The merely average need not apply.
Adam Ross, the new head of channel sales at NetSuite, is looking for not-your-everyday CPA firm resellers. And that says something about where the CPA market is going.
To be sure, the CPA community remains a core focus for NetSuite and probably always will.
But with NetSuite, which incorporates now a host of integrated applications, resellers will need to be well-versed in everything from debits-and-credits to customer-relationship-management and back again. Many CPA firms sell and service only accounting software, and low-end stuff at that.
If Adam's name rings a bell, it may be because he's been tending the VAR vineyards for about nine years, starting with ACT!, moving on to SalesLogix and arriving at Best before joining NetSuite, which has been funded by Oracle's Larry Ellison.
His views may a harbinger of the future. And certainly worth listening to. There may always be a place in the profession for CPAs who service entry-level software. But as clients grow, they'll need more. CPAs can choose to grow with them, or hand them off to other colleagues in the profession.
Wednesday, March 30, 2005
BUSY SEASON UPDATE:
Entering the Final Stretch
Most now say conditions are better or the same as last year.
In the current results, it appears that pressures on tax professionals eased slightly in the latest week, with a minority, instead of last week's slight majority, reporting relatively difficult conditions.
How's the busy season going so far?
Better than last year: 21%
About the Same: 35%
Not as Well as Last Year: 44%
Interestingly nevertheless, most practitioners are reporting advances in all key operational and financial measures -- revenues, profits, clients, etc.
As of right now, what kind of tax season are you having this year, compared with last year's? (Percentage answering “significant” or “some” increase.)
Total Revenue: 60%
Net Profit: 58%
Number of Clients: 72%
Number on Extension: 42%
Revenue per Client: 64%
Profit per Client: 54%
So what's going on?
Are tax practitioners working harder and enjoying it less?
If so, what would you do differently next year?
A shocker: Respondents suggest personal and inter-personal issues can be just as troublesome this time of year as technology issues or new rules and regs:
Which of these issues is having a significant impact on the filing
season? (Please check all that apply.)
64%: Clients late or unprepared
52%: Shortage of good staff
26%: Technology problems
25%: Personal or family issues
25%: Partner or office issues
24%: New rules, regs, forms
18%: The general economic situation
13%: Last-minute changes by the government
10%: IRS operations
2%: New competition in my area
Why can't CPAs just get along?
Wednesday, March 23, 2005
FIRM ASSOCIATIONS:
Facing the Issues
And bending with the times.
First indications from a canvass of CPA firm association directors shows they are facing the same pressures as state societies and firms themselves.
And they are battling back with a host of ideas and programs. But most of all, they are leveraging their core assets: Strength in numbers.
Here are a few verbatim responses (edited for confidentiality while the project remains a work in progress) received by email. The complete report will contain additional interviews and follow-ups with more association directors.
Association directors and interested firms can contact us directly with questions or comments at rtelberg@telberg.com, or (914) 674-4531.
Or you can leave additional comments by clicking on the “COMMENTS” link at the bottom of this entry.
VERBATIM RESPONSES (edited for confidentiality)
RESPONSE 1
1) WHAT ARE THE MAJOR TRENDS OR ISSUES IMPACTING YOUR MEMBERS AND YOUR ASSOCIATION TODAY?
- Partner succession
- Staffing: retention, utilization, productivity, inter-generational issues
- Technology
- Business development
- Developing efficiencies - improving realization/profitability
- Evaluating/developing new member services and practice niches
- Developing a firm culture based on high moral and ethical standards, where "disciplined people" can thrive and contribute to "great performance". (Jim Collins, "Good to Great")
2) WHAT ARE YOU AND YOUR FIRMS DOING ABOUT IT? OR, WHAT SHOULD THE PROFESSION BE DOING ABOUT IT?
- The total network includes International and Asia Pacific, giving members global resources.
- On-going CPE addresses current issues and trends, combining presentations by high quality speakers and members
- Annual Economic Data Survey for benchmarking
- Leveraging network knowledge
- Development of focus groups, based on member needs
- Encouraging and facilitating greater exchange of information and resources and member collaboration
- An email-based "SOS" program for urgent requests and other information sharing
- Seeking and developing resources and alliances to support member needs
- Participation in IFAC's Forum of Firms initiative
3) HOW'S IT WORKING? DO YOU HAVE ANY EXAMPLES OF THE RESULTS?
- CPE is consistently well evaluated
- The Economic Data Survey report is reviewed in detail at our conference. Part of the review includes a narrative and/or live report of what steps members took to make improvements in their stats
- We recently launched Groove (www.groove.net) collaboration software association-wide with very positive results. For example, the Not-for-Profit focus group has developed a searchable database of audit management letter points which can be easily reviewed and retrieved.
- The knowledge-base program, including Groove, provides resources and opportunities for member-to-member interactions and collaboration. For example, the focus groups participate in periodic conference calls to discuss current issues and exchange information.
- In addition to our global affiliations, we have a strategic alliance with a like-minded association of attorneys, who meet in conjunction with our conferences. This alliance gives member clients multi-disciplinary resources to handle issues such family business succession and/or exit planning.
- Membership in the Forum of Firms positions member firms well to handle international work and prepare them for new international standards as they are developed and implemented.
4) WHY SHOULD A CPA FIRM BELONG TO A FIRM ASSOCIATION? AND WHAT CRITERIA SHOULD THEY USE IN CHOOSING ONE?
- Our members tell us that one of the most important benefits is the opportunity to network and share ideas. Seasoned, long-term partners attend conferences to find fresh ideas and recharge their batteries. Newer partners look to their peers for information, support and informal mentoring. All staff levels and departments benefit from networking with each other. No one has to start with a blank page.
- Most small and mid-size accounting firms don't have the resources to be the "one-stop shop" that clients want. Association membership allows them to exchange information and share resources to provide their clients with the many services they are seeking.
- The on-going CPE allows firms to stay on top of the profession and maximize their productivity and profitability.
- Belonging to an international association gives member firms "local expertise and international presence" and adds to a positive perception by clients.
In choosing an association, firms should:
- match their needs and expectations to the association's list of services and benefits
~ where do they want to fit in terms of firm size?
~ what services are they looking for?
~ what firm goals would they like the association to help them accomplish?
~ what personal development goals would they like the association to help them accomplish?
~ what can they contribute to the association?
- use their list of expectations to interview the association and get specific
- attend an association function to make sure there is compatibility with the members
RESPONSE 2
1) WHAT ARE THE MAJOR TRENDS OR ISSUES IMPACTING YOUR MEMBERS AND YOUR ASSOCIATION TODAY?
The most significant trend affecting our members is the impact of changes to the profession caused by Anderson/Enron/Worldcom/Sarbanes Oxley/PCAOB/Parmalat. These changes have created substantial opportunities for second and even third tier firms. Those firms that have proactively recognized the importance of membership of and active participation in an association like ours are well positioned to take advantage of these opportunities. The challenge that our members are facing is the ability to demonstrate that their membership in an association of CPA firms does in fact represent a viable alternative to the networks available at the Big Four and the other international firms like BDO, Grant Thornton etc.
The biggest challenge faced at the association level is getting the message to CPA firms about the strong value of membership in an association of firms. (Interestingly enough, it is apparent that the message is starting to register given the number of articles that have appeared over the past few months about this specific subject.
2) WHAT ARE YOU AND YOUR FIRMS DOING ABOUT IT? OR, WHAT SHOULD THE PROFESSION BE DOING ABOUT IT?
The proactive firms are definitely getting the message about the abundant opportunities in the marketplace and are taking full advantage of their membership in associations at the local level. As is the case with many opportunities or challenges it takes the profession some time to absorb change and an even longer time to take advantage of change. A strong association, where member firms are active participants, opportunities become far easier to identify and change becomes far easier to accept. This phenomenon can only be attributed to the power of the mutual exchange of ideas generated in a non-competitive environment of member firms that are willing to work together for the good of their fellow member firms as a whole.
The profession seems to be recognizing the value of membership in an association (perhaps as reflected by this proposed article) and by continually reinforcing the benefits, more firms will eventually realize what they are missing.
Separately our association has become a sponsor at various conferences targeted to the profession with a view to raising the profile of associations and the role they can play at the local level. Given the extent to which the profession is unaware of the advantages, we recognized that this would be a three year program and are now in our second year.
3) HOW'S IT WORKING? DO YOU HAVE ANY EXAMPLES OF THE RESULTS?
There have been several significant opportunities that our member firms have secured as a result of the "fallout" described above and the positioning of the respective member firms in taking advantage of the fallout.
These opportunities include:
Joint proposal to a publicly traded German company with operation throughout Europe and in the United States. Participants in the opportunity included a firm located in California and the lead firm in Germany. The biggest hurdle was demonstrating that the members of the association were in a position to offer the same level of sophisticated services rendered by the existing accountant (a Big Four). Through the proposal process, our member firms were able to demonstrate a close working relationship with strong local talent and were ultimately successful.
Another opportunity existed for a strong local firm in the US. A large publicly traded US company (with worldwide operations whose audit and tax services were being provided by Big Four) was concerned about their sky-rocketing audit and tax fees. They were introduced to a member firm with strong local tax talent. They were quite concerned about the services required around the world. Throughout the proposal process and after a review of the offices around the world the work was awarded to our association’s local firm for a minimum of three years.
While these are significant opportunities, they are not the norm. The more realistic opportunity is generally mid-market companies who historically have not recognized that there are viable alternatives to the large national and international firms. These opportunities are far more common and indicate the importance of membership of an association like ours.
4) WHY SHOULD A CPA FIRM BELONG TO A FIRM ASSOCIATION? AND WHAT CRITERIA SHOULD THEY USE IN CHOOSING ONE?
Clients are demanding greater sophistication in all areas of work performed by their CPAs. This sophistication not only impacts work performed at local level but on a national and even international level. In order to meet these demands, CPA firms need to be able to bring solutions that reflect specialization at the local level and also national and international level.
In addition to meeting client needs, demands of running a local firm have grown over the last ten years. Changes in the profession, changes in clients needs, changes in employee issues, changes in standards etc cannot be fully applied to a local firm in a vacuum. Membership in an appropriate association will provide a strong network for discussing practice management issues and for developing best practices scenarios that benefit each of the member firms.
Firms looking to be a member of an association need to make sure that:
1) The members of the association share common goals and objectives (which should be consistent with those of the firm). For example the firms should generally be of similar size, and the philosophy of member firms should be fairly homogenous.
2) The members of the association are subject to some level of peer review by their fellow members.
3) Strong national and international spread of coverage.
4) The association holds regular meetings to encourage networking and the development of strong bonds between member firms.
5) IS THERE ANYTHING WE SHOULD BE ASKING ABOUT TRENDS IN FIRM ASSOCIATIONS THAT ISN'T COVERED HERE?
One interesting trend that has been percolating over the last few years is the role that associations are playing in bringing firms together in more permanent ways. A good example of this change is the formation of one association recently which developed out of close relationships that were built among members of one particular association. An unfortunate side effect of such a development is the impact on some of the firms that did not fit into the profile that the new association was attempting to develop. Some of these firms were forced to look to other alternatives to meet their own needs. (This goes to my earlier point about the importance that members of the association share common goals and objectives.)
It is inevitable -- in an era where mergers are prominent -- that the close relationships that develop between members firms within an association leads to possible mergers over the next few years.
RESPONSE 3
1) WHAT ARE THE MAJOR TRENDS OR ISSUES IMPACTING YOUR MEMBERS AND YOUR ASSOCIATION TODAY?
SOX legislation.
2) WHAT ARE YOU AND YOUR FIRMS DOING ABOUT IT? OR, WHAT SHOULD THE PROFESSION BE DOING ABOUT IT?
We have set up two SOX committees - one in Europe & one in North America. They are being guided by one of our members experienced in the field to obtain the required training to help companies comply with section 404.
3) HOW'S IT WORKING?
It is starting to work. We have one engagement in progress involving 5 different firms in five different countries. and we have two other proposals submitted.
