Life Planning: The Conversation of a Lifetime

Life planningIt’s just not enough to give your clients the tools they need for long-term financial planning; to really connect with them, it is good practice to humanize your approach by integrating life goals with financial goals. This is “Life Planning.”

When I started my practice, about 50% of my clients were psychologists, psychiatrists and other mental health professionals. After I began attending their workshops and learned more about human psychology, I started thinking about my own business relationships. To truly be a benefit to my clients, I needed to find a way to develop an authentic relationship they would value.

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10 Steps to Finding a Career Development Mentor

Mentoring keyQuick--what comes to mind when you hear the word “mentor”? Did you envision a well-connected senior leader who is older, wiser and much more experienced than you are? While it’s true that most mentors once fit that description, the current thinking around mentors and mentorship has expanded. Today, we recognize that age, experience or a person’s profession doesn’t necessarily mean they will be an effective mentor. The main requirement is that a mentor is someone you highly respect, who can offer feedback, and is interested in helping you develop professionally and holistically.

Professional development experts have been reassessing other aspects of mentorship as well, including the notion of time. In the past, mentoring relationships were often expected to happen over the course of years, or even without any clear end date. Today, however, professional development experts advocate for mentoring relationships that are for a specific timeframe--ideally, six to 12 months.  

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New Version of Bank On It Teaches Financial Literacy Skills

Bank On ItCPAs have an innate calling to educate the public about their finances. The need for this education has never been greater. A recent online survey conducted by Harris Poll on behalf of the AICPA showed that a staggering 75% of college students acknowledged that their student loan debt would require some sacrifices in their lives after graduation. So how can we help students develop a better understanding of their financial situations prior to attending college, while also setting them on a path to financial success?

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Tips to Make Your Not-for-Profit Clients’ Next Audit a Success

Nfp auditTimes have changed significantly from when I started performing audits over 20 years ago. U.S. Generally Accepted Auditing Standards have evolved, and now emphasize the auditee’s responsibility for financial reporting. Today, not-for-profits are in charge of identifying and recording the adjustments necessary to close their books, gathering the financial statements and designing control systems needed to prevent, detect and correct errors that may occur. As a result, the cost and efficiency of the audit is directly impacted by how well your clients prepare. Here are some best practice tips to help them prepare:

Create a detailed timeline.  It is a good idea to meet with clients at least three months prior to the start of the audit to identify key dates and milestones, such as when the client-prepared information will be completed, when the audit will start, when draft financial statements will be provided to management, and when meetings with the audit or finance committee and board of directors will take place. If your firm is also providing tax services, the timeline should include the expected completion date of the client-prepared tax schedules, as well as the delivery date for the IRS Form 990. All parties should agree to, and receive a copy of the schedule containing these items. This will define each party’s responsibility in meeting the final deadline. 

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Happy New Year and a Look Back at the Top 10 Posts of 2015

Happy new yearAll of us at AICPA Insights wish you a joyous holiday season and a Happy New Year. This will be our final post for 2015, but we’ll be back with more exciting content the first week of January. In the meantime, in case you missed them, here’s a look back at the top 10 posts of 2015:

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3 Initiatives to Improve Employee Engagement in Your Firm

Engaged employeeWhat if the concept of employee turnover was foreign to your firm? What if the Monday morning faces of each of your staff shone like those of children lined up for entrance to Disneyland? What if your firm had so many clients eager for your help that your biggest problem was managing new business?

The best firms have already figured out that motivated and passionate employees equals success. The real challenge lies in retaining those employees and keeping them engaged and inspired so they aren’t tempted to look for work elsewhere. Here are three initiatives to help your firm enhance employee engagement and inspire long-lasting dedication.

