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FFSC Board Notes

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This is the first Board Notes we’ve sent since March, so you have not been missing issues, we’ve just not been preparing and sending any. With all the activity going on with the summer meeting, membership renewals, etc., it’s been hectic.

New Council Leadership

Todd Doehring, second from left, heads up the new FFSC leadership team elected at the Council’s annual meeting held July 27 in Champaign, IL. Doehring is a director with Centrec Consulting Group, Savoy, IL. Other members of the leadership group are, from left: Jan Bitter, Immediate Past president, vice president at Farm Credit East, Homer, NY; Keith Raynor, Vice President, principal with TRP CPAs, Dunn, NC; and, Brenda Duckworth, Secretary/Treasurer, farm staff accountant with AgriVision Farm Management, Hartley, TX. Board members elected at the meeting are: Jonathan Shepherd, University of Kentucky; Bill Rutter, MidAtlantic Farm Credit, Westminster, MD; Deena Brown, CGB Agri Finance Services, Louisville, KY; Angela Chesley, Van Bruggen/Vande Vegle, PC, Rock Valley, IA; Kathy Reinhardt, Reinhardt Farms, Seaton, IL; and, Lyle Anderson, Rabo AgriFinance, Billings, MT.

 

Thank You, Jan

New FFSC President Todd Doehring presents a special commemorative president’s gavel to Outgoing President Jan Bitter. Prior to being elected Council President in 2017, Bitter served as Vice President and Secretary/Treasurer of the Council as well as on numerous committees. As Vice President she chaired the 2017 Annual Conference which was held in Syracuse, NY.

New Directory Coming Very Soon

The new Council Membership Directory will be coming to you very shortly. This will be updated with the current membership roster and complete contact information on the new leadership group. We are awaiting photos of some of the officers, committee members and directors and will then get it out to all.

We’d Like to See Your Face

It’s always great to know who you are communicating with and an easy way to make that happen with your Council Colleagues is to send us a head-and-shoulders photo of yourself and we’ll add it to the directory. Color jpgs work best, of course. Just send along something you have — does not have to be formal or in a business suit or dress. Will need by Friday, Sept. 7 to make this edition. 250-ppi jpgs are just fine. Please…no low-rez…you will NOT like the way you look.

Share your thoughts about the Council

One of the keys to attracting new, and even retaining current members, is the sharing of your thoughts regarding your experience/relationship with the Council…we are always looking for comments from members that can be used to promote membership. Have you met colleagues from across the country? Found participation in one of the committees to be rewarding personally and/or professionally? And if you have a complaint or other concern that should be shared with the leadership we want those as well!!

Are you Actively Involved with the Council?

When we discussed changing the dues at the Council last year there was concern about membership retention….would the dues get to be too high? What benefits of membership could we offer that would make people really want to stay members of the Council? Our experience has been that those who are actively involved with the happenings of the Council take on an ownership role with the organization. They are not just sitting back and waiting for something to happen….they are MAKING things happen and they develop an enthusiasm that becomes contagious.

Are you missing this spark? Contact any one of our committee chairs and ask them how you can become more involved. And COME TO THE ANNUAL MEETING! Everyone who attends this event has a great time and meets colleagues from across the nation, literally. If you have other possible benefits to membership, let us know. We don’t pretend to know all the ways to make belonging to an organization

2019 Annual Meeting

Mark your calendars now for the 2019 FFSC Annual Meeting. It will be held July 24 – 26 at the DoubleTree by Hilton, Raleigh Durham Airport at Research Triangle Park near Durham, NC.

Going to the ABA Ag Bankers Conference?

This will be in Omaha November 11 – 14 and the Council will be there. If you are attending, stop by our booth in the Exhibit Hall and say ‘hi.’ More information on the conference and registration is on the Council Web site.

That’s probably enough for now.

Watch for your new directory (Send us your photo today!!), and don’t be a stranger… stay in touch and let us know how the Council is a part, however small, of your professional life…….

