Friday, December 6, 2019

Even Bad Bosses Can Offer Something

This was a Thanksgiving holiday I will surely not press amongst the pages in my scrapbook. First on Black Friday while everyone was cramming into the nation’s retailers desperately seeking discounts, I was stuck in a tire center for 6 hours waiting for a wheel alignment and struts to be installed on my VW to the tune of $800.

Then, just to make the weekend complete, I came down with the flu and have been virtually bedridden for the past five days. So, as anyone who is mired in their bedroom for long periods of time knows, eventually cabin fever begins to set in.

So, thinking about the topic for my weekly blog I figured out during my working life I have had, give or take – roughly 37 direct reports. No that’s not a misprint, 37.

I reflected on what I took away from each of them and naturally, depending on their leadership qualities and job competence, it varied from person to person. Some were absolutely career changing, while others made a contribution here and there. Some management tenures were short-lived and still others were fortunately not around long enough to display their obvious shortcomings.

But I can honestly say that there were only two direct reports in my career that I gleaned absolutely nothing from, and both were and still are destined for anonymity. Not to be petty and vindictive but good riddance!

And the lessons I learned as it turns out did not have to be complicated.

Friday, November 22, 2019

Statistics for the Ages - Literally

Ever been in a bar or perhaps a family gathering and observe a group (or pair) of stat-crazy sports fans passionately argue baseball averages or football passing yardages totals?

I refer to them as the stat geeks – those rabid folks who can recite Stan Musial’s phenomenal on-base percentage or prove why Ted Williams was the greatest hitter of all time. Was Washington’s Redskins Hall of Famer Sonny Jurgensen really the best passing quarterback of the past six decades? I’m sure there’s someone out there who can spew out the numbers to back that claim up.

How about some statistics that have nothing to do with sports? I’m talking about uncomfortable succession planning figures that should make even the most stubborn procrastinator sit up and take notice.

How about the following?

  • The Beatles broke up 50 years ago.
  • Vanna White, statuesque letter turner on the Wheel of Fortune is 62 years old.
  • Rolling Stones legendary front man Mick Jagger is a great, great, grandfather.

How about some non-show business stats?

  • One person turns 65 every 8 seconds in this country.
  • 75 percent of the 420,000 plus members of the American Institute of CPAs will be eligible to retire in 2020.
  • Less than half of the CPA firms in the U.S. have a formal succession plan in place.

Okay that’s enough shock therapy for today although that last one should give any and everyone reason to pause.

Friday, November 15, 2019

Back to the Future

More years ago than I want to remember (hint, the Oval Office was occupied by someone with the initials R.R.) I interviewed for an associate editor’s position at a publishing company in midtown Manhattan. The offices were in a newly completed spiraling glass structure – one of many high-rise projects on the construction docket that year in New York City.

After the perfunctory Q&A, the interviewer showed me around the space which included a “relaxation room” replete with couches soft music and EZ chairs, and a state-of-the-art gymnasium on premise. Smoking which was still allowed at the time in many companies was strictly forbidden. Those with an insatiable nicotine habit were forced to light up outside – no matter the weather.

The HR executive explained the amenities were a way of differentiating themselves from their competitors and a reason why the turnover rate at the company lingered in the low single digits.

For those keeping score at home I didn’t get the job, but always remembered how the company viewed its employees and the importance of standing out in a competitive field.

Which brings me to today’s missive.

Friday, November 8, 2019

Today’s Succession Market – A Harsh Reality

Two months ago, my neighbor of more than 20 years hung out a “For Sale” in front of his house. He told me it was time. His children were grown and out of the house and he was closing in on retirement from his job with the county. His wife had retired just months before. He had set his sights on North Carolina and showed me the blueprints for his retirement home.

He was one of those true do-it-yourselfers, he mowed his own lawn, repaved his own driveway and installed a new front door. His home was always immaculate, and I assumed it would sell immediately.


The sign is still out and despite a few nibbles no one has made a concrete offer. I asked him what the problem was, and he said the realtor told him that it was truly a buyer’s market and home shoppers could be a lot more selective than even as recently as five years ago.

So, he waits and waits and waits for an offer that hopefully will come before the New Year.

Which in a roundabout way sort of brings me to the accounting marketplace – particularly regarding succession and M&A.

This week I had to have a painful heart to heart with a practitioner in his mid-70s – a sole owner with no succession plan. When I asked him our $64,000 question about how many more years he wanted to work full time – he simply replied “forever.”

Friday, November 1, 2019

It Must Be the Altitude

More years ago, than I care to remember I attended the University of Denver and graduated without fanfare. I think my sole accomplishment during my tenure there was being listed in the Metro phone book.

I had always heard about how being 5,280 feet above sea level affects you both physically and mentally – a fact hammered home convincingly after participating in a touch football game the second day on campus. After six or seven plays, I was wheezing like a 40-year chain smoker and had to sit on the sidelines for a while.

