CPA Leadership Report

Expanding Your Knowledge While Conserving Your Time

Vol. 9 No. 7, July 2011

CPA Leadership Report is the monthly review of the most important management and leadership

articles in the accounting press. It includes electronic links to publishers‟ websites, where you

can find the original complete articles. Our editors review more than 35 publications every

month.

Members of CPA Leadership Institute can access the reviews below. Nonmembers can become

familiar with CPA Leadership Report by reading the articles marked with an *.

Click here to learn about the comprehensive benefits of membership and the extraordinary value

of our Professional program level, which allows you to attend all our webinars at no cost.

Practice Management

Weathering the Storm

The accounting profession is currently faced with three major challenges that combine to form a

“perfect storm.”

CPA Practice Management Forum

*How to Measure Success

August Aquila presents the Balanced Scorecard – a means of implementing and measuring the

success of your firm‟s approach to business.

Partner Insights

Does Your Business Model Support Your Mission?

A model driven by value creation, as opposed to by hourly billing, is more in line with a firm‟s

mission.

CPA Success

Great Leaders Stay Ahead of Trends

The biggest reason great leaders fail, says futurist Andrew Zolli, is that they fail to detect the

weak signals of disruptive change on the horizon.

CPA Success

Consider the Risks When Rewarding Success

Robert Torok offers an alternative compensation program that weighs long-term risk and

motivates through incentive.

AICPA CPA Insider

Staying on Top of the Trends

Use technology to keep your business current and serve your clients better.

CPA Trendlines

Are Your Clients Right for You?

Consider more than whether they are breathing when evaluating prospective clients.

CPA Trendlines

Make the Most of Your Post-Conference Motivation

Make a plan for action before your post-conference ideas and enthusiasm fade away.

Convergence Coaching, LLC Inspired Ideas

The Firm of the Future?

DeepSky‟s goal is to replace the in-house accounting department with an outsourced, virtual one.

Accounting Today

“We Sell Time” – A Flawed Business Model

Ron Baker finds fault with the traditional business model embraced by professional firms.

Accounting Today

Healthier Relationships Lead to Less Conflict

Sylvia Lane provides insight for minimizing conflict in personal and business relationships.

Convergence Coaching, LLC Inspired Ideas

Questions for Firm Leaders

Rita Keller asks firm leaders to consider their motivation and approach to leadership decisions.

Solutions for CPA Firm Leaders

*Take Your Leap into the Cloud

Has your firm been hesitating to join the migration to the cloud? Get practical suggestions for

how to tackle your move to Web-based systems.

AICPA CPA Insider

AICPA to Overhaul Ethics Code The AICPA‟s Professional Ethics Executive Committee is recodifying and enhancing the

organization‟s Code of Professional Conduct.

Journal of Accountancy

Do You Have the Right Credentials?

A designation‟s weight depends on the organization that stands behind it.

Accounting Today

A Downside to Social Media?

Has your firm considered the risks of using of social media?

Solutions for CPA Firm Leaders

Succession Planning and M&A

Finding Your Perfect Match

How to determine whether a merger candidate is a “good fit.”

Public Practice

*Six Steps to Successful Succession

Most people place the “cultural” components ahead of the size of their paycheck.

The Rainmaker Academy

Marketing

Build Your Online Brand (Before Someone Else Does)

If you want to stay relevant today, your communications arsenal had better include a healthy

dose of social media.

CPA Success

Networking on the Web? Or in Person?

Jody Padar explains how she has used social media to expand her business and connect with

Generations X and Y.

AICPA CPA Insider

Client Services

Show Clients How to Succeed in Business

CPAs can provide significant value to their clients by helping them improve their business

planning and develop strategies for enhancing their financial performance.

The CPA Journal

Books

101 Marketing Strategies

In this month‟s issue we present Chapter 14 of 101 Marketing Strategies, by Troy Waugh. The

book – designed for senior associates and partners of accounting, legal, consulting, and other

professional business service firms – offers Waugh‟s proven process model for selling

professional services. We present one chapter per month, or you can order the book now at 888-

797-RAIN (7246) or via mail@therainmakeracademy.com.

Practice Management

Weathering the Storm

Source: CPA Practice Management Forum

According to consultant Joseph A. Tarasco, the accounting profession is currently faced with

three major challenges that combine to form a “perfect storm.” They are:

A general lack of formal succession plans;

Significant merger activity at the local, regional, and national levels; and

The economic recession.

