Ever heard of Chicken & Waffles potato chips? What about Dulce Almond ice cream? Frito-Lay and Ben & Jerry’s came up with these unique flavor ideas by soliciting opinions and contributions from large groups of individuals, a process known as idea crowdsourcing. Idea crowdsourcing is an excellent method to gather collective knowledge and gauge market interest.
Future-focused companies are increasingly turning to idea crowdsourcing to gain insights, gauge market interest and ignite innovation. They see organizational enhancements as well as external benefits like improved customer satisfaction. Here are a few more:
1. Foster knowledge and solutions
Two heads are better than one, right? What about 20 heads? Or 200? Idea crowdsourcing taps into collective knowledge -- the wisdom of many individuals, teams, and communities -- to create a deeper understanding of issues while gathering tremendous insights. It diversifies cognitive and creative talent, providing better ways to solve problems.
The Affordable Care Act is here to stay and continues to challenge CPAs with many unanswered questions and some mind boggling confusion. Every time I think I understand the ACA, rules change and interpretations contradict themselves. Despite the high frustration level, our own firms, our companies and our clients depend on us to guide them.
As a CPE discussion leader for the AICPA and others, I am continuously challenged by participants who complain about leaving class with more questions than answers on ACA. This situation is not about to resolve itself.
When the law was passed in 2010, the knee jerk reaction for many employers was: “We'll just cancel our health insurance plan and pay the penalties.” This is not a good answer. Take my own CPA firm as an example. We employ about 35 people and do not have to offer affordable health insurance since we have fewer than 50 full-time equivalent employees. Although Full-Time Equivalent Employee is defined three different ways in the ACA, our firm is definitely exempt from penalties.
Taxpayers often have a large percentage of their wealth tied up in a single stock, but a single stock portfolio is unfavorable for two reasons. First, it is risky to bet your financial future on the performance of a single company, and second, the volatility associated with a concentrated portfolio could be expected to substantially reduce returns.
In the research report The Enviable Dilemma: Hold, Sell or Hedge Stock, for example, the authors found that from 1984 to 2003, the annualized compounded return on the S&P 500 was 13%, while the annualized compounded return for the average stock was only 9.9%, nearly a 24% reduction.
Editor’s Note: Last January, Janet Hagy, CPA (and AICPA Tax Section volunteer) wrote a popular blog about her concerns regarding new rules for health reimbursement arrangements and their impact on her staff. We asked Ms. Hagy to give us an update and also discuss the Affordable Healthcare Act compliance concerns she has as a practitioner for the current tax season.
What I have learned in the last year about the ACA adds extra concerns to this already complicated tax season. We have two major compliance challenges right now – coverage documentation and standalone health reimbursement arrangements (HRAs). Otherwise, penalties, higher fees and more frustration could be waiting for many of us.
The first issue is that we as CPAs have sign-off on whether our individual clients had the required health insurance for each month in 2014 for all household members. We are probably not going to receive any 2014 forms 1095-B or 1095-C from employers or insurance companies substantiating what our clients tell us about their coverage, since these forms are voluntary for 2014 and do not become mandatory until 2015.
Do you remember a time when sending a note meant writing a handwritten letter? When speaking on the phone always meant calling a landline? Today, email and smartphones often replace those forms of communication. Don’t get me wrong – it is great to be able to reach someone in a moment’s notice, but there is something to be said about the personal touch associated with those other methods of communication.
With all my reliance on digital communications, I sometimes have to remind myself of the value of returning a client’s call rather than sending them a quick email. Although the latter is more efficient, a phone call can make a world of difference in clarifying any issues and developing rapport.
Below are 10 simple but significant tips that I follow to help strengthen my relationships with clients:
Imagine your firm’s future if your monthly partner meetings become challenging. What if everyone offers different ideas about what your firm should be spending on office space or disparate opinions about compensation, billing and utilization rates going forward? What if you’ve got a merger, a retirement and the buy-in of two new partners on the table? Sounds like you need sound benchmarking data to help you make some important decisions
Fortunately, results of the 2014 National Management of an Accounting Practice (MAP) Survey conducted by the AICPA Private Companies Practice Section (PCPS) and the Texas Society of CPAs (TSCPA) can provide you with the information you need to make the right choices. The survey’s comprehensive benchmarking data on firm finances and practice management options allow you to compare your firm to those in the same market and of the same size. The survey can be a vital tool in your strategic planning and decision making, and the new platform enables survey participants to see their own confidential data pre-populated beside the comparative benchmarks. Watch this video for details. (The results provide rich data that all firms—even those that didn’t participate—will find useful. If your firm didn’t participate, you can still access survey reports, but you’ll need to compile your own firm’s data for comparative purposes. This video provides a tutorial.)
