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AICPA/PCPS Update: Top Issues for Firms
Jason Deshayes, CPARobert F. Butler CPA, P.C.
Private Companies Practice Section
What issues keep practitioners up at night? What issues are shaping the future of the profession? What are the priorities? What are the opportunities? What are the solutions to the challenges?
Practical solutions to help your practice RUN SMOOTHER.
PCPS: Understanding the Issues
Private Companies Practice Section
2009 PCPS CPA Firm Top Issues
Private Companies Practice Section
2011 PCPS CPA Firm Top Issues
Private Companies Practice Section
Keeping up with tax laws and accounting standards, retention & growth, fee pressure and seasonality top the 2011 lists
Slight shift in focus from client retention to client acquisition between 2009 and 2011
Human capital no longer the top issue — but still an issue — which is a temporary shift
Firms with five professionals or fewer are less focused on succession, yet the most vulnerable
PCPS CPA Firm Top Issues Bottom Line
Private Companies Practice Section
Keeping Up With A&A Standards
Private Companies Practice Section
PCPS Technical Issues Committee (TIC) Alert The TIC monitors technical developments that could significantly
affect private companies and the firms that serve them When standards are written, the TIC submits informed comments
and recommendations in support of small-to-medium-size firms Stay abreast of TIC activities
Keeping Up With A&A Standards — TIC Alert
Private Companies Practice Section
Keeping Up With A&A Standards
Technical Toolkits Clarified Auditing Standards
(effective December 15, 2012!)
SSARS 19 Toolkit
Private Companies Practice Section
Keeping Up With A&A Standards — Clarified Auditing Standards Toolkit Available at aicpa.org/pcps/castoolkit
Private Companies Practice Section
Keeping Up With A&A Standards — PEEC/ARSC Changes to Compilation Standards Changes definition of
a compilation to “read and report”
Changes preparation of financial statements to a non-attest service
Private Companies Practice Section
Keeping Up With A&A Standards — Changes to PEEC/ARSC Compilation Standards
Resources available at: Interest Areas - Financial Reporting Center - Compilation Services
Private Companies Practice Section
Keeping Up With A&A Standards — New Mandatory Firm Rotation Resources
Talking points developed for practitioners to use in discussing mandatory firm rotation concerns
aicpa.org/pcps/mfr
Private Companies Practice Section
Keeping Up With A&A Standards — Private Company Financial Reporting
Private Company Council Financial Reporting
Framework for SMEs Privately held small and
medium enterprises Less complicated, less costly U.S. GAAP financial
statements not needed FAF supports as “important
and complementary” Exposure Draft — October
2012aicpa.org/FRF-SMEs
Private Companies Practice Section
Keeping Up With Changes and Complexity of Tax Laws
Private Companies Practice Section
Keeping Up With Changes and Complexity of Tax Laws
PCPS Health Care Reform Toolkit Strategy Checklist Client brochures (Business and Individual) Client PowerPoint template All customizable
Private Companies Practice Section
Keeping Up With Changes and Complexity of Tax Laws
Fiscal Cliff — uncertainty in unresolved tax issues aicpa.org/fiscalcliff
AICPA’s Tax Section
Total Tax Insightstotaltaxinsights.org
Private Companies Practice Section
Client Acquisition and Retention
Private Companies Practice Section
Client Acquisition and RetentionChanging Landscape
BeforeTransactional
TodayAdvisory
$ $$
Private Companies Practice Section
Client Acquisition and Retention
Move Up the Client Value Pyramid
Client Value Pyramid
Controllership ServicesMonthly close, financial statements, cash flow analysis
Virtual CFOBudget, business planning, business modeling, etc..
Transactional ServicesTax, write up, bookkeeping, A/P, payroll, etc..
More CPAs are becoming outsourced CFOs for their business clients
Private Companies Practice Section
Client Acquisition and RetentionNew Service Opportunities
Attestation engagements — Statements of Control (SOC) reports
Consulting & advisory — Trusted Business AdvisorSM
State and local tax (SALT) compliance Business process outsourcing — cloud computing Forensic Services Financial Services
Private Companies Practice Section
Client Acquisition and RetentionTrusted Business Advisor (TBA) 2.0 Workshopand PCPS TBA Consulting Toolbox
Make knowledgeable and confident presentations to clients
Demonstrate and price unique value Ask the right questions to understand
client concerns and priorities Use core skills and evolve as clients’
strategic partner Build strong relationships and earn
clients’ trust
Private Companies Practice Section
Client Acquisition and RetentionYOU are the Value Online Video Workshop
Differentiate yourself from other CPAs so you can confidently present yourself to clients in a unique way.