4) WHY SHOULD A CPA FIRM BELONG TO A FIRM ASSOCIATION?
It expands their horizons by exposing them to different business cultures, enables them to retain clients who may think they have to change to one of the big 4, and it gives them an opportunity to exchange problems with peers in a non-competitive environment.
5) IS THERE ANYTHING ELSE WE SHOULD BE ASKING?
Firms should ask of associations:
-- Are they growing, staying steady, or stagnating?
-- Are mergers happening and if so are they working out?
-- What services are they providing to their members?
RESPONSE 4
1) WHAT ARE THE MAJOR TRENDS OR ISSUES IMPACTING YOUR MEMBERS AND YOUR ASSOCIATION TODAY?
* Finding enough staff. There is plenty of work right now, but will we firms be able to find the staff to do it all?
* New wave of consolidation/mergers.
* Leadership/grooming the next generation.
2) WHAT ARE YOU AND YOUR FIRMS DOING ABOUT IT? OR, WHAT SHOULD THE PROFESSION BE DOING ABOUT IT?
* Staffing: Some of our firms are hiring from abroad. Lack of facility with English can be a problem.
* Mergers: Some of our firms have merged or acquired firms to be
able to win larger engagements.
* Leadership: Our Association now has a leadership program for new partners and
for managers.
3) HOW'S IT WORKING? DO YOU HAVE ANY EXAMPLES OF THE RESULTS?
* Staffing: The staffing shortage continues.
* Mergers: Those firms that have upped their size have positioned
themselves well to take advantage of the SOX fallout.
* Leadership: Our program has received rave reviews from the
managing partners and from the attendees.
4) WHY SHOULD A CPA FIRM BELONG TO A FIRM ASSOCIATION? AND WHAT
CRITERIA SHOULD THEY USE IN CHOOSING ONE?
* Each association is unique. Our members join to share best practices and technical expertise, benefit from leadership development and coaching, and have a robust national and international network to help serve their clients. Without a network you are alone; with a network a world of opportunity opens to you.
* For firms considering joining an association, talk to the members. Find out if the member firms share similar issues and concerns of yours. Why do they belong? Will you be able to learn from the group, and will you be able to contribute? Is the network broad, both nationally and internationally? Would you feel comfortable referring a valued client to another member firm?
RESPONSE 5
1) WHAT ARE THE MAJOR TRENDS OR ISSUES IMPACTING YOUR MEMBERS AND YOUR ASSOCIATION TODAY?
Our members are impacted in numerous ways, including:
How to keep up with changes in the profession.
How to keep up with changes in the marketplace.
How to increase profitability.
How to improve quality of practice.
2) WHAT ARE YOU AND YOUR FIRMS DOING ABOUT IT? OR, WHAT SHOULD THE PROFESSION BE DOING ABOUT IT?
As an association we provide members with the latest information through the following initiatives:
Networking and collaborative efforts
Three leadership conferences per year where we provide highly qualified and successful speakers to address current issues in the profession and the marketplace. These conferences provide exceptional networking opportunities as well as informative and substantive leadership training.
A Marketing Program which helps medium size firms effectively address marketing issues in a cost effective manner.
Benchmarking, Technology, and Human Resource surveys which are compiled, shared and discussed in depth with members at Leadership conferences.
A website with an online library, a database of services provided, message boards, and where information can be exchanged.
One-on-one firm counseling.
We provide yearly staff training and sales/advisory training to improve the skill sets of member firm's employees, from associates to partners.
Newsletters
Technical issues sub-groups to address trends in the technical areas of Tax, Accounting & Auditing, and Technology.
3) HOW'S IT WORKING?
We’ve produced valuable relationships and sharing quality work and providing increased profits for our firms. We have also established numerous affiliations and alliances which have either produced revenue or cut costs for our member firms.
4) WHY SHOULD A CPA FIRM BELONG TO A FIRM ASSOCIATION? AND WHAT CRITERIA SHOULD THEY USE IN CHOOSING ONE?
Belonging to an association is only of benefit to a firm if the association is working diligently and successfully to provide benefits to the member firms, such as those listed above.
The criteria for joining an association include those where member firms are matched in their firm size and expertise, where the association can best meets the firm's needs for the future and where the association and its members provide assistance in achieving long-term goals and improving their practice.
RESPONSE 6
1) WHAT ARE THE MAJOR TRENDS OR ISSUES IMPACTING YOUR MEMBERS AND YOUR ASSOCIATION TODAY?
The number one issue our firms are talking about is "Exit strategies for today's owners."
Our conferences have and will continue to focus on two possible solutions: Selling or merging your practice and/or training the next generation of partners (internal sale). The problem the association faces is that many of our firms are being approached about selling or merging their practices. In the last three months two of our members have either been acquired or are in final discussions with other practices about merging.
Although we have been fortunate to retain both members, as the larger regional firms begin to buy market share, our members will be likely targets and we will be forced to either find new firms to replace them or change our model regarding geographical exclusivity or admitting firms who belong to other associations.
3) Regarding results:
It is too early to tell what is going to happen but my informal discussion with many members is that they see selling their practices as the most viable option to their retirements. "They just ain't making partners anymore!"
4) Why belong?
It's like joining a support group...you get to find out that everyone else has similar issues and many times they get to learn from other's experiences. Benchmarking is also a great benefit as is staying ahead of the curve. Our members learned about "outsourcing" four years ago. We are early adopters and early adopters get the worm.
Look for an association that has similar sized, similar thinking firms. The issues of smaller firms are not the same as larger ones although larger firms seem to think that they cannot learn from smaller ones. That is just foolishness. Small firms can get to market faster. Do not join an association to get referral business. Look for a dues structure where everyone is on the same footing. Associations where dues are based on size of the firm are run by those that pay the most!
5) What else?
How come firms in the Midwest and West are so underrepresented in associations? Read PAR's CPA Firm Association Directory issue (January 31, 2005) and notice that almost every association is looking for firms west of the Mississippi!
First indications from a canvass of CPA firm association directors shows they are facing the same pressures as state societies and firms themselves.
And they are battling back with a host of ideas and programs. But most of all, they are leveraging their core assets: Strength in numbers.
Here are a few verbatim responses (edited for confidentiality while the project remains a work in progress) received by email. The complete report will contain additional interviews and follow-ups with more association directors.
Association directors and interested firms can contact us directly with questions or comments at rtelberg@telberg.com, or (914) 674-4531.
Or you can leave additional comments by clicking on the “COMMENTS” link at the bottom of this entry.
VERBATIM RESPONSES (edited for confidentiality)
RESPONSE 1
1) WHAT ARE THE MAJOR TRENDS OR ISSUES IMPACTING YOUR MEMBERS AND YOUR ASSOCIATION TODAY?
- Partner succession
- Staffing: retention, utilization, productivity, inter-generational issues
- Technology
- Business development
- Developing efficiencies - improving realization/profitability
- Evaluating/developing new member services and practice niches
- Developing a firm culture based on high moral and ethical standards, where "disciplined people" can thrive and contribute to "great performance". (Jim Collins, "Good to Great")
2) WHAT ARE YOU AND YOUR FIRMS DOING ABOUT IT? OR, WHAT SHOULD THE PROFESSION BE DOING ABOUT IT?
- The total network includes International and Asia Pacific, giving members global resources.
- On-going CPE addresses current issues and trends, combining presentations by high quality speakers and members
- Annual Economic Data Survey for benchmarking
- Leveraging network knowledge
- Development of focus groups, based on member needs
- Encouraging and facilitating greater exchange of information and resources and member collaboration
- An email-based "SOS" program for urgent requests and other information sharing
- Seeking and developing resources and alliances to support member needs
- Participation in IFAC's Forum of Firms initiative
3) HOW'S IT WORKING? DO YOU HAVE ANY EXAMPLES OF THE RESULTS?
- CPE is consistently well evaluated
- The Economic Data Survey report is reviewed in detail at our conference. Part of the review includes a narrative and/or live report of what steps members took to make improvements in their stats
- We recently launched Groove (www.groove.net) collaboration software association-wide with very positive results. For example, the Not-for-Profit focus group has developed a searchable database of audit management letter points which can be easily reviewed and retrieved.
- The knowledge-base program, including Groove, provides resources and opportunities for member-to-member interactions and collaboration. For example, the focus groups participate in periodic conference calls to discuss current issues and exchange information.
- In addition to our global affiliations, we have a strategic alliance with a like-minded association of attorneys, who meet in conjunction with our conferences. This alliance gives member clients multi-disciplinary resources to handle issues such family business succession and/or exit planning.
- Membership in the Forum of Firms positions member firms well to handle international work and prepare them for new international standards as they are developed and implemented.
4) WHY SHOULD A CPA FIRM BELONG TO A FIRM ASSOCIATION? AND WHAT CRITERIA SHOULD THEY USE IN CHOOSING ONE?
- Our members tell us that one of the most important benefits is the opportunity to network and share ideas. Seasoned, long-term partners attend conferences to find fresh ideas and recharge their batteries. Newer partners look to their peers for information, support and informal mentoring. All staff levels and departments benefit from networking with each other. No one has to start with a blank page.
- Most small and mid-size accounting firms don't have the resources to be the "one-stop shop" that clients want. Association membership allows them to exchange information and share resources to provide their clients with the many services they are seeking.
- The on-going CPE allows firms to stay on top of the profession and maximize their productivity and profitability.
- Belonging to an international association gives member firms "local expertise and international presence" and adds to a positive perception by clients.
In choosing an association, firms should:
- match their needs and expectations to the association's list of services and benefits
~ where do they want to fit in terms of firm size?
~ what services are they looking for?
~ what firm goals would they like the association to help them accomplish?
~ what personal development goals would they like the association to help them accomplish?
~ what can they contribute to the association?
- use their list of expectations to interview the association and get specific
- attend an association function to make sure there is compatibility with the members
RESPONSE 2
1) WHAT ARE THE MAJOR TRENDS OR ISSUES IMPACTING YOUR MEMBERS AND YOUR ASSOCIATION TODAY?
The most significant trend affecting our members is the impact of changes to the profession caused by Anderson/Enron/Worldcom/Sarbanes Oxley/PCAOB/Parmalat. These changes have created substantial opportunities for second and even third tier firms. Those firms that have proactively recognized the importance of membership of and active participation in an association like ours are well positioned to take advantage of these opportunities. The challenge that our members are facing is the ability to demonstrate that their membership in an association of CPA firms does in fact represent a viable alternative to the networks available at the Big Four and the other international firms like BDO, Grant Thornton etc.
The biggest challenge faced at the association level is getting the message to CPA firms about the strong value of membership in an association of firms. (Interestingly enough, it is apparent that the message is starting to register given the number of articles that have appeared over the past few months about this specific subject.
2) WHAT ARE YOU AND YOUR FIRMS DOING ABOUT IT? OR, WHAT SHOULD THE PROFESSION BE DOING ABOUT IT?
The proactive firms are definitely getting the message about the abundant opportunities in the marketplace and are taking full advantage of their membership in associations at the local level. As is the case with many opportunities or challenges it takes the profession some time to absorb change and an even longer time to take advantage of change. A strong association, where member firms are active participants, opportunities become far easier to identify and change becomes far easier to accept. This phenomenon can only be attributed to the power of the mutual exchange of ideas generated in a non-competitive environment of member firms that are willing to work together for the good of their fellow member firms as a whole.
The profession seems to be recognizing the value of membership in an association (perhaps as reflected by this proposed article) and by continually reinforcing the benefits, more firms will eventually realize what they are missing.
Separately our association has become a sponsor at various conferences targeted to the profession with a view to raising the profile of associations and the role they can play at the local level. Given the extent to which the profession is unaware of the advantages, we recognized that this would be a three year program and are now in our second year.
3) HOW'S IT WORKING? DO YOU HAVE ANY EXAMPLES OF THE RESULTS?
There have been several significant opportunities that our member firms have secured as a result of the "fallout" described above and the positioning of the respective member firms in taking advantage of the fallout.