Unlike in the boom years, Tarasco suggests, firms no longer have “the luxury of making poor

business decisions without significant consequences to partner earnings.” Now, to weather the

storm, firms must make some smart, tough business decisions. The article outlines several

survival strategies, including:

Developing and implementing a performance-based partner compensation program that‟s

tailored to a firm‟s specific needs and goals;

Attracting, retaining, and developing the best professionals available to create the next

generation of firm leaders;

Enhancing the client base with better quality, more profitable clients and holding partners

accountable for increasing realizations on current clients and bringing in more profitable

new clients;

Growing through mergers and acquisitions – a strategy, Tarasco says, that is becoming a

necessity rather than an option; and

Offering competitive salaries.

For the complete article, read “Overcoming the Perfect Storm.” [Link to come]

From CPA Practice Management Forum, CCH Incorporated, 800-449-8114, June 2011, p. 5.

How to Measure Success

Source: Partner Insights

The following includes excerpts, reproduced with permission, from an article by August Aquila.

What would it be worth to you if you had a system that could measure your business

development and management efforts? There are several systems that can help do this, but there

is one that I want to discuss because it provides the accounting firm with a balanced approach.

The system is called the Balanced Scorecard. It‟s about implementing your firm‟s strategy.

Here‟s how it works. Management uses the balanced scorecard to align the firm‟s strategy

around four basic areas – financial, client, internal business processes, and employee growth and

learning. Objectives are developed in each area along with measures, targets and action steps.

The scorecard also requires you to do more than set objectives. You need to determine the cause

and effect they will have on each other and your firm‟s strategies and desired outcomes.

For example, if your firm can improve staff and partner technical and marketing skills, and you

provide them with access to a client relationship management system, we could assume an

increase in professional productivity.

Further, if we create processes that provide on-time delivery, the development of new services

and cross selling, we would further expect an increase in client confidence in our abilities and a

higher client-satisfaction level, which in turn would provide us with a broader revenue mix and

improve operating efficiency. All this would ultimately improve profits.

Every practice is different and it‟s up to you to determine what needs measuring and how best to

do it. If you don‟t measure it you won‟t be able to change it. If you focus on the true drivers of

your practice, you will see improvement in the financial results.

For the complete article, read “Don‟t Kid Yourself – Metrics Make a Difference.”

[http://goo.gl/cvCxa]

From Partner Insights, Aquila Global Advisors, LLC, June 2011,

http://www.aquilaadvisors.com.

Does Your Business Model Support Your Mission?

Source: CPA Success

In this video interview, conducted at the Verasage Summit, Kurt Siemers, CEO of Salina, Kan.-

based Kennedy and Coe, discusses his firm‟s implementation of value pricing and its impact on

young professionals. Siemers says he has always struggled with the traditional CPA firm

business model, which is driven by an “hourly billing mentality.” He finds it difficult to get the

traditional model to jive with his firm‟s mission, which focuses on creating value for clients and

improving the well being of its employees.

A model driven by value creation, Siemers explains, better aligns how the firm does things with

what the firm is trying to do. It encourages professionals to focus on “Where‟s the value?” and

“Where can we make a difference?” By allowing professionals to take the time to understand a

client‟s needs, this model fosters creativity and produces results for clients. That, in turn, helps

get professionals more “engaged,” especially younger ones who haven‟t yet adopted the “old

business paradigms” and who tend to embrace the concepts of value creation and value pricing

quickly.

Siemers recognizes that shifting to a new business model can be a major undertaking, especially

for a large firm. But he encourages firm leaders who are struggling with the current model to be

open to new ideas that can help them make a difference and create better results for their clients.

For the full blog post and video, see “Are you creating value or selling time?”

[http://goo.gl/bMmRC]

From CPA Success, the blog of the Maryland Association of CPAs, http://www.cpasuccess.com,

May 24, 2011.

Great Leaders Stay Ahead of Trends

Source: CPA Success

The following includes experts, reproduced with permission, from a blog entry by Bill Sheridan.

The biggest reason great leaders fail, says futurist Andrew Zolli, is that they fail to detect the

weak signals of disruptive change on the horizon.

