Closely Held Business Challenges

Management advisory services provide support for a large variety of issues that senior executives must address. Many of our entrepreneurial clients find that rapid growth is a two-edged sword. On the one hand, it is an exciting time, brimming with promising opportunities. On the other hand, a rapidly expanding company must manage several critical challenges that have the potential, if not addressed properly, to derail growth of even the most promising enterprises. Some of the critical management challenges include:

  • Funding growth: How do you plan to fund the organization’s growth? Is your growth constrained by restrictive covenants on the bonds you’ve issued? What are the financial effects of changes to your capital structure?
  • Cash management: Do you have systems set up that assess your short-term sources and uses of cash? Are you using excess cash effectively? Do you have procedures to warn of an upcoming cash crunch?
  • Internal controls: What policies and procedures do you have in place to prevent error, fraud and waste? Are your internal controls effective?
  • Personnel policies: Do you have reporting systems that measure manager effectiveness? What are your recruitment, retention and succession plans?

We provide advisory services that address the vast spectrum of management challenges.

Internal Control Studies

One of the most important management challenges addresses whether your organization has designed and implemented effective internal controls. White Nelson Diehl Evans performs internal control studies, both as stand-alone projects and as part of audit engagements. We often find that the managers of rapidly growing businesses are spread too thin to give internal controls the full consideration they requires. The rudimentary controls used by a $1M company won’t suffice when it suddenly grows into a $20M enterprise, much less a $200M enterprise. That is why proper internal control must be established as early as possible, particularly if your actual growth is far greater than you expected or planned.

Internal controls are meant to protect your company’s assets. It requires the hiring of trustworthy employees and the design of operational procedures that minimize the occurrences of errors, theft, fraud and waste. The most familiar elements of an internal control policy include:

  • Segregation of duties: dividing up tasks to avoid the opportunity to defraud the company
  • Protecting bank statements/data from manipulation
  • Ensuring all expenses are legitimate
  • Reconciling physical inventory with purchasing and shipment activity
  • Protecting the integrity of accounts receivable against fraud and mismanagement
  • Designing signature procedures, including protections against forgery
  • Resisting pressures to work around the normal internal controls

One exceedingly important aspect of internal controls is that they may lose their effectiveness as an organization expands its range of operations. Businesses evolve, employees change and new positions are created. That is why it is prudent to commission an annual study of internal controls. Our senior forensic accountants can assess weaknesses in an organization’s control structure and investigate actual cases of fraud.

Succession Planning

The goal of succession planning is to create a blueprint for recruiting, retaining, replacing, promoting and retiring key personnel within an organization. The role of a CPA firm is to advise about the costs involved in each facet of the succession plan, including contingencies such as mergers and acquisitions, tax consideration, legal factors and changes to the size, scope or structure of an organization. We can help you evaluate compensation plans and compare them to those of similar organizations in Southern California. We can project the costs of promoting from within versus external recruiting, including the costs of bonus plans, training/education, retirement plans, employee stock option plans and benefits plans. Top executives may have complicated contracts with contingency costs that must be periodically re-evaluated.

We can perform financial analyses of cost and revenue centers to quantify the effectiveness of current managers in relation to others within the organization and the industry, an important input to succession planning.

Small partnerships may require special planning, especially in the event of the death or exit of a founder or partner. They must evaluate how this kind of disruption will affect a firm, the structure and costs of buy-out agreements, insurance issues, stock bequests and much more. A plan might be insufficient due to the existence of key talent at lower organizational levels. The costs of not performing complete succession planning invariably exceeds those of creating a comprehensive plan. Whatever the circumstances, we provide the information you need to generate an effective succession plan.


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Tax Planning Guide

At White Nelson Diehl Evans, we know how difficult it is to stay ahead of the complex and dynamic tax laws. From new standards changing revenue recognition rules to the impact of the Affordable Care Act, our goal is to help our clients stay in front of tax issues that impact your bottom line. To help in this effort, we have put together a comprehensive tax-planning guide and it’s available to download for free.

Partner Testimonial

“Unlike larger firms, our advisory engagements are focused on solving specific issues and objectives, without unnecessary, and expensive consulting. If you are seeking expertise to help address complex issues, such as improving revenues, increasing efficiencies, or managing capital, WNDE advisory services can provide targeted solutions and strategies to drive bottom-line results.”

Gregory Coleman Audit Partner