Author: FFC

I recently had the privilege of speaking on financial planning to 150 CPAs at a Washington Society of CPAs conference. I began my remarks by asking how many in the audience considered themselves financial planners. Only two raised their hands.

That surprised me. I know that many CPAs help clients with some aspect of financial planning, from tax, retirement and estate planning to succession planning and wealth management. And, frankly, who better to help clients negotiate their financial futures than CPAs? Clients already rely on us to provide trusted advice on other financial matters.

The sparse response got me thinking back about my own experience coming to terms with the term “CPA financial planner.”

I, like many others, started out with a tax practice, happily providing tax and accounting services for clients for many years. My move into financial planning felt quite organic as it was happening, but looking back, I realize it was triggered by my father’s sudden death at age 64.

Financially sound, my father had just retired, bought an RV and was ready to take off touring with my mom when he was killed in a car accident. I still hold the vision of his brand new motor home in the driveway that he never got to drive around the block.

I began helping my mom secure her finances, and also found myself talking with friends and colleagues about what they were doing to prepare for their future, and their spouses’, and how they were allocating resources to pay for it.

At the same time, more of my tax clients were bringing up financial planning topics in offhand ways, asking me what I was doing to save for my children’s college, how long I planned to work and how I was planning for retirement. Those conversations evolved, eventually turning into engagements to help them map out their financial plans. And, finally, it dawned on me that I was doing financial planning.

In 2001, I left the tax practice and launched a financial planning firm with a colleague. We searched to find the right term to describe our services. Over the years, we used many terms: private client services, wealth management, financial advising and the like.

Then, three years ago, I realized that CPA financial planner was the best term to describe what we are. It’s definitely the term clients relate to. I know that from my own experience. And AICPA research confirms the term “financial planner” is what consumers use when looking for the services we offer.

So why the reluctance to use CPA financial planner? I think that, as CPAs, we tend to associate that term with selling. We think clients will think we’re trying to sell them something and that we’ll lose our fiscal objectivity if we do that. I think that’s a big hurdle for CPAs to overcome.

But in my experience, clients don’t automatically assume you are selling something.  And you don’t have to. Our firm chooses to manage investments, but it’s not a requirement. Many CPAs provide financial planning advice and simply refer the investment piece to trusted colleagues.

There are many reasons for CPAs to let their clients know they offer financial planning services.

Business-wise, it’s a huge area of potential growth for our profession. The need for personal financial advisers is expected to grow 30 percent over the next decade, according to U.S. Bureau of Labor Statistics projections. Not surprising given the 10,000 baby boomers a day who are turning 65 (according to Pew Research Center data) and the enormous wealth that will be changing hands in coming years.

Using the term simply tells consumers you’re offering the services they seek, which makes good business sense.

On the personal side, I find it extremely rewarding to help my clients succeed, so I’m eager to let them know I can.

The person who was originally scheduled to speak before me at the Washington Society of CPAs conference was a client. He, like others, sought financial planning services not only to plan for his future but to ensure his spouse would know what to do and where to turn if something happened to him.

A few weeks before that conference, his wife called me to say he had passed away. When she came to our office to meet with us, she said. “There aren’t many places I want to be right now, but I was looking forward to coming to see you.”

If you’re interested in providing financial planning services, I encourage you to let your clients and potential clients know it. If you want more training or need a deeper understand about the roles and responsibilities of a financial planner, I’ve attended and recommend the AICPA’s Personal Financial Planning Conference. It will be one of six individual conferences offered at AICPA ENGAGE in Las Vegas on June 12-15. You can also learn more about calling yourself a CPA financial planner and access a toolkit here.

Call yourself a CPA financial planner and wear that term with pride. Let your clients know the person they already trust with their financial well-being can offer them so much more.  

David A. Stolz, CPA/PFS, is principal CPA and financial planner for Stolz & Associates in Tacoma, Wash. He is the past chair of the Personal Financial Planning Committee for the Washington Society of Certified Public Accountants and serves on the AICPA’s Personal Financial Specialist Credential Committee.

Name tag image courtesy Shutterstock.

     

Related Stories

• Keeping it in Perspective: A Woman’s Take on the Profession
• Leave Yourself Behind When Working With Clients
• 5 Ways to Drive Small Firm Growth

 

CPA firms across the country are thriving, according to the 2016 PCPS/CPA.com National Management of an Accounting Practice (MAP) Survey. This unique study is the largest and most comprehensive examination of firms’ financial health and practice management approaches and solutions. To enhance the survey’s usefulness, the results are broken down into seven defined CPA firm segments, from small practices with less than $200,000 in annual revenue to large firms with $10 million or more. The latest survey found that firms are indeed doing well, with many practices making the strategic decision to reinvest profits back into the firm to build an even stronger foundation for the future.

Small firms appeared to have a particularly bright future. Firms with less than $200,000 in revenues who completed the survey reported growth of almost 11%—up from 8% in 2014. What trends or decisions are powering small firm growth? Here are some key insights based on the survey findings:

1. Client relationships/management. The core of any CPA firm’s success is the bond that practitioners create and build with their clients. Clients value their CPAs because they provide quality services, are responsive to client needs and have a proactive interest in the issues affecting them. These positive attributes allow firms to retain their current clients and obtain new ones. The resources in the Clients and Relationship Building section of the AICPA PCPS Firm inMotion e-Toolkit can help you enhance your own firm’s efforts.

