Milwaukee-area businesses are more optimistic about their fourth quarter performances than they have been in any quarter in more than four years, according to the Metropolitan Milwaukee Association of Commerce (MMAC) Business Outlook Survey.
The survey respondents’ sales and employment expectations rose from third quarter forecasts, while profit expectations held steady.
"Sales and employment expectations for the year’s fourth quarter are as high as they have been since before the 2001 recession," said Bret Mayborne, the MMAC’s economic research director. "Survey results suggest that accelerating growth is likely in the metro area for the remainder of this year and into 2005."
Seventy-five percent of surveyed businesses foresee rising real sales levels for the fourth quarter (compared with the fourth quarter of 2003), up from the 70 percent who forecast third-quarter gains.
The percentage of businesses predicting quarterly sales increases reached its highest level since the second quarter of 2000.
Only 9 percent of the respondents foresee declines in fourth-quarter sales levels, while 16% expect no change.
The bullish projections in the new MMAC survey surprised Karen Vernal, president of downtown Milwaukee-based Vernal Management Consultants LLC, who is not convinced the local economy is so robust.
"It really depends on the client’s organization and industry. I just met with a client who projects that it will be at least 18 months before they believe they will be even close to the level of profitability they were at before 9/11," said Vernal, who is a member of the MMAC’s Council of Small Business Executives (COSBE) board of directors.
"There are some that are cautiously optimistic and beginning to take a look at adding staff. But I really think it is very industry-specific. It’s spotty, it really is," Vernal said.
Vernal candidly suggested that she is wondering if some of the responses to the MMAC survey were politically motivated, as in attempting to validate President George W. Bush’s claims that the economy is in full recovery.
"Frankly, I’m wondering if any of the responses are politically influenced. I’m just asking the question. That’s the message the (Bush) campaign puts out, and I’m fascinated with those kinds of (poll) results at this time of year. Especially this year," Vernal said.
Mayborne didn’t’ entirely dismiss the notion that some respondents to the survey might have political motivations, but he said the overall results could not be heavily skewed by such shenanigans.
"I’ve been here almost 20 years, through a couple of different administrations, I guess," Mayborne said. "I’ve never noticed anything per se, but I haven’t looked for it. I doubt that it’s that direct. It might be kind of an underlying thing that they think the (economic) record needs to be corrected, but the numbers have been sneaking up since late last year.
"There may be a little bit of added optimism in there because of the political element, but no. I just think we’re on a ramp-up," Mayborne said.
Regardless of their motivations, manufacturers expressed particular optimism for the upcoming quarter in the survey. Eighty-five percent of the responding manufacturers project see fourth-quarter sales gains.
By employment size, 78 percent of large companies (100 or more employees) surveyed foresee fourth-quarter sales gains, compared with 71 percent of small companies.
Profit expectations for 2004’s fourth quarter were virtually unchanged. Sixty-two percent of all businesses surveyed project increases in fourth-quarter profit levels compared with year-ago levels, only marginally lower than the 63 percent who expected third-quarter profit gains. Twenty-one percent expect declines in fourth-quarter profits, while 17 percent expect no change.
The percentage of businesses forecasting fourth-quarter 2004 employment increases vs. year-ago levels (52 percent) outnumbers the proportion those expecting job declines (16 percent) by more than a three-to-one margin. That response was a significant improvement over the 37 percent who had predicted third-quarter job gains.
Employment in the metro area’s manufacturing sector may also be back on track after more than five years of job decline, according to the survey. Manufacturers expressed more confidence toward fourth-quarter employment increases (59 percent) than non-manufacturers (48 percent).
Currently, non-manufacturers and smaller employers anticipate higher average employee wage and salary increases than manufacturers and larger employers.
Optimism toward future sales gains continues into 2005 among the survey respondents. Eighty-two percent of businesses expect increases in real sales levels for 2005, while only 6 percent expect declines. Twelve percent foresee no change.
The Business Outlook Survey, conducted by the MMAC, contains responses from 119
Milwaukee area firms, both large and small, employing more than 55,800 people. The quarterly survey is reported first exclusively by Small Business Times.
October 1, 2004, Small Business Times, Milwaukee, WI
New MMAC poll is strongest since 9/11
Columbia Savings & Loan plans new facility
Columbia Savings & Loan Association plans to become the first minority-owned financial institution in Milwaukee to build a new facility for itself.
Milwaukee historian John Gurda said he does not know of any other minority-owned financial institutions that have built their own facilities. Previously, African American-owned banks in Milwaukee have occupied buildings originally built by someone else, said Wisconsin Black Historical Society executive director Clayborn Benson.
Established in 1924, Columbia was the state’s first African American-owned financial institution, Benson said.
Currently located at 2000 W. Fond du Lac Ave., Columbia Savings & Loan is acquiring the rest of the triangle-shaped property bounded by Fond du Lac Avenue, North Avenue and North 20th Street. The firm owns a 2,400-square-foot two-story building at the N. 20th Street and Fond du Lac Avenue corner of the triangle.
Columbia is buying 11,400 square feet of land at the Fond du Lac Avenue and North Avenue corner from the City of Milwaukee. In addition, the firm is working to finalize deals for a few privately owned lots in the triangle, said Columbia president George E. Gary.
Columbia plans to build a two-story, 10,000-square-foot facility, including the basement, on the land it is purchasing from the city. The project will cost about $1.5 million, Gary said.
"I really want to make this happen," he said. "We want to become a full-service institution. We want to bring more financial services to the community, and to do that, we need more people and space."
Columbia provides savings accounts, certificates of deposit, home mortgages and some commercial real estate loans. Home loans account for about 85 percent of the firm’s revenue, Gary said.
The savings and loan plans to add checking accounts, consumer loans and business loans, Gary said.
The firm also plans to add 10 additional employees over a five-year period to provide the new services. Currently, Columbia has eight employees.
Construction of the new facility is expected to begin in April and be completed by the end of 2005, Gary said.
Columbia plans to begin offering checking accounts to its customers on a small scale before the new facility is completed.
"Right now, we want to concentrate on getting our checking accounts up and running," Gary said. "I’m going to try to get that started before we move into the new building, rather than waiting to start it until after we open. Then, when we move, we will have experience and good working knowledge."
Columbia still plans to keep its current building and use it for storage and other services after the new one is opened, Gary said.
The new facility will include three drive-up lanes and a drive-up ATM lane, amenities the current facility does not offer.
