Author: FFC

What’s RPA? Will bots take my job? How can my firm get started with automation? 

To answer these questions and more, we spoke with two automation experts – Jotham Ty, the founder and CEO of Gappify, a provider of automation software for corporate accounting teams and Lesley Mast, CPA, who is leading the adoption of robotic process automation (RPA) for her firm at Rea & Associates in Wooster, Ohio.

Participants were enthusiastic and inquisitive during our 20-minute LinkedIn Live event, How CPA firms can get started with automation. After the event, Ty and Mast provided additional answers to questions.

What’s the difference between RPA and automation?

Ty: People use the terms automation and RPA (robotic process automation) interchangeably, but that isn’t always correct. Lots of automation types – like RPA – fall under automation. Some RPA software vendors are expanding into intelligent bots, and those bots fall under Artificial Intelligence (AI), a more complex form of automation. RPA is considered a stepping-stone toward AI. There are many types of automation, but RPA is the most popular today.

What processes can be automated? Do you have specific examples you can share?

Mast: CPAs can delegate many mundane, time-consuming tasks to a bot, such as data entry, invoicing, or even starting a tax return. Our firm uses a bot to pull clients’ monthly bank statements, which then saves them to a drive on a server for us to use. We’re saving 10 to 15 minutes for each statement we previously pulled manually, saving us several hours per month.

Ty: You can use automation in AP and AR vouchering. One of our clients uses their bots for cash collections. The company’s CEO said implementing RPA has increased collections by 60%. Addressing this sort of operational task with automation is a common first step.

What are bots? And one participant asked, “Are bots going to take my job?”

Ty: A bot is a type of software that can automate repetitive, low-value tasks that humans do. Bots are not about taking humans’ jobs. They perform the boring tasks so that people can focus on work that requires strategic thinking.

Mast: Think of bots as an assistant who handles those mundane tasks for you.

What are the benefits of using automation?

Mast: RPA takes away the time wasters and makes you available for more valuable projects. Our staff has more time to spend on clients’ reports and other deep-thinking work that we enjoy. Firms that implement RPA can focus on things only humans can do, like developing strategy, solving problems and building client relationships.

Bots reduce human error in audits by accurately copying data across different files. They can also run calculations to determine financial statement accuracy, internal consistency and tie-outs of prior-year amounts.

What kind of investment is needed? Is RPA just for large firms?

Mast: Automation is a hot topic in our field, so CPAs need to first invest in themselves. I know the AICPA is offering the Digital Mindset Pack (free to members until the end of the year) and there’s an automation module in the pack. That’s a great place to start.

The costs vary, depending on what your firm wants. It’s like deciding what type of car you’ll buy: There are many options. We interviewed vendors who offered our firm two options. One would train our staff in programming. The second option proposed that our vendor handle the bot programming for us. We chose the long-term, costlier investment and trained our people to do the programming. Honestly, programming has been challenging and exciting, but I’m adding skills to my toolbox.

Ty: There’s this misconception that RPA is only for large firms or organizations. Low-cost, low-code solutions exist for a sole proprietor or small business. Don’t let the cost of RPA prohibit you from exploring the possibility.

How do you measure the success of an RPA project? What criteria do you evaluate?

Ty: The primary measure for quantifying success is ROI or cost savings, but many organizations are excited about improvements in key business metrics. For example, autonomous bots and workflow solutions can accelerate cash collections. The benefit of cash flexibility from improved customer collections is harder to quantify, but just as critical to business success.

More info on automation

If you want to learn more about RPA, watch our 20-minute LinkedIn Live event. To read more about automation, check out this experiential brochure with sections tailored to public accountants and management accountants.

Association Staff

     

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Today is International Accounting Day, the day the world celebrates YOU. And because it’s your unique talent that attracts clients, we want to have some fun by discovering your “true accountant personality!” Think you know? Take this quiz to find out exactly which type of accountant you are. When you finish, share it with your accounting friends so they can do the same.

