I asked a bunch of accountants about their favorite financial calculator and this is what they said*: [Read more…]
AICPA Announces 2017 Changes to the CPA Exam But Likely Won’t Make the Grade
The AICPA recently released a report announcing some potentially major changes to the uniform CPA examination. [Read more…]
Masters in Accounting Not The Sweet Treat Some Students Think
Getting a Masters in Accounting (MSA) is a waste of money, but aspiring accountants everywhere continue to struggle with whether or not to pursue this advanced degree. [Read more…]
How to Transition from Accountant to Advisor (Friendzone to Endzone)
A new intern recently reached out to me to ask some questions about my career path. One of the organizations we work with (LEAD Program) was hoping to have testimonials from people in the accounting field. Specifically, they wanted to increase exposure to the youth about how attractive the profession can be.
If you’ve been reading this blog for a while you know that LEAD was the reason I pursued accounting in the first place (I talked about that briefly here).
The email I got asked a couple questions and was looking for just a short blurb, but one thing inspired me to expand on my initial thoughts. He asked how I transitioned from accountant to advisor. While I didn’t see the two as different things before, the question made me reconsider my position. You can read what I concluded here:
Segregation of Duties: What’s the Role of FPA vs. Accounting?
You ever go into a client or into the office and wonder if people understand what segregation of duties means? You’d think in the post-Enron era that at least large companies would want to avoid an appearance of impropriety at all costs.
I can’t say for certain if this is true across the board, but there is one particular segregation of duties scenario where people sometimes forget that doing the right thing doesn’t mean doing the easiest thing. That situation is when FP&A starts getting involved in booking financial transactions in the system.
Does the “A” in FP&A not stand for “accounting”?
For those who don’t know FP&A stands for financial planning and analysis, in most cases means this group of people owns the task for forecasting a business’ results. These people usually have some portion of their compensation tied to how well they forecast, so they should NEVER EVER have access to record journal entries to modify actual results…yet I’ve seen it more than a few times over the course of my career
Why Should FP&A and accounting be treated differently?
The issue I have doesn’t stem from the fact that FP&A has the ability book entries because many CPAs who understand accounting exceptionally well go into FP&A roles if they want to move away from the retrospective world of accounting and toward the prospective world of finance (At least, this is how the functions historically have been divided). My problem goes beyond the superficial labels of these two groups of people. The fact that FPA title tends to get more respect for some reason as perceived value creators as opposed to back office cost centers like accounting operations is a topic I’ll save for another day.
My problem, and yours should too if you come across this, relates to segregation of duties. If you aren’t familiar with that term, it just means you (should) have a system of checks and balances in place to prevent fiscal misconduct within a firm. Thinking about it that way, the conflict is obvious. First, most FP&A organizations, at least at large corporations receive a bonus based on forecast accuracy. Now, if your wallet’s health depends on minimizing the gap between actual results and forecasted results, of course you should only have access to change one of these variables. Otherwise, the temptation to create transactions to help boost your bonus may be a burden too heavy to bare over the long term.
The bottom line is if you work in or with a company where everyone wears many hats, you need to ensure the compensation structure matches that organizational structure and incents the desired behavior or you/your client eventually will end up chasing explanations for transactions that never existed.
What do you think? Let me know in the comments.
What I Learned From the Promotion That Got Away [Case Study]
 |
| Life isn’t fair |
Getting promoted is no easy task, which I talked about a bit in this previous post, but what I’ve found is most helpful to those coming into the workforce with lofty goals is to understand how to learn from things not going as well as planned, like getting passed over for a promotion that you KNEW you were ready for. It happens to the best of us, and by that I mean it happened to me. While I can’t guarantee what I’m about to share with you will keep you from ever missing out on a promotion you want, I guarantee this cautionary tale will help you better shape your course of attack.