The project also will add about 35 to 40 parking spaces between the new and old buildings.
The company’s current parking lot, which Columbia owns, may be developed eventually, Gary said.
The institution also is considering a name change to reflect the additional services. Savings and loans were not allowed to offer checking accounts until the late 1970s, and some customers may assume Columbia does not offer that service, even after it is added, Gary said. Therefore, the institution may become a savings bank, he said.
"We have to give that some more thought," he said. "I don’t think we ever want to give up the ‘savings’ in the name. We like being one of the largest thrifts in the state."
Columbia has not made final selections of an architect or a general contractor for the project.
Some contamination must be removed from the building site. Columbia and the city are applying for a $75,000 brownfield cleanup grant from the Wisconsin Department of Commerce. The property Columbia is buying from the city was once the site of a King Furniture store. The contamination is from fill that was placed in the ground after that building was demolished.
Columbia Savings & Loan has $19.5 million in assets. The firm had $4.5 million in assets in 1974.
"Our growth has been slow," Gary said. "We don’t go after the big jumbo deposits like some banks do."
That may change as the institution continues to grow, he said. Columbia had its best year for net income in 2002, with $179,270. Net income dropped to $80,753 last year, largely because Columbia purchased $60,000 to $70,000 in new computer equipment, Gary said.
This year, Columbia’s net income already is at about $150,000.
"This year, we are far ahead of our projections," Gary said.
Columbia’s success and longevity is a result of a long-standing commitment to customer service, which has resulted in repeat business and word-of-mouth promotion, Gary said.
The support of the savings and loan’s customers has helped the firm survive through difficult economic times.
"Columbia is an institution that survived the Great Depression," he said. "When we were faced with double-digit inflation in the 70s and 80s, Columbia sailed through with a profit every year except for one. In the 1990s, our profits started to exceed $100,000.
"We like to think we did a good job because we got repeat business that helped us grow. They came back, and they recommended us to other people. I think over the years we have developed a very loyal customer base. Our customers come from all over the city," Gary said.
Columbia moved to its current location in 1958 after construction of Interstate 43 forced the firm to leave its previous location at North 8th Street and North Avenue.
When the firm moved in, the neighborhood was a thriving business area. However, the neighborhood later declined, especially after a Sears store left what is now the Milwaukee Mall building at North and Fond du Lac avenues.
The area has improved some in recent years. Columbia Savings & Loan has helped by providing loans for some of the homes built in the area, continuing a mission from the firm’s beginning.
Ardie and Wilbur Halyard founded the savings and loan 80 years ago to provide home loans for the city’s African American residents.
Now Columbia is planning another significant contribution to the community by adding more financial services and more jobs.
The firm strives to help improve the lives of its customers, Gary said.
"We want to continue to encourage the residents of this community to save and invest to build a future for themselves and their families," he said.
Info box:
Columbia Savings & Loan Association
Founded: 1924
Location: 2000 W. Fond du Lac Ave., Milwaukee
Assets: $19.5 million
Year-to-date net income: $150,000
Number of employees: 8
October 1, 2004, Small Business Times, Milwaukee, WI
Employees buy out Central Office Systems
When five long-time employees of Central Office Systems purchased the company from founder Stan Cozzuli this summer, they knew the New Berlin-based office supply firm was a sound investment.
However, they didn’t anticipate that their investment would pay off so quickly.
After about three months of overseeing all of the company’s operations, Central Office Systems’ revenues have increased by 200 percent.
The five owners, each of whom manages the department they work in, said the addition of sales manager Rob Lyons, who started with the company in May, has been a key component to that growth.
"A big part of that (growth) is Rob, who worked with us before," said Herb Schrank, the company’s warehouse manager and one of the five partners. "When we sought out a sales manager, we knew it should be someone who knew our customers and knew how our operations worked."
Even though the decision to hire Lyons was made before the company was officially purchased by the group, it was one they arrived at together, like all major changes the company has made since the new ownership team was formed.
"We all have our own specialty," said Kathleen Simonis, one of the partners who is also the company’s business manager. "The large capital things we work on together."
Central Office Systems has been in business for more than 30 years, selling office equipment such as photocopiers, fax machines and scanners, as well as maintenance and supplies for those machines.
The company has been at its 6,000-square-foot New Berlin location for about one year after moving from a Brookfield location.
All five of the company’s new owners said the comfort level they have with each other after working together for many years was one of the attractions to purchase the business from Cozzuli earlier this year.
Perry Bartkiewicz, one of the owners selected to serve as the company’s president, said the diversity of the ownership team’s areas of expertise is critical to the firm’s success.
"It’s more of a family type of business," Bartkiewicz said. "And since last September, we have been real involved in the whole picture of the business, the flow of revenue and product. We were kind of running the business since last October."
Simonis said having the department managers take a more active role in the day-to-day operations at Central Office Systems was one of the factors that led them to think about making an offer to Cozzuli to purchase the company.
"We were able to make it more profitable month to month," she said. "We saw that we could do it ourselves, and we approached Stan. We saw that he was ready to turn the company over."
Although Cozzuli has sold the company, he has stayed on as an employee in its sales department. While he doesn’t work every day, Charles Jewell, a partner who works as the company’s marketing director, said the former owner is serving an important role.
"Stan is still involved in the business, and that’s important for us," Jewell said. "He has a lot more experience than we have. And sometimes we’ll pass things by Stan. A lot of times, what looks like a golden egg will be rotten on the inside."
While the sale of the company was completed July 1, it was not something that came about quickly. The five partners proposed the sale last December.
Each needed to come up with about $20,000, their share of approximately $100,000 they would use as a down payment for the company.
The partners declined to disclose what they paid for the company, but said they were able to purchase it though a U.S. Small Business Administration loan and financing through Waukesha State Bank.
Jewell said all of the partners had to expose themselves to a bit of risk with the company acquisition, but the roll of the dice was the right decision.
"Our necks are long and thin," Jewell said. "But with 200 percent growth, it’s worth it."
The company is expecting about $2 million in revenues for 2004, Jewell said.
The new partners also had to take on some liabilities with the purchase of the business, Simonis said. Specifically, one-year maintenance contracts that were signed before July 1 were seen as a liability because money had been taken in, but the company was still obligated to send workers and parts for machines needing service within the contract period.
Simonis and other partners said the purchase was made as easy as possible because the new partners and Cozzuli used the same accounting firm during the acquisition process.
"They made sure everything balanced out, and no one felt cheated in any way," she said.
