does not work for larger size businesses or for those clients who have been kept totally in the dark. They should have an understanding of the general workings of the business and the level of work performed by their spouse.
This service is also not for those cases where the records are unreliable and need further investigation that cannot be overcome by making assumptions.
LE$$ is not for everyone. It can, however, assist those attorneys, and clients, who need to get a “ballpark” figure for a business in order to help bring a case to a timely economic conclusion.
LE$$ documents to produce means more client satisfaction
Looking at the differences in document production
With the Limited Evaluation Solution Service, no party or their representatives will probably need to crawl through the attic, garage or storage bin looking for those dusty half eaten scraps of paper to meet the standard “boiler plate — kitchen sink” document request typically issued with larger scope, more heavily disputed engagements.
Make no mistake, getting documents produced, having some of them copied, indexing and having control of them can be a significant portion of fees in any case.
The limited engagement solution service boils down to the lowest denominator only the most essential documents. They won’t be all the documents needed to paint a clear picture, but they will help provide a rough sketch. Actually more like a crude charcoal as opposed a finely painted oil. With less documents produced the time necessary to get the job done is much faster. Problems such as large differences between the date of separation and the date of trial can become less of an issue.
When cost conscious parties agree to limit the parameters of our work assignment then the attendant costs necessary to gather the information, run the numbers and generate limited findings for settlement discussions, stay where they belong — contained.
Differences between a LE$$ engagement and a regular valuation
Donald John Miod, CPA, ABV, CVA, CBA
The LE$$ engagement is limited in Scope. In accountants terms “scope” refers to the amount and depth of analysis work the accountant performs. How does this differ from a full scope valuation engagement? Here are some of the differences:
LE$$ also = LESS time
Get the valuation issue over in a hurry
With less documents produced and relying to a great degree on provided assumptions, we can cut the turn around time from weeks to days. This can only serve to help settle a case sooner. Even though it will take less time, we should be asked to perform this service early on in the case. Do not wait until the end of the case to bring us in because if the case does not settle and you need our regular appraisal done, we may not have the time. Get us in early!
TESTIMONY IN COURT
Due to the extreme cost cutting measures necessary to allow the LE$$ product to work, the limitation in scope prohibits the use of any of our reports in court. The reason for this is the tremendous difference in scope between our regular engagements and the LE$$ service. Our reputation is the most valuable thing we have. When you think about it, it is the only thing any professional has. Our reputation for quality, in everything we do, must be protected.
It is our hope that testimony will never be needed for this type of service. The goal is to help settle the case at the earliest point.