Braddon Group

Implementing the new revenue recognition standard is like climbing a mountain.

It’s a challenge. It has to be addressed since the standard is effective for private companies and many not-for-profits in calendar year 2019. It can be tedious to make sure systems are updated appropriately and staff is trained.

Sometimes your clients may get breathless through this exercise and feel discouraged, so they turn to you. As your clients’ management and accountants climb “Mount 606,” as I like to call it (named after the FASB ASC 606), they look to their CPA firms — you — for help up the summit.

When your CPA firm provides such implementation help to attest clients, you must maintain independence. That task can be especially challenging with FASB ASC 606, given the complexity and scope of implementing the standard.

The AICPA Code of Professional Conduct addresses how nonattest services can be provided to an attest client while maintaining independence. Those rules appear in  “Nonattest Services” subtopic (ET 1.295) of the Code. They only apply when performed for an attest client. If the client is a financial statement attest client, the rules also apply (with certain exceptions) to that client’s affiliates.

When nonattest services are performed for an attest client, threats to compliance with the “Independence Rule” (ET 1.200.001) may exist. When significant independence threats exist, independence will be impaired unless the threats are reduced to an acceptable level. Reducing those threats includes making sure to meet the requirements included in the interpretations of the “Nonattest Services” subtopic under the “Independence Rule.”

We know independence rules can be overwhelming, and we’re here to help.

The Center for Plain English Accounting, AICPA’s national A&A resource center, recently issued a report to our members that covers the application of the AICPA independence rules to engagements to assist attest clients with FASB ASC 606 implementation. That report is now available to everyone, regardless of Center for Plain English Accounting membership.

Using a case study approach, it covers various requests that a client may make of a CPA firm, such as:

• Getting involved with the client’s FASB ASC 606 project team — Practitioners need to be careful here and avoid performing management responsibilities.
• Assessing how FASB ASC 606 will affect the client — Practitioners could identify current process flows for revenue recognition.
• Identifying gaps between the current state and the requirements of FASB ASC 606 — Practitioners may perform a gap analysis and present the results to the board of directors.
• Developing a plan for implementing FASB ASC 606 — Practitioners can provide advice and recommendations.
• Revising processes, internal controls and accounting policies — Practitioners can provide some assistance, but not all services are permissible.
• Helping the client identify and evaluate customer contracts — Practitioners may help but should not perform these activities on behalf of the client.
• Identifying performance obligations — Practitioners may serve in a support role, but the client needs to perform these activities.

In addition, the report discusses the CPA firm’s evaluation of threats to independence and other matters.

Practitioners need answers to their difficult A&A questions. The Center for Plain English Accounting is here to help. Ensure your firm has access to top-notch A&A advice by joining the Center for Plain English Accounting.

Also be sure to check out episode 9 of Ethically Speaking, the podcast of the AICPA Professional Ethics Division. This video addresses helping clients without crossing the independence line and how to apply safeguards as well as services you may provide and understanding a client’s documentation of compliance with the standard.

Bob Durak, Director — Audit & Accounting — Technical Services — Public Accounting, Association of International Certified Professional Accountants

     

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They might not have won the World Series this year, but the Boston Red Sox are definitely winning. As one of the highest-valued Major League Baseball franchises, the organization leverages the power of data analytics to make better business decisions. Tim Zue, the franchise’s Executive Vice President and CFO, recently shared in a Facebook Live interview how he uses technology and data to increase revenue, lower costs and optimize the fan experience. Here’s his advice on how finance leaders can use data analytics to bring greater value to their organizations and customers.

Identify the problem you’re trying to solve.

Data can be a powerful tool if you know the question you’re trying to answer. If you don’t, you’ll end up with an extraordinary amount of mostly useless information. Zue recommends first identifying one or two problems you’re trying to solve. For the Boston Red Sox, it was learning more about their fans and their preferences to better align ticket prices to the market demand. Next, determine what data you already have access to and what data you need to find.

Start small and go slowly.

You don’t have to be a large organization to leverage the power of data analytics. The Boston Red Sox are a medium-sized enterprise with finance, analytics and IT teams totaling about 40 people. Yet, the team is leveraging several new and emerging technologies to collect, report and analyze data. Zue says their journey to data analytics was only possible because he started small and proved his success to leadership one project at a time. He cautions finance leaders against jumping into a large data analytics project too fast. It’s easy to make an early mistake that can be devastating to the reputation of what you’re trying to achieve. His advice: Be patient and work to gain leadership buy-in slowly, one small win at a time.