Bill Berkhahn, the fifth partner and service manager, said having the same accountant on both sides ensured that all details of the transfer were worked out seamlessly.
"We were closing on a Friday, and we were here until midnight on that Wednesday," he said. "We were looking at all of the last little details until the last moment."
The ownership transition has been relatively seamless for the company’s employees and its customers, Simonis said.
"We sent letters to specific vendors and anyone we’ve had contacts with," she said. "And with most of our customers, it’s been verbal, because it was a friendly acquisition."
Even though the change was made as smooth as possible, a few changes have been made throughout this year.
Aside from hiring Lyons to head up the sales team, several other sales specialists were hired, helping to increase the firm’s sales numbers, Jewell said.
One of the specific areas in which the company has seen an increase has been through the sale of a new product, the Konica/Minolta Business Hub C350, a color and black-and-white copier that also scans, prints and collates.
"We’ve got more order placements than any other dealer in southeastern Wisconsin," Jewell said.
New owners
Central Office Systems recently was purchased by a group of five department managers who have a combined 76 years of service with the company. They are:
* Kathleen Simonis – Business administrator, has been with the company 20 years.
* Bill Berkhahn – Service manager, has been with the company 17 years.
* Charles Jewell – Marketing manager, has been with the company 17 years.
* Herb Schrank – Warehouse manager, has been with the company 16 years.
* Perry Bartkiewicz – Company president and service manager, has been with the company eight years.
October 1, 2004, Small Business Times, Milwaukee, WI
Investing in a ‘smaller’ world
You’ve all heard the phrases: "The world is shrinking" and "We live in a global village." While advances in technology and transportation have slashed the time it takes to communicate and travel, they haven’t changed the age-old fact that much of what happens around the globe is driven by the relationship between people and where they live.
Geography is not just a "Jeopardy" category. It doesn’t exist so contestants can pinpoint the Sea of Okhotsk or Sierra Leone under pressure. It is the discipline that links the study of human societies and natural environments in a way that helps us understand today’s events – and tomorrow’s mega-trends.
That message was delivered by noted geographer H.J. de Blij of Michigan State University in a recent presentation to the State of Wisconsin Investment Board, the state agency that invests the assets of the Wisconsin Retirement System, the State Investment Fund and all other state trust funds. In total, SWIB has about $70 billion under management.
Why is an investment board – granted, one of the largest of its kind in the country – hearing from a geographer? Understanding the forces at play in the world today could help determine how, and where, those assets are invested.
A native of the Netherlands and the co-author of books such as "Concepts and Regions in Geography," de Blij consistently tells audiences that understanding the layout of the world is essential to anticipating and solving problems. He sees four major challenges to the United States in the 21st century – and each is linked to geography. Here’s a summary:
Catastrophic environment change
The next 25 to 50 years will see the world get dramatically warmer, to the point that sea levels will rise and continental climates will change. Unlike many environmentalists, however, de Blij doesn’t blame it on purely on human activity. Natural changes in the Earth’s climate – such as the Ice Age that shaped Wisconsin’s landscape thousands of years ago and, more recently, the "Little Ice Age" that changed history in Europe 700 years ago – are largely beyond human control.
"This is nature’s grand design. If we think we can stabilize the climate by plugging up the exhaust pipes of cars or shutting down coal-fired power plants, we must think again," de Blij said. "That doesn’t mean we shouldn’t clean up, but just don’t expect a (climate-related) reward for the effort."
World leaders should nonetheless be stepping up efforts to move from a carbon-based economy to a hydrogen economy (fuel cell technologies), and preparing for rising waters in coastal areas. If two-thirds of the Netherlands can exist below sea level, de Blij said, it’s possible to protect coastlines elsewhere.
The geography of terrorism
From the schoolhouse slaughter in Beslan, Russia, to attempts by Islamic radicals to regain the lost borders of Islam, the study of geography can help explain why much of the world appears under siege. Whether it is religious fundamentalism or "the last wars of de-colonialization," explained de Blij, the world is living today with maps altered by conquests and politics hundreds of years ago. Those maps don’t always mesh with the geographic realities of where human societies developed.
"It makes me quite pessimistic about some form of compromise," he said.
Managing relations with China
Even as climates change, China will be able to cope because of its proximity to vast food-producing regions. It has not surrendered historic claims to land in present-day Russia, however, and there’s a belief among many Chinese that the United States is thwarting its natural order in the world.
"This relationship will develop more Cold War overtones" before it improves, de Blij said.
Making Africa a priority
Having spent years on the continent, de Blij described Africa as "a fractured state where there is neither a dominant state nor a dominant belief system." The Islamic movement is spreading south from the sub-Saharan region, and it is the only place in the world today where food production is falling. It is a continent still rich in natural resources, however, including oil, uranium, cobalt and platinum.
Because colonialism helped create many of the problems in Africa today, de Blij said, "the world owes Africa a break" and should do its best to help stabilize the region.
Viewing the world in geographic perspective will help to explain the momentous political, social and economic transformations under way. We may live in a global village – but that village still has many neighborhoods.
Tom Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison. He writes a regular column for WisBusiness.com, a business news media partner of Small Business Times. Additional content is available at www.wisbusiness.com.
October 1, 2004, Small Business Times, Milwaukee, WI
SBA report says Wisconsin is poised for growth
Wisconsin’s education system will help its economy grow better than most Midwest states in the 21st century, according to a report released recently by the U.S. Small Business Administration.
Patrick Rea, administrator of the SBA’s Midwest region, said Wisconsin is second only to Minnesota in the report for economic growth potential, largely because of its high-quality education system.
The report, titled, "21st Century Jobs and Entrepreneurship in the Midwest: A Study Capturing the Future of the Heartland’s Economic Landscape," was based on information from larger national reports commissioned by the SBA, including the Rand Report, a nationwide report completed earlier this year. The Rand Report was commissioned by the U.S. Department of Labor.
The "21st Century Jobs" report states that the Midwest and Wisconsin may have slower economic growth than other parts of the nation because the region has less access to immigrants than other areas. However, the region does have some economic advantages, according to the report.
"The industrial strength of the heartland will be (part of) its strength into the 21st century," Rea said. "While (our growth) will not be the same as the rest of the nation, we will have enough to be a major competitor to provide the new workers for industry."
The SBA’s Midwest region includes Wisconsin, Minnesota, Illinois, Michigan, Indiana and Ohio.
Wisconsin’s technical college program in particular drew high praise from Rea.
