We all get used to doing things a certain way. It’s easy. It’s comfortable. But over time, we lose sight of whether what we’re doing makes sense. Is it effective? Is it worthwhile? Does it take more time and energy than it returns? It’s ...


3 Meh Ways to Promote Your Firm—and 1 Great One and more...

3 Meh Ways to Promote Your Firm—and 1 Great One

CPAPoweredWe all get used to doing things a certain way. It’s easy. It’s comfortable. But over time, we lose sight of whether what we’re doing makes sense. Is it effective? Is it worthwhile? Does it take more time and energy than it returns? It’s worthwhile to take a hard look at how you market your services and ask tough questions.

Every day, CPA firms across the country rely on ideas for promoting their services that might not present the best value. Call them old habits or if-it-ain’t-broke-don’t-fix-it syndrome, but the result is the same: results that are “meh.” What more could you do to promote the very real value you bring to clients on a daily basis? Let’s start with what you might be doing now that may not be effective.

  1. Wordy, confusing or complicated ads.

We live in the age of the 140 character tweet. You have probably noticed that communication today is all about being concise. Gone are the days of full-page print ads filled with text that explains your services in minute detail. They won’t get read. Today’s promotion is a line of text in a digital ad, or a short blurb on a web page. Anything more, and your audience is likely to tune out.

Equally ineffective are promotions that use technical lingo, industry speak or try too hard to sound studious. Your clients want a simple, clear value proposition. They want you to show quickly and plainly how you solve a problem for them. Keep it short, keep it simple. Impress your audience by respecting their time and getting to the point fast.

  1. Forgetting the all-important check-ins.

Serving the clients you DO have means keeping up with them. Quarterly (or at least semi-annual) check-ins provide you with opportunities, and your client with better service. This applies to individuals AND businesses both. Has there been a regulation change at the local, state or federal level? A recent event in your client’s profession? Did their business appear in the news? You have a great opportunity to make a call or send an email or text to catch up.

There’s a very good chance that your clients aren’t aware of all you can do for them. Communicating your value is a year-round proposition, and one savvy firms take seriously. By spending just a few extra minutes a week catching up with your clients, you can reap major rewards. If you only speak with your clients when they come to you, you’re making it harder on yourself to promote your firm’s services.

  1. Not paying attention to the next generation.

If you’ve gotten comfortable serving a particular kind of client, you are missing a significant way to grow business. Millennials are the largest living generation, having recently overtaken Boomers. And with a $15 TRILLION wealth transfer about to take place as Boomers pass on what they have accumulated to their children and grandchildren, it behooves you to adapt (or pay attention). Millennials are the future of business.

With that future is a host of new technologies that Millennials expect. Keeping up may require changes—email is increasingly read on mobile devices, for example, meaning differences in how it should be formatted. It will take some changes in the way you think and do business to make progress on this front. Consider hiring someone qualified to guide your firm in engaging the new generation.

And here’s the great one.

The value a CPA brings to the planning and running of a new business is powerful. The #CPApowered website is the hub of the AICPA’s efforts to showcase the numerous ways in which a CPA is a small business’ most trusted continuous strategic partner. Since its launch in 2014, the award-winning #CPAPowered program has reached more than 3 million people through innovative digital media and content strategies. This year’s campaign features two breakthrough, engaging 30-second videos that you can share through your website and social media channels. We’re inviting firms and state CPA societies to join in the action this fall and promote your organizations alongside a national cable TV and social media buy. There are multiple options for participating. Sign up forms (available online) are due by August 15.

Lisa Simpson, CPA, CGMA, Associate Director--Firm Services, Association of International Certified Professional Accountants



Is Watching Shark Week Deadlier than Actual Sharks?

SharkAs a child, I loved watching movies about summer vacations. To someone from a low-income household whose summer adventures were circumscribed to the occasional elementary school-run day camp, the idea of vacationing was exotic – regardless of whether the family went to Walley World (National Lampoon’s Summer Vacation) or to a charming Massachusetts beach town like Amity (JAWS). Even the latter, where an insatiable Great White swallows poor beachgoers whole, seemed preferable to languishing away hours reading comics in my sweltering bedroom, ignoring my mom’s relentless nagging to ‘go play outside.’

