• How Running a Small Business Might Change in 2022

    by Bryce Sanders, Perceptive Business Solutions, Inc. | May 05, 2022

    Many of the concerns small business owners have now focus on how they can stay afloat after the COVID-19 pandemic. This blog explains how changes to the market might affect these clients and what CPAs can do to help them navigate the recovery afterward.

    “This time it’s different.” Some say these are the four most dangerous words uttered on Wall Street. Here is another concept: “People like the familiar and the comfortable.” Your client who owns a local business might think the COVID-19 pandemic is over and business can get back to the way it was in 2019, but there are some major factors that indicate this time, it really will be different. Here’s what has changed:

    1. Hiring personnel

    Many businesses have a “We Are Hiring” sign in their window these days. Your client might have one in theirs, too. They might assume that once financial support from the government ends, people will be back on the street looking for work. 

    • How it was:  Labor was like electricity. You paid for the amount you used. Your client might have had a pool of employees whom they could schedule at a moment’s notice or send home midday if business was slow. There was no shortage of employees.
    • How it’s different: Many people left their jobs during the pandemic. Employers like Amazon went on a hiring spree, offering attractive pay and benefits. Now, employees want a set schedule each month, as well as competitive pay and attractive benefits.

    2. Access to capital

    Over the last two years, your client might have seen new buildings going up, old properties getting renovated and property prices reaching record highs and wondered, “Where is all that money coming from?”

    • How it was: Interest rates were low, and borrowing was cheap. Private equity firms had pools of capital looking for a home. Property owners got plenty of cold calls asking if they wanted to sell it. Your client might have been thinking of expanding.
    • How it’s different: This time it’s different. As interest rates rise, the window of opportunity closes. Higher interest rates mean the projected rate of return on projects needs to be higher to attract capital. The lenders or individuals considering putting money into your client’s business will want a better deal or more security. The longer your client waits, the tougher it will be to arrange new financing.

    3. Supply chains

    Because of supply chain issues, customers now must wait for order fulfillment, pay more or accept substitutions.

    • How it was: Several vendors knew what your client needed and competed to provide it. Your client could play them off against each other and beat down the price. Just-in-time delivery and free shipping were the norm.
    • How it’s different:  Many inputs your client uses came from overseas. Factories may be back in business, but shipping costs ballooned in the meantime. These costs are being passed on to the customer, your client. They will need to line up alternate suppliers closer to home.

    4. Business taxes

    This is your specialty. You help your client pay only the amount they need to pay to different levels of government.

    • How it was: Your client put aside money for payroll taxes and property taxes. You kept them current with their filings. The tax code had stayed the same for a while. You helped them take advantage of incentives the government offered.
    • How it’s different: The government handed out a lot of money during the pandemic. They will look at the Paycheck Protection Program (PPP) loans that were granted, expect repayment in some situations but also work to track down cheaters. (Your client should be safe.) The government will find ways to raise taxes on businesses.

    5. Price competition

    If your client owns a restaurant, they endured a long period of closure. Once they reopened, they might have pushed prices up and blamed inflation.

    • How it was: Your client knew what their competitors were charging and was able to align their cost of inputs plus pricing to make some profit. If prices rose, they might have absorbed those costs for a while to prevent the loss of customers.
    • How it’s different: This time it’s different: Your client is getting hit by rising wages, energy costs, shipping costs and raw material costs. Prices have not leveled off. Customers have expected prices to rise but are pushing back or buying less. Fortunately, online shopping has opened the door to your client’s market to the whole world.  Are they taking advantage of this opportunity?

    6. Inflation

    It has been low for years. We got used to 2-percent inflation. Unfortunately, nothing lasts forever. 

    • How it was: When inflation was 2 percent or less, prices remained stable. Wages did not increase that much. The cost to borrow was low. Unfortunately, so were guaranteed interest rates on savings.
    • How it’s different: Your client’s labor costs will need to at least keep up with inflation, otherwise they will lose employees. They will need to determine what level of price increases they can pass along to customers without large-scale defections. They will need to determine how much of the cost increases they can absorb and for how long.

    7. Interest rates

    This cost was low. Borrowing was cheap. Banks liked to lend at variable rates because it reduced their risk. They made money on the spread.

    • How it was: Your client was fine with variable-rate debt because interest rates were low. They might have borrowed aggressively.
    • How it’s different: No one knows how high interest rates will go or how long rate increases will continue. Variable-rate debt is an open-ended problem for your client. They should convert variable-rate debt to fixed-rate debt as quickly as possible. Ideally, they should pay it off, but that might not be possible.

    8. Retaining customers

    Whenever prices increase, your client loses customers to competitors. People become price conscious.

    • How it was: Your client’s business probably has or had a core group of loyal clients. However, some clients probably left when money got tight. While some may have returned when lockdown ended, many still have not.
    • How it’s different: Your client needs to absorb some price increases to retain customers or develop a loyalty rewards program that incentivizes them to shop at their store. Otherwise, if price increases are passed directly to consumers, they will shop around for better prices.

    Your business-owning client has endured a couple of very difficult years. Unfortunately, it is probably going to get a lot harder because of inflation. They need your business planning expertise to develop a strategy to move forward.

    This blog was originally published as a column on AccountingWEB and can be read here. It is republished with permission.  

  • 5 Trends Impacting Today’s Accounting Professionals

    by Biley Kakou, Reckitt | Apr 27, 2022

    The accounting profession is the beating heart of the business world. With a dynamic global business environment, one may ask how this wind of globalization will impact the profession and accountants' everyday functions. 

    Here are five key trends for today’s accounting professionals to incorporate:

    1. Understand tech’s growing influence. The accounting profession is transitioning from a manual to a more automated environment with the increased usage of artificial intelligence (AI) and blockchain. Some accounting tasks could be fully automated, such as the sample selections process in auditing. The availability of data is also pushing the industry toward becoming more data-analytics driven with tools such as Power BI, Tableau (visualization) and SQL. Technological advancements will contribute to the efficiency and effectiveness of performing accounting duties overall.
    2. Become a “global accountant” by focusing more on environmental, social and governance (ESG). The pursuit of a cost-efficient business model has opened the world to accounting professionals. Between the developed (e.g., U.S., Germany, China) and emerging (e.g., India, Brazil) economies, business operations are intertwined and dependent upon each other. This means that accountants must put an emphasis on becoming “global accountants,” if necessary, who focus on the emotional quotient as well as soft skills. We must focus on cultural awareness as many businesses today operate in multiple countries and on several continents. Being knowledgeable with respect to culture, communication, the environment in other countries, a client’s social influence and corporate governance should become as much as a priority as technical accounting. Most accountants will be expected to have some sort of expertise in ESG as sustainability becomes a global priority for the planet.
    3. Counteract the decline in enrollment and help make the industry attractive to younger generations. There must be a push from all current professionals to mentor high school students and to inspire the younger generations that this profession is truly a noble one. The need to ensure a safe level of accounting talent replenishment in the future is very primordial to the survival of the profession. The accounting profession can maximize the use of social media to reach and engage future generations.
    4. Stay current on future trends. COVID-19 has shown that every industry can evolve and adapt in the face of adversity. Work-from-home measures were implemented to address the consequences of the pandemic. This move has prompted a shift in the job market and, as a result, candidates expect the work-from-home feature to be included in any new job offer. This means that accounting firms and companies must adapt to this demand to remain attractive to candidates. The reality is there is no need to be inflexible; with technological advancement, virtual meetings can be held from basically anywhere by using tools such as Microsoft Teams, Zoom, WebEx and the Metaverse. Data needed to complete applicable tasks can be accessed remotely from anywhere. Another aspect to think about is pay transparency and competitiveness; this can help in enhancing trust with potential hires. Diversity is also a key factor to consider if the profession wants to attract the best candidates in the future.
    5. Be flexible. The future of the accounting profession will be determined by how flexible and how adaptable it is to the dynamic business environment. The global accountant must always remain informed to anticipate and incorporate the future trends into his or her short- and long-term strategic planning.
  • CEO Compass - Spring 2022

    by Ralph Albert Thomas, CPA (DC), CGMA | NJCPA CEO and Executive Director | Apr 06, 2022

    It's time to take stock, reconnect and find the way forward

    It's been two years since the pandemic gripped our world, but with spring upon us, we’re seeing glimmers of hope. In New Jersey, the public health emergency has ended, the mask mandates in our schools have disappeared and a constant sense of foreboding about the pandemic has been lifted enough that we can look forward to events with our family and friends. While many challenges must still be met by our state, nation and world, it’s important to reconnect with one another in meaningful ways.