 

 

     

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This year has been a whirlwind. I’m sure that the extended April 15 filing deadline, the payment deadlines and helping clients navigate PPP funding have kept you busy. Like me, you’re probably just catching your breath. When you’re ready, why not take a moment to reflect on the year you’ve had and consider your goals for your practice. Have you spoken with clients about their retirement or estate plans? Now might be the time to proactively and more formally incorporate financial planning into your tax practice—and begin identifying yourself as a CPA financial planner. Here are four steps you can take to get started: 

1. Create a roadmap. When you set out on a trip, you plug the destination into your GPS and review the directions. The same goes here. Where do you want to go and how will you get there? The Roadmap to developing a tax & financial planning business is a great resource to help you get off to a strong start. It lays out key priorities to consider, such as selecting a business model and examples of specific financial planning activities you can offer your clients. CPAs who have transitioned from tax to financial planning created a 10-part podcast series that’s ideal if you prefer to learn on the go. 

2. Hone your skills. Before year-end, make time for learning. You have many options, so pick what speaks to you, whether that’s attending webcasts on recent legislative changes or taking courses on year-end planning. The coursework associated with the Personal Financial Specialist (PFS) credential, including the Personal Financial Planning (PFP) certificate program, provides a comprehensive and strong foundation. I recommend it. An added benefit is that they can help you reach your CPE requirements for the year.

3. Engage in holistic client conversations. Proactively talk with clients regularly. It’s amazing what you’ll uncover if you ask probing questions that often lead to new ways you can support them. There’s a webcast 10 (free CPE for PFP Section members) on post-election year-end planning that will illustrate actionable planning ideas you can put into practice to help clients before the year ends. Even if you consider yourself a tax specialist, you can advise clients in areas beyond tax. You’ll help your clients navigate challenges while further illustrating your role as their trusted adviser. You don’t have to have all the knowledge as long as you have a network of peers who can offer expertise. Your clients will appreciate that you’re coordinating all activities relating to their finances.

4. Explore financial planning software. You may want to consider investing in additional tools to help you. While there are several types of software available, I find it helpful to focus on two: financial planning software and client relationship management (CRM) software. The former helps manage your client’s financials and has a client-facing interface while the latter helps you maintain relationships with clients and prospects. This guide, written by a CPA financial planner who offers both tax and financial planning services, lays out what you’ll want to think through, and includes a checklist to get started.

Regardless of where you start, your clients will appreciate that you are expanding your offerings to serve their needs. They’ll realize the benefits of having a trusted adviser who takes a comprehensive look at their finances. Take your practice to the next level and see the results these efforts bring to your practice.

Deborah Meyer, CPA/PFS, Family Wealth Manager and CEO, Worthynest. She has over 15 years of experience as a CPA financial planner. Her areas of technical expertise include business exit planning, entrepreneurship, charitable giving, college planning and tax strategies. Deb received the AICPA’s Standing Ovation Award in 2018.

     

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Of the many lessons 2020 has taught us, one is the importance of self-care. We are often so busy making sure we take care of the things around us that we bypass taking care of ourselves. In our efforts to make sure our employers, clients, children, parents and pets have what they need to thrive, we can overlook our health and happiness.

As we wrapup Breast Cancer Awareness Month, I urge you not to make this mistake. Being a two-time breast cancer survivor, I cannot stress enough the importance of early cancer detection — it saves lives. I encourage you to prioritize your well-being and get your screening on time. If you are already late, make an appointment today.

Some additional examples of how you can practice self-care as October ends include:

• Set a reminder on your phone to perform a monthly breast self-exam.
• Get ahead of it and schedule your next appointment for an annual clinical breast exam or mammogram.
• Get information from your parents about your family’s cancer history, and share the information with your children.
• Talk to your doctor about breast cancer risk factors and symptoms.

Of course, there are many other important health care screenings to discuss with your doctor. To make sure you and your loved ones stay healthy, you can practice self-care together!

For those of you who are leaders in the profession, it is important to discuss self-care and well-being in general with your staff and to lead by example. Younger professionals look to you for guidance on how to act, so “talk the talk” and “walk the walk” when it comes to taking good care of yourself. If you are a young professional, establish good habits that will last throughout your career. Make time now for routine health care checkups.

Regardless of whether you are an experienced professional or just getting started — whatever your practice area or where you live — take time for yourself and your well-being. While Breast Cancer Awareness Month may be ending, your health should always be a priority.