This year’s social media trends forecasts are buzzing over innovations such as the integration of ecommerce with Facebook and Twitter, wearable technology and sophisticated analytics that report return on investment. While it will be interesting to see the development in these areas, there are additional trends that can significantly impact your firm’s success on social media. Here are five trends to consider as you go about implementing your firm’s social media strategy for 2015.
I’ve always thought the world would be a better place if only there were more professional accountants working throughout organizations. Each and every day, we bring transparency and accountability to businesses and governments around the globe. We promote financial integrity, expose wrongdoing, and lift the veil of uncertainty to shine light on the truth. When you think about it, we are much like the Swiss-Army knife for modern business—equipped to bring solutions in countless ways.
Tax work? We do that. Financial statements? We do those too. Interpreting human capital and supply chain implications of the latest regulatory standards? Your CPA has you covered.
If CPAs are like the Swiss-Army knife, then transparency is the Master Key that unlocks good business practices; transparency holds decision-makers accountable, leads to better management decisions, and provides the reliable, actionable information on which investors and the free market rely.
CPA financial planners are always looking for ways to help clients and their extended families realize their dreams and provide for future generations.
There are plenty of financial advisors in the marketplace, but not nearly as many as there are CPAs who work with individual clients and understand their needs from a tax and accounting perspective. That’s the edge we have that makes a difference. CPAs are well positioned to offer holistic financial planning services – ranging from traditional tax and estate planning to retirement, investment and risk management planning.
Last month, as part of the AICPA’s PFP Section’s CPA Financial Planning Thought Leadership series, I moderated the webcast, “Outlook for the Financial Planning Profession.” Panelists shared their perspectives on trends that affect their clients and the CPA financial planning profession, as well as how they integrate financial planning into their firms. While there are many different approaches that can be successful in this area, the key is to focus on your clients and what you do best for them.
Have you ever performed an in-depth comparison of your firm’s standing against other firms of the same size? The 2014 PCPS/TSCPA National Management of an Accounting Practice Survey provides some new and valuable ways to assess where your firm stands and plot your future course. If you participated in the survey this year but haven’t really delved into the results, which became available in November, you definitely want to check them out. Thanks to a new online platform, it’s much easier to take a peek at how firms like yours operate. And even if you didn’t participate, the survey offers some valuable information that will help your firm plan.
Take the case of a single owner firm like mine. We have a boutique corporate tax practice. In addition to myself, our permanent staff includes one CPA and one CPA candidate, but we add an administrative person and per diem help in busy season. When I’m planning for the future, I often wonder what a top performance single-owner firm looks like, but it’s tough to find more than anecdotal information.
When explaining the principles, the first thing I usually mention is that they are not a prescriptive set of rules. They are principles-based, comprehensive, best-practice guidance designed to help organizations (and specifically finance leaders, CEOs and boards) benchmark and improve their management accounting functions.
The Global Management Accounting Principles encompass four core principles focused on four outcomes:
Influence - Communication provides insight that is influential
Relevance - Information is relevant
Value - Impact on value is analyzed
Trust - Stewardship builds trust
The principles outline the fundamental values and qualities that represent management accounting. Application of the principles, combined with talented people and robust performance systems, will help drive effective management accounting functions.
The document is most impactful in section five, where the core principles are applied to 14 management accounting practice areas. Here, extensive good practice guidance is provided in key areas such as treasury management, financial strategy, cost transformation, budgetary control, investment appraisal and risk management. The guidance can be used to self-assess existing processes. A diagnostic checklist is available to facilitate the review.
A complimentary resource to the management accounting principles is the CGMA Competency Framework, which is designed to help management accountants understand knowledge requirements and assess skills needed for current and desired roles. In addition to technical areas, the Competency Framework addresses business, people and leadership skills.
The Global Management Accounting Principles are focused on the organization. The Competency Framework is directed at the individual. Combined, they are powerful tools that we hope you and your team find useful.