As Exhibit A, I give you Anheuser-Busch. In “Dethroning the King: The Hostile Takeover of

Anheuser-Busch,” Financial Times reporter Julie MacIntosh examines the internal culture and

politics that led to the brewing icon‟s takeover. For years, CEO August Busch III was focused

solely on crushing rival Miller and dominating the American market. He was so focused on that

one goal that he failed to ask a simple question: What happens next?

The answer would be found beyond American borders, but Busch failed to pay attention to

beer‟s expanding global market. But his rivals paid attention, buying or merging with foreign

beer makers and gobbling up sizeable pieces of the global pie. By the time A-B noticed, it was

shut out of the M&A action – and ripe for a takeover.

Here‟s what Andrew Zolli told me in 2010:

“Our normal metaphors about innovation are all about breakthroughs, change, things that are

different, a radical reframing of an industry. The reality is that most innovative work is

incremental improvement. It’s about staying ahead of trends as opposed to reacting to trends.

“We need to begin to adapt to a world in which we engage the very top of the organization in a

conversation about embracing a different kind of risk portfolio. That means having an

established set of processes in place in which you have no expectation of return. You understand

that you make investments not just for operational excellence, but for learning and adaptation.

Those things are inherently uncertain, but if you begin to do them at a small or medium scale,

they can yield tremendous benefits.”

For the complete article, read “Trouble‟s brewing on the horizon. Pay attention.”

[http://goo.gl/iHlYD]

From CPA Success, the blog of the Maryland Association of CPAs, www.cpasuccess.com, May

23, 2011.

Consider the Risks When Rewarding Success

Source: AICPA CPA Insider

The following includes excerpts, reproduced with permission, from an article by Robert Torok.

A key driver of risk is the incentive that an individual may have to achieve a certain result. This

situation is further amplified by four factors:

1. The relatively short tenure of an executive in any given position;

2. The very substantial incentive award that can be earned for single period results;

3. The long-term nature of many business decisions, such that a potential risk may

not materialize for several years; and

4. The irreversibility of past-period compensation payments.

Fundamentally, the problem is that individuals earn rewards based on business results for a

single period, receive those rewards immediately and cannot „lose‟ the reward virtually no matter

what happens in the future.

These factors can be overcome through the use of a multi-period and multi-metric set of

performance incentives that meets three objectives:

1. Balance risk over multiple periods, with rewards earned in each period but adjusted and

paid over time, reflecting the fact that business decisions may deliver positive results in

the short term while creating risk in future years.

2. Force the organization to consider multiple conflicting metrics when making decisions.

3. Take a long-term view, which may be 15 years or 20 years for a public utility, but only

two years for a high-technology or software company.

To do so, organizations must:

Utilize a balanced scorecard, one that recognizes both financial and other performance

targets, with portions of incentive compensation tied to each element, thus meeting the

second objective above; and

Implement an incentive pay-out structure that reflects the occurrence of a risk event,

driven even in part by decisions of prior years, thus meeting the first and third objectives.

For the complete article, read “Incentive Compensation and Risk Management.”

[http://goo.gl/RlHxH]

From AICPA CPA Insider, May 9, 2011, http://www.CPA2biz.com.

Staying on Top of the Trends

Source: CPA Trendlines

The following includes excerpts, reproduced with permission, from an article by Dustin

Lubertazzi.

With the changing technological landscape, what must accountants do to stay competitive?

1) Increase Value-Add Services to Retain Clients – Compliance work is getting more and more

standardized and streamlined due to technological advances. If you can shift time and resources

from these commoditized services, you can focus more on becoming an indispensible advisor.

Balancing compliance work and helping clients make strategic decisions to protect and grow

their business is the role of the accountant for the foreseeable future.

2) Differentiate Your Firm – It is normal now for the buying process to begin online. What

makes your firm different from firms listed ahead of yours in search results? Do something to

stand out when speaking with prospects and prospects will spread the word. For the initial

meeting, familiarize yourself with their industry, provide something more to take home than your

marketing brochure, and follow up with a handwritten thank you note.

3) Build an Online Presence – If prospective clients start their buying process online, it is

important for your firm to be among search engine results. That is difficult, though, if your firm

does not maintain a website. According to the 2010 AICPA MAP Survey, 33 percent of CPA

firms still don‟t have an active site.

4) Be Conscious of Your Clients‟ Time (or Lack Thereof) – Technology can help:

(a) Make file transmission less of a hassle by giving clients the ability to connect with you online

through a client portal.