Tracey Golden, CPA, CGMA, Chair of the American Institute of CPAs, Chair of the Association of International Certified Professional Accountants

     

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According to the Centers for Disease Control and Prevention, about one in four adults in the U.S. — nearly 61 million people — is living with a disability that impacts their life activities, including work.

In 1990, The Americans with Disabilities Act became law, prohibiting discrimination based on disability. And while Americans with disabilities are protected by the law, some employers still overlook crucial elements to maintaining inclusivity in the workplace.

Disability inclusion means understanding the relationship between the way people function and how they participate in society. It means making sure everybody has the same opportunities to participate in every aspect of life to the best of their abilities and desires.

In honor of National Disability Employment Awareness Month, here are five points for making your workplace more inclusive.

1. Not all disabilities are visible.

Although the accounting profession came in at the top of Bestschools.org’s list of The best careers for the physically disabled, not all disabilities are physical. Cognitive disabilities or mental health disorders such as ADHD, anxiety or depression, are not visible but impact a person’s life. Chronic illnesses can also impact a person’s day to day functions. Disabilities we can’t see could lead us to view others as being rude or inattentive, but the person may just need a little support or leniency to get the job done. 

People with chronic illnesses, cognitive disabilities or other less-visible conditions may have difficulty meeting deadlines or concentrating — especially during a global pandemic. If you question a colleague’s quality of work, avoid insinuations and consider asking a question. Perhaps something like: This isn’t what I was looking for, but can you explain the process you used to complete this?

Be thoughtful in your communication.

2. Employees with a disability have the right to choose the terms of

Some people with disabilities openly communicate about it; others prefer discretion. In any case, your organization should have a crystal-clear protocol for how employees can request sensible accommodations. The protocol should be visible to existing employees in the handbook or other office materials, and on recruiting web pages for potential hires.

Learn to ask new employees — direct reports or team members — the right questions. When first establishing work relationships or launching new projects, you could ask: Is there anything you’d like me to know that might affect your performance? or What kind of support can I provide to help you accomplish your tasks comfortably? Also, consider scheduling a recurring check-in meeting.

Be kind and avoid pushing an employee to reveal their disability if they’re not comfortable doing so.

3. Discriminatory language — including jokes — is unacceptable.

Fortunately, language has evolved greatly over time. Words that were once certified medical terms are considered egregious today. Words like lame, invalid, nuts, psycho, etc. are considered ableist language as they are offensive and oppressive. Ableism is discrimination and social prejudice against people with disabilities or people who are perceived to have them.

Reducing human beings to their disabilities suggests that they are somehow inferior to those without disabilities. There should be no tolerance for ableist language or microaggressions in the workplace. Make that the rule and enforce it in accordance with your organization’s disciplinary policies. And encourage your employees to speak up and report the use of discriminatory language.

4. Knowledge is power.

Learn about your unconscious biases to avoid a misstep. Being educated will help you and your staff recognize and respect behaviors that may be related to specific disabilities.

Staff will need access to training materials — courses, webcasts, brochures — to learn about situations people with various types of disabilities experience in mainstream society. Additional factors — culture, ethnicity, sex, gender-identity, sexual orientation and socioeconomic background — also shape people’s experience of discrimination. For example, some communities consider mental health to be taboo, which can lead to withdrawal or feeling ashamed. The CDC provides great resources on disability inclusion to get you started and you could hire a professional speaker to educate your employees.

5. The accounting profession needs to be inclusive.

A person with a disability may be discouraged to apply for a job for fear of discrimination or harassment, and some might not see accounting firms as a potential employer.

Organizations like the American Association of People with Disabilities (AAPD), The Arc, and Employer Assistance and Resource Network on Disability Inclusion (EARN) can help you understand how to create inclusive hiring processes.

For more ideas about workplace inclusivity, check out Foundation Diversity and Inclusion Programs and consider registering for the “Microaggressions in the Workplace” webcast taking place on Nov. 9.

Association Staff

     

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Ballot initiatives relating to cannabis will be voted on in five states — Arizona, Mississippi, Montana, New Jersey and South Dakota — this November. Topics being considered are presented in Marijuana on the ballot.

