Taking Stock: Atlanta CFOs Focus on Priorities for the Future

Halpern’s Chief Financial Officer, Lisa Loften

Back in June, at The Wall Street Journal’s CFO Network conference, CFOs and other corporate executives met and presented management and policy recommendations that their colleagues should pursue.The conference attendees voted on the top five priorities for 2013: lower corporate tax rate, improved cybersecurity, territorial tax system, energy’s chance of a lifetime with the oil and gas renaissance in the nation, and infrastructure investment.For Atlanta-area CFOs, the common themes included tax reform, technology use, the implications of the Affordable Care Act and internal environments that promote business growth.

Lisa Loften is the chief financial officer of Halpern Enterprises Inc., a family-owned company that owns more than 3.4 million square feet of leasable space in 33 retail properties, who keeps a close and concerned eye on current interest rates. She also is worried about the rising costs of health care and ever-evolving technologies.

“These are the things that keep me up at night and these are the topics I talk about when I go sit down with the chairman and president of my company,” she said.

The uncertainty in the interest rate environment makes her question what the future holds. While somewhat specific to her job and industry, it is still something that Loften believes affects a majority of financial officers because most businesses need real estate.

“How will the Fed extricate themselves out of the stimulus package that has kept interest rates artificially low? They can’t do it too quickly because we would have chaos but at some point they have to pull out,” she said. “It’s like taking the training wheels off and letting the economy grow on its own. We know there will be some stumbles along the way.”

Until that happens, investors are acting fast to take the “last bite of the apple” before interest rates go up significantly and that is creating an unprecedented workload for Loften and her team.

With only 30 employees, Halpern outsources its IT function. Still, Loften stays on top of the rapidly changing technology infrastructure — another area of concern.

“We run really lean but still we have a very sophisticated technology infrastructure for a company of our size, but it is a challenge to maintain that system and make sure we are not missing out and are utilizing technology fully, effectively and efficiently,” she said.

Another issue high on her radar is raising health-care costs and the implications for the business and its workers, especially as the Affordable Care Act goes into effect.

“I am not sure what is going to happen on this front,” she said. “I am working on my 2014 budget right now and I have no idea what to put on the line that addresses health-care costs. Providing health-care benefits is critical to retain good talent, but we have to closely look at those benefits each year.”

Jeremy Wilson, manager at Draffin & Tucker LLP, a public accounting firm that serves a large segment of not-for-profit health-care systems and hospitals along with a number of closely held businesses in a variety of industries, also believes health-care reform has business owners and CFOs concerned.

In his position, Wilson gets an interesting perspective from both the health-care providers who are unsure about reimbursement rates and processes and from the business owners who don’t know how health-care reform will affect the bottom line.

“There is a lot of uncertainty on what this will do to the cost of health care, in particular for the short term,” he said.

But an even bigger concern for Wilson is much-needed tax reform.

“With my clients, we are hearing a lot about tax reform and the tax system. It has gotten so complex,” he said.

Since many of his clients are taxed at the individual level, sweeping reform that only affects corporate tax structures won’t help them.

“If we have corporate tax reform, that is essentially not even going to touch a lot of my clients because many are flow-through entities,” he said. “I don’t know if you can break out the individual and corporate tax reforms, which makes it that much more difficult to do a complete overhaul.”

One thing that affects Atlanta businesses’ ability to grow is the city’s transportation woes.

“Infrastructure will continue to be an issue in Atlanta until we can fully, or even partially, address the issue. The defeat of TSPLOST last year left people scratching their heads and wondering what is the alternative now. All our eggs were placed in that basket. It was almost like TSPLOST or bust, and we ended up in a bust situation,” Wilson said.

This creates more difficulty for the city to attract new businesses and grow a customer base for existing businesses. This can also speak to talent retention, he said.

“If I can get roughly the same job and with the same salary and cut my commute time by an hour, why stay in Atlanta versus some other city?” Wilson said.

Chris Albrecht, CFO of Integrated Care Management, said as his company continues to grow 30 percent year over year, he and his business partner have been focused on business growth. They have done this by streamlining their product offerings, hiring talented employees and providing an environment where employees can succeed and earn competitive compensation and great benefits, he said.

“We have tried to build a place that is more than just a place to hang your hat. It is very team-oriented and feels more like family,” he said. “That is the secret sauce as to what we stay focused on and that in turn helps us stay focused on our growth.”

Another secret to success Albrecht said other CFOs can learn from is that ICM has built a strong relationship with its banking partner, which has led to an increased line of credit.

“Access to capital has been a big concern for other businesses,” he said. “We have built and cultivated a very close relationship with our banking partner.”

ICM has taken advantage of many bank services and technologies that take daily duties, like check writing and keying in checks, off the desks of ICM employees.

“We have tried to leverage technology to keep our group lean and mean. To us, taking advantage of these offerings seemed blatantly obvious but still so many companies do these things the old school way instead of taking advantage of the technologies available to them,” he said. “For me it was a matter of cost benefit — how can I utilize my staff’s time to contribute to growing the business without doing the mundane business duties?”

High priorities

Metro Atlanta CFOs say their top-of-mind issues are:

–          Tax reform

–          Technology use

–          Implications of the Affordable Care Act

–          Internal environments that promote business growth