CPA Trendlines

Five Tech Trends You Can’t Stop

But some firms are still trying.

by Rick Telberg

Cieslak

If you’re worried about your computer and network security, you’re probably worrying about the wrong things.

But then, if you’re not worried, you’re probably not paying attention.

“For every security concern out there, there are reasonable responses,” according to David Cieslak, CPA.CITP, a partner at Arxis Technology of Simi Valley, Calif., and one of the profession’s leading authorities on technology.  “But CPAs are easily spooked and they sometimes look at the wrong things.”

Like what? Cieslak names five areas where some accounting firms and finance departments may be missing the IT mark, thus depriving themselves of important technology-powered productivity tools and habits.

Here, according to Cieslak, are five of the biggest technology mistakes he sees CPAs making today:

1 — Shunning wireless network connections, or Wi-Fi, even in the office.

Instead of shunning Wi-Fi connections completely, be smart. “Always look for the highest level of security available,” Cieslak says. Wired Equivalent Privacy (WEP) is better than nothing. But he prefers Wi-Fi Protected Access (WPA) or WPA2 (replaced WPA). And if you’re connecting to the office, always use virtual private network (VPN).

But if you’re not using your laptop’s wireless connection turn it off. “Most people don’t realize that unless they turn it off — and it really is a pretty simple switch on most computers — you are still connected to the Internet when you don’t have to be,” Cieslak says.

2 — Blocking social media tools like Facebook, LinkedIn
or Twitter.

Some employers may have valid reasons for worrying that employees will be distracted by online interruptions. But Cieslak says, “There is no reason to block Facebook or any of the other leading sites because of IT security concerns.”

For professionals like CPAs, Cieslak says Facebook, Twitter and LinkedIn are now too important to ignore completely and they should be available in most workplaces. So instead of trying to stand against the tide, companies need to talk about social media in the workplace, establish a few smart and simple policies and integrate the technology into everyday practices.

For instance, employees need to understand that if anyone invites you to join their “Mafia family,” just don’t. Any Web site that asks for your username and password should be highly suspect. Malware like the so-called Mafia family game can steal your contacts and broadcast bogus invitations in your name.

3 — Banning instant messaging applications from
the workplace.

Another losing battle for employers is instant messaging. IM has been around for almost two decades now, since AOL popularized it. Today Microsoft, Google and Yahoo provide popular IM messenger apps. “Instant messaging is such a critical tool for me,” Cieslak says, “that I can’t believe everyone isn’t using it every day.” For Cieslak, IM has replaced a lot of internal e-mails. Still, he doesn’t use it with clients. “For that, I want a little more formal contact,” he says.

4 — Holding back on Smartphone deployments and then using the devices carelessly.

The first mistake many accountants and accounting firms make, Cieslak says, is simply failing to embrace devices like a BlackBerry or an iPhone and deploy them to as many professionals on staff as possible.

But second, he finds that too many people are using them too carelessly. For instance, people shouldn’t store confidential information like all their contacts, Social Security numbers or passwords on their cell phones. And, because they too often do, owners need to be able to deactivate them and wipe the data remotely. That’s one reason why firms and companies should want to issue employer-owned devices. In the event of loss or theft (or the untimely departure of an employee), confidential information can be protected with software that is now so inexpensive and easy that even families should
consider it.

5 — Ignoring portable media.

Like cell phones, portable media of any type can be hazardous to your IT health. Universal Serial Bus (USB) drives, secure digital (SD) cards or laptop computers are being used by office workers to transport files and information from one office to another or home for the weekend. In the event of loss, the results can be disastrous. That’s why every accounting office should consider, instead, supplying their own devices and banning the use of all others. “It’s not expensive,” Cieslak
says, “and we can make sure the data is encrypted
and authenticated.”

By the same token, laptop’s hard drives, if not individual files or folders, should be routinely encrypted. It’s about as simple as clicking a button on a setting menu and even easier in the forthcoming Windows 7.

To be sure, IT security is a legitimate concern, as CPAs well know. But, according to Cieslak, cutting yourself off from innovation is the wrong way to go.