Paul Parks, CPA, CGMA, Associate Director- Business Industry and Government, American Institute of CPAs
With the issuance of the AICPA’s Audit Data Standards, the Institute has introduced what promises to be a significant disruptive technology – data on demand. ADS were designed to bridge the gap between disparate Enterprise Resource Planning systems and apps (tools and technologies) that analyze a company’s data. Until now business information consumers had to rely on IT personnel to either develop customized extraction routines or develop applications within the ERP system to do what users were asking for. But, as many business information consumers know, that process is often expensive and time-consuming. All that is about to change.
The business environment has changed profoundly over the past few years. New regulations, developments in technology and global expansion have altered the way we work with one another. The AICPA closely monitors each of these factors and considers how they impact the future of the accounting profession.
Given this constantly evolving landscape, we need to take a closer look at how changes in the environment affect those who plan to enter the profession – the newly licensed CPAs. Experience and education requirements for licensure vary by state, but passing the Uniform CPA Examination is a must for everyone.
Have you received a survey asking for your feedback on what content should be tested on the CPA Exam? (Remember to check your spam folder!) If so, your input – which directly reflects your experience in practice – is instrumental in helping us understand exactly what topics the Exam should include.
CPA firms are at an important turning point. We have a choice: we can stick to the practices and procedures we know—ones that have admittedly helped us build the success we enjoy today—or we can take the kinds of bold steps that will ensure our future relevance and prosperity. This will be an understandably tough decision. To prosper over the long-term, though, firms must address the radical changes taking place in the domestic and international marketplace, including increasing market and technical complexity facing CPAs and their clients, as well as the expectations of a new generation of professionals. The profound transformation in so many areas requires a similar alteration in the way we manage our practices. If our firms don’t identify the obstacles preventing us from affecting meaningful change, we risk being left behind. In particular, there are three pitfalls that will make it challenging even to get started on the road to transformation.
Entrepreneurism is on the rise. With start-up fever igniting the Bay Area to the Chesapeake Bay what CPA hasn’t considered—even for a moment—starting his or her own firm? We each started our own firms and know firsthand about the advantages and challenges of venturing out on our own. A few months ago we participated in a live Facebook chat on how to start your own practice. Many of you joined us and asked great questions such as: What prompted you to start your practice? What is the best way to get your name out there? What were some of the unexpected challenges you encountered?
What’s our advice? Here are seven tips for starting your own firm:
CPA financial planners and others who advise clients on healthcare and estate planning issues will want to know that the Medicare annual open enrollment period runs Oct. 15 through Dec. 7, 2014.
Many people understand they can switch from their 2014 standalone Part D prescription drug plan to a new standalone plan for 2015. Medicare beneficiaries can also drop their Part D coverage altogether, although this is not a good move unless you are moving from traditional Medicare to a Medicare Advantage plan with a prescription drug feature.
Medicare beneficiaries can also do the following:
1. Change from traditional Medicare to a Medicare Advantage plan.
2. Go from a Medicare Advantage plan to traditional Medicare, although the choices may be limited when it comes to finding a Medicare Supplement plan.
3. Transfer from their current Medicare Advantage plan to a new Medicare Advantage plan for 2015.
4. Move from a Medicare Advantage plan without prescription drug coverage to a plan that offers prescription drug coverage. Note that the Medicare beneficiary can also move from a Medicare Advantage plan that offers prescription drug coverage to one that does not.
In all of my dealings with employers on Affordable Care Act (ACA) matters since 2010, I’ve reached a few reasonably sound conclusions. Here’s one: employers are faking it! They are doing so when it comes to how IRS controlled group rules influence the ACA’s “Applicable Large Employer” (ALE) determination. It is this determination that serves as a foundational component of the ACA’s Employer Shared Responsibility (“pay or play”) mandate. To recap, employers of 50 or more full-time equivalent employees (100 or more for 2015) are expected to offer ACA compliant coverage (play) or pay assessable payments. The amounts of these payments are based on factors that include the number of full-time employees and how many of them qualify for Exchange-based premium subsidies.
Over the past three decades, a growing number of CPAs expanded their service offerings beyond tax compliance to help individuals and families address and plan for all aspects of their financial lives. These aspects might include paying for children’s education, transferring wealth, protecting assets, funding retirement and more.