    This is why it’s a good time to bring up our NJCPA Convention & Expo — this year’s theme is “The Way Forward: Transform. Innovate. Grow.” We are excited to be back at the Borgata in Atlantic City, June 14-17. The Convention has always been THE forum for bringing you and your colleagues together and providing access to top-notch leadership training, up-to-the-minute professional information and networking opportunities — all in all a fun, relaxed environment. 

    We want you to join us and are excited to tell you about our featured speakers:

    • Susan O’Malley, the first female president of a professional sports franchise, will share leadership and life lessons.
    • Jim Bourke, director of firm technology and managing director of advisory services at Withum, will address the transformation of the profession.
    • Dr. Kecia Williams Smith, director of the Master of Accountancy program at North Carolina A&T State University, will talk about how we can move forward together.
    • Donny Shimamoto, founder of IntrapriseTechKnowlogies, will show us how to craft an accounting innovation strategy.
    • Gene Marks, columnist, author and owner of the Marks Group, will share strategies and actions to increase profitability.
    • G. Scott Clemons, chief investment strategist at Brown Brothers Harriman & Co., will provide a national economic outlook.

    The NJCPA itself is embracing the way forward as we look at where we are as an organization, the issues facing the profession and how we can best serve you. 

    As I’ve mentioned previously, the profession has a pipeline problem. The NJCPA Board of Trustees is addressing this challenge by exploring a new membership category for graduates as they embark on their careers before passing the CPA Exam and becoming licensed. This new category would serve as a bridge between student membership and full CPA membership, enabling graduates and young professionals to learn and network with more experienced peers while advancing their careers.

    By allowing graduates and young professionals to maintain their membership in the Society at a low cost (free the first year for graduating students), those individuals will remain plugged into the profession and continue to learn about the benefits of the CPA credential for as long as it takes (the average age of successful CPA Exam candidates is 29). We’ll share more information about this new category at the Convention and over the following months leading up to a bylaws vote in October.

    The last two years of our lives have commonly been referred to as a “collective trauma.”  Moving forward after any trauma depends in large part on both feeling heard and sharing common experiences. The NJCPA was created for some of those same reasons nearly 125 years ago — to make our members stronger, personally and professionally. We want you to leverage the full advantage of NJCPA membership, develop your professional skills and help you do your job better. So, stay connected. As always, please let us know your thoughts at feedback@njcpa.org.

  • 3 Tips for Negotiating Salary

    by Rachel Anevski, MAOB, PHR, SHRM-CP, Matters of Management, LLC | Mar 10, 2022

    You’ve just had a great final interview. You like the company as much as they like you. HR called and said to check your inbox, and there you find “The Offer.” The offer letter is complete with information such as your start date, where and who you will be reporting to, your official title, information on benefits and, of course, the presentation of salary. Unfortunately, the offered salary underwhelms you. You feel melancholy. You begin to question if they did like you as much you liked them, and you freeze. The process that occurs next likely sets the tone for your “incoming behavior” and establishes boundaries, expectations and professionalism.  

    Here is the perspective from the other side. HR is responsible for hiring people like you. Day in and day out, they are working with salary guides, hiring budgets and, ultimately, the authority to go up to a maximum per job opening. HR is working the numbers the moment they lay eyes on your resume. Some are so good that they can value your experience before making it to the pre-screening video chat. Keep in mind that the job of HR personnel is to stay under budget on all hires, which ultimately makes them excel at their role, so they have already developed a skill set that starts with the lowest possible offering in hopes that you will simply accept. 

    But now you know better. So how do you prepare in advance? Here are three ways to make sure you don’t lose sight of your value: 

    1. Set your minimum. Jobs usually have a range, and depending on the geographic location, number of employees and company revenue, this number is likely set. The only time it fluctuates is if a candidate is either missing some essential skills and the employer is desperate to hire or if the candidate is overqualified or brings a unique background to the company (a bonus candidate). Before the interview, do your homework on what the position pays by reviewing similar jobs in the market, checking salary databases or even asking your peers. Ask the interviewer how many candidates are being interviewed. or why they chose your resume. Even ask them to share the range for the position.  
    2. Tell them what you want and more! Most candidates are given this cookie-cutter question: “What is your salary requirement?” This is a perfect moment for you to announce your minimum… and add 10 percent. If you are working with a recruiter, your best bet is to defer to that recruiter and let them handle it. If not, and you know that you are the right candidate, feel confident with this number. It gives you immediate leverage. Once you announce your requirement, it is up to HR to negotiate with you instead of vice versa. They may say that your number is within range. If so, bravo! You’ve just given yourself a nice 10-percent increase. If they say, I’m sorry, we are looking to pay up to “X,” then you at least have the ability to adjust down to your own set minimum. If the range is below your set minimum, thank them for the interview and continue to look for opportunities. In other words, know your worth. 
    3. Don’t be afraid to decline. If a salary offer is given to you without prior discussion, you can choose to fight or flee. “Fighting” would look a lot like a dance between two professionals. You may want to consider the following responses:
    • “Thank you kindly for the offer of $80,000. However, with my years of experience, my last role at (insert previous company here), I cannot accept this offer unless it is re-presented at a base salary of $85,000. Would you kindly reconsider and get back to me?”
    • “I appreciate the offer, and I would love to accept; however, I was expecting this role to pay between $85,000 and $95,000 per year. As such, is there any room in the budget to increase the base pay?”
    • “I am excited to begin working at (company name). However, I am concerned that the compensation presented will not allow me to truly engage in the workplace experience. Is there any wiggle room in the offer? Are there any additional opportunities for compensation enhancement within this role?” 

    The truth is, if you don’t ask, you will never know.  

    Many negotiations take place before the start date. These conversations are expected from a majority of new hires. While I would love to say that there is an equal ratio of men to women in terms of negotiations; unfortunately, this is not the case. Considerably fewer women negotiate their salary before taking a position; this has been expressed frequently as an underlying issue in pay equity. Negotiating your salary from the onset of a new relationship exemplifies a level of business acumen and confidence. In a worst-case scenario, you find out that you might not be suitable for the company, and in a best-case scenario, you have scored a great job and just stood up for yourself in a way that can help shape your financial future positively.  

  • NetWeaving – A Softer Approach to Networking

    by Eileen Monesson, CPC, MBA, PRCounts LLC | Mar 04, 2022

    Most people who attend networking functions are there for one reason — to promote themselves and their business. They go into the function looking for “What’s in it for me?”  This focus results in individuals using the opportunity to sell themselves and not developing a relationship based on trust.

    Instead, the “netweaving” concept, developed by Bob Littell of NetWeaving International, focuses on helping others and can easily be applied to CPAs trying to grow their network or business clients. Rather than looking for “What’s in it for me?” the NetWeaver, as he calls it, looks at “what’s in it for them.” A skilled NetWeaver is constantly on the lookout for ways to bring people together and to help people locate resources to meet their needs. NetWeavers act without regard for what they will receive in return.

    Littell developed two key elements of NetWeaving. The first is learning to become a Strategic Connector of others — putting people together in win-win relationships — without gaining from the relationship. The second element of NetWeaving is learning how to position yourself as a Strategic Resource for others — or the “go to” person for getting something accomplished. Sometimes this means that you will be the resource provider. Other times it will mean that you will provide introductions from your Trusted Resource Network — a broad group of experts in diverse fields who have agreed to be a member of your network in exchange for you agreeing to be a part of theirs. 