(b) Provide detailed information on your services through your website, so prospects and clients

can easily find what they are looking for.

(c) Stay in touch with them proactively; consider sending out an electronic client newsletter or

other regular electronic correspondence.

For the complete article, read “Technology Raises the Bar: Four Things Accountants Must Do to

Keep Up.” [http://goo.gl/FptnS]

From CPA Trendlines, http://cpatrendlines.com, April 21, 2011.

Are Your Clients Right for You?

Source: CPA Trendlines

The following blog post by Jean Caragher is reproduced in its entirety with permission.

Not every prospect will be an appropriate client for your firm. Consider more than whether they

are breathing when evaluating prospective clients, such as your fee, potential realization, the

prospects‟ ability to pay, year-end, growth potential, risk, leads expected from the prospects and

opportunities to cross-sell. By focusing on your best new client opportunities, your client

retention tactics will also focus on your best clients.

In fact, client acceptance and client retention were the two very reasons why Norfolk, Va.-based

CPA firm Wall, Einhorn & Chernitzer, P.C., formed its Revenue Enhancement Committee in

2007. The REC is still active today:

• Implementing client acceptance criteria.

• Strategizing pricing options for clients and new business prospects.

• Evaluating the lowest realization clients (largest write-offs) for each partner and manager,

and brainstorming ideas to improve work efficiency and job profitability.

• Reviewing Client Evaluation Forms (and process) for use by managers to identify

problem clients and solutions.

• Reviewing WIP adjustments.

The REC‟s efforts have resulted in improved realization. This is attributable to REC-initiated

factors such as better pricing, more discussions with clients regarding preparation they can

complete to make their work more efficient, more up-front discussions with clients about fees

and better management of fees incurred while work is ongoing.

The benefits of the REC‟s efforts also include:

• More input from managers on client billing and about clients, in general.

• Many procedural features that improved WEC‟s own quality control.

• Identifying additional service opportunities that were communicated to clients, resulting

in better client service and extra fees.

For the original post, read “How to Get Choosy with New Clients.” [http://goo.gl/7Ezg4]

From CPA Trendlines, http://cpatrendlines.com, May 21, 2011.

Make the Most of Your Post-Conference Motivation

Source: ConvergenceCoaching, LLC Inspired Ideas

The following includes excerpts, reproduced with permission, from a blog entry by Michelle

Baca.

What can you do to keep yourself from losing the motivation and momentum you gained

while attending your conference, association meeting, or other training session?

Select two or three major actions or commitments at the most – As you attend your

conference, maintain a running list of all of the things you “might” do. At the end of the

conference, review your list and highlight the top two or three things that would make the

biggest positive difference and set goals related to them.

Find someone to hold you accountable – Identify someone you can enlist to hold you

accountable. Tell him or her your deadline for reaching your goal. Give him or her permission to

check in with you if he or she hasn‟t heard from you by the deadline.

Schedule time in your calendar for conference follow-up activities – Do this before you leave

for the conference and schedule your block or blocks of time as close to the end of the

conference as possible.

Be prepared for the negativity that you may encounter when sharing your ideas – Being

prepared for any type of reaction that is less than positive will help protect you from letting your

ideas be squashed. Prepare for and even minimize this reaction by:

Synthesizing your ideas into two or three commitments

Identifying the positive result you will achieve

Communicating the positive result and the benefit to the people you‟re sharing it with

Track possible future actions – Remember the list of things that didn‟t make it into your top

two or three? Create a special file for these so that you can circle back to them once you have

successfully completed your first goals.

For the complete article, read “Capitalizing on „Conference Pixie Dust.‟” [http://goo.gl/yQrOH]

From Convergence Coaching, LLC Inspired Ideas, http://blog.convergencecoaching.com, May

11, 2011.

The Firm of the Future?

Source: Accounting Today

DeepSky touts itself as a “virtual accounting department.” Technically based in Irvine, Calif., the

firm is truly virtual, with no physical office space and employees armed with Macs and

smartphones. Founded a few years ago by W. Michael Hsu – formerly of Denver-based Hein &

Associates – DeepSky provides outsourced invoicing, bookkeeping, business consulting, and

other services. Most of the firm‟s processes are cloud-based, and what little paper it does receive

is promptly scanned and converted into digital format.

DeepSky is committed to using knowledge and technology to provide services to entrepreneurs.

