Maryland CPAs Seek ‘Essential Business’ Designation During Shutdown

Maryland Gov. Lawrence Hogan this morning ordered all non-essential businesses in the state to close, but the Maryland Association of CPAs (MACPA) is asking Hogan to make an exception for CPAs.

Anticipating the shutdown, a March 21 letter to Hogan asked that the CPA profession be included on the list of essential critical infrastructure workforce exceptions.

Tom Hood

MACPA president and CEO Tom Hood requested the designation, which would allow public accountants to go to their physical offices as needed, while maintaining appropriate social distancing by staffing at less than 50% of office capacity. Hood’s argument notes that while many CPAs have implemented remote work, there are some critical functions that are required to be done in the office, including payroll and banking in secure systems, as well as processing mail with checks, invoices and other financial correspondence.

He further argues that CPAs are essential to the U.S. economy due to their work on compliance with federal and state tax and financial reporting requirements, the preparation of taxes, audits and financial reports for business financing and loans, and projections and contingency planning for businesses. And, since the financial services sector has been designated as one of 16 essential critical infrastructure areas by the U.S. Department of Homeland Security, MACPA believes CPAs should surely be included in that designation.

This is a fluid situation, so please check with your state societies for any updates.

Create a Wow Factor Workplace for Remote Employees: Ways to Nurture Employee Engagement

When you create a culture of ‘wow,’ it makes a powerful impact on all employees – including the growing number of people who work away from the office. Deb Boelkes shares a few of her best practices for inspiring and empowering your remote workforce.

In 2020, there’s a good chance at least some of your employees work from home, a coworking space or some other distant location. And while the arrangement has benefits for all parties, the trade-off is that remote workers get far less (if any) face time with leaders and coworkers. This may lead you to wonder: Can you truly engage remote employees? Is it possible to shape a positive company culture that encompasses everyone?

Boelkes says yes – and the solution lies in your ongoing pursuit of the “wow factor.” This is her terminology for those “Best Place to Work” leaders who consistently motivate and inspire employees, fill them with purpose, challenge them, and make them feel safe and supported.

“Many companies don’t work to deliberately shape a positive culture,” says Boelkes, author of The WOW Factor Workplace: How to Create a Best Place to Work Culture. “They think it will just happen, but that’s rarely true even when everyone is in the same place. And if a company has remote employees, the need to get intentional about culture-building is intensified.”

Engaging remote employees comes down to making them feel like they belong and are part of a cohesive team. They should feel valued and understand that their contributions are seen and appreciated, and that they are making an impact. That’s job No. 1.

Boelkes says there are plenty of simple engagement practices that make your virtual team members feel supported, connected and empowered.

Make sure remote employees know why they’re there. All employees should know (and embrace) the mission, vision, values and objectives of the company. They are a big part of how you convey the sense of meaning and purpose that’s so vital to engagement. Talk about these guiding factors explicitly and regularly. These things can change and when they do you need everyone in the loop. Additionally, make sure remote employees understand how their work aligns with and supports goals of the company, division and department.

“All team members need to know what they do really matters and that their efforts ­– and results – make a difference,” says Boelkes. “Acknowledge them in the way they prefer to be acknowledged.”

Never leave them hanging or assume they know what’s going on. This is vital, says Boelkes, especially regarding decisions made at upper levels. The biggest complaint most large or multi-site companies hear from employee satisfaction surveys is lack of communication from senior leaders. Don’t be a micromanager but do communicate, communicate, communicate…and be consistent in your messaging from the top down.

Make yourself available (on their timetable). Managers need to make sure meaningful one-on-one conversations with remote reports happen. Out of sight (and off-site) should not mean out of mind or out of the loop. Be willing to be flexible versus forcing employees to adapt to your schedule and communication style.

“Find out what works for your remote reports,” says Boelkes. “Some team members may prefer to establish a fixed time each week to catch up while others may prefer to call in for a quick update as project schedules permit. Let the employee know when you will be available and how they can get a message to you if it’s critical. Otherwise, be there for them.”

