CPA Trendlines

Four Fast and Easy Tech Fixes for CPA Firms

How to take quantum leaps, even in busy season.

by Rick Telberg

If your accounting firm or finance department is pushing off technology decisions to the IT department, you may be pushing it off to the wrong people.

Not that they don’t know what they’re doing. But effective technology strategies cannot be pushed off. They must start at the top, with the users and in alignment and constant re-alignment with overall plans and strategies.

The problem is not that IT people may do the wrong things. But without executive-level champions, they may not get the support they need to do anything at all. That leaves accounting offices adrift and falling behind.

Kepczyk

Roman Kepczyk, CPA.CITP, is out to change that. As a past chairman of the AICPA IT Executive Committee, a member of the AICPA Special Committee on Enhanced Business Reporting, the AICPA Group of 100, AICPA Best Practices Task Force and one of the charter Certified Information Technology Professionals (CITP) that the AICPA has designated (among other distinctions), he qualifies as a top industry guru.

In a CPA firm, Kepczyk says, “the executive committee shouldn’t push it all off to IT. Leadership must lead.”

Too often, he says, partners and firm administrators don’t trust their own IT people. As a result, the firm falls into an expensive and time-consuming break-fix cycle that could have been avoided if only top leadership had taken some time to understand their firm’s long-term needs and lay out a strategic plan. In a new handbook, Quantum of Paperless: Partner’s Guide to Accounting Firm Optimization, Kepczyk finds 32 areas in which a little knowledge and forethought could save firms big money. Investing a couple hours in this little book with a sharp No. 2 pencil could be the best tech investment you make all year.

Here are some of the fastest and easiest strategies to implement, with the some of the best ROI.

1. Add a third monitor. Some 90 percent of firms are already using dual monitors for the 2009 busy season, according to an Info Tech Partners North America (ITPNA) survey for the Association of Accounting Administrators. But 37 percent have given at least some people a third monitor, up from 10 percent in 2007. Dual monitors cut task times by 20 percent; the third monitor becomes essential in the paperless office.
2. Start scanning. Scan everything at the front end and invest in dedicated work stations where administrative staff can handle it efficiently. About 81 percent of firms are already doing it. Kepczyck recommends that accountants look first at market leaders Fujitsu and Canon.
3. Stop buying desktop PCs. Instead buy laptops. “The professional’s rule of thumb,” he says, “is that everyone who works out of the office one day per week or more should have a laptop as their only machine.” And stick to the name brands — Dell, Lenovo, Toshiba and HP. If you standardize on brands and the business models, your firm could save 26 percent on total cost of ownership.
4. Move backups offsite. That means uploading to the internet cloud. “The tape drive you have today will be the last one you will ever own,” Kepczyk says. Small firms should start with network attached storage drives (NAS, for short) to consolidate a firm’s data. Then they can choose from Mozy or Carbonite as off-site repositories. Larger firms should look into DoubleTake, Data Domain, Xcentric and TROI.

If you haven’t already done these things, then you’re already losing ground. But if you hurry, you might still have time to do something before busy season gets completely crazy.

Copyright 2010 AICPA.

Hiring Your Firm’s First Salesperson

As a firm owner, you can’t risk putting a dent in your reputation with a poor salesperson.

But how and where do you find a good salesperson?

The answer is: Start where you shop. Start paying attention to the good salespeople you encounter when you’re the consumer. What is it they’re doing that makes you feel good about working with them? Learning to recognize good salespeople is the most important first step.

Three more ideas:

Word of mouth. The more typical ways of finding good salespeople revolve around word-of-mouth recommendations. Tell everyone you know that you’re seeking a strong salesperson:

Tell your clients. If they’re fans of your product, one of them might even be interested in coming on board.

Tell your suppliers. The people who call on your business are in sales and know many others. There could be someone good they know of who’s just burned out on the product line they currently represent and need a change. This is an especially wise method for finding good help because your suppliers won’t recommend a dud. Their reputation with you would be ruined and they might lose your business.

Tell your banker. When your business succeeds, so does theirs.

via Entrepreneur

CPA Jobs Set for Surge. But When?