Background
When I first started out in industry, I began as an accountant on a five person team, which included a supervisor. It looked like this:
- 2 Accountants
- 1 Senior Accountant I
- 1 Senior Accountant II
- 1 Supervisor
Over time, I did get a job and was able to get promoted into different roles. In fact, I was in a position where I had did the accountant role for one year, the senior accountant role for a year and a half, and I was in the senior accountant II role, informally supervising the work of the other accountant role, for a year when the supervisor role opened up (for this team, which is a key piece of information I’ll come back to later). To fully provide context of the situation, my company had had a policy in place that said employees should stay in a role for a minimum of eighteen months before looking for their next role (either lateral or promotion). So by all measures, I didn’t have a lot to complain about since I was getting promoted on a “fast track.”
Going After The Job
So one day, I’m looking at the weekly job opening report and I see that there is a supervisor role open and it just so happens that it’s the supervisor for my team. It seemed like a perfect fit. I had exposure to all four roles with EXTENSIVE hands-on experience with three out of the four roles.There was nobody in the rest of the accounting group slated for the position, so I thought it was a no-brainer that I should at least be considered for the job. I proceed to send an email to the senior manager of the group saying something along the lines of “can I be considered for this role?” and he replied back with “it’s too soon,” and that was that.
We proceeded to hire someone from one of the big 4 accounting firms to fill the role – a bright guy but he didn’t know the business as well as I did or the systems and processes that were in place. In fact, I ended up spending a lot of time getting the new person up to speed, and I still consider that new supervisor AND the senior manager as friends of mine today. That’s not to say I wasn’t upset or disappointed because I was both, but the answer seemed pretty final and I didn’t see any reason to let them impact my performance and upward trajectory because I wasn’t in a bad position. The fact is if it were any other supervisor role I wouldn’t have even said anything because two-level jumps were few and far between and it wouldn’t have made as much sense as this move.
What I Should Have Done Differently
I made a HUGE assumption that my senior manager saw the obvious fit that this role was for me. Rarely do you have a supervisor come in that knows the roles reporting to it in as much detail as I did. It was a dream come true from a transition perspective. The team would’ve kept on rolling without so much as a hitch, even if that meant I had to do my job and the supervisor job for some time…but I didn’t say ANY of this in my email which created two problems that I realize in hindsight:
- He may not have seen what I saw from a fit perspective (at least not with as much confidence)
- My short inquiry didn’t show just how serious I was about the role. This was an opportunity to display an ability to put together a compelling business case and I didn’t do it. In that sense, maybe it was too soon, but it’s something I could (and did) quickly pick up.
The fact that I didn’t follow-up face-to-face also likely gave the impression that this was just a passing whim.
What I Did Right
Part of being professional is continuing to perform at a high level even when things aren’t going your way. Pouting is a terrible look both literally and figuratively – if you feel like you’ve been wrongly passed over for a job, you can prove your employer wrong by excelling even more at your current job or leaving for a different job where you think you’ll be valued more. Don’t sacrifice relationships that you may need again because you decided to throw a temper tantrum in the workplace. Nobody wins in that situation.
What are your thoughts on this? What lessons have you learned from falling short on a career pursuit?
6 Reasons You Should Bring in a Hired Gun To Prepare Your Taxes
 |
| Uncle Sam is a force to be reckoned with |
We’re just about halfway through December and that means it’s almost tax time. Many people balk at the cost of having a CPA prepare their tax returns, but there are many reasons why you should hire a professional to battle Uncle Sam on your behalf.
Here are just a few of those considerations:
- CPAs can answer questions you may have about a tax treatment that you can’t “ask” do-it-yourself software.
- Who would you rather have standing in front of the IRS answering question on why the numbers you filed don’t match their records?
- CPAs can help you plan your tax strategy for the future.
- People who don’t prepare taxes regularly generally make more mistakes on tax returns than those who do, resulting in smaller refunds (amounts left on the table often exceed the costs of hiring a CPA).
- Major life events such as marriage, divorce, child birth/adoption, or home purchases are a great time to reassess hiring a CPA if you haven’t done so in the past.
- Your time is better utilized doing what you know best. For example, if you run a small business and you think spending four hours of your time (the same amount of tax it would take you to complete your own tax return) can generate $1,000 in sales, and a CPA will complete your tax return for $250, it makes more sense ($750 worth of it) for you to spend your time selling your product.