Private Companies Practice Section
Client Acquisition and RetentionClient Advisory Board Toolkit
Gain perspective and hear directly from clients about: Client
expectations How the firm can
improve How the firm can
cross-sell and add to its service offerings
Private Companies Practice Section
Client Acquisition and RetentionHow CPAs Grow Their Practice
Relationship — stronger bond with clients Know your value and how to articulate it Manage seasonal lows and revenue generation Identify new services mix Plan to make money
Private Companies Practice Section
Client Acquisition and RetentionPCPS Social Media Toolkit
Toolkit includes:
Action Plan
Guidance — what, why and how
Sample policy, with policy writing tips
Guides for LinkedIn, Twitter and Facebook
Guide for blogging
Private Companies Practice Section
Client Acquisition and RetentionAICPA Tax Practitioner’s Toolkit – Communicate Your Value
Preparing Your Firm to Understand and Articulate the Value of Your Tax Services Implementation checklist CPAs vs. unlicensed tax preparers PowerPoint template
Engaging With Clients to Stay Top of Mind Customizable client-facing brochures and PowerPoints Tax blurbs for websites or newsletters
Promoting Your Firm to Attract New Clients Print ads, Google AdWords
Private Companies Practice Section
Fee Pressure & Pricing of Services
Private Companies Practice Section
Demonstrate and communicate value Reinvent the engagement
Step down service Push work back to client
Use retainers More and more firms are successful with retainers
Straight talk from the start Consider specific fee language in your engagement letter “The fee will not exceed $XXX” “This service will cost $XXX at a minimum”
Evaluate your clients … fire “D” clients Utilize the Client Evaluation Tool
Bill timely and demonstrate the value delivered
Fee Pressure & Pricing of Services
Private Companies Practice Section
Fee Pressure & Pricing of Services
Private Companies Practice Section
Human Capital
Private Companies Practice Section
Partner Accountability and Unity
• Partner Accountability and Unity Guide
• Leadership Attributes Assessment
• Governance grid sample
Finding Qualified Staff
• Team Recruitment Action Plan
• Sample Recruitment Advertisement
• Firm Needs Assessment
• Interview questions• Value proposition for
joining firm
Retaining Qualified Staff
• Firm Competency Model
• Exit interview template
• New hire checklists and agendas
• Mentoring guide• Performance
management templates
Tools for Human Capital Concerns:
Human CapitalPCPS Human Capital Resource Center
Private Companies Practice Section
Highlighted tool – CPA Firm Competency Model
Human CapitalPCPS Human Capital Resource Center
Private Companies Practice Section
Highlighted resource – PCPS Human Capital Center Toolbox Series
Human CapitalPCPS Human Capital Resource Center
Private Companies Practice Section
Succession Planning
Private Companies Practice Section
2012 PCPS Succession Survey
54% without written plan
Leadership development tops challenges
44% of firms in M&A talks
Few managing partners have ability to hold partners accountable
Multi-Owner Firms 94% without
Practice Cont. Agreement
39% intend to merge or sell
Half expect to sell $1 for $1 of billings, actual is likely much less
Sole Owners
www.aicpa.org/pcps
Private Companies Practice Section
2012 PCPS Succession Survey (Multi-Owner Firms)
PCPS Succession Survey
Private Companies Practice Section
2012 PCPS Succession Survey (Sole Owners)
PCPS Succession Survey
Private Companies Practice Section
Recently Updated!
PCPS Succession Survey
Private Companies Practice Section
• 3-year written plan• Identify exit strategies• Practice continuation agreement• Evaluate rates/clients• Leverage technology Sole Owners
• 3-year written plan• Improve operating policies and procedures• Develop people• Strong governance with robust compensation framework• Define rules for retiring partners
Multi-owner Firms
Succession Planning — Best Practices
Private Companies Practice Section
Firms Today
Private Companies Practice Section
Covers key practice management issues and enables firms to: Benchmark management policies and
financial results Gain strategic insights and guidance
The National MAP Survey’s rich history makes it the leading benchmarking survey for CPA firms. See how your firm measures up using targeted and relevant practice management benchmarks including billing rates, chargeability ratios, compensation and other key performance indicators.
aicpa.org/pcps/MAP2012
Firms Today2012 PCPS/TSCPA National MAP Survey
Private Companies Practice Section
Firms are recovering Not quite back to 2008 levels, but better than 2010
A majority of firms experienced year-over-year revenue growth in 2012
Partner compensation is on the rise after the belt-tightening of the downturn
Indications that larger firms are adding new partners for retention and in anticipation of retirements
Survey Highlights
Firms Today2012 PCPS/TSCPA National MAP Survey
Private Companies Practice Section
Firms Today2012 PCPS/TSCPA National MAP Survey
Private Companies Practice Section
Firms Today2012 PCPS/TSCPA National MAP Survey
Private Companies Practice Section
What’s Next?
Download the results at aicpa.org/pcps/maps2012
Use the comparative data to pinpoint differences that are of greatest concern to your practice
Compare your firm’s figures What stands out? What areas need focus for improvement?
Implement changes Align with strategic plan
Firms Today2012 PCPS/TSCPA National MAP Survey
Private Companies Practice Section
Firms TodayWhat We are Seeing
Fee pressure
Clients uncertain — sitting on cash — stuck in neutral
Staff turnover has returned — primarily to industry
Profitability — flat or up a little
Merger activity increasing — horizontal
Private Companies Practice Section
Firms TodayWhat We are Seeing
Signs of recovery in certain areas and growth in some industries
Firm rotation — issue with NFPs and government entities
Identify theft for IRS refunds is epidemic
Technology — cloud, security, privacy
What are you experiencing?
Private Companies Practice Section
Large FirmNetworking Group
EmergingPartner Forum
Human CapitalNetworking Group
TBA Alumni
PCPS Communities
Medium FirmNetworking Group
Small FirmNetworking Group
Sole Practitioner’sVirtual Network
Women in theProfession
Private Companies Practice Section
aicpa.org/PCPS
800.CPA.FIRM
Thank You!Please Contact Us!
Private Companies Practice Section
Questions?