Archives for February 2016

The Siegfried Group Announces New Connecticut Office

Wilmington, Del.-based The Siegfried Group LLP (FY14 net revenue of $98 million) announced the opening of its new Greenwich, Conn., office located at 1700 E. Putnam Ave. Siegfried’s new office supports the firm’s ongoing commitment to supporting the Greenwich business community and belief in its growth.

Although the firm has cultivated business in the area for years, having a new permanent local presence at this prestigious venue enables the firm to serve better existing and future clients.

The Siegfried leadership team includes Katie Nyarady Clymer, managing director, Domenica Scarpulla, regional market leader, Michael Blando, operations director, Chris Bromark, professional resource director, Eli Argento, professional resource director, Jacki Tirelli, recruiting director, Sean Maffei, associate director, and Bill McColl, operations associate.

“We continue to be very excited about the value Siegfried can bring to growing businesses in the Greenwich Region,” says Scarpulla. “Siegfried continues to expand into new cities and build permanent, cutting-edge office space in its 18 existing cities as part of its growth strategy and outlook for the future.”

Lane Gorman Trubitt Admits New Partners

Kevin Warneke

Kevin Warneke

Lane Gorman Trubitt (LGT) (FY14 net revenue of $18.2 million) of Dallas admitted two new partners to the firm. Kevin Warneke, an assurance services professional, and Scott Gunn, a financial planning consultant, have both been asked to join their respective partner groups.

Gunn has more than 20 years of investment consulting and financial planning experience. He joined LGT as a principal in January 2009. His responsibilities include investment advisory services, comprehensive financial planning and qualified plan consulting to employers. Gunn also serves as LGT’s chief compliance officer and conducts due diligence on the firm’s investment strategies.

Scott Gunn

Scott Gunn

Warneke joined the firm in 2000 and was asked to join the firm as a partner in January. His primary focus is on client service and he has more than 15 years of public accounting experience. His experience includes the audits of a broad range of financial statements. His responsibilities include all aspects of audit and consulting engagements from planning, assessing risk and supervising staff to the review and presentation of final deliverables to management and boards of directors.

SaxBST Admits Two Partners in New Jersey Office

Al Traverso

Al Traverso

Albany, N.Y.-based SaxBST (FY14 net revenue of $42.1 million) admitted Al Traverso and Shivani Jain to partners in the firm’s Clifton, N.J., office. In their new roles, they will continue to service clients, develop staff and expand upon their account oversight and firm growth initiatives.

Traverso and Jain have been with SaxBST since 1996 and 2004, respectively, and have served in various leadership roles at the firm. As an A&A director, Traverso led efforts to implement computerized audit techniques and training, as well as A&A professional development programs. Jain serves as co-tax leader of the New Jersey and New York City tax practice and oversees tax training curriculum and the standardization of tax procedures.

Shivani Jain

Shivani Jain

In addition, they are both members of the firm’s manufacturing and distribution industry service group, which provides industry-specific accounting and advisory services to mid-size and closely held companies in the M&D market sector.

“Organic growth is at the heart of our vision at SaxBST,” says Joseph Damiano, co-MP. “Al and Shivani have risen through the ranks by availing themselves of the many resources and professional growth opportunities at the firm. Their technical competence and service excellence have become tremendous assets to our clients, staff and leadership team.”

Kabat, Schertzer, De La Torre, Taraboulos & Co. Expands in South Florida, Opens New Office

Miami-based Kabat, Schertzer, De La Torre, Taraboulos and Company (KSDT) announced it has opened an office in Weston, Fla., to better serve its growing staff and client base north and west of Miami-Dade County.

The 2,505-square-foot space, which is located at 1625 N. Commerce Parkway in Weston, Fla., will become the new home to many KSDT employees who had previously worked out of smaller satellite offices in Hollywood, Fla., and Coral Springs, Fla. In addition, the new office will serve as a central hub for firm members to meet more frequently with clients located throughout South Florida and on the state’s Gulf Coast.

“Our firm has expanded exponentially, and we recognized that we needed a central location where we could build-out the space to meet our evolving needs,” says Jeffrey Taraboulos, MP with KSDT. “The Weston office is a major step in our firm’s growth and our commitment to enhancing client relationships.”

