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13 posts from October 2015

How to Create a Retirement Savings Policy Statement for Your Clients

LIVE FOR TODAY“Live for today – plan for tomorrow” has always been my firm's mantra, yet clients and advisers have often understood this reality far too late in the client's earnings years.

As retirement nears, clients are often so excited to spread their wings that they sometimes forget how spending money on travel and luxury items, for example, impacts their long-term savings. The key is to help them create a Retirement Savings Policy Statement (RSPS), a detailed summary of savings guidelines and how to measure retirement life choices. Doing this earlier in their working years helps increase the likelihood that they will have the necessary funds for retirement.

The RSPS takes into account current savings and a lifelong approach to increase saving for the future. It requires a client to be realistic about goals and plans in case something changes, such as an unexpected illness or family crisis.

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Post-Mortem Planning: Helping Clients Make Decisions About Their Money

End of the financial rainbowWhat happens to your money when you die? While it’s never too early to sit down with your clients to discuss their plans for how their money should be disbursed upon their death, it can certainly be too late. Meeting with them sooner rather than later can generate more income beyond their lives for their family and beneficiaries.

The best plan is to meet with your clients to determine their goals on this topic. This isn’t an easy conversation for anyone, let alone someone who is very much with us now and, hopefully, for years to come. When I’ve met with my clients on this topic, I’ve been surprised by some of the issues. For example, the client may have concerns about a spouse spending too much money too quickly, a child mishandling a large amount of money, a situation regarding a handicapped or special needs child or asset allocation worries.

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4 Ways to Help Clients Plan for Unexpected Medical Expenses

Medical expensesHealthcare costs are rising faster than inflation, so it is no wonder that a recent AICPA survey of CPA financial planners found that clients were most concerned about running out of money, partially due to unpredictable healthcare costs, as well as market fluctuations and lifestyle expenses. One unexpected costly illness could cause significant financial distress for many Americans. Here are four ways you can help your clients avoid this particular fate and better secure their future.

1: Medical expenses toward the end of life can create significant tax deductions. The moment you hear that a client or a client’s spouse is having a healthcare crisis, moving into a nursing home or incurring significant healthcare expenses, you should start thinking about the best approach to fully utilize healthcare deductions. For example, the client may benefit from taking money out of an annuity, doing a Roth conversion or simply taking more money out of an IRA than the Required Minimum Distribution calls for. Rather than reacting to the need for immediate cash, you can help your clients plan for “seemingly” unexpected expenses. I say “seemingly” because all of us can expect to incur end-of-life expenses; we just don’t know when they will occur, of course.

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Maintaining Relevance in a Transformative Time

Tommye_barie_headshot2It seems like only a short time ago that I was beginning a very exciting year as AICPA Chair of the Board of Directors. I’m amazed at how quickly time has passed, and at how much has occurred in the business world during the past 12 months.

My year began with an unforgettable visit to Rome for the World Congress of Accountants (WCOA) last November. The Imperial Sponsor of the event was the Chartered Global Management Accountant (CGMA) designation, a joint effort of the AICPA and the Chartered Institute of Management Accountants (CIMA). WCOA gave me an opportunity to represent the profession, position the AICPA as a global thought leader, and discuss accounting issues with leaders from around the world. The pasta was pretty good, too.

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5 Tips to Make the Best of an Open Office

Open officeA vast, open office space without doors or interior walls. Sleek, floor-to-ceiling glass windows. An office dog, unlimited free snacks, and maybe some music. Sounds fun, right? For years, spurred by the second tech revolution (Facebook, Google and their ilk of Silicon Valley giants), open-office floor plans — and some of the above-mentioned perks — grew in popularity. But if you actually talk to the employees who have to work in these offices, you might find they aren’t the halcyon spaces that were intended.

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Does More Money Make You Happier When You Retire? Not Always

Hapy retirementMany of us imagine a future in retirement when we leave the obligations and stresses of our work life behind; but few of us take the time to create a plan for what we will actually do when we retire and who will share that life with us.

CPA financial planners help clients achieve their financial retirement goals, but there’s more to retirement planning than making sure there’s enough money in the bank. The biggest challenge is ensuring there’s financial stability along with investing in developing a meaningful social network that will create a fulfilling retirement.

Here are some things you can share with your clients so they can create a well-rounded plan.

1. For those of us who are savers, the good news is that data from a nationwide Health and Retirement Study states that financial wealth does make us happier, and the effect is generally linear—higher wealth groups are significantly happier, but there’s a limit. At about $3.5 million of savings, retirees actually become less satisfied. This may be because they have more money than they could ever spend in retirement, and essentially feel burdened with the additional stress of managing it.

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Need Help? 3 Simple Steps to Find CPA Talent

Hiring“I just cannot decide which one of these tax manager candidates to hire”…

Says the rare CPA firm these days.

It is no surprise to CPAs in tax practice that finding and keeping talented staff is no easy task. Gone are the days of a waiting area filled with navy suits, briefcases, and overly qualified CPAs, each praying he or she will be the one chosen for the position. I imagine, instead, a desperate employer fumbling through Internet job sites, which serve as a digital wall too tall and wide to see around, with talented people all over the world on the other side, yet often seemingly unreachable to the employer.

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Tackling the Systems Side of the New Revenue Recognition Standard

Red phoneAre you ready to implement the new revenue recognition standard? Due to the deferral of the effective date of ASU 2014-09, public organizations must apply the new revenue standard to annual reporting periods beginning after December 15, 2017, while nonpublic entities have until December 15, 2018 to adopt the new standard. We at Telephone and Data Systems Inc., a telecommunications company headquartered in Chicago, are working hard to ensure that we are prepared in time for the effective date.

Under the current guidance, amounts billed to customers via the billing system are generally the same as the amounts recognized as revenue in the accounting records. Under the new revenue recognition standard, however, this is unlikely to be the case. The new standard requires a reallocation of transaction price between performance obligations under a five step model, resulting in the creation and amortization of contract assets and liabilities. Although the customer experience will not change, we will have to alter how we recognize and report revenue. Given that we have millions of customers, it would be impractical for our company to manually support the requirements under the new standard. For this reason, we have determined that a system solution is necessary.

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Technology and International Opportunities Key to Future, Say AICPA Members

One of my greatest joys is talking to members and sharing with them how the profession is evolving. Whether at state CPA societies, conferences or other events, members and I often engage in dialogue about trends and the profession’s path to maintain relevance in an ever-changing marketplace.  

Over the last few months, as part of my presentation, I’ve asked firm leaders, state CPA societies and members of our governing Council a series of poll questions, intended to gauge what members are seeing and experiencing in the marketplace. Are CPAs and the profession’s stakeholders affected by the convergence of macro trends? Do they capitalize on opportunities enabled by technology? What are they doing to attract and retain a talented and diverse workforce? Is their business crossing borders more than ever before?

The answer in each case was a resounding ‘yes.’ Below is a summary of some of the questions and analysis of what the results mean for our profession.

“By 2020, where do you think the profession needs to be on the technology adoption curve?” and… “Where are you on the curve?”

The technology adoption curve was made popular in the 1990s by Dr. Geoffrey Moore and was later referenced again in a whitepaper called “Accounting Services: Harness the Power of the Cloud,” which was based on research conducted by Dr. Moore. Barry polls

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How Cultural Inclusion Leads to Professional Success

Ed RamosTwo years ago, I was nominated to serve a three-year term on the AICPA’s National Commission on Diversity and Inclusion (NCDI). The NCDI was formed to serve as a champion and advisor within the accounting profession, proposing strategies to recruit, retain, and advance underrepresented minorities in the profession. As I look back at my time serving on the NCDI, I am amazed by the progress made in such a short period. However, there is still much work to be done.

My family moved from Puerto Rico to Tacoma, Washington which is where I was born and raised; I always felt most comfortable surrounded by my family. Throughout my journey as a minority student in accounting, I found myself lost without direction in the profession. I did not have anyone to push me to the next level, nor did I realize the value of networking and how it could help guide my career. It was not until I discovered the Association of Latino Professionals in Finance and Accounting (ALPFA) that my eyes opened to the full potential of my career.

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5 Tips to Increase Profitability by Leveraging Technology

TechnologyDoes your practice make the best use of some of the relatively straightforward technology solutions available? I have to admit, my firm did not always take advantage of steps that could have improved our relationships with clients, opened up service opportunities and, ultimately, enhanced our profitability. Here’s what we did to change our approach and improve our results:     

Improve efficiency by utilizing targeted solutions. Firms have many targeted technology solutions to choose from -- everything from online bill management services and workflow automation to cloud-based accounting and financial management software, payroll and more. My firm started by looking at CPA.com’s partner solutions. The products we selected allowed our firm to provide better and faster service. And best of all, it saved our firm and our clients’ money. We use an automated bill payment system which allows us to manage our accounting services clients’ payables effectively and efficiently. Additionally, after seeing how a cloud-based financial management and accounting system could improve productivity, reduce costs and speed growth at our firm, we decided to offer this valuable service to clients in various industries. By doing so, we have expanded our service offerings and tapped into a new revenue stream. 

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17 Game Changing Ideas for CPA Firms to Join Forces and Get Ahead

HamburgerAre you ready for the McWhopper? Recently, fast food behemoths Burger King and McDonald’s announced they would partner up to create a pop-up venture featuring the hybrid mega sandwich for a charitable cause. With such heated competition in the quick-eats restaurant industry, the two companies have struggled to maintain marketshare. While a merger is nowhere on the horizon, a short-term partnership, which has already garnered the two some much-needed positive PR, seems like a win-win.

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Is Your Organization Prepared for a Disaster?

Disaster preparednessTen years have passed since Hurricane Katrina caused $135 billion in damages along the Gulf coast. Unfortunately, businesses in New Orleans learned the hard way about the importance of disaster preparedness. Like many charities, the Greater New Orleans Foundation could not stop working. It simply was not an option, as the Foundation’s leadership was called upon to help with disaster relief.

Below are a number of steps you can take to prepare your organization for a disaster:

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