Economic prosperity may be right around the corner. But some CPAs don't have too many corners left to turn. And that's not good.
by Rick Telberg
At Large
Taken together, the voices of CPAs across the nation could be summed up as: "It was the best of times; it was the worst of times."
The profession's outlook for the economy seems as divided and polarized as the electorate is about the choice for president in this election year.
Just listen to a pair of managing partners, both at small, local CPA firms: One reports, "Unemployment in my area is at 3.4 percent or virtually full employment." And the other says, "Unemployment in my area is consistently above 10 percent." Can you guess which CPA is in a so-called Red State and which is in a Blue State?
There's a middle manager in a large public accounting firm who's exultant about the economy. "It's an excellent time to be an accountant," he says. There's another, in Dallas, who, never without work before, has now been looking for a job for almost a year. You'll recognize her at the unemployment office and in the food stamp line. "I'm the only one in a suit with an M.S. degree," she says.
Indeed, my soundings from over 700 accountants suggest barely more than half expect business conditions to improve over the next 12 months, with the rest split between predicting more of the same or some backsliding. Compare that with a study from the National Federation of Independent Business, a Washington small-business lobby, which predicts "the best economy in 20 years."
Nevertheless, some clear majorities of accounting and finance professionals see good signs for some business metrics in their own firms or companies, namely:
1. Revenues;
2. Profits;
3. Demand from clients and customers;
4. The ability to raise prices or fees; and
5. Expanding the business.
The biggest and darkest clouds on the economic horizon are, just as starkly:
1. Lack of affordable health care;
2. New or problematic government rules and regs;
3. Constricted access to new financing;
4. A need for more staffing at the same time as pressure remains to cut payrolls; and
5. Tight capital spending budgets.
To Bernadette Hardcastle, managing partner at her own local CPA firm of Knopp & Hardcastle in Corpus Christi, Texas, it's like a 1980's flashback. "Overall the economy is improving slowly, but there are areas of the country that have not improved and probably won't for a while."
Some companies are taking advantage of some special market opportunities. "Currently our business is playing on the market; we purchased low and we're selling high," says Shelly Munger, distribution division accounting manager at Meridian, Idaho-based Hoff Cos. "Next year we probably will not have that luxury because imports will have increased their pricing by then. However, we hope to have gained more market share over the course of this last year."
One solo accountant is capitalizing on work other companies are leaving behind, even at the expense of other accountants. "As more and more people are put out of work by larger companies downsizing and outsourcing," she says, "the opportunities for small businesses providing outsourcing activities and/or innovative products and services increase."
While other industries may be struggling, Tim Watson, managing partner at Benford Brown & Associates, in Chicago, is having a great year. He credits it, ironically perhaps, to Enron, Andersen and Sarbanes-Oxley.
"The demand for auditors and experienced accountants has gone through the roof," says Watson. "The work has doubled and the supply of people has essentially remained the same. As a result, even small firms like mine are getting involved in Sarbanes-Oxley engagements and many other projects that have resulted from the major shifts in business and clients between firms."
James Lewis, audit director at Lincoln University in Pennsylvania, might agree, but grudgingly. "The outlook for smaller CPA firms is very good as they experience the continuing trickle-down effects of Sarbanes-Oxley," he says. "But locally, other business is very dependent on the continued housing boom, and any increase in interest rates over one-half of one percent will likely cause a slight downturn."
Fragile as it may be then, hope springs eternal among CPAs. But with their trademark professional skepticism, they won't get too hopeful. History, they know, has all too often confounded the prognosticators.
Monday, August 23, 2004
Thursday, August 19, 2004
Your Job Won't Love You Back
The top 5 things CPAs really love and really hate about their jobs -- and what it means for management.
by Rick Telberg
Career Insider
What do you like best about your job? If you're like most CPAs, you find satisfaction in the intellectual challenge of the work.
So go ahead and love your job. Just remember, your job won't love you back.
For CPAs, your biggest challenge may be balancing your love of your work and the rest of your life. For accounting managers, the management challenges are as stark: Let your people love their work, but don't take advantage of it.
"I do love what I do," according to Yvette Beaudin, a CPA/CVA from El Paso, Texas, who works in a small CPA firm. She says she enjoys continuously challenging herself as she learns new things.