Tell your story well.

Your data could unveil groundbreaking insights. But if your CEO, board or other decision-makers can’t see how it will help them make a decision, you’ve missed the mark. Helping people make better decisions is the goal of data analytics. Zue says delivering data in an actionable, easy-to-read format is critical. His organization uses heat maps to show its owner which tickets are overpriced or underpriced. He’s also convinced leadership to use the Tableau app to see the team’s financial data through visualizations in real time. His boss can now check financials at any time with the tap of a button. This transparency helps speed along business decisions and builds trust.

Make sure your team has the right skills.

Zue’s journey to the C-suite did not follow a traditional accounting path. That’s why he says it’s critical that he has people on his team who are accounting experts. This means accounting professionals who understand budgeting, forecasting, reporting and other essential accounting duties.  Zue also says it’s important that today’s accounting and finance professionals embrace a digital mindset. This means having knowledge of new and emerging technologies and understanding how to apply them within the context of finance. And, finally, he emphasizes the importance of “soft skills,” such as critical thinking, decision-making and collaboration.  When he hires someone for his team, he’s seeks someone with strong business partnering skills who is passionate, innovative and willing to try new approaches. 

Resources to help you

Zue said that having the right players with the right skill sets is a key component to a winning team. To help you build your own winning team, the Association of International Certified Professional Accountants® (the united voice of the AICPA and CIMA), delivers the latest insights, tools and resources. Here are a few for you to check out:

• Closing the skills gap in data analytics — An interactive brochure that highlights how finance professionals can better leverage data to drive decision-making
• CGMA® Digital Mindset Pack — The pack is a crash course on blockchain, robotic process automation and data-driven decision-making. This digital learning bundle carries 6 CPE hours and is free for CGMA designation holders.
• CGMA Competency Framework — A roadmap to guide you and your team’s skills development
• CGMA Finance Leadership Program — On-demand learning to help your team develop the digital, business, technical, leadership and people skills required for our digital era
• CGMA Advantage newsletter — The latest financial and leadership insights delivered to your inbox five times a week

Colette Sharbaugh, Senior Manager – Communications & Public Relations, Association of International Certified Professional Accountants

     

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• Boost your career by becoming a better listener

 

What did you say?

Listening can seem surprisingly complicated. It’s possible to hear what someone says but not catch every nuance of what they are telling you or their unspoken statements. Improving your listening skills can help you become a better professional. It can make it easier to understand what a colleague or supervisor expects of you or determine what service will add value for a client.

In honor of National Listening Day, here are ways to enhance your ability to be an active listener.

Listen more than you talk.

This advice comes from Sir Richard Branson, founder of the Virgin Group, in a LinkedIn article. “Nobody learned anything by hearing themselves speak,” he writes.

While it’s acceptable to share your ideas, don’t miss the chance to learn from and about other people. Generally, your goal should be to listen to hear the other person and get something out of their words, not simply so can you respond when they’re done.

Be attentive.

The habits of an active listener include facing the speaker, maintaining eye contact and good posture and — particularly important — letting the other person complete what they have to say before speaking yourself. Interrupting someone not only prevents them from getting their points or information across, but it also can indicate impatience or a lack of interest in what they are saying.

Even if you have a quick answer or response to what you’re being told, try to be patient and, if necessary, find a diplomatic way to ask a question if they’ve gone on a while. Checking your phone can also make it tough to absorb what someone is saying, and it gives the impression that listening to them is not your top priority.

Ask questions.

If you’re in a job interview or a meeting with your boss or a client and aren’t sure of something the other person has said, repeat what you think you’ve heard and ask if you’ve got it right. That’s also a good approach if someone has brought you a complaint and you want to show you’ve understood their issues.

You might also ask questions to dig deeper into the points someone has made. Ask for more details about a boss’s expectations, or encourage a client to share information about business challenges or opportunities that they mention in passing. You may uncover valuable insights that can help you advance your career or better serve a client.

Be aware of nuances.

UCLA researcher Albert Mehrabian found that spoken words only account for 7% of what we communicate. Body language communicates 55% and the tone of voice the other 38%.

With that in mind, watch for clues such as facial expression and speaking tone to get a better sense of the feelings behind the words. If someone insists they aren’t upset about something but they’re speaking loudly or emotionally, they probably really are upset. If they smile with their mouth but not with their eyes, they may not be as complacent or agreeable as they say.

As management expert Peter Drucker noted, “The most important thing in communication is hearing what isn’t said.”

Empathize.