As CPA financial planners help their clients realize their long-term goals, this expansion of service offerings opens up new revenue streams and deepens client relationships.
Earlier this year, as part of the AICPA’s PFP Section’s CPA Financial Planning Thought Leadership series, I moderated the webcast, “Being an Advisor of Choice.” Panelists shared their perspectives on working with individual and closely held business clients, the benefits of this expanded business model to the practitioner and firm and the outlook for maintaining this model. (See the note at the end of this blog post about how to download a recording of the webcast.)
During the webcast, we discussed a great deal of information. Here is a quick rundown of eight ways you can become your clients’ “advisor of choice.” How many of these are you already doing and how many would you like to accomplish?
1. Add Financial Planning to Your Practice
Tax compliance is becoming a commodity. Integrating financial planning into your practice offers a chance to make a deeper connection with clients, requiring you to give objective advice and keep clients’ best interests at the forefront.
2. Determine Your Value Proposition
When you add financial planning to your practice, you also add value, but you figure out what kind of value you want to add in order to grow your bottom line. The last thing you want to do is become just another firm offering the same services as everyone else.
3. Avoid Becoming a One Trick Pony Advisor
Clients are outgrowing the services of mono-line advisors. If you were simply a specialist in tax or investments, your clients will grow beyond your services.
4. Know Your Strengths
Position yourself as the advisor of choice. You have an excellent professional reputation, offer high quality professional advice and possess transferable skills that are diverse and applicable to various client situations.
5. It’s all About the Relationship
Deepen and enhance the relationships you have with existing clients who already understand your role as their advisor of choice. You may even need to reposition yourself with existing clients, particularly CFOs or controllers who retain you just for audit work or corporate compliance.
6. Listen to Your Clients
Competent advisors do their best work when they sit down with their clients to let them voice their concerns about the current financial world they live in. Listen for issues you can help understand and solve.
7. Build on Your Three Distinguishing Qualities
As a financial professional, you are competent and objective and maintain the highest integrity. Remember these qualities and seize the best opportunities you can.
8. Break the Mold
Advisors who are willing to address the wide range of issues that come into play and work with their clients and other specialists to serve their needs will be in a great position to be a strong, key resource.
AICPA PFP Section’s Thought Leadership Series
Access the free webcast recordings and presentation materials from the AICPA PFP Section’s Thought Leadership series featuring forward thinking from CPA financial planners advising their clients in tax, estate, retirement, risk management and investments. Two panels will host free thought leadership webcasts on November 12th and 13th covering investments and the outlook for the CPA financial planning profession.
Lyle Benson, CPA/PFS, CFP®, President and Founder, L.K. Benson & Company. Based in Baltimore, Lyle’s firm specializes in personal financial planning, tax and investment advisory services for high income individuals and families, as well as corporate executives and entrepreneurial, closely held business owners across the country. Lyle is chair of the AICPA’s PFP Executive Committee.
What were you doing at 7:32 p.m. on April 23, 2011? Chances are that Google, Facebook, Microsoft, Apple, your phone company and your Internet Service Provider know. If you share a computer, all of the other users may know. Your employer may know. As will the government, if it so chooses. And if this isn’t enough, they may even know where you were when you were doing it.
Is this a problem? Well, that depends. Do you like getting bombarded with online ads and email obviously based on your recent surfing habits? Are you researching that perfect gift for your wife or husband, or planning a big surprise party? Perhaps you are pregnant or researching medical symptoms and don’t want anyone to know?
Let’s go back in time to December of 1978. You are longing for the weekend and thinking about going to see the new movie “Grease”that everyone is talking about. You need to get away from the three channels on your television set, as all that you see is the news about anti-Shah protestors in Iran and the craziness of someone giving a baseball player $32 million in a four-year contract. Maybe President Carter can do something to get us back on track. Well, at least you have your brand new Betamax and can record whatever television you miss – as long as it is not more than one hour long...
At work, your client has asked you to perform bookkeeping services for them. The client needs you to process their payroll, record certain journal entries in their general ledger book and calculate the amount of sales tax that they need to remit to the state. Additionally, the client needs you to prepare monthly financial statements for the owners and the bank that provides the entity’s line of credit. You sit down with a few sharpened pencils and ledger paper and draft those financial statements. The recently issued Statement on Standards for Accounting and Review Services No. 1, Compilation and Review of Financial Statements,requires that you, at a minimum, perform a compilation engagement with respect to those financial statements that you submit to your client. So, you issue a compilation report along with those financial statements. The application of the compilation literature is easy to understand and apply.
