Plaxo Update: Financial Crisis Reactions

There’s a no-holds-barred discussion of the financial meltdown going on in my Plaxo/Pulse network.

If you’re already a Plaxo member, join the poll and the discussion here: http://pulse.plaxo.com/pulse/events/show/91930688.

Or join us on Plaxo here: http://pulse.plaxo.com/pulse/.

We kicked it off by asking in a poll: On a 10-point scale, how concerned are you about the Wall Street “market meltdown?”

After 60 votes, here are the standings:

10 - Beyond concerned. This is a PANIC! - 1%
9 - Extremely concerned. - 20%
8 - Very concerned. - 28% Read more

Posted on October 11, 2008
Filed Under BSG [CPA TRENDLINES] | Leave a Comment

CPA = Certified Partisan Accountant?

Long Island CPA firm gets caught in crossfire of feuding LLC partners.

This is rare: A CPA has been sued in spin-off litigation involving charges of improperly taking sides in an underlying dissolution case. It could have a bearing on disputes and breakups among owners and partners for many a company.

Three years after going to work for a company, Needleman & Schacter CPAs of New Hyde Park, N.Y., got sued by one of the company’s partners after a falling out, via Peter Mahler, attorney at Farrell Fritz.

Here’s what happened: Read more

Posted on October 11, 2008
Filed Under BSG [CPA TRENDLINES] | Leave a Comment

NEW STUDY LAUNCHED: THE CPA/CLIENT CONNECTION

Take the survey; get the results.

Service, Satisfaction and Expectations

CPA Trendlines Research by Bay Street Group LLC

Get the answers from hundreds of other CPAs and firms on:

  1. How firms track client satisfaction
  2. Measuring how clients rank - A, B, C, or D
  3. The best client acceptance proceesses
  4. When and how to “fire” a client
  5. The smartest client management systems

Plus:

START HERE: Join the survey here; get the results.

Posted on October 10, 2008
Filed Under BSG [CPA TRENDLINES] | Leave a Comment

CPA Campaign Donations Favor Republicans

Ace investigative reporter Ken Rankin reports on campaign finance in the new Accounting Today.

“During the past four congressional elections, over 90 percent of the accounting profession’s campaign funds were donated to sitting congressmen and senators seeking re-election,” according to Rankin. “The remaining funds were likely to go to candidates for open congressional seats with no incumbents in the race.”

And, even though the GOP candidates collected most of the donations, Democrats stand to gain in homestretch. Some $3.4 million was awarded through primary season, with another $4 million in reserve for the final few weeks leading up to the general election.

Who gave how much to whom?

Here’s the latest rundown on accounting industry PAC activity for the 2008 elections: Read more

Posted on October 10, 2008
Filed Under BSG [CPA TRENDLINES] | Leave a Comment

John Kane: Money Tips

Recession Rule No. 1: Cash is King.

by John P. Kane
J.P. Kane & Co.

Take a look at your overall cash flow.

1. Are you collecting your receivables (amounts your customers owe you) in a timely manner? If not, review and follow up with those customers.

2. Are you taking advantage of prompt payment discounts offered by vendors?

3. How quickly are you paying vendors? If they offer you 30 days to pay are you paying the outstanding amount immediately or are you taking advantage of the time they allow you to pay. We are not saying to become delinquent, but to take advantage of the time allowed.

It is important to budget and recognizing the company’s cycle (periods during the year when business is slow or business is high) so that they can plan ahead for the slow times. The use of a line of credit should be included in their plan to help them through the slow times, but they also need to include the payback on the LOC in their plan.

Look at your loans and be sure the financing is in line:. Loans for equipment and longer-lived assets should be term loans. Loans that are for cash flow needs should be on a line of credit.

Customer service is a lost art - and it does not cost anything for your employees/team to give awesome customer service. It will help customers and clients come back. For example, for those prompt paying clients, tell them thank you. It will increase the perceived value the client/customer receives from you.

Posted on October 9, 2008
Filed Under BSG [CPA TRENDLINES] | Leave a Comment

Can You Boost Realization 10%

This firm did. Here’s how…

Wall, Einhorn & Chernitzer formed its Revenue Enhancement Committee (REC) about 18 months ago to focus on client retention and acceptance, and on pricing, reports marketing whiz Jean Caragher (pictured).