    Instead of spending time talking about them, the NetWeaver will ask high-gain questions to discover information about another person. For example:

    • How do you create revenue in your business?
    • What does your best prospect look like?
    • Tell me the story of how you landed your best client or customer?
    • What are the strategic differentiators that make you unique?
    • Who are the three or four people you would like to meet?

    When communicating with other people, the NetWeaver is looking to determine:

    • Is there someone I know who would benefit from knowing or meeting this person?
    • Could this person provide information and/or resources to someone else I know?
    • Has this person impressed me so much that I need to get to know them better, and if they continue to impress me with their exceptional value, should I make them part of my Trusted Referral Network?

    The four levels of giving referrals in NetWeaving are:

    1. Loaning your good name. Allowing someone to use your good name as a means of entry.
    2. Loaning your good name plus a written introduction. Sending an email or a personal letter explaining why you think the two people would benefit from meeting, as well as a testimonial.
    3. Loaning your good name, plus a written and telephone introduction. Following up to further validate the importance of the person’s worth and the value of meeting the other person. 
    4. Hosting the introduction. Hosting an in-person or virtual meeting and facilitating a discussion as to why each person will benefit from working together.

    Netweaving is a softer approach to networking because it eliminates the need to “sell.” Instead, you are helping someone out and, in doing so, providing real value to that person as well as to yourself.

  • The Multiple Benefits of Giving Back to the Community

    by John M. Winn and Amy Wardrop, Deloitte & Touche LLP | Mar 01, 2022

    Given the recent events and changes in the world, the value of giving back has become increasingly important. As we continue to live though the COVID-19 pandemic, many organizations have been operating on a completely virtual basis, while others are still trying to navigate the right balance of being in-person versus virtual. This can present many challenges for an organization and its employees to get involved in community, mentoring, and diversity, equity and inclusion (DEI) activities. However, the value of these activities can be vital to an organization. Here are some potential benefits to getting employees involved:

    • When your current employees are involved with activities that benefit others and help to pass along knowledge, it can provide a sense of well-being and comradery. It can also provide networking opportunities across departments that may not otherwise interact.
    • Getting involved can create a positive work environment, which may retain employees. The current job market has been extremely competitive resulting in many people changing jobs and, at times, changing their overall career path. This can present challenges for organizations to retain and attract talent. Getting your organization involved in community, mentoring and DEI activities is an investment in people. It is a great way to demonstrate your organization’s values and show the community some of the benefits of being part of your organization.
    • Professionals can step away from their daily job responsibilities for a few hours, get energized by the connections and create memories. One way that Deloitte is involved in these initiatives is through the Big Brothers Big Sisters of Coastal & Northern New Jersey workplace mentoring program, which coincides with the school year and exposes students to local businesses where employees volunteer. Through bi-weekly sessions, employees provide support, friendship and explore topics such as decision-making, conflict resolution, self-esteem, long-term life planning, job shadowing, workplace diversity, and college and career preparedness. Our professionals have enjoyed both the contributions as mentors and being “Bigs” over the years. The program has been a success for several years.

    Based on our experiences with community, mentoring and DEI activities, we encourage you to consider what types of initiatives your organization has or may get involved in. There are many benefits to these types of programs! For more information about Big Brothers Big Sisters of Coastal & Northern New Jersey, please visit https://mentornj.org/



    This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

    As used in this document, “Deloitte” means Deloitte & Touche LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of our legal structure. Certain services may not be available to attest clients under the rules and regulations of public accounting.

    Copyright © 2022 Deloitte Development LLC. All rights reserved.

  • Tax versus Audit versus Advisory Services – Where to Take Your Business

    by Richard P. Higgins, CPA, McCarthy & Company, PC | Feb 24, 2022

    A CPA firm, like any business, should always have its eyes on the horizon — looking at what’s next for its clients and its future. This often includes expanding the firm’s services or restructuring existing ones. There are several major categories of services in the accounting industry — tax, audit and advisory — and each has its own benefits.

    Tax

    Traditionally, tax planning and preparation services have been significant contributors to the work of CPA firms, but are they the most productive services?

    Pros:

    • Everyone must file taxes. Taxes are a constant; CPA firms review the tax complexity of each client and evaluate tax credits and opportunities. Offering these tax services to individuals and businesses annually provides a steady source of income for a firm.
    • It’s the least expensive service. Unlike advisory services, taxes are formulaic, and new tax software has streamlined the process significantly. This is more cost effective for clients and less intensive for the firm’s staff. 
    Cons: 
    • It only happens a few times a year. Most people and businesses only file their taxes once or twice a year. This leaves little room to develop the necessary relationships with clients to ensure their return.
    • The market is shrinking. Tax software companies are marketing more types of taxes as DIY, shrinking the need to go through a firm to file. This makes it harder to compete in the market.

    Takeaway: Tax services are a great place to build upon for emerging firms, but they don’t present much added value if the firm is already established and looking to grow.

    Audit

    Like taxes, audits have traditionally served as a primary source of revenue for CPA firms. This is where the most value can be added for a firm that is considering how to develop its presence in a competitive market.

    Pros:

    • It’s cost efficient. Assurance services are formulaic in nature, making them cost-efficient. 
    • It facilitates multi-service clients. While assurance services require a firm to be independent, if different teams are doing work, these clients can also become tax or advisory clients, building a stronger relationship. 
    • It’s required. Audits are required for many different businesses and business transactions, making them a consistent source of income for a firm. 

    Cons: 

    • It comes with risk to the firm. When a firm executes an audit for a business, it creates a level of liability to the firm. If the audit was part of a loan process and that business defaults, the firm could be held liable to the extent that lenders or other entities relied on the accuracy of their findings. 
    • It’s a transactional service. Like taxes, audits are not an ongoing service. They are executed annually or semi-annually, leaving little to no added value for the firm once they are completed.

    Takeaway:Assurance services can be a beneficial addition for clients, but they do pose risks. When considering adding them, it’s important to understand the tradeoffs and make a decision that reflects the firm’s goals and needs.

    Advisory

    Advisory is usually added to established firms that are looking to expand. While these services require a great deal of maintenance, the added value can be worth it.

    Pros:

    • It creates loyal customers. Because advisory generally is an ongoing engagement rather than a one-time, transactional service, the primary benefit is the door it opens to creating long-term relationships with clients. Relationships create loyal customers, and loyal customers create a sustainable revenue source.
    • It creates more-valuable clients. Advisory clients often become tax or assurance clients in other firm departments — increasing their overall value as clients.
    • There’s added value throughout the process. Being a client’s advisor often puts the CPA in the driver’s seat to streamline processes for interacting with other departments in the firm. If a CPA is helping clients prepare statements throughout the year, there will be less clean up when it comes time to file or submit for an audit.

    Cons:

    • It can be expensive and time-consuming. Landing an advisory client can take a lot of time and effort. The high-touch nature of the relationship can strain a firm’s team if the adequate time and resources are not allocated to complete the assessment.

    Takeaway: Advisory services may be more time-consuming than others, but they can provide your firm with sustainable growth over the years.

    Looking Toward the Future

    A key factor in planning a firm’s future is evaluating where it is today. Start with an analysis of the current operations and work from there to determine if and how to modify or expand services.

    It’s important to target the efforts towards remaining cost effective and up to date with current technologies to stay competitive in the market and show clients the firm is committed to growth and moving forward together.