As part of its on-going commitment to helping members maintain and enhance audit quality and to improve the consistency of quality across the profession, the AICPA recently launched the Enhancing Audit Quality Initiative. Because of the critical nature of the initiative, the AICPA Peer Review Team will take immediate action on two facets of the initiative: identifying emerging industries and high priority audit areas and applying a combination of outreach, training, and robust peer reviews in these industries and areas.
The Peer Review Team has developed a list of potential “deep dive areas” or emerging industries and risk areas, derived through careful analysis of the following:
CPAs and other financial services firms largely rely on referrals to grow their client base and stay in business. This business model has worked for a countless number of years. However, the way clients make decisions has changed, which affects your rate of referral. Under the new model, a referral is only the first step. Used the right way, technologies like websites, email and social media can energize your current client base to make referrals and increase the conversion rate of referral prospects.
There is no longer one linear funnel for client referrals, but rather a series of influencing points that lead to channels where the prospect is most comfortable making contact. Today, a referred prospect is likely to make initial contact in a number of ways:
Through your website. They will visit your website to understand why your firm is different and whether your value proposition aligns with the prospect’s expectations.
Social media. A prospect will turn to social media to get a sense of your firm’s focus and culture. They may also turn to review websites that allow users to leave feedback, such as Yelp.
Email newsletter. Prospects might sign up for your e-newsletter to get a preview of what it is like to be your client.
October is here - the leaves are changing color, there’s a chill in the air and we’re drawing close to the end of another year. At your CPA firm, you’re likely getting ready for performance reviews, preparing for busy season and working on strategic planning for 2015 and beyond. As you put together your marketing plan, be sure to spend some time formulating a social media strategy. This will help determine how often you blog, what social channels you use and whether you invest in social media advertising – all of which will impact how you allocate resources for the coming year. Creating a social media strategy doesn’t have to be a long and arduous process. You can get started by asking these five questions:
Wouldn’t life be great if we all had a crystal ball? While wizardry and fantasy may sound like a great way to see the future, no one would actually advise a client or employer on assumptions based in magic and hearsay.
Typically, we serve our clients and employers based on fact-based historical reporting, which tells us where we are and where we’ve been. However, there is another way to offer guidance and opinion: predictive analytics, a process-driven activity that combines facts about the past with inferences to anticipate the future.
Dr. Smith left you a voicemail at 10 p.m. on a Sunday night. You couldn’t make out the entire message due to a weak cellphone signal and background noise, but you gathered he was talking about the Health Insurance Portability and Accountability Act and needing you to sign something called a Business Associate Agreement.
Dr. Smith is an excellent dermatologist, but you know from doing his taxes that regulatory compliance isn’t necessarily his forte.
As part of its commitment to serving member needs, the AICPA Forensic and Valuation Services Section regularly surveys FVS professionals to get a sense of the state of the practice today and the trends these professionals will face in the short term. According to the recent 2014 AICPA Survey on International Trends in Forensic and Valuation Services, done in conjunction with CPA Canada, there is currently a healthy demand for forensic and valuation services, and very strong growth potential for the future. This is good news.
The survey found that 76 percent of forensic and 54 percent of valuation respondents expected their practices to grow, with the majority expecting growth of between 10 percent and 50 percent over the next two to five years.
Here are a few predictions — by practice area — from the survey:
Have you ever wondered what a day in the life of an auditor will look like in the near future, and how it will be different from today’s practice? Here is a glimpse…
You enter the audit room at 7:30 a.m. on Tuesday morning as the external audit partner of XYZ Enterprises, Inc. After settling in, you sign into AART, the audit firm’s Automated Audit, Reporting and Tracking system that was developed to leverage the widespread availability of information on a 24/7 basis. AART’s technology monitors XYZ Enterprises’ controls, transactions and account balances continuously. As you review the dashboard you notice that all of your audit status indicators are green, except for one. You also notice that you have been copied on a message that AART sent to your controls team notifying them of a modification to a key control parameter in the centralized enterprise resource planning system. You begin looking into the situation.
