Cherry Bekaert: Technology: Recent Episodes
Cherry Bekaert LLP
Cherry Bekaert’s podcast for technology where we discuss developing trends and market dynamics as well as tax and accounting tips that could impact your business.
Section 174 mandates the capitalization of specified research or experimental expenditures (SRE), which includes a broad range of costs related to development. Listen as Tax Credits & Incentives Advisory Leader Martin Karamon, Director Vivian Kohrs and Senior Manager Bryan Weems discuss why it’s vital to evaluate intercompany intellectual property (IP) agreements and contracts for research and development (R&D) performed on behalf of others overseas.
Tune in to learn more about:
- How to prevent double capitalization
- The potential impact of Section 174 when structuring an intercompany IP agreement
- The rights or risk stipulation related to R&D activity
Listen to other episodes in our Global Tech Tax Matters podcast series created for technology companies either conducting business in multiple countries or considering international expansion:
- How to Protect Your Intellectual Property Abroad and Minimize Tax Liabilities
- From Outbound to Inbound: A Tech Company’s Guide to Expanding Globally (Part One – Outbound Transactions)
- From Outbound to Inbound: A Tech Company’s Guide to Expanding Globally (Part Two – Inbound Transactions)
Related Guidance
- Section 174 New Requirements and Its Impact on Technology Companies
- How To Plan for Global Tax Minimization
- Section 174 Research & Software Development Costs – A Guide to Compliance
- Global Intellectual Property Tax Planning
Continuing the conversation on international tax planning strategies for both outbound and inbound companies, International Tax Services Managing Director Rajesh Tripathi and Tax Partner Chris Delcambre discuss the various considerations foreign parent companies need to make when establishing operations in the U.S.
Inbound companies have both employee and entity type complexities associated with them and must be aware of several factors that could pose a risk if not properly addressed. Listen to learn more and avoid potential pitfalls. This episode covers:
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Permanent establishment risk
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Federal treaty rules and individual state tax regulations
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Employee (particularly C-Suite) travel scenarios
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Exit strategies
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Penalties for improper or non-existent transfer pricing
If you haven’t already, listen to part one of this conversation, which focuses on outbound companies and transactions: From Outbound to Inbound: A Tech Company’s Guide to Expanding Globally (Part One)
Related Guidance
- Going Global: Tax Issues to Consider When Just Starting Your Global Expansion
- How to Protect Your Intellectual Property Abroad and Minimize Tax Liabilities
Many technology companies reap the benefits of hiring consultants or long-term employees outside the U.S., such as experiencing greater efficiency and expanding their global reach. However, if company leadership isn’t careful in planning, structuring and reporting, serious tax issues could arise. In our latest podcast for technology companies, we cover key missteps to avoid when it comes to hiring, contracting or using third parties abroad.
Listen to learn more about:
- What may trigger a permanent establishment risk
- Specific considerations for hiring consultants or employees in foreign countries
- The importance of treaties established between the U.S. and other countries
Related Guidance
- Going Global: Tax Issues to Consider When Just Starting Your Global Expansion
- How to Protect Your Intellectual Property Abroad and Minimize Tax Liabilities
- Global Intellectual Property Tax Planning Services
Is your technology company’s biggest asset – its intellectual property (IP) – automatically protected in other countries just because it is protected in the U.S.? It’s not! In this podcast episode, members of our International Tax Practice uncover this and other missteps that many companies make in the tax planning process when trying to expand globally.
Tune in as they share insights on key considerations for timing, structuring and planning properly so you’re not paying taxes in multiple jurisdictions.
Listen to learn more about:
- Considerations to make to protect intellectual property
- The implications of developing IP in foreign countries by hiring independent consultants
- What happens when foreign entities are inherited
- The implications and risks associated with a multinational leveraging IP to customers for their use
Relatively new rules around research and experimentation costs have had a notable impact on early and growth stage technology companies, sending many into a newly taxable income position. Join two of Cherry Bekaert’s Technology Tax Partners to learn more about what companies in this position should do to mitigate the impact of those rule changes as well as plan strategically for 2024.