Be proactive about removing their roadblocks. If something is preventing a remote worker from being able to do their job efficiently, make sure they know to immediately come to you. In fact, ask them regularly if they need anything. It’s the manager’s job to remove any obstacles impeding team members’ efforts and to get them the resources and information they need.

Bring all team members together often. If possible, have an all-hands, on-site meeting at the start of a major project or at the beginning of the fiscal year. At the very least, schedule weekly all-hands team calls to update everyone on what’s going on, to see who needs help, to announce major accomplishments and recognize team members, and to brainstorm new approaches.

“Team members need to know each other,” says Boelkes. “They need to know what the other members are working on, and how they can help one another. They need to trust each other. Regular meetings can help achieve all of that.”

Remember: face to face matters, so make it happen however you can. You may not be able to meet in person often, but try to make it happen at least occasionally. And of course, conferencing technology like Zoom, WhatsApp or FaceTime can be incredibly valuable in helping remote employees connect and engage with the rest of the team. “Observation of facial expressions and body language can be just as important as hearing the words being spoken,” says Boelkes.

Don’t let meetings become time-wasters. Call meetings only when necessary and keep them succinct. When preparing for a remote team call or video conference, ask individual members ahead of time what, if anything, they want to present, what they want to hear or learn, and if they have anything to share. Then stick to the agenda.

Encourage team members to connect with one another regularly. “Feeling like part of a team is vital,” says Boelkes. “The boss doesn’t have to be the one who coordinates everything. Make sure they feel free to text, phone or email each other when they have questions or need guidance or feedback.”

Pair new employees with a “buddy.” Newer employees need more hand holding – especially if they’re telecommuting. Among other training, the buddy’s job is to make sure the employee knows who does what on the team, who is an expert at what, and who to go to for what.

Be sensitive to cultural differences. Not everyone interprets communications the same way. Cultural differences can occur regionally within the same country but may be especially problematic between major geographic regions and countries. If this occurs, managers must really listen for understanding, then reframe and restate what they heard, and ask the remote worker to do the same.

“Managing multi-country team members can be difficult if members never have on-site meetings over multiple days during which people can get to know each other,” says Boelkes. “When possible, it’s helpful to know locals or expats who are from the remote region and can interpret what may be intended or how things could be interpreted in various situations.”

Occasionally, oversee employee/client interactions. From time to time, managers should try to participate live when an employee has important events with a customer or client; listening to the clients’ feedback is just as important as employee feedback. While it is important to show trust and confidence in the team members serving the client, it is equally important to acknowledge when things need improvement or when action must be taken.

When in doubt, reach out. If things aren’t feeling right with an employee, they probably aren’t. Meet in person for a heart-to-heart off-site and talk through their concerns or problems. And again, as a general rule try to get together in person at least once a year if not quarterly; these meetings keep the lines of communication open.

Request feedback (from your customers AND your remote workers). During one-on-ones with each remote employee as well as during one-on-ones with clients, ask for honest feedback. Then based on that feedback, strategize ways the organization could better leverage the skillsets of the team members while moving the organization closer to its goals.

Know when an employee isn’t suited for remote work. Pay attention to signs that an employee is not cut out for being a remote team member. For example, they may frequently turn in work late, get distracted or lose sight of the project at hand, or need frequent interaction with coworkers.

“Some workers need daily live interaction to do their best work,” says Boelkes. “Be attuned to this and don’t be afraid to make changes to ensure the employee is in the right environment with the needed support and/or freedom.”

Finally, make sure every employee knows you have their best interests at heart. Be a heartfelt leader.

You can’t inspire anyone – in-house or otherwise – until you start leading with your heart,” concludes Boelkes. “Check in with your own passion and make sure it informs all of your interactions. Your heart-driven engagement will spread to your workers near and far, and together you will make a difference.”

AICPA Survey: Coronavirus Concerns Grow Among Business Executives

Business executives’ outlook for the U.S. economy rose sharply in the past quarter, but concern is growing about the potential global fallout from the spread of coronavirus.