  • 5 Considerations When Choosing Public Versus Private Accounting

    by Biley Kakou, Topcon America Corporation | Feb 11, 2022

    The accounting profession is vast when it comes to job choices — accountants can work in public practice or the private or corporate sector, for governmental/nonprofit organizations or in academia. But what motivates one to choose public over private or vice versa? Which aspects of each appeal to jobs seekers in order to prioritize one versus the other? Here are five considerations:

    1. Exposure to different aspects of accounting. Public accounting can provide the opportunity to work across multiple industries. During my public accounting years, I realized that I like the manufacturing and distribution industry. I have had colleagues who realized that their niche was financial services. Private accounting can also provide some great exposure, but it will be limited to the industry in which the corporation operates and cyclical daily/monthly accounting tasks. Accounting skills obtained within a specific private industry can be transferrable.
    2. Compensation. It’s no secret that, coming out of college, public accounting compensates more than private accounting. The raises are generally also better depending on how well you perform. Many graduates tend to prioritize a high-paying job so to provide some breathing room while addressing their debt-to-equity ratio. In private accounting, despite the starting salary being lower, there are future opportunities for significant base salary increase through promotion or a lateral move to another company within the same industry.
    3. The level of experience. In public accounting, you can get experience being exposed to various industries (financial services, manufacturing and distribution, food, retirement plans etc.), running meetings, managing teams, cross-organization collaboration, mentorship (both upward and downward), presenting and becoming an expert within your respective field. In private accounting, one can delve deeply into the specific industry the company is in.
    4. Work-life balance. Working in public accounting typically requires long hours, lots of travel and a challenging work-life balance as opposed to private accounting, where the hours are set and the increased work hours are seasonal (e.g., during month-end close, year-end close). I must add that, given the fact that we have been in the middle of a pandemic for more than two years, remote work is being offered by more and more businesses. That can help contribute to some sort of work-life balance.
    5. Know your end goal. The answer to this question will determine your choice of a career in public or private accounting. If your goal is to make partner/director and become a leader of a business segment, then public accounting should be your choice. If your goal is to work for a company and contribute to the operation and success of that company, then private is for you. One can also combine both public and private by starting in one and switching. I wanted experience in technical accounting, managing, mentoring and participating in business meetings, so I chose to start in public accounting. I spent four years learning the craft and, after I had reached my goals, I transitioned into private where I combined my expertise acquired in manufacturing and distribution with internal audit.

    There is no one-size-fits-all formula; choosing a career in public versus private accounting is based on many factors. The key determinants are to know yourself, what motivates you and what your short- and long-term goals are. Once you have enough self-awareness, you can make a choice. If you do not feel like you made the right choice, then reevaluate and make some adjustments. Most importantly, do not be afraid to fail, and do not embrace the easy way out; both are recipes for disaster in your professional and personal life. 

  • 5 Ways to Embrace DEI in Your Recruitment and Retention Strategy

    by Sandy Niespodzianski, USI Affinity | Feb 02, 2022

    More employers have come to embrace diversity, equity and inclusion (DEI) initiatives as a way to improve workplace culture and demonstrate they value their employees as people, not just workers. A 2021 Harvard Business Review report found that 65 percent of U.S. executives say DEI is a high strategic priority, and organizations report multiple organizational benefits related to their DEI work, including increased employee engagement, innovation and success in recruitment and retention of employees. Additional studies suggest that taking the right actions to improve DEI can also lead to better financial outcomes for the organization.

    There are many opportunities for employers to make small adjustments with big impact, particularly in employee benefits, programs and policies, and these adjustments may be easier and less expensive than you’d think. These include:

    • Pathways to parenthood: family-forming benefits. Many health plans cover some form of fertility treatment, but the scope of treatment options may inadvertently exclude certain plan members and family structures, such as transgender individuals, same-sex couples or single individuals, as well as members in need of donor tissue and/or looking to preserve fertility. Making changes to the types of treatment covered by the plan can greatly expand access to these services and demonstrate your commitment to DEI.
    • Healthcare access. People from some racial and ethnic minority groups continue to face multiple barriers to accessing healthcare, such as inadequate insurance, proximity to care, access to childcare or the ability to take time off from work, according to the CDC. Social determinants of health — conditions in the places where people live, learn, work, play and worship that affect a wide range of health risks and outcomes — have historically prevented certain groups from equal access to care. Taking steps to ensure employees have just and fair opportunities to be as healthy as possible may help reduce their financial burdens and help reduce overall health plan costs.
    • Financial wellness. Benefits and programs to support the financial well-being of your employees signal that you value and support them and their needs. Helping employees address their financial concerns can also help increase engagement and reduce absenteeism and presenteeism.
    • Retirement. A 2020 report from the Federal Reserve found that among middle-aged families (age 35 to 54), only 44 percent of Black families and 28 percent of Latinx families have at least one retirement account, compared to 65 percent of white families. Addressing the importance of retirement, presented in a meaningful way to employees, can help bolster retirement readiness. For example, use a custom-tailored approach to communicate financial wellness to different employee groups.
    • Policies and communication. Expanding policy offerings and eligibility beyond what’s required by law is an easy and often low- or no-cost way to demonstrate your commitment to increasing DEI within your workplace. For example, adjust time-off policies to include a broader range of reasons so that more employees can better manage work/life responsibilities, and/or update existing employee handbooks, policies and communications with more gender-neutral language. Training your HR and benefits admin employees, as well as people managers, on how to address employee questions and concerns in an inclusive manner can also help foster more open communication and better understanding.

    Work with your benefits providers and/or third-party administrator to determine what coverages, services and solutions may already be available to employees, or programs to enhance or expand. Employers may also choose to engage third-party solutions or service providers to address needs not currently being met.

     

  • Choosing the Right Succession Plan for Your Client

    by Bryce Sanders, Perceptive Business Solutions, Inc. | Feb 01, 2022

    Your business-owning clients have nightmares, and as an accounting professional who cares about them, you do, too. But here’s a nightmare scenario your business-owning client might not have considered: Let’s say they own a business they have spent decades building up, and the value of the business represents the majority of their wealth. No one else in the family works because the business provides the owner with a good enough income. The business has weathered the peaks and valleys of economic cycles; however, because of the pandemic, it is now struggling. 

    If the business owner dies, staff may continue to operate the business on a day-to-day basis. But if word spreads that the owner is gone and clients with outstanding invoices don’t pay, the business will develop cash-flow problems. Meanwhile, if the family no longer has the owner’s paycheck coming in to pay household expenses and they have no interest in running the business, they may look for a quick sale. If the business is sold for a fraction of its value under ideal conditions, the family will suffer, and longtime employees will lose their jobs.

    This scenario happened because there was no business succession plan in place. Here are some options for your business-owning client who needs a succession plan:

    1. Sell the business to employees

    Your client may decide to sell the business to their employees. This involves setting up an employee stock ownership plan (ESOP). The first step is setting up an ESOP trust. The company either contributes cash to the trust or borrows money from a bank. This cash is used to buy all or some of the shares of stock belonging to the owner. They have effectively sold the business (or a portion) to the ESOP trust. The business is valued independently. Assuming cash from the firm was used (and no debt), shares are allocated to company employees on a fair basis. These shares are part of the employee’s 401(k) plan. The employees’ ownership of the shares vests over time, and employees leaving the company are cashed out. This requires the ESOP trust to have cash on hand to buy back those shares from departing employees.

    The owner can still be involved in running the business in this situation if they still retain some shares. The employee-owned company will have a board of directors that includes employee shareholders. There are significant tax advantages for the owner, company and employees. For example, if the employees’ shares are held within their 401(k) plans, they are in a tax-deferred environment.  

    How accountants can add value: The business needs to be independently valued, the ESOP trust needs to be established, the funding and structure need to be determined, the trust needs to be administered and tax reporting needs to be addressed.

    2. Merge the business

    Your client may be planning to retire and needs an exit strategy. Perhaps another business owner in a similar or complimentary field knows your client, and they get along well. Your client may decide to merge the two businesses, taking on a percentage ownership of the newly combined business. Your client can still be active in the business, and both businesses are independently valued to arrive at a realistic value for the combined new entity. Responsibilities are defined, and the business owner must live up to his or her obligations.  

    If the business owner dies, the family or the owner’s estate owns a stake in the combined company, which is an ongoing business. The expectation is the other partner(s) would buy them out.

    How accountants can add value: The business needs to be valued, a good merger partner needs to be found and that business needs valuation, too. The terms of the merger agreement need to be set, and the responsibilities of each party need to be spelled out.

