Andrew Parrish is CEO and president of Diligentiam, a consulting firm that specializes in due diligence and transaction advice, along with tax and financial strategy.
He previously served as founder of a tax strategy company known as Alternative Tax Solutions, and has experience in operational management, customer service, and international and domestic sales management.
PBN: How has your company been impacted by COVID-19? Has demand for certain services – accounting/tax consulting, business valuation, strategy – changed dramatically as a result?
PARRISH: We have been fortunate that we have not had any case of COVID-19 among our employees nor have any of our employees experienced any flu-like symptoms.
We have seen the demand for our services grow this year. It is important to note that our company did not perform any Paycheck Protection Program-related services for our clients because we do not perform general accounting or payroll services. We have seen growth in our tax consulting services because we helped our CPA [certified public accountant] clients fully leverage the CARES [Coronavirus, Aid, and Relief Economic Security] Act net operating loss carryback provisions.
In the third quarter, we have seen growth in our business valuation, evaluation and strategic structuring services for companies looking to sell their business and/or acquire a business. We are forecasting continued growth in the fourth quarter.
PBN: Financial valuations and projections seem especially important for companies right now, yet predicting how their business will be impacted in an uncertain economy has also become more difficult. What tools or strategies have you used to offer financial assessments and projections during this time to your clients?
PARRISH: Right now, the biggest problems clients are facing [are] managing cash burn and forecasting future sales accurately. We utilize diagnostic data analytics tools to help solve these problems. Some of the diagnostic data analytics tools we use are Excel, Access, Sequel and Python, and for graphical representation and modeling of unstructured data, we use KNIME.
In many situations, traditional methods of performing business valuation will be less useful because the effects of COVID-19 have changed the dynamics of industries and markets. The intrinsic nature of the ebb and flow of business is changing not only because of COVID but also because of the changing supply chains, sourcing of materials, and currency fluctuations and restructuring.
Data analytics and the graphical structuring of big data will be needed to provide in-depth customer cohort analysis, to establish brand value and the value of intellectual property, and to understand the effects of geopolitical uncertainties. All of these criteria and more will be needed to provide accurate business valuations.
PBN: Your company was founded on a data analytics-based approach. How has having that background and investment in tools/technology been advantageous since the pandemic began?
PARRISH: Diligentiam is utilizing data analytics to mine new insights from both historical and external data to improve our clients’ negotiation strategies. We accomplish this by providing transactional due diligence that includes assessing risk and compliance issues, conducting tax and financial planning, and determining cash flow models.
We help our clients who want to sell their business tell the real story behind the numbers despite setbacks that may have occurred because of COVID-19. Examples of Diligentiam’s data-driven services include:
- Behavior analytics to understand potential partners more clearly.
- Available talent pool analytics for demographic region, utilizing LinkedIn profile information.
- Customer cohort charts analysis to understand the potential partner’s customer base more clearly.
- Data Analytics on pre-close integration planning and post-close integration and implementation.
PBN: Are there other ways your business is better positioned – or has been changed to become so – compared to competitors?
PARRISH: Because we are tax consultants, we utilize areas of the tax code to obtain net operating loss carrybacks, as well as obtain tax credits, both of which may be used to create a cash infusion into the business that more than pays for our services.
Before we engage with our clients, we also do a free analysis report to ensure that we have a full understanding of their situation and that our clients have a full understanding of Diligentiam’s solutions and the economic benefits and ramifications.
PBN: What long-term impacts do you think the pandemic will have on financial consulting services such as tax and valuations, both for your company and the industry as a whole?
PARRISH: I believe many financial consulting companies are beginning to realize that having employees working from home is very productive and efficient, thus raising the real possibility of reducing overhead expense. The use of new technologies, such as data analytics and AI [artificial intelligence], will increase profit per employee.
I also believe there will be a need for some of their clients to obtain financing from traditional sources, and there is a lot of pent up mergers and acquisition activity that has started in the third quarter and will continue to expand all the way through 2021. The tax code will continue to be used to stimulate the economy, and tax consultants should be very busy helping their clients utilize complicated parts of the tax code to both alleviate tax exposure and create cash infusion into their businesses.
Nancy Lavin is a staff writer for the PBN. Contact her at Lavin@PBN.com.