What’s going on in the other person’s head as they speak to you? How does it feel to be them? This may sound difficult to determine. But even trying to empathize can give you a greater understanding of the full story behind their words and help you notice those signals in body language and tone of voice.

“I am endlessly surprised by what new and useful information I can gather just by keeping my ears open,” Branson writes.

Use these tips to boost your listening skills. You may be amazed at what you learn!

Liz Rock, Manager – Branded Content Strategy, Association of International Certified Professional Accountant

     

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The original goal of the first Bitcoin blockchain was to improve the efficiency, transparency and speed with which institutions could conduct financial transactions and trade information. That objective is still front and center today, which is why blockchain is being embraced by the insurance industry.

Here are five key insights into the ongoing impact of blockchain:   

1. The importance of blockchain is clear. A public, private or consortium blockchain enables individuals to store and transmit information to each other in a manner that’s encrypted. It can be a great advantage in helping clients and customers make more informed choices. Today, the significant amounts of time that people spend reconciling and transferring data do not add value for their organizations or their customers, but with blockchain that manual reconciliation and transfer are no longer necessary.

2. Blockchain is already being put to work, with global impact. One high-profile example is Walmart, which has asked all its suppliers of leafy greens to use blockchain to link their products back to the farm where they were grown. J.P. Morgan, IBM, British Airways and Toyota are also using blockchain, with tremendous implications for those companies and anyone who does business with them.

Is blockchain already a part of everyday conversation at your organization? If not, you can expect it to be within the next two years. Those in management, financial or accounting roles will have to understand and be able to communicate about it.

3. Two Ts explain the value of Blockchain. The new technology’s transparency and traceability address a major pain point in insurance: knowing if information is accurate, up to date and available to all the parties involved. A real-time update of the common record is crucial to the insurance business. All parties must be informed and aware of their rights and obligations once a triggering event has occurred.

The ability to trace a triggering event to the processing and payment of a claim on a common blockchain platform that all the parties have access to is a game changer., That traceability can help offset the fraud, errors and other risks that end up costing insurance carriers — and all of us — money.

4. Blockchain’s use is being tested in the insurance industry. Organizations have launched pilot blockchain programs in a wide array of insurance areas, including property, maritime, property and casualty, auto and health insurance. The list of companies with projects is extensive.

This is to be expected, since the point of insurance is to insure clients against external risks while making sure that the variables that go into the pricing of insurance and payment of policies operate in an efficient manner. Doing so requires sharing information between organizations that may not operate on one common platform, and blockchain solves that problem. 

5. There will be changes for both insurers and customers. Each side will have to be on the same page with how the platform is going to operate, who has access to it and what type of information will be stored. If your company is working with an insurer that is on a blockchain platform, your controls, procedures, workflows and access rights must be up to par with the platform’s requirements.

Information will have to be stored in a digital format, but many insurance and accounting organizations still use a lot of paper today. The benefits of blockchain won’t be realized if data can’t be uploaded to a digital platform. There will also have to be policies on how the platform updates procedures and on maintaining consistent controls.

The perfect arena for CPAs

CPAs gather information from internal and external sources and use it to develop insights that their organizations or clients can use in critical decision making. With that in mind, accounting, tax, audit and numerous other professional areas are ripe for using blockchain to augment current processes. It can help you become more efficient, productive and give better advice to clients and customers.

Right now, no organization or person has a monopoly on information in the blockchain space. This presents an opportunity for CPA firms that position themselves as trusted advisers in this fast-growing area. To learn more, turn to AICPA resources such as the Blockchain for Insurance learning guide, the comprehensive “Blockchain Fundamentals for Accounting and Finance Professionals Certificate” course and the primer “How will blockchain change accounting?”

Dr. Sean Stein Smith, Assistant Professor – Lehman College at City University of New York (CUNY). He served as a technical editor/presenter for AICPA & CIMA’s RPA courses as well as the Blockchain certificate program. He is the chair of the Accounting Working Group of the Wall Street Blockchain Alliance.

     

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Turn on the news and you’ll see that no organization is too big or too small to be the victim of a cyberattack. It’s vitally important for an organization’s leaders to understand and manage cybersecurity efforts because you can never be totally safe from the risks.

Here are four cybersecurity best practices every organization should follow:

1. Keep your system up to date.

Updates are almost always one of the biggest missing security components. Companies like Microsoft and Google identify problems in existing systems and create updates to address them, but these patches won’t do you any good if you don’t install them. For your personal computer or a small office, just check the box in your settings to automatically apply updates. As organizations grow, company leaders should work with their IT team to ensure updates are made.

