You’ve spent years building your business. Every decision, every investment, every late night has been aimed at creating something valuable—not just for today, but for your future and your family’s legacy. But when major tax legislation passes, do you really understand how it affects what you’ve built? More importantly, do you know whether you’re positioned to take full advantage of new opportunities, or if you’re unknowingly leaving value on the table?

The One Big Beautiful Bill Act, signed into law on July 4, 2025, represents the most significant overhaul of U.S. federal tax policy since 2017. While the headlines focus on percentages and policy jargon, the real story is what this means for your business valuation, your exit strategy, and your ability to transfer wealth to the next generation. For many business owners, navigating these complex changes feels overwhelming—especially when you’re already focused on running and growing your company.

We understand. Staying current with tax legislation while managing daily operations, strategic planning, and growth initiatives isn’t realistic for most business owners. That’s why having experienced advisors who can translate policy changes into actionable strategies for your specific situation is critical. At HBK CPAs & Consultants, we’ve been helping business owners navigate major tax legislation for decades. As a Top 50 accounting firm with specialized expertise in business valuation and strategic planning, we’ve guided hundreds of businesses through significant transitions—and we’re here to help you understand what OBBBA means for your company’s value and your financial future.

Let’s break down the provisions that matter most to you and your business.

1. Bonus Depreciation: Accelerating Your Cash Flow

One of OBBBA’s cornerstone provisions is the permanent reinstatement of 100% bonus depreciation for qualified property. Under the TCJA, bonus depreciation was scheduled to phase down gradually (80% in 2023, 60% in 2024, and so forth). OBBBA eliminates that sunset and ensures businesses can continue to fully expense qualifying property in the year it is placed in service.

Notably, OBBBA also expands eligibility to include certain categories of real property, particularly manufacturing-related improvements, creating new opportunities for industrial businesses to accelerate deductions.

What This Means for Your Business Value

From a valuation standpoint, bonus depreciation accelerates the timing of tax deductions, effectively boosting near-term after-tax cash flow. Since the value of a business is tied to the present value of future free cash flows, this provision increases enterprise value for capital-intensive firms.

If you’re considering selling your business or bringing on investors, 100% bonus depreciation has a positive impact on post-transaction cash flow, especially for asset-intensive businesses. Consequently, deal flow, transaction volume, and valuation multiples have the potential to increase.

2. Section 179 Expensing: Immediate Benefits for Small and Midsize Businesses

OBBBA expands the thresholds and eligible property under Section 179, which allows small and midsize businesses to immediately deduct the full purchase price of certain assets, rather than depreciate them over time.

What This Means for Your Business Value

While the impact is smaller in scale compared to bonus depreciation, Section 179 changes have a similar directional effect—enhancing near-term cash flow and improving the economics of M&A transactions structured as asset sales.

3. Research and Development Expensing: A Game-Changer for Innovation

Under the TCJA, companies were required to capitalize and amortize R&D expenses over five years (15 years for foreign research). OBBBA reverses this policy, allowing immediate expensing of domestic R&D costs once again.

What This Means for Your Business Value

This change materially benefits R&D-intensive industries—such as technology, pharmaceuticals, and advanced manufacturing—by improving short-term cash flow and increasing after-tax returns on innovation.

Want to understand how these provisions apply to your specific situation and industry? [Learn more about our business valuation and strategic advisory services].

4. Tax Loss Carryforwards and Interest Deductibility: Better Leverage for Growth

OBBBA also redefines adjusted taxable income (ATI) used in calculating the limitation on the deductibility of business interest expense. This new definition allows additional interest expense to be deducted in the current period, rather than carried forward.

What This Means for Your Business Value

Greater interest deductibility improves near-term free cash flow, especially for leveraged or private equity-backed companies. For businesses with existing net operating losses (NOLs), OBBBA’s adjustments to carryforward utilization rules increase the value of deferred tax assets, which should be explicitly modeled in any valuation.

These provisions also affect capital structure assumptions—since increased deductibility can enhance the tax efficiency of debt financing, marginally lowering the weighted average cost of capital (WACC) used to discount future earnings to the present.

5. Section 199A: Qualified Business Income Deduction Made Permanent

Under the TCJA, the 20% Qualified Business Income (QBI) deduction for pass-through entities was scheduled to expire after 2025. OBBBA makes this deduction permanent, thereby avoiding a significant increase in effective tax rates for partnerships, S corporations, and LLCs.

What This Means for Your Business Value

This permanence introduces greater tax predictability for pass-through entities and materially affects normalized after-tax earnings.

For valuation purposes, the permanence of Section 199A removes the need to factor in an increase in pass-through tax burdens in the near-term. It may also influence entity structure decisions, as the relative advantage of pass-through taxation is preserved compared to the corporate tax regime.

6. Qualified Small Business Stock (QSBS): Enhanced Capital Gains Exclusion

OBBBA enhances the Qualified Small Business Stock (QSBS) provision under Section 1202 by raising the capital gains exclusion limit to $15 million and introducing a sliding-scale benefit based on the holding period:

• 5 years: 100% exclusion
• 4 years: 75% exclusion
• 3 years: 50% exclusion

What This Means for Your Business Value

The expanded QSBS exclusion significantly increases after-tax investor returns in qualifying private companies, potentially spurring capital formation in the lower middle market.

From a valuation perspective, the expected after-tax proceeds to investors are higher, which can reduce required rates of return or increase observed transaction multiples for eligible firms.

7. Estate Planning and the Lifetime Exclusion: Protecting Your Legacy

OBBBA increases the lifetime estate and gift tax exclusion to $15 million per individual, indexed for inflation, and designates it as permanent. While “permanent” is a legislative term of art rather than a guarantee, the expanded exclusion opens substantial opportunities for wealth transfer planning.

Why This Matters for Your Family’s Future

High-net-worth individuals and business owners may wish to use at least part of the expanded exclusion now, particularly to transfer highly appreciating assets such as minority interests in private companies. These transfers can lock in current valuations and shift future appreciation outside the taxable estate.