Or, listen to another happily employed CPA, a middle manager in a mid-sized CPA firm: "Because my boss creates a good work environment and shows his appreciation to staff for work well done, it creates a good work environment, even though the stress of tax season is still hard."
On the other hand, some CPAs feel so overwhelmed they may be ready to throw in the towel.
"I enjoy my job overall," said one CPA firm partner. "But, with the continuous onslaught of tax and accounting standards, I am getting more pessimistic. It is extremely difficult to keep up when you are a small firm with fewer than five professionals."
A middle manger in a mid-sized says he's fed up. "Because of '404' and Sarbanes-Oxley, I will be retiring as soon as I can. The regulatory aspects of that and the shortened deadlines have taken all the fun out of it."
Fun or not, my study of over 400 CPAs pinpoints the pain points that every CPA firm or finance director must manage to.
Overall, CPAs say the "best" parts of their job are, in order:
1. Interesting work
2. Flexible hours
3. Friendships with their colleagues
4. Good pay
5. The feeling of really getting something done
The "worst":
1. Work overload
2. Not enough pay
3. Not enough recognition
4. Lack of respect for accounting standards or ethics
5. Cranky clients
Furthermore, the difference between job-satisfaction ratings in public accounting vs. business-and-industry can be informative. For instance: Business-and-industry CPAs like their bosses more often than CPAs in public practice, by a ratio of 51 percent to 37 percent. But CPAs in public accountancy are happier with their "flexible" hours, opportunities for advancement and the feeling of really getting something done.
Of course, you can always become a sole proprietor, but even that doesn't necessarily give you full control. As one said: "I'm self-employed. My wife is my boss."
by Rick Telberg
Career Insider
What do you like best about your job? If you're like most CPAs, you find satisfaction in the intellectual challenge of the work.
So go ahead and love your job. Just remember, your job won't love you back.
For CPAs, your biggest challenge may be balancing your love of your work and the rest of your life. For accounting managers, the management challenges are as stark: Let your people love their work, but don't take advantage of it.
"I do love what I do," according to Yvette Beaudin, a CPA/CVA from El Paso, Texas, who works in a small CPA firm. She says she enjoys continuously challenging herself as she learns new things.
Or, listen to another happily employed CPA, a middle manager in a mid-sized CPA firm: "Because my boss creates a good work environment and shows his appreciation to staff for work well done, it creates a good work environment, even though the stress of tax season is still hard."
On the other hand, some CPAs feel so overwhelmed they may be ready to throw in the towel.
"I enjoy my job overall," said one CPA firm partner. "But, with the continuous onslaught of tax and accounting standards, I am getting more pessimistic. It is extremely difficult to keep up when you are a small firm with fewer than five professionals."
A middle manger in a mid-sized says he's fed up. "Because of '404' and Sarbanes-Oxley, I will be retiring as soon as I can. The regulatory aspects of that and the shortened deadlines have taken all the fun out of it."
Fun or not, my study of over 400 CPAs pinpoints the pain points that every CPA firm or finance director must manage to.
Overall, CPAs say the "best" parts of their job are, in order:
1. Interesting work
2. Flexible hours
3. Friendships with their colleagues
4. Good pay
5. The feeling of really getting something done
The "worst":
1. Work overload
2. Not enough pay
3. Not enough recognition
4. Lack of respect for accounting standards or ethics
5. Cranky clients
Furthermore, the difference between job-satisfaction ratings in public accounting vs. business-and-industry can be informative. For instance: Business-and-industry CPAs like their bosses more often than CPAs in public practice, by a ratio of 51 percent to 37 percent. But CPAs in public accountancy are happier with their "flexible" hours, opportunities for advancement and the feeling of really getting something done.
Of course, you can always become a sole proprietor, but even that doesn't necessarily give you full control. As one said: "I'm self-employed. My wife is my boss."
Friday, August 13, 2004
New Realities Force CPAs to Play Catch Up
Amid tumult and reform, two longtime observers assert clients have gained the upper hand in a buyer's market for professional services.
by Rick Telberg
At Large
The scandals, reforms, market shifts and technological advancements of recent years have so changed the landscape of the profession that it is, in some ways, hardly recognizable. In fact, the changes may even have shifted the balance of power, signaling profound new realities for practitioners.
