Author: FFC

Bikram Sachdeva loves salsa and bachata dancing. You might also find him capturing landscapes, skyscapes, and nature scenes with his camera during travels to Senegal, Ghana, Tanzania, Mongolia, El Salvador, Nicaragua, and Jordan—countries where he’s monitored over $ 1.5 billion portfolio of projects.

Sachdeva is a CPA and CGMA, to name just two of five professional designations on his business card. “I hear a lot of stereotypes when people see my business card,” said Sachdeva, director of fiscal accountability at the Millennium Challenge Corporation (MCC), an independent U.S. Government aid agency that works to reduce global poverty through economic growth. “Some people assume that because I’m a CPA, I’m not outgoing. They’re surprised when I tell them I love to dance and take pictures, especially because these interests tend to be outside the norm of what people expect from an accountant.”

He shared the following about his experiences:

Your thoughts on leadership? Each MCC funded project is organized as an entity in the country where the work is taking place and has its own management, including a CEO and CFO. I advise the in-country CFOs, technical advisors and fiscal agents, and also at times interface with boards of directors, tax and finance ministers, and central bankers. Seniority—not just experience, but age—and social customs are very important. Because I may look younger than many of these people, the credentials on my business card are very important for establishing credibility. Sometimes, before we begin meetings my clients are very interested to know what every letter on my business card stands for!

How did you get into government accounting? After I got my MBA in finance, I started my career as a business analyst for a technology firm. When the dot-com bubble burst, I went to Arthur Andersen, got my Master’s in Tax, returned to consulting and then switched over to the litigation support practice at Ernst & Young. I did forensic accounting for Navigant Consulting before moving to my current position. I started to get my CPA license when I was in public accounting and now also hold the CGMA, CFF, CFE and PMP credentials.

Which skills do you believe are most important? To support in-country CFOs and fiscal agents, I deal with nearly every aspect of finance, budgeting, and accounting. A lot of my work is strategic and operational. But I also help CFOs figure out how to meet multiple reporting requirements for the U.S. government and for the countries’ own requirements, which often involve International Financial Reporting Standards and statutory reporting. So I think having a working knowledge of multiple technical areas within finance and management accounting is a necessity. Then you’ve got to have a strong understanding of the organization’s objectives and the ability to influence people who don’t report directly to you. In a global environment, putting all of these things together is what being a CGMA is really about.

What is your greatest challenge? Bridging culture and communication. Technical terms may be used differently from one country to another and many times English is not my counterpart’s first language—so it often requires getting into a discussion of what terms mean. There are also varying local customs for how transactions take place and are recorded, so you’ve got to ask a lot of questions and listen carefully. The CGMA helps prepare you for these kinds of international challenges and opportunities.

What about people skills? In the U.S., I think we keep our personal and professional lives more separate. In other countries, people want to connect with and know more about you as a person. So I tell them about my life and passions outside of work—music, dance, and art are some things that bring people together no matter where you’re from or what language you speak. Describing my hobbies of dancing and photography spark an interest in me as a person and help establish rapport that makes it easier to get work done.

How do you find time for salsa and photography with so much travel? Believe it or not, there are people everywhere who love to dance, so it’s actually easy when I’m traveling. Plus, once my international counterparts learn about my interests, they occasionally join me or offer to take me to places.

Advice for young accountants? If you’re a finance person in government, don’t lose sight of the public good, and remember, as a taxpayer, part of the money being accounted for is yours as well.

The views expressed by Mr. Sachdeva do not necessarily represent those of his agency or the United States.

______________

The CGMA Program is helping grow and strengthen finance teams across industries and around the globe. We invite you to explore the possibilities that will open up when you begin the CGMA Program.

Colette Krahenbuhl, Senior Manager—CGMA Communications and Public Relations, American Institute of CPAs.

Bugs Umamaheswar, Marketing Manager—CGMA and Management Accounting, American Institute of CPAs.

     

Related Stories

• Passion for Performance: A CGMA’s Perspective
• Lifelong Learning and Leadership: A CFO Perspective
• How to Supercharge Your Not-for-Profit’s Board to Achieve Scalable Impact

 

“Amateurs sit and wait for inspiration, the rest of us just get up and go to work.” ― Stephen King 

Whether it be racing to the office to conquer the business world, or managing all of our other daily commitments, we work hard every single day. And it’s not easy to stay productive with conflicting priorities. 

