My family went on a trip to Florida vacation in June as a graduation present to my daughter. Going from Texas we decided to fly and rent a car while we were there. I have rented cars a number of times so when the rental car company started giving me the spiel about gas I quickly said no. I was used to filling the car up before I returned it. The person at the counter reminded me that I needed to fill up the car less then 10 miles before I returned it or there would be a charge. Later in the week I noted that they also wanted you to show a copy of your gas receipt when the car was turned in. I thought that was a bit untrusting, but if that was their policy so be it. Upon returning the car I dutifully filled it up 1.9 miles from the airport and showed the receipt to the clerk when I turned in the car. No extra charge, everything was perfect, or at least I thought it was.
A month later I get a letter from the rental car company saying they were billing me $38.16 because I did not fill up the car before I got to the airport and they had to put gas in it. Of course, if I could fax or mail them a copy of my gas receipt they would be happy to reverse the charges. My initial thought was what a scam. Being a neurotic accountant I kept my receipts, but most people probably don’t keep receipts for a month after the charge was made so they would have no recourse. And for $38 they probably would not spend a lot of time fighting an out of state charge. As I set down to write my cover letter I was thinking of ways to accuse the company of fraud because I felt very strongly that they were doing this deliberately just to get a little extra money out of customers who probably can’t fight back. I also thought that this will be the last time I ever use the rental car company in question.
But as I thought about the situation I began to wonder if it was the rental car company pulling a fraud on me or if it was someone pulling a fraud on the rental car company. Maybe someone was siphoning gas out of the cars, or maybe an employee was reporting they were putting gas in rental cars while they were really putting the gas in their own car. Maybe an employee was falsely reporting the charge so they would make a revenue target and get some kind of sales incentive bonus. I, therefore, decided to scale back my letter and simply point out that a fraud was possibly being committed against one or both of us, but mostly I wanted my money back.
As CPAs, when thinking about fraud we often focus on the impact it might have on investors or the impact that a loss of cash or assets will have to the company, but we rarely think about the impact it might have on customers and that is a mistake. Without customers, a company will not exist. Fraud that impacts customers might be the most insidious and costly fraud of them all so we need to think beyond the financial reporting and beyond the security of assets and think about how even little frauds can cost the company long-term growth relationships with customers. Only then will we be truly incorporating fraud into our mindset.
This is Spring break week where I currently reside and it got me thinking about vacation and what I consider the three must do’s regarding vacation.
Must Do #1 – Take your vacation
If you are like most people in our profession then you work really hard just about all of the time and you probably feel like there is always something to do next. Guess what, there will always be something to do next. If there isn’t then your job might be in jeopardy. You have to fight through the feeling like there is no time to take vacation and take it anyway. We all need time to clear our mind, get reacquainted with our spouse and kids, see friends and relatives – in other words enjoy the fruits of our labor at work. Vacation isn’t a reward or luxury; it is a necessity if you are going to be productive year round. So don’t see vacation as taking away from work, but as a way to enhance work and make you more effective.
Must Do #2 – Plan your vacation
Most CPAs are great planners, but somehow they drop the ball when it comes to planning time off. They say they will fit it in when it is convenient which is a nice way of making sure it never happens. The best way to make sure you take your vacation is to plan it in advance. You don’t have to plan every day, but make plans for at least 90% of the days you intend to take off right from the beginning of the year. Sure those plans might have to change for work or non-work related reasons (your brother announces he is getting married in a destination wedding for example), but it is much easier to make sure you take time off if you already have a plan than if you don’t.
Must Do #3 – Let go on your vacation
Don’t bring that laptop or tablet or smartphone if that is what it takes to truly get disconnected. I know that might be impossible for some people so maybe you just plan on checking email once per day while on vacation – an then only to clear out the junk and eliminate the 10 back and fourth emails leaving the final resolution (with all the build-up) to read more thoroughly when you return to work. People are amazingly considerate if you leave a simple out of office message and let them know you will get back to them when you return.
This week we sit down as a nation and give thanks for our many blessings. We as a CPA profession are also very blessed and here is my list of CPA blessings for 2012.
- Thanks for technology that gives us freedom from the office – from laptops to tablets to mobile phones we are no longer tethered to the office and I love the fact we can work when and where we want.
- Thanks for the people who work in Washington to get important messages across; we no longer have to worry about tax patents and eventually the wisdom of due date rationalization will also make those proposed changes a reality.