    3. Buy key person insurance

    What if your business owner has partners? What if the business doesn’t generate enough cash flow or have large enough reserves to easily buy out a partner? One solution is to buy a life insurance policy for each partner or owner. This is called key person insurance. These policies are owned by the business, and the business pays the premiums. When a death occurs, the policy pays the death benefit to the business, allowing the business to compensate the deceased partner’s estate for the value of their shares.

    How accountants can add value: This is primarily an insurance purchase, yet the accountant is involved because of their fiduciary role. As an accountant, you can determine if this is the best and most cost-effective coverage and whether the policy should be cancelled.

    4. Sell the business to a buyer

    This takes advance planning. The business owner makes a conscious decision to sell, understanding they will be involved after the sale and paid over time. The business will need to be in good shape. A buyer must be found, either through a business broker or personal connections, and they will agree on terms. In many cases, the value of the business is in the customer base and the revenue they provide. The business owner may be involved for a few years, transitioning the clientele into the new business. Payments to the owner are made based on how well this has been accomplished.

    There are instances in which a sale can happen more quickly and the owner can be out of the picture after the sale. If your client owns an oil well, for example, the value of the business is primarily the value of the oil underground. If your client owns a fast-food restaurant at a busy airport, they are doing a volume-based business, so the owner’s presence would have little effect on the business’s profitability. When there’s goodwill involved and the customer base needs to transition, the owner’s involvement and the payment period will be prolonged.

    How accountants can add value: The business needs to be valued, a buyer needs to be found, the terms of the sale need to be negotiated, the payment schedule must be defined and the responsibilities of each party need to be spelled out.  

    Your business-owning client needs a succession plan. The alternative can be a nightmare scenario.

    This blog was originally published as a column on AccountingWEB and can be read in its entirety here.

  • How the Pandemic Has Changed What Candidates Are Looking for

    by Marc Peterson, Wiss | Jan 24, 2022

    Hiring needs have changed. It has become a bigger challenge to not only identify talent and get them on board, but also to retain top talent within the market. Before the pandemic in 2017 and 2018, salary was one of the main priorities, but there has been a significant change in the past two years. Candidates today are looking for a variety of items.

    Candidate Asks

    • Flexible schedules and/or work-from-home opportunities. Are they hybrid, 100 percent remote or 100 percent on site? Companies are using a hybrid method in the downtrend of the pandemic, but it depends on the industry. Service sectors are tending to be more remote.
    • Better benefits. How much is being covered? Are employers looking to increase what they contribute? Candidates are not only concerned about the appropriate health care for themselves but also for their families.
    • Better salaries. They want to be able to grow in a position.
    • Clear expectations of their roles. With the loss of jobs in 2020, people had to take on additional roles since they no longer had two or three other people to help support that role. Today, candidates want as much detail as possible about a job; they want to understand going into a job what is going to be expected of them. If an incoming candidate is supposed to do A, B and C and now they are doing everything through X, Y and Z, they won’t be happy.
    • Versatility in their position. Accounting is a perfect example: A recent grad starts out in audit and does a one-year tenure and expresses desire to move into tax. It’s not the easiest to accomplish, but being able to offer some level of versatility is becoming more valuable.
    • Growth opportunities. People do not want to spend three or four years in a row without having the ability to move up to the next level.
    • Mission-focused roles. Having a clear mission statement on your website helps. How much does an organization participate in philanthropic efforts?
    • DEI initiatives. They want to see diversity, equity and inclusion. Policies that include a diverse candidate pool are important.
    • Stability. Nobody wants to move into a role that may not be there in six months.
    • Reputation of their employer within the market. If someone’s reputation on Glassdoor says the work environment is not great, it does have some level of impact.

    The Hiring Process

    For many organizations, the overall hiring process needs to shrink. If an organization can become very efficient with their hiring process, they will see more success with landing the candidate they want. Having seven rounds of interviews, for example, is not acceptable. In the current market, organizations are attempting to narrow down their hiring needs to exactly what they require, even if that means filling only one open position out of a slew of open slots available.

    Employers are also somewhat disadvantaged today in New York and New Jersey due to the lack of the ability to compare salaries from previous jobs. Most companies today will ask what you are targeting in terms of salary and not what are you currently earning.

    Employers can improve the hiring process to assist with obtaining the best candidates by implementing the following procedures:

    • Defining roles clearly and ensure both hiring managers and talent acquisition professionals are on the same page
    • Reviewing candidate experience
    • Having a more efficient interview processes
    • Leveraging technology to conduct interviews
    • Offering feedback and/or closing the loop
    • Making educated but quicker decisions for open roles

    Unconscious Bias

    It’s important to avoid language that has an unconscious gender bias in job descriptions. This is particularly the case when thinking about DEI. Similarly, it’s important to have all company representatives exhibit a positive attitude about the company and no biases through their actions and words when interviewing a potential candidate.

    We are in a revolving job market. There is a need to be transparent about roles much more so now than pre-pandemic. Candidates are also much more aware of how to obtain information about jobs more so than in the past.

    Marc Peterson first presented this information at an NJCPA Business & Industry Professionals Interest Group meeting earlier this month. Learn more about the B&I interest group at njcpa.org/BIP

  • A Blockchain Analogy for CPAs

    by Susan Firriolo, CPA, CISA, Pet Rescue 990 Project | Jan 18, 2022

    Think of blockchain as a huge group of obsessed accountants who want to perfectly keep track of everything. The group has a million complicated rules they must follow to make sure each accountant records the same thing at the same time. After every accountant is satisfied, they all have an exact copy of each record — the records are filed in a see-through drawer with a combination. The combination to the drawer is scrambled. The scrambled combination is put into the next drawer along with the new records from the second day. Since the combination to the first drawer was scrambled, it will never be able to open that drawer again. The same thing happens with the second drawer — the combination is scrambled, put into the third drawer and so on. There are an unlimited number of drawers in each file cabinet. Because the drawers are transparent, clients can view what was done. For instance, Joe Client can view the file cabinet and see when his bank reconciliation was done.

    In reality, a blockchain is an intricate technology designed to securely record transactions. There are various blockchain platforms running different systems. All blockchains work with specialized machines called nodes, which are connected to each other and work together exchanging, storing and securing information. Software specific to the blockchain network runs on the nodes. 

    Types of Blockchains

    There are public and private blockchains, with benefits to both. Public blockchains are available to anyone and provide privacy to participants. Bitcoin and Ethereum are examples of public blockchains. Bitcoin uses a mining and proof of work (PoW) system to validate cryptocurrency transactions, while Ethereum uses a mining and proof of stake (PoS) system.

    In a private blockchain, every user is known and has specific permissions such as viewing, entering and approving data. Walmart uses a private blockchain system which allows suppliers to add certificates of authenticity to the network making it easier for the company to trace the origin of a product. 

    While blockchain technology is very complex, fortunately users do not have to know how the blockchain works to participate in it. Similar to Venmo and PayPal, the user can transfer money to someone without knowing what happens in the background.    

  • 5 Tips to Find an Accounting Job After Graduation

    by Biley Kakou, Topcon America Corporation | Dec 24, 2021

    The accounting industry has experienced a significant increase in demand over the last five years and has even more openings amid the pandemic. But with so many accounting graduates competing for the same jobs, how do you differentiate yourself to effectively get an offer prior to graduation?