But I believe it does funny things to your cognitive processes as well, another Denver-centric fact that became blatantly obvious last week during my CPE sessions there at a major vendor conference.

Okay to be fair the annual event was primarily focused on tax and technology and the attendance at my dual 100-minute sessions for lack of a better term “reflected” those major segments – as succession planning was obviously far down the list in terms of interest.

So, with over 1,300 attendees crammed into one venue, only 40 or so of them (and that included the audio-visual guys) felt succession planning was important enough for them to attend.

And that was unfortunate because if I may be shamelessly immodest for a moment, I felt they were two of the best sessions I’ve ever facilitated in nearly 15 years of teaching CPE. Seriously. Although standing for that long resulted in a rather painful plane ride home the following day.

But back to the topic de jour.

Friday, October 18, 2019

The Elephant(s) in the Room

Next week I am scheduled to jet off to the Mile-High City of Denver where I will deliver a couple of presentations on succession planning at a global software vendors massive user’s conference.

I was flattered when they accepted my speaking proposal but harkened back to when we would regularly exhibit at this event complete with a booth and marketing materials and generate little or no interest from attendees. We collectively figured we were simply catering to the wrong audience.

Perhaps this year will be different.

As evidence, I have already received several emails from attendees who claim they are looking forward to my presentation. I was both flattered and puzzled. Just a few short years ago I taught a similar session at this same event some five years ago and the audience more resembled a haunted house in number than a standing room only crowd.

So, what has changed?

I would like to think they many have finally resigned themselves to the fact that they can no longer ignore the elephant – or perhaps closer to the scale of the problem – the wooly mammoth – in the room – succession planning or lack thereof.

Mark Twain once remarked that no amount of evidence will ever persuade an idiot. I’ll be somewhat more diplomatic and tell anyone that will listen there is a virtual Mount Everest of statistical and real-life evidence that the profession is dangerously behind on succession planning.

Yet most firm owners prefer kicking the can down the road and putting the inevitable off for yet another year.

Case in point. Last year I was working with a sole practitioner in the Northeast who was approaching the dreaded six-five. His practice generated roughly $1 million in billings and made an easy “tuck-in” for larger firms.

Yet, he decided to spurn any offer and opted for the “P” word – procrastination.

Let me tell you what happened in the course of several months. His IT system went on the fritz – requiring an expensive upgrade. One of his key employees resigned and he suffered the loss of a 50K client that he never saw coming.

Now he’s forced to accept far less profitable terms should he finally make the decision to merge.

I should use that as a marquee case study during the conference on the importance of succession planning and see who salutes or at least pays attention.

I don’t know how much has changed in five years, but that’s the skeptic in me talking.

We’ll see.

Friday, October 11, 2019

Why Dilbert Will Always Remain Relevant

Since its debut in 1989 I have been a faithful and unwavering fan of the parody cartoon Dilbert. For those of you unfamiliar with it, it’s a cynical and satirical glimpse of a white-collar office with a cast of characters including lazy and problematic co-workers, a pointy haired boss without a clue and even a cat in the role of an evil human resources director.

But for a lot of us who were, and are, mired in the corporate arena, some of the strips hit far too close to home – particularly with regard to undeserved promotions and questionable upward mobility. Many of you can probably cite examples of C-suite incompetence that not only went unpunished, but often rewarded.

Case in point. A publishing company I once worked for was losing money like a leaky dinghy. Since the majority of its revenue was derived from classified and display advertising sales, upper management hired a consultant to ferret out the problem. It was discovered that the company actually counted more vice presidents in their New York office than actual salespeople.

After the problem was “solved” by basically letting go of several overpaid and useless executives, the CEO was incredibly awarded an “Excellence in Business” certificate by a local organization.

Fast forward 10 years or so later, I was unceremoniously saddled with a micromanaging superior who insisted on putting his pipsqueak hands on everything that fell under my purview including artwork and editorial submissions.

Friday, September 27, 2019

Make a Decision – Please!

My high school football coach often employed a memorable axiom about making mistakes.

He would always lecture his players that if they made a mistake, at least make sure it’s an aggressive one. I road tested that theory in a late-season game when I took it upon myself to blitz the quarterback from my safety position getting there a millisecond too late and leaving my assigned wide receiver to gather in a soft pass and waltz into the end zone.

Instead of getting his usual reaming if a play blew up, he consoled me and said he liked the fact that I at least took a chance.

My father often spouted a similar philosophy, “a bad decision is a bad decision but it’s better than no decision.”

I don’t think that happens very often in the CPA world.

During my 20 years of either covering or consulting on the profession, I have seen little evidence of brazen decision making – particularly when it comes to succession planning – or more accurately, a lack thereof.

In fact, I have witnessed quicker decisions from nervous first-time skydivers jumping out of a plane.

Case in point. Earlier this month I was consulting with a two-partner firm in the Northeast whose owners were each 64 years old.

