Case Studies

Professional Firms

Law Firm – Working with the managing partner of a five attorney firm we designed a day-long strategic planning retreat. We then facilitated the meeting for the attorneys. As a result, the owners identified specific goals and developed actionable plans to reach these goals. Within the identified time period the firm brought in a new partner, grew in volume, and transitioned clients and relationships from a retiring partner.

Medical Practices – In reviewing the banking activity a serious fraud case was identified. After performing forensic procedures, we found that the cash co-pays received at the office were not being deposited. In another practice, the owners found out too late that their office personnel were not billing the services timely and that the practice owed large amounts in back payroll taxes. Both situations occurred due to the lack of appropriate checks and balances.

Medical/Other Practice (could have been any type of firm) – The new office manager was given responsibility for payroll. Payrolls for owners and employees were run on alternating cycles. The new office manager paid himself a full salary on both pay cycles. Once again, the lack of appropriate checks and balances, due to busy owners, allowed a fraud to occur.

Consulting Services Firm – While working with the controller we identified significant potential exposures for state and local taxes. The business potentially owed taxes for employees performing services in multiple states; however, it was not registered to do business in these states, nor was it collecting required taxes. Ultimately the owners would have been responsible for these taxes and penalties if the company didn’t pursue plans to ensure compliance.

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Government Contractors

Case Study #1: Rate Calculations: Direct vs. Indirect

XYZ Government Contractor Corp. is a relatively new company providing Information Technology services to various US Government agencies. It is qualified as an 8(a) Small Business Set-Aside Company with the Small Business Administration (SBA).

The company was identified as being qualified to perform on a brand new multi-million dollar government contract and needed to prepare for a pre-award evaluation by the Defense Contract Audit Agency (DCAA).

New to this process, the President of XYZ contacted HeimLantz and asked for help preparing the company for the pre-award process.

As part of the service performed by HeimLantz the following items were identified and implemented prior to DCAA coming in:

  • Many costs that were being classified as either Overhead (OH) or General and Administrative (G&A) could be further refined and shown as Direct instead.
  • The Fringe Benefit pool calculation excluded some allowable expenses that should be included.
  • Related party lease amounts were erroneously included in the OH and G&A pool calculations.
  • The accounting software package utilized by XYZ (an off-the-shelf product) and the records being maintained on it would not meet the criteria required by Cost Accounting Standards (CAS). HeimLantz recommended a new compliant accounting software package.
  • HeimLantz assisted client to design a new chart of accounts and accounting procedures.


XYZ Company:

  • Successfully passed the DCAA pre-award evaluation.
  • Optimized its various indirect cost pool rates to stay competitive with its competition.
  • Implemented an accounting system that provides “real-time” and accurate financial information to management.
  • Optimized its profitability.
  • Positioned itself for additional government contract opportunities.

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Case Study #2: The Sale of your Business

John Smith and Bill Williams started ABC Government Contractor Corp 25 years ago. The Company had grown to a revenue volume of $35 million. The Company was the primary source of their individual accumulated wealth during this period of time. They were both nearing retirement and looking to sell their business in the near future. What should they do? How could they best market their Company for sale?

The professionals at HeimLantz helped John and Bill get ABC Corp ready for the big game.

HeimLantz developed a 2 year game plan:

  • Clean up the Company’s balance sheet of related party amounts such as loan amounts, unrelated investments, assets, and liabilities.
  • Spin off (tax free) a non-government activity into a separate entity.
  • Recommend the company upgrade from an annual Review of its financial statements to an Audit.
  • Encourage management to operate “lean and mean” for its budgeted expenditures.
  • Encourage management to reduce or eliminate all “discretionary” corporate expenditures within reason.
  • Introduce them to three investment banking firms to market their business and assist them in the selection process.
  • Act as lead financial contact with potential purchasers.
  • Help them structure the final deal to minimize tax exposure for the owners.


The business was sold to a publicly traded company for a multiple of 14 times EBITDA (earnings before interest, taxes, depreciation, and amortization) 2 years later. AND John and Bill lived happily ever after in retirement!

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