To keep you on track (and your sanity intact), below are five tips to inspire productivity at home and at work. 

(1) Don’t Be Afraid to Say “No.” 

Apple co-founder Steve Jobs put it the best. ”Focusing is about saying no.” From a professional standpoint, in order to truly do your job and meet your objectives, every time someone asks you to do something, you need to evaluate whether you are the best person to be doing that job, or even whether it should be done at all. Many of us are people pleasers and want to help, but saying “yes” is not necessarily the best thing for you or the organization. 

Even though saying “no” isn’t always feasible (e.g., we all have bosses), know your goals (business and personal) and inspire yourself to say “no” when valuable. 

(2) Stay Organized: Make Fire Drills the Exception, Not the Rule. 

Juggling countless commitments takes an impeccable memory or a sophisticated reminder system. My Outlook calendar is my saving grace (which syncs to my phone and tablet). For a work deliverable, I’ll often block off time to complete it (which prevents less urgent events from popping up and steamrolling my plans). I do the same thing for a personal obligation, such as a doctor’s appointment. 

I also set up recurring appointments/reminders. For example, I have an annual reminder on June 30 from 7-7:30 pm to change the batteries in our home smoke alarms. No more midnight chirps keeping my family up! 

For most of the smaller to-do items, or for a reminder to start working on something that is due far in the future, I add an appointment with no time associated with it. For example, if I have an article due to our editorial team on Oct. 15, I’ll set up a reminder on Oct. 1 from 8-8 a.m. Then, on Oct. 1, I now have Outlook prompting me to start working on that assignment. And, if I don’t get started on Oct. 1, I simply move the reminder to the next day. Sure, we may procrastinate on some tasks that we don’t want to do, but at least the reminder is there for you. 

I also use a color-coding system so I can easily spot certain types of projects or appointments on my calendar, and I mark many of my reminders as private so that only I can see the task. Every Friday afternoon, I spend 15 minutes looking over the following week’s appointments. This helps me set the stage for a productive work week. This system works well for me, but Outlook Tasks and project management systems, such as Teamwork, can accomplish the same goal. The point is – stay organized and find a reminder system that works for you. 

(3) Meetings: Be Present or Be Absent, But Don’t Try to Be Both. 

How many meetings have you attended where nothing was accomplished? Too many, I imagine. Either the leader wasn’t prepared or was unclear on what he or she needed from the attendees, or the attendees were too busy doing other things to give the meeting its fair attention. 

In order to be productive, meetings need a clear purpose (i.e., what does the leader want to accomplish). The meeting invitation needs to spell out that objective and include specific agenda items. 

To prepare, block off at least 15 minutes before it starts. Get yourself in the right frame of mind so that you come ready to contribute. If a meeting isn’t worth spending 15 minutes to prepare for, it’s probably not worth spending any time attending. 

The leader should verbally summarize action items/deadlines at the end of each meeting, and follow up via email. 

(4) Emails: Keep Them Short and Make Action Items (With Deadlines) Clear. 

We’ve all read the emails that ramble on without any clear purpose or “ask” of the recipient. These emails usually end up ignored or deleted. Get to the point quickly. I learned a lot of tips from attending Stan Berry’s Writing to Get Things Done course. He teaches professionals about the powerful tool of writing (often via emails). 

I’ve used Stan’s suggestions and incorporated a few more tips that work well for me: 

* Ensure the subject line contains the request and a deadline (e.g., “Request to Complete Project Report by 5pm on July 30”). Even if the recipient skims your email, he or she knows what you need from them (and the sense of urgency). If the email is truly information only (FYI), make that clear, too. 

* Use a three-paragraph approach. The first paragraph asks the reader to do something, the second provides a brief explanation on why it’s needed and any pertinent backstory, and the third says when you need the project completed. 

* Keep emails short. If you start writing a book on a project, it will likely be easier and more effective to have a phone conversation. 

* Be cordial. Make sure you have a nice opening and closing. Being clear and direct is crucial, but so is being kind and respectful. If you’re feeling emotional when you draft the email, don’t send it. Review it when you are able to be more objective, and consider having a phone conversation instead; sensitive information will likely be better received face to face. 

(5) Take Breaks to Stay Sharp. 

There are diminishing returns when you work that extra hour in the day. Take a moment to breathe and regroup (sometimes you just need to “sleep it off”). It’s amazing how much more productive you are when you are rested and thinking clearly. 