If you are a CPA working with clients in the cannabis industry, or if you think you might in the future, you’ll want a firm grasp of the issues regarding cannabis accounting.

Cannabis? Marijuana? THC? CBD? Hemp?



Like most industries, the cannabis industry has its own vocabulary.

Cannabis and marijuana both refer to the genus of plant that produces THC and CBD. THC, short for tetrahydrocannabinol, refers to the psychoactive substance found in varying quantities in cannabis. CBD, the abbreviation of cannabidiol, produces no euphoric effect but is used for an assortment of ailments. Hemp, by legal definition, refers to various parts of the Cannabis sativa L. plant that contain no more than .3% THC by dry weight.

Legality varies

Federally, THC and CBD are Schedule 1 controlled substances — the same schedule as cocaine and heroin — defined as having no currently accepted medical use and a high potential for abuse.

However, as of this blog, 33 states have laws permitting the growth, sale, and processing of cannabis in different forms. While several states allow recreational use, some allow use for medicinal purposes only. To further confuse matters, certain states allow CBD preparations only, while others allow CBD and THC preparations for medicinal purposes. And while hemp-based CBD products are federally legal, some states still ban them.

In 2013, the U.S. Department of Justice (DOJ) issued guidance commonly known as the Cole Memorandum. While the memorandum did not legalize cannabis federally on any level, it did allow for the exercise of investigative and prosecutorial discretion in connection with marijuana businesses operating in states that have legalized its use. The Cole Memo provided a consistent nationwide federal policy on prosecution. However, the memo was rescinded in 2018. As a result, the industry is left with the prospect of enforcement policies that differ among the 93 existing U.S. Attorneys.

Banking considerations in the cannabis industry

Problematically, many banks will not open accounts for cannabis businesses. Strictly interpreted, doing so amounts to money laundering, making banks that do so technically in violation of federal law. As a result, many cannabis businesses must operate on a cash basis. This complicates the accounting issues and reporting complexity that CPAs are best positioned to address.

A taxing question

For businesses operating in states where cannabis is legal, federal income tax will need to be paid on any profits. This tax is in addition to any state income, sales or excise taxes paid.

Because of its illegality on the federal stage, cannabis is subject to Internal Revenue Code Sec. 280E restrictions that disallow deductibility of certain regular business expenses for operations trafficking in controlled substances.

Recently, the Treasury Inspector General for Tax Administration issued a report recommending relief to legal cannabis businesses under Sec. 471(c). However, to date, there is no guidance from the IRS and no available court rulings to test this strategy. As it stands, IRC Sec. 280E can result in a federal income tax burden that exceeds net profit.

Legal, taxation and banking issues make cannabis business valuation a challenge.

Being legal or illegal based on geography, licensure and permits, medical vs. recreational sales, and the lack of good metrics for comparable businesses make clear valuation difficult. One-time startup expenses can be high, necessitating careful analysis of what’s recurring and what isn’t.

To attract buyers or investors, valuation of cannabis businesses must be carefully executed and documented with evidence.

If you want to engage in this work, explore strategies and methodologies meticulously to produce the best results.

The industry is expanding.

Due to the increasing number of states legalizing cannabis in one form or another, the industry is evolving rapidly. Some estimates put the legal market for cannabis at more than $70 billion — more than corn and wheat combined — by 2027. CPAs will be needed to provide sound financial advice and support to cannabis businesses.

Regardless of your state’s current laws on cannabis, the industry is expanding quickly. If you want to provide services to cannabis businesses, you’ll want to be prepared.

To help you confidently and competently support your clients, the AICPA & CIMA Cannabis Industry Conference will present sessions on these and many other topics relating to accounting for cannabis. Join via livestream Dec. 7-8.

Association Staff

     

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Main Street America needs CPA expertise more than ever.

Members like you have been working tirelessly to support small businesses and help our country’s economy. You don’t have to face these challenges alone.

Since the start of the pandemic, the AICPA has doubled down on efforts to support the profession and the work you are doing to support your clients and employers.

As your trusted member organization, we serve you, keeping you up to date with changing government guidance and ensuring you have the practical help and resources to do your job.