Friday, September 20, 2019

My Social Media Guidelines – take it or leave it!

I have been a Facebook user since 2007, three years after it made its debut. Like many other things’ technology, I’m always a bit behind the curve.

Ditto for LinkedIn. I first became a member in 2009 – some six years after it launched. Since then I’ve accumulated rather modest totals of Facebook “friends” and LinkedIn connections.

For those keeping score at home it’s 117 for the former and just over 300 for the latter.

I realize those numbers pale in comparison with others on both platforms some of whom have recorded over 1,000 Facebook friends and as much as 2,000 LinkedIn connects.

Wanna know why?

Because as elitist as it sounds, I’m very selective on whom I connect with on each. You would not invite people you didn’t know over to your house for drinks, right? Then I never understood why people agree to instantly connect with everyone who reaches out to them. Particularly on the socially-leaning Facebook which reveals reams of personal information – no matter how many safeguards they install to block them.

My rule is simple – if I don’t know you – or in the case of I know you but don’t like you – your connection requests quickly meet the delete key. I know someone with 2,365 Facebook connections. And no, that’s not a misprint. I’m sorry, it strains the bounds of credulity that they could know each one of them let alone share personal information.

I had a one-time boss whose ineptness could have filled a week’s worth of Dilbert cartoons who, after he was mercifully fired, wanted to be my LinkedIn buddy.


Friday, September 13, 2019

Why Didn’t You Do That Before?

As someone who has reported on two large industries since the mid-1980s, as you may imagine I have written and commented on the omnipresent issue of employee turnover. While an employee revolving door would be more frequent say, in the restaurant industry as opposed to the accounting profession, nevertheless it remains critical metric for CPA firms.

Which is why I’m still astonished at how many remain reactive to employee retention as opposed to proactive.

Case in point.

The other day I was at my local health club when a former partner at one of the super-regional CPA firms and now on his own, was bemoaning about the loss of his long-time senior manager. He explained that the manager was with him nearly eight years but left for a firm that offered more money and a faster track to partnership.

He said he matched the money to get him to remain to which I replied that if he matched the money it meant it was there in the first place so why wasn’t he more proactive about raises and merit promotions?

The ensuing silence reinforced the fact I had brought up an uncomfortable truth. Sadly, that’s more the rule as opposed to the exception.

Closer to home my spouse is leaving her position after 18 years with the same company for a sizeable leap in salary and perks. Her resignation letter set off a panic within upper management and they made a furious charge to convince her to stay – matching the money and the benefits. I pointed out that they hadn’t given her a raise in three years and now additional funds were miraculously available?

Friday, September 6, 2019

These Folks Are Simply Relentless

As one who received a fair amount of spam both written and verbal, you can imagine I’ve fielded one or two calls from folks in downtown Bangalore or Mumbai pretending to be from the Internal Revenue Service and demanding immediate payment for unpaid taxes.

As opposed to those unfortunate souls who have been scammed into tendering their credit cards for tax liens they obviously didn’t owe – I like to have fun with these dolts – asking basic questions such as why are they calling when the IRS always sends letters? Or how is “so and so” who works in your department? The stammering on the other end – complete with a foreign accent and followed by an abrupt hang up – always puts a smile to my morning.

However, these scamsters may be getting smarter.

Recently the IRS has issued a warning to taxpayers and tax practitioners about an email “phishing” scam that impersonates IRS officials with subject lines like “Automatic Income Tax Reminder” or “Electronic Tax Return Reminder”.

The emails include links that show an website with details purporting to be about the taxpayer’s refund, electronic return or tax account. The emails contain a "temporary password" or "one-time password" to "access" the files to submit the refund.

Friday, August 23, 2019

You Don’t Always Get What You Pay For

In our line of work, we get asked about value and valuations on a daily basis. It’s only natural CPA firm owners who have worked most of their adult lives to build up a profitable practice and are now ready to take a step back want to know what they can expect to be paid for their years of sweat equity. 

The answer unfortunately isn’t always so simple – there are multiple factors that go into determining a fair valuation for a firm. It’s not a basic asset sale or service where you pay a set price and in return acquire a business or sign up for cable.

I realize this is a bit far afield from accounting, but I wanted to regale you with a value-oriented vignette regarding my local newspaper.

In full disclosure I’m a print newspaper junkie. I read two papers religiously with my morning coffee- my local paper and one of the New York-based tabloids. The newspaper closer to home keeps me up to date on what’s happening in terms of news, taxes, culture and education within my zip and area codes. But like many print businesses, it’s suffered at the hands of digital publishing in terms of readers and revenue.

Friday, August 16, 2019

“Forgive” Does Not Mean “Forget”

I grew up the product of a mixed marriage. No, not ethnically or religiously, but rather politically.

My father at the time of my youth was a staunch Goldwater Republican, while my mother was “All the Way with LBJ.” The old man has since mellowed a bit, but my mother with the curious exceptions of being a fan of GOP lifer Pat Buchanan as well as anti-immigration, has steadfastly clung to her Democratic roots.