As a result:

  1. the firm improved pricing,
  2. more discussions were held with clients regarding preparation they can complete to make the firm’s work more efficient,
  3. there were more upfront understandings with clients about fees, and
  4. there was improved management of fees incurred while work is ongoing.

The committee’s mandate includes: Read more

Posted on October 8, 2008
Filed Under BSG [CPA TRENDLINES] | Leave a Comment

What the Boss is Doing on the Web

C-Level Executives are Engaged More Actively Than Ever in Web-Based Activities.

Ink-stained fingers and news channel-surfing are becoming things of the past, as the latest installment of Forbes.com’s Day in the Life of C-Level Executives survey found that more than two-thirds of the C-level respondents heavily relied on the Internet for business information.

Of the more than 600 senior-level respondents, 125 indicated they were C-level, and the groups often exhibited differing media consumption habits. For example, 57 percent of the surveyed C-level executives were more likely to access the web than read a newspaper before going to work compared to 49 percent of senior managers.

Contrasts between C-level executives’ daily work routines in 2003 and 2008 were evident, as their online activities increased. Reliance on the helping hands of assistants has also spiked, perhaps due to the excessive amount of email and information available online.

Daily Work Routine for C-level Executives: 2003 vs. 2008.

Source: Forbes.com via  ExecuNet

Posted on October 7, 2008
Filed Under BSG MARKETPLACE - Products, Services and Vendors, BSG [CPA TRENDLINES] | Leave a Comment

Five Early Signs to Spot Clients in Trouble

Now, how about a “rescue plan” for clients?

How many of your clients are about to crash and burn? Don’t get caught flat-footed. Do what you can today to protect yourself and maybe save a client. The causes are not always about bad business decisions alone, or the kind of things that you find in the books.

From a British practitioner, comes this list:

1. An inability to admit they have made a mistake - I’m not sure if it’s pride or stubbornness, but refusing to accept that a business decision was manifestly a complete aberration and then moving on is one sure sign of weakness. As they say, if you’re in a hole, stop digging!

2. Asking for help, but avoiding the real issues. These clients may not be the most reclusive and you may well see them regularly over the course of the year - but in fact they don’t seek your advice on some of the key financial issues, until it’s too late.

3. Deceptively ‘good’ accounting systems. I have seen any number of businesses come unstuck on this count. They may have expensive accounting software and an in-house accountant, but watch out for the excuses. The accounts are usually behind because the bookkeeper is over-worked, or the proprietor won’t hand over all the paperwork on a timely basis. Despite the appearances the company accounts are often filed late or right at the last minute. Management accounts? The bookkeeper probably knocks something together on Excel, but there’s no way you can reconcile his figures or the tax returns with the annual accounts!

4. Too many business interests. It’s good to diversify, but beware the client who gets bored too quickly with a new business idea and moves on to the next one before getting the first one on a firm footing. These clients look like go-ahead entrepreneurs, but likely as not they end up as serial failures. You may turn up for a tax planning meeting only to discover that they have just opened a new branch or started some totally inappropriate new venture without seeking any advice!

5. Spouses not working together - or even speaking to each other. One may well be concealing the true state of the business from the other and putting on a brave act of business as normal. This simply puts off taking meaningful remedial action and it’s often too late to do so once the spouse or partner finds out just how bad things are. OK, let’s be honest, it’s usually the husband putting on a brave face and keeping his wife in the dark! Divorce AND liquidation/bankruptcy then go hand in hand and everyone loses. Knowing this, try to see the spouses separately, and make sure you give the husband a real grilling on the true state of the business.

See original…

Posted on October 6, 2008
Filed Under BSG [CPA TRENDLINES] | Leave a Comment

CPAs at the Meltdown Frontlines

How safe is your job? Join the survey; get the answers.

by Rick Telberg/At Large

Like many Americans, CPAs are shocked and appalled by the seemingly sudden meltdown of the nation’s financial system and ensuing scramble to assemble a rescue plan. But CPA executives in finance and in real estate are on the front lines like few others in the profession.