In "Clients at the Core: Marketing and Managing Today's Professional Services Firm," (Wiley, 2004) August J. Aquila, based in Minnetonka, Minn., and Bruce W. Marcus, in Easton, Conn., a pair of veteran consultants, combine their considerable experience, skill and insight into a veritable strategic planning operator's manual for today's consulting firm.
From the outset, they acknowledge "the professional world doesn't need another book on how to write a press release or write a brochure or run a seminar."
Instead, they provide a new perspective on the crucial subject of how to keep firms relevant to the needs of the marketplace -- mainly, creating clients and building a marketing culture.
They don't get tied up in ideas like "vision," or "mission."
Instead they talk about the new realities of the 21st Century and professions in turmoil: dot-coms gone bust, a stock market meltdown, and a rash of frauds, defalcations, misuse of corporate funds; and then a reformist reaction, still unfolding, that the authors term "a helter-skelter regulatory rush that was at least as punitive as it was appropriate. It would seem that the regulatory garment was cut to fit all, when all don't wear the same size."
"The time is past when just the presence of the professional was its own comfort factor. It's long been believed that the concept of the professional was so exalted, and so trusting, that people accepted advice unquestioningly. No more. The scandals of 2002 and 2003 seem to have bred a diminished - if unwarranted -- respect for professionals," they say.
For today's professionals, here are six lessons you can take to the bank according to the authors :
-- Clients are more sophisticated. They no longer accept advice without questioning, challenging, demanding more reasoning and detail.
-- Because of the complexity of business today, clients demand that their professionals know more about the client's business and industry than ever before.
-- Professional services always function best when trust is at the heart of the relationship, but the corporate scandals of recent years have eroded that trust. That trust must now be regenerated. And the workings of trust are more important in the new economy than in the old.
-- Once the narrow structures of a profession were sufficient to serve clients. But clients now demand a broader spectrum of capabilities. The more broadly educated and well-rounded professional is the one with the greater advantage in meeting the needs of today's client. Clients demand that accountants know more than the basic skills of accounting.
-- Competition is now a fact of life. Clients know they have a choice.
-- Clients know the difference between marketing promises and professional services delivery. Today's client demands more real service and solutions -- not just a warm personal relationship.
To Aquila and Marcus, the new paradigm of professional services requires a new demand for partnership with the client and new participatory skills.
As they say: It's a buyers' market. Get used to it.
by Rick Telberg
At Large
The scandals, reforms, market shifts and technological advancements of recent years have so changed the landscape of the profession that it is, in some ways, hardly recognizable. In fact, the changes may even have shifted the balance of power, signaling profound new realities for practitioners.
In "Clients at the Core: Marketing and Managing Today's Professional Services Firm," (Wiley, 2004) August J. Aquila, based in Minnetonka, Minn., and Bruce W. Marcus, in Easton, Conn., a pair of veteran consultants, combine their considerable experience, skill and insight into a veritable strategic planning operator's manual for today's consulting firm.
From the outset, they acknowledge "the professional world doesn't need another book on how to write a press release or write a brochure or run a seminar."
Instead, they provide a new perspective on the crucial subject of how to keep firms relevant to the needs of the marketplace -- mainly, creating clients and building a marketing culture.
They don't get tied up in ideas like "vision," or "mission."
Instead they talk about the new realities of the 21st Century and professions in turmoil: dot-coms gone bust, a stock market meltdown, and a rash of frauds, defalcations, misuse of corporate funds; and then a reformist reaction, still unfolding, that the authors term "a helter-skelter regulatory rush that was at least as punitive as it was appropriate. It would seem that the regulatory garment was cut to fit all, when all don't wear the same size."
"The time is past when just the presence of the professional was its own comfort factor. It's long been believed that the concept of the professional was so exalted, and so trusting, that people accepted advice unquestioningly. No more. The scandals of 2002 and 2003 seem to have bred a diminished - if unwarranted -- respect for professionals," they say.
For today's professionals, here are six lessons you can take to the bank according to the authors :
-- Clients are more sophisticated. They no longer accept advice without questioning, challenging, demanding more reasoning and detail.
-- Because of the complexity of business today, clients demand that their professionals know more about the client's business and industry than ever before.
-- Professional services always function best when trust is at the heart of the relationship, but the corporate scandals of recent years have eroded that trust. That trust must now be regenerated. And the workings of trust are more important in the new economy than in the old.