 Although many cast JAWS aside as simply a horror movie, to me, it’s always been much more. It’s a classic-if-not-quintessential man vs. beast odyssey, not much unlike those found in Greek mythology. But whether you classify the film as horror or adventure, JAWS undeniably plays to certain fears. Galeophobia (the fear of sharks) is akin to a fear of the dark in that it taps into an anxiety of being unable to see those things which may harm us. In terms of sharks, however, this fear is largely misguided.

According to the American Shore and Beach Preservation Association (ASBPA), an estimated 180 million Americans take 2 billion beach trips annually. By contrast, National Geographic reports that there are only about an average of 19 shark attacks in the U.S. annually – and only one proves fatal in a two-year period. So, if you’re super cautious, maybe it makes sense to avoid the .000000025% risk.

In other words, the ‘beast’ in this particular ‘man vs. beast’ struggle is not the shark; it’s our own unfounded fears.

Of course, it doesn’t help that Shark Week is ramping up. This is a huge event for many – not the least of which, the Discovery Channel, which hosts this week-long elasmobranch extravaganza every summer. It amps up the risks and the fears in a most sensational fashion. This Sunday, for example, Michael Phelps will apparently race a shark.

No. Seriously.

Like most Americans, I enjoy a little sensationalism. But upon closer examination, I’ve found there are other everyday activities far riskier than a swim in the ocean. In fact, watching Shark Week may be deadlier than sharks themselves.

Did you know, for example, that the U.S. Consumer Product Safety Commission (CPSC) released a report warning people of death-by-HDTV?  From 2000 to 2011, 349 people died from toppling furniture and appliances – usually flat screen TVs. Since Leichtman Research suggests 81% of Americans own at least one flat screen (about 260,334,000 people), the aforementioned hazard carries an approximate risk of.000025% – three decimal places greater than a fatal shark attack for those who are counting.

Let’s also say you enjoy celebrating Shark Week in style. You decide to pop a cork of your favorite bubbly. Just know that it’s far likelier that a rogue champagne cork – not a rogue shark – will take your life. Of the 300 million bottles produced each year, an average of 24 will pop their tops in a way that leaves imbibers with a headache from which they’ll never recover (that’s .000008%).

And let’s assume you say “To heck with Shark Week. I’ll just sit here twiddling my thumbs.” That’s not advisable, either. Apparently, you can literally die from boredom (boredom has a pesky way of leading to unhealthy habits and poor life choices). 

In other words, go do that thing that, as a child, I so longed to do. Go out and explore the world. It’s okay to let loose now and then. Resetting is good! Not only does taking a vacation make good business sense, it makes good sense from a health perspective.  It’s riskier not to take that trip, not to unplug, not to unwind. So what are you waiting for? You’ve worked so hard thus far this year. Why are you still at your screen reading this? Take the plunge. Or at least consider wading.

Brock Faucette, Corporate Communications Manager, Association of International Certified Professional Accountants

Shark courtesy of Shutterstock


Rethink Your Not-for-Profit’s Chart of Accounts

Client meetingPart I

By now, most professionals who serve not-for-profit organizations in governance or financial accounting roles have gained a basic understanding of the impending changes to the not-for-profit financial reporting model. This two-part series focuses on implementation and offers actionable recommendations to help not-for-profits prepare for the impacts of the new guidance. 

Look at the New Standard through the Lens of Your Chart of Accounts

The Financial Accounting Standards Board's (FASB) Accounting Standards Update (ASU) No. 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities, will impact several line items in the financial statements of not-for-profit organizations. To accurately and efficiently reflect those changes, it’s important that not-for-profits create a plan to adjust their chart of accounts during 2017 or 2018.

The timing of the adjustments will depend on your organization’s fiscal year-end and whether you plan to early-adopt the new standard. As you prepare to implement the new standard, be sure to discuss the timing with your external auditor to ensure there will be no interruption in the audit and to determine if comparative financial statements should be presented in the year of implementation.