Carroll Merry
Administrator, FFSC
cmerry@countryside-marketing.com
262-253-6902

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Annual Conference Recap

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Over 70 agricultural finance professionals, spouses and other family members gathered in Champaign, IL July 25 – 27 for the 2018 annual conference of the Farm Financial Standards Council. The program consisted of committee meetings and topical discussion, general speaker presentations, a tour of local agricultural facilities, and LOTS of networking. Those attending were from across the U.S., literally, with representatives coming from as far as Washington state, Maryland and North Carolina, Texas to Montana and states in between.

We’ve compiled a photo recap of the festivities. (See the PDF version here.)

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Join the Council in Omaha!

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Many members of the FFSC will be at the ABA National Agricultural Bankers Conference in Omaha November 11-14. You can join us by registering here.

Information from the conference organizers:

The Ag Banking landscape is evolving, and sustaining a successful connection to your customers and communities is more important than ever. How do you find your ground in an environment of ever-changing customer expectations, economic factors and risks?

Join us to learn about opportunities to position you and your customers for future success, network with colleagues and experts and gain unique perspectives into the world of agricultural banking. 

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Todd Doehring Heads New FFSC Leadership Team

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Todd Doehring, second from left, heads up the new FFSC leadership team elected at the Council’s annual meeting held July 27 in Champaign, IL. Doehring is a director with Centrec Consulting Group, Savoy, IL. Other members of the leadership group are, from left: Jan Bitter, Immediate Past president, vice president at Farm Credit East, Homer, NY; Keith Raynor, Vice President, principal with TRP CPAs, Dunn, NC; and, Brenda Duckworth, Secretary/Treasurer, farm staff accountant with AgriVision Farm Management, Hartley, TX.

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Board Notes – March 2018

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Check out our latest tidbits and news for the officers, committee chairs, members of the board of directors, and the general membership of the Farm Financial Standards Council. (Download in PDF form.)

New Membership Directory

A new FFSC Membership Directory has now been produced and distributed to all active FFSC Members. If you did not get one in your e-mail box, let me know and I’ll happily send you a replacement. Total membership has climbed to 182.

We’d Like to See Your Face

Past FFSC President Paul Neiffer and past FFSC Director Curt Covington discuss their presen- tatoins before addressing the crowd of 150 at the event. This is the 5th Boot Camp the Council has co-sponsored with Farm Futures magazine. Other Council board members attending this year included David Olson, co-chair of the Marketing Committee, and Mark Compton, co-chair of the Finance Committee. If we missed noting other Council members please accept our apology.

It’s always great to know who you are communicating with and an easy way to make that happen with your Council Colleagues is to send us a head-and-shoulders photo of yourself and we’ll add it to the directory. Color jpgs work best, of course. Just send along something you have — does not have to be formal or in a business suit or dress.

Kent Meister is doing well

A past FFSC President and our current CFO, Kent suffered a stroke in mid-January andafter many weeks in a hospital in hometown Bloomington, IL is now recovering and receiving therapy at home. Fortunately, his wife, Karen, retired recently so she is available to assist him in getting around the house. He has regained dexterity in both hands and is now doing ‘some tax work’ to stay busy. He is up and functioning completely in his CFO capacity. As soon as he is able to get in and out of their personal vehicle he will go to continued therapy sessions. The two are looking forward to seeing all their friends at the July meeting in nearby Champaign.

Of the get-well gift sent by the Council, Karen writes: Thank you for the rubber tree plant. It is a very nice plant and looks great in our home now that we have been able to come home.

Upcoming Trade Shows

The Council will be present with a display at the annual NFRBMEA Conference which will be held June 10 – 14 in Harrisburg, PA; the AICPA Conference which will be in Las Vegas in July, and the ABA’s National Agricultural Bankers Association conference in Omaha November 11-14. If you are going to be attending any of these events and can spend some time assisting in managing the FFSC display, please let me know.

Annual Conference Coming July 25 – 27

Past FFSC President Ron Swanson and current Director Kathy Reinhardt were part of a panel discussion at the Farm Futures Financial Boot Camp held January 17 in Coralville, IA.

