like many cpas across the nation, firms in toledo, ohio, are reporting continued collection problems.
and now, on top of that, many small firms are getting competition from larger firms moving down-market at cut-rate prices
“business has been good, but everything is getting stretched out,” said chuck mira, a partner in mira + kolena in toledo, ohio. “cash is backed up through the system. “we would like to see national banks open up credit lines.”
price
j. clarke price, president of the ohio society of cpas, said, “i have heard around the state that 30-day clients went to 60 days or even 90.
“collection is more of an issue, and some clients are saying, ‘you’ve got to work with me on the fees.’”
and for the first time in years, clarke said, locally owned cpa firms are feeling competition from big national firms trying to pick up smaller clients.
seasonally-adjusted workforce declined to 916,800 in february.
that’s 3,600 off from january’s 920,400 headcount, and the february 2008 level of 947,000, according to today’s employment situation report from the labor department bureau of labor statistics for the accounting and bookkeeping sector.
accounting and bookkeeping employment - february 2010
but february’s decline follows a revised gain in january of 4,600 jobs.
overall, the number of jobs in the u.s. fell by 36,000 last month, and the unemployment rate held steady at 9.7%. the jobs picture was probably hurt by february snowstorms. still, the rate of job loss may be slowing. last february, by comparison, the u.s. economy lost 726,000 jobs. analysts expect the economy to start adding jobs later this year.
in the offices of cpa firms, in particular, data through january shows a workforce of 400,400 people (not seasonally adjusted), down from 405,600 in december.
total employment at cpa offices - january 2010
for the year, cpa firms employed 415,500 people, down from 433,300 in 2008, and off from the peak 420,200 in 2007.
but the big story may be in taxes.
for tax prep businesses, 2009 represented a (not seasonally adjusted) gain to 114,000 annual workers, a new annual record, up from 2008’s 110,800.
tax preparation offices
and in january the tax sector bulked up with a workforce of 251,600, also a record, and a huge leap from the year-ago 208,000 roster.
payroll business decline
payroll services showed a (not seasonally adjusted) roster of 139,600 in january, down from 147,300 in the year-ago month. and for the full year 2009, payroll shops employed 151,100 workers, down from 167,500 in 2008 and off the record 169,200 in 2007.
and four questions to seize the “high-leverage” opportunities.
after spending the last six months with cpas all across the u.s., maryland cpa association ceo tom hood has a thought or two on where accountants can find new opportunities.
hood
in fact, he has seven:
valuation
forensics and fraud
governmental
international (ifrs and tax)
health care
green / sustainability
xbrl
after gathering your own list, hood says the next step is to assess which options are what he calls “high-leverage opportunities.”
what’s a “high-leverage opportunity?” hood recommends asking these four questions:
are they a source of passion for us? (do they fit your strategic plan, values and purpose?)
do they leverage our resources (customer base, talent, capabilities, etc.)?
do they create value in excess of the time, effort and resources needed to accomplish?
can they be accomplished?
the whole system is part of hood’s i2a: insights to action, an increasingly popular strategic planning process and leadership development program for the profession.
“the two things all of the greatest management thinkers seem to agree on is that we must build on our strengths and focus on opportunities,” hood says.
to get started on action plans, ask yourself:
do you (and your team or partners) know your strengths?
how are you focusing and getting your team to agree on opportunities?
how will you align your partners and organization around those strategic priorities?
world leaders reset agenda for finance strategies.
top topics at davos 2010 (via paul kedrosky)
by rick telberg
in this increasingly globally connected and dependent world, corporate finance executives can glean a few lessons from the world economic forum’s meeting of some 2,500 business, government and civic leaders in the swiss ski resort of davos last month.
this year’s meeting focused on rebalancing the global economy, reforming banking and finance regulation, dealing with climate change and innovating in healthcare. each of these issues presents challenges and opportunities for accountants and finance managers.
in a post-conference summary, mckinsey & co. analysts cited four mega-trends to
emerge this year:
1. debt and deleveraging — almost two years since the first signs of a credit crash, several major economies are still facing additional debt markdowns. “if history is any guide, it will be a lengthy and painful process,” mckinsey says.
2. global consumer shifts — china is moving from a centrally-managed industrial economy to one driven more by a new middle-class consumerism, which bodes well for manufacturers elsewhere, even as the u.s. consumer confronts an imperiled standard of living after almost 20 years of “unsustainably high spending.”