Here’s how the problem can play out when everything goes wrong:

One firm suffered a ransomware attack during the summer that rendered all of its data inaccessible. An outsourced computer consulting firm was performing backups of the firm’s data, so the firm contacted them to restore it. Unfortunately, the restore failed. Even worse, the data was so damaged that the firm had to pay the ransom to access it. Since the data had been damaged, they had to spend a great deal of time rebuilding it, only to face another attack down the road since they hadn’t followed up with the proper security procedures.

The entire problem could have been avoided if the firm had taken two basic cybersecurity precautions: using security patches and testing a restore attempt before they needed one (a different measure from simply testing backups).

2. Pump up your passwords.

Since bad actors can find your username and password, using two-step login or multifactor authentication adds an extra layer of security. The next time you log in and enter your username and password, you will also have to enter data texted to your phone or that you receive in a call. More sophisticated options include apps that run on your phone to generate authentication code numbers. It helps prevent the use of your devices or accounts even if someone obtains your username and password.

To determine if your login data is already out there, you can also go to the website haveibeenpwned.com. Troy Hunt, who runs the site, has built a database of usernames and passwords that have shown up on the dark web. If you find your details there, you need to reset your username and password at the locations you see immediately. If there is a chance you reused the same password to login elsewhere, reset those passwords too.

3. Cordon off third-party access.

When your organization connects with a third party, your security is only as good as theirs. Some organizations suffer cyberattacks that start with their vendors, consultants or suppliers, as it’s very difficult to vet an outsider’s cybersecurity. The first step is to get as much information as possible about the security steps of anyone you deal with and to regularly follow up for updates so they know you’re paying attention.

One strategy to help isolate your network from one of your third party’s insecurities is to tell your IT team set up what’s called a demilitarized zone. Often shortened to “DMZ,” this is a subnetwork that creates a separate area for each company that accesses your network.

If an online provider is doing tax processing, for example, they will need access to your database of client information. You would set up a server or other resource inside a dedicated DMZ that contains that particular information but does not allow access to your full network. If an attacker compromises your vendor’s network, they can access all the information you share with your vendor. However, it will be more difficult for the attacker to enter your network through your connection with the vendor. Find ways to proactively compensate against potential insecurities in your vendors’ systems. Your security is increased if you effectively isolate their access to your network.

4. Hardening your systems.

This refers to methods for preventing damage even if your network is attacked. One of the simplest measures is to make sure you’re using the most recent operating systems since newer systems are more hardened to attack.

Another step is ensuring that no person or program has access to something that they don’t need. People outside HR don’t require access to that department’s employee data, for example, and HR doesn’t need to access client files or financial information. If a bad actor enters your network posing as a user in either of those departments, then until they manage to escalate their access, their access could be limited to just that user’s area.

These four cybersecurity best practices can prevent a devastating data breach, so don’t wait until you’re the victim of a cyberattack to implement them. Accounting and finance professionals must be proactive — take these steps to protect your organization today. 

Mike Foster, founder of the Mike Foster Institute (USA) is a Certified Ethical Hacker, Certified Information Systems Auditor, and Certified Information Systems Security Professional. He’s delivered more than 1,500 presentations and training sessions around the world and has consulted at hundreds of companies in North America. Find out more about Mike on his website.

     

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What’s the right technology for your financial planning practice? In a recent AICPA podcast, I interviewed an expert panel of CPA financial plannersfor advice. Some offer tax compliance and investment management, while others do not. To learn more about their practices, check out this podcast.

Michael Goodman, CPA/PFS, WealthStream Advisors

• With technology, I recommend focusing on three considerations:
  • What program does the best job in letting clients understand what I’m trying to communicate or the service I’m offering?
  • What makes sense for our firm? If the practice has multiple advisers or employees, for example, finding a program that will enable communication and collaboration is a priority.
  • What makes sense for the adviser? Ask yourself what capabilities would make it easier to do your job.

What are the essential software programs for a tax and planning advisory business?

Jean-Luc Bourdon, CPA/PFS, Lucent Wealth Planning:

• A file management program allows you to securely share sensitive files with clients. I use ShareFile, which backs up to the cloud.
• Customer relationship management (CRM) programs let you keep track of client issues. It retains all my client to-do lists, among other valuable information.
• A comprehensive financial planning program is also essential. MoneyGuidePro is an example of a robust program with lots of features.

