CPA Success

Social media's ROI? You won't make a dime until you connect

bill@macpa.org(Bill Sheridan) — Mon, 17 Jun 2013 11:00:00 GMT

Still looking for social media's elusive return on investment?

You should've been with me in Vegas last week. I found it at the AICPA's annual Practitioners' Symposium and Tech+ Conference.

The event included a session titled "Face Time vs. Facebook: Building Client Loyalty in a Digital World," which examined the process of building relationships by pitting the old-school glad-handing concept against the new-school social-networking approach. "Which is better?" was the unasked question as attendees filed into the room.

As the session got under way, the answer quickly became "neither" ... and "both."

The speakers -- Michael Hsu from DeepSky and Michael Shost from Shost & Company -- quickly offered up anecdotes that backed their arguments:

Hsu explained how he used digital technologies -- including social media -- to go more than two years without ever meeting his biggest client.
Shost said his old-school breakfast-and-lunch approach takes more time than social networking, but believes it can build a "golden" business.

It quickly became apparent, though, that neither approach is better than the other, and here's why: They're both about people. They're both about building relationships, and they both go about it in similar ways.

Think about it: "Social networking" isn't a new concept. Whenever you get a crowd together, you've got a social network. We've been doing that since the dawn of time.

It doesn't matter how many "friends" or "followers" or "likes" you have. You still have to make connections and add value to people's lives. If you don't do that, it doesn't matter how big your social network is.

To that point, here are some key takeaways, courtesy of the really smart people who attended the session:

A great way of adding value is by finding your niche and establishing yourself in that area. Social media can help you do that quickly.
Social media makes your reach much broader, but face-to-face still seals the deal.
Social media lets your clients know you before they do business with you.
To know you, your clients have to know the real you. Social media isn't about accounting content. It's about presenting your authentic voice. Don't be afraid to be weird ... and to own that weirdness.
People want to like and trust you. The only way to do that is to show them who you really are.
There is no B2B or C2C. Everything we do is P2P -- people to people. It's all about building relationships.

And there, my friends, is your ROI on social media. You won't make a dime until you build connections and relationships. You won't gain their business until you gain their trust.

And you won't do that until you get to know them and let them know you.

Until you get social.

New reporting framework for SMEs vs. GAAP: Isn't there room for both?

bill@macpa.org(Bill Sheridan) — Fri, 14 Jun 2013 17:16:00 GMT

The AICPA's new Financial Reporting Framework for Small and Medium-Sized Entities was big news when it was released at the Institute's annual Practitioners' Symposium and Tech+ Conference … and it just keeps getting bigger.

The framework is being touted as a financial-reporting alternative for small and mid-sized private companies that are not required to conform with Generally Accepted Accounting Principles (or GAAP). The AICPA's position seems clear: Where GAAP is required, private companies would be wise to follow the advice of the new Private Company Council, the Financial Accounting Foundation, and the Financial Accounting Standards Board, who are working to expand GAAP to private companies.

If GAAP is not required, however, the new framework for SMEs might be a reasonable alternative.

"Some private businesses, typically smaller or those with less complex business models, will see the AICPA’s framework as an effective alternative to other existing financial reporting options," said AICPA President and CEO Barry Melancon. "Larger, more sophisticated private businesses may, in the future, choose to use GAAP for private companies, and still others with unique user needs, regulation or intentions to go public might use GAAP for public companies.”

Not everyone is on board with the new framework, however.

Specifically, the National Association of State Boards of Accountancy (NASBA) is urging private companies to not adopt the new AICPA framework.

NASBA "reaffirmed its support of Generally Accepted Accounting Principles as modified by FASB to meet the financial reporting needs of private companies," Accounting Today reported. "NASBA said it believes significant progress is being made by the Private Company Council of the FASB. 'Consequently, private companies should not consider adopting (the framework),' said NASBA in a press release."

So which is it?

The answer, says Tom Hood, is "both."