This is according to the first-quarter AICPA Economic Outlook Survey, which polls CEOs, CFOs, controllers and other CPAs in senior management roles.

Some 61% of respondents expressed optimism about the U.S. economy’s overall outlook over the next 12 months, up from 50% last quarter. But responses in the final week of the survey, following dramatic stock market declines as the coronavirus spread, were decidedly more pessimistic.

Most businesses said they have seen no impact from coronavirus yet, although 21% reported at least a slight impact. Those impacted said they had seen some combination of supply chain interruptions (10%), factory shutdowns in China or other affected regions (7%), and decreased sales to China (5%) or other markets (3%).

Some 7% of business executives said their companies had made a minor downward adjustment to their profit and revenue forecasts due to virus concerns, while 51% said they had made no change but were closely monitoring the situation.

Forty-two percent said they didn’t expect to have to make any coronavirus-related adjustments, but – like the U.S. economic optimism question – responses late in the survey cycle showed much less confidence.

The AICPA survey is a forward-looking indicator that tracks hiring and business-related expectations for the next 12 months. In comparison, the U.S. Department of Labor’s February employment report, scheduled for release tomorrow, looks back on the previous month’s hiring trends.

More news from the AICPA

Eide Bailly Merges in HMWC

Fargo, N.D.-based Eide Bailly (FY19 net revenue of $341.7 million) has merged in Tustin, Calif.-based HMWC CPAs & Business Advisors (FY19 net revenue of $17.9 million).

The deal, effective May 18, will add 13 partners and 80 staff to Eide Bailly and a new office in Orange County, Calif., in addition to the 10 it already operates in the state.

“The addition of HMWC enhances our California team with a strong commitment to client service, talented staff and a culture that matches our own dedication to being a firm of choice for clients and staff,” says MP and CEO Dave Stende.

HMWC , founded 52 years ago, specializes in medical, dental, construction and real estate clients.

“Joining forces with Eide Bailly will help us serve our clients even better by allowing us to offer additional resources and services to our clients that will help them achieve their goals,” says MP Steve Williams. “We will be able to enhance our ability to serve our clients with additional expertise and talent in areas such as technology consulting, specialized tax services and more that will help them succeed in today’s business environment.”

He adds that staff will also benefit with opportunities for learning and professional growth “to pursue their passions, which in turn will enrich our clients’ experiences.”

Koltin Consulting Group and Gary Shamis of Winding River Consulting advised both two firms.

“HMWC had opportunities with many regional and national firms, but the culture match with Eide Bailly, as well as the leadership and growth opportunities for both clients and their people, made this a great match between two high-performing and well-respected firms,” says Allan Koltin, CEO of Koltin Consulting Group.

Eide Bailly will have more than 350 partners and 2,500 staff after the merger takes effect.

More news from Eide Bailly and HMWC.

If You Want Growth, Your Company Must Have These Three Non-Traditional Roles By: Josh Linkner

From the local barbershop to the giant, multinational corporation, businesses of all shapes and sizes desperately want one thing: growth. Regardless of industry, geography or scale, a company’s ability to grow is directly linked to the inherent enterprise value.

In working closely with organizations around the world, I’ve noticed that the ones who really savor consistent growth have three critical archetypes in their leadership ranks: The Hipster, The Hustler and The Hacker. In smaller companies, a single person may have two or three of these traits. In larger businesses, each role may be filled by an entire team. But if you’re missing one or more of these mission-critical personality types, you’re undercutting your ability to grow.

Let’s examine each of them:

The Hipster. Our first key role understands the times. They’re up to speed with new trends, know what’s relevant and what’s yesterday’s news, and is deeply connected with the zeitgeist of the day. The Hipster ensures the organization is catering to today’s – and tomorrow’s – customer needs, helping to avoid complacency and ultimately irrelevance. Picking up on subtle cues and understanding the convergence of macro-trends, it’s the business equivalent of being fashion-forward.