Brooke Salvini, CPA/PFS, Salvini Financial Planning:

• Cloud solutions: About eight years ago, I decided to switch to a virtual desktop. I use RightSize Solutions, a cloud-based wealth management program. Files are kept safe and secure, and I can access and work on them wherever I am.
• CRM: I initially made a mistake and tried to save money by not getting CRM software, but I have found it to be essential. I use ProTracker Software.
• Client portal: I use eMoney Advisor to share files with clients. It’s an aggregator, so clients can connect their investments or other accounts with a high level of security.
• For CPAs who handle investments, Morningstar Advisor Workstation is a research database.

Susan Tillery, CPA/PFS, Paraklete Financial:

• Financial planning software: I don’t manage assets, but I do integrated and complex planning, so financial planning software is the most important program for me. We recently decided to switch to eMoney, one of the reasons was because of its excellent document file storage capabilities.
• Email: We use IBM Notes, a highly secure email system that also takes care of our CRM needs. 

Michael Goodman, CPA/PFS, WealthStream Advisors:

• Cloud solutions: This is the backbone of your system. I use Itegria, a solution for registered investment advisers.
• Financial planning: I switched to eMoney after many years of using an Excel spreadsheet, because it has the kind of quality control necessary in a multi-adviser firm.
• CRM: Too many CPAs use Outlook as their CRM program, but it doesn’t offer a very powerful way to maintain a relationship. I use Junxure, which keeps all my client information and notes from meetings in one place. You can pick up a relationship and run with it. In addition, adding a new client involves a between a five- to 15-step process. You can set up that process in your CRM. You complete one step, check a box and the next step appears.
• Document management: I use Worldox, which allows me to access files quickly.

Do these software packages all talk to each other? 

Jean-Luc: The more they talk to each other, the less duplication of input, so it is important to engineer them to fit together. My CRM package, Redtail, imports emails from clients into an email file so I don’t have to scour Outlook for them. My portfolio management software, Orion, imports data from client portfolios to their financial plan in MoneyGuidePro.

How can you determine what package is right for you?

Jean-Luc: Find a peer group, identify participants whose practices are like your own, then see what works for them. The AICPA PFP Section has a wonderful community of planners you can join. Also, many financial planning software providers allow you to try their product free for two weeks. Input your own plan and see how it works. 

Brooke: One important question to consider: Are you going to work with clients virtually or in an office in person? If you want to work with clients around the country or be more mobile, that will have a big impact on how you should structure your technology.

Susan: Remember, too, that switching software can be a huge undertaking for a firm like ours that is so dependent on it. Our transition went well but was very time-consuming. Previously, we had developed our own state-of-the-art document storage vault; but we realized it would cost too much to maintain it at the level eMoney offered. Our clients are thrilled with the new software, which keeps all their information stored in one place.

Michael: Before you buy an additional package, go deep into your existing software to see if it already has the capabilities you need. Contact the company’s tech support, explain how you use the software and ask for best practices they’ve seen in practices similar to yours. Many people don’t take advantage of everything their software has to offer. Get more out of what you’re paying for before you spend money on additional software.

Ted Sarenski, CPA/PFS, President & CEO, Blue Ocean Strategic Capital, LLC. Ted chairs the AICPA’s Advanced Personal Financial Planning Conference Committee and Financial Literacy Commission, in addition to chairing the AICPA Personal Financial Planning Executive Committee’s Elder Planning Task Force.

     

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It’s National Entrepreneurs’ Day! Take a moment to celebrate your success or the great plans you’ve developed.

Maybe you’ve got a fantastic idea for a business and your confident it’s going to be successful. Or perhaps your company is already up and running, but you constantly wonder whether you’re doing everything you can to ensure your business’ financial success and security — and your own. No matter what stage you’re at in the entrepreneurial journey, you can follow these four steps to make the most of the business you’ve built and the future you’re hoping it will have.

1. Create and maintain a sound business plan. A well-crafted business plan should walk you through each step of launching and managing your company. If you’re planning a start-up or are in the initial stages of your business, it can serve as your roadmap. Ideally, this business plan will incorporate the following elements:

• A description of your company and its purpose.
• An analysis of the market in which you’ll do business and your marketing plans.
• A discussion of the products or services you’ll sell.
• Information on your management, highlighting the expertise they bring to the organization.
• Details on your financial situation and prospects.

A business plan isn’t just a great tool for you, it’s also a requirement for prospective investors and lenders who want a good sense of how your company works.

If you’re already running a business, consider updating your plan. This will help you spot new opportunities you can seize as well as weaknesses that need to be addressed. If you created a plan in the early days of your company, be sure to update it regularly so that you have an informed understanding of where your business stands today.

