CPA Success

What is your tone at the top?

One of the favorite parts of my job is getting to hang out with CPAs all over Maryland (and around the United States).

Yesterday afternoon, I was invited to do a CPA profession update for one of our largest firms, Watkins, Meegan & Drury, at their annual State of the Firm meeting.

The meeting was set in an election theme, with the firm's core values displayed on big red, white and blue signs (like a party convention) all over the room. Everybody had an election-style button displaying a core value, and they all had those red, white and blue signs (see the picture) displaying their values (trust, honesty, commitment, integrity and respect).

Needless to say, I was impressed. At the end of the meeting, the whole group stood up to display their core values.

That is when it hit me. It all comes down to sticking to your core -- core values. Managing Partner Mike Micholas (third from right in front row) exemplifies setting the tone at the top. In these challenging times, it is refreshing to see CPAs sticking to core values. Watkins Meegan & Drury is one of the many CPA firms that get up every day and do the right thing and help businesses and individuals make sense of this rapidly changing and complex world.

Congratulations to Mike and the Watkins Meegan & Drury team, and to all the CPAs who do the right thing every day. You are the core of the profession.

What ways are you setting the ethical "tone at the top?" Send me your fun examples of how you do that.

One of the fun things we always cover included the discussion about the multi-generations in the workplace and social media. You can get my presentation here.

Which reminds me to add the new ways to connect to MACPA using social media:

• Visit us on Facebook. Join our New/Young Professionals Group.
• Join the MACPA's LinkedIn Group. 
• Follow the MACPA on Twitter.
• Follow me on Twitter.
• Check us out on YouTube.
• Slideshare
• Read our Second Life blog.
• Self-guided social media learning for CPAs.

H&R Block: Here they go again

The MACPA's own Richard Rabicoff has been doing some thinking lately about H&R Block's latest tax season ads. In this guest post, he writes what all of us at the MACPA have been thinking lately.

It seems to happen almost every other tax season. Around about January, H&R Block starts taking pot shots at CPAs in its TV and radio advertising. The ads portray CPAs as dullards at best or incompetents at worst. Evidently, only the tax geniuses at H&R Block can rescue taxpayers from the morass that CPAs have helped to create.

MACPA members have called this to our attention and we are pleased to say that CPAs never take this lying down. This year, as in the past, the AICPA’s Barry Melancon has sent a letter to H&R Block CEO Russ Smyth, requesting that the company discontinue these ads immediately. The AICPA is currently awaiting the response and we will let MACPA members know what happens. We have reason to expect that Smyth, like his predecessor, will discontinue the ads.

It’s hard to say what H&R Block has to gain by disparaging CPAs. In fact, on their Web site, they even reach out to CPAs as partners: "If you're a CPA who's already operating a CPA practice, we still have great opportunities to offer you," it reads. "Let us show you all the advantages of making your CPA practice part of the H&R Block Tax & Business Services family."

If a client or friend mentions the H&R Block commercials, you might keep in mind some of the talking points developed by the AICPA to address such comments.

• CPAs are honest, skilled, and competent tax professionals. CPAs have college degrees, they pass rigorous exams, they are committed to continuing professional education, and they are certified, licensed and regulated by state boards of accountancy.
• CPAs are required to pass a rigorous professional exam after they complete their college education in order to be licensed by the states in which they practice. After they are licensed, mandatory continuing professional education requirements ensure that CPAs are current with regulatory and legal changes.
• As members of the AICPA and state CPA societies, CPAs are required to adhere to strict professional ethics standards. Additional ethics rules apply to CPAs who are tax practitioners.
• If the IRS raises a question about a tax return, only CPAs, attorneys and enrolled agents are authorized to represent taxpayers before the IRS.
• CPA tax professionals often know a lot about your personal situation, so the continuity of service you receive from a CPA may be an important factor to consider.  CPAs are business people in the community who will be there for taxpayers year after year.
• The MACPA is committed to ensuring that CPAs work in the public interest by providing the resources to best hone skills of CPA tax professionals and by regulating unacceptable professional conduct while advocating on behalf of the public and members an effective and efficient system of taxation.