These frontline CPAs are talking in terms of unprecedented challenge, fear and risk. But they are also calling on their training and experience to steer their businesses as safely as possible through the storm.

“I have never seen anything like this,” says Grant Smothers, treasurer of a Nashville, Tenn., real estate investment and management firm, echoing many CPAs today.

HOW SAFE IS YOUR JOB?

Join the study; get the answers.

(Free. Confidential.)

Read more

Posted on October 6, 2008
Filed Under BSG [CPA TRENDLINES] | 1 Comment

Lucky 13: Tips for Can’t-Miss Client Acceptance

Having no policy is like bowling with a blindfold.

More CPA firms are adopting client acceptance policies and sticking to them, according to Jeff Stimpson in this month’s Practical Accountant.

Here are some of his best tips for selecting clients:

  1. Stick to the plan. You may need to revise it over time, but don’t adopt it and ignore it.
  2. Formalize the process.
  3. Make the paperwork and the process as simple and consistent as possible.
  4. Increase due-diligence with background checks, Google searches, and additional evaluations for prospects that present a higher risk level.
  5. Know what you do well, and only chase the work you are good at. Make sure the client wants to buy your services and that you aren’t selling them something they don’t need.
  6. Make sure the client can afford what they are hiring you to do.
  7. Don’t let a big prospective client with big fees override the process. Make sure that you still go through and ask all the questions and follow the criteria that have been set up to select a client.
  8. Establish a client-acceptance committee with very senior members of the firm.
  9. Make sure to include your credit person on the committee.
  10. Utilize a third party to perform background checks.
  11. Decide whether the firm is completely committed to this effort. This can’t be done part-time.
  12. Determine what are your true strengths as a firm, which segues into the next step of determining what type of clients align with those strengths. These are who you want to work with.
  13. Create a client acceptance process that’s easy to understand and administer, and can provide periodic feedback to firm stakeholders that help reinforce its continued viability and benefit.

Posted on October 5, 2008
Filed Under BSG [CPA TRENDLINES] | Leave a Comment

Tax Software Update: Keeping up with the Name Changes

New monikers for familiar products.

With shifting company ownership, a host of well-known tax programs are going through name changes and re-branding. It’s hard to keep up. Fortunately, you don’t need to. The new Accounting Technology keeps track:

GoSystem ES. In April, Thomson Reuters changed the name of GoSystem RS, the product for which the initials stood for remote system. The new ES represents enterprise suite, a concept the company introduced that now incorporates applications called Engagement ES, Practice ES and GoFileRoom ES.

IntelliTax. For several years, Intellitax was the name of the Windows product line for Orrtax Software Solutions. Since May, it has also been the name of the company.

Red Gear Technologies. The company still calls its product line TaxWorks. But since the acquisition by the organization of that name by H&R Block early into 2007, the name Red Gear remains.

Thomson Reuters. The company had been Thomson Corp. until its acquisition of Reuters. The change further buried what had been known as Creative Solutions, which was then part of Thomson Tax and Accounting. The operation is now known by its product line, the CS Professional Suite, under what is now called the tax and accounting business of Thomson Reuters.

See original.

Posted on October 4, 2008
Filed Under BSG [CPA TRENDLINES] | Leave a Comment

Top CFOs Gauge the Fallout

CPAs report from the frontlines of six key industries.

by Rick Telberg
On Finance

CPA financial executives around the nation and in every industry are grappling daily - even hourly - with the fallout from the meltdown in the global financial markets.

What are they seeing? Hearing? Saying? What do they think will happen next? What should the government do? What can CPAs do?

These are some of the question we took to leading CPAs in business and industry in the last few days. And, predictably, the CPAs were not spare in their answers.

Read more

Posted on October 2, 2008
Filed Under BSG [CPA TRENDLINES] | Leave a Comment

CAQ Urges Congress to Reject Proposals to Suspend Mark-to-Market (Fair Value) Accounting

The CPA profession is rallying to the defense of fair value accounting.

Floyd Norris at the New York Times has termed the Congressional calls for abandoning mark-to-market “the political lynching of truth-telling in accounting.” He’s right; here the facts, from the Center for Audit Quality, in a letter to Congress today.