2. Invest in your future. Whether you want to expand your facilities, open another location, hire new employees or fund similar goals, it’s important to earmark some of your budget to spur growth. In order to make the best investments, consider how each possibility would fit into your long-term strategic plan and drive growth

You should also be sure to invest in the assets you already have: Maintaining your equipment and infrastructure, for example, or hiring more qualified people. In some cases, you may need to make investments that will help you keep up with growth that’s already occurred. For example, if your product is so popular that your order delivery times have slowed, you should consider expanding your capacity and your staff. That way you can meet demand without keeping customers waiting.

3. Use debt wisely. Borrowing allows you to take advantage of solid opportunities that you can’t cover with cash on hand. So long as you never take on more debt than you can handle, it’s an invaluable resource. To get a loan or new investment, you’ll typically need a solid business case for your request and reliable financial statements. The Small Business Administration offers information on funding a business, including details on SBA-guaranteed loans.
4. Don’t forget personal financial matters. As a first step, separate your business and personal finances by creating and maintaining different checking, saving and investment accounts and credit cards for your business. This makes it easier to independently track your business and personal assets and spending, and to establish credit and financial records for the business.

Consider setting up a separate legal entity for your business, such as an LLC, S Corp or C Corp. This protects your personal assets from business debts. While it’s tempting to dip into company profits as needed, your business and personal life will be easier to manage if you pay yourself a set salary and stick to it.

Keep track of when you use personal items — such as your car — for business purposes so you can deduct the value of that use. And remember to determine how your company will pay for employee health insurance, including yours.

Whether you are an established entrepreneur or are just starting out, following these four tips will benefit your business. For now, pat yourself on the back and recognize all that you’ve accomplished on this special day for entrepreneurs! For resources to help get you started, visit cpapowered.org.

Liz Rock, Manager – Branded Content Strategy, Association of International Certified Professional Accountants

     

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What have you done to manage your time and make it stretch as much as possible? Many of us spend extra time at the office, take work home and scramble to keep up with our never-ending to-do lists. But how do you know when you’ve gone from stressed out to burned out?

It can be hard to know, since burnout can sneak up on you. If you’re showing signs of burnout, though, you can recalibrate and focus on managing your energy rather than your time. 

Recognize burnout

There are numerous signs of burnout, including but not limited to:

• Chronic fatigue and lack of energy. You may start off feeling a little tired, then slowly find you’re exhausted most of the time.
• Insomnia. First it’s hard to fall asleep, then anxiety may keep you up a couple of nights a week. At its most severe, you may feel completely drained but still have trouble sleeping.
• Impaired concentration. You notice you have a hard time focusing, and eventually feel you can’t do anything effectively.
• Other physical signs. These can include headache, digestive issues, chest pains, lowered immunity and loss of appetite.
• Emotional signs. Signs of burnout can include anxiety, depression, irritability that escalates into anger, pessimism that escalates to cynicism and apathy.

Shift your focus

The problem with trying to increase productivity by managing your time is that your time is finite, so you will always run out. There really are just so many hours in a day. Energy, on the other hand, is renewable, which makes it an infinite resource.

You can increase your capacity to bring energy to the things you do, but it requires self-awareness. You must put yourself and your well-being first and be intentional about what you do. You can adopt habits that enable you to renew your energy. You can also identify energy-depleting behaviors and take responsibility for changing them.

Making these changes can be hard but keep reminding yourself that you don’t have to do it all today. Here’s a four-step plan to get you started:

1. Write down all the activities in your daily routine that bring you energy. It could be when you’re laughing, dancing, exercising, spending time with some of your favorite people or out in nature — whatever matters to you. Keep this list and build on it. For now, choose one thing that feels manageable, no matter how small, and commit to adding it to your daily routine.
2. Take 60 seconds and write down the things that drain your energy. It can be the complainers in your life, places that bring you down or activities that leave you feeling spent. Just make sure they are things you have the ability to control and limit. Pick one and make a commitment to remove it from your day.
3. Think about where, when and how you can build renewal breaks into your day. Renewal breaks are opportunities to stop and recharge your energy. Don’t obsess over how busy your schedule is. Instead, remember that these breaks will help your brain work better, enhance your ability to think more creatively and boost your efficiency.
4. Write down answer to these questions: Why is this four-step plan important to you? What difference will it make when you follow it? Remind yourself every day that this is what you committed yourself to doing. If you need accountability to keep you motivated, share your plan with a friend. Consider buddying up with someone who has committed to the same plan so that you can compare your experiences.