Put your phone down, watch a silly TV show with your family and get a good night’s sleep. Trust me, tomorrow will go better this way. 

Cheers to a productive, happy life.

Susan C. Allen, CPA, CITP, CGMA, Senior Technical Manager – Tax Practice & Ethics, American Institute of CPAs. 

 

     

Related Stories

• The Powerful Impact of Women in Accounting and Tax
• 3 Things to Keep When You Tackle Clutter
• Modernizing Fax Filings with the IRS

 

When considering the future success of a startup organization, thoughts naturally turn first to a clearly defined vision, mission and strategy for putting plans into action. After that, many ask, “How do I galvanize my staff and volunteers to lead?” Social impact organizations affect the most critical challenges facing our society– for example, lifting individuals out of poverty, providing access to vital services and fighting inequality. Having the right staff is critical and having the right board of directors is equally important. Scaling an organization’s impact means not just maintaining core processes, but also constantly sharing knowledge to build the organization’s capacity to affect change. Without leadership to keep the organization focused, staff can fall victim to fighting the daily fires that are a distraction from the larger goal of expanding the organization’s reach.

So how can you supercharge your board of directors? Here are four things to consider:

1. Identify needed skills and expertise.

Like any position within your organization, you want to ensure the right talent is at the table. Recruit board members with specific skills that are needed by your organization, such as program-specific knowledge or technical skills like financial or legal expertise. These professionals can be helpful when it comes to facilitating the what-ifs and related risks of strategic planning. Additionally, those with experience in information technology and human resources can help review policies and determine the effectiveness of current systems. A marketing professional on the board can aid in development of messaging for campaigns and outreach efforts. Plus, there can be considerable cost savings from all of this expertise as board members often donate their services, saving the organization money that might otherwise be spent with outside vendors.

2. Invite board members with solid networks.

Don’t be afraid to invite board members based on their personal and professional networks. Of course, potential board members should not be selected based on their connections alone. They should be inspired by the organization’s mission and motivated to make a difference. It is precisely the strength of their conviction that will help the organization when the board member reaches out to his or her contacts for support. With so much funding from corporate and foundation grants, it can be very beneficial to have board members who are well connected to decision makers and potential funders. Every board needs members who are committed to the cause and those who can help ensure the organization’s financial sustainability and growth.

3. Provide an orientation.

Make sure your board knows what to do once it’s in place. Individuals join boards for different reasons, and a diverse board will represent a variety of experiences and perspectives. Note, however, that some may not have previous board experience. Explain the tactics of achieving the mission, board member expectations and any special duties that may be required such as committee service, community events or possibly even responding to media requests. When board members have a clear understanding of what is being asked of them, they are more likely to participate enthusiastically rather than being caught off guard with surprise commitments. If you need help getting started, take a look at the AICPA Not-for-Profit Section’s Guide to Board Orientation.

4. Involve them in the organization’s activities.

Ask your board members to participate regularly in the life of the organization. Encourage them to engage with staff in the office or to volunteer on a regular basis. Whether they help prepare meals, assist on clean-up days or appear at community events, they become even more invested. Their personal testimonies are a powerful way to spread your organization’s message and attract new supporters. Additionally, their involvement in program service delivery may lead to new insights and efficiencies. One caveat: it’s important to clarify roles and responsibilities, lest your board members receive your invitation to participate in the trenches as an opportunity to micromanage. For more information, check out the AICPA Not-for-Profit Section’s Guide to Board Responsibilities.

The best performing not-for-profits succeed because of the committed staff and well-cultivated board members that work towards achieving the organization’s mission. As organization leaders, we should do everything we can to recruit the best board members, educate them on the inner workings of the organization and clarify roles and responsibilities.

If you want to learn more on this topic, I recommend AICPA’s online e-learning course, “Aligning Mission with Strategy.”  You can purchase this course individually or as part of the Not-for-Profit Certificate Program. To learn more, go here.

Tom Pender, CPA, CGMA, Senior Technical Manager- Portfolios, American Institute of CPAs. He frequently volunteers with not-for-profits and has served on a number of boards, including Wheels 4 Hope, an organization that provides safe, reliable automobiles to economically vulnerable families and individuals in North Carolina.