In full disclosure, I have tended to lean more toward my father’s beliefs as opposed to my mother’s especially during Presidential and Gubernatorial elections. The opposite has been true however in local and county races.

But on to today’s missive.

One of the many issues that has surfaced during the initial round of debates among the expansive field of Democratic candidates for the Oval Office is the obscene costs of a college education and the subsequent $1.6 trillion in outstanding student loan debt.

Two of the candidates, Elizabeth Warren of Massachusetts and Bernie Sanders of Vermont, have posited the absurd solution of canceling all student debt – yep, all of it.

To put that $1.6 trillion figure in perspective, that’s more than the gross national product of England, France or Italy.

Friday, August 9, 2019

The Right Way to Market

Like most folks, I regularly get solicitations in the mail - whether snail or electronic - from various entities looking to drum up business. If it’s not an insurance company promising they can cut my auto and home rates in half, it’s financial and estate planners warning me about the dangers of suddenly expiring without a plan or will.

But lately I have been getting inundated with e-mail and or phone requests for the following: to meet in person for a custom-fit suit; with representatives from a sales lead generation company; a pushy sales person wanting to immediately speak to the person in charge of our company’s phone system (that was a quick hang-up); a staffing firm wanting to know if Transition Advisors is in the market for senior level tax managers or auditors; and finally, a clinic that recently opened in my neighborhood that specializes solely in stretching.

As I am to flexible what a rusted bolt is to a pair of pliers, the last one hurts just thinking about it. I predict I will be able to perform a full split about the same time our national deficit is eradicated.
Believe me I have tried to put a stop to this.

Painfully I have discovered that contacting the “Do Not Call” registry has been about as effective as the time my principal ordered a series of “no smoking” signs put up around school property.

Which in a sort of roundabout way brings us to my message de jour – the right way and the wrong way to announce a merger to your accounting clients. It’s more about packaging as opposed to marketing.

Tuesday, July 30, 2019

Don’t Ask Me Again!

There are certain phrases I hear with alarming frequency that well, have me reaching for the antacid.
For example, “It’s not the heat, it’s the humidity.” I’m sure you can drum up many more.

But there’s also the most annoying business-related phrases. Again, for example: “At the end of the day.” “Let’s think outside the box” and perhaps my most loathsome – “Let’s get all our ducks in a row.”

If I had hair, I’d be tempted to tear a good portion of it out each time some mush wit utters one of these overused expressions.

I’d like to add one more to that.

“What’s the multiple?”

I can always count on repetitively being asked that question each time I’m counseling a firm that is contemplating a merger. To be somewhat fair they want to know how much their practice is worth. And many don’t stop until they get an answer.

“What’s the multiple?”

Please repeat that because I didn’t hear it the first two times.

“What’s the multiple?”

Okay for the last time, I’m going to explain the concept of CPA firm multiples.

Determining a firm’s multiple is should be viewed as cause and effect. It’s critical to remember that the multiple is the effect – determined in large part by several distinct variables, which we refer to as the cause. Let’s examine each in depth.

Friday, July 26, 2019

Where Would We Be Without It?

There’s a great deal about my parents’ generation of which I still don’t understand how they did it.

For example, knowing just how to adjust the rabbit ears on the TV antenna as to focus on a clear picture.

My father was a master at this, knowing precisely what angle to tilt one of the arms in order for us to catch the latest episodes of “The Man from U.N.C.L.E.” or “Get Smart.”

Or, having to frequently change the records on the stereo system once the album sides were completed. If only they could have hung on for another 40 years until the advent of playlists.

And I won’t even go into having to use a rotary dial. Imagine having a phone that didn’t tell you who was on the other end and you took your chances. One evening, it was my 7th grade math teacher wanting to speak to my parents about my less-than-stellar grades, but that’s fodder for a future column.

But nostalgia aside, what was the greatest product introduction of the past 20 years?

If you speak to a veteran CPA, they’ll convince you that the PC was the product that helped revolutionize back-office accounting. And there’s little doubt about its effect on firms across the country in the early 1980s. Today, accountants often work on as many as three screens at a time – something that was unthinkable as recently as 15 years ago.

E-mail? Social media platforms? The Tesla?

For my money it’s the GPS. Period.

Tuesday, July 9, 2019

If You Can’t Beat ‘Em…….

There’s an old story which tells of a youngster who sported a pretty decent pitching arm for his age and in sandlot games he regularly struck out the side.

More often than not his team won.

One day he came home obviously moping when his mother asked what was wrong.

He replied sheepishly – “I had a no hitter going until the big kids came home from school.”

I’m sure a lot of us have felt that way at one time or another – in an athletic contest or otherwise.

The same “bigger is better” logic could also be applied to CPA firms.