The MACPA fully supports AICPA's efforts to call H&R Block out on these tasteless and inaccurate commercials. We will keep our members apprised of any further developments.

It's getting hot in here. Let's make some steam.

Our Board of Directors has adopted the 212 mantra as its theme for the coming fiscal year.

Not familiar with 212 yet? Check out this video:

The Reader's Digest version is this: At 211 degrees, water is merely hot. At 212 degrees, it boils ... and makes steam ... and can be used to propel a locomotive.

So the question is this: Where do we find the extra degree that will help us do great things?

There's no single answer that can be applied across the board. That missing degree is hiding deep within each of us. The motivation to find it is an intensely personal thing. No one else can stoke the fires; we have to do that ourselves.

So I was amazed -- simply, utterly amazed -- by what happened today in Maryland.

Today was CPA Day in Annapolis, an event the Maryland Association of CPAs (and, specifically, our own Mary Beth Halpern) had been planning for months. It's the one day each year when CPAs and their lawmakers meet face to face to discuss issues that impact the business community. Members had been registering for weeks. Meetings with legislators had been booked well in advance. Everything was set. This event was going to be held rain or shine.

But we didn't count on ice.

A nasty winter storm swept across the Midwest, dropping layer after slippery layer of freezing rain on the mid-Atlantic region. As the day of the event dawned, roads and sidewalks were coated with ice, making travel of any kind treacherous.

And still our members arrived.

Oh, sure, not in the numbers we had hoped. But they arrived nonetheless. They threw on their coats, scraped the ice off their cars, braved the bad roads and even worse sidewalks, and showed up to protect their profession and their clients. One of them even fell on the icy sidewalks and whacked the back of his head on the chilly concrete. His reaction? He picked himself up, walked into our morning briefing, asked for a couple of aspirin and soldiered on.

In short, they found that extra degree.

This is why America counts on CPAs. They don't let a little thing like an ice storm get in the way of progress. They do what needs to be done to make their profession -- and, in turn, their clients and Maryland's business community -- even stronger.

That's how we're going to claw our way out of this recession -- by picking ourselves up, asking for a couple of aspirin, and then doing what needs to be done.

By finding that extra degree and dialing it up to 212.

Legislation: Be proactive, not reactive

What a horrible, heartbreaking day.

Twenty thousand jobs lost at Caterpillar. Eight thousand lost at Sprint Nextel. Seven thousand at Home Depot. Eight thousand at  Pfizer and Wyeth. Two thousand at General Motors. Thirty-four hundred at Texas Instruments. Seven thousand at IMG. Six thousand at Philips. Thirty-five hundred at Corus.

All told, Jan. 26, 2009 will be known as the day when nearly 72,000 jobs were eliminated worldwide.

Think of it this way: There's a person, perhaps an entire family, behind each of those jobs. The human toll is simply astounding.

And when that many people are impacted, can regulation be far off?

That, says AICPA Chair Ernie Almonte, is why CPAs need to be active legislatively.

Lawmakers will react when their constituents suffer. And if no one is there to explain the consequences of their actions, we could be looking at serious repercussions for CPAs, their clients, Maryland businesses and consumers at large.

"Regulation could be a major (issue) for the CPA profession this year," Almonte said during a recent presentation to the Maryland Association of CPAs' Board of Directors. "Inaction (by regulators) would probably be a mistake, but overreaction could be an even bigger mistake. If (CPAs) don't get involved, we run the risk that regulators will overreact."

And if regulators overreact, we end up with things like, oh, the Sarbanes-Oxley Act, for example.

We need CPAs who are engaged, who are ready to step up and protect the profession and, by extension, their clients and the business community.

In short, we need CPAs to join us at CPA Day in Annapolis. We'll have the opportunity to talk directly with our legislators and explain how potential legislation could impact Maryland businesses and consumers alike.