3. climate change — sustainability accounting and reporting is gaining a foothold in corporations and governments around the world. for u.s. cpas, it means acquiring and practicing a new body of knowledge, as well as opportunity.
4. healthcare — not just in the u.s., but across the globe, governments and insurers are struggling to pay for the medical care that their longer living and more affluent populations are demanding. the winning countries will be the ones who can create the incentives for citizens to live healthier and build the systems to spend smarter.
but for cpas, the single biggest issue in accountancy may be…
5. the outlook for u.s. adoption of international financial reporting standards — big four chief executives were quoted casting doubt on the ifrs timeline, warning that powerful u.s. corporate preparers could very easily prevail on lawmakers to push the sec’s 2014 target date to 2020, much as wall street interests forced accounting standards setters to waver on mark-to-market rules at the height of the banking crisis.
quigley
“the single biggest risk is undue and inappropriate political influence into the standards-setting process,” deloitte touche tohmatsu ceo james quigley told reuters.
“the next six months are going to be defining.” tim flynn, kpmg international chairman, agreed, saying, “we need an independent standards-setting process that should be void of politics.”
flynn
“but,” flynn added in a nod to political reality, “independence doesn’t mean isolation. we have to consider the environment that we are in.”
bob moritz, pricewaterhousecoopers’s u.s. chairman, may have had the most sobering view. “i don’t think you are going to rush to a global set of standards that everybody has bought into anytime soon,” he said.
in a world of economic hurt and uncertainty, the continuing questions over a precise ifrs timeline may be the least of their immediate worries.
thomson reuters executive says time is running out for many firms.
macro-economic, social, technological and demographic trends are combining to accelerate the rate of change for accounting firms. in this short clip, teresa mackintosh, senior vice president and general manager for workflow and service solutions in the americas professional division of thomson reuters’ tax and accounting unit, explains why.
[youtube]ttsybwx9fba[/youtube]
“we can’t take a decade to figure this out,” mackintosh says. “if we don’t respond with urgency, we won’t be there in a year, or two years, or three years.” it’s time to “take advantage of these underlying mega-trends,” she says.
it’s the must-watch video for anyone trying to wrap their minds around just how immersed web technologies have become in our everyday lives, according to mashable.com.
for example:
– there are 1.73 billion internet users worldwide as of september 2009.
– there are 1.4 billion e-mail users worldwide, and on average we collectively send 247 billion e-mails per day. unfortunately 200 billion of those are spam e-mails.
– as of december 2009, there are 234 million websites.
you know the feeling: you finally discover the perfect solution to a particularly vexing problem.
justice
cpa scot justice (“the virtual cfo“) knows the feeling all too well. but he’s also found his answer.
he reports:
i have to say on the front end that backups aren’t sexy or exciting, but they are critical to your company’s continued operations in the event you have a disaster strike your firm. disaster can take the form of pc failure, natural disasters, and theft.
when i opened cpa for small business, llc , i made the decision to have a paperless office. i was successful in doing this in the first year, but as my practice grew the mounting cost of off-site backups made this less desirable. so after a year or so, i moved to a quasi-paperless office. under this system, i kept critical documents in a paperless format, but kept uncritical documents in my filing cabinet kept workpapers.
cloudberry online backup is a pc based backup client that allows you to save your documents to an amazon s3 backup site. for a month, i tested the cloudberry backup and amazon s3 hosting before moving to it exclusively. i’ve been impressed with both amazon s3 as well as cloudberry’s as3 client software.
howard university’s center for accounting education and cook ross inc. finds that many african americans are leaving public accounting out of frustration with a lack of advancement.
frank ross: howard university center for accounting education
only 1 percent of public accounting partners are african american and only 3 percent of cfos of fortune 500 companies have minority backgrounds. accounting firms have been trying to improve their recruitment of minorities, but efforts to hold on to minority staffers, particularly african americans, are falling short. in 2007-2008, 22 percent of all new accounting graduates were minorities, down from 26 percent in the previous year. within this group only 4 percent were african americans in 2007-2008, down from 8 percent in 2006-2007.
how fiscally endangered are your state and local governments?
by rick telberg
if you think your life is busy and stressful, pause for a moment to consider the lot of today’s accountants in government.
on the one hand, government, in general, is a growth industry in need of more and more sophisticated professionals. on the other hand, state and local governments throughout the nation are facing budget problems every bit as severe as their constituents.