"The one in Green Bay (Northeast Wisconsin Technical College) may be among the best in the country to train 21st century workers," he said. "And Racine has a historically strong one (Gateway Technical College)."
Despite the praise, Wisconsin and the Midwest have issues pertaining to education that need attention, Rea said.
The Midwest’s rate of residents with at least a bachelor’s degree was about 26 percent in 2003, compared with almost 27 percent for the nation. Wisconsin’s rate was about 24 percent for the same year.
However, high school graduation rates in both the Midwest and Wisconsin remain better than national averages. Wisconsin graduated 88.5 percent of its high school students in 2003, compared with 88 percent in the region and 86 percent in the nation.
"The Midwest stands at a very interesting opportunity to capture the 21st century jobs and new entrepreneurships," he said. "And those will be based on an excellent education. Wisconsin is better off than most and will have to continue to emphasize that."
October 1, 2004, Small Business Times, Milwaukee, WI
Wired for growth
The Waukesha County Economic Development Corp. (WCEDC) recently finalized a $100,000 loan to Wisconsin Wire Works to help pay for the company’s $1.1 million expansion and relocation.
Wisconsin Wire Works, which makes custom copper and copper alloy for welding, moved in February from a 7,500-square-foot building in Muskego to a 33,000-square-foot building in Wales.
The loan given to Wisconsin Wire Works was part of WCEDC’s Revolving Loan Fund, which is capitalized through the Urban Counties Program of the U.S. Department of Housing and Urban Development.
Wisconsin Wire Works also received loans from the U.S. Small Business Administration and Park Bank for the remaining $1 million in financing for the project. The money will help pay for the new building and machinery.
The company has purchased several pieces of new equipment in the months just before and after the move. Some of the new equipment has arrived in the last month.
In addition, the firm has hired two additional employees this year and may add one more by the end of the year.
Wisconsin Wire Works was founded 10 years ago. Back then, the company had no employees, other than the five partners who started the business. And one of them was a silent partner, leaving four men to work inside their newly leased commercial building in Muskego’s industrial park.
The company was not ready to send its first shipment of wire until nine months after it was founded, making for some quiet times in the shop.
"We washed our cars a lot," recalled John Turriff, one of the three partners who are still active in the business. "And we washed our spouses’ cars a lot."
The partners had decades of wire manufacturing business experience behind them, and each specializes in different areas.
"We put all of our resources and knowledge together," he said. "We had a good combo to cover all the bases, and penetrate the market."
Turriff, Tony Olveda and Rob Pearson still show up for work at 7 a.m. each day, but they’re not the only ones working in at Wisconsin Wire Works anymore. The firm now has six other full-time employees helping to run the company’s fleet of machines.
The company’s new Wales building, a former tool and die shop, is more than four times the size of its former location in Muskego.
Turriff said space constraints in Muskego were one of the things that limited the amount of orders the company could handle. Because of the lack of storage areas, Turriff said, he and his workers regularly stored materials outside while they were working, only to have to bring them back inside at the end of the day.
"It could be pretty rough," he said. "We had to be cognizant of our ordering so it didn’t get in the way of operating (the machines)."
Wisconsin Wire Works’ products are used for making welds in the automotive parts and supplies, mining, ship-building and defense markets.
Sitting near the company’s loading docks are large spools of wire, which are stretched, heated and coiled to customer specifications.
The company also does some fabrication for customers that need welding done but lack space or qualified welders.
Moving to the larger space has provided room for the company to add the new machines. Those, in turn, will enable it to produce more wire, which has Turriff thinking the company will grow its net income in 2004.
"This year, I think we’ll do about 50 percent better in sales," he said. "The potential is there if we can get the material out fast enough."
Last year, the company shipped about 500,000 pounds of finished product. Turriff is predicting it will ship at least 650,000 pounds in 2004.
"This is going to be a good year for us," he said. "And that’s with the move in there."
All of the company’s machines that were housed in the old location had to be taken apart before they could be moved, adding more time to the process, Turriff said.
Turriff said the company had been looking to move for several years before it found its new location in Wales. The firm had even considered constructing its own building in Washington County.
"We sort of jumped on it – it was the right fit," Turriff said. "It’s hard to find a long building. And this one was 240 feet in length. It was one of the longest we could find."
The company needed a long building because some of its machines require a significant amount of length, some with wire stretched in the air more than more than 30 feet.
Turriff said the company’s expansion over the past year will satisfy its needs for now and into the near future, but he is not ruling out additional growth.
"And our cars are a lot dirtier now," Turriff said.
The WCEDC focuses on helping existing business in Waukesha County grow, rather than trying to attract businesses from around the nation to move to the county, said Bill Mitchell, president of the organization.
"Helping them expand is a heck of a better investment," Mitchell said.
Since its inception, the WCEDC’s Revolving Loan Fund has created or retained more than 90 jobs through loans to 41 businesses, totaling $4.1 million.
"We’re in business to help Waukesha County, and this is one way that happens," Mitchell said.
Info box:
Wisconsin Wire Works
Owners: Tony Olveda, Rob Pearson and John Turriff
Location: 319 Universal St., Wales
Product: Copper and copper alloy wire for welding
Founded: 1994
Web site: www.wisconsinwireworks.com
October 1, 2004, Small Business Times, Milwaukee, WI
The check is in the e-mail
As the Oct. 28 enactment of the Check 21 federal banking regulation looms, many southeastern Wisconsin banks are contemplating how the system may help them provide new and more efficient services to their business clients.
For the past year, banks throughout the nation have been preparing for the Check Clearing for the 21st Century Act, a mandate from the Federal Reserve Board more commonly known as Check 21.
Check 21 will create a new system that will enable banks to exchange digital images of checks instead of the actual pieces of paper. The new law is intended to speed up transactions and reduce fraud.
"The important reason Congress was interested was the transportation aspect – getting things around the nation," said Steve Steiner, senior vice president of Brookfield-based North Shore Bank. "(Checks) are an important part of our commercial system, and during events like 9-11, checks were not moving."
Because the new system focuses on transmitting digital images of checks instead of the actual checks themselves, a natural disaster, large snowstorm or other event that could disrupt transportation networks would not necessarily shut down check processing, Steiner said.
Steve SaLoutos, senior vice president of commercial and consumer banking support services for U.S. Bank, said the company’s banks have been ready for Check 21 for months and already have enacted changes required by the new law.
"We’re fully compliant at this point," he said.