The new standard will impact the chart of accounts in five areas: liquidity, net assets, investment return, statement of cash flows and expense reporting. Recommendations for chart of account modifications in these areas will be covered in this blog post series. Keep in mind, the exact types of adjustments depend on the accounting system the organization uses.


The standard requires qualitative information about how a not-for-profit manages its available liquid resources. It also requires quantitative information illustrating the availability of financial assets at the balance sheet date to meet cash needs for general expenditures within one year of the balance sheet date. To capture this information, consider the following:

  • Report assets as current and non-current. In many accounting systems, this can be done by grouping accounts on the balance sheet, but you may need to add new accounts to provide the additional level of detail needed.
  • Determine how to track the information related to external limits imposed by donors, laws or contracts and set up any necessary codes. For example, cash with use restrictions should be readily identifiable.
  • Make sure your implementations of liquidity and net asset requirements (see below) are aligned.

Net Assets

Not-for-profits currently report net asset balances in three classes: (1) unrestricted, (2) temporarily restricted and (3) permanently restricted. The new standard requires not-for-profits to report net assets using two classes: (1) those with donor restrictions and (2) those without donor restrictions. Consider the following recommendations to address these changes:

  • Create a new account called “net assets with donor restrictions” to roll up the temporarily and permanently restricted net asset accounts. If your software allows you to create report groups, you should be able to keep your current temporarily and permanently restricted net asset accounts and just use the grouping feature to combine them for reporting purposes. This will allow you to continue to track the details needed for note disclosure. Remember (1) not-for-profits will still need to track the different types of donor restrictions to support the requirement to disclose the nature and amounts of those restrictions and (2) if the organization has any endowment funds that are considered “underwater,” those funds’ balances will need to be reflected in the new account.
  • Rename the unrestricted net assets account “net assets without donor restrictions.” If the organization has instituted a policy that stipulates an implied time restriction for donor-restricted gifts of property and equipment that will expire over the useful life of the asset, you will need to reclassify any remaining balances to this account.
  • Consider having your board set aside amounts under your operating reserve policy as board designations. If you choose to do this, think about creating an account called “operating reserves.” Doing so will allow you to break out this information for reporting purposes. Depending on your accounting system, you may add a restriction code, a fund code or a net asset account.
  • Consider adding additional subaccounts under “net assets without donor restrictions” for specific board designations, such as investment in capital assets and quasi-endowments. With the new disclosure requirement to provide quantitative and qualitative information about board designations on net assets, this is a good time to review existing board designations to determine if they are still relevant. You may also wish to have the board reaffirm those designations at a future meeting. There is no requirement for an organization to have board-designations on net assets. If there are none, be sure to document that fact. Remember, the organization will likely need written policies/practices regarding board designations on net assets, even if there are no designations.

Looking at potential revisions to your chart of accounts is just one action you can take now to prepare for implementation of the new financial statement presentation standard. Be sure to keep an eye out for Part II of this series, which will cover recommended chart-of-accounts changes related to investment return, statement of cash flows and expense reporting, as the AICPA’s Not-for-Profit Section continues to keep you up-to-date on all things related to the FASB not-for-profit accounting standard.

Cheryl R. Olson, CPA, CGMA, Director of Not-for-Profit Consulting, Clark Nuber, PS. Prior to joining Clark Nuber, Cheryl was Director, Council Financial Consulting at the Girl Scouts of the United States of America. She volunteers on the AICPA Not-for-Profit Advisory Council and is an instructor for AICPA’s Not-for-Profit Certificate II, a video-based eLearning program for not-for-profit professionals and their business advisors.

Diane Shey, CPA, Lead Software Implementer, Clark Nuber, PS. Diane oversees deployment and training of various accounting and fundraising software programs. Her clients include not-for-profits, associations, foundations, as well as organizations providing healthcare, arts and recreation, and social services.

Client meeting courtesy of Shutterstock


Winning the Value War

Value propositionAre you looking to expand your practice beyond financial statements and tax returns? If so, providing more personal financial planning advice and support, which will help clients plan for their financial future, may be the key to successful expansion. But how do you express the value you’ll provide to your clients? Here are some value propositions that CPAs can use to both describe and demonstrate value of those services.