2. New approaches to billing. For many years, firms have been investigating the merits of moving away from hourly billing. It turns out that some smaller firms are in the vanguard when it comes to adopting different billing practices. The survey found that 85% of all firms still use hourly billing. However, at firms with under $500,000 in revenues, a median of 25% of their fees are based on another method, including fixed fees, value billing, a per-tax-form fee and client retainers. While implementing new billing methods won’t make a direct contribution to firm growth, they can change the way firms position what they have to offer clients and emphasize their value. Firms considering a switch can turn to information on transitioning to value pricing in the PCPS’s Trusted Client Advisor Toolbox.

3. Flexibility. Smaller firms are in an excellent position to adopt new practices, given their relatively flat management structure. In addition to implementing new billing methods, small firms can become more competitive in the staffing marketplace by offering recruits or existing staff members schedules and assignments that best meet their needs and expectations. This can enable firms to minimize turnover costs and confidently rely on having staff with the necessary knowledge to meet client needs, each of which can help maximize firm success and profitability.

4. Technology. CPA firms are increasingly investing in technology, according to the 2016 MAP Survey findings. In fact, there were double digit increases over the previous survey in firms’ use of tools such as cloud-based software, cloud-based backups and video conferencing services. For smaller firms, technology can help simplify and speed processes, minimize duplication of effort and enhance communication with clients. As a new generation begins to take over at client businesses, technological advancements can also demonstrate that the firm is prepared to meet their shifting needs.

5. Specializations. Looking for a way to stand out in a crowded marketplace? Or do you wish you could streamline your processes to promote greater efficiency and productivity? Specializations may be the answer. Whether you focus on a specific industry, service or other segment, a niche practice can help you deepen your expertise and reputation in one area and may help mitigate standards overload, among other benefits. The possibilities of specialties you can build are seemingly endless, but you can begin by getting some inspiration from the available AICPA credentials.

What factors will power your firm’s growth? The PCPS/CPA.com National MAP Survey can help you spot trends and best practices that are driving success at firms in your size segment and across the profession. Check out the executive summary for more key findings from the survey research, and find out what insights the MAP Survey can offer your practice.

Carl Peterson, Vice President – Small Firm Interests, Firm Services & Global Alliances, AICPA

CPAs Meeting image courtesy of Shutterstock

     

Related Stories

• Find the Answers to Your Practice Management Questions
• 6 Ways to Ease Audit Workload Compression during Busy Season
• Earlier Date for Information Returns Brings Penalty Risk

 

We are all now facing a new Jan. 31 deadline for filing Forms W-2 with the Social Security Administration and 1099-MISC (when reporting nonemployee compensation payments in box 7) with the IRS. The earlier deadline will allow faster matching of W-2 and 1099 information with tax returns, which helps combat identity and refund theft. Unfortunately, when something is done to combat identity theft, it sometimes means extra work for practitioners, and with this new rule comes increased risk of penalties for not timely filing so we urge you to act quickly.

 

Filing and Reporting

The previous deadline of Feb. 28 for submitting Forms W-2 and 1099-MISC has been in the law for many years and would have been considered “written in stone” prior to this change. All our clients are accustomed to it. We will have a steep learning curve in orienting ourselves, staff and clients to conform to this new deadline. (The deadlines for Forms 1120 and 1065 reverse this year as well.)

Timing requires us to start the education process immediately. The assembly of the necessary data can be a significant task when dealing with clients. You might also need to alert staff that assembling the required data will require an increased effort. And, while the new W-2 and 1099 deadline is being implemented, we must simultaneously educate our business clients about their new deadlines and adapting our system for the 1120 and 1065 deadline switch that immediately follows.

Bottom Line:  We need to shift into overdrive now!

Penalties

The new filing deadlines could put clients at greater risk for penalties, particularly as the penalty regime has grown quite strict. Since 2009, we have seen information return penalties increase and “stacking,” or increasing, of the penalty amount, depending on the date the information return is filed. In addition, these penalties are indexed for inflation.

Everyone engaged in the process of preparing information returns should become familiar with Code sections 6721 and 6722 and the applicable regulations listing the returns covered and applicable penalties for not timely filing information returns. It appears the IRS covered all the information returns and there is no way to avoid the imposition of a penalty for filing an information return late.

Terms and code sections we need to become familiar with are:

• Code section 6041(a) covering the rule for payments of $600 or more
• Reduction when corrected in a specified period (Code section 6721(b))
• Exceptions for de minimis failures (Code sections 6721(c) and 6722(c))
• Safe harbors for de minimis errors (Code sections 6721(c)(3) and 6722(c)(3))
• Lower limitations for persons with gross receipts of not more than $5,000,000 (Code sections 6721(d) and 6722(d))

A new term, “intentional disregard,” has been added, resulting in larger penalty amounts for failure to timely file the information return.

Recent conversations with practitioners from all areas of the country have indicated that the IRS is actively assessing these penalties, is not bashful about including the intentional disregard penalty and is hesitant in granting penalty abatement for either first-time violations or determining reasonable cause if these penalties are imposed. (A recent Tax Adviser article offers tips on seeking relief for clients facing penalties.)