With quantum changes pending in the marketplace - particularly in technologies such as AI, blockchain and robotics which threaten to automate much of the Type 1 work  – the smaller firms may soon find themselves unable to compete with their larger counterparts in  terms of resources, platform of services and perhaps most of all – human capital.

This is not your father’s accounting firm, but it never ceases to amaze me how many firm owners still adhere to that antiquated strategy. You can run a firm in 2019 like you did in 1985 and those that do face a Sisyphean task in attempting to do so. The results are obvious – lost clients, no succession plan and an inability to mine new business.

So, as things go farther and farther south those firms often find themselves at an unpleasant crossroads – scramble to find a merger partner or soap the windows and padlock the door.

Tuesday, July 2, 2019

We’ve All Known a Culture Like This

As a 30-year fan of the genius-like corporate cartoon parody Dilbert, the creator Scott Adams once unveiled a character called “Meeting Moth.”

The Meeting Moth was someone who when peering through a conference room window and witnessed a meeting, began flapping his wings uncontrollably. We’ve all known colleagues like that, folks who have had absolutely no involvement with a meeting yet rubberneck like opposite lane drivers viewing a five-car pile-up.

I had more experience than I’d like to admit about meetings – fruitful or not – as I’ve probably attended more than the Geneva Convention should allow. I worked 12 years for a company that – I kid you not – on more than one occasion scheduled a meeting to determine when we could schedule a meeting.

Our-then publisher once sent out an email at 4 pm on a Friday afternoon calling for a mandatory all-hands-on-deck, no excuses meeting at 6:30 that evening. Amidst the grumbling of delayed restaurant reservations and missing out on various Happy Hours throughout the city, he stood up and said with a straight face, “we’re really not having a meeting I just wanted to see how quickly we could all get together should we need one.”

I believe it took three people to restrain several irate employees who threatened to throw him out the window.

Friday, June 28, 2019

Last of a Dying Breed

If you’re expecting a column loaded with sage advice on accounting M&A or succession planning, stop reading immediately.

There will be none of that today.

No, this missive centers around the recent passing of a journalistic dinosaur, a rugged veteran of the Aussie/London tabloid wars who would do anything to get a story and drank enough to fill a reservoir. This week Steve Dunleavy left for that great copy room in the sky at the age of 81- a fact by itself that thumbed its nose at any accepted principles of medical science. As one veteran journalist mused “Steve never took food with his meals.”

Many remember him from his strong right of center columns for the New York Post where he staunchly supported the police and firefighters or his stint as an on-camera reporter for the nightly “A Current Affair.”

But nearly everyone who ever worked on a New York daily had their own Steve Dunleavy story, from the time he lay nearly comatose in a snowbank only to have his foot broken by a passing plow, or when he slashed the tires on his own father’s car when they both were competing for a story in their native Australia.

Tuesday, June 25, 2019

The .001 Percent Solution

Last week I chronicled my battles with the climate and walking distance during the AICPA ENGAGE conference in Las Vegas, of which I’m admittedly still recovering. During the four-day confab, I received a voice mail from a firm that unknown to me was less than a mile from my office.

The owner, an affable man in his late 50s outlined what he thought he needed to get his practice where it needed to be and despite having no one on his bench to assume control and the fact that he wanted to work just five more years full time he had the perfect solution – acquire a smaller firm with young CPAs.

Ah, yes! I told him he had determined the best strategy to right his firm. Now, I said instead of engaging me to help, he’d have more success not to mention less expense, just rubbing the magic lamp and waiting until the genie appears.

It took him a while to get the joke which was not a good sign.

So, I painfully went through chapter and verse of a speech I’ve given perhaps 300 times since I came aboard this company. I explained that if regional firms generating 20 times his revenue were having trouble hiring, what makes him think his firm would be a sudden magnet for talent?

He wasn’t done.

Tuesday, June 18, 2019

Sin City Reality

There are at least two certainties I can count on when attending the annual AICPA ENGAGE conference in Las Vegas. One, I will walk in excess of five miles between my room – which invariably will be situated at the end of an unending hallway - and the conference center, and two, when I finally set aside some time to venture outside the hotel, the temperature will easily be in triple digits.

Well, according to the app on my phone, I walked 7.3 miles during the four-day meeting and the one afternoon I foolishly decided to walk the famed Strip, the Nevada heat welcomed me with a balmy 108-degree blast to the face accompanied by an official heat index of 124.

Hellish temperatures and marathon walking ventures aside, it was technology that took center stage in a venue where cheesy lounge acts and Elvis impersonators are more common than gambling chips. More specifically the impact that pending trends such as AI, block chain and machine learning will have on the traditional operating paradigm of a CPA firm.

At least five sessions that I attended spoke to the reality that much of what used to be referred to as Type 1 audit and tax work will give way to automation and those practices that gird for this massive shift will be the ones that grow and perhaps more importantly, survive.

Tuesday, May 21, 2019

More Delusion than Illusion

The other day (ever notice how many of my columns begin with those three words?) I received a call from a sole practitioner in the New York area who, as he nears 70, was thinking not of slowing down, but rather inquired as to whether I had any opportunities for him to absorb.