8. Understanding “Permanent” Policy: Act While the Window Is Open

While OBBBA’s provisions are framed as permanent, tax policy is inherently political. Business owners and investors understand that future legislation can reverse even long-term statutes. As a result, many are acting swiftly to capitalize on these provisions while they remain intact.

From a valuation standpoint, this creates a two-speed environment:

In the short term, cash flow and valuation multiples may rise due to enhanced after-tax earnings and favorable deal structures. Over time, as the market adjusts and policy risk reemerges, these benefits could normalize or reverse depending on future congressional action.

Picture Your Business with Strategic Clarity

Imagine knowing exactly how these tax changes affect your company’s value. Imagine having a clear roadmap for when to make capital investments, how to structure your exit, and how to transfer wealth to the next generation with confidence. You’re not reacting to policy changes—you’re ahead of them, making informed decisions that protect and grow what you’ve built.

That’s what strategic guidance looks like. You feel secure knowing your business structure is optimized for current tax laws. You’re empowered to have meaningful conversations with potential buyers or investors because you understand your true enterprise value. Most importantly, you have peace of mind knowing you’re not leaving money on the table or missing critical planning opportunities.

Without understanding these provisions and how they apply to your unique situation, you risk missing opportunities to enhance your business value, optimize your tax position, and protect your legacy. Generic advice won’t cut it—you need advisors who understand your industry, your goals, and how to translate complex legislation into actionable strategy.

Ready to maximize your business value and secure your financial future?

The One Big Beautiful Bill Act creates a unique window of opportunity for business owners who act strategically. Whether you’re planning an exit in the next few years, considering bringing on investors, or simply want to understand how these changes affect your business value and estate plan, now is the time to get clear answers.

Schedule your consultation today to discuss how OBBBA’s provisions apply to your specific situation and what steps you should take now to capitalize on these opportunities.

The One Big Beautiful Bill Act reshapes both the cash flow dynamics and strategic decision-making landscape for U.S. businesses. Permanent bonus depreciation, Section 179 expansion, R&D expensing, and QBI deductions enhance near-term cash flow, while expanded QSBS and estate tax provisions create compelling investment and planning opportunities.

History teaches us that tax policy “permanence” is only as durable as the next legislative session. Those who understand and act within this window—with expert guidance tailored to their specific circumstances—stand to benefit most. You don’t have to navigate this alone. Move from uncertainty to confidence, from reactive to strategic, and from overlooked opportunities to maximized value. Your business deserves advisors who see the whole picture and help you chart the best course forward.

Is Your Practice Leaving Money—and Peace of Mind—on the Table?

You’re closing out another year, and between patient care, staff management, and regulatory changes, the last thing you want to think about is another complex financial review. But here’s the reality: the decisions you make (or avoid) in these final weeks could determine whether your physician group thrives or struggles through 2026.

Many medical groups treat year-end planning as a checkbox exercise—file the taxes, renew the contracts, move on. Meanwhile, they miss critical opportunities to optimize compensation, close compliance gaps, and align their leadership team around a unified strategy. The result? Frustration mounts, revenue leaks through preventable cracks, and partners find themselves rehashing the same disputes year after year.

You deserve better than patchwork planning and reactive decision-making. Your group has worked too hard to let strategic opportunities slip away during your most important planning window.

We Understand the Weight You’re Carrying

At HBK Healthcare Solutions, we’ve worked with physician groups just like yours for decades. We know the unique pressures you face—rising costs, shifting payor models, compensation disputes, and the constant challenge of balancing clinical excellence with financial sustainability. You didn’t go to medical school to become a financial strategist, yet that’s exactly what running a successful practice demands.

That’s why we’ve built our practice around one core mission: helping physician groups navigate complexity with confidence.

As a Top 50 CPA and consulting firm with specialized healthcare expertise, HBK has guided hundreds of medical practices through strategic transitions, growth phases, and challenging markets.

Your Year-End Planning Roadmap: 8 Strategic Focus Areas

1. Retirement and Benefit Plans: Maximize Today, Secure Tomorrow

Review your retirement plan structure before December 31st to ensure you’re capturing every available tax advantage. Confirm that contributions hit current IRS limits for both physicians and staff. If your group has partners with varying compensation levels, consider whether your current 401(k) or profit-sharing structure still serves everyone fairly.

Hybrid plans or tiered contribution formulas can help align long-term benefits with ownership goals, especially when partner distributions are uneven. Don’t forget to coordinate with your CPA and third-party administrator on year-end testing and compliance filings—catching issues now prevents costly corrections later.

2. Payor Compliance and Contract Review: Stop Leaving Revenue on the Table

When was the last time you thoroughly reviewed your payor contracts? Many physician groups operate under outdated terms, missing opportunities for better reimbursement rates or value-based incentives. Year-end is your chance to verify that all provider credentials, NPI updates, and revalidations are current.

More importantly, assess your group’s performance against payor benchmarks. If you’re hitting quality metrics but not capturing the corresponding bonuses, you need better documentation and reporting processes. Small improvements in coding accuracy or outcome tracking can translate to significant revenue gains.

3. Insurance and Risk Management: Protect What You’ve Built

Take a fresh look at your coverage across all lines—malpractice, business interruption, cyber liability, and employee benefits. Are your limits appropriate for your current practice size and exposure? Review any recent claims or close calls with your carrier to identify operational vulnerabilities before they become costly problems.

If you’re anticipating staffing changes or adding providers, address tail coverage and premium adjustments now rather than scrambling in January.

4. Physician and Provider Compensation: Align Incentives With Results

Compensation disputes can tear apart even the strongest physician groups. Year-end provides a natural checkpoint to benchmark your structure against national and regional data from VMG, MGMA, or specialty-specific surveys. Are you competitive enough to retain top talent? Is your model fair to all partners?

If you use productivity or quality-based incentives, verify that your data is accurate and transparent. Your compensation formula should encourage the behaviors that drive group success—patient access, collaboration, ancillary service utilization—not just individual revenue generation. Don’t overlook leadership contributions, administrative duties, and strategic initiatives that may not show up in RVU reports but are essential to your practice.

Want to see how your compensation model compares to industry standards? Contact HBK Healthcare Solutions for a confidential benchmark analysis.