Here’s how.

Advocacy and practical resources

• The government needs to support businesses and employees — we shared nine actions the government must take and we asked Congress to modernize tax provisions in response to the pandemic.

Modernizing tax provisions included allowing deductions for Paycheck Protection Program (PPP) expenses and providing a small business tax credit that would allow businesses to invest in technology and support virtual offices for staff.

• You need to focus on the important work of helping businesses without having to worry about excessive deadlines. We worked to secure tax filing and payment deadline relief so you can.
• A coalition of 3.7 million businesses, collectively employing more than 78 million people and led by us, sought to protect and stabilize our nation’s economic engine during the period of crisis. The coalition recommended that PPP applicants use the gross payroll approach in calculations.

Opportunities for the present and future

New CPE, including data analytics to identify business drivers of the organization, is being developed to give you opportunities to add even more value to your clients or businesses.

Membership allows you to stay up to date on key developments, new rules, hot topics and emerging trends in the ever-changing accounting world.

• Attend timely webinars and a town hall series on a range of topics — many virtual events include free CPE for members.
• Browse the Global Career Hub for new jobs, plus career advice and tips to help you stay ahead of the competition and get your next role.
• Strategize to rebuild the economy. We want to hear from you about ideas you have and resources you need to succeed.

More than ever, businesses need the accounting profession.

While you support your community, during and after the pandemic, we are committed to supporting you. We’re stronger together.

We’re a force for good. Here for good.

Association Staff

     

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At the beginning of 2020, before the COVID-19 public health crisis severely impacted communities across the globe, the World Economic Forum sounded the alarm about climate risk in its 2020 Global Risks Report. For the first time, the top five long-term risks were all environmental: extreme weather, climate action failure, natural disaster, biodiversity loss and human-made natural disasters. Considering that in 2019 weather disasters cost an estimated U.S.$232 billion worldwide, it’s not surprising that the environment took center stage in their risk assessment. This year, risk has become reality for many. Even as people and economies across the globe struggle with the challenges of the pandemic, we are witnessing the dire consequences of environmental events as fires and floods threaten the economic recovery of impacted communities.

Just as our profession has been leading a path through pandemic-driven disruption by focusing on business continuity and resilience, the profession also has a crucial role to play in anticipating and mitigating the impact of climate risk. In a world where politics are increasingly polarized and people often lack trust in information and business, accounting and finance professionals bring a much-needed ethical commitment to objectivity, accuracy and reliability. The profession’s role is not to takes sides in any political debate, but to properly assess risk and provide reliable information on the commitment and measurable impact companies make on sustainability.

United Nations Sustainable Development Goals and recovery

In 2015, the United Nations announced its Sustainable Development Goals (SDGs) for 2030. These were meant to advance the well-being of people across the globe and the health of the planet, but as economic growth has slowed, COVID-19 has imperiled progress on these laudable goals. In their recent update on SDGs, the U.N. reports progress on climate action has been “the most disappointing,” even though the forced inactivity of the pandemic has temporarily eased CO₂ emissions.

This is a crucial moment. How governments and organizations approach recovery from the economic impact of COVID-19 will have far-reaching consequences for mitigating backsliding on SDGs and for long-term resilience. Our profession has an important opportunity to help organizations implement and demonstrate a commitment to sustainable business practices that consider stakeholder and environmental impact and drive long-term value creation.

Call to action in response to climate change

Given the severity of climate risk and the opportunity for the profession to take a leadership role, in February of this year, on behalf of the Association of International Certified Professional Accountants, I signed a call to action in response to climate change, along with the CEOs of 12 other accounting bodies. As members of the Prince of Wale’s Accounting for Sustainability Project (A4S) Accounting Bodies Network, we collectively represent 2.5 million accountants in 179 countries.

The statement is a call to action not only for accountants, but for the accounting bodies that represent them. It’s a call for us as an Association to support the important work our members do to address climate risk through resources and guidance and our advocacy work with policymakers.

How the profession can make a difference

The profession will make its impact in at least two key ways: by advancing integrated thinking and providing reliable, objective disclosure of sustainability-related information.