Hsu feels that the “outsourced accounting department” is the future, and that DeepSky‟s role is to

replace in-house accounting departments, not to replace CPA firms.

The firm has also embraced value pricing, adopting a fixed-price model rather than hourly

billing. For this approach to work, however, a firm needs the right pricing models and clients

who share its philosophy. DeepSky is so committed to value pricing that, earlier this year, it fired

most of its clients and is in the process of rebuilding from the ground up.

For the complete article, read “A new firm paradigm – DeepSky aims to be clients‟ virtual

accounting department.” [http://goo.gl/Hq5vU]

From Accounting Today, June 1, 2011, SourceMedia Inc., One State Street Plaza, 27th Floor,

New York, NY 10004, 800-221-1809.

“We Sell Time” – A Flawed Business Model

Source: Accounting Today

Ron Baker, founder of the Verasage Institute, suggests that the traditional business model

embraced by professional firms is flawed. He describes the model using an equation: Revenue =

people power x efficiency x hourly rate.

There are several problems with this approach, Baker explains, including:

It adds capacity after revenue, which is the reverse of most industries, which add capacity

before revenue.

It overemphasizes efficiency, at the expense of innovation, customer service, investment

in human capital, effectiveness, etc.

It focuses on growth for the sake of growth – on getting more business rather than better

business.

In Baker‟s next article, he will offer a better approach.

For the complete article, read “Avoid being a firm of the past.” [http://goo.gl/ciQrn]

From Accounting Today, June 1, 2011, SourceMedia Inc., One State Street Plaza, 27th Floor,

New York, NY 10004, 800-221-1809.

Healthier Relationships Lead to Less Conflict

Source: ConvergenceCoaching, LLC Inspired Ideas

The following includes excerpts, reproduced with permission, from a blog entry by Sylvia Lane.

Often, we are consulted to help manage and resolve conflict situations and have even developed

an eight-step methodology [http://goo.gl/iWhxn] for approaching conflict conversations. Having

struggled through the difficulties of repairing broken relationships, I decided to focus on ways in

which to make my relationships stronger. I wanted to do this before they were so damaged by

addressing the following questions: How can I avoid conflict? What are some of the signals that

indicate potential conflict? How can I become more adept at recognizing these signs before they

reach the point of crisis?

Think of the most rewarding relationships you have. What makes them fun? How are you

different with these people and why? What makes you be different with people with whom you

experience extreme conflict?

In my own relationships, the ones in which I feel I have been able to prevent conflict are

characterized by the following attributes:

1. Mutual caring and respect

2. A feeling of emotional safety

3. A willingness to be up-front and honest without fear of hostility

4. An acceptance of constructive criticism as well-meaning

5. A belief that we have each other‟s best interest at heart

6. Support for creative expression

7. Acknowledgement of uncomfortable thoughts or feelings

8. Listening carefully to each other without interruption

9. A willingness to problem-solve, even if it‟s difficult

10. Testing new actions that we‟ve agreed upon

11. Continuing to share our feelings, what we appreciate about our relationship and

what‟s not working how we‟d like it to

To prevent conflict, opt for clarity and practice being in communication, coming from a belief

that you both have each other‟s best interest in mind.

For the complete article, read “Preventing Conflict.” [http://goo.gl/wK0I6]

From Convergence Coaching, LLC Inspired Ideas, http://blog.convergencecoaching.com, May

25, 2011.

Questions for Firm Leaders

Source: Solutions for CPA Firm Leaders

The following is a complete reprint, reproduced with permission, of an article by Rita Keller.

How are you leading your firm?

Are you leading to avoid conflict and confrontation?

Are you leading to maintain status quo?

Are you leading to keep as much profit as possible in the pocket of the partners?

Are you leading the way CPA firms have always been led in the past?

Running a business and leading an organization have evolved – the old ways don‟t work.

Why not try leading as if you were not worried about getting fired? Lead as if you could easily

and immediately get another job.

Lead as if you are not running for reelection – simply do what the firm really needs.

“Never, for the sake of peace and quiet, deny your own experience or convictions.” – Dag

Hammarskjold

From Solutions for CPA Firm Leaders, the blog of Rita Keller, president of Keller Advisors,

LLC, rkeller@ritakeller.com, “CPAs‟ Attitude on Leading,” May 30, 2011. Visit

http://ritakeller.com/blog/.