He thought that a young owner with a smaller firm would be willing to merge in with an elder statesman who obviously gave little or no thought to client transition or a buyout.

I thought to myself that this was as self-delusional as buffoonish New York Mayor Bill de Blasio declaring his candidacy for the Presidency in 2020. And had about as much of a chance of succeeding.

But my warnings fell on deaf ears.

He had no intention of slowing down anytime soon and certainly had no one in his firm to take over when he ultimately did decide to slow down.

That’s what colloquially is known as truly a man without a plan.

Not to be outdone, literally a day later I was contacted by a practitioner in New England with basically the same scenario, - in his mid-60s, no one on his “bench” but stubbornly refusing to consider merging up.

Tuesday, May 14, 2019

More than a Remote Chance

Back in high school I had a friend whose father was, often, home, when I came over to his house. I assumed he was unemployed, but then my friend explained that he was a financial planner, just when that line of work was beginning to make inroads to the career mainstream and that he worked from an office in their house.

His office was rather austere, a single telephone, rows of financial and accounting-related books on the shelf, an adding machine, certificates on the wall and an overflowing rolodex – remember those?

Desktop computers were still roughly a decade away from becoming an office staple.

As someone with two working parents – one based in an office and the other in a hospital lab, I found it hard to wrap my head around the idea of a home-based office. I wasn’t so sure I wanted to see my parents both in the morning and the minute I returned from school.

But that was then, and this is now.

I won’t go out on a limb and say that working “remotely” as opposed to the old vernacular of “working from home” has become the rule rather than the exception, but in a recent survey of some 200 CPA firms almost half (43 percent) had staff who worked exclusively from home. While more than 40 percent of those polled said that remote workers allowed them to hire outside their established geographic markets.  And some 82 percent indicated that they retained the remote worker even when said worker moved away.

Friday, May 10, 2019

Where does it all go?

Someone once asked legendary financier J.P. Morgan what kind of gas mileage he got on his newly purchased Rolls Royce.

Without blinking Morgan casually replied, “if you have to ask, you can’t afford the car.”

I can honestly disclose that the purchase of one of the world’s most luxurious automobiles was never a consideration in my household budget. So, asking about mileage on a car like that was sort of moot.

Not surprisingly, items such as mortgages, college tuition, food, clothing, power and telephone jumped to the front of the line at Chez Carlino in lieu of a $300,000 Rolls Royce Phantom or Silver Cloud.

But in a sort of related storyline I recently came across a survey that tracked household finances, with a spotlight on the average month expenses of what the poll termed “non-essential items,” as opposed to   monies dedicated toward savings and other critical financial targets like life insurance.

As it turns out, the average adult in the U.S. spends roughly $1,500 per month on these non-essentials, which, if my math is correct, extrapolates to about $18,000 per year.

Food and beverage costs top the list, specifically eating out, ordering take out, having drinks or buying lunch instead of brown bagging it. Others include “impulse purchases,” gym memberships (personally guilty), and even bottled water.

Tuesday, May 7, 2019

Two Blueprints for Succession Failure

When it comes to facing succession and ownership transition within CPA firms, experience has taught me there are two types of practitioners – those who are proactive to securing their next generation of leaders and those who continue to procrastinate despite repeated efforts to convince them otherwise.

Cases in point.

Late last week I was speaking to an owner in his mid-60s who runs a CPA practice in the Northeast. He has no succession plan, nor has he taken anything but cursory steps to rectify his situation. I had him meet with several firms and not surprisingly he found something he didn’t like in each – mind you nothing that could not have been easily overcome.

In fact, in one of his meetings, he deliberately put his feet on the desk of the managing partner and told him he didn’t want to go from owning a firm to becoming an employee.

That would be the Webster’s official definition of making a wrong impression. Trust me, I heard about it chapter and verse afterward from the buyer firm. I said when something like that happens, it’s obvious he wasn’t the least bit interested from day one.

Not to be outdone, earlier I had visited a long-time client, who, as he approaches 70, continues to log ridiculous hours when at that period in his life he should be more concerned about lowering his handicap.

Tuesday, April 30, 2019

Now Hear This!

There are inarguable certainties that accompany the aging process.

Receding hairline? Check. Well, to be accurate, no hairline.

Expanding waistline? Check – sort of. I like to think I’m fighting the good fight against that one. But in full disclosure it’s a lot harder now than when I was 25.

And perhaps more importantly than the physical deterioration, less patience? Absolutely!

My waning lack of patience has progressed to the point where if I’m in the rare mood for a quick-service meal, I refuse to go to the drive through and sit there idling while the cashier inevitably screws up the orders of the cars in front of me.

Ditto for the bank. I will not be held hostage behind someone who decided they need $200 in quarters and simultaneously requests a stack of deposits or money orders to boot.