Innovation: How Great Firms Excel

By Gary Boomer, Boomer Consulting

Gary Boomer

Gary Boomer

Accounting firms generally are not who you think of when you mention “innovation,” yet many firms excel at innovation and there is a pattern to their success. Innovation is directly linked to growth and not an epiphany like many think; but rather a process that combines hindsight, vision and insight. The accounting profession is going through significant changes and I am often told by firm leaders they just don’t have the next generation of leaders in their firms.

In many cases there is validity to their statement and a better understanding of innovation and how firms get into this situation can help firms take the necessary steps to balance between “discovery” and “delivery” skills. Discovery skills focus on new opportunities, trends and creativity while delivery focuses on execution. You need both, but the tendency is to focus on delivery.

Mature and typically declining firms are dominated by people with excellent delivery skills, but often lack the proper balance of discovery skills. Typically, one or more firm founders were entrepreneurial and tended to hire people for their delivery skills and not their discovery skills. As a result, many partners and managers don’t know how to think about discovery or give enough value to the importance of innovation.

Accounting programs teach people delivery skills while most experiences and on-the-job training also focuses on delivery and execution. In fact, many of the discovery skills are viewed as nonproductive – more about that later. I believe innovation or lack thereof can explain some of the frustration and what firms must do in order to develop the next generation of innovative leaders.

Directional Versus Intersectional

Let’s look at two different types of innovation and then how the most successful firms are modernizing their practices to meet the needs and wants of their clients. Accounting majors are taught the rules and regulations of the profession in school and throughout their careers. This is not a negative, but rather a fact as their perception is often different than those with different training and aptitudes. Upon graduation, most accountants going into public practice start in audit and/or tax. This has been the traditional approach and is the primary reason most innovation in firms is directional innovation.

Directional innovation tends to improve a service in fairly predictable steps with a well-defined dimension or goal. The majority of innovation is directional and is accomplished through increasing levels of expertise and specialization (delivery skills). This is a low-risk approach and one with which many CPAs are comfortable. There is nothing wrong with directional innovation, yet it is limiting due to the fact most of the participants are looking at the problem from the same perspective.

Darwin John, former CIO at the FBI, once said, “If two of you have the same opinion, then we don’t need one of you.” This may be a bit extreme, but the point is that for real innovation (discovery) to occur it requires multiple perspectives. This is often called intersectional innovation, where multiple disciplines meet in the attempt to solve a problem or improve a solution. From my experience in the CPA profession, two areas within firms that have been responsible for innovation over the past 20 years are firm administration and technology. Leaders in these areas have been attempting to bring the silos together and improve performance through improved communications, efficiency and effectiveness.

One step in entrepreneurial innovation and the one leading firms are focusing on is intersectional or client-centric innovation. It not only involves the client, but his multidiscipline advisors. This can be difficult due to egos and personalities, but the CPA is the most trusted business advisor and should take his or her role seriously by acting as the quarterback when it comes to innovation and improved client services.

While many CPAs were trained to be rugged individualists (with an intense focus on delivery) and solve the clients’ problems on their own or with a small team, that approach no longer meets the needs of a majority of clients today.

Services Commoditized

Today, clients are looking for faster, better, cheaper and easier solutions forcing firms to be innovative and sensitive to clients’ wants and needs. The capturing of transactions is becoming a commodity with new technology and the ability to aggregate and integrate information via cloud-based solutions. In the past, tax return preparation has involved a significant amount of time (fee) in aggregating data while technology has automated the calculation and processing of the return. In other words, the CPA is now caught in a situation where the services they are offering are diminishing in value (commoditization). Part of this is due to technological innovation and part is due to the pricing strategies used by the majority of firms (hours times dollars, labor theory of value).

We are living in a connected world and someone is making those connections. As the trusted business advisor it should be you, the CPA, and your firm. The people making these connections tend to be professionals who excelled in one field, but learned from others. This describes many CPAs and why they are the most trusted business advisor. Formal education increases the probability of attaining creative success to a point and then actually reduces the odds. A key to prolonged success throughout one’s career is lifelong learning and multiple experiences. It makes sense to spend time on a variety of projects if you wish to develop fresh and groundbreaking ideas. The value comes from being able to spot trends and then integrate what you already know. This requires curiosity and an interest in a variety of things. Innovators don’t produce because they are successful, but they are successful because they produce.