Not-for-profit board orientation image courtesy of Shutterstock

     

Related Stories

• Advising on U.S. DOL’s Overtime Rule and Worker Classification Issues
• 6 Planning Ideas for CPAs Who Have Aging Clients
• The 4-Step Coach Approach to Client Service

 

I don’t always get mail, but when I do it’s usually a credit card offer. And these cards are often tied to a particular hotel chain or airline. Many of these offers tout initial low-APRs, a waived annual fee and, increasingly, an obscene amount of rewards points – enough for a ROUND TRIP flight!!!! – if I only spend a few thousand dollars in the first couple of months.

However, my wife and I have been diligent about putting all of our charges on a credit card with a rewards program for a particular hotel chain and booking rooms at this brand whenever possible. The last thing I want is to lose our status with that chain by spreading ourselves too thin. This approach is working for us; over the past few years alone, we’ve paid for hotels in Denver, Boston, Puerto Rico, Baltimore and New Orleans using our rewards points. I’m by no means an expert travel hacker – that is, someone who has mastered collecting rewards points to earn free travel – but I’m making sure the money I spend on my card and the trips I take is working to my advantage. Seems simple, right? 

A new AICPA survey on credit card rewards points and travel found that a majority of Americans (58 percent) agree with me that using their credit or debit card to earn travel rewards points makes financial sense. However, few of them are actually taking advantage of these perks to save on their hotel and airline costs. Only seven percent of all Americans used travel rewards to pay for part of their last vacation with a only one in a hundred (one percent) paying for their entire trip.

In fact, the survey found that Americans are just as likely to be unable to pay for their vacations in full as reap the rewards of the points they’ve earned. In their lifetime, only 15 percent of Americans have paid for part or all of a trip with rewards points, compared to 14 percent who say they’ve taken a trip that has resulted in a credit card balance that could not be paid off by their next statement, causing them to pay interest charges.

Some Americans are going to greater lengths to earn free hotel rooms and flights as they pursue elite status. A total of 12 percent say they have opened a credit card specifically in order to obtain hotel or airline rewards, while six percent have selected a more expensive flight or hotel to earn travel rewards points and six percent have taken a trip just to maintain or upgrade a rewards level. I definitely sought out my credit card for the hotel rewards and I’ll admit to occasionally paying a little bit more to fly on my preferred airline and earn the points – but I draw the line at taking a trip solely for the sake of earning status with a hotel chain or carrier. 

Gregory Anton, CPA, CGMA, chair of the AICPA’s National CPA Financial Literacy Commission has advice for Americans to help keep credit card spending on travel for rewards in perspective. “When chasing after elite status with hotels and airlines, it’s important to not lose sight of the fact that miles and points often have a dollar value associated with them. Spending extra money in hopes of earning free nights and flights has the very real potential to leave Americans feeling like they’ve been travel hacked when their credit card payments are due,” Anton said.

Indeed, in just the last year alone, 12 percent of all Americans admit to 12 carrying a balance or paying interest on their credit card because of vacation travel, with three percent missing a payment or being charged a late fee and two percent going over the spending limit on their credit card while on vacation.

Personally, my goal is to come home from my vacations with a nice tan, good memories and maybe even a cheesy souvenir or two – not a credit card balance. If you follow the advice from the AICPA’s National CPA Financial Literacy Commission, you too can make travel rewards work for you.

3 Ways to Make Credit Card Rewards Work for You:

Look for cards with big sign-up bonuses. Your credit score could take a hit if you open too many credit cards in a short period of time, so choose carefully when applying for cards. Try to find cards that have large sign-up bonuses, which is increasingly important since many programs are requiring more points to earn rewards.

Don’t overspend to earn travel rewards. While a free flight or hotel room can be tempting, the rewards may not be worth the pain if you end up paying interest and penalties on unpaid balances.

Pick a card that fits your needs. Before applying for a credit card for travel rewards, determine what is most important to you. If flexibility is your goal, seek cards that allow users to transfer points between companies, such as hotels and airlines, and/or between family members.

In addition, the AICPA strongly recommends that all Americans do an annual check of their credit report and follow up on any errors as a way to protect their credit score. Additional credit card resources are available at on the 360 Degrees of Financial Literacy website.

James Schiavone, Senior Manager – Public Relations, American Institute of CPAs  

Related articles

What’s a Hooraycation, and How Can I Go on One? – AICPA Insights

When it comes to Financial Literacy, Small Steps Add Up Quick – AICPA Insights

Strengthening the Profession’s Core with Relevance, Rigor and Reach

     

Related Stories

• Buying a Home? You May Have Missed an Important Step
• 360 Degrees of Financial Literacy Introduces Spanish-Language Resources
• Are You Helping Protect Your Older Clients From Financial Scams?