One of the largest changes from Check 21 for U.S. Bank has been the addition of digital cameras on check processing equipment in its processing centers. Those cameras take digital images of the checks, which can then be transmitted to different processing centers or other banks.
SaLoutos said the new technology purchased to deal with Check 21, a multi-million dollar investment, will allow customers, particularly business customers, to view digital images of their checks online. That feature will enable business operators to better keep track of checks written out and track instances of fraud earlier.
Terry Littel, deposit operations manager for Milwaukee-based M& I Bank’s corporate marketing, said the bank started ramping up for Check 21 in 2003, when it added the ability to view check images in its secure Web site.
"We’re looking at what types of products this might spawn," Littel said. "This will allow us to do more creative things for our customers, particularly our business customers."
Other than just viewing their cleared checks online, business customers also will be able to obtain software for account reconciliation, which can be used along with their online account statements.
"There are different programs they can use to help do that whole process more efficiently," she said.
Check imaging will create new opportunities for banks in the future, such as greater automation of deposits through corporate lock boxes, Littel said.
"With lock box services, there is a lot of area for improvement," Littel said. "The use of images and revamping of payments could be very beneficial to those services."
M&I Bank and U.S. Bank say they’ve already completed the needed changes to deal with Check 21 and check imaging.
Others, such as like Wells Fargo Bank and State Financial Bank, say changes will be started or completed by the end of the year.
"Our plan is to offer different systems that will be able to offer digital state-of-the-art technology," said Donna Bembenek, senior vice president of sales and marketing for State Financial Bank. "We’re in the process of looking at vendors to provide us with that. That will probably take us into next year."
Some banks are not going to have to make many changes at all to deal with Check 21.
Kim Seidel, vice president of deposit operations for Milwaukee-based Park Bank, said that because the company contracts with M& I services for its check processing, there were essentially no changes it had to make in terms of technology or training employees.
"Their support service center became image-enabled in 2003, and we went image-based on Jan. 1," she said. "For us, it was a gradual transition."
Park Bank, like most others through southeastern Wisconsin, has been focusing in recent months on consumer and employee education on Check 21.
"We are in the process," said David Baumgarten, president of Associated Bank in southeastern Wisconsin. "We’ve started by educating all employees in the bank and sending out information (to customers). As people in the public start reading about this, they start talking to our employees, who are now able to address the issues and how they will affect customers."
The new federal law ultimately will provide efficiencies for banks and their customers, according to Rose Oswald Poels, vice president of the Wisconsin Bankers Association.
"I do think the reality of both operational efficiencies and eliminating fraud will outweigh not participating," she said. "It will take some time for more and more banks to fully participate in Check 21."
Infobox:
Check 21
For information about Check 21, visit the following online resources:
The Federal Reserve Board: www.federeralreserve.com
Wisconsin Bankers Association: www.wisbank.com
Businesses will benefit from Check 21
By Eric Decker, of SBT
Changes mandated in the banking industry that will take effect Oct. 28 will mean a host of small changes for businesses, but they will also offer new opportunities for companies to better keep track of money.
One of the most important changes for business customers will be speed, according to David Baumgarten, president of Associated Bank in southeastern Wisconsin.
"When you make a deposit today, under Check 21, those funds will be good in your account tomorrow," he said. "That’s the positive. In the same line of thought, one caution we’re making to our customers is that as they write checks, they will clear a lot faster."
With current checks, several days often can pass before a check is processed and all funds are placed in a customer’s account.
Perhaps even more significant for businesses will be the potential elimination of the need to physically get to a bank to deposit checks into accounts.
John Jansky, business banking manager for Wells Fargo Bank Wisconsin, said bank customers may be able to digitally transmit images of checks to their banks at times they are not able to get there, such as during heavy snow storm.
"There will be a way to scan checks and transmit them directly to the bank," "Jansky said. "On a snowy day in Wisconsin, when you can’t get out and make a deposit, this way you can. This is some exciting technology to help business."
Other technology put into place to deal with Check 21 will give businesses and other bank customers better access to information about what has happened to checks they have written.
Steve SaLoutos, senior vice president of commercial and consumer banking support services with U.S. Bank, said the company has created a new, secure section within its Web site where customers can view images of their checks.
"If it is cleared, they can go to the site and within two or three seconds can view an image of their check," he said.
Many other banks that are fully converting to a check imaging system are offering their customers the ability to view checks online.
Terry Littel, deposit operations manager for M&I Corporate Banking, said M&I is also offering that opportunity, which business owners could use as another tool to help detect fraud.
"If they see suspicious activity, they can get in touch with whoever they need to as early as possible," she said. "Time is the most critical factor in terms of working through a fraud."
October 1, 2004, Small Business Times, Milwaukee, WI
BIZNOTES FOR 10/1/04
Express Personnel Services, Inc.
Express Personnel Services, Inc., Racine, has partnered with Kenexa, a provider of employee assessment tools. Kenexa’s products will allow Express Personal Services to help clients in their hiring of temporary and full-time workers using more than 800 assessments for clerical, software, call center, behavioral, financial, health care, industrial and technical job classifications.
The Pfister Hotel
The Pfister Hotel, Milwaukee, was chosen as one of the top 40 properties in a Best of MidAmerica reader’s poll for Meetings MidAmerica magazine. Consideration for the award was given to the quality of meeting space, guest rooms, staff, food and beverage service, amenities, activities and value. More than 140 properties in the Midwest were nominated for this award. Of the 40 selected, the Pfister Hotel was one of five properties selected in Wisconsin. The others were: Kalahari Resort in Wisconsin Dells, Radisson Hotel and Conference Center Green Bay, The American Club in Kohler and the Grand Geneva Resort in Lake Geneva.
High Velocity Communications, LLC
Caterpillar Inc., Peoria, Ill., has contracted with High Velocity Communications, LLC, Waukesha, for the publishing of a full-color quarterly magazine targeting heavy equipment machine owners in the construction, demolition, landscaping and other niche markets. The publication, "Tools@Work", has the objective of building awareness and preference for Cat Work Tools, including, buckets, blades, hammers, rippers, trenches and forks, in the aftermarket segment. The magazine will cover various work tool uses through customer testimonial stories. Work tool application tips, new product profiles and troubleshooting suggestions will also be included.