They discuss:
- Two ways to approach Section 174 Research & Experimentation computations
- What the decrease in bonus depreciation means for technology companies
- Areas often overlooked in tax planning such as state & local tax, state and federal credits & incentives, and international tax
Related Guidance
- State Income Tax Challenges in a Technology World
- Section 174 New Requirements and Its Impact on Technology Companies
- Qualified Small Business Stock for Tech Companies: Unlock Tax Benefits
- Section 174 Research & Software Development Costs – A Guide to Compliance
How often are technology companies truly prepared when ready for an exit or to take on new funding? Cherry Bekaert’s Dixie McCurley sits down with investor and CEO Lauren Fernandez to get her take on the components that lead to business growth, success and eventual sale. Lauren shares the number one priority she has for assessing a company’s financial health, as well as thoughts on the future of AI and technology.
They discuss:
- Three primary areas of focus from an investor’s point of view, including the number one culprit for inaccurate documentation
- The importance of accounting practices and consistency per industry standards
- Future technology and AI in accounting
Related Guidance:
- Four Action Items Every Technology Startup Should Take to Protect the Business from Financial Risks
- The Year of Efficiency Part 3: Empowering Your Employees
- How Outsourced Accounting Can Transform Your Business
Efficiencies can come in the form of cost-saving, process streamlining~~,~~ and resource allocation, which act as a catalyst for innovation by freeing up resources, enhancing collaboration, fostering a culture of continuous improvement, and allowing for calculated risks in creativity and experimentation.
Listen as Jim Holman and Steve Holliday provide real-world examples from leading technology companies to further illustrate how these principles have been successfully applied to drive innovation and growth in the fourth and final episode of our “Year of Efficiency” podcast series.
Are Your Company’s Controls Optimized for Efficiency?Inefficient systems are a barrier to growth. If you question whether the proper controls are in place for your technology company to conduct business efficiently, contact our team for a complimentary maturity model assessment. Our digital transformation team can provide an initial assessment of your company's efficiencies and discuss the steps to take it to the next level.
Learn more here
Catch up with the previous episodes in this series:
- The Year of Efficiency Part 1: Process Optimization
- The Year of Efficiency Part 2: Leveraging Automation
- The Year of Efficiency Part 3: Empowering Your Employees
Technology products and software that are hyper-focused on creating efficiencies within an organization can save time and money, and even help scale a business. But as a technology leader, have you taken a step beyond that to explore what it can mean for the empowerment of your employees? Join Cherry Bekaert’s Client Accounting Services Leader, Dixie McCurley, as she discusses the importance of breaking down silos within an organization and creating a culture of true collaboration with our guest and COO of Expensify, Anuradha Muralidharan.
Anu helps her organization meet its mission of returning to its people and customers our scarcest asset: time. In this podcast, she shares the pros and cons of her company’s unique model, and how it inspires employees and maintains the company culture while still fostering growth by creating efficiencies for its people.
Is Your Team Operating as Efficiently as You Would Like?Let us help you explore areas of your business that can lead to greater motivation, inspiration and empowerment for your employees. We’re pleased to offer a Health of the Business Check-Up Report at a discounted rate of $500 to get you started. We’ll examine where you are, where you want to be and how to get there by transforming the accounting function.
Learn more here
Catch up with the previous episodes in this series:
- The Year of Efficiency Part 1: Process Optimization
- The Year of Efficiency Part 2: Leveraging Automation
As technology and business leaders seek efficiencies in nearly every aspect of their business, they need solutions to help them save costs and to make informed decisions quickly. In the second episode of our “Year of Efficiency” podcast series, Jerry Hereden hosts Tertius Eksteen, Senior Manager, and Pamela Butler, Manager, from Cherry Bekaert’s Digital Advisory Services group to discuss how some technology companies are optimizing their business while on a Digital Transformation journey.
Tune in to this episode to learn more about:
- Robotic Process Automation (RPA)
- Leveraging tools such as Salesforce or MuleSoft RPA to reduce manual processes
- Impact to the customer experience
Could your technology company benefit from increased efficiency while improving accuracy and scalability?
Our team offers a free design workshop to assess solutions for your business. We work with you to identify gaps in your current processes and offer solutions to help automate tasks.
Learn more here
Catch up with episode 1 in this series:
- The Year of Efficiency Part 1: Process Optimization
You may have heard it said, it’s the “Year of Efficiency,” as technology companies seek solutions that save on costs, drive faster innovation and better manage processes. While accounting may not be every entrepreneur’s favorite topic, it is ours! Listen to Chase Wright, leader of our Accounting Advisory practice, and Graham Michitsch, Accounting Advisory Senior Manager, as they discuss how the accounting and finance back office is an essential function of a company, and why awareness of the underlying process is just as important as adopting new technology.