On the bright side, IRS has just issued Notice 2017-9 for the safe harbor that the AICPA requested from Congress, which means taxpayers do not have to correct an error on an information return or payee statement (or face a penalty) if the dollar amount reported differs from the correct amount by $100 or less ($25 for withholdings). The safe harbor and related penalty relief do not apply if the payee opts out and requests a corrected return.

Conclusion

The compliance tasks we are facing in preparing and filing these returns are greater because of the shorter time window, and the penalty exposure is more severe, so we cannot stress enough that our clients will need to be educated quickly and warned of the consequences of delay.

As practitioners, we understand your frustrations in bearing the burden of anything requiring extra time because so many criminals are out there. But we have to believe the extra protection will be worth it in the end.

Gerard Schreiber Jr., CPA, Partner, Schreiber & Schreiber CPAs in Metairie, LA. Gerard specializes in tax, accounting and consulting matters for individuals and small businesses. He serves on the AICPA IRS Advocacy and Relations Committee and has authored numerous courses and articles on various tax subjects. In 2016, Schreiber received the AICPA Tax Division’s Distinguished Service Award for his outstanding contributions. He can be reached at ghschreiber@bellsouth.net.

Valrie Chambers, CPA, PhD, Associate Professor of Accounting, Stetson University in Celebration, FL. She has over a decade of public accounting experience as owner/partner-in-charge of a CPA firm in Houston that specialized in advising small business owners. Dr. Chambers has been published in numerous journals and received the Texas Society of CPAs Outstanding Accounting Educator Award for mid-sized Texas universities in 2012. She has volunteered for the AICPA and the IRS’ Volunteer Income Tax Assistance in Corpus Christi.

Time for Action courtesy Shutterstock.

     

Related Stories

• Unclaimed Property: When Does the Auditing Go Too Far?
• Reflections on 2016: Diversity, Inclusion, Our Nation and Our Profession
• Keeping it in Perspective: A Woman’s Take on the Profession

 

As December draws to a close, I’ve been reflecting on the many ways difference and respect have been brought to the forefront in our communities and on the political stage this year. I’ve witnessed tragedies and heard disturbing rhetoric that have left many in our nation feeling unsettled, and even fearful. We cannot ignore these realities because they help shape our strategies for the future.  And while it may be difficult for some, we all must do our best to continue to move forward and lead with clear vision. It’s important to recognize that respect, inclusion and difference made real advancements in 2016, and will continue to do so in years to come.

With this in mind, I’d like to take a moment to highlight several accomplishments in the accounting profession that I am particularly proud of, as well as accomplishments within AICPA’s diversity and inclusion (D&I) initiatives.

 

Strong Cadre of Women Now Leading Our Profession

In October, Kimberly N. Ellison-Taylor, CPA, CGMA and global accounting strategy director for Oracle America was elected as the new chairman of the AICPA board of directors. As the first African-American and fifth woman to hold this role, I find it particularly inspiring in this time of change to see that the AICPA, at our highest levels, is not just talking about diversity and inclusion, but enthusiastically moving highly qualified diverse individuals into leadership roles.

Within the accounting profession, 2015 witnessed major organizations, including Deloitte LLP and KMPG, hiring women for leadership roles, notably Cathy Engelbert, CEO at Deloitte, and Lynne Doughtie, CEO at KPMG. These women, along with Kimberly Ellison-Taylor, continued to blaze trails in 2016 within their organizations and the profession. It will be exciting to see the energy and innovation they will drive as we move into 2017.

2016 AICPA D&I Initiatives

At the AICPA, we launched several D&I initiatives in 2016 designed to drive more students into the pipeline, as well as support the profession, such as:

• AICPA/NAF Recognition Program: The National Academy Foundation (NAF) is an educational nonprofit organization that brings together education, business, and community leaders to ensure high school students are college, career, and future ready. In 2016, the NAF Academies of Finance and AICPA partnered to launch the AICPA/NAF Recognition Program nationwide. The program allows high school students to work through designated courses and engage in AICPA resources in order to receive an AICPA recognition certificate. Now, this program is available to over 300 NAF academies nationwide. This program ensures that diverse high school students across the country are introduced to the many opportunities the accounting profession offers early in their career decision-making process.
• National Diversity Pipeline Campaign: The AICPA launched a national awareness campaign to encourage college students to become CPAs. The campaign featured CPAs from diverse backgrounds and debunked CPA stereotypes, positioning the profession as both adventurous and down-to-earth. The campaign kicked off during the fall and will include a spring 2017 tour to campuses and universities across the country where students with have the opportunity to interact with CPAs featured in the campaign and learn more about the accounting profession.

In the profession, we continued to make strides to educate our members and bring forth greater understanding and growth.

• D&I Webcast Series: In February 2016, for the first time, the AICPA launched its first webcast series, focused on D&I issues. These educational offerings are free to the public and allow CPAs to earn CPE credits. Some of the course topics included Unconscious Bias, Inclusion vs. Assimilation, and Diversity 101, and as we close the year completing six webinars, we are pleased to see rapidly growing interest in this offering. Early in 2017, we will launch new courses that will dive even deeper into these issues. Visit aicpa.org/diversity to view archived webcasts and for more information on the 2017 webcast series.