    Here are five tips to help:

    1. Strategize and be adaptable. Job searching can be a laborious process. Strategy and adaptability can give you an edge. This process should start in your sophomore year in college. The AICPA 2019 Trends Analysis on supply of accounting graduates and the demand for public accounting recruits noted that between 2012 and 2018, on average, 80,000 students graduated yearly with an accounting degree. It also noted that, on average, 38,000 graduates were hired by accounting firms. With this hiring rate of only 50 percent of yearly graduates by accounting firms, what separates you from everyone else? Know your strengths and weaknesses. Familiarize yourself with typical candidate profiles. You'll gain a better understanding of what the accounting industry is looking for.
    2. Know the size of the company you would like to work for. One of the first questions you should ask yourself is, who do I want to work for? Choices can include following:
      • The Big Four (EY, Deloitte, KPMG, and PWC)
      • Large, regional firms
      • Midsize firms
      • Small firms and sole proprietorships
      • Private companies
      If you decide on a Big Four, large or midsize firm, identify their candidate profile. In general, most accounting recruiters in these firms consider a good candidate as one with:
      • A strong GPA
      • An internship or work experience
      • Some volunteering
      • Progress made toward completing the CPA Exam
      It helps to do extensive research on companies and establish which corporate culture fits you best. But do know that once hired, you may work long hours. If you find that's not appealing, the last thing you want to do is to end up working for a company that does not suit you. There are many benefits to becoming an accountant, and being miserable certainly is not one of them.
    3. Join a professional association. After creating your plan, equip yourself with the tools necessary to succeed. For example, joining a professional organization such as the NJCPA or AICPA is the first step. If you know accounting is what you love, get involved with the NJCPA or any other professional association. I personally reaped the benefits of attending events like the NJCPA’s Career Night where you can find internships and full-time entry-level positions. I started my career in public accounting because I attended this event. I was able to connect with prospective employers and schedule interviews. Other accounting graduates have had the same success.
    4. Attend career fairs and reach out to your school's alumni network. Most universities host career fairs that can help you secure a job. You can also identify alumni who are currently working within the accounting profession. For example, my alma mater, Ramapo College, holds a roundtable every semester for students and alumni from different fields to meet, connect and network.

      The career center, available at each university, can help you prepare your resume, cover letter, find an internship and obtain an entry-level position. I found both of my internships and interviewed with several accounting firms during my senior year, utilizing my school’s career center.

      If, after all these steps, you still have difficulty securing a job, apply online through websites like Indeed, Monster and LinkedIn or directly through the respective companies’ website. Set goals for the number of applications that you want to send out daily or weekly. Five or 10 applications a week is standard.
    5. Make use of LinkedIn.  It has become a very important job search tool. If you do not have a LinkedIn profile, I strongly urge you to create one. Recruiters use the website to locate prospective candidates. Keep your profile and resume current and your profile picture professional. Remember that your resume and profile is your first introduction/impression to prospective employers. Make sure it represents you well.

      Don't underestimate the importance of social media. When used effectively, it has the potential to open doors. Many recruiters screen candidates by looking at their social media feeds. It is always imperative to demonstrate professionalism on these sites. One misstep could cost you a potential job offer.

    The mindset that you have going through a situation often determines the outcome. Stay positive and treat each interview as a new opportunity, not a continuation of rejection. Even if you had 10 unsuccessful interviews, treat the eleventh as a new opportunity. Even if you do not get the job, remember that you are still getting great experience from the interview process. Like riding a bicycle, the more you ride the better you become. A job search is a marathon, not a sprint. Avoid unnecessary comparison with your peers while going trough the process. I am a firm believer that everyone has his own destiny. Run your race. Everything will work out the way it is supposed to.

  • CEO Compass - Winter 2021/22

    by Ralph Albert Thomas, CPA (DC), CGMA | NJCPA CEO and Executive Director | Dec 22, 2021

    New Transitions, New Beginnings

    The year is drawing to a close, and between rushed trips to the mall and appearances at countless gatherings, in-person and virtual, it’s important to remember that the holidays are a perfect time to look ahead to the future and set goals for ourselves. In that spirit, we recently asked our members this question: Looking back on the last year, how have your career or business objectives changed?

    The responses from more than 700 CPAs and CPA candidates were revealing but not surprising. The two most frequently mentioned words were “retirement” and “clients.” Those members who are in position to retire are leaving their firms or companies, and those still working have too much to do and not enough staff to do it with.

    Respondents in public accounting and industry want to maintain a better work/life balance, showing a willingness to sacrifice career growth and leadership positions, or making job changes, to make that aspiration a reality. Firms are becoming more selective when taking on new clients and even reducing client lists and changing their pricing structures.

    While some of these changes may sound alarming, many of the responses actually represent positive steps forward for the profession. The pandemic immediately bred innovation such as remote work, flexible work schedules and increased use of technology. Public members have risen to the challenge and changed their business models to advise clients regarding their businesses rather than, as one member put it, “just being a tax compliance drone.” CPAs across the profession are just spending more time with their family.

    Clearly, this is a critical time of transition in the profession. As you work through your own challenges and opportunities, I want to assure you that the NJCPA will be here for you.

    The coming year will be one of transition and evolution for the NJCPA. Our Board of Trustees recognizes the impacts that pandemic and demographic trends will have on the Society and membership and is taking steps to address the situation.

    One area of focus is the front-end of the CPA pipeline. According to the most recent AICPA Trends Report — a comprehensive biennial report tracking the supply and demand of U.S. accounting graduates — the number of new CPA Exam candidates hit a 10-year low. And those declines were recorded before the COVID-19 pandemic turned our world upside down. The question needs to be asked: Is the profession producing enough new CPAs to replace professionals reaching retirement age in the next five to 10 years?

    The Board is focused on the NJCPA’s CPA Candidate membership category, recognizing that the greatest opportunity for bringing new candidates into the profession is to support graduates and young professionals who are still unsure about becoming a CPA. The Board will share more information about changes to the CPA Candidate category, as well as other proposed adjustments to the Society’s membership structure, this spring and summer.

    In closing, I want to thank you for your membership and involvement with the NJCPA. I encourage all of you to put away the stresses of the past 12 months and enjoy this charitable, pleasant time of year. As always, please let us know your thoughts at feedback@njcpa.org.

    Have a wonderful and safe holiday, and I look forward to connecting with you in 2022! In the meantime, please enjoy our annual holiday video.

  • Uncle Sam Dives into Crypto — Implications for CPAs

    by Kristina Kostovski, CPA, Traphagen CPAs & Wealth Advisors | Dec 13, 2021

    Bitcoin, the oldest and most popular cryptocurrency created in 2008, paved the way for thousands of different altcoins available on today’s market. Cryptocurrency quickly gained popularity as transactions could be performed quickly with no involvement of an intermediary to facilitate these transactions. Coupled with anonymity, transparency, worldwide use and access, crypto became a popular choice for remitting and receiving payments.

    Bitcoin’s first large price increase occurred in 2010; it jumped from less than a penny to eight cents. Celebrity endorsements inspired the world to jump into investing and trading cryptocurrency. The value popularity of cryptocurrency reached a high as Bitcoin broke $66,990.90 a coin on Nov.10, 2021. Crypto’s journey into the mainstream markets hit a milestone in October of 2021, when the first exchange-traded fund linked to bitcoin futures made its stock market debut; this allowed anyone to buy and sell a bitcoin-backed financial product on the stock market. ProShares, the Maryland-based company behind the ETF, saw its product top $1 billion in trading volume on its first day. However, what many have failed to recognize are the tax implications.

    Factoring in Taxes

    A required question on an individual’s 2020 1040 Schedule 1 was “At any time during [the tax year], did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?” This very question alluded to the IRS’s increased scrutiny of cryptocurrency transactions as its popularity grew. A taxable event occurs when a taxpayer trades cryptocurrency to fiat currency like the U.S. dollar, trades one cryptocurrency for another cryptocurrency, uses cryptocurrency to pay for goods and services or earns crypto as income.

    Capital gains will be realized when the crypto received is sold. The gain or loss will be the difference between the adjusted basis in the virtual currency and the fair market value (FMV) of the amount received in virtual currency. Because wash sale rules currently do not apply to crypto, all losses can be used to offset gains. If one regularly trades cryptocurrency, it may be beneficial to make a mark-to-market election, given the complexity and multitude of trades.

    Income generated from staking or mining crypto should be recognized as ordinary income. Simply put, mining crypto is the process of solving complex mathematical problems and using computing power to add new transactions to the blockchain. Despite mining income being subject to self-employment tax, the income is considered ordinary in nature and, therefore, it can be reported on schedule C where expenses may then be deducted. Staking crypto, on the other hand, is similar to keeping money in the bank and earning interest.