1.    Get Employees Involved

An engaged employee is one who has a strong connection with their firm. That connection can be developed when the firm’s vision, mission, and core values are created and lived out through the involvement of all employees – not just trickled down from higher-ups. To help increase employee involvement, establish an engagement system that will benefit everyone in the firm, such as:

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Tangible Property Wins Demonstrate AICPA’s Advocacy for Taxpayers

AdvocacyThe AICPA continually advocates on tax matters to improve tax policy and administration for tax practitioners and taxpayers alike. Though the issues and challenges we grapple with could be difficult, our goals are simple:  transparency, simplicity and certainty.  Taxpayers and practitioners have scored a major victory for certainty and simplicity as AICPA-supported provisions in legislation will soon become law.  Taxpayers will have to deal with fewer late and amended Forms 1099 that have $100 of income or less impact, fewer identity theft situations due to Forms W-2 will soon have truncated Social Security numbers, and clients will be able to rely on several permanent rather than temporary tax credits.

We also achieved more simplicity when the small business tax community received two big wins to make the “repair regs” more taxpayer friendly.

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Member Profile: Rebecca McNeil, CPA, CGMA

Rebecca McNeilRebecca McNeil, CPA, CGMA is the chief financial officer of The Arts Finance Cohort, a collaboration between five Pittsburgh-based arts organizations including a theater company, a performing arts venue, a community arts space and ceramic studio, a glass studio and a crafts center. As a shared CFO, she provides strategic and operational financial expertise the groups could not afford individually. Her task is to move the organizations beyond year-to-year, break-even operations to long-term sustainability, as she helps each create a capitalization plan. McNeil is also a classically trained clarinet player. In this AICPA Insights Member Spotlight, we find out how Rebecca is using her management accounting skills to help an industry that she is passionate about: the arts.

1. Tell me about your day-to-day responsibilities.

There’s a wide variety of work. I might review one group’s [IRS] 990 and make corrections to the form, perform current-year projections for another group and work on policies and procedures for another. For some organizations, I'm providing higher-level oversight and strategic planning advice and for others I'm offering more upper-level staff support by updating their record-keeping. I have to evaluate with each organization based on the staff they have in place.

2. What are your direct areas of responsibility?

My job is to not just show the numbers, but to tell the story of the organization through the numbers. I’ve redrafted nearly every organization’s financial statements at this point. I’m trying to get more clarity on the numbers and present them in a way that makes sense.

There’s also been some education for the organizations on their financial statements so they can understand where their focus should be. I’m trying to help them manage their cash flow while understanding how much fundraising they need to do. We’re trying to get realistic, achievable budgets, and in some cases that requires resetting the budget process.

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4 Benefits of Finding the Right Niche

SpecializingIt’s flu season -- conveniently coinciding with busy season. It’s time to stock up on cough syrup and analgesics to ward off the aches and discomfort of the flu. A visit to your family doctor might also be in order, if you can get an appointment. But what do you do if that ringing in your stuffy ear is a sign of hearing loss and not some flu-induced infection? What if those sniffles just won’t clear up on account of that broken nose you suffered last spring? Well, that’s when you visit the ENT-- the Ear, Nose and Throat specialist. She sees patients who need more focused care. She’s managing a niche practice.

For many CPAs, setting themselves apart in a competitive market is a critical goal. The popularity of practice areas such as personal financial planning, IT specialization, fraud and forensic accounting, business valuation, tax and assurance services demonstrates the value that finding the right niche can offer. Here are a few of the many benefits that help explain why more CPAs are choosing to specialize.

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Taxes and Terrorism: Why Data Could Become Vulnerable

Data breachThe world watched and listened in horror recently as reports of terrorism in Paris and San Bernardino, Calif., dominated the airwaves. In what is becoming a regrettably familiar scene, countries around the world joined the victims in mourning. But as the days wore on, attention increasingly turned to the covert, encrypted digital communications of the perpetrators. The government has begun questioning the wisdom of unbreakable encryption as a result. It might all seem a million miles from the concerns of tax practitioners. But is it?

