Friday, February 15th, 2019

New State Electronic Filing Requirement

“You have to learn the rules of the game, and then you have to play better than anyone else.” – Albert Einstein

One of my clients recently talked to me about the 10 business day rule for state electronic filing. I was unaware.

Since then, I have talked to several more of my clients and most of them were not aware of this new “rule.” The new requirement has been implemented for every software company and is intended to reduce the error rate of returns filed without the latest update(s).

Via CCH: The requirement mandates that “users/customers of this product who attempt to e-file 10 or more business days after a production release will be required to download and apply the product update.”

Read more about it here via CCH and also here via Accounting Today.

  • "There are no rules here - we're trying to accomplish something."
  • Thomas Edison

Thursday, February 14th, 2019

It’s Still True – Happy Valentine’s Day!

“If you have only one smile in you give it to the people you love.” – Maya Angelou

On Valentine’s Day, you will be thinking of someone you love. Hopefully, you will be thinking of several someones you love. People love other people, dogs, cats, horses, Spring, Summer, the mountains, the beach, the nighttime sky and much more.

I love all of that (and much more). But, unlike most people, I have a special love and it has been going on for decades! Yes, I love CPAs!

Fill your Valentine’s Day with love!

Photo on 2-13-13 at 2.58 PM

  • "All you need is love. But a little chocolate now and then doesn't hurt."
  • Charles M. Schulz

Wednesday, February 13th, 2019

A Typical CPA Firm

“The idea that you will wake up tomorrow and everything that you know to be true about your practice is suddenly gone is a gross overstatement.” – Darren Root

While many profession leaders are warning CPAs that the typical public accounting firm is a dying breed and that its demise will happen rapidly, it is not what I observe in my consulting practice.

In the “typical” CPA firms I work with, there is definitely a need to become more digital and take advantage of the efficiencies that result. Most of these firms still do a lot of compliance work but also do a lot of true consulting work with their clients. I do expect them to make the transition into more of a consulting practice but I don’t expect it will happen rapidly.

That’s why I enjoyed reading Darren Root’s recent article via Accounting Today – The Traditional Is Still Very Much Alive.

Read it and see what you think. How will your firm make its way into the future?

  • "Because technology and client demands will continue to push firms to adapt, we know that transformation, at some level, is inevitable."
  • Darren Root

Tuesday, February 12th, 2019

Unlimited PTO – Things To Consider

“A vacation is what you take when you can no longer take what you’ve been taking.” – Earl Wilson

I am aware that several firms have now adopted an Unlimited PTO policy. If you are considering this type of policy for your CPA firm, I want to share some very interesting insights from someone who has experienced unlimited PTO first-hand. He is an audit manager with a firm in the western part of the USA. I hope you find his comments helpful if you are considering adding this benefit.

My current firm does not have unlimited PTO, but I have worked at firms that did. I can’t offer a written policy – there really wasn’t one – but I can offer some considerations, most of which you probably are already aware.

First, doing away with traceable measures (PTO available/used) demands reliance on other performance measures to determine whether the unlimited policy is being abused. Partners/managers need to pay closer attention to metrics at the individual employee level.

Regularly reviewing metrics such as individual realization, time-to-completion, deadlines met (or missed) as well as the timing of PTO days taken becomes essential.

Be sure your practice management system can provide that information before enacting the unlimited policy. Also, the policy assumes that everyone will “do the right thing.” Be aware that not everyone will do the right thing and be prepared to take action against those that abuse the system. If you allow unchecked abuse, it will become rampant.

In an unexpected twist, you may need to actually force some people to take PTO. Without the pressure of the old use-or-lose policy, some of those Type A folks will be more inclined, or more pressured, to work instead of taking time off. I’m sorry I can’t cite a specific study, but there is some evidence that the unlimited PTO policy actually results in less time away from the office.

Finally, be aware that some states (California and Washington, for example) have passed legislation regarding required sick leave. This is a number that may, by law, require tracking and that might throw a wrench in your unlimited policy. There are typically exceptions if your leave policy is more permissive. And the standard disclaimer: check with your state or your employment law attorney before changing your policy.

  • "Isn't it amazing how much stuff we get done the day before vacation?"
  • Zig Ziglar

Monday, February 11th, 2019

Performance Standards

“Performance standards help to set expectations and provide consistency.” – Sharlyn Lauby

When a new hire enters your firm or even if it is a short-term intern, do they really understand what is expected of them?

Of course, you provide a detailed job description, maybe not to an intern but to a full-time new hire. What if you communicated even more clearly?

I believe some clearly defined Standards of Performance are in order. Why not rename and reformat your job descriptions into performance standards?

If you want a sample of Standards of Performance for accountants working in a CPA firm, just let me know, I am happy to share.

Here’s a good article titled, Employees Become Successful When They Know What Success Looks Like, from Sharlyn Lauby, @hrbartender.

  • "The true measure of any business leader and manager is performance."
  • Brian Tracy

Friday, February 8th, 2019

Think

I read the following quote on Twitter yesterday and it made me THINK.

“The best leaders I’ve studied discipline themselves to take time out of their working lives to think. They all muse. They all reflect.” – Marcus Buckingham

During a coaching session recently, I asked a question. I’ll ask it of all of you reading this post:

What, specifically, do YOU think you need to work on to get to the next level?