These opportunities include:
Joint proposal to a publicly traded German company with operation throughout Europe and in the United States. Participants in the opportunity included a firm located in California and the lead firm in Germany. The biggest hurdle was demonstrating that the members of the association were in a position to offer the same level of sophisticated services rendered by the existing accountant (a Big Four). Through the proposal process, our member firms were able to demonstrate a close working relationship with strong local talent and were ultimately successful.
Another opportunity existed for a strong local firm in the US. A large publicly traded US company (with worldwide operations whose audit and tax services were being provided by Big Four) was concerned about their sky-rocketing audit and tax fees. They were introduced to a member firm with strong local tax talent. They were quite concerned about the services required around the world. Throughout the proposal process and after a review of the offices around the world the work was awarded to our association’s local firm for a minimum of three years.
While these are significant opportunities, they are not the norm. The more realistic opportunity is generally mid-market companies who historically have not recognized that there are viable alternatives to the large national and international firms. These opportunities are far more common and indicate the importance of membership of an association like ours.
4) WHY SHOULD A CPA FIRM BELONG TO A FIRM ASSOCIATION? AND WHAT CRITERIA SHOULD THEY USE IN CHOOSING ONE?
Clients are demanding greater sophistication in all areas of work performed by their CPAs. This sophistication not only impacts work performed at local level but on a national and even international level. In order to meet these demands, CPA firms need to be able to bring solutions that reflect specialization at the local level and also national and international level.
In addition to meeting client needs, demands of running a local firm have grown over the last ten years. Changes in the profession, changes in clients needs, changes in employee issues, changes in standards etc cannot be fully applied to a local firm in a vacuum. Membership in an appropriate association will provide a strong network for discussing practice management issues and for developing best practices scenarios that benefit each of the member firms.
Firms looking to be a member of an association need to make sure that:
1) The members of the association share common goals and objectives (which should be consistent with those of the firm). For example the firms should generally be of similar size, and the philosophy of member firms should be fairly homogenous.
2) The members of the association are subject to some level of peer review by their fellow members.
3) Strong national and international spread of coverage.
4) The association holds regular meetings to encourage networking and the development of strong bonds between member firms.
5) IS THERE ANYTHING WE SHOULD BE ASKING ABOUT TRENDS IN FIRM ASSOCIATIONS THAT ISN'T COVERED HERE?
One interesting trend that has been percolating over the last few years is the role that associations are playing in bringing firms together in more permanent ways. A good example of this change is the formation of one association recently which developed out of close relationships that were built among members of one particular association. An unfortunate side effect of such a development is the impact on some of the firms that did not fit into the profile that the new association was attempting to develop. Some of these firms were forced to look to other alternatives to meet their own needs. (This goes to my earlier point about the importance that members of the association share common goals and objectives.)
It is inevitable -- in an era where mergers are prominent -- that the close relationships that develop between members firms within an association leads to possible mergers over the next few years.
RESPONSE 3
1) WHAT ARE THE MAJOR TRENDS OR ISSUES IMPACTING YOUR MEMBERS AND YOUR ASSOCIATION TODAY?
SOX legislation.
2) WHAT ARE YOU AND YOUR FIRMS DOING ABOUT IT? OR, WHAT SHOULD THE PROFESSION BE DOING ABOUT IT?
We have set up two SOX committees - one in Europe & one in North America. They are being guided by one of our members experienced in the field to obtain the required training to help companies comply with section 404.
3) HOW'S IT WORKING?
It is starting to work. We have one engagement in progress involving 5 different firms in five different countries. and we have two other proposals submitted.
4) WHY SHOULD A CPA FIRM BELONG TO A FIRM ASSOCIATION?
It expands their horizons by exposing them to different business cultures, enables them to retain clients who may think they have to change to one of the big 4, and it gives them an opportunity to exchange problems with peers in a non-competitive environment.
5) IS THERE ANYTHING ELSE WE SHOULD BE ASKING?
Firms should ask of associations:
-- Are they growing, staying steady, or stagnating?
-- Are mergers happening and if so are they working out?
-- What services are they providing to their members?
RESPONSE 4
1) WHAT ARE THE MAJOR TRENDS OR ISSUES IMPACTING YOUR MEMBERS AND YOUR ASSOCIATION TODAY?
* Finding enough staff. There is plenty of work right now, but will we firms be able to find the staff to do it all?
* New wave of consolidation/mergers.
* Leadership/grooming the next generation.
2) WHAT ARE YOU AND YOUR FIRMS DOING ABOUT IT? OR, WHAT SHOULD THE PROFESSION BE DOING ABOUT IT?
* Staffing: Some of our firms are hiring from abroad. Lack of facility with English can be a problem.
* Mergers: Some of our firms have merged or acquired firms to be
able to win larger engagements.
* Leadership: Our Association now has a leadership program for new partners and
for managers.
3) HOW'S IT WORKING? DO YOU HAVE ANY EXAMPLES OF THE RESULTS?
* Staffing: The staffing shortage continues.
* Mergers: Those firms that have upped their size have positioned
themselves well to take advantage of the SOX fallout.
* Leadership: Our program has received rave reviews from the
managing partners and from the attendees.
4) WHY SHOULD A CPA FIRM BELONG TO A FIRM ASSOCIATION? AND WHAT
CRITERIA SHOULD THEY USE IN CHOOSING ONE?
* Each association is unique. Our members join to share best practices and technical expertise, benefit from leadership development and coaching, and have a robust national and international network to help serve their clients. Without a network you are alone; with a network a world of opportunity opens to you.
* For firms considering joining an association, talk to the members. Find out if the member firms share similar issues and concerns of yours. Why do they belong? Will you be able to learn from the group, and will you be able to contribute? Is the network broad, both nationally and internationally? Would you feel comfortable referring a valued client to another member firm?
RESPONSE 5
1) WHAT ARE THE MAJOR TRENDS OR ISSUES IMPACTING YOUR MEMBERS AND YOUR ASSOCIATION TODAY?
Our members are impacted in numerous ways, including:
How to keep up with changes in the profession.
How to keep up with changes in the marketplace.
How to increase profitability.
How to improve quality of practice.
2) WHAT ARE YOU AND YOUR FIRMS DOING ABOUT IT? OR, WHAT SHOULD THE PROFESSION BE DOING ABOUT IT?
As an association we provide members with the latest information through the following initiatives:
Networking and collaborative efforts
Three leadership conferences per year where we provide highly qualified and successful speakers to address current issues in the profession and the marketplace. These conferences provide exceptional networking opportunities as well as informative and substantive leadership training.
A Marketing Program which helps medium size firms effectively address marketing issues in a cost effective manner.
Benchmarking, Technology, and Human Resource surveys which are compiled, shared and discussed in depth with members at Leadership conferences.
A website with an online library, a database of services provided, message boards, and where information can be exchanged.
One-on-one firm counseling.
We provide yearly staff training and sales/advisory training to improve the skill sets of member firm's employees, from associates to partners.
Newsletters
Technical issues sub-groups to address trends in the technical areas of Tax, Accounting & Auditing, and Technology.
3) HOW'S IT WORKING?
We’ve produced valuable relationships and sharing quality work and providing increased profits for our firms. We have also established numerous affiliations and alliances which have either produced revenue or cut costs for our member firms.
4) WHY SHOULD A CPA FIRM BELONG TO A FIRM ASSOCIATION? AND WHAT CRITERIA SHOULD THEY USE IN CHOOSING ONE?
Belonging to an association is only of benefit to a firm if the association is working diligently and successfully to provide benefits to the member firms, such as those listed above.
The criteria for joining an association include those where member firms are matched in their firm size and expertise, where the association can best meets the firm's needs for the future and where the association and its members provide assistance in achieving long-term goals and improving their practice.
RESPONSE 6
1) WHAT ARE THE MAJOR TRENDS OR ISSUES IMPACTING YOUR MEMBERS AND YOUR ASSOCIATION TODAY?
The number one issue our firms are talking about is "Exit strategies for today's owners."
Our conferences have and will continue to focus on two possible solutions: Selling or merging your practice and/or training the next generation of partners (internal sale). The problem the association faces is that many of our firms are being approached about selling or merging their practices. In the last three months two of our members have either been acquired or are in final discussions with other practices about merging.
Although we have been fortunate to retain both members, as the larger regional firms begin to buy market share, our members will be likely targets and we will be forced to either find new firms to replace them or change our model regarding geographical exclusivity or admitting firms who belong to other associations.
3) Regarding results:
It is too early to tell what is going to happen but my informal discussion with many members is that they see selling their practices as the most viable option to their retirements. "They just ain't making partners anymore!"
4) Why belong?
It's like joining a support group...you get to find out that everyone else has similar issues and many times they get to learn from other's experiences. Benchmarking is also a great benefit as is staying ahead of the curve. Our members learned about "outsourcing" four years ago. We are early adopters and early adopters get the worm.
Look for an association that has similar sized, similar thinking firms. The issues of smaller firms are not the same as larger ones although larger firms seem to think that they cannot learn from smaller ones. That is just foolishness. Small firms can get to market faster. Do not join an association to get referral business. Look for a dues structure where everyone is on the same footing. Associations where dues are based on size of the firm are run by those that pay the most!
5) What else?
How come firms in the Midwest and West are so underrepresented in associations? Read PAR's CPA Firm Association Directory issue (January 31, 2005) and notice that almost every association is looking for firms west of the Mississippi!
Tuesday, March 22, 2005
BUSY SEASON UPDATE:
Suddenly, Rough Going
It's been a rough week for tax pros and financial execs grappling with the twin demons of the IRS and SOX.
The percentage of respondents who say operating conditions are running worse than last year has jumped to 51% from 33% in one week.
Of course, the data could be skewed by the mid-March SOX filings. And the season's not over until the fat lady sings. (Now, if ONLY we could remember the tune, we'd have something to look forward to.)
So, How's YOUR busy season? The polls are open all season. Click here to join the sample group and get the regular updates. Less than three weeks left!
How's the busy season going so far?
(as of week of March 21, 2005)
Better than last year: 28% (versus 41% last week)
About the Same : 22% (26% last week)
Not as Well as Last Year: 51% (33% last week)
RANDOM VERBATIMS
I was an audit manager at a big four public accounting. I left in late 2004 due to the black cloud named SOX that was looming on the horizon. I could see our firm was grossly understaffed and would not be able to handle the work coming our way (nor were they making any real changes to address the problem outside of "we'll make it work"). Busy season had always required very long hours, so adding SOX to the workload was unthinkable using the same staff. Personally, I had already given 5 prime years of my life working insane hours and could not bear giving anymore. I recently spoke with my old staff and their comments to me consistently reflect that the effect of SOX on the office is far worse than they could have possibly imagined. ... The staff on SOX engagements are working from 8 am to 9 pm everyday (sometimes until 3 am), including weekends, and are having their meals delivered to them so they don't leave their desks. They speak proudly that they were the last person in the group to have a "breakdown." Even if these staff people had wanted to leave the firm, they have no time to look for another job or are still too new to the firm to have the marketability they hoped to gain from working in public. ... These comments lead me to believe this is truly a horrible busy season for some. In this last article, I noticed quotes are disproportionately from partners, and I would be very interested in hearing from staff from large firms grappling with SOX (at the Microsofts, GEs and Coca Colas of the world). As we all know, most things roll downhill.
Head of tax department left, only 1 employee left (me!). No one's checking my work, there's no one to ask questions of - very stressful.
Had hired helped but did not have the experience they needed. Had been misinformed
Better prepared, fewer changes for my clients
More hours. The work itself is fantastic. There are challenges and comfortable "as-usual" accounts all in the same day, but I wonder why accountants put up with the schedule. There must be options other than 12-hour days, 6-7 days a week. I suppose if I were 22 and single, and work was my main social outlet I might feel differently. As an older staff accountant, I have a different view on the demands of work over home, and yearn for a reasonable alternative.
E-Filing added additional burdens. New tax preparers needed training. Younger CPAs are not as work-oriented as those who are older.
A combination of SOX and restatements are killing me. Eight 80 hour weeks in a row is not my idea of fun.