According to Google, 81 percent of searches for products and services now happen online. By the end of 2015, the majority of web searches will be via a mobile device. Your CPA firm’s website needs to be easily found in search results to ensure you are able to capitalize on this game-changing trend.
Refreshing your marketing to maintain its effectiveness despite the change in how potential clients find your services is not as difficult as you might think. The right approach is to focus on the areas that offer the biggest return and commit to an ongoing improvement program. Your core digital asset is your website. It will deliver the first impression to cold prospects and can reinforce referred prospects’ positive view of your firm. The goal in both cases is to give the visiting prospect a reason to take the next step and contact your firm—lead conversion.
Here are five steps you can take to increase the number of lead conversions from web visitors:
Is your client’s organization considered a public business entity under the new U.S. GAAP definition? Queries sent to the AICPA’s Private Company Practice Section Center for Plain English Accounting indicate that members continue to struggle with whether or not their entity qualifies to use the Financial Accounting Standards Board’s new Private Company Council accounting alternatives.
Understanding whether a reporting entity is a PBE is the first step in understanding whether it can apply the PCC accounting alternatives. Some of the most common areas of confusion regarding an organization’s definition as a PBE surround broker-dealers, equity-method investments held by PBEs, and governmental units or entities. The following explanations should help to clarify when to use PCC accounting alternatives.
As public accounting is a competitive industry, CPA firms have the luxury of being selective and only hiring the best and brightest. Many firms host early identification programs, which typically take place in the summer and are geared toward freshman, sophomore and junior accounting majors working toward 150 credits. Most firms call them “leadership programs.” These programs typically last one to three days and serve to build relationships early with the top students and hire as interns and then into full-time hires.
Indira Gandhi is elected as the first female Prime Minister of India (Photo credit: Wikipedia)
Indira Gandhi once said, “I suppose that leadership at one time meant muscle; but today it means getting along with people.”
Despite being the first female Prime Minister of India and an extremely influential figure in world history, those close to Gandhi say she felt uncomfortable around educated people because of her own lack of schooling. Despite her persona as a commander, she constantly had to pull from her inner strength and circle of confidants to establish herself outwardly as a leader.
What I draw from this is that leadership and role-modeling in any situation means action, not position. How friends, colleagues, and others perceive us should be centered in our ability to gather the appropriate input to make sound decisions, rather than our need to rely on where we fall in the relationship. However, because of the role modeling we’ve experienced and become conditioned to throughout our lives, many of us think we have to emulate the role of the leader—always decisive and always in control.
If I’m not perceived as a leader and enter into a collaborative situation, I may come across as weak. While that may be the general belief, is it accurate?
If you are a CPA who audits employee benefit plans, you understand how complex they can be. You know how critical it is to make certain that you and your staff have all of the knowledge and resources you need to perform quality audits in this area. Luckily, the AICPA has several resources available to assist members in performing EBP audits.
One such resource is the Center for Plain English Accounting. I am the director of the newly launched CPEA, the AICPA’s national A&A resource center for Private Companies Practice Section member firms. Members can submit written questions to the CPEA and receive written responses and gain access to reports, alerts and webinars on A&A topics including EBP, revenue recognition and Private Company Council accounting alternatives. Watch the video below for more information on CPEA.
I often meet CPAs who are committed to enhancing their practices but are missing crucial intelligence that would allow them to benchmark their results against those of similar firms. If you could use thorough and meaningful data on how you compare with the competition, but you’re not sure how to get it, the AICPA PCPS/TSCPA National MAP Survey is your answer. The profession’s premier benchmarking study, which remains in the field until July 31, the National MAP Survey, offers participating CPAs a comprehensive platform to perform a personalized diagnostic review of their firm every two years, deriving important takeaways. The new dynamic reporting options make it easy to download reports in a variety of modes, including Excel, PowerPoint and PDF files, based on each firm’s needs.
We’re halfway through the year and while there are many areas you can focus on to further develop your CPA practice, now is a great time to think about how you’re marketing your firm. It’s natural to think that effective marketing requires a commitment of extensive resources, but that isn’t necessarily true. A corporate blog is a marketing vehicle that can be managed by your existing staff.
A blog offers many opportunities: it allows you to demonstrate the expertise of you and your staff; it lets you showcase your values as a firm and convey your firm’s personality so you can attract the “right” clients; it allows you to answer frequently- asked questions and introduce potential clients to your staff. Another big advantage of blogging is that it can help your firm rank higher in search engine results.