Economists predict demand for accountants and auditors will explode over the next few years.

by Rick Telberg

In a report that’s getting a lot of attention from savvy CPA firms and financial services headhunters, the Bureau of Labor Statistics (BLS) last month forecast a 22 percent headcount expansion from 2008 through 2018. That’s 279,400 new jobs.

Courtney

Brendan Courtney, president of The Mergis Group, told me that jobs are already surging for accountants in the new bailout and recovery industry. He’s looking for thousands of trained, experienced finance professionals.

But he also says that today’s displaced job hunters will need to look first at contract work and temp jobs until employers feel it’s safe to hire permanent workers again.

To be sure, many tax, accounting and finance professionals are still slogging through the Great Recession. The Association for Financial Professionals, for instance, reported that about one in four respondents say their organizations will contract in 2010. At the same time, a PricewaterhouseCoopers survey of private companies found 43 percent of CEOs and CFOs still budgeting no expansion over the next 12 months to 18 months. The data just seem to reinforce economic uncertainties and a weak outlook.

On the other hand, finance and accounting professionals continue to do better than average. Robert Half, for example, names several areas in which salaries are holding steady or rising, and starting salaries this year will beat the averages:

• Tax accountant. With at least three years of Fortune 500 experience, and a track record of achieving sizable tax savings, starting salaries will average $46,500 to $61,500 this year.
• Compliance director. Even at smaller companies, new accounting rules and government regulations are boosting demand. Starting pay: $83,750 to $108,500.
• Credit manager/supervisor. In a world where cash is king, accountants who can evaluate credit risk and manage delinquent accounts are starting at between $42,500 and $57,500.
• Senior financial analyst. If you can find ways to boost the bottom line, employers are paying $57,750 to $74,000 to start.

Looking past the recession, the BLS sees burgeoning opportunities for professionals. “As the economy grows, the number of business establishments will increase, requiring more accountants and auditors to set up books, prepare taxes and provide management advice,” according to the BLS.

“As these businesses grow, the volume and complexity of information reviewed by accountants and auditors regarding costs, expenditures, taxes and internal controls will expand as well,” the BLS says.

But it will be important to take a broader view of opportunities.

And the BLS says much of the finance and accounting profession could be profoundly affected by a newly borderless business world. “The continued globalization of business,” BLS researchers say, “will lead to more demand for accounting expertise and services related to international trade and accounting rules and international mergers and acquisitions.”

And here’s the growing movement towards International Financial Reporting Standards (IFRS), which, the BLS explains in it’s own simplified way, “uses a judgment-based system to determine the fair-market value of assets and liabilities.”

Judgment? That’s exactly what professionals are hired to do.

Add it all up and the experts seem to be saying that if you can make it through 2010, the rest of the decade should be much easier. Of course, we must still survive 2010.

Copyright 2010 AICPA.

Three Key Ways to Think Like a Client

They’re thinking “short-term.” Do you know what that means and how to use it?

A huge 45% of small business owners consider their focus to be short-term rather than long-term. Additionally, when the Executive Board asked business owners what they consider to be “short-term,” 50% of them said one to three months.

Source: Executive Board

So how can accountants use this “focus” to capture business owners’ attention? The Executive Board advises:

1. Keep it fresh: Because half of small businesses think short-term, practitioners should tweak positioning every three months to keep their messaging fresh. Emphasize a different service in each communication, consistent with the time of year.
2. Take a short-term focus yourself: In advertising and communications with small business owners, emphasize the short-term advantage or financial benefit of your service as opposed to stressing the long-term advantage.
3. Contact business owners quarterly: Contact your existing customers four to six times yearly to keep your brand top-of-mind, especially in your email campaigns (business owners’ favorite method of communication from suppliers).

Aligning your marketing with the mindsets of small business owners is important in ensuring that it resonates with them.

Accounting Firm Mergers: What Could Go Wrong?

Plenty. The real work starts when the deal is done.

by Rick Telberg

As if busy season wasn’t busy enough, many accountants are finding themselves weighed down by the added burdens of integrating a new practice merger or grappling with a new restructuring.

Either way, you may be dealing with change you didn’t expect. And yet, the post-merger or post-restructuring period will determine your and your new organization’s ultimate success or failure.