5. Leadership and Governance Alignment: Unite Around a Shared Vision

A practice divided at the leadership level will struggle at every other level. Use year-end as an opportunity to assess your governance structure. Are partner meetings productive and strategic, or do they devolve into the same old debates? Are committee assignments matched to the right skill sets?

Consider scheduling a strategic retreat early in 2026 to revisit your mission, vision, and growth objectives. Leadership alignment around compensation, investment priorities, and succession planning will prevent costly disputes and position your group for sustainable growth.

6. Operational Review and Staffing: Work Smarter, Not Harder

Conduct a comprehensive operational review to identify efficiency opportunities. Analyze patient encounters per provider, support staff ratios, and scheduling patterns. Are there areas where automation or cross-training could boost productivity?

If expenses are climbing faster than revenue, you may need to make tough staffing decisions. Conversely, if patient demand is creating bottlenecks and long wait times, adding a nurse practitioner, physician assistant, or another physician could improve both patient satisfaction and practice revenue.

7. Backlog and Patient Capacity: Meet Demand Without Burning Out

How long are your new patients waiting for appointments? If lead times are stretching into months, you’re constraining growth and potentially losing patients to competitors. Evaluate whether your group should expand provider capacity, extend clinic hours, or leverage telehealth and mid-level providers to relieve pressure.

Document your access and capacity challenges carefully. This data strengthens your position when negotiating with payors or exploring partnerships.

8. Strategic Partnership and Expert Guidance: You Don’t Have to Figure This Out Alone

Year-end planning requires both strategic vision and operational expertise. You need someone who understands the financial mechanics of healthcare, speaks your language, and can translate complex data into clear, actionable decisions.

HBK Healthcare Solutions specializes in helping physician groups like yours tackle these exact challenges. Our team provides compensation and alignment modeling, payor contract review, practice profitability analysis, retirement plan optimization, and governance strategies—all designed to strengthen your organizational foundation.

Whether you’re planning for growth, navigating financial headwinds, or simply want to start 2026 on solid footing, we bring the analytics, benchmarking, and guidance you need.

A Confident, Aligned Start to 2026

Imagine walking into January with a clear strategic roadmap, a compensation model that everyone understands and supports, optimized benefit plans, and a leadership team that’s united around shared goals. You’re not scrambling to fix problems from the previous year—you’re executing a plan that positions your practice for sustainable growth and profitability.

You feel secure in your decisions because they’re grounded in data and industry expertise. Your partners are aligned. Your staff is positioned for success. And you can focus your energy where it belongs: providing exceptional patient care.

That’s the power of strategic year-end planning done right.

Don’t Let Another Year Slip By With Missed Opportunities

Without a comprehensive year-end review, physician groups often repeat the same mistakes: leaving tax advantages unclaimed, operating under suboptimal contracts, perpetuating compensation disputes, and missing growth opportunities that were hiding in plain sight. The cost isn’t just financial—it’s the ongoing frustration, misalignment, and stress of running a practice without a solid strategic foundation.

Ready to Transform Your Practice Planning?

Year-end planning is more than a financial exercise—it’s your opportunity to reset, realign, and position your physician group for confident, sustainable success in 2026.

Schedule your consultation with Joshua J. Zarlenga, CPA, and the HBK Healthcare Solutions team today. Let’s turn year-end planning into your competitive advantage.

Schedule Your Strategic Consultation Now

From overwhelmed and reactive to strategic and confident—that’s the transformation HBK Healthcare Solutions delivers for physician groups across the country. Let’s make 2026 your best year yet.

Most business owners think of valuation as something you do once, right before you sell, merge, or bring in investors. But that mindset can cost you—sometimes hundreds of thousands of dollars in lost value or missed opportunities.

A valuation isn’t just a number; it’s a thorough health check of your company that can guide better decisions, uncover hidden risks, and help you build long-term value. Yet only about 20% of small businesses ever successfully sell,[^1] often because owners wait until it’s too late to discover and address critical value gaps.

Treating valuation as an ongoing process, rather than a one-time event, gives you the insight and control you need to thrive in your industry.

The Myth of the One-Time Valuation

Too often, owners only call a valuation expert when they’re preparing to exit or handle a triggering event—retirement, divorce, new investors. But by then, you’re reacting, not optimizing.

A single, last-minute valuation gives you a snapshot, but not the story behind the numbers. Without regular check-ins, you might miss red flags such as overreliance on a single customer, declining profitability margins, or inefficient asset management. These issues can slash your valuation and are nearly impossible to fix quickly when you’re already in negotiations.

The business owners who achieve the strongest exits are those who began planning years in advance, using regular valuations to guide their strategic decisions and systematically addressing gaps that could limit value.

Why Ongoing Valuation Pays Off

1. Evaluate Investments and ROI

Valuations help you measure whether your strategic moves are actually working. Are your investments in new technology, product lines, or market expansions driving returns above your cost of capital?

The business valuation industry has grown to $2.8 billion in 2025, with revenue increasing at 5.1% annually over the past five years[^2]—reflecting growing recognition that professional valuation isn’t optional for serious business owners. Regular valuations ensure your capital allocations are optimized, not just spent.

2. Identify Where to Improve Value

Detailed valuation reports identify the specific factors that drive or hinder value: risk profile, cash flow quality, growth potential, and competitive position. That knowledge is power.

Valuation reports expose the weak points in your business and clarify exactly where to focus your efforts to maximize shareholder value. Think of it as a roadmap showing you which improvements will deliver the highest returns—whether that’s diversifying your customer base, strengthening your management team, or improving operational efficiency.

3. Support Strategic Planning and Decision-Making

When evaluating potential acquisitions, new market entries, or major capital investments, regular valuations help you model how each option will impact your overall business value. You’re not guessing—you’re making data-driven decisions backed by objective financial analysis.

This strategic clarity helps you navigate your business journey with confidence, knowing exactly how your choices affect your most valuable asset.

4. Tax Planning and Ownership Transitions

For gift and estate tax filing purposes, business owners often seek valuations only when required, then wind up shocked by the resulting tax liability. Estate and gift taxes quickly reach the 40% bracket,[^3] making strategic planning crucial.