- Thanks for States Boards and Societies with the vision to make Mobility a reality; we now have 49 states and DC allowing CPA Mobility – something I never thought I would see.
- Thanks to leadership that is working to ensure the U.S. CPA stays as one world’s most respected accounting credentials by taking steps to internationalize the CPA and enter into a global joint venture with CIMA.
- Thanks to the 36,000 U.S. based CGMAs that are part of over 100,000 CGMAs worldwide that show that there are accounting professional in business that truly do make a difference.
- Thanks to teachers that provide a gateway for thousands of new members of the profession every year and show the wisdom to realize that we must change through the recommendations of the Pathways Commission to continue building a great profession tomorrow.
- Thanks to the AICPA for creating the Financial Reporting Framework for Small and medium Enterprises – it is about time we finally recognized the unique needs of the millions of users of these small business financial statements.
- Thanks for another year of opportunity and satisfaction; I love being a CPA and am so glad people have such a high level of respect for what we do.
So enjoy the turkey and the football as we look forward to another year of progress in making life even better for everyone in and served by our wonderful profession.
As a youth sports referee I am always cognizant of not wanting to “decide the game.” One of my fellow referees put it best when he said “let’s be invisible out there.” He didn’t mean don’t make calls. He meant let the game flow and keep it within the rules so no one even noticed we were doing our job until the end of the game when they say “wow that was a great game” between two teams and not even think about calls we did or did not make.
The reality is of course that we do get “blamed” for deciding the game much more often then is the actual case. The losing team goes off whining that if this one call had been made (or not made) the whole outcome of the game would have been changed. That attitude gets amplified if the call is made near or at the end of the game. That brings me to the ruckus over the Green Bay – Seattle game. Was there a bad call at the end of the game? Yes. Is that why Green Bay lost – No.
Before the cheeseheads threaten me with death due to heresy let me explain. If you watched that game – in particular the first half – you do have to point out that the eight sacks of Aaron Rogers and no points scored in the first half (not to mention kicking field goals instead of getting touchdowns on two drives early in the second half) had as much to do with Green Bay losing the game as one bad call. Face it, Green Bay’s poor play put them in the position that one mistake (by them or by the officials) would result in a loss.
So what does this have to do with business? Actually, a lot. There is a very important lesson here for anyone in business (or anyone in life for that matter). The lesson is that when something goes wrong, all too often we focus on the “final event” and want to pick that event apart to make sure the event never happens again. That actually can lead to extra inefficient work and poorly constructed controls. Instead, just as the Green Bay loss was set up by poor performance on the 120 plus plays (events) before the final bad call, business needs to look at the entire process and determine where and when controls should be put in place to truly minimize the potential for a bad outcome over the entire cycle, be that a day, month or year.
16 Column paper may only be fit for display in an accounting museum, but there is still one thing I learned in school 25 years ago that I use on a regular basis – T accounts. T accounts are a wonderful tool to get to the bottom of complex transactions and follow the numbers. With massive ERP systems handling thousands or even millions of transactions, consolidation systems combing hundreds of legal entities at the touch of a button and payroll systems automatically posting expense, payments and withholdings to dozens of accounts one might think the need for the simple T account is dead, but it seems we need them more than ever today.
I’m guessing there may be a few of you younger ones out there wondering what I am talking about. T accounts look just like they sound:
Debits go on the left and credits on the right. I’ve done analysis with ten or twelve T accounts and debits and credits flowing all over the place, but with the magic of double entry bookkeeping handed to us by Luca Pacioli as long as you make the left (debit) side of all the T accounts equal the right (credit) side then you will always come up with a entries that work.
T accounts can be particularly useful in figuring out complex transactions involving multiple related and unrelated entities. You know you’re an accounting geek when your blood gets pumping standing up to the white board with 10 different colored dry erase markers using each color to signify a separate entry as you map out how the transaction will get booked and flow through your systems.
So, next time your having trouble figuring out how to get something booked, pull out those T accounts and have a little old school accounting fun.
That famous phrase came to my mind a lot the week I spent in India. It hit me as soon as I got off the plane and was walking through the airport. It’s hard not to notice the soldiers walking around with AK 47s on their shoulders. I reminded myself that this was India that was subject to several terrorist bombings in the last year and they were taking security seriously, but this was a high profile airport and things would change once I was on my way to the Hotel. Yeah right.