"We have to develop a rapport with legislators," Almonte said. "We have to develop relationships with legislators and become a trusted advisor for them. Once that happens, our message carries more weight."

It all starts on CPA Day, set for Wednesday, Jan. 28 in Annapolis. CPAs will have the opportunity to meet face to face with their legislators and discuss issues of importance to the profession.

• Register to attend.
• Listen to our agenda.
• Get all of the information you need to prepare.

This is it, folks -- your opportunity to step forward and protect your profession, your clients and our economy. It all starts Wednesday in Annapolis. Join us, and make a difference.

Shortest list ever: The top 1 reason to use social media

Saturdays at CPA Success are usually spent reviewing online tools that can help increase our productivity. Keep in mind that we do not endorse any of these services. We simply offer them up for your consideration. Do your own homework and find the service that best meets your needs.

Everyone has a list these days.

If you do a lot of reading online, you've seen them. Top 10 Amazing Chemistry Videos. Top 20 Most Affordable Cities in the U.S. 10 Things You Shouldn't Buy New. Top 10 Weirdest Food Halloween Costumes. The 20 Worst Foods in America. There's a list for everything out there.

Let's face it: Everyone loves a good list. We've even been known to publish a list here from time to time to time.

Even so, the number of social media lists popping up today is astounding. Everyone wants to share what they've learned on the Web 2.0 playground, so we're getting a lot of lists like these:

• 50 Ideas on Using Twitter for Business
• 10 Reasons Why You Should Sign Up for FriendFeed
• 50 Social Sites That Every Business Needs a Presence on
• 10 Ways to Use LinkedIn
• 35 Social Media Tools That Make Life Easier
• Top 10 Ways to Use Facebook to Promote Your Business

And that's just the beginning. You can't open your RSS reader without seeing another two or three of them.

I'm not complaining, mind you. There's plenty of great advice and inspired insight in each of these lists.

But you don't need 10 or 20 or 50 reasons to figure out why you should be paying attention to social media. You just need one word -- relationships.

Social media is all about relationships. It's about making meaningful connections with like-minded people who provide the advice, resources, information and constructive criticism that enrich our professional lives.

In his acclaimed book The Tipping Point, Malcolm Gladwell writes about the importance of "connectors." These are people who have "a special gift for bringing the world together," writes Gladwell. They're the hyper-connected folks who make it possible for the "six degrees of separation" concept to work. They know huge numbers of people and make it possible for us to know huge numbers of people, too.

That's what social media tools are. They're the connectors that open up the world to us.

I've met bloggers and finance folks throughout the world on Twitter, and each of them has a unique perspective on the topics of the day. I've reconnected with long-lost friends on Facebook, and it's almost as if we've never been apart. I've asked for and received advice from the people who make up my professional Rolodex on LinkedIn.

None of that would have been possible without social media.

And what's all that knowledge worth? What's the ROI on having a world's worth of information at your fingertips? Can you even put a pricetag on it? I don't think so.

The most concise social media list around is one item long: Relationships. That's the only reason you'll ever need to use these tools.

New laws bring huge changes for taxpayers, preparers

Now might be a good time to say "so long" to our CPAs.

They're packing up their tax guides and NoDoz and heading to the office in preparation for another grueling filing season. We'll see them again when they re-emerge, tired but triumphant, on April 16, so we'd better wish them well while we have the opportunity.

Before they go, though, let's give them one more weapon for their tax season arsenal.

An astounding number of changes have been made to our tax laws in the past few months, mostly as a result of the federal government's economic recovery package. The Emergency Economic Stablization Act of 2008 "serves as one of the largest tax bills in recent years. The new law makes almost 300 changes to the Internal Revenue Code," reports CCH in a recent tax briefing. "While roughly $150 billion in tax breaks had to be computed over a requisite 10-year period for budget scoring purposes, the lion's share of that outlay provides taxpayer relief immediately in 2008 and 2009."