Preemptive valuations assist with tax planning and help smooth the process of gifting or estate transitions, potentially saving hundreds of thousands of dollars. Regular valuations also establish fair market value for buy-sell agreements, succession planning, and equitable ownership transitions—protecting all stakeholders’ interests.

5. Strengthen Your Position with Lenders and Investors

Lenders and investors require reliable valuation information to make informed decisions. A well-documented, professionally conducted valuation enhances your business’s appeal and can be the difference between securing favorable financing terms or being declined altogether.

As your business evolves, maintaining current valuation data positions you to move quickly when opportunities for expansion, acquisition, or strategic investment arise.

How Often to Revisit Valuation

Most businesses should perform a valuation annually, like a routine doctor’s checkup. But certain triggers call for an update sooner:

1. Launching or discontinuing major product lines
2. Securing (or losing) a significant customer or contract
3. Leadership changes or ownership transitions
4. Taking on substantial new debt or capital
5. Major industry or regulatory changes
6. Contemplating retirement or exit within five years
7. Significant market shifts affecting your industry’s valuation multiples

Valuation multiples have experienced notable fluctuations in recent years due to interest rate changes, inflation pressures, and evolving industry dynamics.[^4] Regular updates ensure you understand how these market forces affect your specific business value.

Proactive updates mean you’re always ready—whether that’s to fine-tune your business strategy, seize an acquisition opportunity, negotiate a loan, or respond to a buyout offer.

Making Valuation Part of Your Business Rhythm

To make valuations truly useful, weave them into the normal rhythm of running your business.

Keep your financials clean and timely. Reliable and interpretable books make every valuation faster, more accurate, and more insightful. Implement accounting practices that meet buyer and lender expectations, making your business more attractive and trustworthy.

Don’t overlook intangible assets. Processes, intellectual property, customer relationships, and even company culture can add real, measurable value but are often under-documented. Make sure these assets are properly identified and protected.

Benchmark regularly. Compare your performance and risk profile to peers in your industry to understand where you’re strong and where you might need to improve. Industry-specific insights are critical—what drives value in manufacturing differs significantly from what matters in professional services or technology.

Work with specialists who know your market. A firm with deep industry knowledge won’t just hand you a number but will deliver practical insights you can act on to increase long-term value. They understand the unique complexities of your industry and can provide tailored strategic guidance.

From Overwhelmed to Empowered

Business owners who implement regular valuations report a fundamental shift in how they run their companies. Instead of feeling uncertain about whether their decisions are building value, they gain clarity. Instead of discovering problems during a sale process, they identify and resolve issues years in advance. Instead of accepting generic advice, they receive industry-specific strategic guidance that actually moves the needle.

This is the transformation from reactive to proactive, from guessing to knowing, from overwhelmed to empowered.

Final Thought

Think of valuation like your business’s annual physical. You wouldn’t only see a doctor when you’re critically ill. You go for regular checkups to stay strong and catch problems early.

When valuation becomes part of your business rhythm, you gain clarity on whether your investments are working, how to reduce risk, and where to increase value. And when the time does come to sell, merge, or raise capital, you’ll be ready with the confidence and numbers to back you up.

Ready to Understand Your Business’s True Value?

Don’t wait until you’re ready to exit to discover what your business is worth. HBK CPAs & Consultants delivers not only exceptional valuation services but comprehensive business consulting solutions designed specifically for your industry’s unique complexities.

Our experienced valuation team combines technical expertise with deep industry knowledge to provide insights you can actually use—helping you make strategic decisions with confidence, identify opportunities for value enhancement, and build a business positioned for long-term success.

Schedule your consultation with HBK’s valuation services team today. We’ll help you understand your current value, uncover opportunities you might be missing, and create a roadmap for maximizing your business’s potential.

Contact us now to get started. Because choosing HBK means you’re securing a partnership that truly understands your industry and needs.

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References

[^1]: 45 Day Exit, “Valuing a Small Business for Sale,” October 2024. https://45dayexit.com/how-to-value-a-small-business-for-sale/

[^2]: IBISWorld, “Business Valuation Firms in the US – Market Research Report (2014-2029),” 2025. https://www.ibisworld.com/united-states/industry/business-valuation-firms/4797/

[^3]: Eqvista, “Succession Planning Valuation: Founder’s Guide,” March 2025. https://eqvista.com/company-valuation/founders-approach-valuing-business-succession-planning/

[^4]: Andersen Global, “Trends Impacting Business Valuation in 2024,” August 2024. https://eg.andersen.com/business-valuation-2024/

If you’re navigating the complexities of integrating automation and AI into your manufacturing operations, you’re not alone—and the opportunity has never been greater. Automation and artificial intelligence (AI) are revolutionizing the manufacturing industry, ushering in an era of unprecedented efficiency and precision. From predictive maintenance and real-time quality control to autonomous robotics and supply chain optimization, AI technologies are streamlining operations and reducing waste. Factories equipped with smart sensors and machine learning algorithms can now adapt to changing conditions, detect anomalies before they become costly problems, and even self-correct production errors. This transformation is not just about faster production, it’s about smarter, more resilient systems that can respond dynamically to market demands and operational challenges.

However, the rise of AI in manufacturing also raises critical questions about workforce displacement. We understand the concerns: as machines take over repetitive and labor-intensive tasks, many traditional roles are being phased out, prompting worries about job security and economic inequality. Yet, this shift also creates opportunities for new kinds of employment—roles focused on AI oversight, data analysis, and system integration. The challenge lies in managing the transition: investing in reskilling programs, fostering collaboration between humans and machines, and ensuring that technological progress benefits workers as much as it does bottom lines. Balancing efficiency with empathy will be key to shaping a future where innovation uplifts rather than replaces.

To fully harness the benefits of AI in manufacturing, collaboration between industry leaders, policymakers, and educational institutions is essential. Governments can play a pivotal role by incentivizing innovation while safeguarding workers through updated labor policies and social safety nets. Meanwhile, companies must prioritize ethical deployment—ensuring transparency in AI decision-making and fostering inclusive growth. Educational institutions can bridge the skills gap by aligning curriculum with emerging technologies, preparing the next generation for hybrid roles that blend technical expertise with human judgment. Together, these efforts can shape a manufacturing landscape where AI enhances human potential rather than replaces it.