Menomonee Falls Chamber of Commerce
The Menomonee Falls Chamber of Commerce announced the availability of its 2005 calendar which features landscape photographs taken by eight members of the Menomonee Falls Camera Club. The calendars are available through the Menomonee Falls Chamber of Commerce and cost $10. Proceeds from the sales of the calendars will go to the Menomonee Falls Chamber of Commerce Tourism Committee to support the ongoing efforts of local tourism.
HNI Risk Services
Cyndi Gustavson, a customer service representative for HNI Risk Services, New Berlin, was awarded the 2004 National Outstanding CSR of the Year award for Wisconsin by the National Alliance for Insurance Education & Research, Austin, Texas. To qualify for the award, candidates submitted an essay on the topic, "Four Ways CSRs Make or Break an Agency." Entrants must also have demonstrated commendable service to their agencies, industry and communities. Gustavson has worked for HNI for more than 10 years.
Sales Automation Support, Inc.
The Sales Automation Support, Inc., New Berlin, has partnered with Broadlook Technologies, Pewaukee, in a distribution agreement. All of the Broadlook Technologies products will be compatible with Sales Automation Support’s product, Mobile Marketer.
Society of Automotive Engineers Milwaukee Section
Society of Automotive Engineers (SAE) Milwaukee Section has expanded its board members. New members include: Dale Wiza, chair, from Professional Engineering Placements; Joe Sagat vice president, from Modine; Bernard Krauska, secretary, from Borg Indak; Wayne Richter, treasurer, from MRI-Germantown; Tim Fauser, representative for membership, from Comtel; Dennis Webb, activities, from Badger Meter; Liz Sutton, math and sciences, from Discovery World; Dr. Chris Damm, student activities, from the Milwaukee School of Engineering; Mark DeBattista, programs, from Harley-Davidson; Glenn Bower, delegate, from the University of Wisconsin, Terry Freuhling, publicity, from Harley-Davidson; Mike Freisleben, mini-Baja, from HUSCO; Don Bercham, historian; and Bill Riebe and Bill Schultz, reception.
Southeastern Wisconsin Chapter of The Association for Women in Communications
The southeastern Wisconsin Chapter of The Association for Women in Communications (AWC) has announced its 2004-2005 board members. Elected to the following positions were: president, Sandy Krause of American Diabetes Association; secretary, Sandy Rusch Walton of City of Milwaukee Health Department; vice president of membership, Erin Reising of Trivera Interactive; co-vice presidents of programming, Mary Brophy of Jacobson Rost and Racheal Loppnow of American Diabetes Association; vice president of community outreach, Kristen Scheuing of International Bowling Congress; co-vice presidents of the awards program, Tamara Kriese of GMR Marketing and Dena Gehlhoff of Badger Association of the Blind and Visually Impaired; vice president of communications, Christina Steder of Winter, Kloman, Moter & Repp.
October 1, 2004, Small Business Times, Milwaukee, WI
Imagine Wisconsin in 2020, and let’s get it done
Wisconsin 2020. Let’s say we get it done. Let’s enact and implement all of the great ideas floating around Wisconsin on how to improve our economy.
First, let’s take a look at the list of what needs to be accomplished: capping the growth of government, regulatory relief, venture capital formation, eliminating the death tax, broadband adoption, linking the colleges and universities with the business community, finishing the Marquette Interchange, high-speed rail, K-12 reform (especially in Milwaukee), shared revenue reform, health care reform and the list goes on. Let’s say we get it all done in the next few years.
If we can, here’s what Wisconsin could look like in the year 2020:
Welcome to the future. We live in an innovation-based economy. Manufacturers, who have prospered, have found that they ensure their place in the supply-chain with their ability to change and adapt. Intellectual property, like special metal formulas or specialized manufacturing processes, is fused with their products. Worker productivity skyrockets with the adoption of new technologies.
There are no multiple phone numbers or devices, simply one tool that continuously is actively receiving information, including phone calls, e-mails, news updates and scheduling changes – all on the fly. There is a "cloud" of high-speed broadband service surrounding us, even while we are traveling 65 mph on the Interstate.
Odds are that people under 40 likely work for a start-up or a small company under 5 years old. Because we finally developed a robust venture capital network, our educational institutions (like WARF at UW-Madison) stopped looking 1,000 miles away for capital and decided to keep our companies and people in Wisconsin.
We are attracting talent, not exporting it. Our demographic nightmare, more people retiring than entering the workforce, is reversing itself.
Agriculture is robust. Research science and health management have contributed to next-generation foods and manufacturing processes that allow even higher food quality. Preventative care programs and health savings accounts have shifted the focus of health management from the health care provider to the individual.
People still work a lot, but their personal lives are more balanced because three generations now will live in Wisconsin, thanks to a new tax climate that has allowed it.
It would seem this dream has no impediment from becoming a reality; that smart people will win and Wisconsin wins for keeping them here. However, it will take hard work and tremendous energy.
We must stop shooting ourselves in the foot. We must get rid of the death tax, slow the growth of government spending and invest here at home.
We need to stop looking at the future as merely budget-to-budget. Rather, we should be making decisions now with the future in mind so that we are ready for the ensuing changes.
We must reform our government institutions. Our education system is strong, but it has a weak link. Unless the children of Milwaukee leave Milwaukee Public Schools, charter schools or choice schools with an excellent education, we will not prosper as a state. It is vital that those children are educated rather than incarcerated. Shared revenue must be reformed to focus on reducing the cost of government while still maintaining a quality of services.
Cooperation and consolidation efforts are difficult processes, but they are essential for local governments to keep the overall costs down.
And most importantly, we must have energy and a relentless commitment to growing Wisconsin.
State Sen. Ted Kanavas represents the 33rd Senate District, which includes Waukesha. He can be reached at (608) 266-9174.
October 1, 2004, Small Business Times, Milwaukee, WI
Project manager
Question: Recently, I have been assigned as a project manager to ensure we deliver what we promised to a new high-profile client. Doing so involves cross-departmental cooperation and teamwork. While I love the responsibility, the reality is I have no authority to tell them what to do. Do you have any suggestions for negotiating outcomes?
Response: First of all, congratulations on being selected to facilitate the team. You obviously have special talents and abilities, otherwise you would not have been selected to lead such a high risk project.
It sounds like your team is made up of departments, each of which have special functions such as sales, marketing, manufacturing/operations, finance and accounting. The value of this type of multi-functional team is that is promotes efficiency and facilitates direction and control over communications and tasks.
For example, each of these departments might be involved to some degree in fulfilling the deliverables.