No matter what you might have heard about the risks and long-term value of bitcoin, chances are good that your clients and employers will want to know more about how the adoption and use of digital currencies as a means of commerce may affect the way they do business.
Although bitcoin is still very much in its infancy, its impact should not be underestimated or ignored just because it is new and somewhat mysterious. Described by bitcoin.org as “a consensus network that enables a new payment system and a completely digital money,” bitcoin is not the only digital currency in today’s market. In fact, according to Coinmarketcap.com, there are 303 digital currencies in at least 637 markets, with trendy names such as “Litecoin,” and “Darkcoin.”
Due to the American Taxpayer Relief Act of 2012 and the net investment income tax, many clients have no doubt experienced the impact of the new multi-layered tax environment. According to a panel of leading CPA financial planners, clients ranging from those with high net worth to those with middle income were shocked to be hit with the NIIT and higher tax rates this tax season, and have been receptive to proactive planning to mitigate in future years.
Consequently, 2014 is the year to sit down with your clients and provide proactive guidance, education, planning and expertise. Here are a few helpful tips from our panel of experts to help you do that.
Regardless of the size of your business, somebody should be responsible for maintaining your company's fixed asset or depreciation schedule. Since in most cases this is not a full-time job, it may be neglected. Updating accounting records is unavoidable for most of us. However, many of us are incredibly busy. Who has time to pull out a fixed asset list - just to make an addition? If your company is large enough to employ an asset manager, you may be up to speed with fixed assets. If not, who is responsible for managing this schedule and do they have the information they need? New tax regulations that went into effect Jan. 1 allow organizations to go back and write off those assets on the books that are long gone. The regulations even allow for partial dispositions of "units of property" that previously were not permitted.
Many preparers and practitioners have been anxiously awaiting the new, converged revenue recognition standard for quite some time. The standard was released by the Financial Accounting Standards Board and the International Accounting Standards Board on May 28. How can we prepare for a smooth transition to the new standard? What major changes will we encounter as we begin implementing it? The new standard is principle-based, which is a big shift from the industry-specific guidance we have today. In preparation for this change in approach, the AICPA has established 16 industry task forces which are developing a new accounting guide containing helpful tips and illustrative examples for applying the new revenue recognition standard.
As the co-chairs of the Construction Contractors Revenue Recognition Task Force, we have been thinking about our major implementation issues for a while now. Here are our top 12 concerns so far.
Since the release of the final tangible property regulations, practitioners and taxpayers have shared numerous concerns about their complexity and administrative burden. One of the most common complaints is the de minimis safe harbor election.
The de minimis safe harbor provision, if elected, allows a taxpayer to immediately deduct amounts paid to acquire, produce or improve tangible property and gives the taxpayer additional protection from future Internal Revenue Service examination adjustments. The safe harbor provision has two separate thresholds ($500 for taxpayers without an applicable financial statement and $5,000 for taxpayers with an AFS). A certified audited financial statement is considered an AFS but reviewed or compiled financial statements are not.
If you’re like me, the answer to that question has changed over the years. I’ve answered everything from “shortstop for the Kansas City Royals” to “managing partner of a CPA firm,” and everything in between—and there is a lot in between. But, whatever your career aspirations are, no matter what position you hope to have, or what industry you hope to be in when you retire, you will need people to help you get there.
People who turn lofty dreams and career aspirations into reality almost always have one thing in common: a tremendous network of people. How do you develop this network when you’re a young professional? Where do you begin? It seems daunting to think of going from the seemingly insignificant network you graduated with to the “who’s who” list that some partners at your firm carry with them. While you could go to every one of the grip-and-grin networking happy hours offered every month, how effective is that? Is that really the kind of interaction you’re seeking?
Is the United States somewhat behind the rest of the world when it comes to embracing sustainability practices and reporting? Some seem to think so. However, a shift has occurred over the last couple of years as companies are beginning to recognize that sustainable business practices are simply good for business. This point was made in a conversation between Susan Coffey, AICPA Senior Vice President, Public Practice and Global Alliances, and Jessica Fries, Executive Chairman and Board Director of the Prince of Wales Accounting for Sustainability Project, also known as A4S. Many companies around the world are beginning to take notice of risks within their business models, such as their reliance on non-renewable forms of energy or their excessive water consumption, and are working toward replacing these practices with sustainable solutions.