Take Your Leap into the Cloud

Source: AICPA CPA Insider

The following includes excerpts, reproduced with permission, from an article by James Bourke.

As I travel the country one thing is extremely evident … everyone has heard about the cloud

computing “revolution.” Now, taking that awareness to the next level – migration and

implementation – is very often the challenge that has held many back.

Let‟s take a high-level approach and view some of the steps that a CPA firm should take when

going from “legacy” systems and applications to those found in the cloud.

How Much Bandwidth Should You Have? You need to move from a “garden hose” to a “fire hose” and every effort should be made to

obtain the largest amount of bandwidth affordable.

Which Area to Target First? Tax-preparation applications are the easiest and best target for testing the cloud model. An

extremely close second is content or document management.

Once tax and content management solutions have been migrated, it would be time to explore

other practice areas. Vendors are now starting to become more plentiful in areas such as:

Practice Management

o Thomson Reuters [http://goo.gl/WsmJM]

o Practice Engine [http://www.praceng.com]

Electronic Workflow

o XCM Solution [http://www.cpa2biz.com/workflow]

Employee Evaluation

o Halogen Software [http://www.halogensoftware.com]

o viDesktop [http://www.videsktop.com]

Education and CPE Tracking

o Reqwired [http://www.reqwired.org/for_profs]

Don‟t forget about migration of other solutions commonly used across many industries. Some

good candidates for migration to the cloud would include e-mail solutions such as Microsoft

Exchange, Office, SharePoint and more.

The other areas that benefit from the cloud model are those on which we collaborate with

our clients.

A handful of vendors in this area do collaboration and do it well!

Intaact, with its Intaact Accountant Edition [http://www.cpa2biz.com/Intacct] clearly has an

understanding of how we can add value by collaborating with our clients.

Bill.com [http://www.cpa2biz.com/Bill] is another vendor that allows CPAs to collaborate with

their clients.

For the complete article, read “The Move to the Cloud.” [http://goo.gl/oYFX0]

From AICPA CPA Insider, May 23, 2011, http://www.CPA2biz.com.

AICPA to Overhaul Ethics Code Source: Journal of Accountancy

The AICPA‟s Professional Ethics Executive Committee (PEEC) is recodifying and enhancing

the organization‟s Code of Professional Conduct. This article reviews the planned changes.

Many of the changes involve reorganizing the code into topical areas to make it easier for

practitioners to find what they need and ensure that they consider all relevant standards necessary

to reach the right conclusion.

One of PEEC‟s goals is to continue the process of converging the AICPA‟s code with the

International Ethics Standards Board for Accountants (IESBA) Code of Ethics for Professional

Accountants. To that end, PEEC plans to more fully integrate the “conceptual framework” into

the AICPA code. The conceptual framework, currently limited to the code‟s independence rules,

provides principles-based guidance on complying with ethical standards in situations in which no

specific rule exists. PEEC plans to expand the conceptual framework approach to other rules as

well.

The recodification will have little impact on existing standards, but it should make the code

easier to apply and provide more useful guidance for dealing with the “gray areas.”

For the complete article, read “Improving the Code of Professional Conduct.”

[http://goo.gl/vBtqh]

From Journal of Accountancy, American Institute of Certified Public Accountants, June 2011,

http://www.journalofaccountancy.com/Issues/2011/June.

Do You Have the Right Credentials?

Source: Accounting Today

Not all credentials are created equal. The weight of a particular designation – and the competitive

advantage it provides – depends on the organization that stands behind the certification and the

requirements for achieving it. Clients can research CPAs‟ credentials at websites such as

DesignationCheck.com, so it‟s a good idea for professionals to do the same.

This article reviews several of the most important designations for CPAs:

Organization Designation

AICPA Personal Financial Specialist (PFS)

Accredited in Business Valuation (ABV)

Certified Information Technology Professional (CITP)

Certified in Financial Forensics (CFF)

College of Financial Planning Certified Financial Planner (CFP)

National Association of Certified Valuation Analysts Certified Valuation Analyst (CVA)

Association of Certified Fraud Examiners Certified Fraud Examiner (CFE)

For the complete article, read “Alphabet soup – A growing roster of professional designations

fosters credential-mania.” [http://goo.gl/sGFyZ]

From Accounting Today, June 1, 2011, SourceMedia Inc., One State Street Plaza, 27th Floor,

New York, NY 10004, 800-221-1809.