That's a lot of information to digest in a short period of time, but Bill Smith is up to the task.

Smith is director of the National Tax Office for CBIZ, and I spoke with him over the phone recently about all the new stuff facing CPAs and taxpayers this year. Among the changes are:

• a revised tax preparer penalty standard;
• a patch for the Alternative Minimum Tax;
• mortgage debt relief; and
• a credit for first-time home buyers.

And that just scratches the surface. In a CPA Spotlight podcast, Smith takes a closer look at all the major changes and offers some insight into what the near future holds taxpayers under President Obama's policies.

• Listen to the podcast here.
• Subscribe to our podcast here, or search for "CPA Spotlight" in iTunes.

And don't forget to check out our other tax season tools as well:

• The MACPA's tax listserve: Ask questions and share resources and advice with hundreds of MACPA members.
• 1040 Central: The IRS's tax-filing resource center.
• CCH tax guides: The best-selling guides are available to MACPA members at 30-percent discounts.
• Tax resource center: All of the MACPA's online tax resources in one place.
• Money Management columns: Free columns that offer great advice for taxpayers.
• Tax seminars: All of the latest tax developments from the MACPA. Pick "Taxation" under "Fields of Study" in our online catalog.

Today's political lesson: Let a pro do your taxes

Here's yet another reason why you shouldn't do your own taxes: You could end up being grilled by the Senate Finance Committee.

That's what happened to Timothy Geithner, anyway.

You know the story by now: While working for the International Monetary Fund from 2001 to 2004, Barack Obama's choice for Treasury secretary failed to pay $34,000 in self-employment taxes. Geithner has since paid his debts, but he's been left in the embarrassing position of having to explain how a potential leader of the U.S. Treasury Department -- the same outfit that oversees the IRS -- could fail to pay his taxes.

Turns out he prepared the faulty returns himself.

"These were careless mistakes," Geithner told the Senate panel. "They were avoidable mistakes, but they were unintentional. I should have been more careful."

None of this is expected to derail Geithner's nomination. Still, if he had only hired a CPA -- America's most trusted business professional -- to do the returns for him, he could have avoided this mess entirely.

Lesson learned.

Six steps to manage better in a downturn

"The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic."

— Peter Drucker

This post is courtesy of Harvard Business Publishing's Memo to CEO blog, titled "Your Blueprint for Managing in a Downturn," by Orit Gadiesh and Hugh MacArthur. They talk about creating your blueprint for managing through a downturn.

1. Develop a roadmap for your three to five key initiatives, and focus.
2. Start macro, and work down to what you will do differently on “Monday morning, 8 a.m.” — that is, the actionable to-do list.
3. Be specific and pragmatic.
4. Let the facts win the day.
5. Create excitement and alignment.
6. Budget two to six months (at least the first time).

The authors borrow from the lessons from private equity firms who often operate in turnaround mod. See their related post on "Lessons from Private Equity Any Company Can Use."

The authors define blueprint in this way:

"What is a blueprint? It is nothing more and nothing less than a strategic operating plan that takes the few key initiatives that promises the highest payback and turns them into results. The emphasis is on measurable actions. It starts with high-level moves and works its way down to things you can actually do differently on 'Monday morning, at 8 a.m. — in other words, to the detailed operational level — choreographing the moves from standing start to the finish line. Along the way, it helps create excitement and build alignment."

We have used a similar technique that borrows from Norton and Kaplan, called a strategy map. The point of all of these tools is to create the line-of-sight from every member of your team back to the organization's strategic plan. In today's world, you must be recalibrating your strategy and actions much more frequently than in the past due to the pace of change.

What tools do you use to manage in turbulent times?

Mobility questions? Get your answers here

CPA mobility -- a movement to make it easier for CPAs to cross state lines to do business -- has been on the books in Maryland since April 2008, but there are still lots of questions swirling around the topic.

In particular, Mary Beth Halpern, the MACPA's technical services and regulatory affairs manager, says she has heard from many CPAs who still have questions about the mobility provisions in other states.