As I conclude, I’d like to leave you with another reason for optimism: We are seeing what hopefully will become a trend across the country, as companies take a stand for their employees, customers and communities.

Notably, we saw many companies respond publically to North Carolina’s House Bill 2, which requires transgender people to use restrooms in schools and other public buildings that correspond with the sex on their birth certificate, not their gender identity. Passed in March 2016, this law also limits other anti-discrimination protections for gay, lesbian, bisexual and transgender people.

I’m encouraged by the thoughtful leadership we have in organizations today, and want you to know that the AICPA will continue to be not only a catalyst for change regarding workplace diversity and inclusion, but a leader that will continue to drive change and inclusion within our profession.

Kimberly Drumgo, Director, Diversity & Inclusion, American Institute of CPAs.

     

Related Stories

• Continuing the Journey of Inclusion: The Year in Review
• Keeping it in Perspective: A Woman’s Take on the Profession
• Three Tips for Effectively Managing Remote Teams

 

Our profession took shape more than a century ago, about the time a Scottish-born scientist named Bell was inventing the telephone, two brothers from Ohio were figuring out how to take flight and Henry Ford was creating his horseless carriage.

To say that things have changed a bit since then would be a comedic understatement. We’ve transformed the phone into an omnipresent digital assistant, soared far beyond the boundaries of this planet and figured out how to make cars drive themselves.

As the world has changed, so has our profession. We are strong and relevant today, because we anticipate and adapt to the changing needs of the clients and businesses we serve. As chairman of the AICPA, it’s so important to me that we maintain a laser focus on what’s next – because it is coming at us faster than ever.

From my conversations with CPAs and CGMAs across the country and around the world I’d like to share five disruptors that I see shaping the business environment in 2017. I would love to hear from you, too. Let me know in the comments what you are seeing and anticipating in the New Year.

Technology

The World Economic Forum says we are entering a fourth industrial revolution that will fundamentally alter the way we live, work and relate to one another. Change is happening at an exponential pace, and “the breadth and depth of these changes herald the transformation of entire systems of production, management and governance.”

That might sound like hyperbole to some. And it is the case that many technologies are overhyped, especially in the early days. But I can tell you from what I see in my role at Oracle, the amount of innovation across all fields is staggering. Technology is at the top of my list for 2017, because it drives many of the opportunities and challenges we’ll see.

There are numerous technology trends I could highlight for the coming year – cognitive software, virtual reality, cloud computing – but I want to draw your attention to one statistic in particular. Next year, the number of smart devices like thermostats, fitness trackers, cameras and appliances connected to the Internet is expected to exceed 28 billion – that’s double the number from just three years ago.

Imagine the exponential growth in data at our fingertips – offering more insight into customer behaviors and business operations. Managing and making sense of that data, however, brings its own set of challenges. And it brings me to the next issue I expect will have a significant impact on 2017.

Trust

Consumers want to know that their data is safe. And investors want to know that organizations have appropriate safeguards in place to protect confidential information.

About 70 percent of connected devices contain vulnerabilities, according to HP, and 56 percent of business leaders report they wouldn’t be able to detect an attack. Breaches can have significant financial ramifications for organizations. The average total cost of a data breach is $4 million, which includes the loss of revenue due to customer attrition. Forrester, a research and advisory firm, predicts that we’ll see a Fortune 1000 company fail next year because of a cybersecurity breach and related fallout.

In its report on 2017 trends, Forrester sums it up like this: “The basic fabric of trust is at stake as CEOs grapple with how to defend against escalating, dynamic security and privacy risk.”

Trust is the cornerstone of our profession – and public and management accountants are uniquely qualified to lead in this area. Early next year, the AICPA will publish criteria for a cybersecurity attestation engagement that CPAs can perform to assist boards, senior management and other stakeholders as they evaluate the effectiveness of an organization’s cybersecurity risk management program.

We are also developing an attestation performance and reporting guide so auditors of an organization will be able to report on management’s description of their cybersecurity risk management program, as well as on the operating effectiveness of controls designed to mitigate and react to cyber risks.

Transformation

One of the most striking data points I’ve seen recently is from a KPMG study: Two-thirds of CEOs say the next three years will be more critical than the past 50. And 4 in 10 will transform their organizations into significantly different entities by 2020.

Technology, again, is a significant driver as organizations contend with innovations that challenge – or enhance – their business models. You see it across the spectrum, even from very successful companies. Amazon is building a distribution system that could rival FedEx or UPS, while Google and its parent, Alphabet, are doing work with virtual reality for businesses and home digital assistants.

One way that organizations are transforming themselves is through new partnerships, alliances and acquisitions. We’re seeing it in our profession, too. As of the end of November, we tracked 121 mergers or similar transactions among public accounting firms. And 24 of them involved non-CPA firms.

Expect to see the trend of organizational transformation accelerate next year. Deloitte reports that 75 percent of 1,000 corporate executives and private equity investors it surveyed expect mergers and acquisition activity to increase in 2017 – and nearly two-thirds of those surveyed expect the size of those deals to be bigger. The top strategic driver: Acquiring technology assets.