Tools to change your life

There are numerous tools you can use to shift your focus. “Planning for Self Care” is a seminar focusing on how managers, leaders and business owners can align optimum performance with employee health and wellbeing. You can also access free stress-busting resources from The HeartMath Institute. 

Putting an emphasis on energy instead of time will help you bring engagement and your full self to everything you do. I know this from personal experience: Back in 2013 I was suffering from burnout myself and started a morning routine that included exercise and meditation. Building from this strong foundation, I found that making time for myself somehow amplified my time for everything else. By giving myself opportunities to restore my energy, I became more connected with work and better at handling challenges.

If you try this four-step plan, I promise that it will change your life, too.

Sarah Elliott, co-founder of Intend2Lead and founder of the Ellivate Alliance, author, speaker and instructor on coaching and leadership development and an advocate for women leaders. Recognized several times by the AICPA and CPA Practice Advisor as one of the Most Powerful Women in Accounting.

     

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Today is International Accounting Day, a day started to honor Luca Pacioli — the Father of Accounting and Bookkeeping. On this day, we honor the hard work of accounting and finance professionals around the world. To celebrate, we asked CPAs why they chose the accounting profession. Here’s what they said.

“I went to college knowing one thing — I was going to college. I didn’t know what my major would be, so I started taking classes that I thought sounded interesting. A year and a half in, I signed up for my first accounting class. I jokingly tell people that on day one in my intro to accounting class, I could hear a chorus of angels singing. Suddenly, I’d found my calling — debits and credits were the most genius thing ever. It clicked, it made sense and I loved it! Accounting is the language of business and financial literacy — a valuable life skill. The opportunities I’ve had because I’m a CPA are more than I could have imagined, and I’m very thankful I signed up for that intro to accounting class.”

Lisa Simpson, CPA, CGMA

“If you ask my friends and co-workers to use one word to describe me, I believe the overwhelming majority would say that I am logical. I decided to pursue a career in accounting because of my logical nature. I wanted to have a job. No matter how the economy is doing, companies will always need someone to assist with their finances. However, having a good salary and job security was not the only motivation for me to become an accountant. My passion for playing with numbers and understanding the story behind them rather than just counting them inspired me to pursue a career in accounting. There’s nothing more exciting than seeing clients’ faces light up when I find a solution to their problems or ‘translate’ technical language of ASCs into plain English for them. Accounting is indeed a fulfilling career.”

Iryna Klepcha, CPA

“The reason I got into accounting was to get into the FBI. I was good at accounting in high school. I had four schools that were recruiting me for football, and the school I chose had a great accounting program. My friend’s father told me to go for accounting while his son and my other friends went to school for law enforcement. He said this way, when I showed up to the crime scene, I could tell them ‘out of the way, I’m in charge.’ Went to the right school [Canisius] for the wrong reason [to play football] but was lucky enough they had a strong culture of promoting the CPA. Something I didn’t know anything about and when I learned of it, I started to attend ‘Meet the Accountants’ nights. When meeting firm representatives, it changed my career goal to become a CPA.”

Mark Koziel, CPA, CGMA

“Compassionate. Protector. Always. CPA. When I was five, I would use my dad’s 10-key [the kind with printing tape] and a periscope-style flashlight I pretended was a phone to play a made-up game I called ‘office,’ where my friends and I ran a company helping others make sound financial decisions with their Monopoly money. Twenty years later, I became a CPA. Why? Because — like the other hats I wear as a daughter, sister, wife, mom, friend, colleague and coach — it affords me the opportunity to connect with others in a meaningful way to share love, kindness, compassion and appreciation. Every day, I get to use my gifts to help others, protect the public and advocate for the accounting profession.”

Sarah Bradley, CPA

“I became an accountant because I’ve always been fascinated by business, and accounting is the language of business. My goal was to become a CFO. And, to manage an organization’s finances or make sound investment decisions, you need to speak the language. My interests changed over time, but my career progression wouldn’t have been possible without my background in accounting.”

Carl Mayes, CPA

“I became a CPA because I wanted to help people’s dreams come true. Dreamsreams often start with a solid financial footprint, and CPAs are the best at helping people achieve their financial dreams — so that their clients are able to pay for their children to go to college and achieve their college dreams, buy their dream vacation home or even retire earlier and live their dream life. Plus, I became a CPA because I really like to work with people and connect with them so that I am part of their team in terms of their financial and tax planning goals. The CPA profession is extremely rewarding, and I’m grateful for the experiences I’ve had in the profession. Plus, it has allowed me ample opportunities to grow and prosper and the work-life balance to make time for all of the things I enjoy.”