This year’s FFSC Annual Conference will be held at the Hilton Garden Inn in Cham- paign, IL July 25 – 27 and ALL ARE WELCOME TO ATTEND. The final agenda along with registration information will be coming out right around April 1 (no joke!!). The agenda will follow that from previous years….

• Wednesday afternoon (July 25) Committee Meetings — These are open to anyone wishing to participate with NO OBLIGATIONS. What we really want are your ideas. That evening we will have a welcoming reception and barbecue. This is open to all who attend including spouses, significant others and family members who just happen to be traveling with you.

• Thursday (July 26) — Speakers throughout the day with enough programming to qualify for 6 hours of professional CE. (The Council is a registered CPA education provider and certificates of attendance will provided to all who request them. An evening activity is in the works.

• Friday (July 27) — Committee reports and the annual business meeting and election of officers and directors. We will be electing two directors for three-year terms and a secretary/treasurer who will then serve in the chairs to advance to vice president and president of the Council. IF YOU WANT TO BE NOMINATED let us know. The Nominating Committee will be meeting soon to develop the slate for election. Optional afternoon activities are being developed but will likely include a visit to a local grain farm and elevator.

There will PLENTY TO DO in the area if you want to consider bringing family for a bit of a vacation….at the top of the list should be the Abraham Lincoln Library in Springfield….AWESOME is the only word we know of to describe the experience there and it is for the entire family. We will include links to the local Convention and Visitor’s Bureau website with the registration information.

Like Us On Facebook

The Council is expanding its presence on Social Media and has a Facebook Page…. please visit us…just type in Farm Financial Standards Council, Like us and help us get this train moving. We’re also looking for members who have experience working with Twitter… please contact David Olsen, co-chair of the Marketing Committee, if you want to lend a hand and offer us some advice. We are also on LinkedIn. But we need your involvement to help us grow our networks.

Committee Co-Chairs (Contact information is in the directory)

Technical Committee
Jeff Bushey, Nietzke & Faupel, PC
Alan Miller, Purdue University (retired)

Marketing Committee
Brenda Duckworth, AgriVision Farm Management
David Olsen, Agrifamily Consulting, Inc.

Finance Committee
Scotty Elston, AgTexas Farm Credit Services
D. Mark Compton, Compton Accounting

Membership Committee
Grace Richardson, Freed Maxick CPAs
Thomas Groppel, Cedar Ridge Farm

That wraps it up for now… Keep an eye out for information coming on the July meeting….and start looking at things to do and see on the way to and from Champaign….make it a family event and bring ’em all.

Happy St. Patrick’s Day!!

Carroll Merry
Administrator, FFSC
cmerry@countryside-marketing.com
262-253-6902

 

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FFSC Releases Free Implementation Guide

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(Menomonee Falls, WI — November 1, 2017) Never have the financial stakes been higher in agriculture, yet few producers have the accounting training to effectively monitor and control their expanding operations. In direct response to the Farm Crisis of the ‘80s the Farm Financial Standards Council (the Council) developed its Financial Guidelines for Agriculture. This document is designed to assist in developing sound financial statements on agricultural operations. However, direct adoption of the Guidelines by farmers has been hampered by two obstacles – understanding financial terms and not being accountants.

Get Our Free Implementation Guide

Download our free implementation guide for better financial decision-making.

For that reason the Council has developed and now released a 17-page Implementation Guide to assist non-accounting individuals in developing sound financial reports. It is available free of charge and is designed to be used in tandem with the Financial Guidelines and Management Accounting Guidelines documents available through the Council.

This is according to Jeff Bushey, CPA, a managing partner with Nietzke & Faupel, PC, an accounting firm in Pigeon, MI. As chair and a long-time member of the Technical Committee for the Council., he and fellow committee members are charged with keeping the Guidelines documents current and publishing revisions to them when deemed necessary.

“The first obstacle to adoption is often expressed as the question, ‘How do I get started moving beyond basic, mandatory tax records to meaningful financial reporting’?” Bushey says. “Most agricultural producers and lenders are already using some system to collect and report financial information with farm record books or record keeping software programs which are designed to provide information for two purposes: reporting federal income taxes, and; securing a loan from a financial institution.”