Grouping Innovation

Diversity promotes innovation while too much expertise can create barriers to innovation. Innovation requires a balance. More good ideas come when working in a group than when working independently. The big question becomes: What can and should firms do to promote innovation at the intersection? As I said earlier in the article, innovation occurs with vision, hindsight and insight. By looking at the current generation of great firm leaders we see several characteristics that allowed them to be innovative. Let’s look at a list of the most important discovery characteristics.

  1. The ability to connect and associate different perspectives (clients, multiple advisors, trends, technology and etc.)
  2. The ability to question the status quo.
  3. The ability to hold self and others accountable.
  4. The willingness to participate in “safe haven” meetings with peer leaders.
  5. The ability to manage, not avoid risk. The quantity of new ideas improves the quality. Create the environment to promote, not stifle, innovation.

This list may not seem important to those who focus only on the delivery side. Firms must be cautious not to swing the pendulum too far toward the delivery or discovery skills. Both skills are required, important and cannot be ignored. Success today requires a team. The team should involve younger members who are capable and expected to challenge the status quo or strategy, which has often been developed and implemented by senior leadership.

The fact is most large organizations generally fail at disruptive innovation because top management has been selected for their delivery skills. While it is the role of the managing partner or CEO to lead the innovation, it is an extremely difficult assignment. Delivery executives do not like having the strategy constantly challenged, nor do they appreciate change. Does your firm reward and promote discovery skills? If the answer is no, you have your answer as to why you don’t have the innovative leaders for the future. Now is the time to identify and develop leaders with the skills and willingness to focus on intersectional innovation. The future success of your firm depends upon innovation.

An Innovation Checklist

Here are five areas where innovation will produce significant results. Granted they may not fit every firm, but most firms will find three or more of these innovative ideas profitable.

  1. Billing and collection policies – Use technology to improve cash flow (ACH payments and credit cards). ACH payment processing is becoming more and more popular lately, this method increases cash flow whilst also making transactions easier for customers. However, both of these methods require different thinking and change management. Too many firms are allowing clients to treat them as interest-free or “cheap” banks. You can turn this around with improved engagement letters that specify payment terms leveraging monthly bank drafts.
  2. Tax return preparations processes – Avoid loops and focus on one-way workflow. There are better ways to train than sending work back to the preparer. You can use technology to grade performance and report errors. Current workflow software has its roots with outsourcing companies. If Federal Express can track packages electronically, firms should be able to track work in an efficient manner reducing cycle time.
  3. Client accounting in the cloud – Firms can provide transactional as well as value-added services such as bill payment, payroll, controller, human resources, IT and CFO-related services on a monthly basis. Private labeled software that can be centrally updated and supported will allow firms to take back control of accounting. It will also allow your firm to become hardware agnostic. It works the same on Mac as on a Windows-based PC via a browser.
  4. Use portals to aggregate client data for auditing and accounting as well as tax return preparation. Avoid false starts and wasted time. Portals provide security, are inexpensive and clients like them. Most of the resistance I see is within the firm.
  5. Conduct client focus groups with marketing, tax and technology expertise present. This will provide innovation at the intersection from multiple perspectives. Listen to the client and provide the services they want. Utilize firm leaders with discovery skills.

Innovation and Leadership

Innovation is part of a firm’s culture and DNA. It requires leadership and the willingness to manage risk. Not every idea is a great idea, but the quantity of ideas determines quality. Successful firms balance discovery and delivery skills. Does your firm have the discovery skills necessary to meet your clients’ demands in a rapidly changing world? Provide your people with the time and resources to innovate. Based upon recent studies, most firms are less than 50% chargeable. What better use of the non-chargeable time than innovation, training and new business development?

View the original article.

Gary Boomer is the president of Boomer Consulting, in Manhattan, Kan.