Which brings me to the topic de jour of which I’m only going to say once.

Now that we’re post April 15th, I will again restart my conversations with potential successor and seller firms.

But for the record I will make two attempts to contact you and help you with your succession plans whatever they may be. After that you’re on your own. 

Tuesday, April 9, 2019

Customer Service Overload

When it comes to hoarding – whether clothing or functional accessories – I’m a split personality.

For example, when I find a comfortable nightshirt – it will often last through several presidential administrations. Other times, I wear something once and then immediately donate it to a local charity.

As best as I can remember I have had the same soft briefcase for nearly 20 years. It has carried me through three different jobs, hundreds of airline flights and conventions, and I have often even taken it on vacations.

In other words, it’s a keeper. Or rather it was.

Alas, the other day I discovered a tear at the bottom ridge which sort of would defeat the purpose of carrying items in a briefcase.

So, I decided to visit one of our area’s large electronics and office supply retailer and pick out a new one.

I had a fairly good idea of what I was looking for so I figured my visit there would be relatively short since I had other weekend errands to run. Just pick one out, pay for it and then exit.

That is until I ran into an eager-to-please junior sales clerk.

I explained what I was looking for and in return I received an understanding nod and an escort to what amounted to at least five racks of laptop/briefcases.

The ensuing conversation went something like this.

Friday, April 5, 2019

The Not-so-subtle Art of Reinvention

When you work remotely, you seldom bypass an invitation for a free lunch. Not only for a chance to get out of the office, but also for the opportunity to interact with someone personally as opposed to receiving an email or hearing a voice at the other end of the phone.

So, with the signs of early spring in full bloom in the Northeast, I made a 60-minute drive up the scenic Merritt Parkway in Connecticut to meet with the CEO of one of the country’s Top100 firms.

I was greeted by the executive at white tablecloth Italian bistro, and instead of a menu, he had his iPad spread out over the table displaying a power point presentation that detailed the sea changes that have occurred at the firm since he assumed the leadership reins some three years ago. In the first 10 minutes he shooed the waiter away three times.

The firm, which by design I’m keeping anonymous, had previously been quite active in the M&A arena often to the detriment of organic growth. He explained that he put the brakes on that strategy immediately and instead focused on how to grow internally and concentrate on what they do best as well as explore other rapidly growing niches.  

Where they previously had assigned managing partners for each office, he streamlined that down to a single managing partner for each region. That firm had a footprint.

Tuesday, April 2, 2019

No Such Thing as a Free Ride

I promise this will be my last auto-centric column for a while.

But in my meager defense this vignette actually has an accounting angle – sort of.

Over the weekend my health club displayed a gleaming new McLaren automobile – of course cordoned off from touchy feely onlookers with thick velvet ropes and patrolled by a security guard who looked like someone straight out of the Blackwater recruiting catalogue.

Apparently, the local dealership was giving gym members a chance to win the car via $250 raffle tickets. Should you hit the proverbial jackpot a $300,000 McLaren Spider Coupe was all yours.

One member whom I shall refer to as Ralphie, decided to take a chance. Now Ralphie does not have the financial means of a hedge fund manager or a plastic surgeon – in fact Ralphie is one of the school bus drivers in my district. So, $250 would more than likely take a sizeable bite out of his weekly budget.

I tried mightily to talk him out of it. Thus, the conversation went something like this:

Friday, March 29, 2019

Car Shopping Made Easy!

A while back I used this space to veer decidedly from accounting and regaled you with adventures of perhaps my least favorite pursuit – car shopping.

In terms of pure enjoyment, I would rate shopping for my next automobile just slightly below a visit to a wax museum.

In other words, I’m not a fan.

But along the lines of “good things come to those who wait,” just this week I received an email declaring me the proud winner of a 2019 BMW Model 530i, metallic silver, 6-speed automatic transmission and equipped with a special cold weather package.

According to various websites, the vehicle MSRP on that model is roughly $55,000. Wow, I could not believe it, my first-ever luxury car! Providing you discount the 1969 Cadillac de Ville I was driving circa 1981.

And, apparently, I’ve also won a check for $1.5 million authorized by the British Gaming Board and the BMW Lottery Department. Odd, I wasn’t aware that BMW had a lottery department. But boy, does that fill a lot of financial potholes at Chez Carlino!

Now all I must do is email all my pertinent financial information to someone whose IP address ends with

You see where I’m going with this right?

Tuesday, March 26, 2019

In Other News Water is Wet

As you might imagine, after either covering or consulting with the accounting profession for some 20 years, I’ve seen and read my share of industry-related surveys. I’ve seen polls on salaries and employment, technology, fraud, taxes and succession to name just a few.

And more often than not, I have taken something away for future use – usually when I’m teaching a live CPE session.

But I’ll have to admit in two decades of doing this I’ve never quite encountered a finding with such an absurdly obvious conclusion as I did last week.

