Accounting professionals in the not-for-profit sector wear many hats. We often have the blessing and curse of selecting and implementing enterprise resource planning (ERP) systems. If you have undertaken this herculean effort before, you’ll probably ...


5 things I wish I knew when selecting an ERP system and more...

5 things I wish I knew when selecting an ERP system

ERPAccounting professionals in the not-for-profit sector wear many hats. We often have the blessing and curse of selecting and implementing enterprise resource planning (ERP) systems. If you have undertaken this herculean effort before, you’ll probably never forget the education you gained throughout the experience. If you haven’t had the opportunity yet, there are some things you should consider to help your not-for-profit or your not-for-profit clients avoid mistakes. Here are five key lessons I learned when selecting an ERP system for my organization.

  1. You get what you ask for. It’s important to be specific about what you want to do and how you want to do it so you can find out if vendors can accommodate your needs. If the business requirements you specify are too generic, you may be surprised to discover significant gaps in the system’s capabilities too late in the game. For example, saying you need the ability to make electronic payments may be too generic. Instead, indicate that you need the ability to automate batches of electronic payments via EFT and wire. In this example, the added clarity ensures the system can not only make electronic payments but also process them via EFT, and that payments may be initiated through automatic batches rather than manually, one by one.
  • Look past the sales pitch and focus on the system. Go into the sales presentation prepared. Know that the salesperson will try to wow you by talking about capabilities that may be out of your scope, so stay focused on your specific needs and whether the software product’s capabilities are a good match. You know your organization and what is feasible, but it also may be helpful to invite other key players to the meeting, including your implementation specialist or project manager, since they may have additional questions or concerns.
  • Be willing to adjust your business processes. It is likely your organization’s business processes were developed to accommodate the current ERP system. This means it’s unlikely all of those processes follow best practices. If a new system doesn’t meet your business requirements, consider whether it is a deficiency of the ERP system or an internal process. Perhaps the business requirements relate to a process that could be simplified or modified in the future, moving more toward best practice in the new system. Approach the selection process recognizing some processes will have to change.
  • Make sure the information technology (IT) team has bought into the solution, even if it is cloud-based. Many vendors try to sell cloud-based applications to the functional side of the business directly by stating that no IT assistance is required. Most of the time, that’s simply not the case. Most business units are not equipped to dive into IT configurations, and the solutions may not meet the internal architectural or security guidelines. Make any selection in partnership with your IT team, starting with input into the functional requirements, through the sales process and on to implementation and evaluation.
  • The system is only as good as the implementation. Carefully consider what you are looking for in an implementation partner. Do you need:
    1. Assistance identifying best practices for the future?
    2. Support navigating complex needs that might require customization?
    3. Help with data integrations?
    4. Help following a specific project implementation approach, such as the waterfall or agile method?

Clarify upfront what you need from an implementation partner and seek one with those strengths. Otherwise, you could spend valuable hours engaging with them, only to find they are missing the mark and not providing the specific guidance you need.

No ERP system is perfect, but applying these lessons when selecting a new system may help you choose a good match for your organization and more fully leverage its capabilities.

For more information, tools and resources to help not-for-profit professionals, visit the AICPA’s Not-for-Profit Section. You’ll find a comprehensive resource library covering topics in not-for-profit accounting and financial reporting, assurance, tax compliance, and governance and management, along with the latest news and learning opportunities related to those topics.

Jennifer Brenner, CPA, Controller, World Vision US, has more than fifteen years of public and private accounting experience, including domestic and international accounting and tax compliance. She serves as chair of the AICPA’s Not-for-Profit Industry Expert Panel.

Enterprise resource plan graphic courtesy of Shutterstock 


Reflecting MLK’s work in the fabric of the profession

MLKToday is the federal holiday when we commemorate Dr. Martin Luther King Jr.’s life and extraordinary work.

Just shy of fifty years since his assassination, we have undoubtedly made progress. However, we still face an unsettling reality where disrespectful language, aggressive rhetoric and harassing behavior continues in some corners of our society.