The first thing you notice on the roads in India is that the white lines are merely suggestions, and not serious ones at that. There might be three lanes at an intersection, but there are often six or even eight vehicles across and when the light changes, watch out! They also take their horns very seriously. They use them so often the cars often have special buttons on the steering wheel so they don’t have to lift their hand to honk the horn (yes I am serious). I thought a New York taxi ride was wild, until I road around India for a week.
Once I survived my ride to the hotel I thought it would finally be time to relax, but once again I was wrong. As my car got into queue to go through the gated entrance to the hotel, I realized that all of the cars were popping their hoods and trunks and the guards were using a mirror device to look under the cars for bombs. I guess after the bombing of the hotel in Mumbai last year, they decided to get very serious about making sure it didn’t happen again. Tip for those traveling without their spouse – do like I did and don’t tell them about the bomb inspections until you get home. There is nothing they can do about it anyway, except worry, so why put them through that.
After being sequestered in the Hotel for the conference, we finally got to get back out on the roads for some more eye opening experiences. The 150 kilometer (less than 120 miles) trip to the Taj Mahal took five hours one way – and that was on one of the better highways. The concept of slow vehicles staying to the right (or I guess the left in the case of India since they drive on the opposite side of the road like the British), does not enter the Indian psyche. We were weaving (as best you could do in a bus) around tractors pulling trailers, Camels and Cows (yes cows) pulling carts and the ever popular Tuk-Tuks (a three wheeled motorized vehicle that often functions as a taxi).
Please don’t get me wrong. India is a very modern country with all of the latest gadgets available to its citizens. There is a large and growing middle class, and you can see the potential with every turn. But being in India for a week also made me realize how wondrous our country is and why so many people want to come here. Even our poor live in sizable apartments with multiple rooms and at least one nice T.V. – not the mud huts that we saw some of the farmers living along the highway. As crumbling as you hear the politicians describe our highways and infrastructure, it is still light years ahead of what they have in India.
As interesting as India was, I was happy to return to the U.S. and drive 30 miles in 30 minutes to get to my house from the airport. In fact, sitting in traffic this week didn’t seem nearly as bad as it did the week before I left. Maybe that is the most important lesson I learned from my trip to India – to appreciate the many blessings I have by living here in the U.S. and being part of the greatest profession in the country.
Playlists are very popular these days. Politicians have them for their campaigns, President’s give them to dignitaries and I bet most of you have created a few of your own. I think it’s time to have some fun and create the CPA playlist. Here is my start with ten songs – feel free to suggest others.
10) Pressure by Billy Joel – a great tune when you need that adrenaline rush because those deadlines aren’t enough.
9) Cats in the Cradle by Harry Chapin – to remind you of what’s important.
8) In the Air Tonight by Phil Collins – the theme song for all those forensic accountants out there.
7) Runnin’ Down a Dream by Tom Petty – for those young CPAs trying to make their mark.
6) 25 or 6 to 4 by Chicago – it’s got numbers in the title, it must be for CPAs.
5) Mr. Roboto by Styx – for the CITP’s!
4) Carry on Wayward Son by Kansas – because someone is going to have to run all those firms when the Boomers retire.
3) Wherever We Go by the Newsboys – because CPAs really do make things better.
2) The logical Song by Supertramp – for all those creative CPAs feeling lost in the numbers.
1) Taxman by the Beatles – need I say more.
A few years ago I was receiving my annual evaluation and was disappointed in the overall rating. I thought I had done several things during the year to deserve a higher rating than I received, but I decided the best course of action was not to question the rating, but instead to question what it would take to receive a higher rating in the future. That’s when the Controller said “there is nothing you can do to receive a higher rating, all you can do is mess up and get an even lower rating.” After my initial disappointment to hear such a thing, I realized that attitude applies to a lot of critical areas in a Finance and Accounting group.
Probably the most obvious example is Payroll. No one in Payroll ever gets noticed when the deposits are made on time, the withholdings are paid to the right parties (especially the government), the W-2s are issued and the journal entries get the expenses to the right budget codes. But make a $10 mistake on someone’s pay and the calls don’t stop until it is resolved. The problem with payroll is that you are sometimes at the mercy of Congress and the IRS.
