Posted: July 16, 2018 Filed under: Guest Blogger
While some Baby Boomers are starting to retire, there are many that are still filling upper management positions. As more and more Millennials graduate and settle into their careers, they are bringing different outlooks on life to the workforce. These two generations working together highlight the differences between Baby Boomer bosses and Millennial employees that can stir up conflict.
Baby Boomers have a distinct mentality about work and their positions within their organizations. Many Baby Boomers have an ambitious work ethic that can appear to a Millennial to be a workaholic attitude or a “live to work” attitude. Baby Boomers are also very loyal to the organizations that they work in, more so than their subsequent generations. This loyalty is beneficial because organizations require Baby Boomers to provide their vast array of experience, knowledge, and ethical leadership. However, with their work ethic and experience, Baby Boomers can get critical of, or frustrated with, those who do not share their same attitudes and qualities regarding work.
The fact of the matter is that Millennials have a different attitude surrounding work and how it fits into the grand scheme of life. First off, Millennials prefer to have a work-life balance that accommodates their pursuits of personal hobbies or interests. This attitude of “working to live” can come across as lazy to their bosses. Second, Millennials tend to want more frequent, open communication and feedback from their supervisors than preceding generations have. Supervisors may see this desire for more positive support as burdensome. Also, the Millennials’ inclination to want to talk about everything, even information that is more sensitive or reserved for senior management can be taken as a sign of disrespect. Third, unlike the Baby Boomers who are loyal to the company, Millennials are usually more loyal to an individual or supervisor that they admire. This creates a willingness to leave if the supervisor moves on or no longer works with them on a frequent basis.
Although all of the above Millennial traits can strain relationships with Baby Boomer bosses, Millennials bring some great qualities to an organization. First, Millennials are more accepting of diversity which leads to better communication and the ability to work in groups. Second, they have unique perspectives and can be a great asset when trying to solve problems. Lastly, they have grown up surrounded by technology. Millennials are great at mastering new technologies as they emerge. Organizations can use the unique attributes of both the Baby Boomers and Millennials to minimize the risk of clashing viewpoints.
There are three great ways a company or an organization can satisfy the new attitudes of Millennials while preserving the great qualities of Baby Boomers. First, organizations can encourage communication and problem solving by creating a more open work environment. This can be done through on-boarding processes with new hires to help assimilate them into an organization’s culture. Also, continued socialization after the on-boarding process fulfills the communication desire of Millennials while decreasing the differences that Baby Boomers’ perceive (Anderson, Baur, Griffith & Buckley, 2017). Second, when organizations are willing to add some flexibility into their structure they are likely to see many advantages in relation to their employees such as lower turnover, higher job satisfaction, and greater synergy with Millennials (Myers & Sadaghiani, 2010). Lastly, organizations can build on the technological savvy of Millennials by using the idea of reverse mentoring. Reverse mentoring is the idea of pairing a Millennial with a Baby Boomer to help the Baby Boomer learn how to more efficiently use the technology within the organization. This creates a sense of importance and positive interaction for the Millennial while at the same time allowing the Baby Boomer to teach the Millennial more about how the organization works and what is expected.
At the end of the day, whether you are a Baby Boomer or a Millennial, we should all be thankful because we help define each other, build off of each other’s strengths, and fill in each other’s areas of weakness to create well-rounded organizations and communities. We need to learn how to interact with the purpose of understanding our differences instead of criticizing them.
Anderson, H. J., Baur, J. E., Griffith, J. A., & Buckley, M. R. (2017). What works for you may not work for (Gen)Me: Limitations of present leadership theories for the new generation. The Leadership Quarterly,28(1), 245-260. Retrieved from https://doi.org/10.1016/j.leaqua.2016.08.001.
Myers, K. K., & Sadaghiani, K. (2010). Millennials in the Workplace: A Communication Perspective on Millennials’ Organizational Relationships and Performance. Journal of Business and Psychology,25, 225-238. doi:10.1007/s10869-010-9172-7
Staci White, CPA, is an accountant for Howard, Cunningham, Houchin, & Turner, LLP in Lubbock, Texas. She is a member of the South Plains Chapter and currently serves on the TSCPA Board of Directors.