To advance successfully together, we must face these facts with courage and uphold Dr. King’s legacy to support respect and inclusion. Of the voices carrying his mantle, Dr. King would be proudest to know that ordinary people are increasingly empowered to echo his original messages of equality and justice. In 2017, we heard from a diverse chorus of voices in entertainment, sports, business and politics as well as our neighbors and friends.

The AICPA is committed to inclusion in the accounting profession as well as within our organization. We rely on each individual (member and employee) and their unique views of the world to make the profession stronger and better prepared for the future. We also rely on respect and equality to bolster us against any negative pressure we face as citizens in our communities.  

We thank the members of the our National Commission on Diversity and Inclusion for their dedication and leadership in guiding the profession through our journey of inclusion. And we salute the many accountants and students across the world who are advocates of inclusion.

May you take this day an opportunity to not only celebrate the legacy of Dr. King, but to begin to create legacies of your own so that in 50 years you too are celebrating standing up for change.

“If we are to go forward, we must go back and rediscover those precious values - that all reality hinges on moral foundations and that all reality has spiritual control.”

– Dr. Martin Luther King, Jr.

Please join me, Thursday, January 17 at 1pm, ET for Global diversity: driving innovation through inclusion. This webinar will help you understand how your firm or organization can capitalize on the diversity of thought, background and experience of your team to drum up new business and innovate for the future.

Kim Drumgo, Director -- Diversity and Inclusion, Association of International Certified Professional Accountants and Chair of the PhD Project, an effort to advance workplace diversity by increasing the diversity of business school faculty  

Martin Luther King, Jr. courtesy of Shutterstock


Today’s most binge-worthy TV, brought to you by inclusion

BlackishHopefully you were able to slow down long enough over the holidays to catch up on some of today’s most popular shows. If you’re like me, you want to see interesting shows representing a wide spectrum of perspectives and experiences. With the growth of cable networks and streaming services, you can find shows featuring a range of ethnicities, races, sexuality, and abilities, making for much more engaging and enlightening content.

But inclusion in entertainment didn’t happen overnight. Digital entertainment companies like Amazon, Netflix, Hulu and HBO (just to name a few) have been challenging the network television status quo for nearly a decade by assembling writers, producers and actors from various backgrounds to create fresh content. The networks are answering and keeping themselves relevant with their own solid offerings. Today’s improved TV proves that business’ most innovative offerings are spurred on by inclusion as well as competition.

Having access to all of this great programming is why so many of us spent much of our holiday break binge-watching TV. With characters, writers, and actors of all backgrounds, it’s clear we’re embarking upon a golden era of diverse TV programming. Here are some of my favorites:

  • Black-ish—Now in its fourth season, this award-winning comedy focuses on an African-American family and the challenges they face living in a mostly white, upper-middle-class neighborhood. The main character and father of four children, Dre, combats cultural assimilation and tries to maintain ethnic identity within his household. Critics agree this ABC show is a stand-out among network sitcoms.
  • Fresh Off the Boat—Another ABC sitcom that goes above and beyond. Based on the book of the same name by chef Eddie Huang, this is the first American TV show to star an Asian-American family. It follows the adventures of a Taiwanese-American family trying to adjust to life in a Florida community after moving from Washington, D.C.’s Chinatown.
  • The Good DoctorThe Good Doctor puts neurodiversity center stage. It’s about a young surgical resident with autism. Interesting to note that this show is based on the award-winning South Korean show of the same name.
  • Mr. Robot—Proof that innovative TV isn’t only happening in comedy, this cyber-thriller features a lead character with social anxiety disorder and clinical depression. It’s provocative, edgy, and suspenseful TV.
  • Insecure—Creator, writer and actress Issa Rae presents a fictionalized version of her and her friends’ adventures as millennial professionals in Los Angeles. She’s funny, weird and yes… insecure, but since she’s the first person to point it out, it also makes her charming and loveable.
  • Runaways—Prefer something a little (or a lot) less realistic? Then try this Marvel series about six teenagers from different backgrounds who join forces and unique skillsets to fight the criminals they have in common: their parents. Think typical teenage soap meets comic books.