-- Once the narrow structures of a profession were sufficient to serve clients. But clients now demand a broader spectrum of capabilities. The more broadly educated and well-rounded professional is the one with the greater advantage in meeting the needs of today's client. Clients demand that accountants know more than the basic skills of accounting.
-- Competition is now a fact of life. Clients know they have a choice.
-- Clients know the difference between marketing promises and professional services delivery. Today's client demands more real service and solutions -- not just a warm personal relationship.
To Aquila and Marcus, the new paradigm of professional services requires a new demand for partnership with the client and new participatory skills.
As they say: It's a buyers' market. Get used to it.
Thursday, August 05, 2004
3 Hot Trends from Some Cool CPA Shows
The summer's trade-show circuit suggests renewed vitality and confidence in the profession and some hints of new trends.
by Rick Telberg
At Large
As Yogi Berra once said (or is said to have said): "You can learn a lot by watching."
In the business-end of the accounting profession, you can learn a lot by watching, too. Take, for instance, a couple recent strolls through trade shows for CPAs. A couple months ago, it was the New Jersey state society's show. Last month, it was the New York society's show, perhaps, at 30 years old, the grand-daddy of them all. Both shows, run by the avuncular and peripatetic Russell Flagg (who also runs the California society's show), suggest renewed vitality and confidence in the profession, and provide clues to key trends to watch for. And, for the record, the AICPA was well-represented by CPA2Biz with a busy booth very much in tune with new offerings for CPAs, their clients and companies.
Trend-to-Watch No. 1: Document Management Is More Than Just 'Going Paperless.'
It's really about all sorts of new customer and supplier relationships, workflow efficiencies, corporate security and disaster recovery.
CPA Alan Kupperman, from the Parsippany, N.J., office of J.H. Cohn, for example, told how, a year after rollout, his large regional firm was improving productivity, cutting costs, enhancing client service, and mitigating risk with improved security. One key: Administrative assistants each have their own desktop scanners now.
All software vendors are playing into this trend, from tax, accounting and auditing, to practice management and time-and-billing. But a few making a big splash at the New York show include specialists Champion Workflow Systems, eFilecabinet, Immediatech, and a couple new ones: Office Tools Pro, ViewWise, and the British-import Star Computers Ltd., a practice management suite. Mirra Personal Server, whose booth was reportedly thronged at the Los Angeles show, should not be left out of this list for their automatic backup and storage capabilities. And of course, Hewlett-Packard and Fujitsu were there in strength, with HP showing off its standard-setting PC's, laptops and multifunction printer-fax-copier-scanners, and Fujitsu with a small but fast portable scanner. One more note on the HP booth: The new tablet PC seems poised to become a handy cross-breed between a PDA and an ultra-lightweight PC. You have to see it to believe it.
Trend-to-Watch No. 2: Local Bankers and Financial Businesses Are Hungry for CPAs.
How badly do bankers rely on CPAs? Take it from Karen Adler, a senior mortgage consultant at Emigrant Mortgage. She said at the New York show that 25 percent of her traffic comes via CPAs. So, clearly, the competition for the trust and loyalty of the CPA is of paramount interest to bankers and other financial professionals.
The First National Bank of Long Island, for instance, was offering a free gift for every new business checking account opened by Aug. 21, plus special lines of credit for CPA firms and their principals. The Temecula Valley Bank in New Jersey was on the prowl for CPAs with common clients in gas station and convenience stores, a couple of the bank's specialties. Not to be counted out, national powerhouse Washington Mutual was offering a 500-basis-point discount on business real estate loans. CitiGroup is waiving a slew of fees for CPA firms. It's enough to send CPAs laughing all the way to the bank.
On the financial services front, global UBS was at the show looking to hire CPAs as personal financial advisors. Fidelity was hawking their massive IRA rollover capabilities and their groundbreaking Charitable Gift Fund. Financial Analysts Inc. was looking for life insurance sales. The voluble Lance Wallach was pitching VEBA's as passionately as ever.
But most interesting was WorthMark Financial Services of St. Paul, Minn., which is offering a new alternative for CPAs considering the broker-dealer business. Since it can cost $100,000 to $500,000-plus for a CPA firm to set up its own B-D, WorthMark has created limited partnerships with units priced as low at $25,000 in existing B-D's, thus sidestepping a lot of regulatory and administrative costs and headaches.