Full staff. Last year had one out on maternity leave. Absorbed two large clients last year. Not taking new business this year. Much of the work was delayed due to compliance work taking precedence on our clients part - forcing 3 80 hour weeks in a row - many of the big companies have outsourced parts of their accounting - covering all the bases and assuring security of information is becoming a nightmare.
Later nights, longer Saturdays.
More clients are e-filing their returns.
I have reached the point in my career when peers in other industries are referring me business. I am able to make a much greater contribution to my firm's bottom line other than by billable hours alone. My career really feels like it growing. I hope that my reviews and raise reflect that sentiment.
Much more emphasis on audit support, and more pressure around SOX and 404 compliance. Plus, we can do less work for our audit clients, and when we do it is somewhat contentious at times.
More involved audit requires greater dedicated resources.
Monday, March 21, 2005
NEW SURVEY IN THE FIELD:
Making Work More Livable
Can you share some good ideas?
We’re looking for a few good ideas from accountants, or effective programs from employers, that are aimed at alleviating early burn-out. For our latest on the topic, check out "How Happy Are You to Go to Work?"
If you have a good idea or a program to talk about, please join the new survey we just launched, here.
We’re looking for a few good ideas from accountants, or effective programs from employers, that are aimed at alleviating early burn-out. For our latest on the topic, check out "How Happy Are You to Go to Work?"
If you have a good idea or a program to talk about, please join the new survey we just launched, here.
MANAGING:
How Happy Are YOU to Go to Work?
The double whammy of SOX and tax season is taking a toll. How's YOUR busy season going so far?
by Rick Telberg
At Large
Who's excited about going to work in the morning? Of the hundreds of accountants we asked, the yays outnumbered the nays, but not by much, and about half of both groups were a little equivocal.
Like most other people, they had good mornings and bad. But the combination of tax season and Sarbanes-Oxley is a double whammy slamming CPAs these days. So who can blame them?
A total of 56 percent said "yes," they are excited to go to work in the morning. That's not an overwhelming majority. And even then, almost all admitted that "excited" was a little strong for their morning emotion, at least on some days.
Several preferred using the word "enjoy." Others chose instead "love," "like" or "look forward to." One really liked the word "juiced" to explain his feeling in the morning.
Some people just couldn't get enough. Excited? "Even at 76 years of age," said the managing partner of a small firm in Independence, Mo. "Evenings, too," said a consultant in Mountain Lakes, N.J.
Some were apparently keeping track. One felt excitement 85 percent to 90 percent of the time. Another hit just 40 percent.
Others had already had enough. A weary partner said, "After 27 tax seasons, it's getting old."
"Not as much fun as it used to be," said another partner.
Another said, "After putting in one 12-hour day after another, it is difficult to muster the excitement that I once had about going to work every morning."
Those who still feel the excitement of accounting get it from either their daily challenges or the people they work with.
A managing partner in Renton, Wash., said it well: "I am stimulated by working with people, analyzing challenges and communicating solutions to clients."
A partner in Basking Ridge, N.J., had a similarly healthy approach: "I enjoy what I am doing and enjoy helping others, which is the way I look at my work."
Someone in middle management at a regional firm expressed a feeling common to both groups: "I am excited some mornings, but busy season wears you down."
The busy season seems to have accounted for many of the 44 percent of negative responses. What the cheerier CPAs saw as challenges, the gloomier saw as pressure and stress.
"Too much to do during tax season and so few hours," according to a managing partner of a small firm in Atlanta.
Even some of the positives had really bad days. "I generally enjoy work," said a reader in middle management at a mid-sized firm, "but there are some mornings I would rather eat dirt!"
"Sometimes the work is drudgery and the client has no idea of the time it takes to get the job done right."
A more common sentiment: "If it's the same old stuff, no. I do get excited about new challenges, though."
Not one person praised the excitement and challenge of complying with the federal government. In fact, the opposite was true. One manager of a Sarbanes-Oxley 404 project professed excitement "until last week when finger-pointing ensued over the client's SOX project."
Ditto for someone in corporate middle management: "It stopped being fun when we started our 404 compliance activities last year."
But as we all know, SOX wasn't supposed to inspire excitement. It was meant to prevent it.
NOW IT'S YOUR TURN: How's YOUR busy season going so far?
COMMENTS? Send your rants, raves, questions or idle thoughts to Rick Telberg at malto: rtelberg@telberg.com.
by Rick Telberg
At Large
Who's excited about going to work in the morning? Of the hundreds of accountants we asked, the yays outnumbered the nays, but not by much, and about half of both groups were a little equivocal.
Like most other people, they had good mornings and bad. But the combination of tax season and Sarbanes-Oxley is a double whammy slamming CPAs these days. So who can blame them?
A total of 56 percent said "yes," they are excited to go to work in the morning. That's not an overwhelming majority. And even then, almost all admitted that "excited" was a little strong for their morning emotion, at least on some days.
Several preferred using the word "enjoy." Others chose instead "love," "like" or "look forward to." One really liked the word "juiced" to explain his feeling in the morning.
Some people just couldn't get enough. Excited? "Even at 76 years of age," said the managing partner of a small firm in Independence, Mo. "Evenings, too," said a consultant in Mountain Lakes, N.J.
Some were apparently keeping track. One felt excitement 85 percent to 90 percent of the time. Another hit just 40 percent.
Others had already had enough. A weary partner said, "After 27 tax seasons, it's getting old."
"Not as much fun as it used to be," said another partner.
Another said, "After putting in one 12-hour day after another, it is difficult to muster the excitement that I once had about going to work every morning."
Those who still feel the excitement of accounting get it from either their daily challenges or the people they work with.
A managing partner in Renton, Wash., said it well: "I am stimulated by working with people, analyzing challenges and communicating solutions to clients."
A partner in Basking Ridge, N.J., had a similarly healthy approach: "I enjoy what I am doing and enjoy helping others, which is the way I look at my work."
Someone in middle management at a regional firm expressed a feeling common to both groups: "I am excited some mornings, but busy season wears you down."
The busy season seems to have accounted for many of the 44 percent of negative responses. What the cheerier CPAs saw as challenges, the gloomier saw as pressure and stress.
"Too much to do during tax season and so few hours," according to a managing partner of a small firm in Atlanta.
Even some of the positives had really bad days. "I generally enjoy work," said a reader in middle management at a mid-sized firm, "but there are some mornings I would rather eat dirt!"
"Sometimes the work is drudgery and the client has no idea of the time it takes to get the job done right."
A more common sentiment: "If it's the same old stuff, no. I do get excited about new challenges, though."
Not one person praised the excitement and challenge of complying with the federal government. In fact, the opposite was true. One manager of a Sarbanes-Oxley 404 project professed excitement "until last week when finger-pointing ensued over the client's SOX project."
Ditto for someone in corporate middle management: "It stopped being fun when we started our 404 compliance activities last year."
But as we all know, SOX wasn't supposed to inspire excitement. It was meant to prevent it.
NOW IT'S YOUR TURN: How's YOUR busy season going so far?
COMMENTS? Send your rants, raves, questions or idle thoughts to Rick Telberg at malto: rtelberg@telberg.com.
TAX SEASON: What's Bigger than Clay Aiken or Paris Hilton?
Answer: The IRS website.
In the midst of the annual tax season, the IRS says its Web site, www.irs.gov, is averaging more than 1 million hits a day.
"Just to give you a frame of reference," says Mark Everson, IRS chief, "one major search engine reported in a recent week that we were surpassed only by Paris Hilton, Clay Aiken, Pamela Anderson, Britney Spears and a poker game."
In the midst of the annual tax season, the IRS says its Web site, www.irs.gov, is averaging more than 1 million hits a day.
"Just to give you a frame of reference," says Mark Everson, IRS chief, "one major search engine reported in a recent week that we were surpassed only by Paris Hilton, Clay Aiken, Pamela Anderson, Britney Spears and a poker game."
Friday, March 18, 2005
VENDOR UPDATE:
PayCycle Online Payroll Shifts into Higher Gear
Adobe executive James Heeger joins co-founder LaCerte as new CEO
PayCycle, whose customer base has doubled to 18,000 in the past year under founder Rene LaCerte (yes, THAT LaCerte family), has hired James Heeger, senior vice president at Adobe Systems, as president and chairman.
Lacerte, current CEO, will become CFO and lead the company's finance and business development efforts. Lacerte, who helped start the online payroll provider in 1999, goes back a long way with Heeger. They worked in Intuit's payroll business together at one time. And Heeger has remained a friend and confidante.
Payroll, mundane as it is, is no small business. It may be a $10 billion a year market. Maybe that's one reason it's in LaCerte's genes. He started in business working payroll for the family operation in Florida.
PayCycle, whose customer base has doubled to 18,000 in the past year under founder Rene LaCerte (yes, THAT LaCerte family), has hired James Heeger, senior vice president at Adobe Systems, as president and chairman.
Lacerte, current CEO, will become CFO and lead the company's finance and business development efforts. Lacerte, who helped start the online payroll provider in 1999, goes back a long way with Heeger. They worked in Intuit's payroll business together at one time. And Heeger has remained a friend and confidante.
Payroll, mundane as it is, is no small business. It may be a $10 billion a year market. Maybe that's one reason it's in LaCerte's genes. He started in business working payroll for the family operation in Florida.
Tuesday, March 15, 2005
BUSY SEASON UPDATE:
Good, Bad, and BUSY!
Despite staffing shortages, tax season seems to be running smoothly, with more ups than downs. How are YOU doing?
At Large
For America's accountants, 'tis the season to be busy, and busy they are. But apparently there's "good" busy and "bad" busy.
Far more accountants are good-busy than bad-busy. For instance, in our early straw polls, 33 percent of CPAs say the season so far is running "better than last year." About 49 percent call it "about the same." And 18 percent term it "not as well" as last year's.
Of course, finance managers and executives are suffering their own first-quarter crunch. And this year, their most common complaint is Sarbanes-Oxley 404 and increased auditor scrutiny.
At Large
For America's accountants, 'tis the season to be busy, and busy they are. But apparently there's "good" busy and "bad" busy.
Far more accountants are good-busy than bad-busy. For instance, in our early straw polls, 33 percent of CPAs say the season so far is running "better than last year." About 49 percent call it "about the same." And 18 percent term it "not as well" as last year's.
Of course, finance managers and executives are suffering their own first-quarter crunch. And this year, their most common complaint is Sarbanes-Oxley 404 and increased auditor scrutiny.
But almost everybody has something to say.
And most of it is something akin to a gripe. If they are busy, they are too busy. If they aren't busy, it's because business is bad.
A sole practitioner seemed to speak for dozens of others: "Better than last year financially, but way behind on deadlines due to increased work."
"Buried," said a managing partner of a small firm.
"Dragging on," said a staff member of a slightly larger firm. A senior partner said, "I feel overwhelmed and crazy with all the pressure." An overstressed staff member confessed: "I'm a zombie already!"
One mid-level firm manager said, "I'm already tired." A managing partner said, "I'm exhausted," and another said, "I'm running out of steam."
The leading cause of busyness: shortage of staff. Dozens of accountants specifically mentioned lack of staff or time devoted to training newbies. A handful said staff additions had alleviated problems.
Said one partner of a small firm, "After years of stable staff, we've experienced some turnover. It's amazing what you take for granted. Maybe that's why we had the turnover."
Having too many clients (and too many slow clients) was a far more common problem than having too few clients.
And most of it is something akin to a gripe. If they are busy, they are too busy. If they aren't busy, it's because business is bad.
A sole practitioner seemed to speak for dozens of others: "Better than last year financially, but way behind on deadlines due to increased work."
"Buried," said a managing partner of a small firm.
"Dragging on," said a staff member of a slightly larger firm. A senior partner said, "I feel overwhelmed and crazy with all the pressure." An overstressed staff member confessed: "I'm a zombie already!"
One mid-level firm manager said, "I'm already tired." A managing partner said, "I'm exhausted," and another said, "I'm running out of steam."