Posted: June 18, 2018 Filed under: Guest Blogger
Selling a company is three parts art, seven parts science with a little sprinkle of luck, but it is 100 percent process oriented. It is critical to begin with strategic planning to posture the company in its best operational and financial light. Sellers commonly fail to consider exit strategies when things are going well for their company, and tend not to focus on an exit strategy or transfer process until an unforeseen external event triggers an awakening or they decide to retire or reach burn-out. Knowledgeable sellers understand that to exert control over internal forces (employees, accounting and operational processes) and external forces (economic turbulence, industry downturn, changing competition, illness, etc.) they must clearly examine all aspects of their business, define their personal goals and objectives, and begin exit preparation yesterday. A transaction has three characters; a seller, a buyer and a financing source. Sellers should take a critical look at their company from the prospective buyer’s or lender’s viewpoint. If sellers manage their company with an “End in Mind” decision-making outlook, then they will always be in a continuous process of preparing their company for sale.
Seller’s Goals and Objectives
How do sellers begin to define their goals and objectives? Sellers must delineate specific objectives for financial goals (liquidity, sale price, taxation/estate planning) and non-financial goals (succession, legacy and reputation, employee, stakeholder concerns and other special interests). Decision-making questions include: To whom do I want to sell/transfer the business (family, financial investors or competitors)? How long, post-closing, do I want to be involved? Do I want to accept some upside/risk? Are there employees or others whom I want to protect/reward? What is my after-sale tax position? What are my financial alternatives post closings?
Assemble and Communicate with Trusted Advisor Professionals
Sellers should not try planning their exit strategy alone. Running a company is a full-time job. Sellers shouldn’t take their eye of the ball. Sellers should assemble their advisory team early in the exit-strategy planning process and clearly communicate their exit goals and objectives. Sellers must listen to their advisors’ advice, understand their options and implement the agreed upon suggestions. Advisors who must be in position early in the planning process include: certified public accountant, transactional attorney, financial advisor, merger and acquisition advisor.
Market Value and Transaction Structuring Alternatives
A prerequisite of a comprehensive exit plan is to understand the current market value range of the company. A comparison of market value to the seller’s financial objectives will indicate if the right time to exit is now. If market value is too low a seller needs to contemplate how they will increase their company’s value. Deal structuring, tax structuring and financial engineering can significantly impact the seller’s transactional proceeds. Sellers that understand the implications of transaction structuring alternatives will be prepared when they elect to take their company to market.
Influence Value — Develop Credible Financial and Operational Projections
“Buyers analyze the past but buy the future”. A persuasive growth strategy is a key element of exit planning. In a sale, to maximize the transactional value of a company, sellers must provide potential buyers with a compelling story of future growth opportunities and profitability. Sellers should develop a credible set of detailed financial projections and key operational drivers for the next three to five years which will, in part, define the buyer’s perception of the company’s future and management’s ability to deliver.
A Company’s Financial Profile Via a Buyer’s/Lender’s Perspective
Owners should let their CPA perform the heavy lifting but having a thorough personal knowledge of the company’s financial performance is sage advice when preparing to sell your company. Buyers will want a transparent understanding of the target company’s historical performance. It is best to have three years of audited financial statements plus interim year-to-date financials. Very clean, compiled/reviewed statements with their accompanying tax returns will suffice in some cases. The validation of the “the numbers” via audited financials will engender confidence with the buyer. Accurate historical financial information will allow the buyer to focus on the future with a better understanding of the risks and rewards associated with their potential acquisition. Sellers and their CPAs should focus on:
- Evaluating the company’s current corporate structure.
- Eliminating personal expenses and over generous benefits to friends and family.
- Cleaning up the balance sheet by:
- Selling excess or non-producing assets;
- Recognizing all on and off-balance sheet liabilities such as customer prepayments, work in process billings, warranty obligations etc. openly; and
- Taking any necessary “write downs” for uncollectable accounts receivable (A/R) or unusable inventory.
- Eliminating any unrelated “side” activities intermixed with the company.
- Maintaining an accurate inventory and current inventory value.
- Understanding the company’s key performance indicators and how they compare in the industry.
- Improving the quality of earnings.
A Company’s Operational Profile Via a Buyer’s/Lender’s Perspective
Buyers will spotlight the key operational drivers of the target company. A seller should review and be prepared to give accurate details regarding the prior, current and future status of the:
- Size of the Company
- Location of the Company
- History of the Company
- Management of the Company
- Employee Resources
- Barriers to Entry
- Manufacturing Processes
- Market Share
- Client Base
- Business Growth
- Pricing Policy
- Inventory Levels
Owners who have prepared their exit strategy will begin the marketing of their company in a position of strength. Clear goals and objectives will place the seller in the optimal position to negotiate favorable price and terms, or, if necessary, to walk away.