Integrated thinking about the range of financial and non-financial factors that materially affect an organization’s ability to create value is required in our complex, interdependent world. Charged with managing the flow of essential information and insight, the profession is uniquely positioned to advance a more holistic understanding of risks and opportunities — one that includes assessing and planning for climate-related risks such as disrupted supply chains and regulatory changes. Through integrated thinking, we will enable better decision-making.

Underpinning all smart decision-making — whether it’s by business leaders, regulators, investors or consumers — is reliable information. Together, the profession’s skill set and expertise make management and public accountants uniquely qualified to measure, report and provide assurance on consistent, comparable and meaningful sustainability-related information.

Towards a consistent global approach and broader business reporting

A consistent global approach to sustainability accounting standards and comprehensive corporate reporting will maximize usefulness for all stakeholders. The International Integrated Reporting Council, where I serve as Board Chair, has been working towards the goal of a comprehensive approach to reporting with the Integrated Reporting framework. And, last month, in an important step, the International Federation of Accountants (IFAC) called for a new sustainability accounting standards board. In a time when businesses, investors and other stakeholders need robust and trusted standards, IFAC’s recommendations help advance meaningful progress.

Rationalization and simplification of frameworks and standards will help us move towards a global, uniform and reliable system. I’m encouraged by the initiatives and cooperation currently being explored by the likes of the International Financial Reporting Standards Foundation (IFRS) consultation paper into a new sustainability standards board; the statement from the Climate Disclosure Standards Board (CDSB), the Global Reporting Initiatives (GRI), the International Integrated Reporting Council (IIRC), the Sustainability Accounting Standards Board (SASB) and CDP (formerly the Carbon Disclosure Project) on working together towards comprehensive corporate reporting; and the World Economic Forum’s (WEF) report towards consistent reporting on sustainable value creation. These are clearly demonstrating a new era in systems thinking in the business reporting space.

Times of crisis can also provide opportunities for change. Today, in a world full of challenges, we are seeing increasing emphasis on business practices that consider people and the planet, alongside profit. As customers, regulators, shareholders and communities demand more in the arena of broader business reporting, the profession must be versed in what is being considered and continue to provide the much-needed trust in information and stewardship of resources that build resilient organizations for the long term.

Barry Melancon, CPA, CGMA, President and CEO of the American Institute of CPAs (AICPA) and CEO of the Association of International Certified Professional Accountants

     

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Ready to learn about cybersecurity to help your clients or business? The pandemic, and corresponding increase of eCommerce and internet use, have created many opportunities for cyber thieves — data breaches increased 273% in the first quarter of 2020.

But opportunities are also being created for you. It’s anticipated that the cybersecurity market will be worth $248 billion by 2023, providing a unique opening for CPAs.

CPAs are trusted advisers. Your qualifications as a CPA, along with a shortage of cybersecurity experts, put you in a prime position to lead businesses in their cybersecurity efforts.

Want to learn about cybersecurity or further hone your skills?

You’re in luck. If you’re seeking opportunities in cybersecurity or simply want to bolster your knowledge, these free resources below will get you on your way.

1. A CPA’s Introduction to Cybersecurity. There is opportunity in cybersecurity for small and medium-sized firms working with small- and medium-sized businesses. This brochure provides an overview.
2. This 60-second video explains why CPAs should care about cybersecurity.
3. For a limited time, AICPA members can take a module of our cybersecurity certificate for free and earn up to 3 free CPE hours with the Digital Mindset Pack.
4. What’s the board’s role in cybersecurity risk? What is the company’s? Learn that and more in this Journal of Accountancy article, Corporate governance in COVID-19: Cybersecurity and technology considerations.
5. Why CFOs need more cybersecurity vigilance. The rise of cybersecurity concerns mean that CFOs need to make it a priority. Read how in this FM
6. Leverage the AICPA Cybersecurity Risk Management Reporting framework to communicate about the effectiveness of controls on a company’s cybersecurity risk management program. The framework is a key component of a System and Organization Controls(SOC) for Cybersecurity engagement.
7. In the Go Beyond Disruption podcast’s Cybersecurity Advisory series, your fellow CPAs share key technical challenges and best practices for remote work, business continuity, compliance and risk management.
8. Co-brand this brochure — SOC for Cybersecurity: Helping you build trust and transparency – and send it to clients to explain the value and benefits of a SOC for cybersecurity examination.