Good habits, such as updating your software, maintaining tough passwords and keeping track of hardware, are much more important.

Copyright 2009 AICPA. Used by pemission.

NEW SURVEY: What’s on Your CPE Agenda?

If it’s after Oct. 15, then it’s now CPE season.

We’re launching a new survey to gather the profession’s plans for continuing professional education this year.

Join the survey and be the first to get the answers to:

• Today’s hottest CPE topics and subjects.
• Trends in online, self-study, live seminar.
• What CPAs REALLY wish their CPE was all about.

Click here to join the survey; get the results. Or just add your comments below. The best comments may win a special preview of the survey findings.

Oklahoma CPAs Start Voting Today on Non-CPA Ownership

You might have thought this was settled in the 1990′s.

But Oklahoma remains one of six states left in the U.S. that still (technically, at least) bans non-CPAs from owning a piece of a CPA firm.

Today the Oklahoma society of CPAs will be emailing a survey to members to see if they want to bring their state’s rules into the mainstream. In a straw poll of directors and committee chairs, 40 out of 45 voted in favor of lifting the ban.

Under the proposed change:

• A majority of the ownership of any CPA firm must be CPAs.
• Non-CPA owners must be active participants in the firm; passive ownership is not permitted.
• A licensed CPA must be designated and identified to the state board as the individual responsible for registration of the firm.
• The partner/owner in charge of attest services must be a licensed CPA.

The state society says small to mid-sized firms will benefit from the change because it will allow them to “increase the scope of services to their clients” and “offer attractive partnership positions to non-CPA specialists in areas such as information technology or estate planning.”

But it’s always been the small and mid-sized firms who have traditionally opposed opening up CPA firms to non-CPAs, fearing larger firms were more able to take advantage of the strategy.

Only Alaska, Hawaii, New York, Connecticut and Delaware remain in Oklahoma’s camp.

Source: OSCPA

What Clients Wish You Already Knew

Are you listening?

by Rick Telberg

Shhh! Can you hear that? It’s the sound of your clients trying to tell you what they’d really like from you.

I’ve been asking corporate accountants, bookkeepers, finance executives and managers how much they like (or don’t like) their current accounting firms. And the results could be a wake-up call for many accounting firms.

Last week, in What’s the ‘Secret Sauce’ for Success?, we heard from accountants who had recently landed new clients for their winning recipes.  This week, we’re looking at the question of client satisfaction from the other side, the client side.

Changing accounting firms, of course, is horrendously difficult for companies. So they avoid it as much as possible. But I’m hearing a disconcerting amount of disappointment with the quality of service they
are receiving.

To be sure, few finance managers are concerned about the accuracy, integrity, objectivity or competence of their CPAs. The problem isn’t in the accounting. It’s in the delivery.

Certainly, there are clients like Chris Hartrich at Northbrook, Ill.–based Omeda Communications. He is wildly happy with his company’s new CPA firm, “much more so than our prior firm.” He hails the new firm as “very responsive” and loves their “timely service.”

Like many corporate clients, Hartrich wanted a firm that could provide “attentive, cost effective, proactive service.” But they also needed to “understand the business issues and bring best-practice suggestions to address them.”

Still, some finance managers in corporations, government, not-for-profits and educational institutions are telling me that they would be “highly likely” to recommend their current accounting firm to an interested friend or colleague. So if you listen intently to the finance managers who fall into the less than “highly likely” to recommend category, you may be able to learn even more about what it takes to retain and satisfy a customer these days.

Take, for instance, a senior finance manager at a mid-sized business in Germantown, Md. She is looking for a “proactive, accurate partner who offers a wide range of services and knows the industry and business model.” If you want this account, you’d better be positioned “low-cost on bread-and-butter services” and “save the higher fees for specialized value-
added services.”

Another corporate CPA simply expects “good service, advice and a fair price,” which sounds pretty basic. But too often he sees firms falling short in “really understanding the client’s perspective.”