Transition

The evolving political landscape will be another driver of transformation. The AICPA’s most recent Business and Industry Economic Outlook Survey found that 3 out of 4 executives expect the outcome of the U.S. elections to impact planning, budgeting and forecasting in 2017.

While there’s no way to predict exactly what will happen in Washington, we can be certain that transition in leadership will prompt changes. As Barry Melancon, AICPA President and CEO, noted last week, there’s the highest probability for major tax reform since the 1986 tax act. President-elect Trump and majority leaders in the House and Senate have been vocal about their intentions to revise and repeal existing policies in the areas of tax, health care, financial legislation and international trade. And some predict a more receptive regulatory environment for the mergers and acquisitions I mentioned above.

But it’s not just political transition in Washington that will have impact. Britain is expected to begin the process of exiting the European Union, which will have global implications for everything from trade policies to currency valuations. And there are key elections in France and Germany that will be closely watched to see what they signal for the future of the world’s largest single market and the populist movements that have upended politics in 2016.

Talent

Finally, I want to mention talent. You might have noticed in the special issue of CPA Letter Daily last week that that the most read article of 2016 was “5 things you should never say to millennials.” Well, just when you’ve figured out how to work with Millennials, you’ve got to get ready for the next generation.

In 2017, Generation Z – those born beginning in the mid-1990s – will begin entering the workforce, and by 2020 they’ll make up 20 percent of the working population. This is a group that has only known a world with the Internet and has come of age in an era of Facebook, Twitter and Snapchat. They typically have an 8-second attention span, are entrepreneurial – and they want to make a mark. More than half (60 percent) say they want to have an impact on the world, and 55 percent report wanting to start their own business.

I often say that I’m a Gen Xer who speaks Boomer. It will be important in 2017 that we begin to find ways to connect with this new generation, because we have so much to learn from each other. There is no doubt that young professionals who have been raised online can teach us a lot about meeting the needs of our future clients and customers.

In all of these issues, trends and predictions, I hope you see the critical role that our profession will play in advising, connecting, challenging and leading in the year ahead.

And you can be certain that no matter how the year unfolds, the AICPA will be here to support you with the tools and resources you need to meet the needs of clients and businesses you serve. In fact, we’ll be even better positioned to do so as we launch the new Association of International Certified Professional Accountants (“the Association”) that members approved earlier this year.

Launching in early 2017 and representing more than 650,000 current and future accounting professionals across the globe, the Association will allow us to be even more influential advocates for the profession and public interest. We will also usher in a new brand for the American Institute of CPAs to reflect the CPA profession’s continued strength and relevance in this modern age of business. Look for more details in January.

I look forward to meeting many of you in the coming year, and working together toward a bright future.

Kimberly N. Ellison-Taylor, CPA, CGMA, Chairman of the Board of Directors, American Institute of CPAs.

      

The Q1/Q2 2017 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.

 

 

 

 

 

 

 

 

 

*The examination data files the AICPA receives after March 11 will be included in the final target score release date.

 

 

 

 

 

**Due to the changes to the Exam, which become effective with the 2017 April/May (Q2) testing window, there will be a delay in the release of scores with a single score release for all candidates approximately 10 weeks after the close of the testing window. The delay in the score release is necessary to provide sufficient time to statistically validate candidate performance on the new Exam.

 

Keep in mind:

• All dates and times are based on Eastern Standard Time zone.
• For the vast majority of candidates, the AICPA receives the examination data files from Prometric within 24 hours after a candidate completes the Exam.
• The scores for the examination data files received after the AICPA cutoff dates will be in the subsequent scheduled target score release.
• Some candidates who take the BEC section might receive their scores approximately one week following the target release date due to additional analysis that might be required for the written communication tasks.

We encourage candidates to visit the Psychometrics and Scoring page on the Exams website at www.aicpa.org/cpa-exam for information about score release and the scoring process, including the CPA Exam Score Release Timeline FAQs .

     

Related Stories

• Mr. Miyagi Can Help You Master the Exam
• CPA Exam Q3/Q4 2016 Score Release Timetables
• In Case You Missed It: Golf, Beyoncé, and the Next Version of the CPA Exam

 

It’s amazing how much things have changed. Back in 2004, I was recruited by my adviser and changed my career from forensic accounting to financial planning. I can clearly remember my first day in the firm’s Monday morning training; I was the only woman in the group and the firm owner addressed us as, “Guys… and gal.” I imagine his limited experience with women in this role (the firm had only employed a few other women advisers) caused him to want to tread lightly. His effort to include me was sincere, but in the process he made me feel different. It may not be surprising to hear that many financial planning firms simply do not have a large number of female advisers on staff in 2016, but they were even more scarce in 2004.

Today, I own Sonstein Financial Group and 40% of my advisers are women. This is good news all around; not only are more women studying financial planning, they are converting that education to a career in the profession. A female adviser is no longer a novelty and my firm’s success demonstrates that a diverse workforce is good for business.

While a number of scientific studies, conducted by McKinsey & Company and others, have concluded that gender diversity is advantageous to businesses, sometimes the specifics of that conclusion are harder to see in practice. Rarely does a client walk through the door and request a female instead of a male adviser, but that doesn’t mean they won’t naturally gravitate to one over the other. The psychology of likeness is undeniable. In some cases this can mean gravitating toward a female over a male and vice versa.

