Monthly Archives: May 2012

Mistakes, Errors and Bobbles

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How are mistakes handled at your public accounting firm or company? Naturally, the answer to that question depends on the severity of the mistake. There’s a lesson to be learned from comedian and actor Martin Short in dealing with the miscues of others. A CPA or business owner learning from Martin Short or Kathie Lee Gifford? You betcha.

While spinning my news web on iShade’s BulletIN today, I came across an incident that occurred on Wednesday involving that third amigo. Martin Short was on to plug his latest film during the final hour of NBC News’ TODAY program. A very awkward moment then took place when co-host Kathie Lee Gifford complimented Short on his marriage–not realizing that his wife died a year and a half ago. During a commercial break, Gifford was informed of her faux pas. Taking the high road, Martin Short later commented, “I think that it’s live television and people make mistakes and there’s no ill will intended… and I think it’s nice to aspire to be that way.” There are so many directions this incident could have gone, with this being perhaps the best possible outcome. Short took it all in stride; Gifford apologized profusely.

I certainly learned a bit from this incident. How do you handle the mistakes of others (and your own errors)? How does your boss handle errors or oversights? Grace under pressure or an explosion?

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Is Our Tax System an Insult to Americans?

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“The tax law must be simplified. Do away with the tax credits and replace it all with lower tax rates.” Do you feel the same way? E. Lynn Nichols, CPA, made this statement while on the topic of what he calls “today’s ineffective tax administration.” One reason why Lynn feels so strongly about revamping the current tax system is that such an overhaul would do wonders in catching “the tax cheats,” as Lynn put it. Further commenting, “Nothing of substance is going to happen until after the election.” I certainly won’t dispute that one!

Lynn Nichols started in public accounting in 1964. During that nearly 50-year stretch, Lynn says he has not witnessed any period of time quite like what we’re all in the midst of right now. “The state of tax law has never been as chaotic as it is today,” stated Nichols. As an experienced tax accountant and also a tax CPE teacher through Nichols Patrick CPE, Inc., agree with his stance or not, you have to give it considerable weight due to his time in the trenches.

Speaking of trenches, there’s a lot of digging going on in Northeastern Ohio where Lynn Nichols makes his home. Growth in this part of Ohio, as well as in Northwestern Pennsylvania, is booming due to the expansion of steel production and the oil/gas industry explosion in this part of the country. Comments Lynn, “This area will be as prosperous in five years as it was 40 years ago.” Great news for jobs, great news for America.

On a more somber note, Lynn Nichols took a step not often seen in the world of accounting. Taking a stance to admit his battle with alcoholism, Lynn has never seen it as being “brave”—it never occurred to him. Like many alcoholics who have struggled to beat the disease, they want to help others. Count Lynn Nichols in that group.

To read more of Lynn’s story and also find out about the Concerned CPA Network, click the photo of Lynn below.

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Your Firm’s Business Model: Is It the Right Fit?

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With the news load from the past three days, I am just now getting to the paper version of today’s WSJ. There’s a great opinion piece on page A13 titled “The Law Firm Business Model is Dying.” It’s worth a read, especially if you are a partner of a law firm or public accounting firm.

This line in the article: “Law firms are aware of the value that professional business managers can add to their operations” is ringing true far more these days than it was, say, five years ago. Many public accounting firms have signed on to this way of life–and more will follow. You don’t believe it? Would you have believed a monkey and a dog could be buddies?

 

 

 

 

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Find the Cost of Freedom

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As you may recall, Robert Reich was the Secretary of Labor under President Bill Clinton. An avid political commentator, Reich usually has something spot-on to say. I particularly like this Robert Reich quote, which applies to the upcoming Memorial Day holiday:

“True patriotism isn’t cheap. It’s about taking on a fair share of the burden of keeping America going.”

Smart accountants, like you, know the costs on all levels. As we prepare for the holiday weekend, accountants (and others) in America will pause to remember those great Americans who paid the ultimate sacrifice so that we have the freedoms to celebrate this and other holidays. Paying homage to the people who died for this country is an honor and a privilege. All of us at iShade wish you and yours a safe, happy and blessed Memorial Day weekend.