In the wake of potential terrorist attacks, government officials are again addressing the complexities of obtaining intelligence data in an encrypted world. John Brennan, Director of the CIA, recently outlined these complexities in a talk at the Center for Strategic and International Studies in Washington:

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AICPA President & CEO Highlights Profession’s Successes and Future

BarryAICPA President and CEO Barry Melancon, CPA, CGMA, reflects on the accounting profession’s successes in 2015 and highlights how the profession will continue to adapt to today’s changing environment. Citing initiatives to drive quality; support CPAs’ services in accounting, auditing and tax; and boost the CPA pipeline, Melancon sees a strong profession shaping its opportunities for future success.

1) What were the profession’s most significant accomplishments this year?

The profession enjoyed another tremendous year of achievements on many important fronts. I think the growth and retention of our membership is the best evidence of that, and now we are the professional home for more than 412,000 members. Our membership is broad in scope, with members working in many different types of environments. Whether in public accounting, management accounting, government, education or another area, they all see the value in our efforts to support the CPA reputation and market position, help firms and organizations drive success and advance the profession for the future.

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CPA Exam Q1/Q2 2016 Score Release Timetables

The Q1/Q2 2016 score release timetable is now available. Score release timelines are updated biannually on AICPA Insights and on the CPA Exam website. For more information about score release and the scoring process, please visit the Psychometrics and Scoring page.

The National Association of State Boards of Accountancy releases the scores to candidates and state boards of accountancy based upon the target score release dates listed in the tables below.

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BEPS: FATCA on Steroids or Much Ado About Nothing?

ArbitrationBy now, most CPAs have heard of FATCA (Foreign Account Tax Compliance Act), which requires foreign financial entities to report information on their U.S. account holders to the IRS.  In return, the U.S. (in some cases) is sharing information on accounts held in this country by foreign nationals with the individual’s home country. The goal of this information sharing is to ensure that individuals are reporting all their income properly and paying the appropriate amount of tax.

Now the focus is shifting to tax avoidance by multi-national businesses. In early October, the Organization for Economic Co-operation and Development (OECD) released the final reports from their two-year project targeting Base Erosion and Profit Shifting (BEPS) activities. BEPS occurs when businesses take advantage of differences in countries’ tax laws, tax treaty provisions and (occasionally) special arrangements with a local tax authority to minimize their total worldwide tax liability. Some of the ways businesses do this include:

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Remaining Competitive in the Context of an Evolving Profession

Myriam Madden Paul_StahlinThe AICPA’s joint venture with the Chartered Institute of Management Accountants (CIMA), the world’s largest and leading professional body of management accountants, has been very successful with more than 150,000 finance professionals obtaining the Chartered Global Management Accountant® (CGMA®) designation, including more than 50,000 U.S. CPAs.

I recently had the pleasure of speaking with two of the profession’s leaders to discuss their thoughts on the profession and the evolution of the joint venture between the AICPA and CIMA. Paul Stahlin, CPA, CGMA, is the former chairman of the AICPA’s Board of Directors and Myriam Madden, FCMA, CGMA, is the president of CIMA.


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Continuing the Journey of Inclusion: The Year in Review

DiversityAs 2015 draws to a close, I’ve been reflecting on the 12-month journey that our society and the accounting profession have made in the area of diversity and inclusion. This has been a banner year for diversity and inclusion in the profession, especially in relation to gender issues. Additionally, there are a number of new opportunities for accountants to capitalize upon as a result of a key diversity and inclusion-related ruling raised by the U.S. Supreme Court.

In July of 2015, KPMG announced Lynne Doughtie as their U.S. Chairman and CEO. In addition, growth in leadership among women within the accounting profession continued. Tommie Barry recently concluded her year as AICPA Chairperson of the Board of Directors. At the same time, the AICPA’s governing Council voted Kimberly Ellison Taylor into the Vice-Chair position of the AICPA Board of Directors at its fall meeting.  Of even greater note, Kimberly is the first African American voted into such a position within the AICPA. 

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The Ins and Outs of Holiday Gift Giving at the Office

Gifts at the officeTo give or not to give: that is the annual question. Gift giving at the office can be fraught with confusion—do I give gifts to my colleagues? What about my boss? What’s an acceptable amount of money to spend? Can’t I just buy everyone a bottle of wine?