One accounting publication featured an article co-written by a student and a professor at a Northeastern college which concluded that auditor productivity and quality declines when said employees are sick with the flu.

Let me repeat that – productivity declines with the onset of influenza.

What’s next, water is found to be wet?

Now, let me be clear – the flu is nothing to make light of.

Friday, March 22, 2019

Hiding in Plain Sight

For those who followed the Bernie Madoff scandal, you might recall that his company, which purportedly held nearly $65 billion in assets under management was – ahem – “audited” by a miniscule 3-person CPA firm located in a strip mall in bucolic Rockland County, N.Y.

Apparently, this accounting mismatch did little to attract any more than cursory attention from regulators and exactly none from the New York State Society of CPAs which, incredibly, allowed the owner to pen a regular column on auditing ethics. Let me repeat that auditing ethics. That was of course prior to the episode imploding into the biggest financial fraud in American history and earning Madoff a 150-year prison sentence.

Trust me, I can’t make this stuff up.

Along the same lines, but not nearly the same in scope, it has now come out that Key Worldwide Charity - the California non-profit at the nucleus of the burgeoning “Operation Varsity Blues” college admissions scandal failed to attract any notice from the IRS despite listing no employees, three officers who worked ZERO hours and no independent directors in its filings and taking in over $7 million in donations over the past four years.

And to think I got a rather terse email earlier this year from the IRS claiming an additional $3,000 in taxes stemming from a modest IRA disbursement.

And yet, with more yellow flags than undertow warnings at a beach resort, no one gave this organization a second look.

Tuesday, March 19, 2019

Entitlement Part II

Last week in this space I felt, or at least I hoped, I waxed rather eloquently about the recent “Varsity Blues” college admission scandal, whereupon a virtual national network of bribes, testing irregularities and fabricated athletic achievements were doled out like the buffet at Golden Corral in order for the children of hedge funders and celebrities to gain admission to some of the country’s most prestigious colleges.

Again, I was not only astonished by the scope of these egregious acts, but rather some of the attitudes of the children of these parents who are now going to either serve jail time for or pay out astronomical amounts in fines and prepare to perform public service.

Which brings me to sort of an ancillary topic – accumulation of college debt and this ongoing call for “student debt forgiveness.”

How many times have you recently seen the media interview some clueless student who purports to be the leader of this or that movement, demanding free college tuition and elimination of all school debt loans? “Student loan forgiveness,” they call it. They insist a college education is literally a birthright and should be free.

But then in the next breath, admit they have absolutely no clue on how to pay for it.

For the moment, let’s take the cry for loan forgiveness and apply it to say, purchasing a car.

Friday, March 15, 2019

Was it Really Worth It?

More years ago than I care to remember I had just completed a two-year hitch at a junior college due to an overlong apprenticeship as a young screw-off and was in the process of filling out applications to several four-year schools.

In the end, I had narrowed the choices to two: Cornell University or the University of Denver. The choice was made easier for me when the powers that be at Cornell took a look at my grades and told me to go to Denver. Technically, Cornell wait-listed me much to my father’s amazement.

“You? Cornell? Really?”

So much for a patenal booster in self-confidence. But to be fair, my mother was equally astonished.

So, I spent the next several years in the Mile-High City getting my degree and like countless other students, accruing debt from school loans.

Flash forward to the present. I, like probably millions of others was a bit shocked when the national scandal broke concerning under-the-table payments for admission into elite colleges, a ring that included coaches, administrators, scores of obscenely wealthy parents and two high-profile actresses who, often played rather wholesome characters on television.

Not that I was so naïve as to believe that test cheating and side bribes to get into college didn’t occur on a regular basis, but what was so hard to believe was the massive scope of this national disgrace.

My first question was “where were all these people when I was applying?” I was joking of course.

Sort of.

Friday, March 8, 2019

You Can Lead ‘em to Water…

As a parent for nearly three decades, I’m sort of used to having my advice ignored. Whether it be music, TV, clothing or food, my daughters dutifully listened to their father’s suggested guidance and then just as promptly ignored it.

But that goes with the territory – especially during that joyful tantrum-filled period between middle school and high school graduation. I think I personally kept the manufacturers of Maalox in business or at least buoyed their share price.

But perhaps no urging I put forth was as vehement was my strong directive that each study accounting in college. Having either covered or consulted on the accounting profession for nearly 20 years I was well-aware of both the opportunities and the large talent void in the pipeline that existed.

And true to form each decided to eschew accounting and instead pursue marketing and public relations. Not that they haven’t up to this point become successful – in fact one recently received a promotion to media buyer. And each explained that what they currently do is/was far more exciting than looking at tax and audit spreadsheets in some cubicle. To that point it was hard to argue.

But along these lines I noticed an online survey titled College Factual recently unveiled a list of the top 10 accounting schools in the country and wouldn’t you know it, my youngest’s alma mater Binghamton University, a school well-known for its engineering and STEM curriculum in upstate New York, was ranked No. 8.