 

You might have noticed the “graying” of your clients and thought “how can I, as a CPA and trusted adviser, provide services that meet their changing needs? What are the practice considerations surrounding those services?”

Recently, we served on a panel at the AICPA Conference on Tax Strategies for the High-Income Individual that focused specifically on these issues. Consider some of the following ideas gleaned from the session and how you may be able to incorporate them into your practice:

1. Services: Cognitive challenges often affect executive functioning, such as the ability to handle day-to-day finances. Services you might offer include automating finances such as bill paying, monitoring investments, and reviewing banking records to identify elder financial abuse. With clients more commonly living into their 90s and beyond, budgeting and the recurring financial responsibilities of an individual or family take on a very different nature.

2. Billing: Consideration must be given to how practitioners will bill for these services, not only upon inception, but also as the clients age. Commonly, service needs increase due to deteriorating health. If services are priced on a fixed-fee basis, what happens if the client develops Alzheimer’s disease or another type of dementia and the scope of services expands? While practitioners are often familiar with billing for accounting and tax compliance work on an hourly basis, some of the work for aging clients will be different and will require different billing alternatives.

3. Next Gen: Expanded services to aging clients can help CPAs grow their practices by reaching the children or other heirs of aging clients. The children or others who are named as agents under aging clients’ durable powers of attorney, or as successor trustees under clients’ revocable trusts, are the ideal people to contact. Reaching out to clients to arrange meetings with their designated fiduciaries is a logical value-added step, often minimizing the risks of problems when the baton is passed.

4. Reality of Family: Many planners presume that every client has an array of trusted family members to serve in various fiduciary capacities, such as serving as an agent under a durable power of attorney to handle finances when the client is incapacitated. Practitioners should have open discussions with clients as to whom they have named in these capacities and whether the people they named are really appropriate.

5. Marketing: Marketing a new array of services for aging clients will require educating potential clients about the benefits of having a CPA more involved in their financial affairs. Also, this type of educational marketing should focus on building comfort and peace of mind for the target audience. Older advisers who may have long-term relationships with older clients are in an ideal position to market their firm services to those aging clients. In addition, older, and in particular, retired partners may be ideal candidates for clients to name in fiduciary capacities as co-trustees or trust protectors.

6. Collaboration: Myriad issues facing aging clients requires the collaboration of all consulting professionals. Not only is planning for aging a multi-disciplinary task, but clients often tell different parts of their story to different advisers. Collaboration can help put the disparate pieces of the client’s puzzle together.

 Many CPAs may believe that developing the expertise, forms, procedures, engagement letters and other steps to serve an aging market will not be profitable. There is no doubt that there will be upfront investment costs in time and training. However, this truly presents an opportunity for CPAs and CPA financial planners to help aging clients with significant life-long decisions. The AICPA PFP Division has a number of resources which provide guidance on these issues, including its Elder Planning and Life Transitions after Retirement webpage, as well as a webcast recording on New Services to Offer Aging Clients. 

Martin Finn, CPA, L.L.M., Lavelle & Finn, LLP. Martin counsels clients on estate, financial, tax, business and elder law issues, including personal and corporate tax planning, business counseling, structuring of business transactions, estate administration and estate and business succession planning. 

Ted Sarenski, CPA/PFS, Blue Ocean Strategic Capital, LLC. Ted is chief executive officer and president of Blue Ocean Strategic Capital, LLC, in Syracuse, New York. He is a frequent presenter on webcasts and at conferences, and recently authored the newly updated CPA’s Guide to Social Security Planning for the AICPA’s Personal Financial Planning Section.

Martin Shenkman, CPA, MBA, PFS, AEP, JD, Shenkman Law. Martin is the founder of Shenkman Law, where he focuses on estate and tax planning. He is the author of more than 42 books and 1,000 articles, and is a quoted expert on tax matters. His work appears in well-known publications, including The Wall Street Journal and The New York Times. See his blog posts at www.shenkmanlaw.com.

Aging clients courtesy of Shutterstock.

     

Related Stories

• The 4-Step Coach Approach to Client Service
• Advising on U.S. DOL’s Overtime Rule and Worker Classification Issues
• 7 Models to Consider When Implementing the FASB’s New Credit Losses Standard

 

Often times, in-person conferences are the best time to get updates on industry news and to learn new things. The EDGE Experience, the premier career development event for young CPAs, focuses on building young professionals not only technically, but with soft skills as well.