Here are a few tips to help you navigate this tricky time of year and emerge smiling and ready to wish everyone a Happy (insert holiday here).

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Reaching Agreement to Embrace Change

CPA Exam changesAs we near the end of 2015, the AICPA’s Examinations team is wrapping up the development of the next version of the CPA Exam, and is confident in the depth and relevance of the final proposal we put forth in September. In the Exposure Draft, Maintaining the Relevance of the Uniform CPA Examination, we captured feedback from a multi-year research initiative that ensures the Exam remains truly aligned with what the profession needs from its next generation of CPAs. Responses were sought to the Exposure Draft during the AICPA’s public comment period that closed on November 30, with critical feedback received from key stakeholders, including firms, state CPA societies, academics and state boards.

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Tax Extenders: Been There, Done That

Hamster in a wheelWhat has been will be again . . . There is nothing new under the sun."

      - Ecclesiastes

It seems like writing about expiring provisions is a regular rite of passage and frankly, it doesn't feel like the religious experience alluded to in Ecclesiastes. The last time I spoke with you about tax extenders (Nov. 28, 2014), I asked: Whats the million dollar topic on membersminds these days? The choices were the following:

  1. The IRS
  2. The congressional lame duck session
  3. Extenders
  4. Starting busy season
  5. Government appropriations
  6. The Keystone Pipeline
  7. Immigration reform
  8. Bipartisan cooperation in Washington
  9. All of the above

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Not-for-Profit Board Service is a Meaningful Way to Give

Board responsibilityWe are in the midst of giving season— a time when many of us pause to be grateful for what we have and to help those who are less fortunate. This is the time of year when many CPAs and finance leaders are asked to serve on not-for-profit boards, an experience which can be an incredibly rewarding way to give back. However, volunteering on a nonprofit board requires a significant time investment and comes with serious legal, fiduciary and stewardship responsibilities. 

Before saying “yes” to board service, ask yourself the following questions to help you determine if the board you are considering is the right choice for you.

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Reinventing the Way We Learn Accounting

Accounting edWe live in an age of short attention spans and demands for more productivity. In my role as an accounting professor, if I don’t grab my accounting students’ attention and immediately explain the relevancy of a topic, they tune out.

Today’s young people have a greater aptitude for learning new skills, especially when it comes to new technological applications. They enjoy experimenting, and they don’t mind failing – as long as failure is just a hurdle on the way to the reward at the finish line.

Short attention spans and the need to multi-task are not limited to college students. The nature of today’s business environment requires CPAs to be multitaskers. Thirty years ago when I was a CPA in public practice, we used to take CPE courses once or twice a year to catch up on new standards and guidance. Today, changes are taking place so quickly that we need to be learning new material daily. Our instructional methods and learning habits need to adapt accordingly.

Nano Learning: Breaking Instruction Into Small Pieces

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Attracting, Engaging and Inspiring Future CPAs

Pipeline picOur commitment to the CPA pipeline is stronger than ever. Efforts of the AICPA, firms, state societies and many others have led to the number of accounting college graduates growing in the past 12 years from 45,000 in 2001-2002 to 82,000 in 2013-2014. Additionally, while about 24,000 candidates successfully completed the CPA Exam in 2008, we have averaged slightly over 26,000 since then.

The profession’s focus on the CPA pipeline has long been a priority. That will continue, with new approaches to attracting, engaging and inspiring the future generation of CPAs. We are constantly creating, implementing and evaluating programs to build the pipeline.

Over the past year, we have launched or refined many AICPA programs to align better with our goals. Our initiatives are focused on three themes:

1) Increasing the recognition of the CPA on campus;

2) Expanding reach beyond 4-year colleges; and

3) Building relationships with academics.

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Native American Indian History Month: Dominic Ortiz

Dominic OrtizTribal, Family and Mentor Support Helped Guide Dominic Ortiz to Valuable Opportunities

In November, the AICPA along with the entire nation, celebrates Native American Indian History Month. For Dominic Ortiz, a CPA, CGMA and enrolled tribal member of the Prairie Band Potawatomi Nation, the month is about recognizing the contributions that First Nations Peoples have made to the U.S. and sharing tribal culture and traditions. It is also about honoring his heritage by using his experience as a CPA and CGMA to continually give back to the community that has given him so much.