About 10 years ago, one of my clients referred a female business owner to me. I was told that she didn’t “like” financial advisers and that she could be difficult to schedule an appointment with. Once I contacted her, she told me immediately that she was hesitant to meet because, “I’m so busy, I barely have time to do everything I have to already.”

I had been trained on how to respond when someone says they’re too busy to invest the time in planning for their future, but that training didn’t feel appropriate here. I recall pausing before responding, “Mike shared with me how successful your company is; though he did not share if you are a mom. As a business owner and a mom, it is obvious to me you are a mother as well. I find myself saying often that there is never enough time in the day to do it all.  I can hear your stress in your tone of voice and I am familiar with that tone.  Normally, clients meet me in my office; would it be easier for me to meet you at your office or home? Personally, I have an infant and I know how hard it is to be pulled in so many directions. Can we find a time and place for you to invest 30 minutes to focus on your personal and business goals and dreams? Running a household and a large company, you must be focusing on everyone else all the time, right? If you will allow me to, I will commit to learning what is important to you and focus only on that.”

She told me years later that she became a client of mine in that moment. She shared in that first meeting with me that she has a child with special needs and wanted to provide for him. Additionally, she had concerns about the future of her business due to changes in the law, as well as her goals and dreams for her family and business. Today, she remains one of the firm’s largest clients.

Having a diverse workforce creates an opportunity to serve clients of all stripes. Working with a culturally and gender diverse firm, that has advisers who offer a range of life experiences, professional experiences and yes, genders to a client allows them to:

• Create a more personal connection with their adviser.
• Share openly what they truly value, as well as their goals and needs.
• Be more receptive to professional advice.

Similarly, financial planning offers value to women in the profession. As a working mother, work-life balance is important to me. It’s true that building a successful business often means long hours, hard work and dedication, but financial planning also offers flexibility. I can schedule my time around school concerts, class trips, softball or soccer games. We’ve built a collaborative, cooperative environment at Sonstein Financial Group, not merely a group of producers. Advisers frequently fill in for one another during maternity leave and other absences. It takes a village, as they say.

As financial planning evolves and parts of it become more commoditized, I believe the firms most likely to survive will be those that recognize the importance of a diverse work culture, and value having a robust female perspective on the work they do. Doing so will better serve and will provide more value to our clients, in turn improving the bottom line for the firm. Additionally, it will model the advantages of the industry for women considering a career in financial planning, perpetuating even more inclusion. It’s been a successful model for my firm, and one I’m confident would work well for others.

Amy Sonstein, CPA/PFS is principal of Sonstein Financial Group in Marlton, NJ. Her practice offers a full range of strategic personal, business and estate planning advisement.

Financial planning adviser courtesy Shutterstock.

     

Related Stories

• Leave Yourself Behind When Working With Clients
• Five Experts Advisers Should Follow
• Three Tips for Effectively Managing Remote Teams

 

With business continuing to expand globally, leaders need to exercise new management skills in order to effectively engage an increasingly remote and diverse workforce. <click to tweet> In an article for CGMA Magazine, Dan Griffiths, CPA, CGMA, director of strategy and leadership at Tanner LLC, says, “One challenge of managing decentralized workers is giving them a sense of inclusion. Their in-person interaction is limited, but there are ways to make them feel like part of the team.” Read on for three tips from profession leaders on effectively managing remote workers:

Schedule Face Time with Individual Employees

Rita Karachun, CPA, CGMA, SVP and Global Controller, Merck, carves out time for weekly one-on-one phone or video chats with her far-flung staff to make sure they have all of the tools they need for success. “My job is not to micromanage them but to help them if they’re experiencing a roadblock,” she said. The weekly meetings also allow her staff to raise any issues that may have an impact on the business. In addition to weekly calls, Karachun travels to visit her global staff at least once a year for face-to-face meetings. “I want them to feel connected to the finance organization—to know they’re part of something.”

Griffiths says organizations must budget for and schedule time for in-person interaction. “Remote employees should visit the main office, and supervisors should visit remote workers,” he said. Face time helps remote employees build relationships, catch up on company news and meet new hires. “Additionally, the in-person visit gives remote workers a chance to discuss serious concerns with their supervisor that they might have hesitated to bring up in a virtual meeting.”

Foster an Inclusive Environment

It’s easy for remote staff to feel disconnected from the organization as a whole—especially if they work in a different region or country from the home office. “In order to be competitive in a global environment, you need to make sure your employees think of the whole enterprise,” said Steven Rivera, CPA, CGMA, Worldwide Senior Director, Johnson & Johnson. To help foster this type of inclusive thinking, J&J implements employee incentives on the enterprise-level. “Employees get to thinking, ‘Well, hold on. It’s not my or even my team’s success that determines my bonus, but the performance of the entire company.’ And that drives a more integrated way of thinking and working.”

Bose Corporation uses a similar incentive tactic: “We actually have a metric around collaboration across the organization,” said Jim Waddell, MBA, Corporate Controller. “People around the organization are responsible for putting forth what they have done over the course of the year that has been super collaborative.”