Yesterday, Stacie Saunders, Senior Manager of Social Business at the AICPA, sat down with three CPAs to talk about how they began a professional strategy on social media. Saunders began the conversation by saying “most of us started on social media for personal reasons, but as you start to use it you can see how the benefits can cross over into a professional space.” So, how does one begin to use social media professionally?

As a special treat for AICPA Insights readers, we listened in and pulled tips and tricks for some of the most common questions surrounding social media.

Can you remember a defining moment when your social media went from personal to professional?

Rebekah Brown, CPA, recalled a time a few years ago when she published a blog series detailing her journey pursuing the CPA. After publishing the series, she received an email from a student in NC. “She had recently decided to major in accounting and was struggling and found my post through Google. She emailed me to thank me, saying it encouraged her to stick with it. I think that’s when I realized the real power of social media. I talk with a lot of students across Maryland (her home state), but certainly cannot connect with all of them, and had never even dreamed of reaching a student in another state. But with social media I can. I can help encourage and develop the future of this great profession, and that is what I am most passionate about.”

What is one of the challenges you faced when developing a social media strategy and how did you overcome it?

Using his background in litigation support, Chris Ekimoff, CPA/CFF, CFE, developed his strategy as if he would be on the stand testifying. “If and when an individual produces an expert report and is put on the stand to testify, opposing counsel will perform a significant amount of research and review of previous publications, interviews, and reports. Along that vein, so too will opposing counsel look into any publicly-available social media postings and videos. When structuring the goal of my social media efforts, I took that idea into account to be sure that I was conducting myself in a professional, defensible manner with every tweet or Facebook message. By thinking long-term about the implications of your social media use, you can keep many doors open down the road, instead of potentially painting yourself into a corner.”

What does your employer see as the biggest benefit to you or your organization having a presence on social media?

Amy Vetter, CPA/CITP, CGMA, put it perfectly when she said “We are a part of the conversation with our customers by being engaged with social media. We learn about what is going on with our customers and can instantly respond if needed. We also utilize it to provide real-time information that they may need for their businesses as well. In addition, we create closed groups where we can freely discuss topics that are solely related to Xero for people that select to be in those private forums.”

Interested in learning more about building a social media strategy? The AICPA has social media user guides available to help you do just that.

Elizabeth Rock, Specialist – Social Media and Member Engagement, American Institute of CPAs.

Social media icons courtesy of Shutterstock.

     

Related Stories

• A Tale of Two Cities: The Power of Hashtags
• SlideShare: An Introduction for CPAs
• Do You Remember a Mentor’s Best Advice?

 

I don’t know about you, but I’ve been having more conversations with my clients on employment issues lately. The new U.S. Department of Labor’s (DOL) overtime rule was announced May 18 and goes into effect December 1, 2016. Among other things, the new rule extends eligibility for overtime to certain white-collar workers by increasing the wage threshold from $455/week to $913/week ($47,476/year).

When my clients call with a “quick question” about the new rule, I chuckle to myself. These calls usually take an hour or more, as one question leads to another. These worker classification decisions can have major budget implications, particularly for small businesses and not-for-profits, and there is little time to come into compliance before December 1. In many small businesses without an HR department, employment issues fall under the finance or accounting function. 

Here is the basic guidance I’ve given to clients:

1. Review job descriptions and personnel records.

Their first question is “what is this going to cost?” But before beginning to do any analysis, my advice to clients is to use this opportunity to blow some cobwebs off their organization’s hiring records and contracts to make sure all overtime-eligible individuals are identified.

The white-collar job duties test, though it remains unchanged, needs a closer look in light of the new rule. Just because the word “manager” is in an employee’s title does not determine anything. Take a case-by-case look at a worker’s responsibilities; for example, do they exercise a degree of independent judgment on matters of significance to the organization? Refer to the DOL’s fact sheets that describe criteria for bona fide executive, administrative, professional and outside sales employees. It is not always straightforward, and in those instances, I encourage my clients to seek the counsel of an attorney specializing in employment law.

2. Look at classification of contractors versus employees.

Improper classification of workers as independent contractors, when they really ought to be treated as employees, is a perennial problem. A common misperception: Just because a position is grant-funded does not necessarily mean the worker is an independent contractor. The primary issue is who “controls” the worker, as well as the type of relationship and the financial aspects. The IRS’s Publication 15-A has detailed information on making the determination.