Sales made the contact with the customer and secured an agreement to move forward with the plan. They understand who the players are, what the expectations are and the buffer space you have for re-negotiating different stages of the deliverables.
Marketing may be responsible for scheduling and overseeing the special promotional discounts to each region the customer competes in.
Manufacturing and operations produces the products and arranges for delivery. Finance and accounting makes sure the invoices are correct reflecting the special pricing, terms, etc.
Because of all the details involved, it’s easy for mistakes to happen. That’s why a project manager is needed.
The difficulties involved in leading a cross-functional team typically fall in three areas:
Conflict. It’s bound to arise. Why? Because each department has specific rules and objectives they are required to meet. The scope of the customer’s project may come in direct conflict with these and as a result, the project will challenge standard protocol, causing delays until these issues are worked out.
Furthermore, the reward system that is in place may not take into account the work they are required to do for this customer. As a result, they are forced to make decisions about what is most important to them, their family or the customer. And depending upon the experience and success each person has had in working in this type of team situation, they may lack the patience and understanding needed, as each person will bring a particular viewpoint to the table: their own.
Competency. Team members do not have the authority to tell others what they need to do. Rather, they need to be persuasive and influence the decisions and actions of others. Some managers will be more effective at this than others. When deadlines are looming and patience is thin, people will start directing rather than influencing, which is likely to cause resistance.
Lack of experience and infrastructure. When people do not have a model or experience for how something should work, they are naturally skeptical. As a result, artificial walls or hurdles may develop, causing wasted energy to be invested in non-productive outcomes.
Each of these issues speaks to the value and need for you to oversee and facilitate each meeting with a clear agenda. Be sure to establish clear ground rules regarding how people communicate with one another. For example, one ground rule may be that no one interrupts another person when they are speaking. Or, when people get hot under the collar, you assume the role as mediator in which all communication is directed to or through you rather than with one another.
Here are 10 tips to help you negotiate and navigate your way through this project:
1. Establish team goals. At the onset, explore each department’s desire to see this project through to success. Have them communicate out loud the value of a successful project from their perspective. If you think it is appropriate, you may even want to craft a team mission statement that defines the goal(s) of the project.
2. Clarify everyone’s role and responsibilities. Before getting too far into the project, take a preliminary walk-through of the project, mapping out the expectations, responsibilities and deliverables of each department as best as you can up front. Be sure to identify each handoff from one department to another as specifically as possible, and the communication needed to make sure it is clean and easily executed from a systems standpoint.
3. Develop standards of performance. Determine as a team what are acceptable standards of performance, what are not and how you will work together to ensure your standards are consistently achieved. This includes product, service and teamwork.
4. Secure senior management support. At every critical step, debrief with senior management to ensure they are in the loop regarding the steps the team is taking and secure their approval for moving forward. This is especially important when departmental rules and processes must be tweaked for the project to advance.
5. All team members must contribute. It’s important that each team member feel that he or she has an equal voice in the process. The value of bringing together a multi-functional team is that people will see the project from different standpoints and therefore, will identify different issues and opportunities. It’s important that each person feel they not only have permission, but are also required to contribute to the team’s planning and implementation process.
6. Design a process for handling conflict. Then, use it. Minor issues can turn into major hurdles if even one or two team members feel slighted or negated. Be sure to develop a process in which all voices are heard and decisions are made by group consensus. Define what consensus means – is it 50 percent of the votes, 70 percent, 90 percent or 100 percent?
7. Recap agreements and action steps. Following each meeting, send an e-mail to all parties, including top management, to recap the discussion points, follow up on action steps, unresolved issues/hurdles and a tentative agenda for the next meeting. Keep a binder with each meeting’s notes so you can reference past conversations and information when needed. Also, consider asking someone outside of the team to serve as a recorder to capture the key points of the discussion. This will enable you to maintain laser sharp focus and you can be more effective in facilitating the group’s discussion.
8. Don’t play favorites. While we all have people we prefer to work with, be careful about showing favoritism. This will alienate other members of the team and will undermine your credibility as an objective facilitator/project manager.
9. Get to know the team individually. It’s easier to facilitate conversation and resolve issues when you have a personal connection with the players. Take time to meet with each member of the team individually. Meet for breakfast or lunch so you both have some time to sit back and relax. Get to know them personally. What silent strengths or areas of expertise do they possess that you didn’t know about? What is important to them about the outcome(s) of this project? What recommendations do they have about how to make this work? This extra effort will pay great rewards down the road.
10. Speak clearly. Be careful about using too many technical terms. Be mindful of the players represented and, where appropriate, interpret language so everyone in the group is on the same page. While it is our hope that group members would ask questions when they don’t understand something, it’s not unusual for people to just shut down. This is counter-productive.
While this seems like a long list, these skills will become second-nature to you once you use them. It sounds to me as if this project could be a turning point for you in your career. Once you demonstrate your competency as a skilled project manager and facilitator, the options for you to lead are endless. Best of luck.
Christine McMahon is the owner of Christine McMahon & Associates, a training and coaching firm in Milwaukee. She can be reached at (414) 290-3344, via fax at (414) 290-3330 or e-mail her at:ccm@christinemcmahon.com.
October 1, 2004, Small Business Times, Milwaukee, WI
How do you rate as a CEO?
The Executive Committee (TEC) speaker Walt Sutton has spent the last 50 years as either a chief executive officer or a consultant to other CEOs.
He’s a guy with a very soothing, reassuring demeanor. He doesn’t carry a big stick, but when he speaks, you can hear a pencil drop in the meeting room (yes, some of us still use pencils). So this month, let’s hear from Walt.
He has nine keys for CEOs-kind of the bottom line on how to really distinguish yourself in this very lonely arena.
I have to be candid here. I’ve done a good job over the past 14 years as CEO of TEC in some of the areas he mentions. I’ve not done as well in some of the other areas. Our TEC staff and chairmen (about 40 professionals) would attest to this, I’m sure.
Here’s how it works. Give yourself a score on a point range from 1 (poor) to 10 (outstanding). I’ll share my own score along the way. I promise to be honest if you do too.
Tip #1: Survive.
We’ve all heard the story that most business start-ups disappear within the first five years. Why do the others survive? Because the owner, the chief visionary and architect of the concept doesn’t give up.
When Bob Nourse started TEC in 1957, he was building a business that his advisers said had insurmountable odds of succeeding. They warned that he, too, had some major personal obstacles such as his age, 57, and the fact that he had already failed as the CEO of a family business.