That information is required, at least annually, he explains. “With some additional information, the result can be a vastly-improved financial reporting program.”

This is compounded by a second obstacle: farmers and ranchers are great producers but generally are not accountants. “In a cost-versus-benefit framework, the cost is often considered too high to fully implement the Guidelines,” Bushey says.

“The new Implementation Guide is a simple way to learn how to use the Financial Guidelines. It’s written for a farmer using everyday terms,” Bushey explains. “The Financial Guidelines explain how to produce useful financial information. The Implementation Guide is a road map of how to get there.”This publication leads non-accountants in an abbreviated implementation of the Guidelines by applying a checklist approach and discussion of implementation issues. This checklist enables users to assess the information needed at the various stages of implementation and the benefits and costs associated with moving to each successive stage.

“Once they categorize their current level of farm records users can then begin advancing at their own pace through up to four stages of implementation,” he states. “For example, Stage I only requires a cash basis tax return, Stage II adds a market value balance sheet, Stage III incorporates cost basis valuation and Stage IV completes the process with double-entry accounting records.”

“The Implementation Guide suggests that producers don’t have to go all-in to benefit from partially implementing the fundamental financial reporting concepts discussed in the Financial Guidelines and that the recommendations are likely to be implemented in stages,” notes retired Purdue University Extension Specialist and CPA Alan Miller. He is also a long-time member of the Council’s Technical Committee.

He explains that as in any do-it-yourself project, a level of commitment will be required to achieve meaningful results. These commitments will often require changes in daily, or at minimum weekly, operating procedures.

“Family members and employees must also be committed to the timeliness, accuracy and discipline in gathering information and coding transactions to lay the groundwork for improved financial control and decisions,” Miller explains.

“Each producer must ultimately determine to what extent they will receive additional net benefits from adopting more of the recommendations.”

As farmers implement the Guidelines they can begin benefitting in these areas:
• Improve management decision-making and enhanced profitability
• Better lender relationships and access to capital
• Enhance production as well as financial understanding of their business
• Focus on strengths that set them apart from their peers
• Determine cost of production (through the Council’s Managerial Accounting Guidelines)
• Gain a better understanding of standard financial measures

“A fundamental concept of financial reporting is that accounting period profitability can only be measured accurately on an accrual basis. Cash basis income tax returns are not indicative of farm profitability,” Miller stresses.

“The net benefit of moving to the next stage — accrual-adjusted financial reports to assess farm profitability and financial condition — will be a huge improvement in the quality of information available for decision-making.”

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Board Notes

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Tidbits and news for the officers, committee chairs, members of the board of directors, and the general membership of the Farm Financial Standards Council.

New Membership Directory

A new FFSC Membership Directory has now been produced and distributed to all ac-
tive FFSC Members. If you did not get one in your e-mail box, let me know and I’ll
happily send you a replacement.

Wanna See Your Face?

It’s always great to know who you are communicating with
and an easy way to make that happen with your Council Colleagues is to send us a
head-and-shoulders photo of yourself and we’ll add it to the directory. Color jpgs work
best, of course. Just send along something you have — does not have to be formal or
in a business suit or dress, any ol’ pic will do — and we’ll add it to the next issue of the
directory. If you sent us one and it’s not in this issue, my apologies….send it again and
we’ll get it added.

Been in the News Lately?

Share it with us. If you’ve been in your local news lately,
share the information with us so we can spread the word to your fellow Council mem-
bers. Did you make presentation to a local service club? Even a grand opening at your
business or being named a C of C Amabassador. Or did you serve on a panel talking
ag finance?…..We want to put a very human face on the Council and the best way to do
that is to show our industry that we are just normal folks who are business people who
just happen to have a penchant for working with ag financial programs. It would really
be great if we could get some pix of our folks and post them on our web site…..at which
we do NOT share contact information on members (nor do we share our membership
roster with anyone!!)

A Torch has been Passed.