The leading cause of busyness: shortage of staff. Dozens of accountants specifically mentioned lack of staff or time devoted to training newbies. A handful said staff additions had alleviated problems.
Said one partner of a small firm, "After years of stable staff, we've experienced some turnover. It's amazing what you take for granted. Maybe that's why we had the turnover."
Having too many clients (and too many slow clients) was a far more common problem than having too few clients.
A partner at a very small firm, complaining of only five hours' sleep, revealed a tempting solution: "I will continue to increase my prices and cut back on clients." A sole proprietor in Redding, Conn., said the season was going well because "I am getting better at saying 'no' to client requests for my time."
Technology was helping some, hurting others. A partner in Tennessee said, "It's going 100 percen better than last year. Our systems seem to be working thus far." But a senior partner in a mid-sized firm said his "firm's efforts to implement 'paperless' procedures are making the busy season difficult."
Not many complained of slow business, but a note from the Rust Belt may reflect a common problem: "In Michigan, it is a very bad business climate, thus it gets depressing watching good clients have to close their doors."
NOW IT'S YOUR TURN: How's YOUR busy season going so far?
COMMENTS? Send your rants, raves, questions or idle thoughts to Rick Telberg here.
COMMENTS? Send your rants, raves, questions or idle thoughts to Rick Telberg here.
BUSY SEASON UPDATE:
Signs of Improvement
Busy season seems to be swinging into practitioners’ favor.
Compared to last week, more tax pros and financial executives are reporting that their busy seasons are running “better than last year.”
So, How’s YOUR busy season? The polls are open all season. Click here to join the sample group and get the regular updates. (Or you may need to cut-and-paste into your browser: http://www.zoomerang.com/survey.zgi?p=WEB2247MD58STC)
How's the busy season going so far?
Better than last year: 41% (up from 36% last week)
About the Same: 26% (versus 27% last week)
Not as Well as Last Year: 33% (down from 37% last week)
SAMPLE VERBATIMS:
unable to find trained and competent help
More referrals
I have another year of experience. Not as many new accounting pronouncements for non-public companies this year.
more new clients, more business, farther behind than last year
More work, less qualified staff. All individual taxes are electronically filed.
more work and less people than last year
Management keeps pushing up tax calcs.
Not enjoying the work as much.
efiling
Paperless on all individual returns
New director of taxes, at an owner experience level, coming in with no clients of his own. My workload should be split in two with him, but has stayed the same due to all the work that used to just be left on the table or not fully addressed. Scary that I can load 2,000 chargeables on to his shoulders, and my chargeables don't drop. Now we are both swamped. And this is at the only firm you have ever heard of where firm policy prohibits active marketing. We couldn't handle the results of good marketing. Still, even though we are both swamped, the nature of the stress has eased up a lot with an entire new person sharing my load, so it's much better. And the future should be better still. We are now 4 CPAs including 2 owners, plus an office manager and a write up/payroll person, 1100 separate annual tax filings, plus audits, reviews, writeup & special projects and consulting. About 10,000 annual chargeables..
I have not encountered many efile rejections.
more clients
clients are more unprepared than usual, they are more confused about taxes than ever. more are being hit alt min tax
Slow start on personal returns. Info came in later than usual
It seems we have plenty of work but the cash flow for this time of year isn't very good.
We are controlling work flow better
First, I came into tax season with projects that could not be completed last year due to slow cooperation from the client and/or attorney. Second I have picked up additional business that I have not been able to get to. However, the tax returns are turning around only slightly behind schedule. My top concern is being able to keep up the pace.
STATE SOCIETIES:
What's the Real Deal?
State societies are reacting with energy and innovation to a bevy of weighty challenges.
Here are some early results from a canvass we are currently conducting of the State-of-the-State of State CPA Societies...
Trends affecting societies:
1. Membership declines.
2. CPA firm mergers (bigger firms buy less CPE).
3. CPA brand competition.
4. Increasing costs and prices of live CPE.
6. Increasing demand for online learning.
7. Membership demographic shifting female
Issues/trends affecting members:
1. Finding staff.
2. Technology (Keeping up with it, competing with it, and/or competing against it.)
3. Work-life balance for new generation.
4. Lack of succession planning.
5. Increased regulatory activity.
6. The rise of new non-CPA competitors, from H&R Block to local banks.
VERBATIM RESPONSES
While the study remains a work in progress, we are holding the names of the respondents in confidence. Thus, you'll notice some editing in the verbatim responses. But otherwise, they are published here in their entireties.
RESPONSE #1
QUESTION 1: What are the most important trends or issues impacting your organization in particular, or your members in general?
There is an ongoing effort to liberalize the existing accounting statute, to allow the provision of services and use of accounting titles, by individuals who do not hold the required credential elements - in particular education and examination. The issue has been raised in the legislative arena, without success. At present the issue is now before District US Court.
QUESTION 2: What are you doing about it? What programs, remedies, activities, strategies, solutions, etc. are you undertaking in the face of these challenges or opportunities? Or what should the profession as a whole be doing about it?
We continue to actively represent the accounting profession, in the legislative arena.
RESPONSE #2
QUESTION 1: What are the most important trends or issues impacting your organization in particular, or your members in general?
The younger generation of members are not as interested (or available) for actively serving in Society positions nor attending Society business functions. I think they feel either disconnected from the organization (which may be at their own choosing, or problems with our communication methods), or they simply think "someone" else can handle the matters of the Society. I think the firms place a much higher value on what their employees do to elevate the firm, than what their employees do to nurture and secure the reputation of the accounting profession.
QUESTION 2: What are you doing about it?
We are working on changes in our governing structure from a very complicated one put in place in 2000 to a simpler structure. Also, lessening the number of standing committees. Retaining some standing committees, but moving toward Task Forces which are given specific measurable tasks each year. Also, Committee Chairs are to be invited to serve as chair each year by the incoming Chairman of the organization. Also, efforts are being made to bring together the two primary constituencies of members [in key cities]. Having two metropolitan areas 500 miles apart and quite dissimilar in characteristics complicates efforts toward a truly united statewide organization. Our new governing structure, (Board of Directors), will automatically include a member or members from the boards of those Chapters.
THE MORE PUBLIC SERVICE ANNOUNCEMENTS THAT THE AICPA CAN FUND ON RADIO STATIONS WHICH EMPHASIZE THE QUALITY OF CPAS, AND STATES "THIS MESSAGE IS BROUGHT TO YOU BY THE AICPA AND YOUR STATE CPA SOCIETY"..........THE BETTER. THE MESSAGE CONVEYS NOT JUST THE INFORMATION YOU WANT TO REACH THE PUBLIC, BUT ALSO INDICATES A CERTAIN PRESTIGE FOR A CPA TO BE A MEMBER OF HIS STATE CPA ORGANIZATION.
QUESTION #3: How's it working?
Ask me in a year.
RESPONSE #3
QUESTION 1: What are the most important trends or issues impacting your organization in particular, or your members in general?
Our most recent Board planning session took the pulse of every major segment of our membership (Publicly-traded & privately-held corporate, government and non-profit, large firm to sole practitioner) and came up with a list of almost one hundred major issues. Yet when we looked for the root causes or fundamental drivers, there were only four -
1) Work-Life Balance (which includes staffing shortages, succession planning, student recruitment, etc);
2) Increased Regulations and greater risk (post SARBOX impacts);
3) Training & Development; and
4) Impact of Technology.
Each one of these had major impacts into each and every segment of our membership - from sole practitioners struggling with the changing regulations and standards to public company CFOs & large firms struggling to implement Section 404, they all agreed that the Profession was still navigating the whitewaters of change.
QUESTION 2: What are you doing about it? What programs, remedies, activities, strategies, solutions, etc. are you undertaking in the face of these challenges or opportunities? Or what should the profession as a whole be doing about it?
Mobilizing our members! The power of associations is very simply stated as, strength in numbers. Time after time in our one hundred year history we have examples of how small groups of CPAs have made huge contributions to the CPA Profession and the public at large. Now is the time when we must leverage the collective talents of the CPA Profession to solve some of these BIG problems. We are working on several key initiatives and many educational/informational initiatives - each targeted to help specific segments of our membership.
Our biggest priorities directly address the first three fundamental issues (Work-life; Regulatory; Training & Development) facing our members:
1) Work-Life Balance - several of our largest initiatives directly impact our members' struggle to deal with this issue. The regulatory changes as a result of SARBOX combined with the profession wide staffing shortage have made work-life balance almost impossible. Fortunately, we have been working on this for awhile, planting seeds that are now beginning to bear fruit.
Our student recruitment programs are building the future supply of CPAs to lessen the staffing shortage which impacts all segments of our membership. Our New/Young Professionals Network has worked to create a multi-year Leadership Academy to jumpstart CPAs into their careers and prepare them for leadership in firms and companies.
2) Increased Regulations & Risk - This is an area that proves the power of mobilizing our members. From the moment Enron collapsed, our Accounting Reform Task Force was formed and put out a whitepaper entitled, "The Road to Reform: Protecting the Public Interest, Strengthening the CPA Profession".
This effort has resulted in a comprehensive legislative and regulatory strategy that is based on a philosophy that our best defense against draconian SARBOX reforms in the private company sector is a strong proactive offense. The work of this group of our members has led to defeating a major SOX bill in 2003; participation in a major public hearing by our State Board of Public Accountancy and now three "proactive" bills in our legislature (Mandatory Peer Review, Substantial Equivalency, and Separate Funding for our State Board) that have the support of our regulators.
These bills also include the substantial equivalency provision from the Uniform Accountancy Act that is designed to help our members practice more easily across state borders.
Other important initiatives that help our members in this critical area include our Section 404 Task Force; new education programs in the areas of fraud detection, ethics, internal controls; a partnership with [a major liability insurer] to bring more risk management resources to our firms; and several sessions with the PCAOB to discuss new rules & regulations.
This spring we are planning small firm roundtables to help our small firms understand some of the major changes recently implemented and on the horizon (Ethics Rules 101-2; 101-3; Differential Standards; Tax changes; Succession planning; workload compression, etc.). All of these programs deal with this critical and changing area of the Profession.
The amazing thing I have found is that the diversity of our membership as State CPA Societies gives us a powerful advantage over vertical homogeneous organizations. Gathering CPAs from all segments - practice - government - industry brings a wealth of knowledge and perspective that enables us to solve some of these important problems in a holistic way that benefits all CPAs.
3) Training & Development - We see this as an area where we are making a major impact. Professional Development is a core competency that all State CPA Societies have since the Profession adopted mandatory CPE in the mid-1970s.
CPAs in all areas are struggling to keep up with the In Maryland, we sharpened this competency and expanded it in several key areas - leadership development; leading-edge technical training (fraud, internal controls, ethics, SOX, Section 404); and customized in-house training - where we bring timely, relevant training right into our CPA firms and Corporations.
Our Business Learning Institute has created major programs in leadership and management training to help CPAs acquire the critical hard skills required today. We also provide strategic planning services and competency plans to help firms and companies create custom professional development programs designed to help them accomplish their strategic initiatives.
4) Impact of Technology - We are in the process of several initiatives designed to enable us to provide more focused information to our members. We are involved in the national Shared Services project with the AICPA and a majority of the State CPA Societies. This is a long-term collaborative project to provide us with the technology infrastructure to better support and serve the diverse needs of our members. Without the help of technology, we risk becoming irrelevant as we focus on the fundamental issues of all CPAs without the additional capabilities of delivering information to each member in personalized or customized way. We are working toward the day when all of our members can get the most important and relevant information in the easiest way possible.
QUESTION 3: How's it working?
As they say the proof is in the pudding - results are critical in this day of tight resources and the extreme constraints on our members' most important asset - their time. We measure success by results and impact of our volunteers in addition to traditional ROI measures.
In the past few years we have seen enrollment [in state] accounting programs increase by five times the national average - a direct result of our more than 150 volunteers who annually visit over 4,000 high school and college students to talks about an exciting career as a CPA. This program has expanded to include financial literacy initiatives which also increase the image of the CPA. The ROI is huge when you factor the future staffing increase for our firms and corporations as these new accounting majors become productive CPAs.