Janae Chamblee, CPA, BCB, CBI, is a Director of the TSCPA and the Dallas CPA Society. As the owner of First Business Resources, Inc.*, a merger and acquisition services company, Janae has twenty years of experience in providing hands-on guidance to her clients in helping them buy or sell their company.
*This firm is not a CPA firm.
Posted: April 16, 2018 Filed under: Guest Blogger
I still have family friends ask me about my career path with a response similar to this: “Accounting, huh? That seems…interesting.” It is hard for people to try and act excited about my college path, especially when they still think of my generation as the technological savvy, entrepreneurial, adventurous type. However, I think a lot of individuals confuse Millennials with Generation Z; furthermore, there are actually a lot of Gen Z’ers that are interested in fields like accounting. Here is a list of reasons why I, as a fellow Gen Z’er, chose accounting:
“Accountants are boring.” Some of my friends continue to joke with me about this idea, but I laugh it off! I think a lot of non-accounting majors do not understand the vast routes you can take. For instance, by the time I graduate, I will have engaged in three internships—all of them will be based on accounting but are completely different at the same time. My first internship was in corporate accounting for a private company in an office-like environment. My second internship will be in internal audit with a lead producing company. I will be able to visit multiple facilities in France, California and New York and assist with conducting audits. Finally, my third internship will be in external audit with a Big Four firm. This will allow me to engage with different clients and review their financial records and documents.
And it doesn’t just end there. There are SO many other different pathways to take in an accounting career, and each one will help you develop a new skill set. Accounting is great for the indecisive but also for those who want to work the same job until retirement.
Stability and Growth
I am personally not a huge risk-taker. In fact, I have already started a Roth IRA to save up for my retirement because I like having a cushion to fall back on. With an accounting career (especially public accounting) I can feel safe knowing that I probably won’t be laid off any time soon. Also, a public accounting career provides almost guaranteed promotions after a certain timeframe. “Hmm, I wonder if I will ever get promoted to senior associate?” is not a question new auditors typically have to worry about. It certainly takes a heavy weight off my shoulders!
Accounting is not Always Forever
But what if you end up hating accounting? This is a question I receive a LOT, and here’s my take on it:
As I mentioned earlier, there are different routes to take, so I could always try a different accounting sector. Even then, if I still did not enjoy my career, I am not forced to stay in accounting just because that is what my degree is in. I know many individuals who have switched from accounting to marketing or human resources and are currently executives at a company. Accounting provides such a strong foundation that is integral in all parts of a business and can allow you to branch out to new departments. That’s why I personally think accounting is a strong degree to pick for undecisive business majors.
I’ll be honest, accounting is typically not the first major that comes to a student’s mind in terms of studies (it may be a last choice for some, in fact). However, the benefits, learning experience and ability to grow, and even travel, are just a few of the factors that attract Generation Z’ers to this field. I think accounting is a hidden gem that not many young students think about, so I consider myself lucky to have discovered it so early!
Blogger: Liz Wood
TXCPA2B is a blog written by Texas students in pursuit of the CPA certificate. The views expressed here are those of the authors and not necessarily held by TSCPA or our members.
Posted: March 26, 2018 Filed under: Guest Blogger
The Tax Cuts and Jobs Act of 2017 lowered the corporate income tax rate to a flat 21 percent and provided a one-time deemed repatriation tax on controlled foreign corporations’ current earnings and prior untaxed earnings back to 1986. The repatriation rate is 15.5 percent on liquid assets and 8 percent on illiquid assets instead of the prior 35 percent rate. Many large corporations are reporting radical changes to their bottom line from adjustments to their deferred tax assets and liabilities.
It is difficult to estimate the book income effect of the repatriation tax because we do not know how management may have initially accounted the deferred tax, with many companies assuming that earnings would be perpetually reinvested overseas and not booking deferred tax liabilities. Also, there is uncertainty as to when repatriation will be recognized with the new tax law allowing the tax to be paid over up to eight years. Some companies will pick up the tax expense immediately, with Apple announcing that it will pay $38 billion to repatriate its foreign earnings of $252.3 billion that have not been previously taxed in the U.S. It is estimated that more than $2.6 trillion in corporate profits are sitting in foreign bank accounts.