CohnReznick Admits Hamilton as New Research & Development Partner

Scott Hamilton

Scott Hamilton

New York-based CohnReznick LLP (FY15 net revenue of $575 million) admitted Scott Hamilton to the firm as a partner with a corporate tax leadership role in the research & development (R&D) group.

Based in the Los Angeles office, Hamilton has more than 15 years of experience as a corporate tax advisor, including roles serving both publicly traded and closely held companies that have operations in multiple international and domestic locations.

His expertise is in R&D tax credits. He has assisted clients with IRS and state audit matters. Hamilton’s experience spans industries including manufacturing and wholesale distribution, medical, life sciences, technology and gaming.

“Scott brings vast experience in R&D tax credits that will benefit our clients in many industries both here in the LA area and across the Firm,” says Scott Sachs, MP of the West region.

Prior to joining CohnReznick, Hamilton was a managing director at a large accounting firm. His practice focused on R&D tax credits within the firm’s federal tax consulting group. This group focused on accounting methods and periods, R&D tax credits, fixed asset consulting, domestic production activities deduction and other similar tax consulting services.

From Billable Hours to Value Pricing

Richard Goldstein

Richard Goldstein

By Richard Goldstein, partner at Buchbinder Tunick & Company

Many industry consultants are urging PR firms to dump billable hours and replace it with a fixed-pricing model, or even value pricing. For some reason, billable hours seem to be set in stone in many service organizations, including PR agencies.

The beginning of billable hours begins with the initial proposal. By this I mean a price is determined, usually based on hours to complete the project. Staff is given budgets to complete a project and record their time in a time-keeping system. At the end of the project, management has a profit or loss based on billable hours. More frequently than not, the question asked is, “How can this have taken that much time?” The question translates into a realization write-off and overall dissatisfaction from the account supervisor and the team members!

Some history

So what is wrong with the billable hour? The billable hour was never meant to be a pricing method. It was originally intended to be a tool to allow a service organization to measure the profitability of an engagement, not a means to price it. It is a cost accounting tool!

Ask a professional of any profession to eliminate his or her time sheet. Staff will chuck it in an instant. Management would be concerned that they would not know whether or not they made money on an individual engagement. This is a valid point but wrong! The concept of using a standard billing rate is not cost accounting but profit forecasting. By this I mean knowing the desired net income of the firm using a cost plus formula. By the way, a cost plus formula is only as good as the determination of the cost plus formula input. The U.S. Postal Service uses cost plus to determine price. We know how well it does!

Lessons from the accounting professionGrowth Dollar Sign

Many CPA firms are still using billable hours internally to help calculate a fixed monthly rate for some of its clients. However, other firms are completely discarding the notion of an hourly metric and instead use “value pricing” to determine prices based on the value of the service to the client. It is interesting that based on accounting firm surveys, the majority of CPA firms still use the billable hour. Those that say they use value pricing are really just using another form of the billable hour according to Ron Baker, a well-known value pricing consultant.

What’s wrong with using billable hours?

According to Baker, the billable hour relies on practitioner’s input, namely time, rather than the output, results. The value of the results should determine the cost of the service, not the time it takes to achieve them. Otherwise, firms can find their revenue stream severely limited. (There are only so many hours a person can work in a day.) Also, think about this — how much time and energy does it take to track time, analyze the result and labor over what went wrong! The time is better spent on results for clients!


Firms are hesitant to move away from the billable hour, because firm management still needs to track time to determine their costs and gauge which services produce the best margin. (In my view even this is not done properly.) Baker disagrees with this notion, arguing instead that other methods such as price-led costing, project management, key predicative indicators and after-action reviews are better suited to determining and managing costs than time sheets.

If your client demands hourly billing

There are many clients that want to see all the detail behind the bill, including how you determined the billable rate, etc. According to Baker, some buyers of your expertise are so used to buying services based on time and rate, they demand to know this. I have been asked many times to provide the firm’s billing rates in the proposal. It is also true that sometimes a client/customer just wants to buy your time (perhaps to ask a numerous questions according to Baker), and the only benchmark of value in that instance is the time spent. This is not the type of client you want to deal with, since the client has no idea of the value you bring, or if he/she does, is not willing to pay for it. After all, you spent a lifetime learning your craft, why should you give $10,000 of value to a customer in a one-hour meeting? Better yet, why should you provide this value in the proposal?