With that in mind, here are a few resources that might help clear the air:

• NASBA mobility tracker: This is a cool resource from the National Association of State Boards of Accountancy that takes a state-by-state look at the latest mobility-related developments.
• AICPA mobility resource center: This online tool offers videos about the mobility movement, a summary of pending mobility legislation across the country, reference materials, articles and more.
• Mobility FAQs: From the AICPA.
• MACPA mobility resource center: Access to all these tools and more is available on the MACPA's Web site.

And if you still have questions after reading this stuff, let us know and we'll try to track down the answers for you.

Why we can beat this recession

Here are three more reports that give me hope and evidence that we are closer to a recovery than other parts of the U.S.

While these all point to good news, we continue to hear stories everyday of companies going out of business and people being laid off. We continue to look for the best economic data we can so that companies with some strength can position themselves for recovery.

For companies that are struggling, this may provide some data that helps them size up their staying power and evaluate their options better.

Despite the good news, we are committed to finding new solutions and resources to help CPAs help the Maryland business community.

First, the good news:

U.S. Council of Mayors report indicates Washington-Baltimore in lead of cities
Despite bleak news for U.S. cities in a report prepared for the U.S. Council of Mayors, Washington and Baltimore make another good showing in beating this recession.

A recent Reuters headline reads, Almost all U.S. cities to lose jobs in 2009: forecast. The story reads, "All but five U.S. cities will experience job losses this year, with New York suffering the largest decline, according to a forecast released by the U.S. Conference of Mayors on Saturday."

Guess who is one of the five?

The Washington - Baltimore metro area is in the top five metros to actually have increases in jobs (from the last recession of 2001 through the current one).

 

And we rank among the top five in terms of real GMP (Gross Metropolitan Production) in the nation.

You can download the full global Insight report here.

Baltimore Examiner.com reports that Baltimore/DC is one of the fortunate areas of the country
I just read this piece from one of our members who writes for the Examiner.com, Tom Taylor, CPA. From his article titled, Foreclosure rate in Baltimore region jumps 47 percent but that's not the whole story:

"The greater Baltimore/DC region is one of the fortunate areas of the country that typically does better than the national averages. Because of the wealth of government, education and health care jobs in the area our economy typically fairs much better in economic downturns. That's not to say we don't take our lumps, we do, but we don't sink as deep and we recover faster."

BBJ reports Baltimore is a top growth market -- especially in professional services
Then there is the latest piece in the Baltimore Business Journal by Ryan Sharrow: Forbes: Baltimore a top job growth market. Sharrow writes, "The business publication said although the local unemployment rate has climbed from 3.6 percent to 5.1 percent in the last year, jobs in education, professional services and business services have grown."

Now what? Want to do more to beat this recession?

Join us in having the serious conversations we need to have to help the Maryland Community recover and prosper again. We are participating in series of events that we hope will make a difference - for all of us.

We started by joining the Maryland Chamber of Commerce at its Business Policy Conference in November. Then we joined the Maryland Bankers Association at its Economic Outlook Forum on the first Friday of 2009. Next is the program titled “Surviving the Economic Slowdown:  Expert help for small businesses in Baltimore County” on Feb. 27 from 8 a.m. to noon at the Cromwell Bridge Holiday Inn. This program is being held by the Baltimore County Department of Economic Development and the Maryland Department of Business and Economic Development.

Then, on June 16-17, we will host the Maryland Business and Accounting Expo, where we will bring together the business community, state and local governments, the Small Business Administration, and more than 100 vendors and service providers to form a megacommunity engaged in finding new ways to solve the tough problems we face. After all, we are all in this together.

Tell us what you think? Let us know if you want to particpate in our efforts to have a mega conversation at the MD Biz Expo.

More recession resources to help you survive and thrive in the recession:

• Five reasons why Maryland can beat the recession
• Top 6 tips to recession-proof your career
• Top seven issues facing CPAs in business and industry