For tax rate changes, recent reports in the press show major companies taking hits: Amgen, $6-6.5 billion; Bank of America, $3 billion; and Credit Suisse, $2.32 billion. Fannie Mae and Freddie Mac had net operating losses from the financial meltdown and will have to adjust the value of their deferred assets downward by a combined total of $10-$20 billion. However, about two-thirds of the companies in the Dow Jones Industrial Average will have a boost in income as a result of reducing deferred tax liabilities. These include Verizon, $18.4 billion; Exxon, $12 billion; Pfizer, $17.5 billion; and Apple, $11 billion.
These valuation changes flow through the income statement, but most savvy analysts view this as not important and a distraction from real operating results. On the first page of his annual letter to shareholders, Warren Buffet commented on the $24 billion increase in Berkshire Hathaway income from adjusting its deferred taxes, saying that it distracted from operating results and, “For analytical purposes, Berkshire’s ‘bottom-line’ will be useless.”
Smaller corporations have less dramatic dollar amounts, but they still must make required valuation adjustments to their deferred taxes and be prepared to explain unexpected results to owners and lenders.
Accounting for taxes is a generally shared responsibility for financial accounting and tax experts, but often they each look at the other as having the primary responsibility. Financial accountants sometimes see tax accounting as tax, and tax experts see tax accounting as having FINs (financial interpretations). The important thing is for everyone to know what is required at this point. Accounting Standards Codification (ASC) 740, Income Taxes, requires adjustments to the beginning of the year balance of a valuation allowance if there is a change in circumstances that causes a change in management’s judgment about the realizability of the recognized deferred tax assets. A valuation allowance is required if it is more likely than not that some or all of the deferred tax asset will not be realized in the future. ASC 740 also requires analysis and disclosure of changes to deferred tax assets, which will help in seeing how corporations are managing their deferred tax assets and liabilities.
William R. Stromsem, JD, CPA, is a technical writer for TSCPA’s Federal Tax Policy Committee and an assistant professor at George Washington University School of Business.
Posted: September 20, 2017 Filed under: Guest Blogger
Sometimes you reap what you sow…………………..
Have you had too many employee challenges and too much turnover? It’s easy to bemoan not finding “the right” candidates/employees in a tight labor market. One path to better results is to analyze your hiring process.
Being both a CPA and recruiter, I have the opportunity to see many organizations’ hiring processes. If you are looking to improve your hiring and retention results, consider these questions:
- Am I realistic in assessing the current labor market? A strong economy, many baby boomers retiring and the 150 hour CPA requirement all contribute to fewer candidates in the market. Be careful waiting to interview too many candidates only to lose your top candidate due to delays. When you see somebody you like, you have to move quickly in a competitive market; otherwise somebody else will. Also, researching the appropriate salary range for a particular skill set and experience level are key.
- Is it appropriate to delegate the screening process? You, as the hiring manager, know what you need better than anybody else. Therefore, it makes sense to be as involved as possible in the early stages of the process. This is an investment of time, but it is an investment that pays off.
- What personality and working style makes sense? Beyond your company culture, specific roles require specific working styles. Somebody who is a great Analyst, for example, usually wouldn’t be the right person for a high volume data entry role. Consider what specific working style makes sense given the nature of the work.
- Are we doing all we should to ensure an employee’s long-term success? Once hired, do they feel they are a part of the team? Have they been introduced to possible mentors? Are they being invited to participate in events? Employees in today’s market decide quickly whether or not they consider their new positions to be a long-term fit. Make sure you invest as much in them post hire as you did to hire them in the first place.
Assessing your hiring and onboarding process prior to a search is an investment in the beginning, but pays good returns in the end. You are more likely to locate and secure the right fit and they are more likely to stay with your organization for a longer tenure.
Best wishes in all your hiring processes,
Bryan Edwards, MSA, CPA
Posted: June 19, 2017 Filed under: Guest Blogger
When you think of a leader, what comes to mind? What about a boss? If these two terms are not synonymous in your vocabulary, then the remainder of this post is for you.
Imagine two scenarios:
- You show up to work only to be yelled at by a superior demanding that certain tasks get done in an unreasonable amount of time. There is no appreciation when you meet their extreme expectations, and you feel like you have been stuck in the same position for too long.
- Your boss asks how projects are going and asks if there is any way they can lend a hand. Not only do they go out of their way to provide assistance, but they make sure you have all the tools necessary to reach your full potential.