Ortiz credits his tribe, as well as family members and mentors, for supporting, encouraging and guiding him. Ortiz began his academic career at Haskell Indian’s Nation University. While there, he became president of the American Indian Business Leaders (AIBL), a nonprofit dedicated to empowering business students.

While he was a student, he met Tom Clevenger, a CPA and professor in Accounting who was working with his tribe as a business consultant. Clevenger and Ortiz’s father, a tribally elected member of the tribal council, had become friends.

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Happy Thanksgiving from AICPA Insights

ThanksgivingWe’d like to wish you a happy, healthy Thanksgiving. We are grateful for your readership, comments and continued interest in AICPA Insights. Enjoy turkey (or Tofurky) and stuffing with family and friends—and we’ll be back with more food—for thought, that is—next week.

Happy Thanksgiving.

--AICPA Communications

Thanksgiving wishes courtesy of Shutterstock.

Shaping Our Future: Driving a Relevant Profession

Christen_Tim_headshot_resizeI’m honored and excited to be taking on the role of chairman of the AICPA Board of Directors at such a pivotal time in our profession’s evolution. Although today we enjoy tremendous success and respect, we must acknowledge that transformative changes in the business environment pose many potential risks to our relevance. We work in an evolving marketplace, one that’s defined by new technologies, complexity, specialization, a changing workforce, globalization and other mega trends. We know that just because something worked in the past doesn’t mean it will continue to work in the future. Now it’s incumbent on us to forge solutions that will preserve our relevance going forward.

Fortunately, CPAs are starting from a position of strength. Let me share my own story with you.

Like many AICPA members, I’m a first generation professional. I grew up in the small farming town of Belmont, Wisconsin, about 65 miles from Madison. I’ve spent my entire career with Baker Tilly Virchow Krause, except for a two-year stint when I worked as a management accountant for one of our firm’s clients, an automobile dealership. The owner taught me something that’s critical to our profession: a sense of urgency. Emil’s dealerships measured productivity every day and frequently asked customers for candid feedback. I thought these were brilliant ideas and put them to work when I returned to Virchow Krause. We began questioning the established rules and implementing the lessons of urgency and action. We measured revenue in real time and solicited immediate feedback from our employees and clients. Our sense of urgency helped us grow from a small Wisconsin firm to the 13th largest firm in America. We didn’t wait for the marketplace to determine our future for us.

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Holiday Shopping: A Cautionary Tale

Holiday present

 Holiday Shopping: A Cautionary Tale

As a teenager, every year I knew where I would be the Saturday before Christmas: getting dragged from store to store by my father, who inevitably waited until then to go shopping for my mother’s gifts. This annual exercise in procrastination and family bonding was a recipe for arguing and, more importantly, left my dad no opportunity to shop around for the best deals.

Here’s how you can avoid these holiday shopping pitfalls and get good deals, stay on budget, and remember to factor in more than just gifts when you calculate your holiday spending goals.

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Women's Initiatives Executive Committee CPA Firm Gender Survey

18866-386 WIEC CPA Firm Gender Survey Infographic_HighRez

Click here to download a PDF of this infographic.

How to Retain Retirement Planning Clients – For the Long Term

Retirement planThe latest AICPA PFP Trends Survey, a quarterly poll of CPA financial planners, yielded interesting insights into the impact of strong client relationships.

This year’s market fluctuations could have really thrown clients into a tailspin of concern about their retirement savings and resulted in them making impulsive decisions about leaving the market. Despite the market volatility, a majority of CPA financial planners’ clients exhibited resolve, with only 16% of their clients contacting their CPA with concerns about getting out of the market. The survey quantified the impact of specific reasons for this tenacity, including client education, age and their relationship with their CPA financial planner.