A Downside to Social Media?

Source: Solutions for CPA Firm Leaders

The following is a complete reprint, reproduced with permission, of an article by Rita Keller.

Are you having discussions inside your firm about the pros and cons, risks and benefits of social

media? It is definitely a hot topic at CPA management conferences and a cause for concern

inside firms.

At a recent Ohio Society Hot Topics for Corporate CPAs Conference, Nancy Flynn talked to the

attendees about the legal risks of social media. Flynn is the founder and executive director of The

ePolicy Institute.

Flynn authored a three-part online guide on social media rules for the Ohio Society of

CPAs. You can access the information by visiting this article [http://goo.gl/Y24vG] on the

OSCPA website.

From Solutions for CPA Firm Leaders, the blog of Rita Keller, president of Keller Advisors,

LLC, rkeller@ritakeller.com, “Legal Risks of Social Media – Info for CPAs,” May 26, 2011.

Visit http://ritakeller.com/blog/.

Succession Planning and M&A

Finding Your Perfect Match

Source: Public Practice

In the first article [http://goo.gl/3T1HL] in this series, Bill Reeb examined the common reasons

(both good and bad) why CPA firms merge. In this installment, Reeb and coauthor Dom

Cingoranelli explain how firms can determine whether a merger candidate is a “good fit.”

To do this, one needs to go beyond the traditional due diligence process, which often focuses on

whether a merger makes economic sense, and consider factors such as:

Strategic perspective,

Owners‟ styles, goals, and relationships,

General cultural match,

Client bases and services offered,

Performance management and pay systems,

Firm ownership and governance models,

Business processes and practices, and

Succession management practices.

The next installment will examine the different perspectives of younger and more senior partners

in evaluating merger opportunities and potential solutions that satisfy both groups.

For the complete article, read “Merger (Column 2) – What to Consider in a Potential Merger

Candidate.” [Link to come]

From Public Practice, Texas Society of CPAs, June 2011, www.tscpa.org.

Six Steps to Successful Succession

Source: The Rainmaker Academy

The following includes excerpts, reproduced with permission, from a blog entry by Patrick

Pruett.

One managing partner writes: How do you create an environment/plan that makes young people

want to take over the firm? Research shows that most people place the “cultural” components

ahead of the size of their paycheck. So when you consider what your firm needs to do to create

the right environment, keep in mind the following six steps toward succession.

1. Hire Right. Employ team members who value the things your firm values.

2. Find Staff Hot Buttons. If you are not sure what drives and motivates your team members,

ask.

3. Map It Out. Take the time to map out what a career path would look like for someone to

become a partner in your firm.

4. Build Leadership Muscle. A CEO once told me he didn‟t want to spend the money training

people for fear that they might leave and he would „lose‟ the investment. My response was: What

if you don‟t train them and they stay?

5. Cultivate the Culture. If you value your firm your people will too. If you value and believe

in your people, they will value and believe in you.

6. Start Now! The old adage “don‟t put off until tomorrow what you can do today” is a good

philosophy for building your firm‟s next leadership team. Too many firms today have partners

ready to retire and no one in the firm to take over.

For the complete blog entry, read “How to Succeed in Succession.” [link to come]

From The Rainmaker Academy, http://www.therainmakeracademy.com, May 11, 2011.

Marketing

Build Your Online Brand (Before Someone Else Does)

Source: CPA Success

The following includes experts, reproduced with permission, from a blog entry by Bill Sheridan.

E-mail? Phone? They‟re so Nineties. If you want to stay relevant today, your communications

arsenal had better include a healthy dose of social media.

And yet there‟s a gaping social divide between large and small companies. Communications firm

Burson-Marsteller says 84 percent of the world‟s largest 100 companies are using social media,

compared to about half of small- and mid-size companies. “And only between a quarter and a

third (of small- and mid-size companies) use it in any structured way,” reports CFO.com‟s Alix

Stuart.

Michelle Golden, a thought leader on the social media front, says social tools offer smaller

businesses some huge advantages in business development and brand management. The first

step, though, is much more personal. CPAs who haven‟t already done so need to build their

individual online brands ... and they need to do it now, before someone else does.

The reason, says Michelle, is simple: Everything is online today. We need to be, too.