Ready to explore how automation and AI can work for your manufacturing operation? To discuss your company’s use of automation and AI, contact a member of HBK Manufacturing Solutions at manufacturing@hbkcpa.com. 

The Office of Management and Budget (OMB) announced a delay in releasing the 2025 OMB Compliance Supplement due to administrative backlogs. Traditionally issued in May, this annual publication provides essential guidance that auditors rely on when performing Single Audits for organizations receiving federal awards.

Understanding the Single Audit Landscape

Single Audits are a critical compliance requirement for organizations that expend $750,000 or more in federal awards during their fiscal year.^[1] In fiscal year 2023 alone, over 40,000 Single Audits were submitted to the Federal Audit Clearinghouse, representing billions of dollars in federal funding across nonprofit organizations, educational institutions, and state and local governments.^[2]

The Compliance Supplement serves as the auditor’s roadmap, providing program-specific audit guidance for the largest federal programs. Without this finalized document, auditors cannot complete the compliance testing required to issue an official Single Audit opinion—even when all fieldwork has been completed.

Key Considerations for YOUR Organization

If your organization receives federal funding and has a June 30, 2025 fiscal year-end, this delay could impact the timing of your audit deliverables:

• The Single Audit cannot be finalized until the official 2025 Compliance Supplement is released by OMB.
• This delay may affect the timely submission of audit reports to federal agencies or pass-through entities. Under the Uniform Guidance, Single Audits must typically be submitted within nine months of fiscal year-end—meaning March 31, 2026 for June 30, 2025 year-ends.^[3]
• However, your financial statement audit can still be completed and issued separately without interruption.

Why This Matters More Than You Think

Organizations facing audit delays may encounter several cascading challenges:

• Grant reimbursement delays: Some federal agencies may hold payments pending receipt of compliant audit reports
• Compliance concerns: Late audit submissions can trigger findings in subsequent years
• Board and stakeholder relations: Delays require careful communication to maintain confidence
• Future funding at risk: Patterns of late audit submissions may impact future grant applications

According to recent federal oversight data, approximately 15% of Single Audits are submitted after their deadline each year, with delays often cited as a contributing factor to findings in subsequent audit periods.^[4]

How HBK Is Responding

Our firm has obtained the draft version of the 2025 Compliance Supplement through the AICPA Government Audit Quality Center (GAQC). While this draft cannot be used to issue final Single Audit reports, it enables our engagement teams to:

• Begin preliminary planning for Single Audit engagements.
• Identify key compliance areas and potential changes from prior years.
• Prepare audit procedures and programs in advance of the official release.
• Maintain momentum on your engagement to minimize delays once the final Supplement is published.

At this time, OMB has indicated that no significant revisions are anticipated between the draft and final versions of the Supplement.

What Makes This Situation Different

Unlike routine audit planning, this administrative delay is entirely outside your organization’s control. The challenge lies in maintaining audit progress while managing stakeholder expectations. Organizations that proactively address this situation demonstrate strong governance and accountability—qualities that strengthen relationships with funders and oversight bodies.

Next Steps

Financial Statement Audit:
You may proceed with your financial statement audit as planned. We recommend discussing with your audit team and users of your financial statements the option to issue the financial statement audit separately from the Single Audit if reporting deadlines require it.

Single Audit:
Planning and preliminary fieldwork may continue, but the final Single Audit report cannot be issued until the official 2025 Supplement is published.

Communication Strategy:
We encourage proactive communication with federal agencies, pass-through entities, and major donors to inform them of the potential delay and to align expectations regarding report submission timelines. Consider these key messages:

• Acknowledge the delay and its industry-wide impact
• Confirm your organization’s commitment to compliance
• Provide updated timeline expectations once the Supplement is released
• Highlight steps being taken to minimize the ultimate delay

Our Commitment

HBK is closely monitoring updates from both the OMB and the AICPA GAQC and will promptly notify clients once the final 2025 Compliance Supplement is released. Our team remains committed to completing your audits efficiently, accurately, and in full compliance with all federal requirements.

You don’t have to navigate this complexity alone. With our proven track record as a Top 50 accounting firm specializing in governmental and nonprofit audits, we understand the unique challenges your industry faces. Our experts have guided hundreds of organizations through audit complexities, ensuring compliance while minimizing disruption to your operations.

For questions about how this delay may affect your organization—or for assistance with stakeholder communication—please contact your HBK engagement team or reach out to our A&A Specialist Group.

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Footnotes:

[1] 2 CFR § 200.501, Audit Requirements, Office of Management and Budget Uniform Guidance (2024).

[2] Federal Audit Clearinghouse, U.S. Census Bureau, “Single Audit Database Statistics” (data as of September 2024), https://facweb.census.gov/

[3] 2 CFR § 200.512(a), Report Submission, Office of Management and Budget Uniform Guidance (2024).

[4] U.S. Government Accountability Office, “Single Audit: Opportunities Exist to Improve Oversight and Address Audit Quality Issues,” GAO-22-104450 (November 2022).

If you recently financed a new vehicle—or you’re a lender who provides car loans—there’s new tax guidance you need to know about. The IRS just released simplified reporting rules for 2025 through Notice 2025-57 PDF that could affect your tax deductions and compliance requirements.

What’s the New Deduction?

Under the One Big Beautiful Bill Act (OBBBA), individuals can now deduct up to $10,000 in interest paid on qualified car loans for vehicles purchased between January 1, 2025, and December 31, 2028. This applies to personal-use vehicles that meet these criteria:

• Cars, minivans, SUVs, pickup trucks, or motorcycles
• Weigh less than 14,000 pounds
• Assembled in the United States
• Purchased with a loan taken out after December 31, 2024

What Does This Mean for Lenders?

If your business receives $600 or more in interest payments on these qualified vehicle loans during the year, you’re required to report that information to both the IRS and the borrower.