The Hustler. Every business needs a promoter, and hopefully yours has the wizardry of legendary boxing promoter Don King. Ensuring that the message cuts through the noise to customers, investors and employees, this person paints a compelling vision and communicates with passion. The role may be a traditional rainmaking role such as VP of sales or chief marketing officer, or it could be something more progressive such as chief evangelist. Someone has to really embrace the core message, and then scream it from the mountaintops.

The Hacker. What organization can grow without a figure-it-out czar? Business is all about tackling insurmountable challenges in creative ways – from sales and marketing obstacles, to production and manufacturing pitfalls. The Hacker believes that every code can be cracked, wasting no time saying it can’t be done. Deconstructing existing approaches, defying traditions and sticking a finger in the eye of conventional wisdom are the hallmarks of this important role.

How does your company stack up when considering these pivotal personalities? If you’re down one, it’s time to recruit or promote quickly. If you lack two or more, you’re in danger of stalling or losing ground. Instead of ensuring traditional roles such as CFO, CMO and CIO, fill your leadership ranks, make sure you’ve got these three growth drivers staffed with A+ talent.

Your biggest leaps forward in growth will occur with the formidable combination of The Hipster, The Hustler and The Hacker.

Josh Linkner, a keynoter at IPA’s PRIME Symposium in 2015, is an author and frequent public speaker on innovation, leadership and creativity.

Big 4 Leaving Audit Behind As Advisory Revenues Grow

Advisory services now total 40% of all revenue for the Big 4 firms, according to GlobalData’s International Accounting Bulletin World Survey 2020.

Audit and accounting services trail behind, only generating 34% of the Big 4’s total income for 2019.

The revenues generated from different service lines has changed dramatically since 2008, when audit and accounting services amounted to 52% of total fee income, and advisory a mere 24%, reports the International Accounting Bulletin, which tracks fee income and staff information from accounting networks and associations.

Overall, Deloitte had the greatest share of its fee income generated by its advisory practice, with it making up 60% of its total global revenue. KPMG also generated more revenue from advisory services (40%) compared to its audit practice (38%). PwC and EY still had more fee income come from their audit practices, but that gap is narrowing slowly.

While the audit and accounting service line and the advisory service line have almost switched places in terms of fee income, tax has remained fairly consistent. In 2008, tax made up 24% of total fee income, and then in 2014 and 2019 it remained steady at 23%.

“As there is growing pressure in a number of jurisdictions to separate, either operationally or legally, audit and non-audit practices, it would be interesting to see which business the Big 4 giants would choose to keep if a decision had to be made,” says Joe Pickard, GlobalData’s The Accountant editor. “I suspect it would not be a hard choice between the heavily regulated, increasingly scrutinized audit, or the less regulated, lucrative gravy train that is the advisory business.”

Outside of the Big 4, audit and accounting services still make up 49% of fee income, compared to 25% from tax and 19% from advisory services. The services line breakdown has seen little change since 2008 when audit and accounting made up 53% of their total fee income.

The Changing World Of Work And A Changing, More Social Approach To Learning

Automation. Talent wars. A tidal wave of retirements. These factors, and many others, are making learning an urgent priority to attract and retain curious and ambitious accounting professionals. And the workforce is ready.

According to a recent PwC report, “Workforce of the Future: The Competing Forces Shaping 2030,” three-quarters of respondents say they were “Ready to learn new skills or completely re-train in order to remain employable in the future.” The strongest agreement to that statement was among Millennials in the survey, which covered 10,000 people in five countries.

While leaders see the need to teach new skills rapidly, observers say the firms themselves must also adapt a more flexible approach to learning. Handing power to the employees to direct their own professional development while encouraging practitioners to learn from each other are two approaches producing positive results in an environment of digital disruption.

To learn more about “future-proofing” professional staff, IPA contacted Kiara Graham, a learning strategist with Kitchener, Ontario-based D2L (Desire2Learn), a cloud-based software used in school classrooms and workplaces in various industries.

What is a “modern learning culture” and why is it so important? Graham says modern workplace learning is all about using technology to give employees real-time access to training and knowledge-sharing, “so that employees can take the reins on their own learning and development.”