Tune in to this episode to learn more about:
- Improving internal processes more rationally rather than in crisis mode
- Identifying the proper technology and tools for the maturity of the business cycle
- Maintaining accurate reporting from an investor’s point of view
Does your team have an overall understanding of what process optimization looks like?Let our advisors with you to create a prioritized solution roadmap for your company. Our tailored, facilitated workshop helps you create quick wins for your accounting function that align with your company’s finance and overall business strategies.
Learn more here
Leaders of technology companies – particularly those in the startup phase or strapped for cash – have a lot to mentally juggle in their day-to-day operations. However, one area of the business they should pay attention to are the state and federal credits available to them. Tax credits for technology companies may save money and time, creating opportunity to manage and optimize their business more effectively.
In the latest episode of our Technology podcast, Chris Delcambre, Tax Partner, welcomes members from Cherry Bekaert’s Tax Credits & Incentives Advisory practice, Martin Karamon, Melinda Young and Vivian Kohrs, to discuss how companies can turn challenges into opportunities through intentional and timely planning.
Listeners will learn about:
- Government assistance for technology companies experiencing staffing issues
- Why it’s important to look into R&D credits sooner rather than later
- How to monetize credits even if your company is in losses
- How to plan around and offset Section 174 costs
Other Relevant Guidance
- Section 174 New Requirements and Its Impact on Technology Companies
- How to Benefit from Business State and Local Tax Credits & Incentives Programs
- Section 174 Research & Software Development Costs – A Guide to Compliance
On the surface, it may seem like a simple accounting method change, but Section 174: Amortization of Research & Experimental Expenditures has complex implications and rules, particularly for technology companies, as it relates to research and software development costs.
Section 174 impacts technology companies much more than other industries. In the latest episode of our Technology podcast, Tim Larson, Tax Partner, welcomes members from Cherry Bekaert’s Tax Credits & Incentives Advisory practice, Martin Karamon, Daniel Mennel and Carolyn Smith Driscoll, to discuss new mandatory requirements for taxpayers under Section 174 and what it means for technology companies.
In this podcast, we’ll cover:
- Differences Between Section 174 and the R&D Tax Credit
- Expenditures vs. Expenses
- Risk Rights
- Software Development vs. Services
- Companies in Losses
Future developments to this tax code are anticipated this year. Subscribe to Cherry Bekaert’s technology podcast and other guidance offerings so you don’t miss a thing.
Other Relevant Guidance:
- Section 174 Research & Software Development Costs – A Guide to Compliance
- R&D Update: What’s Going On With Section 174?
- R&D Tax Credits: 2022 Year in Review
- Planning for Capitalization of Research and Experimentation (R&E) Costs
To conclude our series on State & Local Tax and Sales & Use Tax for tech companies, we explore a few lucrative state credits and incentives not to pass up. While the R&D credit is probably the most common credit that tech companies take advantage of, our specialists shed light on other, less commonly known credits and incentives.
Cherry Bekaert Tax Partner, Tim Larson, welcomes two members of our Tax Credits & Incentives Advisory group: Director, Melinda Young, and Senior Manager, Nick Cousino. Together, they discuss just how much companies could receive in state credits and incentives through the Job Tax, Employee Retention and Angel Investor credits. They’ll also explain how companies that own and operate data centers can qualify for notable tax incentives.
The conversation includes:
- Location-Based Job Tax Credits
- Disaster Employee Retention Credits
- Credits for Companies that Own and Operate Data Centers
- Angel Investor Credits & Incentives
If you haven’t already, catch up on the first three episodes in the series:
- Episode 1: What Tech Companies Overlook in Sales Tax Reporting
- Episode 2: Sales Tax Best Practices for Technology Sellers
- Episode 3: Three State and Local Tax Issues Tech Companies Need to Address Now
Other relevant guidance:
- Transferable State Tax Credits: Opportunities to Reduce State Taxes
- State Taxes and a Remote Workforce
If your tech company is outgrowing its accounting system or experiencing pain points while transitioning to a SaaS model, this podcast episode is for you! Join Technology Industry Practice Leader, Michael Valerio, and Strategic Alliances Director, John Bartz, as they discuss how Cherry Bekaert’s digital advisory team works with tech companies to provide services around strategy, implementation, optimization and support while utilizing Sage Intacct.