Create a Feedback Loop

Ammar Alhassan, FCMA, CGMA, CFO of BMMI—a Bahrain-based retail, distribution and contract supply group—recognizes the need to deliver regular feedback to his remote workers for the sake of both the employees and the enterprise. “It’s a constant challenge to keep everyone aligned to the overall business objectives,” he said. Several years ago, BMMI switched its performance management software to help establish more transparent goal-setting. “We were keen not to have this be perceived as having more software,” Alhassan said. “We wanted to use it as an opportunity to change behavior and change the mindset. We went around to various countries, meeting with everyone, introducing them to this process and setting expectations.”

At Bose, the leadership surveys its staff on a regular basis to uncover what it’s doing right—and where employees see room for improvement. “It breaks down silos because each of the employees has an opportunity to say their piece—and they know that we’re listening,” said Waddell. “It’s quite enlightening for us all.”

Read the latest issue of CGMA Magazine and view this 2-minute video from a CGMA event at Bloomberg headquarters in New York for more insights from finance leaders on critical business partnering skills including communication, leadership and decision making.

Do you have additional tips for managing your workforce? Share your insights in the comments section below or tweet your thoughts to @CGMA.

Chrissy Jones, MBA, Manager-International Communications, AICPA.

Remote worker courtesy of Shutterstock.

     

Related Stories

• Unclaimed Property: When Does the Auditing Go Too Far?
• Find the Answers to Your Practice Management Questions
• Leave Yourself Behind When Working With Clients

 

Curling up in a blanket by the fireplace with some hot cocoa and a great book is one of the most relaxing ways to spend a winter afternoon. To help prepare for potential downtime over the holidays, the AICPA Not-for-Profit Section polled staff and volunteers to pull together a list of recommended page turners that will help invigorate you for the year ahead. Here are our top picks: 

Jennifer Brenner, Controller, World Vision recommends

• Primal Leadership: Realizing the Power of Emotional Intelligence by Daniel Goleman (2013)

This is a must-read for financial professionals to better understand different leadership styles and become an effective leader. The leadership teams at most not-for-profits are comprised of individuals from diverse backgrounds. For example, board chairs and executive teams may come from academia, scientific research, public policy or the medical field, and may not necessarily have a corporate or business background. This book affirms the importance of emotionally intelligent leadership and illustrates leadership that is self-aware, motivating and collaborative. 

 

Ashley Britton, Technical Manager, AICPA Not-for-Profit Content Development recommends

• The Best of Boards: Sound Governance and Leadership for Nonprofit Organizations by Kimberly Strom-Gottfried and Marci Thomas (2011)

Strom-Gottfried and Thomas provide advice for both novice and seasoned board members, share valuable fiduciary and ethical guidance and offer tips for not-for-profit managers dealing with governance challenges. I highly recommend this book for not-for-profit board members and finance managers in particular.

Jennifer Dorff, AICPA Marketing Manager—Not-for-Profit and Tax Section recommends

• Strength Finder 2.0 by Tom Rath (2007)

Strength Finder 2.0 helps individuals find their talents and change the way we think about ourselves. We are constantly receiving performance reviews where there is a focus on weaknesses, but what if we focused on our strengths and natural talents? Our department took the test, and charted our talents to help us understand our abilities as individuals and as a team. A truly enlightening read!

Sandi Matthews, Technical Manager, AICPA Not-for-Profit Section recommends

• Bowling Alone: The Collapse and Revival of American Community by Robert D. Putnam (2000)

Putnam draws on a vast array of facts, figures and surveys to chart behavioral patterns and analyze trends charting a steep decline in Americans’ engagement in their communities. Putnam’s research provides insights essential for community organizers, civic leaders and individuals to build trust and strengthen communities. I also recommend Putnam’s sequel Better Together: Restoring the American Community (2004), for its inspiring stories of activists who are bringing people together to make a difference.

Agnes McIntosh, Director, ARC Services recommends

• The Non Nonprofit: For-Profit Thinking for Nonprofit Success by Steve Rothschild (2012)

Not-for-profit leaders who are new at their leadership role (or even those who are simply seeking a change) will find valuable, practical information in this book. It outlines seven best practices for creating a financially sustainable and socially responsible organization.

Heather O’Connor, AICPA Senior Manager—Communications recommends

• The Art of Possibility by Rosamund Stone Zander and Benjamin Zander (2002)

Running a not-for-profit requires vision, purpose and optimism. This book helps readers break through the mental mind blocks that hold us back and instead focus on opportunities and the steps to achieve them. Co-author Ben Zander draws on his own experience at not-for-profits such as the Boston Philharmonic Orchestra to help readers realize that tapping into possibility can transform individuals, organizations and constituents. I was truly inspired by the stories shared in this book and with the authors’ encouragement to be open to possibility.

Alexis Rothberg, AICPA Communications Manager recommends

• Good to Great: Why Some Companies Make the Leap and Others Don’t by Jim Collins (2001)

Although this book was published 15 years ago, I find it is still relevant today. Collins and his research team studied 28 companies over the course of five years in order to determine what led 11 of them to leap from good to great. One characteristic shared by the 11 great company leaders was level 5 leadership— humility and an intense drive to do what is best for the company.