I spoke with Tom this morning, and he made the following points:

NASBA is absolutely justified in its vigorous support of GAAP and the work of the PCC.
At the same time, there is a clear need for optional standards that provide a standardized financial reporting format and guidance for the 43,000 small CPA practices that serve more than 16 million small U.S. businesses. The MACPA's Private Company Standards Task Force concluded as much in a 2011 whitepaper. So did the International Accounting Standards Board when it released its 230-page "IFRS for SMEs" standards in 2009.

"That is how I see the framework," Tom said. "To me, it's guidance for practitioners who opt out of GAAP due to extreme complexities that are often irrelevant to the financials of small businesses."

For its part, the AICPA released a statement that addresses three main concerns put forth by NASBA. Those concerns are in italics below, and the AICPA's response follows each.

NASBA: (The FRF for SMEs) represents non-authoritative guidance and therefore will be very difficult to regulate or enforce. AICPA: The FRF for SMEs designation, as non-authoritative, is no different than other OCBOAs that have been issued and are also non-authoritative. CPAs remain regulated by boards of accountancy for the work that they do and will be expected to comply with the high expectations of their regulators and their clients.
NASBA: The scope, "small and medium size entities," is undefined. As such, any private company, regardless of size or financial backing, could potentially adopt the FRF. AICPA: The private market can determine which basis of accounting is appropriate. They do not need a regulatory trade group making that decision. For many small and medium-sized enterprises, GAAP (including modifications for private companies) will be appropriate, but for others, the FRF for SMEs and other OCBOAs will be more appropriately suited. The AICPA believes that decision is best resolved between businesses and those that use their financial statements, without interference from outside parties.
NASBA: It allows the use of GAAP financial statement titles, yet does not require disclosure of differences with GAAP, which will cause confusion and invite fraud and abuse. AICPA: The FRF for SMEs framework does not use the terms "balance sheet" or "income statement" in the framework. In fact, the framework uses titles that are not typically considered GAAP. Additionally, the framework requires disclosures that very clearly state that it is not GAAP and therefore will not be confused by a user, whether that user is a private business or a potential lender. Also, any report (audit, review, or compilation) on the framework by a CPA will also state in the report that the FRF for SMEs is not GAAP.

Melancon said discussions between the AICPA and NASBA will continue in an effort to reach some mutual understanding.

In the meantime, I cornered Melancon at the Practitioners' Symposium and asked him what CPAs need to know about the framework. Here's what he said.

The best firms do these things. Do you?

bill@macpa.org(Bill Sheridan) — Wed, 12 Jun 2013 23:53:00 GMT

What sets the best performing firms apart from the competition?

Jennifer Warawa has some ideas.

As vice president of partner programs and channel sales at Sage, Warawa has the research and insights on hand to know how the best firms become the best.

The short answer: They challenge (a) the status quo, and (b) how they think.

About everything.

In a quick-hitting session at the AICPA's annual Practitioners' Symposium and Tech+ Conference in Las Vegas, Warawa offered up a checklist of attributes that make high-performing firms successful. Here are some of my favorites. Read through them, and after each one, ask yourself: Can you say that about your firm?

They price for the value they deliver, not by the hour. And they don't undercharge.
They interact with clients on a frequent, ongoing basis.
They "surprise and delight" clients, going "above and beyond when it's least expected."
They get the "brilliant basics" right -- things like being friendly and responding promptly.
They evaluate clients regularly and fire the bad ones.
They know how to market themselves.
They network, and they have a plan for doing so.
They have their pitch mastered. And remember this: "Your pitch isn't about what you do," Warawa said. "It's about the value you provide."
They have a strong online / social media presence.
They ask happy clients for referrals.

And perhaps most important, they never stop learning. In a changing and complex world, it's the most important thing any of us can do.

Warawa made one more point that really struck home for me: "People do business with a culture," she said.

That's so true. People pay you for your passion, not your product. Or as Simon Sinek would say: "People don't buy what you do, they buy why you do it."