She adds, “A modern learning culture ensures that employees are constantly developing the skills they need to thrive and drive business performance and is also a great way to attract and retain a new generation of talent that really cares about corporate culture and opportunities for personal and professional growth.”

Why are self-directed learning and social learning so often overlooked or under-emphasized and how can partners implement these practices? Compliance training is often centralized and owned by specific individuals or departments, but the model “misses out on opportunities to better engage employees through self-directed learning and to capture and transfer internal subject matter expertise through social learning.”

One way to do this, she says, is through Communities of Practice. While it’s not a new concept, and sometimes these CoPs can spring up organically within a firm, leaders can champion the model and accelerate learning. Practitioners can meet weekly, in person or virtually, to learn new skills or improve existing skills, Graham says.

Virtual meetings, file sharing, posting and watching videos, online discussion groups and the like can be made easier through technology. “Members of CoPs engage in joint activities that enable them to learn from and with each other,” she says. “When employees are part of a CoP, they have easy access to a network of peers who can assist with problem-solving and sharing best practices.”

Some CoPs can focus on one function in the firm, but they can also be used to transfer knowledge throughout the entire organization, a helpful tool in succession planning.

Graham says that transforming a firm’s learning culture and training program won’t happen overnight, but once the business goals and objectives are clearly communicated and individual learning goals are aligned with the overall mission, the firm can set aside “learning time” on a regular schedule. “It doesn’t need to be long, 20 minutes of dedicated learning time every week could be enough.”

Modeling The Right Behavior When Deadlines Are Tight And Stress Is High

Jim Proppe

Jim Proppe

Accounting firm leaders are expected to motivate their tax teams to succeed and deliver excellent customer service all year, but the runup to April 15 is particularly challenging for everyone involved.

With more work than hours in the day, tax season is inherently stressful, and tons of hours are inevitable. With April 15 ahead of us, what lessons can be learned so MPs, partners and other leaders can keep everyone on task throughout the year, lower stress and care for themselves at the same time?

INSIDE Public Accounting asked for insights from Jim Proppe, MP of Southfield, Mich.-based Plante Moran and Larry Autrey, MP of Fort Worth, Texas-based Whitley Penn.

They say that the idea of work-life “balance” is different for everyone, but anyone in a supervisory position should learn what works for them, practice self-care and show staff what that looks like. If managers or partners are exhibiting stress through difficult behaviors, it does not go unnoticed.

Larry Autrey

Larry Autrey

“It does have an impact,” Proppe says. “If the team sees you on overload it cascades down and they start experiencing the same thing – whether it’s true or not.” It may even derail their partner aspirations. “We need to make sure that we’re letting them see how much fun we are having,” he says.

Here’s how both Proppe and Autrey, leading hundreds or even thousands of employees, take care of themselves and their teams when the stakes are high.

Ask for Help – At Plante Moran, each partner can lean on two peers who serve as an advisory team, helping the partner set goals, prioritize and develop plans to improve. “The advisory team is very entrenched in what the partner has going on throughout the year, so they can be an outlet when the partner is on overload,” Proppe says. Additionally, each staff person is assigned a partner as a mentor or coach to help find a customized solution to blend the personal and professional. “It’s a big investment of time, but we think it really pays off, we really do,” Proppe says.

Step Away – MPs encourage staff to schedule time off, not just hope a break will pop up. They do the same. For Proppe, it’s scheduling down time just like any other appointment, except “those are written in ink – they’re not moving – the rest of it is in pencil.” When Autrey was in college, his dad would suggest a long drive to de-stress. It stuck. Today, Autrey grabs an iced tea and although the drive from Fort Worth to Houston is for work, “by the time I get back I’m good.”

Flex, But See the Downsides – “No one says when you come in and when you leave in this profession – at all levels,” Autrey says. “To me, flexibility takes away the stress.” Autrey says the reality is that tax season is far less stressful than it used to be. “For better or worse, staff are saying to us, ‘We’re not working like you did when you were a staff person,’ and we’ve had to build the firm around that.” The danger is, it can mean more work, and more burnout, for managers and partners. “We’re all trying to keep an eye out for those people,” he says. The tax team management meets every Monday and shifts work around to ease the overload. At Plante Moran, one of the dangers for staff is feeling they can’t take time off since PTO is not set, it’s flexible. Proppe says his biggest fear is staff taking too little time off.