I was given the same advice by another group of advisers in 1973. They said that at age 30, I was too young and had no business experience. Neither one of us ever even thought about giving up. I give myself a 10 on this one. How about you?
Tip #2: Make the deals.
Walt believes that businesses are, for the most part, a bunch of successive deals, successive negotiations and successively smart compromises. The CEO’s job is to accept give-and-take to work for win-win and to stay above the fray of it all. It’s hard. Losing your cool is so easy. Actually, when we lose it, we’ve lost it for others around us as well. I give myself a 6 on this one. How about you?
Tip #3: Find and navigate the river of cash.
It sounds so simple, doesn’t it? In a recent column, I went into detail about how to do this, so I won’t belabor the point. A business runs out of cash for several reasons. It over-commits to its markets at cost points that can’t be justified. It builds for tomorrow, and tomorrow never happens. Its ownership bleeds its cash resources at the expense of the business. These are the major ones. I give myself an 8 with respect to cash management. How about you?
Tip #4: Bear debt and allocate profit. Regardless of whether the CEO owns the company or not, it’s critical that he or she personally feels responsible for the company’s debt as well as the proper allocation of its profits. To treat either as a balance sheet or income statement entry only is an abrogation of responsibility. I think I’m a 10 on this one. How about you?
Tip #5: Know the secret of your business and use it.
Every sound business has a secret. The question is, how is the secret deployed to make the business successful? If you haven’t done so, sit in a quiet corner somewhere and contemplate your secret of success. Then check out how well you are acting on it. In TEC, I know my TEC chairmen are my secret. Again, I’ll say it’s a 10. How about you?
Tip #6: Apply the rule of entrepreneurs and managers.
The trick as a CEO is to stay the entrepreneur but surround yourself with excellent managers. It is the CEO entrepreneur who expands and transforms the business, often at high risk. I don’t rate high here, but I have great managers. So I’ll say a 5 for me. How about you?
Tip #7: Build a society and define the seasons.
Translated, be the culture-setter as CEO. Don’t delegate it. Be the king or queen of the village with sound social structure, operating rules and seasonal definition (all businesses have a seasonal flux, and most CEOs know it like the back of their hands). Keeping the culture intact as the seasons change is a real challenge. I think I’m a 7 here. How about you?
Tip #8: Acquire and exercise vision.
This is the CEO’s main job at a higher order than his or her job description. Some would say the CEO needs a vision of perpetuation and change. I agree with that. I’m OK on the first count and lacking on the second. Hence a 5 on this one. How about you?
Tip #9: Live a life-mind, body, heart and spirit.
Do an inventory. The question is, where are you short? The older we get, it seems that the life part requires more attention than the work part. I struggle with this, and for that reason give myself a 6. How about you?
That’s it. My scores add up to 67 out of 90, or 74 percent. Walt says really top CEOs score 80 percent or higher, as rated by their subordinates. So I’ve got some work to do. How about you? Until next month, good luck "score carding" your performance as CEO.
Harry S. Dennis III is the president of TEC (The Executive Committee) in Wisconsin and Michigan. TEC is a professional development group for CEOs, presidents and business owners. He can be reached at (262) 831-3340.
October 1, 2004, Small Business Times, Milwaukee, WI
New IRS regulations allow for retroactive deductibles for business vehicles
Delivery vans are not exactly my idea of luxury vehicles. However, they have long been considered as such under the luxury automobile limits for federal tax depreciation and Section 179 expenses, because they typically cost more than $15,000.
Such vans and pickup trucks are useful in many businesses, but they’re not luxurious. Now, due to recently finalized Internal Revenue Service regulations, luxury auto limitations do not apply to qualified non-personal use vehicles (QNUVs), which should provide much greater depreciation deductions for businesses that own these types of vehicles.
A QNUV is any truck or van that, by reason of its design and modifications, is not likely to be used more than a de minimis amount for personal purposes. QNUVs with a gross vehicle weight rating of greater than 6,000 pounds already are exempt from luxury auto limits; the new IRS regulations only affect those vehicles with a gross vehicle weight rating of less than 6,000 pounds.
In determining how a van or pickup truck qualifies as a QNUV, one of the modifications that needs to be made is the use of permanently affixed decals or painting of advertising associated with the employer’s trade, business or function.
In addition to the change to the outside, vans should only have front seats, permanent shelving that fills most of the cargo area and must be constantly used to carry merchandise or equipment.
Pickup trucks have different requirements than vans. Pickup trucks need to be significantly modified to transport a load or equipped with items such as a permanently installed tank, a hydraulic lift gate or other heavy equipment to qualify as a QNUV.
To see the benefit of a vehicle qualifying as a QNUV, you only have to look at the amounts eligible to be expensed in the first year of purchase.
For example, a catering company purchased four vans that were equipped as described above in July of 2003 at a cost of $25,000 each. Under the old rules, only $44,000 of the $100,000 cost can be expensed in the first year. With the new law, these vans would qualify as a QNUV, and luxury auto limits would not apply. The vans would be eligible for first year expensing of up to $100,000.
If your company has vans or pickup trucks that meet the requirements for qualified non-personal use vehicles, and the luxury auto depreciation limits have been applied and therefore have limited the amount of depreciation or first-year expensing taken on such vehicles, you have some options.
If a QNUV was placed into service in the current year and the tax return has not yet been filed, do not apply the luxury auto limits to the QNUV. If the vehicle was placed in service in prior years, taxpayers can retroactively take depreciation and first-year expensing that was limited by either filing an amended return, or filing Form 3115 for a change in accounting method with the IRS. In doing so, a company can pick up the additional depreciation in the current year.
Amending the returns will prevent you from having to wait until the end of the current year to receive the benefits of the additional depreciation expense, but multiple amended returns might need to be filed if multiple years are involved.
For example, if a QNUV was put into service in 2001, an amended return for 2001, 2002 and 2003 will have to be filed. Amending the returns for QNUVs placed into service before July 7, 2003 also will need to be done by the end of this year. Filing Form 3115 will be the simplest way to make the change if multiple years are involved.
The Form 3115 is attached with the taxpayer’s return for the year of change (likely the 2004 return unless the 2003 return has not yet been filed), and the net adjustment of the now allowable, but unclaimed, depreciation and first-year expensing is included on the current year’s return.
Stephen A. Bjork is a certified public accountant at Komisar Brady & Co. LLP, Milwaukee.
October 1, 2004, Small Business Times, Milwaukee, WI
