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
Source: OSCPA

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.


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

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.

Staffs shrink by 7% at NY’s top 25 CPA firms

The number of New York-area professionals at the region's top 25 accounting firms fell by 1,929 people, or 7%, versus year-earlier levels.

The latest Crain's list of the 25 largest accounting firms in the New York metropolitan area shows the firms together employing more than 23,000 professionals as of June 30.

Overall, only nine accounting firms saw their New York-area professional headcount increase during the June-to-June period, while the remaining 16 experienced a decline.

Eisner—ranked No. 7 on the Crain's list—saw the biggest local increase, growing by 120 professionals, or 25%. Marks Paneth & Shron also boasted a relatively large increase—47 professionals, or 13.4%. And Rosen Seymour Shapss Martin & Co. grew its local professional head count by 11.7%, or 20 professionals.

via Crain's New York Business.

NEW SURVEY: Year-end Tax Planning 2009? Filing Season Outlook 2010?

For an article for accounting and tax practitioners, we've launched a new open-ended survey question...

(1) What are the essential year-end 2009 tax planning issues to address with clients today?


(2) what are the biggest headaches to expect for filing season 2010?

You can respond in Comments below. But you know you can also always contact me directly: (914) 674 4531 Eastern, or rickt@cpatrendlines.com.

I'm hoping to publish the article(s) for the AICPA Insider (sample here) and here at cpatrendlines.com. So I might need your full contact info for verification and maybe a 73dpi web-ready head-and-shoulders portrait.

--- rick

PS: If you know someone else who also may be exceptionally qualified to answer this query, please feel free to forward this invitation to them. I'm sure they'll be appreciative.

15 new client service opportunities for tax season 2010 [VIDEO]

If you're not already scheduling meetings with tax clients for year-end planning, you may be falling behind.

The government's massive response to the financial meltdown and business downturn is producing a volcano of changes in year-end tax planning and potentially new challenges when filing season starts in 2010.

We caught up with CCH tax guru Mark Luscombe at this week's NASBA CPE Expo to get his thoughts on what accountants should be talking about with their clients today.

And we asked what kind of headaches tax professionals can expect for busy season.

Here's more, a few excerpts from his slides, listing 15 items for individuals alone:

Eight  New 2009 Year-End Tax Planning Tips for Individuals

  1. Making Work Pay Credit (Watch out for under-withholding. Consider economic recovery payments)
  2. First-time Homebuyer Credit
  3. American Opportunity Tax Credit
  4. Qualified 529 Plan Expenses
  5. Exclusion for Unemployment benefits
  6. Madoff Losses
  7. Disaster Relief
  8. Plug-In Electric Drive Motor Vehicle Credit

Seven New 2010 Tax Proposals for Individuals

  1. Late changing rules, regs and forms through filing season
  2. Revised Saver’s Credit
  3. Restoring 36% and 39.6% brackets
  4. 20% cap gain and dividend rate
  5. Restore phase-out of itemized deductions and exemptions
  6. Limit tax value of itemized deductions to 28%
  7. New fees and taxes with healthcare insurance overhaul, including: (small business credit and surcharge on high-income earners)

Source: CCH

For more tips on client service opportunities in today's market, click here to tune in to our Client Satisfaction and Retention webinar at 1 pm Eastern on Wednesday, October 7

What do you see as your biggest challenges and opportunities in the upcoming tax season? Tell us in comments...

Do You Know the Secrets of Happy Clients?

How to battle client retention problems with client satisfaction strategies. But how do you dazzle a customer these days?

by Rick Telberg

With client retention replacing the staffing shortage as the most troublesome issue facing CPA firms, it may be surprising that that so few firms are taking a high-profile, proactive approach to the problem.

Certainly, many firms are stepping up client service levels. Some are creating specialty practices to handle the critical emergency needs of clients in crisis. For example a number of New York and Palm Beach, Fla., firms have established teams tasked with caring for the needs of clients affected by the Bernie Madoff Ponzi scheme. Many other firms are establishing bankruptcy or restructuring task forces to deal with business clients overwhelmed by the recession.

Still other firms are handling the challenge in everyday ways, with a little more TLC, an extra phone call, a little more analysis into a problem. Yet more are allowing their receivables to age as clients take longer to pay.

Nevertheless, many firms either don’t see the need to react to the client retention issues other firms face, or are choosing to operate as if it’s business as usual.