3. Consider options available and budget implications.

Now that you have identified those employees that will need to be reclassified, the next question is “where do we go from here?” Well, one option is to pay the additional cost of overtime for those eligible employees who work more than 40 hours a week. On the other hand, some organizations forbid overtime, or are making plans to shift work schedules, hire additional part-time workers, or find volunteers to pick up the slack. Some organizations may reduce salaries so they do not result in overtime. Although the latter options keep costs contained, they can harm productivity and morale. 

One challenge for organizations affected by seasonal fluctuations in workload (for example, charitable organizations during the busy holiday giving season), is that they may need to reassess their comp time practices.  If an employee is reclassified, they must be paid overtime for any hour over 40 they work in a week; comp time cannot be substituted for overtime for nonexempt employees.  

Additionally, organizations with positions that are funded by grants may be contractually obligated to maintain program services at a specific level in accordance with the grant terms. Yet, when increased staffing costs are not covered under the grant, absorbing those costs could leave the organization in dire straits.

A great tool for decision-making is a “what if” scenario analysis. Compare changes in the threshold to current employee salaries and wages. Considering the options, compute the costs and compare the effects on your budget and cash flow. Then consider the intangible costs on employee morale and work distribution.

For small businesses, there are difficult decisions ahead. For businesses with June 30 year-ends (common for not-for-profits) whose budget cycle has completed, they may need to amend their budget for the 2016/17 fiscal year. Additionally, they will need to update timekeeping and payroll systems, conduct training for managers, and talk to employees who have been reclassified.

Want to learn more on this topic? Join the AICPA Not-for-Profit Section’s upcoming webcast on August 24. The presentation will be geared toward charitable organizations and is open to anyone with an interest in employment compliance. There will be opportunities for Q&A. The event is CAE and CPE eligible.

Jeff Lange, JD, CPA, President, GHI Accounting. Jeff has spent over 25 years in the industry as an auditor, accountant and tax consultant.  He is also a member of the Not-for-Profit and Tax Sections of the AICPA.

Man working overtime image courtesy of Shutterstock.

     

Related Stories

• The 4-Step Coach Approach to Client Service
• 7 Models to Consider When Implementing the FASB’s New Credit Losses Standard
• 5 Steps to Increase Effectiveness for Not-for-Profit Leaders

 

 

Related articles

5 Financial Tips for Newly-Employed Young People

Taking a Staycation? A Few Tips for Making the Most of It

Risk Management: Increasingly Important and Vastly Underused

Baby on Board? 7 Tax Tips for Expectant (and Hoping to be Expectant) Clients

Fueling the Accounting Profession Pipeline: What Will it Take?

     

Related Stories

• Summer Reading Recommendations

 

Before CPA financial planners can provide expert counsel to clients, they first must get to know them in a very meaningful way. The process involves asking self-reflective questions and something I like to call the “coach approach” to client discovery.

The coach approach is a cooperative process, or a two-way street, and comes from material published by motivational expert Michael Pantalon. A good planner (the coach) guides and motivates, imparting knowledge along the way, but the client must also have some skin in the game with a commitment to executing the plan. After all, a basketball player could be coached to improve his game, but the player must commit to practice, and ultimately perform, before any real progress can be made.

Here are four steps to the “coach approach”:

Step 1: Ask Simple Questions

When we go through discovery, we’re coaching clients to become more aware of what’s important to them. We do this through one-on-one meetings where we identify the areas to explore.  With the coach approach, we go one step further by asking self-reflective questions, which lead to answers that can help us coach the client.

Here are some examples:

1. What’s most important to you?
2. What would it take to attain it?
3. What steps can you take to put that in place?
4. How soon can it be done?
5. Once those questions are answered, would you like me to follow up with you in the timeframe you indicate to see if you, in fact, did take those actions?

These are simple questions with some surprising outcomes. For example, when I went through discovery with a married couple, I asked the wife, “What’s missing in your life?” She thought about it, paused, and said, “a dog.” The look on her husband’s face was priceless because I knew he had just bought her a Mercedes. He probably was thinking, I could have just purchased her a dog!

Step 2: Show Respect & Listen

When asking these questions, demonstrate respect for the client and be a good listener. Acknowledge that the client is the foremost expert on his or her own life, and listen for triggers to help you create the financial plan. Be open minded and nurturing to each client’s personal situation.