“Get the job done, on time and on budget,” says a senior staffer at a Fortune 1000 company. And who could argue with that?

Another corporate finance executive wants a “better attitude from the CPA.” He feels as though his company’s accounting firm is more of an adversary than a friendly advisor. “We are not the enemy.”

Copyright 2009 AICPA.

Calif. Enacts Mandatory Peer Review and 150-Hour Rule

And two more CPA-related laws, too.

via CalCPA

California Gov. Arnold Schwarzenegger has signed into law legislation (SB 819) that requires all California CPAs licensed after 2014 to have 150 hours of college education prior to licensing.

By adopting the 150-hour rule as the only pathway to licensure in California, the state legislature has lifted California’s long-standing roadblock to substantial equivalency. The new law will allow California CPAs to more seamlessly serve their clients’ needs in other states. Most states will recognize a license from a 150-hour state as substantially equivalent and not require a CPA to obtain a state-specific license to provide services in their state. Only Colorado, Puerto Rico, and the U.S. Virgin Islands have not adopted the 150-hour rule as of this writing.

California CPAs licensed prior to 2014 will be grandfathered in as substantially equivalent.

Additionally, the governor signed AB 138, which requires mandatory peer review for CPA firms. The peer review requirement will start in 2010, but implementation will be phased in over a three-year period.

Also signed into law were AB 117, which requires license status disclosure for inactive CPAs, and AB 129, which reinstates a taxpayer privilege provision.

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Five Clues You’re Working for a Loser

Accountants who believe they work for a relatively superior organization are far less likely to be looking for their next job.

by Rick Telberg

With the economic downturn bringing sometimes brutal pressures to bear on corporate finance, many companies are bracing for huge and troubling levels of staff turnover at the first signs of an uptick.

Some companies and organizations will be hurt by the staff turnover. Others will be well-positioned to take advantage of the new flood of talent.

The differences are striking. For instance, corporate finance executives who say they work at better-than-average companies are only half as likely to report “crisis” levels of stress and they’re significantly less likely to be considering a job change, according to a Bay Street Group study for the AICPA Insider family of e-mail newsletters. Of all people, corporate finance professionals know the costs of excessive turnover.

But what do these better-than-average companies look like? And what does it take to become one?

A senior executive at a global technology company gives her Fortune 500 firm the highest ratings because “we set objectives, define metrics and use those to manage and to achieve the objectives.”

But it’s not just the Fortune 500 where you’ll find excellent companies, great finance organizations and high-achieving professionals.

“Although my job is stressful and demanding,” says Dana Best, a top financial manager at a county agency in Carlisle, Pa. “I am fortunate to have a job that also understands that single parenting is demanding and that gives me the flexibility to be both a good parent and a good employee.

She rates the organization highly, terming it “progressive.” And, she says with palpable pride, “politics are kept to a minimum. Most of the time, the county is run like a business. We are rated AAA by Standard & Poor’s. And we offer excellent service while maintaining one of the lowest tax rates for counties in the state.”

Another government-employed finance professional is still enjoying her new promotion. There’s “more e-mail and meetings,” she says, and “less real work.” But unlike other local government agencies, “We have better fiscal management so we haven’t had layoffs and pay reductions like basically every other similar entity in the area.”

Another professional says that despite the fact he works in a small, privately-owned company, he appreciates the fact it “attempts to stay cutting edge with technology.”

A senior staffer at a mid-size company is planning no job change, because, in part, his “company appears concerned about its employees’ attitudes and offers special training.”

“We work to create a positive environment,” according to another finance manager when asked to explain why she gives her company superior ratings. “We work to give feedback as we go along rather than only at performance appraisal time. And our leaders are individuals of integrity with a concern for our employees.”

In summarizing these responses, you can sift out at least five traits that might separate the winning organizations from the losers:

1. Set reasonable objectives.

2. Define the metrics of success.

3. Reward achievement.

4. Provide family-friendly working conditions.

5. Encourage professional growth and excellence.

But maybe the best testament to what makes a company great is this quote from a senior staffer at a small “family-friendly” company: “We have very little turnover. Employees who come here from competitors love it here.”