Special mention: It’s not bingeable yet, but take a look at The Chi on Showtime. Emmy Award-winning write, producer and actor Lena Waithe created this weekly series set in Chicago’s South Side. The show depicts the day-to-day lives and big picture aspirations of two ordinary young men as they navigate their neighborhood’s extraordinarily dangerous streets.

Did we miss one of your favorites? Feel free to add your own must-see diverse show in the comments!

And speaking of diversity, don’t miss the chance to sign up for this webinar I’m hosting—Global diversity: driving innovation through inclusion, January 17 at 1pm, ET. It’ll help you understand how your firm or organization can capitalize on the diversity of thought, background and experience of your team to drum up new business and innovate for the future.

Kim Drumgo, Director -- Diversity and Inclusion, Association of International Certified Professional Accountants and Chair of the PhD Project, an effort to advance workplace diversity by increasing the diversity of business school faculty

Cast of black'ish courtesy of Kathy Hutchins/Shutterstock


3 things more important than tax reform in 2018

Your phone’s already ringing. Clients want to know how the new tax law will impact them. This is understandable, but don’t Small firm prioritiesworry if you aren’t ready to answer their questions just yet It’s a big law and the IRS has yet to provide even the most basic guidance. For most businesses, taxes aren’t the first thing to look at in 2018—in fact, taxes probably shouldn’t be your clients’ second or even third priority. During your client meetings consider tackling these other issues that haven’t made the 6 o’clock news.

  1. Everybody needs to fully reevaluate their accounting.

To start with, after two years of delays, US GAAP is undergoing its biggest changes in decades with implementation of FASB’s new revenue recognition and lease accounting standards. Aside from the high-profile changes for software providers, virtually every business in America that reports under US GAAP will see significant changes to their accounting for revenue recognition. Most of these businesses have leases to look at too.

Particularly if you have clients in the real estate, construction or non-profit sectors, they’ve got some serious work ahead to revamp their accounting. Contracts, leases and legal structures of pass-through entities all need to be examined. If you need help, we have 16 industry-specific task forces that have been studying these issues for the past three and a half years.

The accounting changes alone are enough to make it worthwhile for many small businesses to consider whether to continue reporting under US GAAP or change to a less complex financial reporting framework such as the cash-basis, tax-basis, regulatory-basis, or other comprehensive bases of accounting (OCBOA) such as the Financial Reporting Framework for SMEs. Now, with the tax code overhaul, it’s even more critical that small businesses take a step back and reevaluate their entire approach.

  1. It’s time for major back-office system changes—or outsourcing.

For businesses that have continued using labor-intensive processes for back-office functions such as billing, payroll and financial reporting based on an “if it ain’t broke, don’t fix it” mindset, 2018 will be the year it breaks. You want to be there to help them fix it.

It is unlikely that you will find a system that can accommodate implementing multiple major financial standards or an entirely different accounting framework without a major overhaul or replacement. As CPAs, we can help clients navigate this upset to business as usual.

During the tax season rush, we often get so busy that we forget to bring up other service offerings. Or we’ve talked about these offerings and clients simply weren’t ready. This year—2018—I fully expect more clients than ever will be ready to make major system changes. We can present viable options that may include selecting and transitioning to a new basis of accounting, outsourcing (not just bookkeeping but also CFO services), cloud-based accounting software, and restructuring contracts and leases.

  1. This year cybersecurity should be integrated into everything.

We keep hearing it in the news, but we as CPAs need to do more to protect ourselves and our clients. Most businesses—especially small businesses—aren’t doing enough to protect themselves and their customers from cyberattacks.

The necessary upgrades to financial systems brought on by changes in accounting standards and the tax code present both new risks and new opportunities for cybersecurity. The point I want to emphasize is that cybersecurity shouldn’t be “another thing to look at”—it should be part of everything we look at. Even if cybersecurity isn’t your specialty, don’t miss the opportunity to raise your clients’ awareness. The Private Companies Practice Section has a toolkit that will help you get started.