You probably will not be surprised at the answer from my session – – “I need more time. I need to think more long-term and strategically now if I want to move up in the firm but I’m too deep in the details.”

I agreed because I contend that managing partners, firm administrators, and other internal management leaders need more time to THINK. You cannot address the issues strategically if you never have time to THINK about the BIG picture. Too many of you are so caught up in the details that you rarely THINK long-term.

Did you ever wonder about the slogan THINK? It became widely used at IBM in its early years and is attributed to Thomas Watson. Following is the history from the IBM archives:

When Thomas J. Watson joins the Computer-Tabulating Recording Company — the forerunner of today’s IBM — in 1914, he brings with him the “Think” motto he coined when he managed the sales and advertising departments at the National Cash Register Company. “Thought,” he says, “has been the father of every advance since time began. ‘I didn’t think’ has cost the world millions of dollars.” Soon, the one-word slogan “THINK” appears in large block-letter signs in offices and plants throughout the company.

In the SEARCH box, on the left side of my website type the work THINK and browse through how many posts I’ve done on the topic of thinking. Maybe some of them will inspire you. (There are way too many to read all at once!)

  • "Difficulties mastered are opportunities won."
  • Winston Churchill

Thursday, February 7th, 2019

Mergers 2019

“A dream doesn’t become reality through magic; it takes sweat, determination and hard work.” – Colin Powell

My firm did its first acquisition/merger in 1993. It was a fast way to grow and to enter a new market. It worked for us and the firm did several more over the years. The firm also acquired non-traditional firms such as an employee benefits firm and a TPA company when it was very unusual to do so.

Things have certainly evolved in the CPA firm M&A market since 1993. During our first merger, all we could think about was not losing clients of the acquired firm. We did not lose clients but we lost employees. We learned from that experience and for the next acquisition around 1996 and going forward, we focused on retaining talented people. It had become more important to retain people than clients.

Daniel Hood of Accounting Today recently interviewed several CPA consultants who focus on M&A. There are major changes ahead for M&A. Valuations of firms are declining. It is becoming a buyer’s market. Acquirers are more selective and do not necessarily want more compliance clients. The cost of technology, going forward, is also an issue, especially for smaller firms.

Be sure to read the interesting article. I know many of you are experiencing a succession dilemma.

  • "The difference between the impossible and the possible lies in a man's determination."
  • Tommy Lasorda

Wednesday, February 6th, 2019

The Hiring Challenge

“Practice does not make perfect. Only perfect practice makes perfect.” – Vince Lombardi

I was reading an article via the Journal of Accountancy titled, Small firm spotlight: How I recruit and hire new accountants. Cheryl Meyer interviewed Kenneth Cerini, the managing partner at Cerini & Associates.

I could certainly relate to much of what Mr. Cerini divulged.

Recruiting and hiring is an art, not a science. When you are hiring people, you can’t cram a square peg into a round hole. We’ve brought people in from bigger accounting firms and realize they are not the right fit overall. We have much smaller clients, and our clients need more handholding. That’s why I love interns. I’d rather invest more money in the training and be able to bring on people at a younger level and help them grow within our atmosphere. You learn a tremendous amount during your first two to three years in public accounting.

At my firm, we found that hiring a 5-year person from a big four firm was not a very smart move. We had many small business owners and our 5-year people were so much more knowledgeable on many types of situations. It seemed to us that a 5-year person working at one of the big national accounting firms just did a one-year person’s duties five times.

However, that being said, firms are often very successful in training smart people no matter what their background. Often it is the training programs that need attention and, of course, the experienced new hire’s attitude is key.

  • "Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired, and success achieved."
  • Helen Keller

Tuesday, February 5th, 2019

CES Top Techs

“Everyone thinks of changing the world, but no one thinks of changing himself.” – Tolstoy

Every year, my good friend Roman Kepczyk does his review of the Top Techs and Innovations from the Consumer Electronics Show (CES) in Las Vegas.

He focuses on what the various new technologies mean to those of you working in a CPA firm.

Read his article here.

  • "The real danger is not that computers will begin to think like men, but that men will begin to think like computers."
  • Sydney Harris

Monday, February 4th, 2019

The Most Difficult

“The difficulty lies not so much in developing new ideas as in escaping from old ones.” – John Maynard Keynes

There is something you should do but it is very hard to do. It is difficult and challenging and easy to avoid.

As a leader in a CPA firm, you read about new trends. Many of you attend one or even more CPA firm management conferences each year. You are involved in your state society and take an active part on committees, etc. During these activities, you learn about what your firm needs to do to move successfully into the future.

You bring these ideas back to your firm. If you are a partner you probably set the date for a firm leadership (or partner) retreat. You spend a lot of money on the venue and the facilitator. You make sure that the new trends are on the agenda of the retreat.

At the retreat, the need for change and the adoption of the new trends into the firm is heartily agreed to by the attendees. A strategic plan or action plan is developed. Everyone is excited.

IntentionsIn the weeks and months following the meeting, nothing happens. You are too busy. It seems everyone else is also too busy.

The most difficult thing is taking action. As I often say when describing change inside an accounting firm, “Good intentions, no implementation.”

  • "The best way out of a difficulty is through it."
  • Will Rogers