“Integration is the hardest part of doing a merger,” according to Dom Esposito, chief operating officer at J.H. Cohn & Co., a coast-to-coast super-regional with offices in New York and Los Angeles.

And yet, the tempo of mergers among accounting firms seems to be picking up.  “Mergers are happening at a quicker pace,” confirms Glenn Friedman, managing partner of the Metis Group CPAs. One explanation: “The economy has made it so that larger firms need to grow their top lines like never before. And smaller firms need economies of scale in things like technology, overhead and specialized experience.” In the last five years, Metis has doubled in size, mostly through mergers. In the next 12 years, according to Friedman’s estimates, 75 percent of all CPAs will become eligible for retirement.

Through 2009, RF Resources tracked 27 New York metro area deals, the same as the year before, and just shy of the 2007 peak — and all the 2009 deals have yet to be reported, so there’s probably more to surface.

Ted Felix knows what it’s like to live and thrive through an upstream merger.  After about 40 years in business, he guided the merger of his firm, Lazar Levine & Felix, into a deal with what is now Parente Beard.

But Felix wasn’t expecting to be acquired. “The opportunity came to use as we were looking to buy,” he says. “At first, no, we weren’t considering merging up. Then someone said, Well, what if … ?” And last year at about this time, Lazar Levine & Felix’s staff of 100 joined the then 550-person Parente Randolph. Since then Parente has merged with Beard Miller to create a New York-to-Philadelphia regional powerhouse of 1,250 people.

Friedman has heard Felix’s story before. “Everybody starts out thinking they’re a buyer,” he says. “There’s no shortage of buyers. But brokers don’t need any more buyers. They’re looking for sellers.”

“It can’t be an ‘us-versus-them’ atmosphere,” cautions Esposito. “Many firms are good at getting the paperwork done, but not really good at making things happen after that.” That’s why, at JH Cohn, they create a kind of SWAT team to manage the integration.

An elite crew of partners and staff are paired with counterparts at the incoming firm to both mentor the newbies and glean new best practices that can be spread throughout the new firm. “They’re making sure that, in the process of merging, everybody understands that we’re all building a bigger, better team together with everyone contributing.” You can’t rush the process, Esposito says. “It takes about two years.”

But the biggest obstacle for most sellers is that they understand, perhaps all too well, that their staff, systems and processes may not be up to snuff. For the buy-side firm, that may represent opportunity to fatten margin. For the sell-side firm, that could mean painful changes “Their biggest fear,” Felix says, “is that they know they aren’t doing things right. And now they’ll have to embrace things like timesheets and going paperless, whether they like it or not.”

“The hardest thing for most sellers is giving up control, “ says Friedman. After all, they started their own practices because they wanted to work for themselves and no one else. “But after the merger, they come in, sit at their desk and ask themselves: I’m a managing partner, but now what do I do?”

If you start now, by upgrading your people, plans and processes to the state-of-the-art, you may never need to ask, “What do I do now?” Well, until you’re sipping a daiquiri on a sunny beach somewhere.

Copyright 2009 AICPA.

Who Would Miss the Big Four?

Hardly anyone, says Jim Peterson.

No anarchist, the former Big Four counsel-turned-professor suggests that the collapse of a Big Four firm (or two, or three, or all) would barely be noticed in the financial markets:

Peterson

If the now-standard auditors’ report were suddenly not to be obtainable from any source, who would miss it?

Should the stock exchanges be closed, if a Big Four failure meant that one-quarter of the large listed companies lacked an audit report? Could those companies’ securities be barred from trading? Unthinkable.

Out where capital really flows and trade is actually engaged, the world’s markets would shrug, start the process of designing new forms of assurance from a blank page, and move on.

And the splintered pieces of the former Big Four would provide ample building blocks for a new assurance structure.

What would the new “structure” look like? That’s the question. And why aren’t smart firms moving there already?

The Top 10 Questions Employers Should Ask About Health Care Legislation

What Does Health Care Reform Mean for Employers?

CPA firms and their clients need to be prepared for “myriad new requirements that will arise from the health care bill currently being finalized,” according to attorneys at the Littler law firm.