The Good News: Simplified Reporting for 2025

The IRS is making things easier this year. Instead of complex formal reporting, lenders can meet their 2025 requirements by simply making the total interest amount available to borrowers by January 31, 2026 through:

• An online customer portal
• Monthly statements
• An annual summary statement
• Any similar method that provides accurate information

Better yet, the IRS won’t impose penalties on lenders who follow these simplified guidelines, even if they don’t file traditional information returns for 2025.

What Should You Do Next?

Whether you’re claiming this deduction or you’re a lender navigating these new reporting requirements, the details matter. One misstep could mean leaving money on the table or facing unexpected compliance issues.

Partner with Advisors Who Understand Your Industry

At HBK CPAs & Consultants, we don’t just explain the rules—we help you apply them strategically to your specific situation. Our team stays on top of evolving tax guidance so you can focus on running your business with confidence. From maximizing deductions to ensuring seamless compliance, we provide the tailored expertise you need to thrive in your industry.

Schedule your consultation today to discuss how this new guidance affects your business and discover what other opportunities you might be missing.

Strategic acquisition adds specialized expertise in real estate, high-net-worth individuals, and family offices.

PARAMUS, NEW JERSEY – HBK, a leading accounting and advisory firm, announced today the acquisition of Konner, Harbus and Schwartz, PC (KHS), a boutique accounting firm based in Paramus, New Jersey. The transaction, closing at the end of October, will establish the firm’s newest office location in Northern New Jersey. Ira Rosenbloom of Optimum Strategies advised both firms on the transaction.

KHS brings a distinctive client portfolio that includes significant concentrations in real estate, amusement and recreation, high-net-worth individuals, and fiduciary services. Despite its size, the firm has built a reputation for delivering sophisticated services typically associated with larger firms, but with a personalized approach that has attracted clients throughout the tri-state area and beyond.

“KHS has carved out a unique position in the market by providing Big 4-level expertise with the personal attention and responsiveness that high-net-worth clients and their families value,” said HBK CEO and Managing Principal Thomas M. Angelo, CPA, CTIP. Their track record of attracting clients who previously worked with larger firms speaks to the quality of their service model. This is exactly the type of specialized capability we want to bring into HBK.”

The firm’s proximity to New York City has enabled KHS to develop deep relationships with clients in private equity, real estate, and other sophisticated industries. Many of these clients have transitioned from national firms seeking more personalized service without sacrificing technical expertise.

As part of the acquisition, Dina Schwartz and Marc Harbus will join HBK as Principals. Dina will lead operations at the Paramus location, while Marc will divide his time between HBK’s Boca Raton, Florida and Paramus offices.

“We’ve built our practice on the principle that high-net-worth individuals and complex clients deserve both technical excellence and personal attention,” said Marc Harbus, Principal in the new Paramus office. “Joining HBK allows us to enhance our service offerings while maintaining the boutique approach our clients expect. We’re excited about the additional resources and expertise we can now bring to our relationships.”

The addition of KHS supports HBK’s strategic initiatives, focusing on proactive growth through strategic acquisitions, geographic expansion, and enhanced service delivery capabilities. The Paramus location will offer HBK’s full range of accounting, tax, and advisory services with particular strength in real estate, fiduciary services, and high-net-worth individual planning.

About HBK: HBK provides businesses, their owners and operators a wide range of financial solutions, including accounting, tax, and audit services; wealth management; business valuation; transaction advisory services; forensic accounting; litigation support services; and business consulting, including broad expertise in a number of major industries. The CPA firm dates back to 1949 and added its wealth management practice in 2001. HBK CPAs & Consultants and HBKS Wealth Advisors serve clients out of offices in Columbus and Youngstown, Ohio; Pittsburgh, Philadelphia, Erie, Hermitage, Meadville, and King of Prussia, Pennsylvania; Holmdel, Cherry Hill, and Paramus New Jersey; Long Island and Fredonia, New York; Fort Myers, Naples, Stuart, Sarasota, and Boca Raton, Florida; and Delhi, India. HBK also ranks in the Top 50 on Accounting Today’s list of the largest U.S. CPA firms; HBKS Wealth Advisors is a Top 100 registered investment advisory.

Media Contact: Loriann Facenda, Director of Communications, lfacenda@hbkcpa.com

What is SOC 2?

SOC 2 is a reporting framework developed by the American Institute of Certified Public Accountants (AICPA) that provides a standard for service organizations to ensure they protect customer data effectively.

The framework is built around five Trust Services Criteria (TSC): Security, Availability, Processing Integrity, Confidentiality, and Privacy. Organizations can align their controls against these criteria to demonstrate their commitment to data protection. Of these five categories, Security is the only required area and serves as the foundation. It comprises nine components, known as Common Criteria (CC), which incorporate the COSO internal control framework.

The Three Stages of SOC 2 Compliance

Organizations typically progress through three stages when integrating SOC 2 into their operations or demonstrating the effectiveness of their controls:

Stage 1: Readiness Assessment
This introductory stage helps organizations understand where they stand in relation to SOC 2 requirements. The results are intended for internal management use only and serve as a roadmap for compliance efforts.

Stage 2: Type 1 Coverage
Type 1 represents a point-in-time assessment that confirms controls have been properly designed and implemented to align with the Common Criteria. However, this stage does not test whether controls are operating effectively over time. The resulting report can be shared with external stakeholders and typically serves as an interim step toward achieving Type 2 attestation.

Stage 3: Type 2 Coverage
Type 2 provides the strongest level of assurance by examining controls over a period of time, generally twelve months. This stage validates the operating effectiveness of identified controls through comprehensive testing. The report can be shared with external users, and organizations typically maintain ongoing coverage through periodic reviews to ensure continuous compliance.

SOC 2 Readiness Assessment: Your First Step

The Readiness Assessment is the crucial first step a service organization takes when working toward SOC 2 compliance. At this stage, the goal is not to pass a formal audit but to understand your organization’s current position in relation to SOC 2’s Trust Services Criteria. Think of it as a preparation phase where internal practices are measured against what will eventually be reviewed by an independent auditor.

What Happens During a Readiness Assessment?