Leadership Academy - from concept to launch in nine months with input from managing partners from firms all across the state and several CFOs of [state] companies.
Driven by our new/young professionals group, this initiative promises to help provide tangible benefits to CPAs and their employers. Using competency models from the AICPA Business & Industry Committee, the AICPA Assurance Services Committee, and Harvard Business School Publishing, we developed a six-year leadership program designed to create well-rounded professionals from entry in the Profession (Industry, Government, or Practice) to the point in their career that they become a leader. Our program is unique in that it features experiential volunteer activities that are designed to network the CPA in the business community, impact the community in areas like financial literacy or student recruitment, and learn how to influence the Profession of the future (regulatory and legislative involvement).
By integrating these activities into a competency-based curriculum, we believe we can provide more productive professionals that will help solve some of the major issues we face under the work life crisis (succession planning, staffing shortage). This should also build a solid foundation for regulatory and legislative advocacy to address the increasing regulatory risk facing our Profession.
Business Learning Institute and our "in-house" training efforts - Over 150 satisfied clients including Maryland's largest corporations, national CPA firms, local CPA firms, and privately-held companies held over 200 programs training over 4,000 CPAs in leadership, ethics, internal control, fraud detection, management and technical training. This is in addition to our traditional professional development programs available to all of our members. The measurable results are in our growth (this has doubled every year since its inception four years ago), customer satisfaction, and customer retention. Many of these programs and instructors have been included in our leadership academy.
Increased Regulations & Risk - Stopped the [State] Corporate Accountability Act in 2003 which would have imposed many Sarbanes-Oxley provisions on privately-held companies. Expect to pass reasonable reform in the form of mandatory peer review and get an added benefit of easier practice privileges by passing "Substantial Equivalency". Held a private session between our Section 404 Task Force and Chairman Bill McDonough of the PCAOB and created a referral bureau for CPA firms wanting to do 404 work.
These initiatives were driven by over one hundred volunteers over the past three years - from our Accounting Reform Task Force to our CPA Day attendees - these CPAs have demonstrated that a focused effort can produce big results - we have stopped the cascade of SARBOX from hurting [state’s] small businesses and their CPAs. We have also been successful in restoring the public trust in the CPA in Maryland through these same efforts.
Question 4 - what should you be asking?
I think the fundamental question is What can we do to revitalize the involvement of CPAs in their Profession?
Most CPAs in their 40s and 50s were told to join and be active in their Professional Associations (AICPA & State CPA Societies), yet that does not happen in this highly competitive and rapidly changing environment. Active membership from larger firms and companies has been on a decline for years. Young CPAs don't have the time or encouragement from their employers. More and more I hear the CPA as a credential and not a Profession.
I worry that we could go the way of the medical profession as it lost its voice in the marketplace. Doctors began specializing and lost their identity with the fundamental designation of Doctor. They spent more time in their specialty and stopped worrying about the profession of being Doctors. The result was special interest groups like trial lawyers and HMOs began to weigh in on their issues and they lacked the critical mass to fight them.
The CPA Profession is at that same tipping point today. The BAR association is weighing in on tax services and special interest groups are working congress and state legislatures with ideas on how to reform our Profession. As CPAs we all have a stake in our Profession and we are all impacted by the major forces of the marketplace. Only by sticking together as CPAs will we be able to maintain our role as trusted professionals. This is our biggest focus for the upcoming year...
RESPONSE #4
QUESTION 1: What are the most important trends or issues impacting your organization in particular, or your members in general?
The shrinking talent pool for firms; this is the number one issue. Hiring and retention of CPAs in public practice firms is becoming more difficult. There are so many obstacles to entering the practice now: the cost in time and money of the 150 hour requirement; the difficulties with the new CPA exam; the ability of CPAs to be certified without any public practice experience; the flood of work consuming the firms trying to comply with so many new rules and regulations, making firms less anxious to give candidates the time to study and take the exam on four (or many more) different occasions; the rising costs of the Becker course and the rising costs of the exam; the poor pass rate of the exam makes it less attractive to invest the time and money in the entire exercise; etc.
Of course, the shrinking pool will also begin to be reflected in the Society's long-term membership strength. An aging population, coupled with the above challenges will take their toll. Historically, industry members have not been as loyal to the profession -- partly because employers do not necessarily pay for association dues, and partly because members in industry are less likely to need the CPA certification to progress in their careers.
QUESTION 2: What are you doing about it?
We are changing the focus of our strategic plan to incorporate this problem, and will assign our Firm Development Committee to the Executive Committee to begin tackling these issues.
QUESTION 3: How's it working?
Retreat was held this month, we are still in the planning stages.
RESPONSE #5
QUESTION 1: What are the most important trends or issues impacting your organization in particular, or your members in general?
Issues/trends affecting [our state]:
1. Membership decline due to fewer people taking the exam and more Boomers retiring.
2. Increase in mergers and acquisitions of CPA firms could impact our revenue because bigger firms buy less CPE.
3. Expanding list of certifications in marketplace is making the CPA brand fuzzy.
4. A decreasing supply of new instructors and consolidation of CPE vendors may raise fees and limit offerings in CPE.
5. The trend for people to hold 7-12 jobs in their lifetime is creating increased need for career-related services.
6. Increasing demand for online learning.
7. Unknown effect of 150 hour rule taking effect 7-1-06.
8. Greater emphasis on specialization is weakening the CPA brand as the "gold standard" in accounting.
9. Our membership is gradually becoming more and more female. Understanding what this will mean... deserves attention.
Issues/trends affecting... members:
1. Finding staff is the most
urgent issue. It hits smaller firms and businesses hardest.
2. Providing services to clients online -- technology is a challenge for smaller firms.
3. Insistence on work-life balance by new employees -- once again, our members in smaller firms and businesses have the greatest challenge.
4. Lack of good succession planning.
5. Increased "aggressiveness" in the regulatory arena, both at the state and federal levels.
6. The rise of new competitors, such as H&R Block's move into providing comprehensive business services for small businesses. We think banks may start hiring CPAs soon to provide services to businesses.
QUESTION 2: What are you doing about it?
We're making major efforts in our college accounting programs -- visiting the students at least once a year all over the state to promote the CPA exam and the CPA profession. We're hoping to increase the pool of graduates for new hires and increase the number taking the CPA exam.
We're strengthening our relationship with our state Board of Accountancy.
We're adding capability in online education and expanding our offerings. We're offering opportunities to new instructors in a special series of summer CPE programs.
We're evaluating adding an expanded career support center.
We're participating in the Ambassador Program and hope that will facilitate getting the word out to the public and business community about the value of using/hiring CPAs.
The profession as a whole will need to beef up the efforts to help the public and business community understand the value of a CPA versus other certifications. We need to figure out an effective way to reach those hiring in business and industry so that they support their new hires in getting their CPA.
Monday, March 14, 2005
STUDY PREVIEW:
Issues and Outlook ‘05
Of all leading issues, CPAs seem most concerned by "public confidence in profession."
A little while ago we ran a series of reports capturing the ideas of dozens of leading thinkers in the profession.
The articles included:
Bunting Sets Agenda for New Year
Could SOX Really Be CPA-Friendly?
Colleges Share Burden for Profession's Future
Too Much Work, or Not Enough People?
2005 Could Be a Banner Year for the Profession
At the same time, we asked readers to rate the issues raised by the reports.
“Public confidence in the profession” emerged as the single biggest issue, with 92 percent calling it “highly” or “very” important.
In your opinion, how important are these issues to the profession?
(Percentage answering Highly or Very Important)
92% -- Public confidence in the profession.
89% -- Work/Life balance in the profession.
89% -- Information overload of new rules, regs and standards.
82% -- Regulation of the profession.
81% -- The tax system.
80% -- Potential shortage of next generation of CPAs.
78% -- Regulation of business in general.
77% -- New Sarbanes-Oxley workload.
77% -- Current shortage of CPAs.
75% -- Americans' financial awareness and literacy.
74% -- Potential for new disclosures of past accounting misdeeds.
66% -- The Social Security system.
60% -- Upward mobility of women.
Meanwhile, the results of another question suggest that at least two-thirds of CPAs are confident that 2005 will turn out better than 2004. More on that here:
Speaking for yourself (your own business or career), how confident are you that 2005 will be better for you than 2004?
Completely Confident: 25%
Mostly Confident: 39%
Somewhat Confident: 24%
Not Confident: 12%
So, How’s your year going so far? Join the study panel and get an early preview of the results.
INTERACTIVE MARKETING:
Is Your Web Site Attracting or Repelling Prospects?
Avoiding costly mistakes that drive prospects away.
Citing Internet Marketing Report, the latest edition of the AICPA's CPA Marketing Insider, edited by publisher Hank Berkowitz, lists four common mistakes "that could be repelling, rather than attracting prospects to your site."
1. Self-absorbed vanity sites.
2. Splash pages that waste prospects' time.
3. Poor navigation that gets prospects lost.
4. No call to action.
If anything here sounds familiar, AICPA Custom Publishing and Bay Street Group can help make sure your site isn't in the next edition of the best-selling "Websites That Suck." Get a free evaluation now.
Citing Internet Marketing Report, the latest edition of the AICPA's CPA Marketing Insider, edited by publisher Hank Berkowitz, lists four common mistakes "that could be repelling, rather than attracting prospects to your site."
1. Self-absorbed vanity sites.
2. Splash pages that waste prospects' time.
3. Poor navigation that gets prospects lost.
4. No call to action.
If anything here sounds familiar, AICPA Custom Publishing and Bay Street Group can help make sure your site isn't in the next edition of the best-selling "Websites That Suck." Get a free evaluation now.
Sunday, March 13, 2005
SOX UPDATE:
Hidden Fraud Risk?
Too much data? Too little protection?
The complex and copious amounts of data stored on corporate networks after the enactment of the Sarbanes-Oxley Act may be creating greater opportunities for fraud.
Peter Dorrington, head of fraud solutions at the SAS Institute, says companies are storing vast amounts of data but giving little thought to what is being stored. That could make the occasional instances of fraud or anomalous data far more difficult to spot, he said.
"Fraudsters are reliant upon their transaction being a tree hidden a forest," Dorrington said. The vast amounts of data being stored as part of efforts to comply with the Sarbanes-Oxley Act are simply increasing the size and density of that forest, he said.
The complex and copious amounts of data stored on corporate networks after the enactment of the Sarbanes-Oxley Act may be creating greater opportunities for fraud.
Peter Dorrington, head of fraud solutions at the SAS Institute, says companies are storing vast amounts of data but giving little thought to what is being stored. That could make the occasional instances of fraud or anomalous data far more difficult to spot, he said.
"Fraudsters are reliant upon their transaction being a tree hidden a forest," Dorrington said. The vast amounts of data being stored as part of efforts to comply with the Sarbanes-Oxley Act are simply increasing the size and density of that forest, he said.
Friday, March 11, 2005
U.S. Business Relies on Accountants for IT Security
When you want reliable systems, 'who ya gonna call'? Answer: Accountants
By Rick Telberg
For the third consecutive year, information security leads the list of top technology issues identified by an American Institute of Certified Public Accountants' survey of high tech professionals. For accountants wondering about new business areas to focus on after tax season, this is opportunity on a grand scale. IT security skills are a must-have for all accounting practitioners and financial managers.
Don't count yourself out of the picture just because you are not already involved in technology systems implementation. Although the greater technology expertise the better, finance professionals in non-technology specialties owe it to their firms and companies to embrace this work area because IT security breakdowns become over-arching business management issues when they result in down time and loss of critical data.
Now is the time to look for a reliable partner who knows IT security and can help you do what's needed to make your firm and its clients confident amid all of today's security concern. But be advised, there are several different IT security areas that are key for businesses of all sizes, especially small and medium sized ones.
Hardware: Every traveling executive has at times probably harbored a fear of losing their laptop at an airport, but hardware theft is not all that uncommon inside a business's walls by unauthorized visitors or undesirable employees walking away with unsecured laptops, thin clients and small peripherals.