This episode offers insight into how Sage Intacct solutions can greatly improve a tech company’s reporting and financial management, particularly when it experiences multi-entity consolidation, international expansion, change from a legacy system and more.
Other Relevant Guidance:
- Collaboration Tools Changing the Landscape of the Workplace
- How to Build a Data-Driven Culture in Your Organization
As every state has its own rules surrounding tax structure and income sourcing, it is imperative to your company to consider the nuances of state tax reporting. To address these complexities and much more, we continue our podcast series dedicated to technology companies by discussing three main issues that that continually arise for the sector when it comes to state and local tax (SALT).
Rob Schwarzmann, Tax Partner, hosts Cathie Stanton, SALT Leader, and Tony Konkol, SALT Manager, as they highlight key areas of focus that should be on every CFO’s mind: Nexus, Revenue Sourcing and Pass-Through Entity Elections (PTEs).
The conversation includes:
- Nexus & State-Specific Standards
- Revenue Sourcing
- Early or Growth Stage Companies in Losses
- PTE Elections
- Private Equity Considerations
- State Legislation & Statutes
- PTE Election Takeaways
Catch up on the first and second parts of our series:
- Episode 1: What Tech Companies Overlook in Sales Tax Reporting
- Episode 2: Sales Tax Best Practices for Technology Sellers
Relevant Guidance:
- State Pass-Through Entity Tax Elections – Don’t Leave Cash on the Table!
- Pass-Through Entity Tax Update
- How Supply Chain Changes Impact Your State and Local Taxes
In the first episode of this technology podcast series, we highlighted a few key sales tax considerations for technology companies. In this follow-up episode, Cherry Bekaert’s Sales Tax team focuses on issues that impact sellers of technology.
Listen as Megan Hutchinson, Technology Tax Partner, is joined once again by Lauren Stinson, Sales & Use Tax Leader, and Don King, Indirect Tax Director, as they discuss marketplace sales, tax-exempt wholesalers' sales, and sales tax technology solutions. They will also share their predictions for 2023 as they pertain to recent tax law changes.
Other relevant guidance:
- https://www.cbh.com/guide/articles/tips-for-applying-for-a-sales-and-use-tax-refund/
- https://www.cbh.com/guide/alerts/sales-and-use-tax-technology-and-the-evolving-definition-of-sales-tax-nexus/
- https://www.cbh.com/events/why-growing-tech-companies-need-a-sales-tax-strategy-now/
- https://www.cbh.com/guide/case-studies/sales-tax-exposure-reduction-in-technology-companies-acquisitions/
Tech entrepreneurs and company leaders are often so laser-focused on company growth that sales tax is not top-of-mind. But since the 2018 Wayfair decision – a ruling that allows states to impose sales tax obligations on companies with economic presences – many technology companies still disregard an important tax obligation, leading to costly and complicated compliance situations.
Join leaders of Cherry Bekaert’s Sales Tax team for a short series that will focus on important issues affecting your technology company. Tax Partner Megan Hutchinson moderates the first episode as Lauren Stinson, Sales & Use Tax Leader, and Don King, Indirect Tax Director, cover these areas and more on:
- Taxability considerations for technology
- Sourcing challenges
- Impacts on M&A transactions
Other relevant guidance:
- https://www.cbh.com/guide/alerts/sales-and-use-tax-technology-and-the-evolving-definition-of-sales-tax-nexus/
- https://www.cbh.com/events/why-growing-tech-companies-need-a-sales-tax-strategy-now/
- https://www.cbh.com/guide/case-studies/sales-tax-exposure-reduction-in-technology-companies-acquisitions/
As your tech company considers working with the federal government, but has concerns about giving up its intellectual property (IP), listen to the latest episode in our podcast series where we address best practices for negotiating contracts, classifying and tracking projects, and protecting your rights.
Joining Craig Hunter in this episode is Cherry Bekaert’s Brendan Halloran, who has several years of experience working with the government in the Defense Contacting Management Agency. Together, they discuss areas a contractor should be mindful of when proposing or negotiating a contract with respect to the protection of IP as well as future potential commercialization of a technology.