You can have an impact on your clients’ anxiety, or lack thereof, about market fluctuation and long-term financial planning. According to the survey:

Exposure to a CPA financial planner positively impacted their clients’ response to market swings. Clients who have a long-term, more established relationship with their CPA were more confident than new clients. The scale of 1 (fearful) to 5 (confident) has more established clients rating a 3.6, with newer clients feeling slightly fearful at 2.5

Furthermore, clients who were educated about the market rated their confidence level at 3.4 versus 2.4 for those with little interest or knowledge.

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Six Tips from a 30-year EBP Auditing Veteran

EBP auditsI tackled my first employee benefit plan audit in 1984. It was a full-scope defined benefit plan audit, and I’m proud to say that I still have that same audit client today. As a sole practitioner with three staff members, I spend about 30% of my time conducting 12 EBP audits annually. I also peer review EBP audits for other firms.

Much has changed since 1984. Between 2006 and 2015 alone, the AICPA Employee Benefit Plans—Audit and Accounting Guide increased two to three times in size. The number of service providers and the types of investment options have also grown. Some firms used to use EBP engagements as “fill work” during slow periods, but with the complexities that we now see in these plans, specialization is a necessity.

When I speak at conferences and visit firms as a peer reviewer, I often get questions from CPAs looking to get into EBP auditing or to improve their practices. The following are some frequently asked questions and answers that I hope you’ll find helpful:

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CPAs Give Back This Veterans Day

VeteransIn this country, we owe a debt of gratitude to veterans. Each year, more than 180,000 service people exit the U.S. Armed Forces after their loyal service. As they return to civilian life, veterans can find financial advice, guidance on how to run a business and help planning for the future from local CPAs.

Since 2011, the AICPA has partnered with the mentoring and training organization, SCORE to connect veterans with CPAs across the country. Through the Veteran Fast Launch Initiative, CPAs have an opportunity to volunteer and provide up to five hours of free financial advice to veterans about starting or growing a business.

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How to Help Your Clients Get Ready for Retirement

Retirement pigClients approaching retirement may be eager to make lifestyle changes, find a second profession or hobby, or even punch out their bucket list. Before they retire, they should consider income tax planning, healthcare coverage, long-term recordkeeping and housing options as part of their preparation plans.

Minimizing Taxes and Healthcare Costs

Clients want to know how much retirement is going to cost and how you can help them minimize those costs. Here are four strategies to consider with your pre-retiree clients:

Before collecting Social Security: Help your clients lessen their tax brackets in retirement by timing ROTH IRA conversions or traditional IRA withdrawals to fully use lower tax brackets each year from ages 60 to 71.

When transitioning from employer-sponsored health coverage to retirement health coverage: Your clients must consider COBRA along with Medicare and Medicare supplemental policies so they can avoid gaps in coverage. Help them do this by offering them education and guidance. Also understand that Medicare supplemental policies do not consider COBRA as creditable coverage, so make sure you consult with a qualified professional that specializes in Medicare and Medicare supplemental policies whenever your clients have COBRA or are continuing work with employer or union coverage after age 65.

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Important Changes to LinkedIn Groups Have Arrived

LinkedInAcross the social media space, LinkedIn is one of the most widely adopted platforms among CPAs. In an effort to simplify the platform for users, LinkedIn will be making some changes to its popular groups feature over the coming weeks. Below are some of the key changes that will improve the experience.

  • All groups are now member only. Simply put, this means that every group will require a request to join. Before, some groups and conversations were open to the public. However, now you will have to be a member of any group you would like to participate in.
  • Standard vs. Unlisted. All LinkedIn groups will fall into these two categories, compared to the multiple settings previously offered. One of the biggest impacts this change will have is that unlisted groups will no longer show up in search results. If you’re having trouble finding a group, visit the website of the organization that runs it. They will typically have the links to all social networks they have a presence on.

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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’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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Back to School: Budgeting 101

College student moneyFor CPAs, budgeting is as easy as debits on the left, credits on the right. It is simply the way it is. But not everyone is a talented budgeter. A recent AICPA survey revealed that college students aren’t as monetarily savvy as they think they are.