    In 2019 alone, the IRS issued more than 10,000 warning and action letters to non-compliant crypto investors. Although crypto exchanges may not issue 1099s to investors and traders, it is the individual’s responsibility to properly report these transactions on their tax return. Don’t leave it to Uncle Sam to determine your liability!

  • How Technology and COVID-19 Changed the Future of the Accounting Profession

    by Anand Madhusudanan, CPA, MST, and Sukhpreet Parmar, CPA, Citrin Cooperman | Dec 01, 2021

    The accounting profession has arguably become even more important and competitive during the pandemic. Changes on the legal and regulatory front make this field extremely challenging — forcing accountants to rely more on technology due to time constraints and demand accuracy. At the same time, younger CPAs are seeing huge shifts in the current business environment, creating an express lane to the future.

    Technology’s Impact

    Technological advancements have enabled business automation — and the ability to perform transactions electronically — at a much faster pace. As a result, accounting firms are investing in technologies that help them process large volumes of complex information quickly and with better accuracy. New technologies like artificial intelligence (AI) will enable accountants to shift from mundane tasks and routine functions to providing data-based, higher-value recommendations. Firms will still need a human workforce to manage technologies and ultimately review technological output.

    It is also a great time for accountants to use existing technologies. Technologies such as cloud-based software, client portals and Microsoft Teams have existed for a long time. Records are kept in soft copies in a cloud-based storage system like a client portal, where information can be accessed from anywhere, almost instantly. The client portal sends information electronically, saving valuable office space, reducing paper clutter and keeping retention policies intact.

    Not only have client portals streamlined daily operations, they have also improved the security of client information. Now clients can transmit their personal, sensitive and confidential information without the fear that it will get lost in the mail. The ease of sharing information electronically between clients and professionals is prompting widespread adoption, and it’s not going away.

    COVID’s Influence

    The COVID-19 pandemic has launched the profession much further into the future — especially for young people. While COVID-19 is a global tragedy and there is no question that it has had innumerable adverse effects, it has also given accountants a leg up, especially with respect to technology — both new and existing. Prior to the pandemic, CPAs were hesitant to use and place new technology in service, fearing disruptions in workflow and diminution in productivity and efficiency. However, being open and adapting to new technology is now a necessity. Millennials are more likely to be tech-savvy, and firms are looking to these young CPAs to help shape the future of this field. Consequently, younger CPAs now have an opportunity to take advantage of the COVID-19 curveball to apply their tech knowledge to advance their careers.

    Millennials have long yearned to be experts in their respective fields and industries but have consistently been disadvantaged by their lack of experience. With the Paycheck Protection Program (PPP), Economic Injury Disaster Loan Program (EIDL) and payroll tax changes, it is the perfect time for younger CPAs to propel their careers.

    With new tax legislation and accounting updates coming out every day, clients and even partners with years of experience are seeking expertise. Younger CPAs can take advantage of this time by becoming go-to experts in EIDL and the PPP forgiveness process, and they can help understand new financial statement disclosures related to the COVID-19 pandemic.

    The tide has been turning for quite some time, changing the role of the accountant to business advisor. What has become clear now, more than ever, is that technology and automation is the future of the accounting profession.

    “Citrin Cooperman” is the brand under which Citrin Cooperman & Company, LLP, a licensed independent CPA firm, and Citrin Cooperman Advisors LLC serve clients’ business needs. The two firms operate as separate legal entities in an alternative practice structure.

  • 5 SEO Strategies for CPAs to Get Found Online

    by Becky Livingston, Penheel Marketing | Nov 03, 2021

    Search engine optimization (SEO) is the organic way that people find your company using a search engine, such as Google or Bing. Some of the more common U.S. accounting terms, according to Google’s keyword ranking tool for June 2019 through May 2020 include the following: accounting, CPA, accountant, bookkeeper, certified management accountant, CPA near me, tax preparation near me, QuickBooks Intuit and tax preparers.

    By using common terms on your website, the site competes with thousands of others for first-page ranking. It’s more effective to create the niche result you want to be found for rather than ask people to sift through the noise to find you.

    What can you do?

    Here are five SEO strategies you can begin using today to help people find your website tomorrow:

    1. Complete your free Google and Bing local business listing pages. Be sure to complete as many fields as possible, including your services and the industries you serve. Also include an interesting photo of your location or office to help it stand out. Remember to make the image file name your brand name and location, e.g., MyCPAFirm_NYC.jpg.
    2. Conduct keyword research to incorporate niche, industry and service line keywords into your website content, including headlines, URLs, image file names and text. See the bonus tip below.
    3. Work with an SEO professional and your website developer to ensure keywords are used throughout your site, including page URLs, description and keyword meta tag fields, image alt tags and H1 and H2 header tags. If you’re using WordPress, some effective SEO plugins include All In One SEO, SEO Press, Rank Math and WP Rocket. Find additional SEO tools in this post by WP Beginner.
    4. Contact your website and domain hosting providers to add an SSL certificate to the site. Creative Minds states, “If your site is being used to collect any sort of information on your visitors (name, address, credit card information, etc.), you’ll want to make sure you’re using SSL. Without it, your customers are at risk of having their information compromised.” Sites without an SSL certificate also have a hard time ranking on Google Search.
    5. Create monthly content themes that align with your business goals. Then post focused content onto your website. You can find a sample content calendar here.

    Bonus Tip

    When it comes to keyword ranking, there are a few things to keep in mind, including:

    • Create a shortlist (three to five phrases) of the main keywords you want to rank for all the time.
    • Identify your geographic region of focus. Interestingly, location does influence some top search terms. For example, “small business bookkeeping” may rank high in one location but not in another.
    • Consider common misspellings, such as “acountant,” acounting” or “bookeeping.”

    Quick-Hit SEO

    The above items take some time to complete. What can you do now that will have some impact? Here are some tips from Backlinko:

    • Check your site load time. Use Google’s Page Speed Insights, which tells you how to improve your page’s load time.
    • Link to great content on your site and other sites within existing posts or pages.
    • Repurpose content into different formats. For example, a blog list could become a video or infographic.
    • Leverage the firm’s brand name in the page’s title tag, e.g., 5 SEO Strategies to Get Found Online | NJCPA.

    How to Find Keywords

    Below are several free keyword planning tools to find the keyword phrases most people use for your skills, services or products.

    Now that you have these SEO tips, it’s time to revisit the most prominent pages on your site and ensure the right keywords are in place. Once it’s complete, remember to resubmit the website to the search engines. That step is free. Motley Fool outlines how to tackle that simple step.

     

  • The Value of Early CPA Exam and Licensure Discussions

    by Sarah L. O'Rourke, CPA, Rutgers Business School | Nov 01, 2021

    Many students don’t give significant thought to the CPA Exam or licensure until later in their college careers. Perhaps the CPA license becomes a blip on their radar during senior year. After all, most candidates can’t sit for the Exam until post-graduation. However, giving thought to the process in the early stages of education is crucial. A basic awareness of the requirements for the CPA Exam and licensure in the sophomore or junior year (as opposed to a first exposure in the senior year) can make a meaningful difference for students. 