Figure out your "why." Find your passion, then serve others with that passion as your foundation.

If you do that, something tells me you can't go wrong.

Rules for beating change: (1) Burn rubber (2) Until you shouldn't

bill@macpa.org(Bill Sheridan) — Tue, 11 Jun 2013 11:00:00 GMT

We're hanging out with more than 1,400 CPAs and friends of the profession at the AICPA's annual Practitioners' Symposium and Tech+ Conference in Las Vegas. It's an amazing show -- three days packed wall-to-wall with cutting-edge CPE and some of the most innovative vendors serving the profession today. It's almost overwhelming.

Predictably, someone's going to find a way to blow off some steam. Usually, that someone is Jody Padar.

For the past couple of years, Jody's New Vision CPA Group and a handful of sponsors (including, this year, the Business Learning Institute) have put together some funky events that have helped CPAs recharge their overtaxed conference batteries. Last year, it was trampoline dodgeball. This year, it was go-karts.

You heard me right. We strapped helmets onto a bunch of CPAs and CPA groupies, then we turned 'em loose on the tracks of Fast Lap Indoor Kart Racing just off the Strip.

Remarkably, no one killed themselves … or anyone else.

Some of us learned a thing or two in the process, though. I know I did.

You've got to go really fast if you want to keep pace. Change is going to happen whether you want it to or not. You need to change too, or risk irrelevancy. As best-selling author and thought leader Peter Sheahan would say, action must come before clarity. We need to act, and fast. Don't wait for a blueprint. We're building the blueprint on the fly. Take a leap of faith and adjust things after the fact.
But you need to know when to slow down. If you try to haul ass through the hair-pin turns and unexpected obstacles in your path, you'll crash. Every now and then, you have to go slower in order to go faster.
It's not us against the world -- except when it is. There's more teamwork involved in outpacing change than you realize. Our go-kart experience included a relay race that featured a remarkable amount of strategy. Who would take the car out first? How many laps would each teammate complete? When should you come into the pits? The rules were mere suggestions, though, and each teammate had to guess when to break them. The moral? Have a strategy … and trust yourself enough to know when to change that strategy on the fly.

And finally, have fun. You might never have a chance to do something like this again. Don't sit on the sidelines.

Do it.

Internet sales tax: Four things CPAs need to know

bill@macpa.org(Bill Sheridan) — Mon, 10 Jun 2013 11:00:00 GMT

Nothing is simple when it comes to taxation these days, is it?

Take Internet sales, for example. Do we tax them? Who has jurisdiction? Who gets the revenue?

No easy answers there, but Congress is trying to find some via the Marketplace Fairness Act.

The bill sailed through the Senate and is hitting some rough waters in the House, and pros and cons abound.

Still, its sponsors hope it will address a decidedly modern issue: How do you tax products and services in a borderless world?

The Internet is great at tearing down walls. if you're a Maryland-based company and you sell something online to someone who lives in Missouri, who gets the sales tax revenue? Should sales taxes apply at all?

Great questions, and the folks at Avalara are trying to come up with some answers.

Avalara's Ray Bigley spent some time with me recently to outline what CPAs need to know about the proposed legislation. He boils it down to these key areas:

The proposal calls for a $1 million threshold, including exemptions.
Regardless of what your client sells, existing state product taxability rules apply. "If I'm a company and I'm selling into California, California law applies to those products," Bigley said.
Adoption is state dependent. According to Bigley, the 24 states that are part of the Streamlined Sales Tax Agreement will likely adopt the legislation easily, should it become law. Other states -- including Maryland -- have indicated they might support the agreement but have not yet passed the necessary legislation.
If the proposed legislation is passed and signed into law, businesses that sell over the Internet will be required to collect sales taxes and then remit and file returns, perhaps in jurisdictions where they haven't previously filed.

Those will be moot points if the bill stalls in the House, of course. Stay tuned.

In the meantime, listen to my interview with Bigley in its entirety: