Friday, April 20, 2018

“Rising” to the Occasion

Over the next several weeks, our company will begin in earnest contacting our CPA firm clients again to gauge their succession readiness or willingness. Or conversely, their lack thereof.

Traditionally, from mid-February until the end of April, our calls to clients are treated with equal disdain to those peddling replacement windows or the latest vacuum cleaner models. In other words, it’s one of the slower periods of the year.

So with tax software glitches, last-minute rule changes and of course, tardy clients who feel that it’s perfectly okay to send in their documents at 2 a.m. on deadline day, I like to re-engage these firms as soon as possible so that the aftertaste of another grueling season is not lost to revisionist history several months down the road.

But on a fee basis if nothing else, most of our clients should be pleased with the 2018 filing season as well as other accounting-related services they provide. Even though the oft-debated tax cuts enacted late last year curtailed the amount going this year to the coffers of the U.S. Treasury, the accountants and preparers were on the receiving end of record-breaking largesse in terms of client spending.

According to a recent survey, Americans doled out some $44 billion on accounting, tax prep, bookkeeping and payroll services in the fourth quarter of 2017. For those keeping score at home, that’s roughly $1 billion more than the year-ago period.

Distilling that figure down even further, it translates to about $135 for every person in the U.S.

On the taxpayer end, an estimated 65 percent of filers will receive a tax cut in 2018, according to the Tax Policy Center, averaging $2,200 from the new law’s individual provisions.

Closer to home, my long-time accountant Rocco said that his fees rose nearly 20 percent this year and that was without an increase or a bump up in the number of clients.

So the question arises, are there more people filing or is it a result of fee increases?

After observing the profession for nearly 20 years, my guess is that it’s an equitable mixture of both.


Not to throw out an oft-repeated cliché, but we’ll strike when the iron is hot and begin our annual client canvass when they’re relieved to have survived another season. And it won’t hurt that many of them will have a bit extra in their pocket.

Tuesday, April 17, 2018

What’s Your Cybersecurity DQ?

For years the measure of someone’s intellect was the Intelligence Quotient or IQ. And anything over 130 was considered high. Growing up I recall there was a girl who lived on the next block who was rumored to have scored 180 as an 11-year old.

Needless to say I was never in any of her classes.

But as time wore on, it was discovered that such things as “environmental factors” can influence someone’s score by 20 points. That must have been why my teacher wrote “see me after class” on my test paper.

Today, with the advent of all things technological, there’s something called a DQ – or digital quotient, which measures your IT IQ so to speak. In a 2014 study conducted by a U.K.-based consulting firm it found that the average adult has a DQ of 96. By contrast, the average six-year-old had a DQ of 98.

I have never been completely comfortable in the tech arena, but with all the new advances encroaching (blockchain, AI, robotics) it has prompted us as a company to expand past our comfort zone of the CPA community and look at pairing our core clients with the higher end advisory and consulting services – HR and medical consulting, family offices, BPO and of course cybersecurity.

Tuesday, April 10, 2018

“Thinking about it,” never cuts it

The summer between my junior and senior years in college, I worked for the now-defunct Jack LaLanne chain of health clubs. My job basically was to sell memberships to people who, in all honesty, most had no intention of embarking on a regular exercise regimen.

Also I was instructed in no uncertain terms to present them with a basic pricing model and then at the 11th hour convert them to what they referred to as the “platinum” tier. Many of you are probably familiar with this underhanded sales tactic – known fondly as “bait and switch.”

It probably goes a long way to explain why the chain is not around today. But if nothing else, I did learn one carryover sales tactic. When I had a prospect in the office who was on the fence about joining and admitted they’d been “thinking about it,” I countered by pointing out that “thinking about it” never got anyone in shape.

That worked about 50 percent of the time, which in sales terms was a pretty good conversion rate.

I sometimes think about that process when I visit CPA firms at the end of tax season which is fast encroaching. I try and schedule my appointments shortly after the filing deadline, so the aggravation and frustration of tax season is still fresh, especially for those firms who are in dire need of a succession plan. A few months down the road, what I like to call “revisionist history” sets in and suddenly those 14-hour days and seven day work weeks don’t seem so bad.