    Planning is key for several reasons. As educators and employers, we can encourage our future CPAs to begin this journey as early as possible. Here are some general guidelines for students to follow:

    • Plan for specific state requirements. As an educator in New Jersey, I see many students graduate and subsequently begin careers in New Jersey. However, quite a few graduates will also find opportunities in New York, along with a desire to obtain a CPA license there. Why does that matter? Some candidates aren’t initially aware that requirements to sit for the Exam and obtain a license vary by state. New Jersey and New York are prime examples with their differences in education requirements. New Jersey requires 24 accounting credits to sit for the Exam, as well as for licensure. New York, on the other hand, only requires a handful of accounting courses to sit for the Exam itself — but requires 33 accounting credits to eventually become licensed.For students who intend to earn a license in New York, awareness of those necessary 33 accounting credits is essential. Realizing in your sophomore or junior year that an extra accounting elective is necessary is somewhat trivial. However, coming to that same realization in the second half of your senior year is inconvenient, to say the least. It’s not an insurmountable obstacle, but the situation itself is avoidable. Other states (such as Illinois and California) require coursework in ethics — again, not a problem if someone has planned for that requirement all along. The takeaway: for a smoother process, students must gather information on the state they want to work in as early as possible.
    • Do not feel intimidated by the CPA Exam, especially in light of the upcoming changes under the CPA Evolution initiative. As an educator, I am excited about the new model for licensure, but I’ll be the first to admit that I’m a bit intimidated myself! Early introduction to the Exam for future applicants can make all the difference.
    • Talk about the Exam with professors and employers.In my Advanced Accounting class, I incorporate practice CPA Exam questions into every class. We discuss approach and strategy. I don’t overdo it — it’s an Advanced Accounting class, not a review course. But the exposure, the discussion, the increasing familiarity of the questions — over time, that experience will provide future candidates with a certain level of comfort and confidence surrounding the Exam. They can do it. As educators and employers, we provide a space where candidates can learn about this next big challenge in their lives.
    • Take advantage of available resources. One great example is the free NJCPA student membership. Students should know what a valuable resource the NJCPA can be for them. The NJCPA website for potential CPAs is fantastic. The site provides very clear information on the Exam, licensure and so much more. For those considering licensure in a state other than New Jersey, similar state society and state board pages are available with these resources.

    My overall goal is for our students to have increased success on the CPA Exam — that they will head into that period of intense study feeling confident and well-prepared, knowing the CPA Exam is something they can tackle. Success on the Exam sets students up for a flourishing career as a licensed CPA. We can jump start the process by providing the next generation of CPAs with the proper tools — these helpful bits of information that will pave the way for much success.

  • How an Annual Mortgage Review Could Help Homeowners at Tax Time

    by Marc Demetriou, CLC, ChFC, CDLP, Guaranteed Rate Inc. | Oct 20, 2021

    With fall in full swing, this is a good time for homeowners to get an annual mortgage review and needs analysis. According to the Consumer Financial Protection Bureau (CFPB), knowing how home loans are calculated can help prospective homebuyers and current homeowners better understand their current or future mortgage loan options. Whether a homeowner is thinking about refinancing or purchasing a new property, having up-to-date mortgage data most certainly helps one revered group of professionals in particular — CPAs.

    Providing the IRS with accurate information on a home’s actual worth can make income tax preparation ahead of April 15 less painful for both the homeowner and their CPA. And with rates still hovering at record-low levels, it makes sense to review mortgage and rate options now. Based on the typical investment time horizon, homeowners should consider using the equity in their homes for one or more of the following financial options:

    • Cash-out refinance for college funding
    • Home renovations
    • Debt consolidation
    • Purchasing a second home or investment property
    • Converting to a shorter-term fixed or adjustable-rate mortgage (ARM) option

    The typical factors that go into a mortgage review are as follows:

    • Current interest rate
    • Current monthly payments
    • Mortgage insurance
    • Estimated value of home (with consultation with an appraiser)
    • Current mortgage product (fixed or ARM and what term)
    • Type of home: condo, single family or multi-family
    • Occupancy type: primary, second home or investment property
    • Approximate credit score
    • State in which the property is located

    The benefits of getting a mortgage review could include:

    • Lower monthly payments (savings, if any, vary based on consumer’s credit profile, interest rate availability and other factors)
    • Shorter loan term
    • Cash out or refinance option
    • Qualifying for another mortgage
    • Peace of mind

    Homeowners who are armed with straightforward and easy-to-understand information about their mortgage can make more-informed decisions on the best financial options that fit their needs.

    Learn more at rate.com/mdemetriou and at Guaranteed Rate's NJCPA member benefit provider page. 

  • The Real Impacts of Cyberattacks: What CPAs and Their Clients Should Know

    by Shekhar Somaiya, CPA, MBA, PMP, CSM, Equus Strategy, LLC | Oct 14, 2021

    October is National Cybersecurity Awareness Month. The FBI’s Internet Crime Report from March 2021 shows that the cost of cybercrimes reached $2.7 billion in 2020 alone. The top three crimes reported were phishing scams, non-payment/non-delivery scams and extortion. Victims lost the most money to business email compromise scams, romance and confidence schemes, and investment fraud.

    Notably, 2020 also saw the emergence of scams exploiting the COVID-19 pandemic. The Internet Crime Complaint Center (IC3) received more than 28,500 complaints related to COVID-19, with fraudsters targeting both businesses and individuals.

    Cyberattack Costs

    The following are some of the most obvious costs and those that can still have a big impact but remain hidden:

    Explicit (visible) costs:

    • Technical investigation
    • Customer breach notification
    • Post-breach customer protection
    • Regulatory compliance
    • Attorney fees and litigation
    • Improving cybersecurity going forward

    Hidden costs:

    • Increase in insurance premium, raising debt
    • Operational disruption/destruction impact
    • Loss of contract revenue
    • Impact on trade name
    • Loss of intellectual property stolen
    • Loss of customer trust and relationship
    • National security/impact to the economy

    Source: Deloitte Webinar -Quantifying Cyber Risk to Chart a More Secure Future

    Small Business Impact

    Information technology and high-speed Internet are great enablers of small business success, but with those benefits comes the need to guard against growing cyber threats. As larger companies take steps to secure their systems, less-secure small businesses are easier targets for cyber criminals. According to a recent Small Business Administration (SBA) survey, 88 percent of small business owners felt their business was vulnerable to a cyberattack. Yet many businesses can’t afford professional IT solutions, have limited time to devote to cybersecurity or don’t know where to begin. The National Cyber Security Alliance reports that 60 percent of small and midsize businesses that face a severe cyberattack go out of business within six months.

    CPAs can assist in keeping clients’ data safe. Implementing a security-first culture helps to keep a company secure. Here are some tips on how to keep small businesses safe from cyberattacks:

    • Learn how to protect your business by paying attention to cybersecurity training and tools.
    • Realize the threats that companies should expect in the hybrid working mode and how to prevent risks.
    • Understand how the importance of security has changed since COVID-19.
    • Recognize the most important steps to take when integrating security into a company’s DNA.
    • Know how Secure Software Development Lifecycle (SDLC) is being implemented by security experts in different industries and companies.

    Avoiding Threats

    Smart cybersecurity has a promising role to play in identifying, filtering, remediating and neutralizing cyber threats. By harnessing the smart automated enterprise tools such as artificial intelligence and machine learning, enterprises will be more readily able to meet future challenges.

    A cybersecurity risk assessment can identify where a business is vulnerable and help clients create a plan of action — which should include user training, guidance on securing email platforms and advice on protecting the business’s information assets.

    Best Practices

    The following best practices can be followed by both CPAs in their own organizations and at their small business clients:
     

    • Train employees on emails (a leading cause of data breaches for small businesses):
      • Spot a phishing email
      • Use good browsing practices
      • Avoid suspicious downloads
      • Create strong passwords
      • Protect sensitive customer and vendor information
      • Maintain good cyber hygiene
    • Use antivirus/antispyware software and keep it updated
    • Secure your networks
    • Use strong passwords
    • Implement multi-factor authentication
    • Protect sensitive data by:
      • Backing up data
      • Securing payment processing
      • Controlling physical access

    Additional Resources and Tools

    • Consider contracting for dedicated IT support.
    • The Federal Communications Commission (FCC) offers a cybersecurity planning tool to help you build a strategy based on your unique business needs.
    • The Department of Homeland Security’s (DHS) Cyber Resilience Review (CRR) is a non-technical assessment to evaluate operational resilience and cybersecurity practices. You can either do the assessment yourself, or request a facilitated assessment by DHS cybersecurity professionals.
    • DHS offers cyber hygiene vulnerability scanning free for small businesses. This service can help secure your internet-facing systems from weak configuration and known vulnerabilities. You will receive a weekly report for your action.
    • Developed by the DHS’ Cybersecurity and Infrastructure Agency (CISA), the Supply Chain Risk Management Toolkit can be used to help shield businesses’ information and communications technology from sophisticated supply chain attacks.