Step 3: Implementation

Now is the time to offer realistic options, working with your clients to create step-by-step plans.  

Begin by discussing the choices for investing based on tax planning and diversification. Assess their risk to determine their insurance needs. See how your client is spending money, and work on budgeting strategies and debt management. Most of all, work together to come up with some realistic goals. This is different for each client and is often affected by priorities and current life stage. For example, they may be ready to retire and sail the world, or instead, save for their kids’ college education.

Every client has such different needs and goals that each one will have a different plan and strategy. That’s why listening, cooperating and coaching is so important. 

Step 4: Accountability & Encouragement

Reflect back on the five simple questions in step one. Asking “how” and “what” triggers possibilities and focuses on the positive. The questions above may seem simple on the surface, but they are quite powerful and go a long way toward building a strong and successful relationship with your clients. Having that accountability and offering encouragement along the way establishes a process that helps clients attain results.

A Collaborative Solution

The coach approach is just one way to look at financial planning; the best approach is one that works for you and for your clients. Regardless what you do, make it a collaborative process. Your clients will respect and respond more readily, and your services and solutions will get them the results they need.

Mark Astrinos, CPA/PFS, Vista Wealth Management, LLC. Mark is a wealth advisor at an RIA located in the heart of the Silicon Valley. A Registered Life Planner®, he is passionate about helping clients find a healthy balance between money and life. Along with Jean-Luc Bourdon, CPA/PFS, he recently presented “Gaining Confidence and Building Rapport in Client Meetings” for members of the AICPA’s Personal Financial Planning Section. Contact him at markastrinos@gmail.com.

Coach’s whistle courtesy of Shutterstock.

Related articles

5 Tips for Building Your Financial Planning Practice

The Importance of Financial Literacy Month

Mine Client Tax Returns for Financial Planning Opportunities

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

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

The One Career Move That Changed My Life – AICPA Insights

Client Advocacy: Susan Tillery, CPA/PFS, Takes a Unique Approach – AICPA Insights

     

Related Stories

• 7 Models to Consider When Implementing the FASB’s New Credit Losses Standard
• Passion for Performance: A CGMA’s Perspective
• The Current Expected Credit Loss Model is Here… Now What?

 

Anyone who is going through the process of buying a home knows that it can be a long and expensive process. And it’s one that you need to get right to build a solid financial future. From finding the right realtor to determining the most important factors for your next home, there are many important steps to take. Luckily, 360 Degrees of Financial Literacy and Feed the Pig are here to help. Here are four essential tips (including one many people overlook) to help you with the home-buying process:

1. Find the right lender. There are many different types of mortgages, including fixed-rate, adjustable-rate, government-insured, conventional loans and others. The interest rate on your mortgage is based on several factors, including how much the home costs, how much money you are putting toward a down payment and the type and length of the mortgage. Make sure you consult a few reputable lenders to determine the best option for you. If you plan to get more than one quote, be sure to request these within days of each other to lessen the impact on your credit score.
2. Search for the right home. Create a list of (reasonable) must-haves for your price-range. Is location or size of house more important to you? Do you like the neighborhood? Is it close to public transit? Does the right school district matter? Think about your home in a holistic way that takes into account the actual house and the surrounding area as well as your lifestyle. You probably won’t get everything on your list so having an understanding of needs versus wants will help speed the process.
3. Find the right mortgage. Although it might be tempting to borrow as much as a bank will lend you, make sure this works with your budget. And the forgotten important step…
4. Look at all living expenses. This is where first-time homebuyers sometimes get into trouble. Make sure your monthly budget accurately reflects all living expenses. Take into account not just the mortgage payment, but other items like property taxes, commuting expenses, utilities including gas, electric, and water. Be sure to take into account any immediate upgrades or repairs your new home may need, including big ticket items like kitchen and bathroom renovations, and repairs to the roof or floors.

For more information, check out this #creditchat, featuring David Lopez, CPA from the National CPA Financial Literacy Commission. Don’t forget about our calculator which figures the amount of income required to get a mortgage.

Dan Bond, Senior Manager – Communications and Consumer Education

Samantha Delgado, Manager – Communications and Consumer Education

Home image courtesy of Shutterstock

     

Related Stories

• Are You Helping Protect Your Older Clients From Financial Scams?
• Prince’s $250 Million Mistake
• 360 Degrees of Financial Literacy Introduces Spanish-Language Resources