At the end of the day, your tax preparer decision is about what complexity of return you’re comfortable managing on your own. If you need help thinking through this decision for this tax season and beyond, you should connect with me using the Contact Form and I’ll get back to you as soon as possible to figure out the best option for your unique situation.
6 Ridiculous Myths About CPAs
When I first started writing this blog, I thought I would be spending equal time posting about issues in the accounting and consulting professions, but I’ve found myself enjoying focusing more on topics related to business school, so I intend to continue doing that until it makes sense to do something different, but first, I’d like to take a moment to talk about my first love professionally – accounting. To this day, passing the CPA exam (on the first attempt) is still one of my top personal accomplishments. For reasons I can’t explain, not everyone values the CPA designation as much as I do. Believe it or not, there myths about CPAs/accountants that couldn’t be further from the truth, and I am now taking on the task of laying these myths to rest once and for all…may they rest in peace.
1. CPAs Have to Be Good at Math
Just because numbers are involved, doesn’t mean you have to be good at math. 99.9% of the time, the most complicated math you do as an accountant is addition and subtraction, not to mention you do this in a spreadsheet or with a calculator. I’ll let you in on a little secret…I’ve worked with many accountants that were horrible at math. I’m talking about glazed over eyes when the word “algebra” is mentioned bad. That’s not to say that accounting is easy, but it’s not a test of mathematical prowess.
2. CPAs Working For Companies Can Only Have Accounting Jobs
Wrong again. The truth is anyone who’s worked within a finance and accounting organization knows that the accountants are the black sheep and FP&A is the favorite son. Case in point, I worked at a company that produced various tasty treats all over the globe. At said company’s office building, if you went on the accounting floor, it was a wasteland. I mean you were lucky if you could even find a binder. On the other hand, when you went onto any of the FP&A floors, there was free product everywhere. I referred to these as lands of milk and honey. Fortunately for the would-be financial analysts, there is hope. I’ve personally seen accountants make the transition to FP&A on many occasions, and the truth is it’s not that difficult to do. The key is to make this transition internally at one company. Leaving your company as an accountant and applying for an FP&A role elsewhere generally is more difficult to do.
3. CPAs Are Only Qualified for Audit/Tax Careers in Professional Services
I work in professional services and while I do some tax work on the side, my primary job is not in audit or tax; it is in management consulting. That’s right. I interact with real people everyday, not just sit in a closet somewhere wearing a green visor and playing with my abacus.
4. CPAs Are Not Strategic Thinkers
This is related to the point above, but I specifically wanted to let you know that organizations everywhere are looking to finance to help drive the strategic visions. And oddly enough, (good) finance teams are just filled with CPAs. It makes perfect sense because nobody really understands the ins and outs of a business better than its CPA. They don’t call accounting the language of business for nothing. I’m working on a project right now for a client that is all about defining the strategy for managing ENTERPRISE performance, not just finance.
5. CPAs Aren’t Tough
You might be thinking, there is no way he can disprove this one with facts. You’re right. I can’t…but the FBI can.
“FBI Special Agents are responsible for conducting sensitive national security investigations and for enforcing over 300 federal statutes. As an FBI Special Agent you may work on matters including terrorism, foreign counterintelligence, cyber crime, organized crime, white-collar crime, public corruption, civil rights violations, financial crime, bribery, bank robbery, extortion, kidnapping, air piracy, interstate criminal activity, fugitive and drug-trafficking matters, and other violations of federal statutes.
Looks pretty tough to me and guess what happens to be one of the critical skills for this position…accounting. Take a look for yourself. I rest my case.
6. CPAs Are Boring
This might be the most unfounded of all CPA myths. People just get carried away with this one. I just read a terrible joke online today which I had heard before but this is probably what prompted the writing of this post: “What do accountants use for birth control? Their personalities.” Now is that really necessary? What did any accountant do to deserve that? Many of us CPAs are quite charming if I do say so myself. We’re also quite funny.
I’m sure there are more out there so let me know what I missed and we can make this a complete list to stomp out all of these CPA myths once and for all!