While there are a variety of specialty lock and clamp down cables on the market, it's also wise to keep data backed up on servers so when someone walks away with a computer, they don't also take any irreplaceable intellectual property. Likewise, make sure that firms and clients in the process of buying new laptops, review "drive lock" systems that prevent thieves from getting into hard drives.
Data: Even more vulnerable than the hardware is the data that's the lifeblood of the computers and of businesses themselves. Accountants can step forward as the guardian against unauthorized users tampering with and corrupting companies' data. In addition to multiple layers of computer passwords and the development of data encryption systems, advanced authentication systems based on such things as fingerprint recognition are also gaining in value.
Networks: With dozens of anti-virus and anti-spam solutions on the market, accountants are advised to learn which are most suitable for different business scenarios. And with so much Internet-based access to business networks and the unrelenting presence of hackers, firewalls are another vital security that smart accountants are keeping up with. The added plus of protecting the networks is that it also provides security to businesses' operating system and applications software.
Security Assessments: Regardless of how deeply involved you choose to get with actual implementation of security tools, there's a growing demand that accountants can fill in assessing businesses' IT security vulnerabilities and advising on how to remedy them.
Large public companies are required to assess their IT system, so why not position yourself as an IT security auditor to your clients or employer.
By Rick Telberg
Special for HP
March 2005
For the third consecutive year, information security leads the list of top technology issues identified by an American Institute of Certified Public Accountants' survey of high tech professionals. For accountants wondering about new business areas to focus on after tax season, this is opportunity on a grand scale. IT security skills are a must-have for all accounting practitioners and financial managers.
Don't count yourself out of the picture just because you are not already involved in technology systems implementation. Although the greater technology expertise the better, finance professionals in non-technology specialties owe it to their firms and companies to embrace this work area because IT security breakdowns become over-arching business management issues when they result in down time and loss of critical data.
Now is the time to look for a reliable partner who knows IT security and can help you do what's needed to make your firm and its clients confident amid all of today's security concern. But be advised, there are several different IT security areas that are key for businesses of all sizes, especially small and medium sized ones.
Hardware: Every traveling executive has at times probably harbored a fear of losing their laptop at an airport, but hardware theft is not all that uncommon inside a business's walls by unauthorized visitors or undesirable employees walking away with unsecured laptops, thin clients and small peripherals.
While there are a variety of specialty lock and clamp down cables on the market, it's also wise to keep data backed up on servers so when someone walks away with a computer, they don't also take any irreplaceable intellectual property. Likewise, make sure that firms and clients in the process of buying new laptops, review "drive lock" systems that prevent thieves from getting into hard drives.
Data: Even more vulnerable than the hardware is the data that's the lifeblood of the computers and of businesses themselves. Accountants can step forward as the guardian against unauthorized users tampering with and corrupting companies' data. In addition to multiple layers of computer passwords and the development of data encryption systems, advanced authentication systems based on such things as fingerprint recognition are also gaining in value.
Networks: With dozens of anti-virus and anti-spam solutions on the market, accountants are advised to learn which are most suitable for different business scenarios. And with so much Internet-based access to business networks and the unrelenting presence of hackers, firewalls are another vital security that smart accountants are keeping up with. The added plus of protecting the networks is that it also provides security to businesses' operating system and applications software.
Security Assessments: Regardless of how deeply involved you choose to get with actual implementation of security tools, there's a growing demand that accountants can fill in assessing businesses' IT security vulnerabilities and advising on how to remedy them.
Large public companies are required to assess their IT system, so why not position yourself as an IT security auditor to your clients or employer.
Wednesday, March 09, 2005
STUDY PREVIEW:
How's YOUR Busy Season?
At first blush: It may be too early to tell.
Based on the first 100 or so responses to the straw poll we launched in “Whistle-Blower Wins Key SOX Ruling,” CPAs are split three ways over how this season compares with last year’s.
The polls will be open all week.
(or cut-and-paste into your browser www.zoomerang.com/recipient/survey.zgi?p=WEB2246JR8KNCY)
So, How's the busy season going so far?
Better than last year: 36%
About the Same: 27%
Not as Well as Last Year: 37%
But who’s doing the best?
Answer: Half of all managing partners, and firms of 50 or fewer people.
If you have a theory on why that might be, we’d love to hear it, at rtelberg@telberg.com.
What's different about this year?
SAMPLE VERBATIM COMMENTS
· More work from larger firms
· Plenty of new business opportunities this year however the challenge is in finding enough qualified staff. Our current staff is dedicated and has a tremendous work ethic however they are getting burned out early in the season this year. The challenge is trying to keep the staff motivated to stick it out while asking them to put in more hours than ever before.
· Implemented new software
· More schedules for 1040's
· 2004's first-year staff now have some experience under their belts. 2. We have a new supervisor on board with extensive 1040 experience. 3. We were lucky enough to snag an intern with strong skills. He's working 30 hrs. per week.
· taxpayers seem more organized and are getting an earlier start than last year.
· 404 sucks.
· Obviously, the focus on SOX and finalizing the certifications for the company.
· Clients are not getting their tax material in as early this year.
· Earlier filings
· A merger right before tax season started has all of us learning to roll with the punches, since we are all trying to figure out who does what, how we as a newly merged group will do things, etc.
· Short handed at work, no replacement of employees leaving prior to tax season
· More SEC audit work.
· client work came in earlier, I was "buried" earlier, and hopefully April won't be quite as crazy. Even though we had major tax bills passed in the fall, they aren't creating hiccups as in past years with changes that were taking effect as tax season progressed. This makes work much more efficient.
· Busier
· SHORT STAFFED
· Do not have enough skilled staff!
· staffing
· I, the CEO, am getting better at my time management, and e-filing is saving us much time.
· Too much work, not enough people
· More organized offset by less experienced individuals.
· More new clients
· same people returning familiar with clients
· IT improvements have backfired.
· New job, better boss.
· more work...
· Different staff members, lack of brokerage house 1099s due to their extensions.
· E filing very helpful
· Tooooooooooooooooo busy (70+ hour weeks)!
· STAFFING
· New software (road to paperless); lack of staff especially on the senior level; state regulatory changes; practice merger.
· I am better prepared this year.
· E-filing
· More knowledge.
· More difficult to find qualified people to do taxes and auditing
· Almost no business! Down 75%
· 50% increase in client load...good for work...bad for workload.
· Sales tax deduction in WA state is a burden
· Things seem to be running more smoothly. Last year I think the biggest additional time drain was for the change in the capital gains in mid-year. This year, without any glitches, my tax practice is running ahead of schedule despite additional business. Pre tax-season planning has paid off. With a week to go my staff and I have just about filed every S corp, C corp and partnership we do, with few extensions.
· More clients
· More work, less productivity
· Review bottlenecks, no interns, staff cuts, and not enough hours in the day.
· I have my own office this year, and can control my hours better. I can also control the type of accounts I want as clients.
· Working longer hours. Our office has increased billable minimums from 55 to 60 hours per week
· Better team moving the work very well. Fired some problem clients.
· I have a larger number of clients and, the repeat clients are far better organized than in previous years
· 2 area preparers are moving out of town so we are getting a lot of their clients. Plus the usual migration of clients from H&R Block.
· VOLUME
· More staffing
· Better coordination of work flow within the office, e-filing capability, tardiness of taxpayers in coming in, later rather than earlier, has allowed us to focus on audits and reviews more thoroughly.
· Information is in slower and new clients with difficult returns taking extra time
· For the first time in 25 years we had not one but two employees leave the firm for industry jobs during tax season.
· Lower level staff cuts, more workload.
· Cut out large corp returns and focusing on individual returns. What a relief!
· Clients are slower than usual. More work--types of work, including divorce planning & litigation, general tax planning.
Based on the first 100 or so responses to the straw poll we launched in “Whistle-Blower Wins Key SOX Ruling,” CPAs are split three ways over how this season compares with last year’s.
The polls will be open all week.
(or cut-and-paste into your browser www.zoomerang.com/recipient/survey.zgi?p=WEB2246JR8KNCY)
So, How's the busy season going so far?
Better than last year: 36%
About the Same: 27%
Not as Well as Last Year: 37%
But who’s doing the best?
Answer: Half of all managing partners, and firms of 50 or fewer people.
If you have a theory on why that might be, we’d love to hear it, at rtelberg@telberg.com.
What's different about this year?
SAMPLE VERBATIM COMMENTS
· More work from larger firms
· Plenty of new business opportunities this year however the challenge is in finding enough qualified staff. Our current staff is dedicated and has a tremendous work ethic however they are getting burned out early in the season this year. The challenge is trying to keep the staff motivated to stick it out while asking them to put in more hours than ever before.
· Implemented new software
· More schedules for 1040's
· 2004's first-year staff now have some experience under their belts. 2. We have a new supervisor on board with extensive 1040 experience. 3. We were lucky enough to snag an intern with strong skills. He's working 30 hrs. per week.
· taxpayers seem more organized and are getting an earlier start than last year.
· 404 sucks.
· Obviously, the focus on SOX and finalizing the certifications for the company.
· Clients are not getting their tax material in as early this year.
· Earlier filings
· A merger right before tax season started has all of us learning to roll with the punches, since we are all trying to figure out who does what, how we as a newly merged group will do things, etc.
· Short handed at work, no replacement of employees leaving prior to tax season
· More SEC audit work.
· client work came in earlier, I was "buried" earlier, and hopefully April won't be quite as crazy. Even though we had major tax bills passed in the fall, they aren't creating hiccups as in past years with changes that were taking effect as tax season progressed. This makes work much more efficient.
· Busier
· SHORT STAFFED
· Do not have enough skilled staff!
· staffing
· I, the CEO, am getting better at my time management, and e-filing is saving us much time.
· Too much work, not enough people
· More organized offset by less experienced individuals.
· More new clients
· same people returning familiar with clients
· IT improvements have backfired.
· New job, better boss.
· more work...
· Different staff members, lack of brokerage house 1099s due to their extensions.
· E filing very helpful
· Tooooooooooooooooo busy (70+ hour weeks)!
· STAFFING
· New software (road to paperless); lack of staff especially on the senior level; state regulatory changes; practice merger.
· I am better prepared this year.
· E-filing
· More knowledge.
· More difficult to find qualified people to do taxes and auditing
· Almost no business! Down 75%
· 50% increase in client load...good for work...bad for workload.
· Sales tax deduction in WA state is a burden
· Things seem to be running more smoothly. Last year I think the biggest additional time drain was for the change in the capital gains in mid-year. This year, without any glitches, my tax practice is running ahead of schedule despite additional business. Pre tax-season planning has paid off. With a week to go my staff and I have just about filed every S corp, C corp and partnership we do, with few extensions.
· More clients
· More work, less productivity
· Review bottlenecks, no interns, staff cuts, and not enough hours in the day.
· I have my own office this year, and can control my hours better. I can also control the type of accounts I want as clients.
· Working longer hours. Our office has increased billable minimums from 55 to 60 hours per week
· Better team moving the work very well. Fired some problem clients.
· I have a larger number of clients and, the repeat clients are far better organized than in previous years
· 2 area preparers are moving out of town so we are getting a lot of their clients. Plus the usual migration of clients from H&R Block.
· VOLUME
· More staffing
· Better coordination of work flow within the office, e-filing capability, tardiness of taxpayers in coming in, later rather than earlier, has allowed us to focus on audits and reviews more thoroughly.
· Information is in slower and new clients with difficult returns taking extra time
· For the first time in 25 years we had not one but two employees leave the firm for industry jobs during tax season.
· Lower level staff cuts, more workload.
· Cut out large corp returns and focusing on individual returns. What a relief!
· Clients are slower than usual. More work--types of work, including divorce planning & litigation, general tax planning.