Being aware of contractual issues and rights at the front end can help ensure a positive outcome for both parties. This podcast will get you thinking about the crucial steps to take for your tech company to stay protected and succeed.
Catch up on the first four episodes of this series:
- Should Your Tech Company Work with the Government?
- How Tech Companies Can Successfully Capture Federal Business
- Your Technology Company Won Its First Contract - Now What?
- The Keys to Sustaining Growth Through Compliance: Government Contract Compliance Checklist for Tech Companies
In this podcast series’ previous episode, we mentioned the need for tech companies contracting with the federal government to have an approved accounting system to properly accumulate and allocate costs, as well as how to bill costs to the government. In this context, the system isn’t simply ERP or an accounting software package, but rather the people, processes, controls and training that comprise an organization. If you’re just getting into working with the federal government, you might be asked to get an approved accounting system in compliance with SF1408 Pre-Award Survey of Prospective Contractor (Accounting System).
Listen as Craig Hunter and Eric Poppe from Cherry Bekaert’s Government Contracting team cover various topics to consider for your company’s compliance:
- Direct vs indirect costs
- Allowable vs unallowable expenses
- How to adjust your current system to track contract costs
- Who the key players are as you work through a contract
Be sure to stick around for the next episode in this series, which will address an important area of concern for many tech companies: protecting commerciality and intellectual property.
And if you haven’t already, be sure to catch up on the first three segments of this series:
- Should Your Tech Company Work with the Government?
- How Tech Companies Can Successfully Capture Federal Business
- You've Won Your First Contract - Now What?
So your technology company has won its first government contract. Now what? Do you have a full understanding of the nuances and reporting requirements that come with that contract award? The government understands that it’s dealing with taxpayer money, so all costs need to be reasonable, allocable and allowable, and there’s a lot to uncover behind these terms.
Join Cherry Bekaert’s Craig Hunter and Eric Poppe for the third episode of this podcast series, as they compare the three major contract categories in which companies can engage, and how costs and reporting must be handled. They’ll also talk about the number one cultural hurdle tech companies must address when they are new to government contracting.
Stay tuned for our next episode which outlines several important areas that need attention to stay compliant with the government.
If you haven’t already, be sure to catch up on part one and part two of this series:
- Should Your Tech Company Work with the Government?
- How Tech Companies Can Successfully Capture Federal Business
Joining us for the second episode in a series of podcasts exploring options for tech companies to work with the federal government is Joe Salgado with Red Team Consulting. He speaks with Craig Hunter, a leader in Cherry Bekaert’s Government Contractors practice, about how tech companies actually go about capturing business from the federal government.
Craig and Joe discuss:
- 4 ways tech company leaders can educate themselves about working with the federal government
- Understanding the Request for Proposal (RFP) process
- The differences between acting as a prime contractor and a subcontractor as well as what experience is needed to bid on federal work
- Joint venture considerations
Stay tuned for our next episode which dives further into what the next steps are once you’ve won your first contract.
If you haven’t already listened, you can catch up on part one of this series:
- Should Your Tech Company Work with the Government?
As a tech innovator, you are focused on continually finding ways to meet the needs and improve the experience of your end user, whether your core customer base is consumers or business entities. But have you considered the world’s largest customer – the U.S. federal government?
In this first episode of a series of podcasts exploring options for tech companies to work with the federal government, Michael Valerio, Cherry Bekaert’s Technology Industry Practice Leader, and Craig Hunter, a leader in the Firm’s GovCon practice, discuss how or even why tech companies may want to consider this option.
They cover:
- Different levels of procurement for selling goods and services
- Small businesses advantages when searching for government contracts
- How to get support from the government to foster innovation
- Differences between various contracting arrangements
In future segments, we will dive into the topics of capturing federal business for your tech company as well as what we’re seeing the government purchase.
As 2020 comes to a close, there are three key areas all technology companies should evaluate for the purposes of smart tax planning. Join Cherry Bekaert’s Eric Pilcher and Sarah McGregor as they discuss opportunities that are particularly important for the tech space. They’ll explore the benefits of both cash and accrual accounting methods, how research & development (R&D) credits can be monetized, and what the Qualified Small Business Stock means for companies seeking funding.