Competitors, consider yourselves warned.

Copyright 2009 AICPA. Used by permission.

AAM issues “call for speakers” for 2010 conference

The Association for Accounting Marketing, which will will be celebrating 21 years of service at the 2010 Annual Summit: Building Strong Foundations for Firm Success, is inviting CPAs and CPA firm marketing directors and advisers to submit applications to speak at the annual connference.

“By presenting at the Summit,” AAM says, “you’ll have the opportunity to share your marketing and sales knowledge with leaders in the field and those looking to take their firms to the next level.”

The conference is scheduled for June 22-25, 2010, in Washington, DC.

Application deadline: Oct. 22

Submit your presentation proposal here.

Download Call for Speaker PDF

What’s the ‘Secret Sauce’ for CPA Success?

With client retention the top issue for firms, we go looking for answers.

by Rick Telberg
At Large

If you want some real answers for how to avoid losing clients, just start asking CPAs how they’ve managed to pick up new clients.

That’s exactly what I’ve been doing lately. Some of the answers are startling. All of them are instructional. Most of the time, accountants can blame the CPA that their new clients were abandoned.

Mirella Martorano, an independent accountant and tax practitioner near Rochester, N.Y., puts it succinctly, “You will lose a client if you charge too much, do not answer their phone calls, do not get their work done on time and do not give them the personal service that they deserve.”

“You may lose a client if you make a mistake,” she adds. “But if you are honest about it and fix it, you may keep them if all the other things are in line.”

I like Howard Cox’s take on it, too. “There are all kinds of ways to lose a client,” says Cox, director of business consulting at Somerset CPAs in Indianapolis. “However, my experience is that when I pick up a new client, the prior CPA repeatedly made one or more” of the following mistakes:

1. Failure to deliver the product, tax or accounting, in a timely manner.

2. Failure to respond to routine inquiries, e-mails or voice-mails, in a timely manner.

3. Failure to understand that the key to profitability is to maximize the lifetime value of a client and not in trying to squeeze the most fees out of an individual transaction.

Joshua Nowack, who calls himself “the chief numbers guy” at his own Nowack Strategic Business Advisory & CPA in the Los Angeles area, is still relatively new as his own practice owner.

But he says he’s been building his new business “by doing three simple things.”

1. Do what I say I’m going to do.

2. Charge what I say I’m going to charge.

3. Ensure that my client understands the value exchanged.

I think most people naturally understand the first and second, but Nowack calls No. 3 “the secret sauce.”

He tells the story of winning a client who had told him, “I just don't understand what that guy did to earn $700.” In fact, Nowack is not much cheaper. He may even be more expensive than the accountant he replaced.

But, he explains, “The point is when you charge for a service, if a client doesn’t perceive the value, there is no reason to come back.” If the incumbent practitioner did nothing to enhance the experience or the relationship, then any kind of fee can feel unjustified. And, that’s “all that’s required to send someone shopping.”

The fact is switching costs are low for most clients, with the exception of audit clients. But overall, the answer seems to come down to setting expectations and then exceeding them. That’s “secret sauce.” Not much of a “secret,” really.

Copyright 2009 AICPA. Used by Permission.

Accounting Loses 6,000 Jobs in September

Industry headcount stands at 928,300.

Today’s U.S. employment report, which showed another month of a so-called “jobless recovery,” also signaled deeper problems for the accounting and bookkeeping sector.

The Bureau of Labor Statistics reported a seasonally-adjusted decline in staffing by 6,000 positions, to 928,300 in September. Coupled with downwardly revised figures since May, it represents the fourth straight month of decline. Earlier BLS reports had shown some gains.

Compared to the year-ago month, accounting and bookkeeping employment declined about 1.9%, to 857,100 people from 874,100, not seasonally adjusted.

Overall, the BLS reported since the start of the recession in December 2007, unemployment has doubled in number and percentage, to 15.1 million people and 9.8% of the nation’s workforce idled.