“All CPAs should have a really solid LinkedIn profile and claim their Google profiles. Both of

those things will help elevate your Internet presence,” she said. “LinkedIn is a great place to

start, for a couple of reasons. One, it‟s the only social media platform that was created

exclusively for business. Two, it gives you the ability to update your status, which is a little like

Facebook. It lets you answer questions, which can feel a little bit like blogging. And it gives you

a home page with a running feed of what your contacts have to say, which is very Twitter-like.

So it gives you an introduction to the types of things that other social media tools offer.”

The bottom line: Don‟t wait. In an online world, your online brand should be near the top of your

priority list.

For the complete article, read “Claim your social space, and do it now.” [http://goo.gl/rTiLF]

From CPA Success, the blog of the Maryland Association of CPAs, www.cpasuccess.com, May

26, 2011.

Networking on the Web? Or in Person?

Source: AICPA CPA Insider

The following includes excerpts, reproduced with permission, from an article by Jody Padar.

The future of your practice will lie with Gen Xers and Gen Yers. So the big question is: How do

you network to capture this market? Yep, you guessed it, the answer is social media. Tools like

Facebook and Twitter are simple and convenient. More importantly, cyberspace is where your

Gen X and Gen Y prospects live.

It is very interesting to see so many CPA firms limiting their staff and managers in the use of

social media. Partners are worried that staff will be misrepresenting the firm, or they don‟t see

any return on investment (ROI). Here are my responses to these familiar arguments:

If you are afraid your staff will misrepresent the firm via social media, what makes you

think they won‟t misrepresent you at onsite events? It‟s really more a matter of hiring the

right employees, not of where they socialize.

You want ROI? Okay, but only if you can tell me the ROI of the last Chamber of

Commerce Chicken Dinner you attended.

With client retention as the number one concern at most firms, it‟s time partners started thinking

differently about how to attract new business. My firm has tripled in size over the past four

years. How? Because I accept the shifts that are occurring and adjust my firm to take advantage

of new trends by:

Aggressively going after Gen Xers and Gen Yers, for whom the distribution of wealth is

progressively shifting.

Realizing that these prospects live on the Internet. I‟ve implemented social media into my

broad marketing strategy by making Facebook and Twitter a standard part of my

workweek. I‟ve also opened use of social media tools to my staff.

For the complete article, read “Reach Out to a New Pool of Prospects.” [http://goo.gl/4gsLn]

From AICPA CPA Insider, May 11, 2011, http://www.CPA2biz.com.

Client Services

Show Clients How to Succeed in Business

Source: The CPA Journal

As the economy continues to dig itself out of the recession, CPAs can provide significant value

to their clients by helping them improve their business planning and develop strategies for

enhancing their financial performance.

This article discusses several areas in which CPAs can assist their clients, including:

Reviewing and refining business plans, budgets, and strategies,

Educating clients about the purpose of a business plan,

Providing in-depth analysis of financial statements,

Comparing actual results to budgets and plans to improve their accuracy,

Identifying critical customers and evaluating vendors,

Developing and implementing fraud prevention and detection policies and practices,

including surprise audits, whistleblower programs, and other methods, and

Developing and implementing controls, such as internal auditing, management review

processes, internal control audits, independent audit committees, and management

certification of financial statements.

For the complete article, read “Growth Potential in a Difficult Economy: Strategies for

Expanding Client Services.” [http://goo.gl/uIMfX]

From The CPA Journal, A Publication of the New York State Society of CPAs, June 2011.

Books

101 Marketing Strategies

By Troy Waugh

In this month‟s issue we present Chapter 14 of 101 Marketing Strategies, by Troy Waugh. The

book – designed for senior associates and partners of accounting, legal, consulting, and other

professional business service firms – offers Waugh‟s proven process model for selling

professional services. We present one chapter per month, or you can order the book now (see

below).

Waugh‟s selling process includes three levels: (1) development of the relationship, (2) the buying

process of the client, and (3) the selling process of the professional. Tested and found highly

effective in hundreds of successful firms, this process is used throughout The Rainmaker

Academy‟s courses and in its leadership and business development programs for accounting

professionals.

Troy Waugh, CPA, MBA, CEO of The Rainmaker Academy, and author of two books, was

selected by Accounting Today as one of the “100 Most Influential People in the Accounting

Profession.”

To order the book, call 888-797-RAIN (7246) or e-mail mail@therainmakeracademy.com.

To read this month‟s chapter, click here. [http://bit.ly/jw4gG4]