Take the recent example of the last minute changes to the social security tax withholding rates. The two month extension at the end of 2011 as enacted so late that many payroll systems were not able to update their tax tables in time for the first paychecks of the year. This meant that too much was withheld from the first paycheck and that had to be corrected by lowering the withholding rate below the statutory 4.2% for the second paycheck of the year. Volatility in paychecks is not a good thing and despite all of the proactive communication efforts, I am sure the calls about a mistake in withholdings came into every Payroll office across the country.
Now congress is at it again. As of this writing a compromise has been reached to extend the lower tax rate for the remainder of the year. No matter what your political leanings, the problem with these last minute changes is that they simply cannot be implemented in a timely basis by the payroll vendors and employers. So once again Payroll departments will be playing catch up with withholdings and spending extra time and money to tell everyone the paychecks are really right straight because Congress can’t get their act together in any kind of timely basis.
The surest way to get someone mad at you is to make them look bad through no fault of their own. When it comes Payroll departments, Congress has done a great job of that this year…And Congress wonders why people in business (not to mention everyone else if you believe the polls) have such a low opinion of them.
If the title of this blog looked familiar it’s because there is a book out there by this title. I recently had the privilege of hearing the author speak and given the time of year the idea of never being able to achieve balance really hit home. For those of us in the reporting world with calendar year-ends our busy time is upon us. Our tax brethren are waiting for the numbers before they start up in earnest and the budget people are taking a slight breather before they start working on updated forecasts and projections and if you are in a small business with a small finance staff you are probably doing or at least coordinating all of these efforts. The point is, no matter what you do there are times that are busier than others.
In this world, the idea of constant compartmentalized balance – work gets 50 hours a week, family 40, God 5 and personal interests 15 – is a fantasy that sets you up for failure. The reality is that your life is always unbalanced. Sometimes family gets priority – can we say vacation? Sometimes it’s the church and sometimes you get to steal a few extra hours for that personal interest – like watching LSU get destroyed in football – and sometimes, maybe more often then the others, its work that gets extra hours. Whatever it is, life is never in balance.
I find this perspective truly refreshing and liberating. Refreshing because it is so contrary to the accepted “people of have balance in life are happier” mentality that is such an urban legend these days. Liberating, because as soon as you stop trying to achieve perfect balance you can stop feeling guilty about never getting it done in the first place.
But if we stop trying to achieve balance, what is it we should try to achieve. That answer will be different for each person. There are lots of answers and none of them are wrong (and none of them a right for everyone). The first priority is to earn enough money to provide the basics – food, clothing, shelter – after that it’s up for grabs. Maybe your desire is to be CFO, maybe your desire is to have a work schedule that allows you to see the kids off to school and be at home when they return, and maybe your desire is to set the all time record score for angry birds. Whatever it is is up to you.
The great thing about being a CPA is that our profession has such a diversity of opportunities in ways to earn a living that you can fit a work schedule to just about any unbalanced life you want. Even better, our profession is great at allowing you to change the way you are unbalanced at different times during the year as well as different times during your career. So my advice is to lose the guilt, stop trying to achieve balance and really think about where you want to unbalance your life. You may have to make changes in your life and your job to get there, but as a CPA, you have a better than average shot at actually being able to do it.
It’s the time of year that everyone is making New Year’s resolutions so I thought it would be appropriate to come up with a list of resolutions for CPAs in Business and Industry to make for the New Year.
10. Stop distributing at least one report currently produced and see who notices.
9. Read at least one business related book during the year. You can’t advance your career if you don’t advance your knowledge.
8. Volunteer to help out a not-for-profit. They could really use your financial expertise.
7. See to it that your company comments on at least 2 exposure drafts. There are plenty to choose from in the coming year with FASB exposure drafts on revenue recognition and leasing, FAF’s proposal to (barely) change the process for private company standard setting, PCAOB exposure drafts on auditor’s reports and independence, the COSO exposure draft on the Internal Control Integrated Framework and potential SEC exposure drafts on the incorporation of IFRS.
6. Change at least one accounting process – automate it, streamline it or just plain eliminate it!
5. Vote in November or don’t complain about the results.
4. Volunteer for at least one position in a professional organization, committee or task force. This is your profession. The only way it will continue to be your profession is if you get involved.
3. Get involved in at least one social media outlet – be it Twitter, LinkedIn or your own blog – do something!
2. Do one thing to go green, and I don’t mean heading to Savannah on St. Patrick’s Day.
1. Take all your required CPE before December and make sure that it will help you do your job better.