Saturday, March 05, 2005
SOX UPDATE:
Whistle-Blower Wins Key Sarbanes-Oxley Ruling
As mid-March filing deadlines near, financial executives and auditors scramble. And who can forget it's tax time? So how's YOUR busy season going so far?
by Rick Telberg
At Large
With the fast-approaching mid-March deadline for new SEC filings looming, public company executives will soon be personally signing off on their financials, many for the first time. So it comes as a poignant coincidence that one of the Sarbanes-Oxley law's new provisions -- the one about whistle-blowing -- is making headlines just now.
In the first test of the whistle-blowing provisions of the new law, Administrative Law Judge Stephen Purcell has ordered Cardinal Bankshares Inc. to reinstate its former chief financial officer, David Welch, and pay him nearly $65,000 in back pay and damages.
______________________________________
Whistle-Blowers or Not.
This is the Busy Season for CPAs of all stripes
-- from tax prep to auditing and financial reporting.
Tell us: How's it going for YOU so far?
(And be the first to see the answers.)
___________________________________________
You may recall Welch's story. We reported on it about a year ago in "SOX Whistleblower Rules Get First Test " and the supportive response from fellow CPAs was overwhelming, "SOX Whistleblower Gets CPA Support."
In all, workers have filed 144 claims with the Department of Labor since the law took effect in mid-2002, alleging that their employers retaliated against them for calling attention to financial mismanagement. Welch is one of just three workers to win protection so far. Another 16 cases have ended in settlements.
The bank plans to appeal. And Welch is still planning on going back to his old job.
But what's it mean for CPAs and financial executives?
For that, we asked attorney Dan Westman of Shaw Pittman LLP in McLean, Va.
"Sarbanes-Oxley protects both CPAs working inside and outside publicly traded companies," Westman said. "There is a common misconception that Sarbanes-Oxley protects only employees of publicly traded companies. This is not the case. CPA firms or other contractors of publicly traded companies also are legally protected for whistle-blowing."
Will we now be seeing more whistle-blowers come forward? "The data so far suggests so," said Westman. "The fastest-growing category of cases handled by the U.S. Department of Labor is Sarbanes-Oxley whistle-blower cases."
And if you look at the docket, you'll find many smaller companies listed.
Westman notes that few corporate laws have received such wide publicity, adding, "This law is no secret, and employees appear to be well aware of it."
In addition, he noted, unlike 30 years ago when whistle-blowers were often denounced as 'snitches' or worse, in 2002 Time magazine made them Persons of the Year. Remember Cynthia Cooper of WorldCom, Coleen Rowley of the FBI and Sherron Watkins of Enron?
Many employees, do remember them, particularly CPAs. And they may be the true heroes of our age. Maybe Dave Welch is too.
NOW IT'S YOUR TURN: How's YOUR busy season going so far?
COMMENTS? Send your rants, raves, questions or idle thoughts to Rick Telberg here.
by Rick Telberg
At Large
With the fast-approaching mid-March deadline for new SEC filings looming, public company executives will soon be personally signing off on their financials, many for the first time. So it comes as a poignant coincidence that one of the Sarbanes-Oxley law's new provisions -- the one about whistle-blowing -- is making headlines just now.
In the first test of the whistle-blowing provisions of the new law, Administrative Law Judge Stephen Purcell has ordered Cardinal Bankshares Inc. to reinstate its former chief financial officer, David Welch, and pay him nearly $65,000 in back pay and damages.
______________________________________
Whistle-Blowers or Not.
This is the Busy Season for CPAs of all stripes
-- from tax prep to auditing and financial reporting.
Tell us: How's it going for YOU so far?
(And be the first to see the answers.)
___________________________________________
You may recall Welch's story. We reported on it about a year ago in "SOX Whistleblower Rules Get First Test " and the supportive response from fellow CPAs was overwhelming, "SOX Whistleblower Gets CPA Support."
In all, workers have filed 144 claims with the Department of Labor since the law took effect in mid-2002, alleging that their employers retaliated against them for calling attention to financial mismanagement. Welch is one of just three workers to win protection so far. Another 16 cases have ended in settlements.
The bank plans to appeal. And Welch is still planning on going back to his old job.
But what's it mean for CPAs and financial executives?
For that, we asked attorney Dan Westman of Shaw Pittman LLP in McLean, Va.
"Sarbanes-Oxley protects both CPAs working inside and outside publicly traded companies," Westman said. "There is a common misconception that Sarbanes-Oxley protects only employees of publicly traded companies. This is not the case. CPA firms or other contractors of publicly traded companies also are legally protected for whistle-blowing."
Will we now be seeing more whistle-blowers come forward? "The data so far suggests so," said Westman. "The fastest-growing category of cases handled by the U.S. Department of Labor is Sarbanes-Oxley whistle-blower cases."
And if you look at the docket, you'll find many smaller companies listed.
Westman notes that few corporate laws have received such wide publicity, adding, "This law is no secret, and employees appear to be well aware of it."
In addition, he noted, unlike 30 years ago when whistle-blowers were often denounced as 'snitches' or worse, in 2002 Time magazine made them Persons of the Year. Remember Cynthia Cooper of WorldCom, Coleen Rowley of the FBI and Sherron Watkins of Enron?
Many employees, do remember them, particularly CPAs. And they may be the true heroes of our age. Maybe Dave Welch is too.
NOW IT'S YOUR TURN: How's YOUR busy season going so far?
COMMENTS? Send your rants, raves, questions or idle thoughts to Rick Telberg here.
Friday, March 04, 2005
ASSOCIATIONS:
Canada Accounting Bodies Kill Merger Plan
Blame lack of interest among members
Talks between leaders of the chartered accountants (CAs), which is the U.S. CPA's closest cousin in Canada, and the certified management accountants (CMAs) have broken off after members gave the idea a big yawn.
"The one thing we found, both parties I think, is that the members really took pride in their designation," David Smith, president and chief executive of the Canadian Institute of Chartered Accountants, told the globe and Mail.
The merger would have led to a single designation ? CA ? and eventually led to the elimination of the CMA title after five years.
"There just wasn't a willingness at this point to automatically transition to the CA designation," said David Fletcher, vice-president of public affairs for the Certified Management Accountants of Canada.
The merger could have created a single group with 105,000 members who would have been able to provide a broad array of services, including audit and assurance, and management and tax.
Canada's accounting profession remains divided into three groups, CAs, CMAs and certified general accountants. By comparison, the AICPA claims 90 per cent of U.S. CPAs.
Talks between leaders of the chartered accountants (CAs), which is the U.S. CPA's closest cousin in Canada, and the certified management accountants (CMAs) have broken off after members gave the idea a big yawn.
"The one thing we found, both parties I think, is that the members really took pride in their designation," David Smith, president and chief executive of the Canadian Institute of Chartered Accountants, told the globe and Mail.
The merger would have led to a single designation ? CA ? and eventually led to the elimination of the CMA title after five years.
"There just wasn't a willingness at this point to automatically transition to the CA designation," said David Fletcher, vice-president of public affairs for the Certified Management Accountants of Canada.
The merger could have created a single group with 105,000 members who would have been able to provide a broad array of services, including audit and assurance, and management and tax.
Canada's accounting profession remains divided into three groups, CAs, CMAs and certified general accountants. By comparison, the AICPA claims 90 per cent of U.S. CPAs.
STAFF SHORTAGE?
3 tips on recruiting
Rule No. 1 for fisherman: Fish where the fish are.
That may be easier said than done.
But if you'?re looking for new staffers in this tight labor market for accountants, here are some clues from some of our latest research:
These are the people most eager to change jobs today:
1. CPAs in business or industry (33% are "likely" to "certain" to consider changing jobs, versus 25% of those in public practice).
2. Look for them in companies of 100 or more employees.
3. And target middle managers. They're the most eager to bail out right now.
For more information on our staffing research, contact rtelberg@telberg.com
STUDY PREVIEW: Your Success Secrets
In "CAREERS & MANAGEMENT: How Does YOUR Raise Rate?" we asked, What does it REALLY take to succeed?
You answered. Here are the flash top-line results.
As you examine the returns, please don't hesitate to let us know if you have any additional thoughts or questions. Email: rtelberg@telberg.com
What's it REALLY take to succeed as a CPA or financial executive in today's business world? (Please check all that apply.)
A sense of humor : 46%
Working for the right organization : 61%
An organization that's having a good year: 12%
Getting a good boss: 44%
Having great clients : 24%
Knowing the right people : 46%
Having the right skills and training : 78%
Integrity : 72%
Reliability: 70%
Getting along with people : 70%
Really understanding what the numbers mean : 57%
Contributing to the success of the organization : 68%
General economic conditions in my industry : 21%
General economic conditions of the nation at large : 11%
Overcoming discrimination and prejudice : 9%
Delivering new clients, revenue or profit to the company : 38%
DEMOGRAPHICS
In what type of business do you work?
Public accounting: 39%
Business or Industry: 50%
Government: 2%
Not-for-profit: 5%
Education: 1%
Other: 3%
How many people work in your office or location?
1 to 10: 15%
11 to 50: 26%
51 to 100: 15%
101 to 500: 26%
More than 500: 18%
Which best describes your position?
Chief executive/Managing Partner: 6%
Senior Executive/Partner: 20%
Middle Management: 47%
Staff: 21%
Other: 6%
Copyright 2005 Rick Telberg/Bay Street Group LLC. All Rights Reserved.
You answered. Here are the flash top-line results.
As you examine the returns, please don't hesitate to let us know if you have any additional thoughts or questions. Email: rtelberg@telberg.com
What's it REALLY take to succeed as a CPA or financial executive in today's business world? (Please check all that apply.)
A sense of humor : 46%
Working for the right organization : 61%
An organization that's having a good year: 12%
Getting a good boss: 44%
Having great clients : 24%
Knowing the right people : 46%
Having the right skills and training : 78%
Integrity : 72%
Reliability: 70%
Getting along with people : 70%
Really understanding what the numbers mean : 57%
Contributing to the success of the organization : 68%
General economic conditions in my industry : 21%
General economic conditions of the nation at large : 11%
Overcoming discrimination and prejudice : 9%
Delivering new clients, revenue or profit to the company : 38%
DEMOGRAPHICS
In what type of business do you work?
Public accounting: 39%
Business or Industry: 50%
Government: 2%
Not-for-profit: 5%
Education: 1%
Other: 3%
How many people work in your office or location?
1 to 10: 15%
11 to 50: 26%
51 to 100: 15%
101 to 500: 26%
More than 500: 18%
Which best describes your position?
Chief executive/Managing Partner: 6%
Senior Executive/Partner: 20%
Middle Management: 47%
Staff: 21%
Other: 6%
Copyright 2005 Rick Telberg/Bay Street Group LLC. All Rights Reserved.
Tuesday, March 01, 2005
STUDY PREVIEW:
How Balanced is YOUR Life?
Not very, suggests our latest study.
A surprising -- and troubling -- number of accountants and financial executives across the profession are clearly not satisfied with the balance between their work and their lives right now.
What do you think? Email me at: rtelberg@telberg.com.
Are you excited about going to work every morning?
Yes: 56%
No: 44%
Are you sure you know what your boss or clients expect of you?
Yes: 68%
No: 32%
Do you feel your life is properly balanced between family, work and community?
Yes: 46%
No: 54%
Do you know what business you're REALLY in?
Yes: 85%
No: 15%
Does work keep you awake at night?
Yes: 38%
No:62%
For additional information about the study, please contact rtelberg@telberg.com.
Copyright 2005 Rick Telberg/Bay Street Group LLC. All Rights Reserved.
A surprising -- and troubling -- number of accountants and financial executives across the profession are clearly not satisfied with the balance between their work and their lives right now.
What do you think? Email me at: rtelberg@telberg.com.
Are you excited about going to work every morning?
Yes: 56%
No: 44%
Are you sure you know what your boss or clients expect of you?
Yes: 68%
No: 32%
Do you feel your life is properly balanced between family, work and community?
Yes: 46%
No: 54%
Do you know what business you're REALLY in?
Yes: 85%
No: 15%
Does work keep you awake at night?
Yes: 38%
No:62%
For additional information about the study, please contact rtelberg@telberg.com.
Copyright 2005 Rick Telberg/Bay Street Group LLC. All Rights Reserved.
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