Susan C. Allen, CPA/CITP, CGMA

We want to keep celebrating you and everything you do. Share your “why” on social media using #InternationalAccountingDay. If you’d like to celebrate with the AICPA, become a member today and use code LUCA20 to receive a special discount.

Liz Rock, Manager — Branded Content Strategy, Association of International Certified Professional Accountants

     

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After another successful busy season, it’s time to take a broader look at your clients’ needs. While tax is one important component of your clients’ financial picture, they need help in other important areas.

They may not be aware that managing risk affects their financial picture. There’s a significant relationship between your clients’ financial well-being and risk management.

Here’s one great example: The greatest potential economic loss for most clients is income loss, either through death or disability. Insurance often best addresses that risk because of the potential magnitude of the loss. If a client dies, beneficiaries inherit the death benefit free of any federal and state income tax, which can be tremendously helpful to those who were depending on the decedent’s income stream. If the policy has a cash value feature such as a universal life insurance policy, the cash value accumulates on a tax-deferred basis. It may be accessed through loans and taxed on a first-in, first-out basis, meaning that any premiums paid on the policy are taken out first and would be tax-free.

Another intersection of tax and risk management involves determining the individual’s insurable interest. Many tax forms offer valuable information to underwriters. For life insurance underwriting purposes, especially for small business owners, their tax return determines income. Property and casualty insurance planning also relies on a tax return, including Forms 1040, 1065, 1120 or 1120-S. An umbrella policy, which can protect clients being sued, may look to both income and asset values to help decide the best amount of insurance for a client in the case of a tort. Both assets and income (via wage garnishment) are available to creditors in the event of a judgment. As CPA financial planners, our work on the client’s tax return can be the primary informant of the type and amount of coverage applicable to a client.

What tax nuances come into play when considering the appropriate type and amount of insurance coverage?

Clients typically want to minimize the tax they pay, within the law’s limits. At the same time, though, it’s important to know that the income level reported on Form 1040 is the primary factor in an underwriter’s decision on how much insurance a client may purchase. Clients purchase life insurance to provide a benefit that will replace cash flow, not necessarily their income as reported on their Form 1040. There are a variety of items that reduce current income but may not affect cash flow, such as depreciation and capital losses.

As a result, insurance companies unsurprisingly ask CPA financial planners to provide additional information and background to influence the level of insurance qualification. It is typical for an insurance underwriter to set an amount that is five to seven times annual reportable income, while also taking into consideration any significant business or personal debts for the insured. Income verification is necessary because an insurance contract must be economically sound.

What are some effective strategies for protecting your clients and their businesses should there be an adverse event?

CPA financial planners often are the first advisers to address small business clients’ questions about the viability of their business if one company owner dies. When putting together a buy-sell agreement to address these concerns, the client’s personal facts and circumstances, as well as the tax code, dictate the agreement terms. Choosing the entity type, the intent of the buy-sell agreement and whether there will be a stepped-up basis, are a few of the income tax considerations that will significantly affect the client’s family and the business co-owners.

Some of the many other insurance contracts that have an important relationship with income tax and personal financial planning include: 

• Disability insurance contracts, which may be used by individuals or in a business setting as part of a buy-sell agreement.
• Business overhead expense insurance, which pays the insured’s business overhead costs if they become disabled.
• Cyber liability insurance, which protects against financial losses from breaches or other cybersecurity events.

The list of insurance coverages that clients may use to protect against economic loss is potentially endless, just as are the economic risks clients may face. Tax practitioners’ expertise and knowledge of client situations make them well-qualified to advise on insurance concerns.

If you want to sharpen your ability to consult with clients on these issues, consider the AICPA Risk Management and Insurance Planning Certificate Program. This dynamic program includes eight courses that cover critical steps in the risk management and insurance planning process, from insurance contracts and annuities to deferred compensation, and it’s one step closer to the CPA/PFS credential. For more information, listen to this podcast episode on taxes and risk management.

Susan Tillery, CPA/PFS, AEP® (Distinguished) Nominee and Tom Tillery AEP®, CFP®, CLU®, are co-founders of Paraklete® Financial, Inc., an integrated fee-for service personal financial planning firm. Susan and Tom provide financial planning without asset management or product sales.  With more than 60 years’ combined experience in financial services, they have also co-authored the AICPA Certificate Program, The Essentials of PFP textbook, and the PFP Boot Camp.

     

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