What does Memorial Day mean to you and your family?

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Take This Money, Please

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With the recent news of Walmart making some under-the-table payments in Mexico designed to quicken the process of new store development, the debate rages on the ethics behind such moves. Ernst & Young recently surveyed chief financial officers around the world on the premise of a “willingness to make cash payments to win or retain business.” Apparently, 15 percent of those polled indicated “yes.” Really, though, I’ll bet the actual number is a bit higher (it was 84 percent in Brazil), as you can imagine the reluctance to fess up on this matter, even under anonymous circumstances.

Normally, I am very anti-Walmart for hosts of reasons. However, in this case, I’m on their side rather than jump on the popular bandwagon of Walmart’s perceived unethical behavior. There are many countries—with Mexico close to the top of the list—where it’s just a part of doing business. Without handing over some envelopes full of cash to city planners and their ilk, the wheels of commerce and progress move very slowly—and sometimes not at all. While this mode of doing business is generally frowned upon in the U.S., we all know it exists. If you doubt that statement, talk to real estate developers in New York City or Chicago.

E&Y’s annual global fraud survey of 400 finance chiefs found a slightly greater tolerance of bribery compared with the previous year. 39 percent of respondents also said that bribery or corrupt practices “occur frequently” in their countries.

“Even if management is strongly communicating that bribery and corruption isn’t OK, they don’t ever see anyone being punished for that,” commented Richard Sibery, E&Y’s leader of fraud and investigations in the Americas.

What do you think?

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Back to the Mandatory Audit Rotation Issue

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Would mandatory rotation raise the cost of audits? Most people think so. It’s hard to argue that costs would stay flat–just doesn’t make sense that they would.

So how does this affect YOU? Does it at all? I would really like to know what this issue means to you, your firm, your company, etc. Please reply directly to this post or via email at rob.nance@ishade.com. Thank you!

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Eat or Text? What to Think About the AICPA Poll

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You’ve probably read by now, on iShade or elsewhere, about the AICPA poll that essentially states the result of cell phones mattering more than food (at least to the survey group). 41 percent of respondents selected “cutting back on eating out” as their most likely response to a financial pinch. In second place was “cutting off cable TV” at 20 percent. The answers of “ending cell phone service” and “stopping downloading songs and digital products” came in at a meager 8 percent each.

Surprised, I’m not; disturbed, you bet. Aside from using these devices for our careers, I think most of us can admit that society has an unhealthy (and largely unnecessary?) relationship with mobile phones. It’s disturbing, especially when I see today’s youth spending time texting when they could be outside playing or reading a book. Frankly, if push came to shove on finances, I would rather have an extra dinner out with my wife each month than have a smart phone. Then again, if I didn’t have a job, I can pretty much guarantee I would not have a mobile phone of any type. In 2012, I do recognize that’s perhaps a bit off-norm, but hey, that’s just me.

I would really like to know what you think about the results of this poll. Please reply directly to this post or via email at rob.nance@ishade.com. No, I’m not typing this from a senior citizens center.

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Driving Toward the Accounting Green

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Landing a great job with a top-notch public accounting firm while you’re still in college must be a terrific feeling, as if you know you’re honed in on the future–and you’re excited about what is in store. At last Friday’s Ohio State University Beta Alpha Psi golf outing that took place on the far south side of Columbus, Ohio, I met a host of bright young people who are ready to tee it up in the profession.

The structure in which this outing was arranged held true to form with each foursome consisting of two young professionals and two students.

 

 

These fine-looking folks–two OSU juniors and two Ernst & Young chaps from the Columbus office are standing next to the iShade-sponsored hole…where they all played brilliantly, I might add.

I urge all accounting firms to help support Beta Alpha Psi and other organizations that strive to make the accounting profession an attractive career option. Grow the business!