To be sure, many firms are unfazed. They say they stand to lose clients only to insolvency or dissolution — situations they deem beyond their control. But many might well be advised to worry about client satisfaction because competitive CPA firms are fighting hard for every good, new client they can get.

That’s why some may be astonished about how few CPA firms actually have formal systems in place to gauge client satisfaction issues. According to Bay Street Group’s latest soundings, six in 10 firms have no formal client satisfaction monitoring program. Even more, seven in 10, rely on “real-time feedback” from clients, which, to me, sounds a little like “we don’t ask, they don’t tell.” But two in 10 firms report to me that they do, indeed, wish they had a better system in place for tracking client satisfaction.

But if you really want to know what clients are thinking, you have to ask them, which is exactly what I’ve been doing. I’ve heard from thousands of CPAs and financial managers on the private side of accounting in business and industry. They may be the toughest critics a public accountant, bookkeeper or auditor could ever run up against. But they are also the most understanding and knowledgeable. Their suggestions and guidance on what makes a CPA-client relationship prosper or fail should be heeded.

“We're a small company in terms of our industry,” explains a senior finance manager at a mid-sized company. “What we really want is an attentive, service-oriented, reasonably priced firm that appreciates our business. We don't have that because our parent organization has dictated that we must use the same firm that they use.”

Clearly, this finance manager would not recommend her current CPA firm. She wants a "better quality product,” adding, “At Big Four prices, I shouldn't have to review in detail to find their errors.” She’s tired of playing second fiddle and wants a firm that “appreciates the business of even the smaller clients and makes sure the smaller clients don't feel they are taking a back seat to the larger clients."

Or listen to this Midwestern CFO whose company is fighting for its life. He wants a CPA who can provide “survival skills for a tough economy and market.” This CFO provides only a lukewarm recommendation for his current accounting firm, but he still needs advisers who can “provide objective insights during these tough economic times.”

CPA Mike Harnish has been on both sides of the table. Today, he is senior vice president and chief operating officer at Portland, Ore.-based Fios Inc., IT evidence sleuths for lawyers. But I’ve known him since the 1990s, when he was a partner at what was then Crowe Chizek. In between we’ve worked together at CPA2Biz.

He says today he’s “fairly likely” to recommend the Big Four firm that services his company, but “I think it depends on the people that get assigned and the complexity of one’s needs.” If you’re a CPA firm who wants Mike’s business, you’re going to have to work for it. For one thing, he says he’s not easily swayed by traditional marketing and sales. He wants to see real expertise that’s relevant to his business and his challenges. Do your homework and get your “research results published.”

In addition, he’ll compare your proposition based on “affordability, breadth of capability and service” and you’ll need to be ready to point out specific areas in which his company’s compliance procedures can be improved, or where you can help him trim costs or save money on taxes. That’s a tall order. And Harnish may be an exemplary financial executive.

But he’s the type of client every CPA firm should be looking for. You can be sure Harnish’s CPA firm is working hard for the business.

Copyright 2009 AICPA. Used by Permission.

CPA Leadership Lessons for Turbulent Times

And three new rules for surviving today’s management challenge. 

by Rick Telberg

In these times that test the mettle of accounting and finance leaders and mangers, it may be worth pausing for a moment to ask if the rules are changing.

Economic downturn and global restructuring are causing many organizations — large and small — to wonder if it has the right people, with the right skills, in the right places. But has the very meaning of leadership changed for managers and professionals in light of today’s tectonic shifts in business and technology?

Some things have not changed, according to Howard Cox, director of business consulting at Somerset CPAs in Indianapolis, one of a number of accountants and advisers I’ve been asking lately.

“I don't think the success factors in this economy are any different than they have ever been,” Cox says. “The fundamental factors of success in business have remained relatively constant over time.”

That may be true. But, he adds, “The differences in this economy are the ramifications if we fail. There just isn't any margin for error.” Errors can be fatal.

It’s more important than ever, according to Ken Kaufman, CEO of CFOwise financial consultants, to “offer more value to your customers, and figure out how to spend less doing it.”

“Your competitors are working on the same issues, and you need to beat them to the punch so you can move towards the next innovations while they are still figuring out the last one,” says Kaufman.

Kevin Mead, president of the North American region of IGAF, the global network of accounting firms, is focusing on two things: Speed and adaptability. “Move quicker, trust your people, question your own preconceptions (but do it quickly) and always assume your competition is working harder and smarter than you,” Mead says. So, a little paranoia is healthy these days.