Just how much do college students need to brush up on their budgeting skills? While 57 percent of students surveyed rated themselves as having excellent or good personal financial management skills, nearly half reported having less than $100 in their bank account at some point in the last year, 38 percent said they had borrowed money from friends or family in the last year, and 11 percent had missed a bill payment. It is clear that college students’ perceptions of their financial skills and reality are not aligned.

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3 Ways Gen Xers Are the Key to Leading Millennials

Sheryl sandbergOdds are that if you manage a business unit or a large team of employees, you’re part of the group of 74.9 million Baby Boomers. This year, for the first time in your life, your generation will no longer be the largest demographic group in the United States.

Millennials now number 75.3 million, according to the Census Bureau, and due to immigration are projected to increase to 81.1 million by 2036. Although demographers differ on the birth range of Millennials (also known as Generation Y), most fall between 1981 and 2000, which means that the oldest are 34 and the majority are in their 20s.

Millennials have a profoundly different approach to the way they find, use and share information—both socially and at work. They don’t read newspapers, watch TV news shows or use the yellow pages. They read—a lot—but it’s not likely to be on printed paper. They’re great networkers, but the majority of their conversations take place electronically rather than face-to-face or by phone. Many find the constraints of working regular office hours—from the office—burdensome and old fashioned. But that doesn’t mean they’re unwilling to work long hours.

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5 Ways to Create a Sense of Belonging through Sponsorship

Men sponsorshipThis blog post is the second part of a two-part series on intentional sponsorship, or dedicated efforts at a firm to ensure that everyone with leadership potential has access to a sponsor.

At HORNE, we launched a formal sponsorship program at our 525-person firm because we recognized first and foremost from a business case perspective, for us to be relevant in the future, we must develop a diverse leadership team.  Collaboration, connecting and creativity require diverse leadership and we cannot win with less than half the leadership talent.  Failure to develop a diverse leadership team will limit our ability to grow, to attract great talent or to have a sustainable succession plan. We also estimated our tangible cost of our turnover at $3 million a year which includes recruiting, onboarding and training.  We excluded the additional costs of lost knowledge and lost client relationships. 

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Cyber Liability Insurance for CPA Firms

CoveredWe see the mega data breaches on the news, and wonder if our personal information has been stolen.  If some of the world’s largest companies cannot protect personal data with their large budgets, what can a small firm do? One step is to purchase cyber liability insurance. This is a relatively new product offered by a few insurers, and often under a different name and with varying levels of coverage. Being a relatively new product, there’s a lot of catching up to do – so let’s start with the basics for partners to think about.

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Digital Estate Planning: More Than a Lifeline

Digital willWhether you think of our connected world as a benefit or as a time waster, there’s no escaping the complex red tape associated with providing access to our digital assets after we pass away. What lives online is neither easy to access nor is it clear cut as to who can get to it.

This is an important focus for all of us, our families and our companies, but it also provides an opportunity for CPA planners to understand digital estate planning in order to help their clients plan for their future.

Not having a digital estate plan as part of your clients’ wills is the same as not having a will at all. In other words, if there is no specific direction given to provide designees access to files, email and even social media accounts, the clients’ wishes may not be able to be carried out. Although there have been small strides made by some states in this digital space, a digital estate plan is absolutely necessary to avoid any questions or ambiguities. Idaho, Indiana and Oklahoma addressed legislation providing access to social media and blogging accounts, while Connecticut and Rhode Island have dealt with access rights to email.

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Changing the What, When, Where and How of Learning

Do you remember when there was one basic kind of accounting and all accountants did pretty much the same thing?

CompetencyNeither do I. But I do know that the demand for broad business knowledge is increasing exponentially. Finance and management disciplines – such as strategy, human resources, risk management and data analysis, to name just a few – are converging, and in today’s business environment, companies expect employees to demonstrate their competence in these areas. This means that CPAs and CGMA® designation holders who want to support their organizations’ growth must develop new competencies.

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