if you’re like many accountants and finance managers, you’re already feeling the effects of the government financial crisis. california was the first to issue ious instead of checks to vendors. but now new york has become the latest in a long list of states that are warning that their tax refunds this year could be delayed.
kennedy
the new york budget office estimated “hundreds of thousands” of taxpayers would receive refunds a couple of weeks later than normal. last year, new york paid $6 billion in refunds to 6.5 million households. north carolina is delaying refunds. kansans can e-file or wait 16 weeks. hawaii taxpayers may be waiting until july for their refunds. the best an accountant can do is to consider suggesting to clients that they re-figure their withholding.
cpa diane kennedy has studied the problem and created a top ten list of “the most dangerous states to live in right now, at least fiscally-speaking,” in terms of tax increases, reduced services and delayed refunds.
the most “fiscally-dangerous” states
1.
california
6.
new jersey
2.
oklahoma
7.
new york
3.
arizona
8.
nevada
4.
illinois
9.
colorado
5.
hawaii
10.
michigan
source: diane kennedy, cpa
state and local treasurers and comptrollers are grappling with revenue shortfalls, budget cuts, layoffs, cutting medicaid even as enrollments surge and closing prisons and schools. state budgets have actually declined for the first time since the 1980s and spending increases are expected to lag inflation. the declines have been so rapid that 43 states were still cutting budgets even after their budgets were approved.
sigritz
after all that, brian sigritz, the fiscal studies director at the national association of state budget officers, says state governments are still headed for a cliff. the nation’s overall gross domestic product (gdp) may be showing signs of recovery, but there are no signs of improvement in at least half the states. and in 37 states, economies will continue shrinking at least through this year, he says. it usually takes five years for state and local budgets to recover from just a typical recession. but sigritz expects long-term spending pressures to persist in health care and schools. the only bright spot, according to sigritz and many of his colleagues in government finance, is that prolonged austerity could create political opportunities for long-lasting reforms.
hundreds of debt-laden cities and municipalities are now seriously considering chapter 9 bankruptcy. created in the great depression, there have only been 600 cases since. now we could see just as many in the next few years. the largest chapter 9 filing was in 1994, when “merrill lynch,” in the words of the wall street journal, “bankrupted orange county, calif., via a form of unsuitable investments that lost a billion-plus dollars on a form of interest rate swaps.”
at the same time, governments are looking in every nook and cranny for new tax revenue. as one finance manager at a small business told me, “states are becoming more aggressive with collections.” to add insult to injury, he added, “some areas are decoupling from federal tax rules and regulations,” creating new complexities and confusion.
many states are turning to so-called “amazon taxes,” to collect sales tax on out-of-state internet transactions. in virginia, for instance, tax writers claim nexus because amazon has a couple of distribution warehouses in the state. but they don’t stop there, virginia argues nexus based on amazon’s agreements with affiliates. sales tax experts have practically given up on a new, streamlined system that’s been contemplated for almost 10 years now. unless congress steps in to narrow nexus, electronic commerce could be severely affected, said joe henchman, an official with the tax foundation, in testimony last month before congress.
gov. jim douglas, r-vt.
“the worst probably is yet to come,” warned gov. jim douglas, r-vt., chairman of the national governors association, at the group’s meeting last week.
all of this adds up to a huge new demand for government finance professionals. your communities need your voice and your cpa expertise as never before. sadly, it’s enough to keep many accountants busy for a long time.
can your clients tell if you are faking it? do you seek out opportunities to learn new things that will help your clients overcome their most difficult challenges? selling value-creation advisory services is truly a slam dunk with most modern … continued
prospects for economic recovery continue to recede as recession lengthens
durham-chapel hill, n.c. — expectations among certified public accountant executives for the u.s. economy remained pessimistic in the first quarter as the recovery proved sluggish amid signs of potential growth in manufacturing and a slightly improving outlook for organizations, according to a new nationwide survey conducted by the american institute of certified public accountants and the university of north carolina’s kenan-flagler business school.
“it is good to see signs of optimism, especially from the manufacturing sector,” said carol scott, cpa, aicpa vice president for business, industry and government. “unfortunately 40 percent of our cpa members in business and industry — chief financial officers, controllers and cpa financial professionals – are now telling us that they do not expect their business to return to pre-recession levels until 2012 and beyond.”