These might sound like two extremes, but scenario 1 exists far too often. There is one simple way to revolutionize how you lead which creates an environment where everyone thrives. This is done through something called servant leadership. Most people view leaders as someone who is at the top and commands people below. Servant leadership flips that idea around and puts the leader on the same level as his subordinates getting the work done with them. The boss from scenario 2 embraces this idea and lets it show in how he directs his employees.
In my six years of employment working various jobs, I have experienced both forms of leadership. A scenario 1 boss creates an environment of hostility and fear in the workplace. Not only do employees dread coming to work, but they are motivated to only put in enough effort to get the boss off their back. A scenario 2 boss creates a warm and trusting environment that employees love. Not only do they look forward to work, but they want to go above and beyond because their boss leads by example.
The beauty of servant leadership is that it does not stop there. One of my favorite quotes is from Todd Wagner. He says, “Great men use power to serve others.” Part of being a servant leader is not just leading by example, but it is using your available resources to ensure that your employees are maximizing their potential and advancing in their careers. If you master this skill as you move up the corporate ladder, there will be no limits.
This idea of leadership is easy to grasp but much harder to put into practice. As a student myself, it is something I constantly strive for because acting as an effective servant leader is not something that happens overnight. I know that if I begin trying now, it will come much easier when I do start off in my career.
Now think of the best boss you have ever worked for; do you see any similarities between how they lead and how a servant leader acts? Perhaps you can think of a terrible boss who does the opposite of what servant leader does. Regardless of which category your superiors fall under, understand that servant leadership is the golden standard. When you put it into practice, you will soon realize that it is a challenging and humbling experience. However, the quicker you adopt the upside-down view of leadership, the better off you will be.
Posted: May 22, 2017 Filed under: Guest Blogger
First the good news: Texas is the best state for accounting positions, with a 16% growth in the number of accounting jobs between 2009 and 2016, and the highest cost-of-living adjusted entry-level and mid-level salaries, and a tie with Delaware for the high-level salaries. (Accounting Principals Blog, August 25, 2016) Accounting salaries are expected to continue to rise, especially for accountants in industry. (Journal of Accountancy News, August 30, 2016) Here’s the 2017 Robert Half Salary Guide for detail by position.
Now the bad news: although demand is strong, studies indicate there are not enough accountants, new hires or experienced, to meet the demand, especially as baby boomers retire. (Going Concern, “The State of Accounting Recruitment and Talent Shortages in 2017”) Here is the AICPA’s full report: Trends in the Supply of Accounting Graduates and Demand for Public Accounting Recruits (2015).
Calling all CPAs: think back—who influenced your decision to become an accountant and a CPA? In my case, it was four practicing CPAs—all with different career paths, all enthusiastic about their jobs, and all encouraging me to study accounting and become a CPA. Although my accounting professors were great, it has usually been practicing accountants who influenced my career—including my decision to pursue becoming a professor.
Has the profession been good to you? Don’t you think it could be a great career for others?
Replace yourself: Help us to recruit more potential accountants and let them know that being a CPA, in all of its great variety, is the best profession ever.
- Encourage your employer to offer accounting internships
Employers can help ensure more future accountants by offering internships. Even more importantly, we need internships in industry so that students can learn about a wide range of career opportunities. Most of the internships on the TSCPA website are in public accounting.
If your company cannot offer internships, what about letting prospective accounting students “shadow” you on the job?
- Adopt a high school or college
Opportunities abound, from representing your company at formal career fairs, to speaking to accounting student groups, to just attending meetings and getting to know the students. The TSCPA has helpful resources for talking to students, including ideas for career fairs, formal PowerPoint documents, and videos. Don’t forget the AICPA’s Start Here Go Places.
- Talk to everyone you meet
Get your “elevator speech” ready. Mine is that accounting is the most beautiful of all subjects. It’s all about balance and relationships. Oh, it probably doesn’t sell, but what can you expect from a professor? Just another reason for practicing accountants to promote the profession.
I am happy for anyone who would like more information or ideas about how to replace yourself to email me at email@example.com.
Susan B. Anders, Ph.D., CPA, CGMA is the Louis J. and Ramona Rodriguez Distinguished Professor of Accounting at Midwestern State University in Wichita Falls TX. She has been an academic accountant for over 20 years, and was a practicing CPA for the first 15 years of her career. She is an officer and board member of the Wichita Falls Chapter of the TSCPA.