Don’t duck the tough questions, says St. Louis CPA Joe Eckelkamp, president and owner at Eckelkamp & Associates CPAs. “Be realistic about the team's position given the current economic situation or you lose credibility with your team.”

Second, he says, “Be confident — not Pollyannaish — about what two or three things you will do — not just could do — to mitigate adverse impacts and then make sure you do them.”

Stephanie Curry, vice president and director of learning and development at PKF North American Network, a CPA firm association, sums it up with a handy checklist. “In my coaching conversations with managers and partners,” Curry says, “the following elements are consistent, particularly in professional services firms:

  1. Adaptability: It’s the No. 1 indicator of leadership potential. True enough in any situation — but in tough times, this competency is needed more than ever.
  2. Empathic Communication: “Our staff and our clients need to feel heard,” she says. Communication needs to increase both in frequency and in style. Good leaders and managers need to ask: How can you adjust your message to help set realistic expectations? And to make your clients and staff feel they’re being take care of? “Client service is our competitive advantage in the accounting industry — we’re selling relationships, not audits,” she says.
  3. Persistence and Optimism: Leaders and managers set the tone through their actions. “People will model what they see,” Curry notes. “So persistence and a sense of optimism are critical for creating an atmosphere that allows people to feel motivated and confident.”

Still, it’s a tough question, with no easy answers. Jeff De Cagna, a widely respected strategic adviser to associations (including a few in the CPA field), acknowledges, “It would be much easier if there were one, specific, here-and-now skill to which we could point. But the reality is that the world is in flux.”

That makes learning and adaptability paramount today. “In a time when you can't be certain what new, unforeseen and complex challenge will emerge next, the capacity to learn and adapt is absolutely crucial,” De Cagna says.

“Unfortunately, learning is also the capability that is least present in leaders who have become successful on the basis of what they already know,” he says. “This means that most of the learning that leaders are doing today is about getting caught up rather than getting ahead. This dynamic must change if our organizations are going to thrive in the 21st century.”

Copyrigh 2009 AICPA. Used by permission.

Today’s Top 10 Marketing Tactics for Accounting Firms

What’s working for CPA firms right now.

by Rick Telberg

The economic downturn seems to be driving accounting firms to turn increasingly to new technologies for their marketing and business development efforts.

To be sure, tried-and-true business-getting tactics such as networking, referrals and community service remain mainstays of practice development in the tax and accounting profession.

But you might be surprised by how many accounting firms are turning — in a sudden rush — to Web site upgrades, e-mail promotions and social media to both stretch their marketing dollar and increase their reach.

In a Bay Street Group/CPA Trendlines survey for the AICPA, new wave technologies are emerging as key ingredients in accounting firm marketing plans. We’ve been asking accountants to tell us which marketing activities their firms would be emphasizing anew in the coming months.

Here’s what they’re saying: READ MORE →

Retaining Clients Through Value-Based Solutions

How does today’s CPA firm improve retention? In one word, “value.”

By Scott H. Cytron, ABC,
Cytron and Company

Value isn’t something intangible; it’s a concentrated effort to give your clients the services, intellectual capital and strategies to help their businesses grow.

I recently presented a seminar, “How to Maintain Client Retention” to the Houston Chapter of the Association of Accounting Marketers. It was amazing to me how many attendees wanted to discuss retention. There’s no doubt about it, it’s easier to keep a client than recruit a new one, so retention should be high on anyone’s list for practically any CPA firm.

One retention strategy I find very compelling is the way a firm educates clients in an orchestrated manner that goes beyond traditional one-off conversations. Web seminars and live seminars on technical topics are very popular.

How do you do this cost effectively? I recently discovered a new opportunity called the QuickBooks Conference Kit, designed for QuickBooks® ProAdvisors and Intuit Solution Providers who don’t have the time or resources to develop their own educational materials, yet want to demonstrate their value in helping clients who want to get the most out of their software. Co-developed by Kevin Cumley of Forepoint LLC and Irene Bushnell of Anderson Zurmuehlen & Co., P.C., Kevin and Irene report firms are beginning to use the Kit to schedule and hold conferences. Not only are clients smarter; the firms continue demonstrating their value as a credible business partner.

What is your firm doing to provide value? Let’s start the conversation!