Here’s their top ten:

1. Do we have to provide health care benefits to our employees?

READ MORE →

Big 4 Leads Top 10 Posts of the Week

Followed by “Top seven growth areas.”

1. Big 4 Slammed by Global Recession http://ow.ly/V66B
2. Top Seven Growth Areas for CPAs http://ow.ly/16lrJB
3. Seven reasons clients leave their CPAs http://ow.ly/16jvpL
4. Five Secrets to Dealing with Unhappy Clients http://ow.ly/V64e
5. Layoff Watch ’10: Grant Thornton January Edition http://ow.ly/16lIt9
6. How Costly Loans Drive the Tax Prep Industry http://ow.ly/V67e
7. More Than a Numbers Game, Accounting Firms Diversify Services http://ow.ly/16jyGC
8. Accounting Loses 2,600 Jobs in December http://ow.ly/V65O
9. GAO Issues Report on S Corporation Compliance Problems  http://ow.ly/16lsMPBig 4bb
10. Jackson Hewitt shares drop amid troubles for its refund anticipation loans, assisted refunds http://ow.ly/16kFfk

Compiled from www.twitter.com/cpa_trendines  data.

Ready for tax season!

…from the folks at Weltman Berfield CPAs in Buffalo Grove, Ill., via @weltmancpa on Twitter.

Networking 101: 54 Ways to Work a Room

Every time you meet someone, you meet opportunity.

You can to share ideas, leads, contacts or get business. The purpose of networking is to give and get information. If you network properly, nobody feels pressured or used. You are not selling, you are telling. You are not asking for favors, you are giving valuable information.

Here’s a compilation of some best practices from Arnold Sanow, a sought-after expert on the subject:

1. Know who’s coming to the event, check the RSVP list (and their relationship with your company), and plan ahead of time who you want to meet.
2. Practice your commercial and put it into play.
3. Prepare several conversation starters – trivia and humor can work.
4. Prepare small talk questions about family and work.
5. Use FORM as a guide to ask open-ended questions. F = Family. O = Occupation. R = Recreation. M = Message
6. Keep your guest engaged with questions (have several planned ahead of the event).
7. Always carry (and give out) your business cards.
8. Wear your name tag on your right shoulder (make sure you dress appropriately to be able to wear it – especially important for female clothing).
9. Dress professionally even if it’s a holiday party.
10. Make a point of introducing yourself to five people you do not know.
11. Set a goal to get at least 10 business cards and write a thank you note to those individuals the next day, i.e., Thanks for coming. It was nice to meet you.
12. Practice an effective close for your conversations.
13. Offer a follow-up meeting and set up the next appointment.
14. When you arrive immediately start talking with guests.
15. Introduce yourself to as many guests as you can.
16. Play the host and greet people at the door.
17. Acknowledge a guest’s business associate or spouse.
18. Offer to bet a beverage for your guest and tell them the food that’s available.
19. Repeat your guest’s name.
20. Ask guests’ opinions about things.
21. Get guests to talk about themselves.
22. Keep engaged in the conversation by nodding.
23. Talk about how your company is helping similar businesses to their business.
24. Thank guests for coming.
25. Find a common interest.
26. Compliment your guests.
27. Keep your conversation light and cheerful.
28. Focus the conversation on the guest, not you.
29. Know when and how to move from one person to the next – truly work the room.
30. Look for guests who are alone and approach them with a smile.
31. Ask guest if he/she is alone at the event.
32. Introduce guests to each other.
33. Have small teams – pair up with your peers to meet guests.
34. Introduce your fellow employees to guests.
35. Circulate against the flow of the room.
36. Re-connect with guest you do know.
37. Do less mingling with co-workers.
38. If you see too many employees together, suggest they mingle with guests.
39. Eat with guests not your co-workers.
40. Invite other guests to your table and stand to introduce other people at your table.
41. Look for an empty chair where guests are sitting and ask if you may join them.
42. Give a firm handshake.
43. Be natural and personable.
44. Be interested, not just interesting
45. Smile
46. Be observant
47. Soften your voice
48. Look your guest in their eyes
49. Be a good listener
50. Be approachable and open with your body language
51. Don’t stand in the same place too long
52. Eat later
53. Don’t drink too much
54. Turn off your Blackberry