Friday, April 6, 2018

Some Things Are Almost Too Obvious

Years ago I remember watching a news segment which profiled a drawbridge that if memory serves, was located in Michigan’s famed tourist attraction - its Upper Peninsula.

Now for you Michiganders, you know that there isn’t a whole lot of activity in the “U.P.” from November to April. The same could be said for this particular structure, which for those six months, stretched across a frozen waterway devoid of any boat traffic. Yet some obscure state law mandated that the bridge be manned even during the off season. So each day someone sat in the small booth with obviously nothing to do until the spring thaw. Talk about a no-show job!

I believe that some years later, saner heads in the Wolverine State prevailed and the law was finally changed.

Talk about no-brainers. Here’s another.

Wellness programs.

I have been reading with increasing frequency about how a number of companies are attaching bonuses to them including a recent announcement from a Big Four firm which launched a $45 million investment for a broad-based program to include parental leave, child adoption, surrogacy, eldercare consultation and of course, health activities such as gym memberships.

Again, some policies should be automatic. Nearly 20 years ago, the CEO of the publishing house where I worked was beside himself because his health care claims were piling up and premiums rising steadily. So a number of us suggested he immediately discontinue the designated smoking room to help clear the air – literally – and strike a corporate rate membership with the new health club that had opened down the street.

He listened intently and then proceeded to ignore everything we suggested. It wasn’t until three years later that he finally acted on both. But in between he managed to sink $1 million into a failing newsletter and then grossly overpaid for a small medical publishing company. Predictably, his company today is a literal shell of what it once was – having siphoned off many of the marquee publishing titles to raise cash in order to stay afloat and just steps ahead of the creditors.

Some 30 years ago a podiatrist told me that medicine in the future will be predicated on the preventive rather than the traditional method of reactive treatment. I don’t think I need to explain how eerily accurate that statement was and wellness programs vs. preventive medicine combine to form a Venn diagram of that. Wellness should be policy at every company with the resources to subsidize such programs. Maybe there’s even a place somewhere for an ex-drawbridge operator.

Tuesday, April 3, 2018

Working through tax season is what you make of it

Over the weekend, a friend of my youngest who works for a Big Four firm in its New York City office was complaining about the skill set of her managers in terms of workplace atmosphere. Now full bore into tax season she harbored no illusions of her position adhering to a 9-to-5 schedule through April 16, but the other night her manager made her remain until nearly midnight on a Saturday to run some minor reports and apparently kept the entire team there for what today they often refer to as “good optics.”

She knows she has to put in at least a year at the firm for continuity sake and the fact that at least a year’s worth of Big Four experience looks good on her resume. But she was stunned that several of her colleagues enjoyed being there, often until 1 or 2 a.m. with seemingly little to do.

As she’s only a mere 22 years of age, I advised her to bite the bullet now and she will have plenty of time down the road to pursue a job at a firm she truly feels comfortable with.

Contrast that with another young, budding CPA who works for a smaller practice. Yes, he’s often there until 9 or 10 pm on weekdays, but was given his choice of working either Saturday or Sunday on the weekends until the annual landfill of 1040s begins to ebb. It’s needless to point out which one is often in the better mood when I see them.

As someone who has either covered or consulted on the accounting profession for nearly 18 years, I’ve seen both sides when it comes to working environments during tax season. I’ve met managing partners who abide by a code that their staff will never be there past 8 pm regardless of how busy they are, and then I’ve spoken to tax partners who lug along cots to the office and see their families about as often as someone confined to protective custody.

You don’t need to be an industrial psychologist to know that the first few years out of college forge a formidable imprint as to working in a profession or industry of one’s choosing. As an example I once thought of entering the hospitality profession, but several weeks of 16 hour days and leaving at 3 or 4 am quickly absolved me of that notion.

No matter how you spin it, tax season is a rough haul – always has been and always will be. It’s up to you and your firm how your younger staff will perceive it on an annual basis. My daughter’s friend is already thinking about the private sector.

For those in public accounting that’s an unpleasant scenario that could probably be avoided with an equitable mixture of creativity and compassion.