If you don’t have in-house expertise, consider partnering with another CPA firm that can help your clients assess and mitigate their cybersecurity risk and, when appropriate, consider assurance services on their cybersecurity risk management program. The AICPA’s cybersecurity risk management reporting framework helps organizations communicate about the effectiveness of the programs they have in place. Visit the SOC for Cybersecurity webpage for more information.

And about tax reform….

Yes, of course it’s a big deal and will be for the next few years. But we can’t look at tax reform in isolation, and we can’t address every tax issue at once. Major changes to the tax code present us as CPAs with a unique opportunity to demonstrate to clients the value of having a trusted advisor who understands their whole business. We can help them prepare for long-term growth.  Small firms can find a wealth of tools that can help them achieve their goals on the AICPA small firm resources site.

Carl Petersen, Vice President – Small Firm Interests—Public Accounting

Small firm priorities courtesy of Shutterstock.


Selling your practice? Don’t forget to cover your tail

Tail insuranceDon’t let this be you: You sell your practice and all is going well. You are enjoying retired life— when all of the sudden you get a call from your practice’s new owner. A previous client is suing you and you aren’t covered. Yes, this sounds like a nightmare, but luckily it doesn’t have to be your reality. Before selling your firm, protect yourself by considering the following.  

  1. Be Aware of the Danger

When you sell or merge your practice, the potential liability claims don’t go away. Instead, they could move forward into the new firm, ready to erupt when you least expect it. Even if you simply shut down your firm, the possible claims don’t disappear. They can follow you into retirement.

  1. Understand the Limitations

The professional liability insurance you buy is typically issued on a “claims-made and reported” basis. In other words, it is good for claims that are made only while the policy is active. For example, let’s say you sell your practice to Sue’s firm as of January 1, 2018. Early in 2019, an old client makes a claim against services you performed in 2017. The claim may not be covered under Sue’s current professional liability policy, and your policy expired when you sold the firm. You and Sue may be now potentially faced with a claim that is not covered by insurance.

  1. Cover Your Tail

The solution is extended-claim reporting-period coverage, which is also known as tail insurance. Tail insurance extends the reporting period past the time your policy expires, so that claims related to past work are covered. Depending on the rules of your state’s insurance commission, the period of extended coverage could be one, three, five or an indefinite number of years.

If you’re practicing and not planning a merger or sale soon, you have no need for tail insurance right now, because your liability is covered by your current policy. Extended-claim reporting-period coverage is only something you—and your merger or acquisition partner—must think about once a transaction is in the works.

  1. Step in the Acquirer’s Shoes

For the buyer or merger partner, investigating quality control practices and past claim experience is a crucial part of the due diligence process. You should know that they may insist that your firm have tail insurance before a deal is finalized. As noted, it’s also something you should know about even if you plan to close your firm’s door on your way out to retirement, since you can’t shut the door on past liabilities.

  1. Make the Most of Existing Resources

Tail insurance is one of the many issues to consider as part of your succession planning process. For help with any succession-related concern, be sure to turn to the Private Companies Practice Section Succession Planning Resource Center. Have insurance questions? To learn more about the AICPA Professional Liability Insurance Program, visit or call 800.221.3023.

Don’t let the problems lurking in past procedures or engagements pop up unexpectedly in retirement. Use tail insurance to put your worries to rest and stay problem free.

Clients of the AICPA Professional Liability Insurance Program through Aon Affinity may be eligible for a discounted or free extended reporting period.  The Named Insured must be a sole practitioner retiring and discontinuing the practice of accounting to be eligible for the vesting credit.  Those insured in the program as a sole practitioner for 7 or more years consecutively may receive a free extended reporting period.  Credit is subject to specific state requirements as well.  For the purposes of determining the vesting credit, a sole practitioner shall mean: One who is engaged in rendering professional accounting services alone with no other partners, CPAs, consultants, bookkeepers, or other professionals working on client engagements.

Keep in mind that policies can be structured differently so it is important to review your policy and options with your broker before retiring, selling a practice, or an M&A transaction.

Mark Koziel, CPA, CGMA, Executive Vice President- Firm Services, Association of International Certified Professional Accountants

Tail insurance is courtesy of Shutterstock.

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