Happy learning!

Association Staff

     

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If you’ve been putting off starting or updating your succession planning, I’d like to share a stark reminder I experienced a couple of years ago: It’s important to act now. My 10-person, Windham, N.H., firm was considering buying a CPA firm from a sole practitioner who had an interesting practice in a good location. We had several positive meetings. But just as we were formalizing a deal, we heard the sole practitioner had unexpectedly passed away. Although the next of kin wanted to continue with the sale of the practice, we had to decline since we knew that many of the firm’s clients would have already moved on by the time we took over. The CPA’s failure to plan for transition made the firm less valuable to us.

We all have short- and long-term goals for our firms, and succession planning can help us establish how to meet them. I have found from my own firm’s experiences that there are several strong benefits to planning, regardless of your firm’s size or how far you and your partners are from retirement.

• A formal succession plan is a great attraction and retention tool. A good staff member often wants to know how they can grow in your practice. A succession plan that details future leadership intentions can answer many questions.
• A strong partnership agreement is the foundation of any plan. An agreement made in conjunction with your succession plan can set forth how a partnership works — from becoming an owner through retirement. It can establish and facilitate the transition to new ownership and make decision-making and overall management more efficient. We encourage potential future leaders in the firm to make suggestions to improve or update the agreement because we want to be transparent with them and encourage their participation in the process.
• You can get a clearer sense of how to add value to your firm. I’ve met with many CPAs who put off updating their technology, but outdated systems may deter potential buyers who won’t want to spend time and money upgrading them. The process of succession planning forces you to think about what would make your firm attractive and valuable to a future internal or external buyer, making it more likely owners will get the deal they want when they leave.
• It’s always beneficial to know where you stand. As we’ve all seen this year, disruption can upend our expectations about the future in ways we would never have imagined. We may have to make some detours because of the challenges we face, but it’s easier to deal with the unexpected and reach your goals in the end if you’ve clearly established your firm’s plans for the future.

The 2020 PCPS Succession Survey

The good news is that there’s a tool that can help you jump-start your succession planning and benchmark your firm’s progress against your peers: The 2020 Succession Planning Survey. Fielded in partnership by the AICPA’s Private Companies Practice Section (PCPS) and the Succession Institute, this comprehensive, unique study will offer insights you won’t find elsewhere. The results will reveal details that include:

• How firms of various sizes are planning, with separate results for sole proprietors and multi-owner firms
• Details on equity ownership and leadership development
• How sole proprietors are using practice continuation agreements
• What CPAs expect in terms of payouts and what firms are receiving
• The age that CPAs in firms like yours expect to retire
• How they transition client relationships
• The current mergers and acquisitions environment

Completing the survey is easy for anyone familiar with firm policies since it requires no detailed financial information. It should take fewer than 15 minutes for solo or sole practitioners and 15 to 45 minutes for those in multi-owner firms. It can be a valuable exercise, too, since the survey provides a roadmap to all the factors to consider in succession planning. In addition, those who participate in the survey will receive a free comprehensive report of today’s succession landscape and be entered into a drawing for one of four $100 gift cards. The deadline to participate is Oct. 8.

You can find additional succession planning resources and other valuable practice management tools on the Private Companies Practice Section (PCPS) page. PCPS is an add-on firm membership section within the AICPA. At only $35 per CPA, and a maximum of $700 per firm, it’s a great investment for the wealth of resources you can use in your practice. Register for a free PCPS web tour to learn more.

Joel Olbricht, CPA, CGMA, OSGroup CPAs. Joel Olbricht is a partner in a successful business consulting CPA firm in N.H. He’s involved in the CPA communities– local, national, and international; serving on many local Boards, active in the N.H. Society of CPAs, advising local practitioners via networking groups and CPE, and currently serving on the AICPA Board. He was chair of the AICPA PCPS Executive Committee and became very interested in succession planning and talking to many CPAs looking to retire and sell with the best insight possible.

     

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