Step One: Recognize the Difficulty of Selling an Intangible Value

In the world of investment advice, defining a value proposition is relatively straightforward because the return on investment (ROI) can be easily measured. And tax savings from effective tax strategies is similarly concrete.

However, when it comes to financial planning, defining a value proposition becomes far more difficult because it involves selling an intangible service and the results are hard to measure.

Step Two: Six Key Value Client Propositions

So, when proposing a long-term service like financial planning to a client, how do you explain exactly what the deliverable value is?

One way is to frame it. Financial life planning pioneer Mitch Anthony is trying to improve a client’s “Return On Life” (ROL, as opposed to ROI on a particular investment). Nonetheless, the goal is to become less investment centric, and to focus more on increasing the client’s ROL. This can be explained with six key value propositions of being their ongoing financial planner:

  • Organization – Bring order to a client’s financial life by getting his or her financial house in order at both the “macro” level of investments (e.g., insurance, estate, taxes, etc.) and “micro” level (e.g., household cash flow).
  • Accountability – Help a client follow through on financial commitments by prioritizing goals, showing the client the necessary steps to take, and regularly reviewing progress towards achieving those goals.
  • Objectivity – Offer insight from an outsider’s point-of-view to help a client avoid emotionally-driven decisions in important money matters. You can do this by being available for consultation at key moments, doing the necessary research to ensure you have all the information, and managing and disclosing any of your own potential conflicts of interest.
  • Proactivity – Work with a client to anticipate certain life transitions and how best to financially prepare for them, by regularly assessing upcoming situations and creating an action plan to address and manage them ahead of time.
  • Education – Conduct the appropriate research to thoroughly understand a client’s situation, then provide the necessary resources to help facilitate the client’s decisions. Finally, explain the options and risks associated with each choice.
  • Partnership – Help a client prepare for a healthy financial future by taking the time to clearly understand your client’s background, philosophy, needs and objectives. You can achieve this by working collaboratively with your client and on their behalf (with the client’s permission), and being transparent about your own costs and compensation.

Step Three: Living up to The Proposition

Stating these value propositions is easy, but actually executing them still takes focus and effort. For example, turning the “data gathering” meeting into a client-centric “get organized” meeting can make a world of difference. And saying you’ll work in partnership with your client means you need to prepare the financial plan collaboratively, in real time with them, not just assemble the plan behind the scenes and instruct your client on what to do next.

Thus, the core value propositions of financial planning are arguably not only good information to share with clients, but they provide a solid guidepost for you to improve your services. Helping clients generate a better ROL requires digging deeper than what many CPAs are accustomed to.

Explaining and communicating financial planning services to a client is difficult enough. So, it’s crucial to develop an effective means of describing and executing the value you can provide. And these value propositions can help pave the way.

For more information on expanding your value proposition to include personal financial planning services, the AICPA Personal Financial Planning Division has an extensive suite of tools, resources and guides to help enhance your financial planning knowledge. Also, check out this page which contains information on the opportunities in personal financial planning along with free toolkits and resources to help you get started. 

Michael Kitces, Partner and Director of Wealth Management for Pinnacle Advisory Group. Michael is co-founder of the XY Planning Network and publisher of a continuing education blog for financial planners, Nerd’s Eye View. You can follow him on Twitter at @MichaelKitces.

Value proposition courtesy of Shutterstock


Myths about Personal Financial Planning Services

MythsThere is a good chance you have visited a physician for a routine check-up. At that appointment, your doctor asked many questions – inquiring about your diet, exercise, stress, and health history – and ran diagnostic tests to assess your overall health. Your physician may not have solved any problems at that appointment, but you undoubtedly valued and were willing to pay for an objective professional to assess your health status.

Why is it, then, that many CPAs doubt the value of offering similar diagnostic and planning services to assist clients in identifying potential problems and improving their overall financial health? Broadening your services by asking the right questions, understanding your clients’ financial situation and delivering advice (or making referrals to trusted specialists) is not only valuable to your clients – but also to your practice.