Owen Thompson served as president of the Council some years ago and was the real
driver behind getting a membership program going with the Council. After he was
finished serving his ‘terms’ in the leadership chairs he was ‘convinced’ (read coerced)
into being the Chair of the Membership Committee, a role he eventually shared with
Keith Raynor. When Keith left his spot on the committee to become Council Secetary/
Treasurer we were fortunate enough to have two ‘new’ members come forward and
volunteer to take on the shared roles of Membership Committee Co-Chairs,….Grace
Richardson and Tom Groppel….. finally giving Owen a break as well. So after his many
years of leadership, Owen has relinquished his duties as the head of the committee….he
did stick around for a couple of conference calls the help get Grace and Tom launched
with their new duties….

This is just a long way of saying “Thank You, Owen” for the vision you had of devel-
oping a membership program and for being a constant driver in making it successful.
And good luck with the deer hunting!!

2018 Committee Co-Chairs

(Contact information is in the directory)

Technical Committee
Jeff Bushey, Nietzke & Faupel, PC
Alan Miller, Purdue University (retired)
Marketing Committee
Brenda Duckworth, AgriVision Farm Management
David Olsen, Agrifamily Consulting, Inc.
Finance Committee
Scotty Elston, AgTexas Farm Credit Services
D. Mark Compton, Compton Accounting
Membership Committee
Grace Richardson, Freed Maxick CPAs
Thomas Groppel, Cedar Ridge Farm

Gonna Be Near Milwaukee or Cedar Rapids?

Stop by the ABA National Ag Bankers Conference in Milwaukee November 12 – 15 or
at the Farm Futures Boot Camp in Cedar Rapids, IA on January 17. The Council will
be well represented at both in the trade show areas and at the podiums where members
will be making presentaitons. So if you are in the area….stop by and say “Hi.”

No New Guidelines for 2018

There will be NO updates to the Financial Guidelines for Agriculture at the end of this
year so the current document will remain in use for 2018.

2018 Dates and Location

Hilton Garden Inn, Champaign, IL, July 25 – 27, 2018.
Todd Doehring is in charge and has been working on the program for some time.

Contact
Carroll Merry
Administrator, FFSC
cmerry@countryside-marketing.com 262-253-6902

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Purposeful Loan Presentations; What You Say and How You Say It Really Does Matter

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By Tim Ohlde, President of Elk State Bank

People often joke about how much they detest public speaking. But for many, it isn’t a joke, they truly dread the thought of it. And, at least for some people right up there with public speaking is writing. Recently regulators have elevated the importance of loan write-ups; the financials will always be important, but the narrative is receiving increased review. Unfortunately, a fair number of loan officers dread writing. So, let’s discuss a few key aspects of the presentation content and how to elevate it to a highly effective level.

Make sure your Loan Presentation does Its Job – A good loan presentation provides a frame of reference for the borrower’s business, the current request and the relationship that the borrower has with your institution. It should set the stage for how this request fits into the broader scope of the operation and the long-term business plan. This might include referencing the complexity of the request and its size relative to the overall operation, the borrower’s management capacity and any competitive advantage that the business has in regard to product or service. At a minimum, it summarizes the request itself and makes a recommendation.

Remember Who Your Audience is – Typically the loan presentation is prepared for three different audiences. First, it is used by the lender to capture information and rationale for the decision on the credit request. Second, there is likely an internal or external loan committee or Board of Directors that will use it. Third, regulators will review at least a sample of loan presentations during exams. When studying a file, they will go to the loan presentation first and often review it offsite, so they read the loan write-up without bank staff available to answer questions. Make sure that what is written and the financial information included will be meaningful to all three groups. And one final audience that is hopefully avoided; a judge in a courtroom. Loan presentations may be requested by the court in the case of a dispute with a borrower.

Capture Context – If there is anything happening outside the borrower’s sphere of influence that may be impacting their business, make sure to reference it. Examples might be a significant change in their specific industry or the loss of a significant competitor.

Require Consistency – Having the same information, in the same format, presented in an organized and orderly fashion helps all audiences track key data. This is particularly powerful when external loan committee members and regulators are wanting to become familiar with the credit.