Will you be taking any books with you on your holiday travels? Do you have any favorites that have benefited your work or professional development? Post a comment or email my team: NFPSection@aicpa.org.

Person reading by fireplace courtesy of Shutterstock

Sandi Matthews, CPA, CGMA, Technical Manager- Not-for-Profit Section, American Institute of CPAs.

     

Related Stories

• 5 Things You May Not Know About IRS Form 990
• Top 3 Takeaways on FASB’s New Not-for-Profit Standard
• 5 Essential Controls for Charities during the Holiday Giving Season

 

You know those gift cards you never got around to using? It’s possible they are now being counted as revenue by the state. Same goes for uncashed payroll checks and other financial instruments that were never claimed or used. States’ interest in unclaimed property as a source of revenue continues to grow. CPAs need to be extremely alert to state abandoned and unclaimed property (AUP) laws (which continue to evolve) and AUP reporting requirements to limit surprises related to an audit.

How does the process work? After the dormancy period expires, holders typically are required to turn over AUP to the state. AUP is property held or owed in the ordinary course of business that the owner has not claimed for a certain period of time and includes:

• uncashed payroll and vendor checks
• unapplied accounts receivable credits
• dormant bank and brokerage accounts
• unredeemed gift certificates and cards
• life insurance policies
• publicly traded securities with lost owners
• customer refunds and rebates
• benefit plan payments
• contents of safe deposit boxes

Many states treat unclaimed AUP as a source of revenue. All states, as well as Puerto Rico, the U.S. Virgin Islands, and Guam, have AUP laws.

Favorable court decision and implications

Historically, Delaware is one state that aggressively audits AUP. Using contract firms to audit companies incorporated in the state, Delaware has estimated AUP liabilities as far back as 30 years. Delaware’s specious theory was that the entire estimate was “no-address property” subject to claim by the holder’s state of incorporation.

In June 2016, a federal district court held in Temple-Inland, Inc. v. Cook et al that Delaware’s method of estimating AUP liabilities violated due process, stating that Delaware “…engaged in a game of ‘gotcha’ that shocks the conscience.” In issuing its decision, the court noted that Delaware waited 22 years to initiate the audit and tried to exploit loopholes in the state’s statute of limitations. The state also failed to notify holders that unclaimed property records should be retained and had no legitimate state interest in retroactively enacting an estimation statute other than raising revenue.

The court’s ruling ostensibly reined in Delaware’s egregious audit methods. That’s the good news. The bad news is the court also concluded that: 1) estimating an AUP liability is permissible; 2) raising revenue is not a prohibited purpose for enacting AUP laws as long as it’s not the only purpose; and 3) apparently, any state can estimate a liability for any holder regardless of the holder’s state of incorporation. As a result, expect to see other states jump on the AUP audit-and-estimate-a-liability train as a way to generate revenue.

The Downside

Running counter to the fact that many businesses underreport AUP are the risks associated with overreporting certain types of property, in particular, appreciated stock, brokerage accounts, certificates of deposits, individual retirement accounts, and health savings accounts. Not surprisingly, states are eager to monetize equity property when it’s received, which stops the clock on future appreciation. Owners have sued – and continue to sue – holders and states for allegedly mishandling the AUP treatment of these types of property.

Adding to the uncertainty is the lack of reporting guidance – statutory or otherwise – for retirement-type accounts. State AUP laws haven’t kept pace with the development of new investment and retirement vehicles, and what little guidance is available often differs from state to state.

Imagine an individual who attempts to withdraw funds from an IRA account only to find that the funds were turned over to the state as AUP 25 years earlier, and, moreover, tax penalties are due because the money was reported before the individual reached retirement age. Failing to follow AUP due diligence procedures can be a costly mistake for holders, especially for property with a growth or appreciation component.

The AUP compliance environment is dynamic, with increasing litigation and constantly changing state laws. The pace of statutory change is expected to increase as states begin to evaluate the provisions of the Revised Uniform Unclaimed Property Act, which was approved by the Uniform Law Commission (National Conference of Commissioners on Uniform State Laws) in July 2016. Staying abreast of developments and understanding the rules – which, of course, vary by state – is critical not only to steer clear of expensive state audits, but also to avoid the potentially high cost of overreporting certain property types.

Chris Hopkins, CPA, is a tax partner with Crowe Horwath LLP based in New York City. He has been at the forefront of unclaimed property as the area has evolved into a significant source of state revenue, and contributes to The Tax Adviser. A significant part of Chris’ practice is devoted to consulting with companies on unclaimed property matters.

Money and lock courtesy of Shutterstock.

Related articles

Year-End Planning: Roth IRA Conversions

12 Revenue Recognition Concerns

How to Help Your Clients Get Ready for Retirement – AICPA Insights

Use a Flowchart to Illustrate Client Wealth Transfer Goals – AICPA Insights

4 Ways to Help Clients Plan for Unexpected Medical Expenses – AICPA Insights

5 Cybersecurity Precautions for Small CPA Firms – AICPA Insights

     

Related Stories

• Find the Answers to Your Practice Management Questions
• Leave Yourself Behind When Working With Clients
• Five Experts Advisers Should Follow