Determining profitability

If you eliminate time sheets, how will you know if you are profitable? It is simple: income statement management. Look at the cost of labor as a percentage of gross revenue. This is a different mindset from poring over hourly reports. Not comfortable with this? Keep your time sheets and make it a true cost accounting system, rather than a pricing model.

I would be remiss if I did not offer the advantages and disadvantages of hourly billing so here are just a few:

Some advantages: It’s easy and efficient; it can be a cost accounting tool; and it transfers risk to the client if the engagement goes over budget.

Disadvantages: Focuses on hours not value; places risk on the client; fosters a production line, not an entrepreneurial spirit; creates a subsidy system where some clients are overcharged and others are undercharged in order to meet hourly quotas; transmits no useful information other than identifying rainmakers, managers and technicians, and useful information is found in client service, attitude, client retention ability, profitability and collection, ability to delegate, monitoring skills, etc.; focuses on efforts not results; encourages the hoarding of hours to fulfill quotas; penalizes technological advances; rates are set by reverse completion (where you look at the rates of your competition in your market and see where you fit in); creates bureaucracy; does not differentiate a firm; and limits income potential.

Get the picture?

Richard Goldstein is a partner at New York-based Buchbinder Tunick & Company LLP.

Joseph Eve CPAs Continues to Expand Staff of Tribal Gaming Experts

Great Falls, Mont.-based Joseph Eve CPAs (FY14 net revenue of $11.4 million) has been serving tribal governments, casinos and entities since 1983, and now the firm is expanding again, adding another tribal gaming expert to its staff.

April Bacon

April Bacon

April Bacon has joined Joseph Eve as an advisory consultant. Bacon comes to the firm from Rosebud Casino in Rosebud, S.D., where she served as assistant controller. She has more than 14 years of direct operational experience in the Indian gaming industry, and in her new role at Joseph Eve, Bacon will be helping organizations improve their accounting and finance functions through the use of modern cloud-based software and improved processes.

“At Joseph Eve, we are serious in our mission to be the premier, go-to accounting firm for tribal and commercial casino operators, and we carefully seek to attract talent that will help us fulfill that mission. We are delighted to have April on our staff, and we are confident her 14+ years of direct Indian gaming experience will serve our clients very well,” says Joseph Eve partner Lindan Elliott.

Wolf & Co. Admits Gorman to Partnership

Ryan Gorman

Ryan Gorman

Boston-based Wolf & Co. PC (FY14 net revenue of $34.8 million) admitted Ryan Gorman to the partnership of the firm.

Now a member of the firm, he has more than 15 years of experience in providing audit, review and business-advisory services to middle-market businesses within various industries and ownership structures.

A significant focus of Gorman’s practice includes private-equity and family-owned manufacturers, distributors, retail and service organizations. In addition to his private-company practice, he also works with publicly traded companies and performs audits of employee benefit plans.

HBK Acquires Florida Accounting Firm

Canfield, Ohio-based Hill Barth & King CPAs & Consultants (HBK) (FY14 net revenue of $51.2 million) announced the merger of Pittsburgh, Pa.-based Urish Popeck of Florida LLC (UPFL) and its wealth management business, Global Wealth Consultants, into HBK.

“We welcome Rick Swope, Jane Lamberson and Mark Matos and their team of professionals, who have been working with businesses and individuals and their families in the Naples area for more than two decades,” says HBK CEO and managing principal Christopher Allegretti. “The highly respected group has been a fixture in Southwest Florida financial services for many years.” The UPFL group of 14 professionals has moved into the HBK and HBKS Wealth Advisors offices in Naples. They have begun operating as part of HBK.

“In addition to their distinguished tradition of close personal attention to clients, Rick, Jane and their team have a proud history of active involvement with the Naples community and many of its civic and charitable causes,” says Barry Holes, PIC of HBK’s Southwest Florida operations. “We are excited to have them on board. The expanded team of professionals and resulting broadened expertise are certain to be a great benefit to all our clients.”