Before you tune out by citing common objections, allow me the opportunity to debunk some of the common myths about personal financial planning (PFP) services.

Objection #1: “I am not a financial planner.”

I often encourage CPAs to consider a simple test to identify personal financial planning. First, does your client’s issue have to do with money? Second, does it involve planning? If “yes” and “yes,” financial planning it is.

If you prefer a more technical description, the AICPA’s Statement on Standards in PFP Services indicates that “PFP services encompass one or more of the following activities: cash flow planning, risk management and insurance planning, retirement planning, investment planning, estate, gift, and wealth transfer planning, elder planning, charitable planning, education planning, and tax planning.” (See SSPFPS paragraphs .03 and .12 for a complete definition of PFP services.)

Accordingly, tax practitioners have financial planning conversations all the time. As an objective adviser, regardless of whether you identify yourself as a “financial planner” or not, clients trust your objectivity and professionalism to go over their full financial situation.

Objection #2: “I am not interested in selling products or managing investments.”

CPAs have been objectively advising individuals for over 100 years. However, when the investment sales industry began using the terms “adviser” or “planner,” confusion in the market ensued. An individual may think, “I have a tax preparer, an estate planning attorney, and a financial adviser; my financial needs are well covered.” Not necessarily. If their “financial adviser” is merely an investment manager, they often have significant gaps in their financial plan. How many times have you seen clients with no will, assets omitted from their trust, inadequate insurance or no realistic retirement plans? This creates an important need and opportunity for CPAs to be “holistic overseers,” making sure that all important areas of a client’s financial life are addressed.

In this role, you are not necessarily handling every aspect of the client’s finances; however, you – like the physician at the annual physical – are asking the right questions and working with other specialists to coordinate the big picture. Many CPA financial planners don’t manage investments or give investment advice, but add enormous value with their knowledge of tax and all it touches – that is, all aspects of the client’s financial life.

Objection #3: “Offering PFP services wouldn’t help my practice.”

The opportunities for practice growth, better client retention and referrals are compelling. Consider the facts:

  • PFP is forecasted to grow two times faster than the accounting profession through 2017 (IBISWorld 2014).
  • The Bureau of Labor Statistics has projected the need for the number of personal financial advisors to increase 27 percent nationwide through 2022.
  • Average total compensation among CPA/PFS credential holders is 11% higher than that of CPAs without the specialty credential (2013 AICPA Compensation Survey).

If you are concerned that your clients won’t pay for these services, consider presenting a one-time overall financial preparedness assessment designed to prevent financial pitfalls or gaps, with optional ongoing monitoring. The diagnostic benefits, motivation and accountability that personal finance assessments provide your clients will logically position you as a much more valuable advisor. Clients often know they should address these needs, but they rarely get around to it or know whom to ask. 

From that assessment, if you end up referring to professionals specialized in solving the issues you and your clients discover, these specialists will undoubtedly value your referrals.  Your collaboration will nurture working relationships.  

Objection #4: “I’m not equipped to offer PFP services.”

Even if you only feel comfortable asking questions of your clients, you offer a critical service by bringing these issues to the forefront. If you are ready to start raising questions to your clients and/or want to dig into deeper planning, the AICPA PFP Section has a range of resources to help you do just that.

Start with this straightforward checklist to analyze a tax return for personal financial planning opportunities, or this interview tool to identify issues and motivate clients. If you are ready to dig deeper, there is a range of PFP practice guides, including a roadmap to help you develop and manage a PFP practice. These tools are just the tip of the iceberg; the PFP Section has comprehensive technical and practice management guidance in this area.

Before you downplay the role you can play in personal financial planning, remember that the value of the questions we ask is as important as that of the answers we bring.

Jean-Luc Bourdon, CPA/PFS. As Principal at Brightpath Wealth Planning in Santa Barbara, CA, Jean-Luc helps clients understand their financial options and choose their best life story. Jean-Luc often speaks and writes about financial planning, as well as serves on the AICPA Personal Financial Planning Executive Committee.

Myths courtesy of Shutterstock

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