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18 posts from August 2016

3 Ways to Make Your Value Clear to Clients

Shutterstock_244717456Value pricing has been a hot topic among CPA firms for a while now as it enables them to focus on what clients really care about. All firms should consider adopting this approach. But while you may be able to quantify the value of what you offer clients in time, it’s crucial not to stop there. Do you know, for example, what truly matters to your clients? What they value in their relationship with you and the services you provide? While your approach to billing is important, the most critical concern for any firm should be the client’s perception of value.  These three steps will help you better understand your own value, ensure that clients are aware of all that you’re worth to them and enable you to take your client relationships to a much deeper level.

  1. Make It Personal

It is important for clients to associate high-quality work and a strong relationship with you and your firm. If another firm promised to complete the engagement for less, would your clients run? You have to differentiate yourself from the competition in a unique way. As simple as it sounds, you should initiate regular meaningful contact with your clients throughout the year, not just when a due date is looming as many CPAs do. Establish a system or process for reaching out so that it happens methodically. Make sure clients realize you aren’t just the person who delivers only compliance work or some required paperwork, but rather the trusted business adviser they can count on.

You can radically change your client’s perception of your firm’s value when you:

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Partnership Audits –Be Careful what You Wish For?

CrossroadsFor years, everyone involved with audits of partnership tax returns (tax professionals, the IRS and the taxpayers themselves) have complained about the often complicated and unclear Tax Equity and Fiscal Responsibility Act (TEFRA) rules. Disputes between the IRS and partnerships, as well as between the various partners, often dragged on for years. 

That is  if the IRS even bothered to start an audit – audit rates for partnerships were historically low compared to similar size corporate entities. Once an audit finally was completed, the IRS would face the onerous task of tracking down and collecting the assessments from each partner, often having to dive through dozens of tiers to find these ultimate taxpayers. Naturally, this resulted in difficulty collecting the additional tax, making the whole exercise seem futile to some. A better way was needed. TEFRA had to die.

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Gwen Jorgensen: From Tax Accountant to Olympic Gold Medalist

Gwen jorgensenIt’s not every day a tax accountant from Wisconsin wins a gold medal at the Olympics. But on Saturday, Aug. 20, Gwen Jorgensen, formerly of the EY corporate tax group in Milwaukee, became the first U.S. woman to do just that. Crossing the finish line with a time of 1:56:16, Jorgensen won gold in the triathlon.

Jorgensen, who earned a master’s degree in accounting at the University of Wisconsin-Madison and passed the CPA exam, didn’t even take up triathlon until after college. Jorgensen was a runner and swimmer in college, and was approached by USA Triathlon looking for college athletes they thought would be successful in the sport. At the time they contacted Jorgensen, she was still in school and had an offer from EY. She turned USA Triathlon down, but they convinced her to at least try triathlon as a hobby while she worked for EY. And, thus, a grueling schedule began: waking at 4 a.m. to ride her bike to the pool, swimming, and getting to the office at 8 a.m. After work, Jorgensen trained some more. And found that she loved triathlon.

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FASB Releases New Accounting Standard for Not-For-Profits


Shutterstock_238756393On August 18, 2016, the Financial Accounting Standards Board issued a standard that affects all not-for-profit entities issuing GAAP-basis financial statements. The new standard simplifies and improves how a not-for-profit entity classifies its net assets as well as the information it presents in financial statements and notes about its liquidity, financial performance and cash flows.

One goal of the standard is to improve how not-for-profits (like charities, foundations, colleges and universities, health care providers, religious organizations, trade associations and cultural institutions) communicate their financial performance and condition to their stakeholders.

 

Why a New Standard?

The current not-for-profit financial reporting model has held up well for more than 20 years, however, the FASB’s Not-for-Profit Advisory Committee and other stakeholders have reported that, while existing standards were sound, they could be improved to provide better information to users of not-for-profit financial statements.

Specifically, stakeholders voiced concerns about the following issues:

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5 Lessons Learned From CPAs #FirstSevenJobs


Thought bubbleEarlier this month Twitter user Marian Call, a singer-songwriter, started a viral trend when she tweeted her first seven jobs. Since then, social media has been all abuzz with users reminiscing about their #firstsevenjobs.

There’s no doubt that every job someone holds will teach them some kind of lesson. First jobs in particular teach those lessons in tough ways. To find out what lessons CPAs have learned, we put out a call for responses on social media; here’s what we heard.

Rand Gambrell

First seven jobs: Draftsman, McDonald’s Cook, Bus Boy, Wendy’s Cook, Bus Boy, Retail Sales, Hotel Sales Manager

Lesson learned: “No matter what your occupation or profession, perform your job to the best of your ability. People always recognize excellence.”

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Taxing Emotions: Death, Section 754 Elections and Serving the Client

Estate Planning 2Confronting the cold monetary and business realities of an estate is extraordinarily difficult in the midst of mourning. Even a well-planned estate’s complexity could mean the process drags on for months or even years, drawing out not only raw emotion but also tax exposure. Careful planning and a detailed explanation of your clients’ wishes are a must if you want to save their loved ones additional suffering.

My mother’s estate was moderate in terms of her personal holdings, but she also participated in substantial limited partnerships that passed to my brothers and me upon her death. While her home and personal effects were relatively simple to liquidate, the partnerships were a different matter.

There was no provision for a buyout of my mother’s interest upon her death. We found ourselves in business with people who didn’t know us, and had conflicting ideas about the future of the entity itself. Like so many partnerships, ours rarely had K-1s prepared in time to allow us to file our individual returns in advance of April 15th. We faced an indeterminate future of filing expensive extensions, estimating our individual tax liabilities and possibly increasing our exposure to an audit.

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5 Key Facts about the New FASB Leases Standard


Shutterstock_165181559What is a lease? And how should it be reported on a balance sheet? While your clients may not have spent much time pondering those questions in the past, the answers will take on new importance for them when a new Financial Accounting Standards Board standard on Leases becomes effective. While it’s true that the final guidance generally does not depart from existing GAAP as much as some earlier FASB proposals on this topic, practitioners should be prepared for significant changes in how all organizations that have lease assets—including private entities and not-for-profits—will account for leases. As practitioners begin to educate themselves on the guidance, here are five critical issues to keep in mind.  

  1. Lessees must now recognize operating lease assets and liabilities on the balance sheet. This is the most significant change, since it will require all organizations and their CPAs to take a different approach to lease accounting. Before this standard, U.S. GAAP only required this type of recognition for capital leases. Operating lease amounts were generally shown in the financial statements as rent expense on the income statement and in disclosures to the financial statements. In implementing the new guidance, entities will have to reconsider the ways they identify lease arrangements.

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Technology Revolutionizes the Transfer of Private Company Information

Shutterstock_104783210How can CPA firms, their clients and the investors and lenders with whom they do business easily access shared documents? How can CPA firms ensure that their signature won’t be used fraudulently or that there won’t be unauthorized changes in their financial reports? I spend a lot of time speaking with CPAs across the country, and these are some of the questions on the minds of firms that serve private company clients.

Public companies have a simple solution for sharing financial information in a secure environment. The Securities and Exchange Commission’s Electronic Data Gathering, Analysis and Retrieval (EDGAR) System collects, validates, indexes and forwards submissions from public companies’ SEC filings. It was launched in 1984 and offers public companies an efficient way to share corporate information, but there has never been a similar system to fit the needs of private companies. 

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Salsa, Scenery, and the CGMA


BSachdeva-3605Bikram Sachdeva loves salsa and bachata dancing. You might also find him capturing landscapes, skyscapes, and nature scenes with his camera during travels to Senegal, Ghana, Tanzania, Mongolia, El Salvador, Nicaragua, and Jordan—countries where he’s monitored over $ 1.5 billion portfolio of projects.

Sachdeva is a CPA and CGMA, to name just two of five professional designations on his business card. “I hear a lot of stereotypes when people see my business card,” said Sachdeva, director of fiscal accountability at the Millennium Challenge Corporation (MCC), an independent U.S. Government aid agency that works to reduce global poverty through economic growth. “Some people assume that because I’m a CPA, I’m not outgoing. They’re surprised when I tell them I love to dance and take pictures, especially because these interests tend to be outside the norm of what people expect from an accountant.”

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Summer Reading Recommendations

Summer reading 3Part III

Looking for things to read on your summer vacation? Here is the third and final installment of the AICPA summer reading recommendations. You can catch up if you missed Part I or Part II.

Valrie Chambers, CPA, MBA, Ph.D, Associate Professor of Taxation and Accounting, Stetson University, and regular AICPA Insights contributor recommends:

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5 Tips to Maximize Productivity - Both at Home and at Work

Shutterstock_438684127“Amateurs sit and wait for inspiration, the rest of us just get up and go to work.” ― Stephen King 

Whether it be racing to the office to conquer the business world, or managing all of our other daily commitments, we work hard every single day. And it’s not easy to stay productive with conflicting priorities. 

To keep you on track (and your sanity intact), below are five tips to inspire productivity at home and at work. 

(1) Don’t Be Afraid to Say “No.” 

Apple co-founder Steve Jobs put it the best. ”Focusing is about saying no.” From a professional standpoint, in order to truly do your job and meet your objectives, every time someone asks you to do something, you need to evaluate whether you are the best person to be doing that job, or even whether it should be done at all. Many of us are people pleasers and want to help, but saying “yes” is not necessarily the best thing for you or the organization. 

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How to Supercharge Your Not-for-Profit’s Board to Achieve Scalable Impact

Shutterstock_174469097When considering the future success of a startup organization, thoughts naturally turn first to a clearly defined vision, mission and strategy for putting plans into action. After that, many ask, “How do I galvanize my staff and volunteers to lead?” Social impact organizations affect the most critical challenges facing our society-- for example, lifting individuals out of poverty, providing access to vital services and fighting inequality. Having the right staff is critical and having the right board of directors is equally important. Scaling an organization’s impact means not just maintaining core processes, but also constantly sharing knowledge to build the organization’s capacity to affect change. Without leadership to keep the organization focused, staff can fall victim to fighting the daily fires that are a distraction from the larger goal of expanding the organization’s reach.

So how can you supercharge your board of directors? Here are four things to consider:

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Get to the Point: How to Make Travel Rewards Work for you


I don’t always get mail, but when I do it’s usually a credit card offer. And these cards are often tied to a particular hotel chain or airline. Many of these offers tout initial low-APRs, a waived annual fee and, increasingly, an obscene amount of rewards points – enough for a ROUND TRIP flight!!!! - if I only spend a few thousand dollars in the first couple of months.

However, my wife and I have been diligent about putting all of our charges on a credit card with a rewards program for a particular hotel chain and booking rooms at this brand whenever possible. The last thing I want is to lose our status with that chain by spreading ourselves too thin. This approach is working for us; over the past few years alone, we’ve paid for hotels in Denver, Boston, Puerto Rico, Baltimore and New Orleans using our rewards points. I’m by no means an expert travel hacker – that is, someone who has mastered collecting rewards points to earn free travel – but I’m making sure the money I spend on my card and the trips I take is working to my advantage. Seems simple, right? 

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6 Planning Ideas for CPAs Who Have Aging Clients

Aging clientsYou might have noticed the “graying” of your clients and thought “how can I, as a CPA and trusted adviser, provide services that meet their changing needs? What are the practice considerations surrounding those services?”

Recently, we served on a panel at the AICPA Conference on Tax Strategies for the High-Income Individual that focused specifically on these issues. Consider some of the following ideas gleaned from the session and how you may be able to incorporate them into your practice:

  1. Services: Cognitive challenges often affect executive functioning, such as the ability to handle day-to-day finances. Services you might offer include automating finances such as bill paying, monitoring investments, and reviewing banking records to identify elder financial abuse. With clients more commonly living into their 90s and beyond, budgeting and the recurring financial responsibilities of an individual or family take on a very different nature.

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Backstage Pass: EDGE Experience

Social mediaOften times, in-person conferences are the best time to get updates on industry news and to learn new things. The EDGE Experience, the premier career development event for young CPAs, focuses on building young professionals not only technically, but with soft skills as well.

Yesterday, Stacie Saunders, Senior Manager of Social Business at the AICPA, sat down with three CPAs to talk about how they began a professional strategy on social media. Saunders began the conversation by saying “most of us started on social media for personal reasons, but as you start to use it you can see how the benefits can cross over into a professional space.” So, how does one begin to use social media professionally?

As a special treat for AICPA Insights readers, we listened in and pulled tips and tricks for some of the most common questions surrounding social media.

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Advising on U.S. DOL’s Overtime Rule and Worker Classification Issues

Shutterstock_282297254I don’t know about you, but I’ve been having more conversations with my clients on employment issues lately. The new U.S. Department of Labor’s (DOL) overtime rule was announced May 18 and goes into effect December 1, 2016. Among other things, the new rule extends eligibility for overtime to certain white-collar workers by increasing the wage threshold from $455/week to $913/week ($47,476/year).

When my clients call with a “quick question” about the new rule, I chuckle to myself. These calls usually take an hour or more, as one question leads to another. These worker classification decisions can have major budget implications, particularly for small businesses and not-for-profits, and there is little time to come into compliance before December 1. In many small businesses without an HR department, employment issues fall under the finance or accounting function. 

Here is the basic guidance I’ve given to clients:

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AICPA Insights Celebrates Five Years

20386-312 AICPA Insights 5th Anniversary_update_R4-2

 

The 4-Step Coach Approach to Client Service

CoachBefore CPA financial planners can provide expert counsel to clients, they first must get to know them in a very meaningful way. The process involves asking self-reflective questions and something I like to call the “coach approach” to client discovery.

The coach approach is a cooperative process, or a two-way street, and comes from material published by motivational expert Michael Pantalon. A good planner (the coach) guides and motivates, imparting knowledge along the way, but the client must also have some skin in the game with a commitment to executing the plan. After all, a basketball player could be coached to improve his game, but the player must commit to practice, and ultimately perform, before any real progress can be made.

Here are four steps to the “coach approach”:

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