During this stage, organizations review their policies, processes, and technical controls to determine whether they align with SOC 2 expectations. This assessment covers critical areas such as:

• How systems are secured against threats
• How sensitive data is managed and protected
• How employees are trained, both during onboarding and throughout their tenure
• Whether documentation meets audit standards

The assessment typically reveals gaps or weaknesses that could create problems during a formal audit. For example, an organization might discover it lacks a written incident response plan, or that certain security monitoring processes are not formally documented or kept current. These findings are invaluable for prioritizing improvements.

The Readiness Report

The outcome of this effort is usually a set of internal findings or a Readiness Report. It’s important to note that this document is not an official SOC 2 deliverable and should not be shared with customers or external stakeholders. Instead, it serves as an internal management tool that identifies where improvements are needed and helps prioritize remediation efforts. The report provides a clear roadmap of next steps, giving the organization actionable guidance on what must be accomplished to meet compliance standards.

Why Readiness Matters

The Readiness stage helps organizations enter a formal SOC 2 audit with confidence. By identifying and addressing issues ahead of time, organizations significantly reduce the risk of failing to meet requirements during the official examination. This proactive approach offers several benefits:

• Risk mitigation: Problems are discovered and resolved before they can derail a formal audit
• Cost efficiency: Fixing issues early is typically less expensive than addressing audit findings
• Internal awareness: The process builds stronger understanding of security and compliance responsibilities across the organization
• Smoother audits: When the formal audit arrives, the organization is better prepared, increasing the likelihood of a favorable outcome

Ultimately, investing time in a thorough Readiness Assessment sets the foundation for successful SOC 2 compliance and demonstrates to stakeholders that your organization takes data protection seriously.

Inventory costing methods are among the most consequential accounting decisions a manufacturing company makes. The choice between FIFO, LIFO, weighted average, or specific identification determines how cost of goods sold and ending inventory are calculated—directly affecting profitability, tax liability, and key financial ratios.

1. First-In, First-Out (FIFO)
   Concept: FIFO assumes that the oldest inventory items are sold first.
   
   Advantages:
   • Matches older costs with current revenues.
   • Ending inventory reflects recent costs, which is useful in inflationary environments.
   • Often aligns with physical inventory flow.
   • Does not require complex calculations.
   
   Disadvantages:
   • Higher taxable income during inflationary periods.
   • May not reflect actual cost of goods sold if prices fluctuate significantly.
   
   
2. Last-In, First-Out (LIFO)
   Concept: LIFO assumes the newest inventory items are sold first.
   
   Advantages:
   • Matches recent costs with current revenues, which can reduce taxable income in inflationary periods.
   • Useful for companies with large inventories and rising costs.
   
   Disadvantages:
   • Ending inventory may be undervalued.
   • Not permitted under IFRS.
   • Can distort financial ratios and is more complicated for inventory management.
   • Requires calculations that may need to be calculated by an outside party or complex spreadsheets.
   
   
3. Weighted Average Cost
   Concept: Inventory cost is based on the average cost of all items available during the period.
   
   Advantages:
   • Smooths out price fluctuations.
   • Simple to apply and consistent.
   
   Disadvantages:
   • May not reflect actual inventory flow.
   • Less accurate in periods of significant price volatility.
   
   
4. Specific Identification
   Concept: Tracks the actual cost of each specific item sold.
   
   Advantages:
   • Most accurate method.
   • Ideal for high-value or unique items (e.g., vehicles, jewelry).
   
   Disadvantages:
   • Impractical for large volumes of homogeneous inventory.
   • Requires detailed tracking systems.
   

Strategic Considerations

• Tax Strategy: LIFO can reduce taxable income but may not be allowed under certain accounting standards.
• Financial Reporting: FIFO and weighted average are more commonly accepted under both GAAP and IFRS.
• Operational Fit: The method should align with the company’s inventory flow and business model.

Conclusion

Choosing the right inventory costing method is not just an accounting decision—it’s a strategic one. It affects financial statements, tax planning, and operational efficiency. For manufacturing firms, where inventory valuation can be complex due to raw materials, work-in-progress, and finished goods, aligning the costing method with business realities is crucial.  To discuss the inventory costing method best for you, please contact a member of the HBK Manufacturing Solutions team at manufacturing@hbkcpa.com. 

In today’s complex healthcare landscape, medical practices face mounting pressures to maintain financial stability while delivering high-quality patient care. One often overlooked yet pivotal factor in achieving this balance is the negotiation of commercial insurance contracts. These agreements dictate reimbursement rates, payment terms, and operational expectations between healthcare providers and private insurers, directly impacting a practice’s revenue cycle and long-term sustainability. For medical practices, mastering the art of negotiation is not just a business strategy—it’s a necessity. Firms like HBK Healthcare Solutions, led by experts such as Joshua J. Zarlenga, CPA, MBA, offer specialized support to navigate this critical process, driving revenue growth and operational efficiency.

The Financial Stakes

Commercial insurance contracts typically account for a significant portion of a practice’s revenue, often surpassing reimbursements from government programs like Medicare and Medicaid. Unlike government payers, where rates are largely non-negotiable, commercial insurers offer a window for negotiation that can make or break a practice’s bottom line. A well-negotiated contract can secure higher reimbursement rates, ensuring that physicians are fairly compensated for their services. Conversely, accepting a boilerplate contract without scrutiny can lock a practice into undervalued payments, eroding profitability over time.

For example, a 2023 study by the American Medical Association found that reimbursement rates for the same procedure can vary by as much as 20-30% between different commercial insurers in the same market. Practices that fail to negotiate effectively may leave substantial revenue on the table—money that could be reinvested in staff, technology, or patient care initiatives. With operational costs rising (e.g., a 4.5% increase in healthcare inflation reported by the Bureau of Labor Statistics in 2024), securing favorable terms becomes even more critical. HBK Healthcare Solutions, under the leadership of Josh Zarlenga, helps practices maximize this opportunity by leveraging data-driven insights to negotiate rates that reflect their true market value.