Trend-to-Watch No. 3: Outsourcing and Offshoring Aren't Necessarily the Same Thing
Everyone knows CPAs "know it all" and "can do it all." But most choose not to. So, since time immemorial, CPAs have been delegating work, referring it out, sending it to service bureaus, or hiring specialists. They're no dummies; it's called "leverage." Since the 1990s, CPAs have been "outsourcing" jobs like computer networking or payroll. Today, the hot-button issue is clearly "offshoring," which the AICPA is monitoring closely and has given clear guidance on, including "AICPA Releases Guidelines on Outsourcing Engagements."
At the New York show, the range of outsourcing solutions ranged from simple bookkeeping, from a company called, simply enough, The Bookkeeping Company, in New York, to the Web-based PayCycle, founded by Rene LaCerte (yes, a cousin of the LaCerte tax family), in Palo Alto, Calif. Of course, stalwarts like ADP, CompuPay, Ceridien, up-and-comer Gevity in human resources, the local Professional Advisor Services in the PEO business, and CPA2Biz's own Paychex programs shouldn't be overlooked. But today, even McBee, once a humble stationery supplier is pitching payroll.
Further up the evolution scale, venture-capital financed Xpitax was at the show, with Datamatics, CCH-owned SurePrep, the Goodrej Group and GT Limited. All, to one extent or another, send some processing overseas. But for all the hubbub over "offshoring," tallied up and footed, the total market for offshored tax returns remains just one-tenth of one percent of the returns filed, according to Greg LaFollette, editor of CPA Technology Adviser.
Of course, if a CPA firm really wants to handle payroll all by itself, PenSoft was at the show with the software for it.
And for CPA firms looking to aid clients in Web commerce, Envision's Roger Maggio was fielding questions.
Miscellany: In other news from the show, global ERP leader SAP drew attention with its midmarket SAP One entry, vying against Best Software's MAS 90 and Microsoft's Great Plains. Mergers and acquisitions brokers were also busy, from Max Krotman at GlobalForce, to Leon Faris and friends at Professional Accounting Sales, and the relatively low-profile Strategic Alliance Funding & Equity Inc. of Fort Lauderdale, Fla.
State CPA society trade shows remain the premier gathering place for CPAs and vendors to do business face-to-face. Two upcoming events that are not to be missed include the Illinois show in Chicago Aug. 24-25 and the Florida exhibition in Fort Lauderdale, Sept 29-Oct.1. Be there or be square.
by Rick Telberg
At Large
As Yogi Berra once said (or is said to have said): "You can learn a lot by watching."
In the business-end of the accounting profession, you can learn a lot by watching, too. Take, for instance, a couple recent strolls through trade shows for CPAs. A couple months ago, it was the New Jersey state society's show. Last month, it was the New York society's show, perhaps, at 30 years old, the grand-daddy of them all. Both shows, run by the avuncular and peripatetic Russell Flagg (who also runs the California society's show), suggest renewed vitality and confidence in the profession, and provide clues to key trends to watch for. And, for the record, the AICPA was well-represented by CPA2Biz with a busy booth very much in tune with new offerings for CPAs, their clients and companies.
Trend-to-Watch No. 1: Document Management Is More Than Just 'Going Paperless.'
It's really about all sorts of new customer and supplier relationships, workflow efficiencies, corporate security and disaster recovery.
CPA Alan Kupperman, from the Parsippany, N.J., office of J.H. Cohn, for example, told how, a year after rollout, his large regional firm was improving productivity, cutting costs, enhancing client service, and mitigating risk with improved security. One key: Administrative assistants each have their own desktop scanners now.
All software vendors are playing into this trend, from tax, accounting and auditing, to practice management and time-and-billing. But a few making a big splash at the New York show include specialists Champion Workflow Systems, eFilecabinet, Immediatech, and a couple new ones: Office Tools Pro, ViewWise, and the British-import Star Computers Ltd., a practice management suite. Mirra Personal Server, whose booth was reportedly thronged at the Los Angeles show, should not be left out of this list for their automatic backup and storage capabilities. And of course, Hewlett-Packard and Fujitsu were there in strength, with HP showing off its standard-setting PC's, laptops and multifunction printer-fax-copier-scanners, and Fujitsu with a small but fast portable scanner. One more note on the HP booth: The new tablet PC seems poised to become a handy cross-breed between a PDA and an ultra-lightweight PC. You have to see it to believe it.
