One Client’s Perspective: How Metal Flow Has Become Tax Lean
Universal Advisor, 2007 Issue No. 1

Headquartered in Holland, Michigan, Metal Flow is a privately owned company that supplies complex deep-drawn metal components and assemblies to customers around the world. Committed to delivering exceptional service and world-class quality using lean manufacturing techniques, it’s no wonder that they’ve embraced lean concepts in other areas of their business as well. Metal Flow’s CFO, Kent Jagnow, recently sat down to discuss how Plante & Moran’s tax team has helped Metal Flow become tax lean.

Plante & Moran’s tax team defines “lean” as identifying and minimizing wasted tax dollars, as well as identifying and utilizing available tax credits and incentives. In what ways has Plante & Moran assisted Metal Flow in becoming tax lean?

In all kinds of ways; throw out a tax question, and they’ve probably helped us. One thing that immediately comes to mind is the nexus study they conducted. We’d been paying 100 percent Michigan tax on all of our sales; thanks to the study, we were able to divert a considerable amount of sales into other states, saving us hundreds of thousands of dollars.

Was that Plante & Moran’s suggestion, or did you retain them specifically for that service?

It was their suggestion. We’d considered it in the past but had been told by our previous advisors that it wasn’t worth looking into. Plante & Moran came to us with the idea and a cost/benefit projection. The results were astronomical — I wasn’t aware we’d be saving that much money. It was a no brainer. The same goes for the research and development (R&D) study.

You were previously unaware of the R&D opportunity?

I knew just enough to be dangerous. Prior to Plante & Moran, we were told that R&D studies required a tremendous amount of work up front to make them cost effective — that every “i” had to be dotted and every “t” had to be crossed. We’re not a large company — we don’t have an accounting department where people are stumbling over each other — so we just didn’t see the cost benefit. Then Plante & Moran came in, identified the opportunity, and came back with an approach, the related costs, and the potential savings. Now I had something to look at — something concrete. And they took all of the headaches away. They did the interviews; they took care of the necessary reports and documentation. It became much less time consuming for us, and again, the benefits have been tremendous.

You’re very complimentary of the firm!

[laughing] Just make sure you let your readers know I’m not on the payroll! Seriously, though, working with them has been great. It became apparent very early on that this wasn’t just going to be a “we’ll come in, do your taxes, and then see you in a year” kind of relationship. It was obvious they were in it for the long haul.

So they’ve become business advisors as well as tax advisors.

Absolutely. We bounce things off of them all the time, and they’re constantly coming up with new opportunities. For example, when we told them we’re building a 45,000-square-foot addition, they suggested we do a cost segregation study. We’d done one 12 years ago, but it’d been awhile, and we’d forgotten that opportunity even existed. They came in with the cost/benefit analysis, and away we went!

How important is partnering with a firm that takes the time, up front, to understand your history and strategic direction?

Every company has a personality, and Plante & Moran took the time to learn ours. That makes it much, much easier for us to discuss issues. For example, I’m not a wine and dine kind of person. Don’t take me out to lunch every week — I don’t want that. They took the time to learn these things, which has made it much easier for them to become involved as a partner in our overall operation.