September 30, 2008

Dear Member of Congress:

The Center for Audit Quality (CAQ) believes that proposals advocating suspension of mark-to-market (or fair value) accounting are not in the best interest of investors or the capital markets and should be rejected.

The principles of mark-to-market accounting are rooted in the fundamental virtue of transparency and are central to informed market decisions and efficient allocation of capital. In our view, investor confidence would be undermined by efforts designed to mask the actual value of financial assets at a given point in time.

It is important to underscore that mark-to-market accounting has contributed positively to revelations about the severity of the economic crisis facing our country’s credit markets and certain institutions, but it did not create the economic crisis.

Recently, some have suggested that the Securities and Exchange Commission (Commission or SEC) or the Financial Accounting Standards Board (FASB) should suspend the application of mark-to-market or fair value accounting or somehow impose a moratorium on mark-to-market requirements for certain financial institutions when preparing financial statements to be used by investors.

Although determining fair values for financial instruments in an illiquid market can be challenging, the best estimate of the prices that would be received for such instruments in orderly transactions occurring at the measurement date remains the most relevant information for investors and policymakers. To lessen the uncertainties about the value of these securities, it is critical that investors continue to have the insight provided by the application of mark-to-market accounting principles.

Many of the current requirements stem from the Savings & Loan crisis in the 1980s, when we learned that not knowing the real, current values of financial instruments held by financial institutions can be devastating when the bubble finally bursts and institutions are forced to close their doors. The current requirements provide a uniform and consistent method to measure market values and provide investors increased disclosures about those measurements. Suspending mark-to-market accounting would throw financial reporting back to a time of less comparability, less consistency and less transparency.

If there are concerns with the impact of asset valuations on capital requirements of financial institutions, regulators have alternatives other than obscuring information relevant to investors. Regulators may modify those requirements based on criteria other than fair value accounting measurements to the extent they deem appropriate.

Other capital markets participants also have expressed concern about the lack of transparency that would be created by a suspension of mark-to-market accounting. The Council of Institutional Investors, which represents 130 public, corporate and union pension funds with combined assets of more than $3 trillion, stated in a recent letter to the SEC that “[a]ny termination or suspension of fair value accounting will lessen transparency and investor confidence in the capital markets at a time when such confidence is critical to the stability of our markets and the overall economy.”

Likewise, the CFA Institute, a global, professional association of more than 97,000 investment professionals with offices around the world, recently wrote to both members of Congress and the SEC and noted that “[c]easing fair value reporting will only serve to undermine the confidence of investors in our financial institutions and lead to a further crisis of confidence in our government and the regulatory bodies overseeing those institutions.”

The proposed Emergency Economic Stabilization Act of 2008 restates the authority of the Commission to suspend the application of Statement of Financial Accounting Standards No. 157, Fair Value Measurements (FAS 157), and requires that the Commission conduct a study on the effects of FAS 157 on financial institutions’ balance sheets, the impact of such accounting on bank failures in 2008, the quality of financial information available to investors, and other matters, and report its findings to Congress within 90 days. While a restatement of existing SEC authority and a study of mark-to-market accounting and its effects are not necessarily harmful in their own right, efforts to weaken the transparency provided by the current standard should be avoided, especially in this time of financial instability.

The CAQ would be pleased to discuss with you any of the points in this letter at your convenience.

Sincerely,
Cynthia M. Fornelli
Executive Director
Center for Audit Quality

Cc: Henry M. Paulson, Jr., Secretary, Department of Treasury
Ben S. Bernanke, Chairman, Federal Reserve
Christopher Cox, Chairman, SEC
Mark W. Olson, Chairman, PCAOB
Robert H. Herz, Chairman, FASB
All Members of Congress

The CAQ is an autonomous public policy organization serving investors, public company auditors and the capital markets and is affiliated with the American Institute of CPAs. The CAQ’s mission is to foster confidence in the audit process and to aid investors and the markets by advancing constructive suggestions for change rooted in the profession’s core values of integrity, objectivity, honesty and trust. Based in Washington, D.C., the CAQ consists of approximately 800 member firms that audit or are interested in auditing public companies.

Posted on September 30, 2008
Filed Under BSG [CPA TRENDLINES] | Leave a Comment

keep looking »