It is important that we, as CPAs and trusted advisers, work on creating long-term relationships with clients at every opportunity. We cannot forget that public accounting has and always will be a people business. While it has a little bit to do with number crunching, most clients want to hire and retain a professional they trust and respect.
That includes you. Whether it is your first year as a CPA or you are a seasoned senior CPA, you are making direct contact with clients on a more frequent basis than many of your managers, directors and partners. As a result, your daily interactions with clients should not just be about getting the answers you need to complete your work papers. Instead, your client interactions should include a conscious effort to build credibility and a personal relationship.
Here is a collection of easy things you can do to start building positive relationships with new and existing clients.
Suppose you are the owner of a convenience store. You purchase newspapers at a fair wholesale price from a man named Harry. Each morning Harry delivers a stack of newspapers to your shop by 6:30 a.m., prior to the morning rush.
At 6:00 a.m. one morning you are walking in your neighborhood and see Harry taking a stack of newspapers from a corner. Harry places the papers in his backpack and continues on his way.
Soon after, Harry arrives at your shop to make his usual delivery. Should you continue your business with him now that you have observed him taking those newspapers?
My husband and I, both CPAs, are expecting a baby boy in August. Of course, being the fun-loving accountants that we are, as soon as we found out about the good news, we started thinking about tax planning for our new addition. Names, nursery theme, telling our family about the good news – those items could wait. But, tax planning, that was a today item.
I’ve been fortunate to work with many clients with children in my public accounting days, so I knew the general tax items that we needed to think about, such as tax credits, flexible spending accounts, household employee/nanny rules, etc. However, I wanted to refresh myself on these items and share some insights with anyone who has or will have a family. Here are some tips for you parents-to-be:
Is this a scenario you could relate to during busy season? It’s one of those days. Your schedule is jam packed. You’re working in overdrive to get it all done. The next thing you know, the receptionist buzzes you with news that one of your clients is in the lobby to drop off some paperwork. They would like to see you if you have a few minutes.
“ARGGHHH…not today!” you’re thinking. “I just don’t have time.” As tempting as it would be to decline the last minute request, you’re mindful that a client is right there in your office. That means you have the opportunity to amp your trust factor while they’re visiting. Maintaining a hands-off approach can make client retention tough. In my practice, the biggest complaint we hear from prospective clients who are considering a new firm is that their current tax expert never talks to them.
It’s here! The new revenue recognition standard, that is. I believe it is the most pervasive and across-the-board important topic that the Financial Accounting Standards Board and the International Accounting Standards Board could have tackled. This new standard eliminates the transaction and industry-specific guidance found in current U.S. GAAP and replaces it with a principle-based approach. Also, it applies to all public, private and not-for-profit entities. I implore you, no matter what your professional discipline, to pay attention to this new standard. And please, don’t get comfortable because the effective dates seem far off.
Are you sure the final words in the new standard are consistent with what you have been hearing to date about this project? Are you comforted in having specific revenue recognition rules replaced by a more principle-based approach? Are you confident that unwritten industry norms of accounting practice formed over decades are consistent with the new standard? In this video, AICPA Senior Technical Manager for Accounting Standards Kim Kushmerick provides an overview of the standard, in addition to highlighting key items to consider and helpful AICPA resources.
Crowdfunding is a popular but complex term. To some, it refers to a large campaign to raise money for charity. To others, it involves pre-ordering products that will be financed by the received contributions. Another form is equity crowdfunding, also known as crowd investing.
The concept of crowdfunding is not new. For hundreds of years, similar local models included citizens of a village or town have coming together to fund a project. These days the Internet makes it possible to operate similar models on a larger scale. It is an effective, transparent and democratic model to raise financing.
Many service men and women encounter challenges upon returning from active duty, including finding employment. Starting a business is an attractive option, but like many entrepreneurs, veterans need support. The good news is that CPAs are in a great position to offer help.
Thanks to the Veteran Fast Launch Initiative, U.S. veterans have the opportunity to gain free help from experts. Through AICPA’s partnership with SCORE, an organization that provides mentoring and training to entrepreneurs, this program connects veterans with CPAs across the country. CPA volunteers provide up to five hours of free financial advice to veterans on starting and growing a business.