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Preparing for What’s Around the Corner

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The founder of Rea & Associates, Richard Rea, was once photographed wearing an accountant’s eyeshade. If I can get this photo file, I’ll share it with you someday. If you have a similar photo of one of your firm’s founders, please e-mail it to me (rob.nance@ishade.com). I have a feeling that Richard Rea would like iShade. You’re not in Ohio? Then you might not know of Rea & Associates, or how to pronounced “Rea.” Fortunately, the firm’s site can assist with the pronunciation. Click here.

Why am I mentioning this firm? Well, I attended a seminar that they held in conjunction with Key Bank about a week ago. It was well done, educational AND they served amazing cantaloupe. These, my friends, are the key ingredients for any successful business seminar.

Business owners Carlos and Polly Clavijo, and many other professionals like them, soaked up the latest insights, regulations and opinions regarding succession planning and exit planning–and were given food for thought in how to prepare for the tax tidal wave that’s currently set to wash ashore on January 1. Smart business owners are now waxing their surf boards, if you know what I mean…and I think you do. If ever there was a time for a business owner to utilize the bright minds of people like Tim McDaniel and David Cain at Rea, as well as Jeffrey Getty and Matthew Stewart at Key Private Bank, by golly, now’s the time. Sunsetting tax cuts and more…there’s a lot to sort out, especially for business owners faced with upcoming succession plan needs or exit strategies blooming on the horizon.

As Jeff Getty discussed deferred compensation and phantom stock options, he also questioned, “What does M&A activity look like now?” Nine of ten opinions from CPAs, attorneys and bankers I’ve spoken with and also read, seem to be on the same page with what Jeff stated: “It’s been a slow start this year, but last year was strong…it’s picking up now…and because of tax rates in 2012, sellers are pushing. We expect the second half of the year to be very active.”

“The biggest exit planning mistake you can make is procrastination,” proclaimed Tim McDaniel of Rea & Associates. We all know what it’s like to be busy—and spending too much time working “in” the business rather than “on” the business. Fighting procrastination was one of the themes of the day, rightfully so. Other notable tips from the event:

*Recommend scheduling the last day of each quarter as the time to properly spend working on your business succession plan—and then communicate it to those who need that information (key employees, family members, etc.)

*Business owners: treat your business like an investment–just as you would with investments in the stock market.

*The annual ROI of the business makes a huge impact over the long-haul.

*Value of Business:
Know
Increase
Protect

*Know the best timing and the worst timing to exit the business.

And remember, do not procrastinate!

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What is Inside You?

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Does “making a difference” get you going every day? Accounting is certainly one of those professions that yields the opportunity to “make a difference,” especially if you’re firmly planted in client situations where you can perform proactively, a.k.a., being a true business advisor.

Mary Werner is one of those dynamic people motivated by making a difference each and every day. And make a difference, she does. With an arsenal of experience at Ernst & Whinney, being a controller at a manufacturing company, and as a financial analyst in the health care profession, Mary has fought hard on the battleground. Now, as a sought-after professional coach, driving executives and partners to excel in their leadership roles and in life, Mary is busy making that difference in many lives. Talking with her over a fine cup of coffee at Au Bon Pain, it became clear to me that making leaders to be better leaders–and guiding people and organizations through change–well, that’s right up her alley.

While not everyone is cut out for leadership, without a doubt, each person has room for improvement. “It’s all in there (inside a person); it’s just chipping away at the gunk.” Whatever a person’s “gunk” might be, there’s no cookie cutter plan to dissolve that gunk. “The client is the expert,” says Mary, “and through coaching, challenging and an inquiry process, the plan and mission take shape. I work with each professional on their vision of what they want to be, where they want to be…it’s a deep dive one-on-one, tailored to each individual.” We talked a while and then Mary was off to work with one of her many clients. I don’t know the client, but something tells me he’s like Mary’s other clients–glad he made the decision to jump down the rabbit hole of self-improvement.

As partners, CFOs and business owners discuss how to make their respective operations more profitable, the matter of coaching often arises. Do you think such a program will exceed your desired ROI? Maybe now is the time for some serious thought and discussion? You bet it is.

For more information about Werner Coaching & Consulting, Inc., click the photo of Mary Werner.

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