Beyond Rates: Operational Implications

Negotiating isn’t just about securing higher payments—it’s about shaping the terms that govern day-to-day operations. Commercial contracts often include clauses on prior authorizations, claims submission deadlines, and denial appeal processes, all of which can burden a practice with administrative overhead. A poorly negotiated contract might impose stringent requirements that increase staff workload and delay payments, while a thoughtfully crafted agreement can streamline these processes, improving cash flow and operational efficiency.

Take prior authorizations as an example. A 2024 survey by the Medical Group Management Association revealed that 89% of practices reported an increase in prior authorization demands from commercial insurers over the past two years, with delays averaging 10-14 days. Negotiating to limit these requirements or expedite approvals can reduce disruptions to patient care and minimize revenue losses from postponed treatments. HBK Healthcare Solutions specializes in identifying and addressing these operational pain points, working with practices to negotiate terms that reduce administrative burdens and enhance revenue cycle performance.

Market Leverage and Data-Driven Negotiation

Successful negotiation hinges on understanding a practice’s leverage. Factors like patient volume, geographic location, and specialty can strengthen a practice’s bargaining power. A practice that serves a large share of an insurer’s covered lives or operates in an underserved area has a compelling case for better rates. Similarly, specialists with unique expertise (e.g., oncology or orthopedics) can command higher reimbursements due to their scarcity.

To wield this leverage effectively, practices must arm themselves with data. Benchmarking reimbursement rates against regional averages—available through tools like the FAIR Health database or MGMA’s compensation reports—provides a factual basis for negotiation. Tracking denial rates and payment timelines from existing contracts further highlights areas for improvement. Insurers are more likely to concede when presented with evidence of below-market rates or operational inefficiencies tied to their terms. Josh Zarlenga, as National Director of HBK Healthcare Solutions, brings extensive experience in analyzing such data, helping practices build a compelling case to secure higher reimbursements and more favorable terms.

Avoiding the Pitfalls of Inaction

Failing to negotiate can have dire consequences. Many practices, especially smaller ones, accept initial contract offers due to time constraints or lack of expertise, assuming they lack the clout to push back. However, this passivity can perpetuate a cycle of underpayment and burnout. A 2024 report from the Physicians Advocacy Institute noted that 60% of independent practices cited declining reimbursements as a key factor in mergers or closures over the past five years. Proactive negotiation, by contrast, can preserve autonomy and financial health. HBK Healthcare Solutions steps in to bridge this gap, offering tailored strategies that empower even small practices to negotiate effectively.

Moreover, contracts often renew automatically with minimal adjustments unless challenged. A practice locked into a multi-year agreement with stagnant rates risks falling behind inflation and rising costs, effectively losing money each year. Regular review and renegotiation—ideally every one to two years—ensure terms evolve with the practice’s needs and market conditions. Zarlenga’s expertise in revenue cycle reviews and profit enhancement ensures that practices stay ahead of these trends, renegotiating contracts proactively to protect their financial future.

How HBK Healthcare Solutions and Josh Zarlenga Help

HBK Healthcare Solutions, led by Josh Zarlenga, provides comprehensive support to medical practices navigating commercial insurance contracts. With over 18 years of experience since joining HBK in 2006, Zarlenga has focused heavily on the healthcare industry, working with private medical practices, skilled nursing facilities, and ambulatory surgery centers. His team offers a range of services designed to boost revenue and streamline operations:

• Contract Analysis and Negotiation: HBK reviews existing contracts to identify undervalued reimbursement rates and burdensome terms, then negotiates with insurers to secure better deals. Zarlenga’s background in financial reporting and profit enhancement ensures that negotiations prioritize both immediate gains and long-term sustainability.
• Revenue Cycle Optimization: By conducting operational and revenue cycle reviews, HBK pinpoints inefficiencies—such as high denial rates or slow payment timelines—and negotiates contract adjustments to address them, improving cash flow.
• Data-Driven Insights: Leveraging industry benchmarks and practice-specific data, Zarlenga helps clients demonstrate their value to insurers, strengthening their negotiating position. This includes highlighting patient volume, quality metrics, or regional scarcity to justify higher rates.
• Specialized Healthcare Expertise: With a focus on medical billing, credentialing, and contract assistance, HBK tailors its approach to the unique needs of each practice, whether it’s a solo physician or a multi-specialty group.

For instance, a private practice struggling with low reimbursements might turn to HBK for a full contract overhaul. Zarlenga’s team would analyze current payer agreements, benchmark them against market standards, and negotiate with insurers to increase rates by 10-15%, potentially adding tens of thousands of dollars to annual revenue—all while reducing administrative hassles like excessive prior authorizations.

Building a Negotiation Strategy

Effective negotiation requires preparation and, often, professional support. Practices should start by assembling a team, whether in-house (e.g., a practice manager with billing expertise) or external (e.g., HBK Healthcare Solutions). This team can analyze current contracts, identify pain points, and develop a proposal grounded in data and patient care priorities.

When engaging insurers, timing is key. Approaching negotiations well before a contract’s renewal date—typically 90-120 days—provides ample room for discussion. Practices should also be willing to walk away if terms don’t align with their goals, as insurers often rely on provider participation to maintain their networks. A united front, such as negotiating as part of a physician group or IPA (Independent Practice Association), can further amplify leverage. HBK guides practices through this process, offering strategic advice and hands-on support to ensure successful outcomes.

The Bigger Picture

Beyond immediate financial gains, negotiating commercial insurance contracts is about advocating for the value of medical services. Fair reimbursement rates enable practices to invest in advanced equipment, hire skilled staff, and expand access to care—outcomes that benefit patients and communities. In an era of consolidation and rising administrative burdens, mastering this skill empowers practices to thrive independently and uphold their mission. With HBK Healthcare Solutions and Josh Zarlenga’s expertise, practices gain a powerful ally in this effort, turning contract negotiations into a catalyst for growth and stability.

In conclusion, negotiating commercial insurance contracts is a linchpin of financial resilience for medical practices. It demands time, expertise, and a strategic mindset, but the payoff—higher revenue, smoother operations, and sustained viability—far outweighs the effort. As the healthcare industry grows more competitive, practices that partner with specialists like HBK Healthcare Solutions and leverage leaders like Josh Zarlenga will not only survive but flourish.