Beware of Post-Tax Season – Proppe says the biggest disconnect for staff is not during tax season, but in late April and May. The expectation is 40-hour weeks, but often they need to work more to catch up on the work put on hold.

Accept that Tax Work is Not for Everyone – Autrey says tax season was his favorite time of year, and that’s still true for many on his 300-member tax team. “Those people do well in the profession.” Some leave thinking they’ll lower their stress with a job in industry, say in a controller job, but they find there’s a ‘tax season’ at the end of every month to close the books. Autrey also left public accounting, but returned in three months. “I’ve got the illness, it’s terminal. I love every bit of it.”

At Plante Moran, staff members who are unhappy can work with their partner to find a different office, or different job within the firm or within industry. The only ‘failure’ is when a staff member announces a departure unexpectedly. “This profession is not for everybody,” Proppe says. “It’s exciting, I love it, but it’s not easy.”

AICPA Report: CPA Exam Candidates Down, Hiring of Non-Accounting Graduates Up

An AICPA report says the number of CPA exam candidates in 2018 dropped to its lowest level in 10 years while hires of new accounting graduates declined by about 30% over the last four years.

This is according to the recently released report, Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits. The report, published every other year since 1971, identifies key trends in U.S. accounting enrollments and graduates as well as hiring of new graduates in public accounting. The report provides projections based upon university responses for the 2017-18 academic year and firm responses for the 2018 calendar year.

Yvonne Hinson, the AICPA’s Academic in Residence, wrote in the report that enrollments in accounting bachelor’s degree programs declined by 4% since 2016, but are the second highest on record. Further declines are seen in master’s and Ph.D. programs, at 6% and 23%, respectively.

“The more telling projections,” she wrote, come from the demand side. “The marketplace continues to demand different competencies and, while accounting graduates are still being hired, firms are seeking other skill sets to expand services. We are seeing that the gap in skills required in the profession, especially as it relates to technology needs, is being met with non-accounting graduates.”

Other results:

  • Diversity – In 2018, female accounting graduates outnumbered male graduates at the master’s level. Racial/ethnic diversity has increased in accounting graduates, with a 7 percentage point increase in Hispanic or Latino accounting graduates.
  • CPA Examination – The number of CPA Exam takers increased in 2015 and 2016 in preparation of the new CPA Exam that launched in 2017. CPA Examination candidates decreased 7% between 2017 and 2018. The number of CPA Exam candidates who passed their fourth section of the exam decreased 6% between 2017 and 2018.
  • Hiring – Hiring of new accounting graduates slowed 11%. Non-accounting hires as a percentage of all new graduate hires are up 11 percentage points to 31%. In 2018, new hires assigned to audit-related services increased by 4 percentage points, while new graduates assigned to taxation declined by 4 percentage points.

Read the full report.

More news from the AICPA

GBQ Partners Expands to Toledo Area

Columbus, Ohio-based GBQ Partners LLC (FY18 net revenue of $31.7 million) has announced that Weber Clark of Sylvania, Ohio, has joined the firm.

Weber Clark, founded in 1980, has a complementary culture and shares GBQ’s commitment to providing service of exceptional quality, integrity and objectivity, GBQ says.

“GBQ is growing in Ohio, responding to increasing demand for our services,” says Darci Congrove, managing director. “Joining with Weber Clark is an important step in our journey to build a regional firm with deep resources.”

Weber Clark founder Jim Weber and his team join GBQ to bring the total staff count to 219. Weber and his fellow partners will become partners at GBQ and will lead GBQ’s Toledo-area office.

“We have worked with GBQ team members on client matters for several years. The combination of the two firms will support our firm’s continued growth and ability to provide strategic ideas and solutions to our growing clients,” Weber says.

More news from GBQ Partners