Develop a Format – Adopting a template for loan presentations that everyone within the institution will use builds commitment to improving credit file content. A presentation model is a tool that makes success in this area more likely. Having this agreed upon template is especially helpful when training a new lender. The model also allows for lenders to easily replicate static information that appears in each loan request. This would include the history of the operation and the background of key managers/owners.

Master a Writing Style – Strive for being succinct but thorough, focused and meaningful. Use words, tables, and formats that draw attention to key items and that lead the reader logically through the loan presentation. Use underlining, bold or italics to highlight key aspects of the financial information and demonstrate understanding of what they mean. The narrative should not restate financial data; it should expand on why and how financials have or will change. This is where a lender demonstrates depth of analysis. Less is more; extra words or uncommon words are undesirable; keep it clear and straightforward so the reader is focused on content, not extensive vocabulary.

Identify Financial Detail – Typical items to include, usually in charts or tables are; Balance Sheet trend analysis, Income Statement trend analysis, collateral coverage, ratio trends and repayment capacity. The repayment analysis will include sensitivity testing as well as timing of repayment based on a cash flow projection. These items usually culminate in credit scoring and/or grading and a summary of the overall credit risk based on the proposed request. Information about a guarantor, if there is one or if one is needed to recommend the loan, will be included because the guarantor’s financials will be reviewed as well.

Expand on Financials – Regulators and Loan Review Committee members are looking for the explanation behind the numbers as proof that the analysis was performed and understood. Back up the recommendation with the facts first, but evaluate context and add interpretations of the financial information.

Make a Recommendation – A summary section with the recommended action and rationale is a basic requirement so make sure that is prominent. This should include how the request scores within your risk rating system and any exceptions that might be necessary. Some institutions summarize the request and the recommendation at the beginning while others leave the recommendation to the end following the financial overview.

Find a Mentor – Look for a colleague who likes to write and organize information. This is the person to create the loan presentation template and to help review the final product for flow as well as missing information. It is hard to objectively review one’s own work; what may be apparent to someone with a long relationship with a borrower may not be obvious to someone taking a first look. After gaining experience, most lenders will outgrow the need for a mentor.

A commitment to exceptional Loan Presentations gets easier over time and reaps immense benefits when reviewing requests. It is also a great opportunity to deepen understanding of a borrower’s business and hopefully the bank’s relationship with them. As a lender strives to explain financial information an opportunity is created for rich and meaningful dialogue with the customer. Most lenders will always prefer numbers to words. But, the numbers alone can’t tell the whole story, the challenge of expressing what the numbers mean creates a better lender and a stronger loan.

Tim Ohlde is President of Elk State Bank based in Clyde Kansas and Founder and CEO of Country Banker Systems LLC, a Loan Analysis Software Product for Ag, Commercial and Consumer Lenders. Tim can be reached at HYPERLINK “mailto:timo@countrybanker.com” timo@countrybanker.com or 1-800-780-5479.

This article originally appeared in the Third Quarter 2017 issue of Ag Banking, a BankNews Media publication.  Copyright 2017 BankNews Media. All rights reserved.

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FFSC Membership Directory – Join Us!

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There are over 160 professionals from around the country, and a couple of international members as well, who are members of the Farm Financial Standards Council. We do not share contact information on these individuals except between the members themselves.

If you would like to become part of this exclusive group of professionals go here.

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Annual Conference Recap & New Leadership

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Janice Bitter, vice president at Farm Credit East, Homer, NY, and new President of the Farm Financial Standards Council, is flanked by her team of officers who will serve for the next year. Behind Bitter, from left, are: Todd Doehring, director with Centrec Consulting Group, Savoy, IL, FFSC Vice President; Keith Raynor, principal with TRP CPAs, Dunn, NC, Secretary/Treasurer, and; Stephen Severe, CFO at Padlock Ranch, Ranchester, WY, Immediate Past President. The four were elected to their terms at the Council’s Annual Conference held in Syracuse, NY.

Download our PDF Photo Recap

Presentations

Tax Opportunities with Succession Planning

Benchmarking FFSC July 2017 Full Slides

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