Trend-to-Watch No. 2: Local Bankers and Financial Businesses Are Hungry for CPAs.
How badly do bankers rely on CPAs? Take it from Karen Adler, a senior mortgage consultant at Emigrant Mortgage. She said at the New York show that 25 percent of her traffic comes via CPAs. So, clearly, the competition for the trust and loyalty of the CPA is of paramount interest to bankers and other financial professionals.
The First National Bank of Long Island, for instance, was offering a free gift for every new business checking account opened by Aug. 21, plus special lines of credit for CPA firms and their principals. The Temecula Valley Bank in New Jersey was on the prowl for CPAs with common clients in gas station and convenience stores, a couple of the bank's specialties. Not to be counted out, national powerhouse Washington Mutual was offering a 500-basis-point discount on business real estate loans. CitiGroup is waiving a slew of fees for CPA firms. It's enough to send CPAs laughing all the way to the bank.
On the financial services front, global UBS was at the show looking to hire CPAs as personal financial advisors. Fidelity was hawking their massive IRA rollover capabilities and their groundbreaking Charitable Gift Fund. Financial Analysts Inc. was looking for life insurance sales. The voluble Lance Wallach was pitching VEBA's as passionately as ever.
But most interesting was WorthMark Financial Services of St. Paul, Minn., which is offering a new alternative for CPAs considering the broker-dealer business. Since it can cost $100,000 to $500,000-plus for a CPA firm to set up its own B-D, WorthMark has created limited partnerships with units priced as low at $25,000 in existing B-D's, thus sidestepping a lot of regulatory and administrative costs and headaches.
Trend-to-Watch No. 3: Outsourcing and Offshoring Aren't Necessarily the Same Thing
Everyone knows CPAs "know it all" and "can do it all." But most choose not to. So, since time immemorial, CPAs have been delegating work, referring it out, sending it to service bureaus, or hiring specialists. They're no dummies; it's called "leverage." Since the 1990s, CPAs have been "outsourcing" jobs like computer networking or payroll. Today, the hot-button issue is clearly "offshoring," which the AICPA is monitoring closely and has given clear guidance on, including "AICPA Releases Guidelines on Outsourcing Engagements."
At the New York show, the range of outsourcing solutions ranged from simple bookkeeping, from a company called, simply enough, The Bookkeeping Company, in New York, to the Web-based PayCycle, founded by Rene LaCerte (yes, a cousin of the LaCerte tax family), in Palo Alto, Calif. Of course, stalwarts like ADP, CompuPay, Ceridien, up-and-comer Gevity in human resources, the local Professional Advisor Services in the PEO business, and CPA2Biz's own Paychex programs shouldn't be overlooked. But today, even McBee, once a humble stationery supplier is pitching payroll.
Further up the evolution scale, venture-capital financed Xpitax was at the show, with Datamatics, CCH-owned SurePrep, the Goodrej Group and GT Limited. All, to one extent or another, send some processing overseas. But for all the hubbub over "offshoring," tallied up and footed, the total market for offshored tax returns remains just one-tenth of one percent of the returns filed, according to Greg LaFollette, editor of CPA Technology Adviser.
Of course, if a CPA firm really wants to handle payroll all by itself, PenSoft was at the show with the software for it.
And for CPA firms looking to aid clients in Web commerce, Envision's Roger Maggio was fielding questions.
Miscellany: In other news from the show, global ERP leader SAP drew attention with its midmarket SAP One entry, vying against Best Software's MAS 90 and Microsoft's Great Plains. Mergers and acquisitions brokers were also busy, from Max Krotman at GlobalForce, to Leon Faris and friends at Professional Accounting Sales, and the relatively low-profile Strategic Alliance Funding & Equity Inc. of Fort Lauderdale, Fla.
State CPA society trade shows remain the premier gathering place for CPAs and vendors to do business face-to-face. Two upcoming events that are not to be missed include the Illinois show in Chicago Aug. 24-25 and the Florida exhibition in Fort Lauderdale, Sept 29-Oct.1. Be there or be square.
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