23rd Mid-Year Meeting Takeaways

This year’s mid-year meeting was in Austin, Texas. We had over 20 members and prospects attend the meeting. Below is a synopsis of the session highlights:

Benchmarking and Succession Planning

We welcomed back Charles Hylan of The Growth Partnership to review the results of the 2016 Rosenberg Survey. Participants were able to learn how their firm stacks up against other CPAsNET member firms as well as firms in similar size markets and geographic regions.

This session also examined financial benchmarks to help member firms understand what activities and behaviors separate the high performing firms from the rest of the group.

The biggest finding relevant to our members is the need to increase billing rates. CPAsNET member firms average billing rates are $20 lower than the national average for firms of our size.

We recorded Charles’s session, if you would like access to the recording, please let us know. We also have the capability to offer CPE credits for this session. For more information, give us a call.

State of the Profession

We were pleased to welcome Barry Melancon, President and CEO of the AICPA, to our mid-year meeting. Barry provided an overview of the key forces driving change for the CPA profession today and in the future. Driving forces included:

  • Disruptive technology (i.e. drones, driverless cars impacting current business models)
  • Geopolitical instability
  • 2016 US Election
  • Regulatory Complexity
  • Financial challenges worldwide
  • Workforce Changes
  • Technology and Cyber issues
  • Block Chain Technology
  • Big Data

Barry highlighted the most desirable skills for today’s business world. Statistical analysis, data mining and data modeling are the top desirable skills. Forecasting and new business development were at the bottom of the list. According to Barry, the next generation of CPAs (Generation Z) will be entirely different from millennials. To prepare for generation z, you must embrace future learning concepts.  Generation Z:

  • Wants to have an impact on the world
  • Will make up more than 20% of the workforce by 2020
  • Is more likely to want to start a business and hire others
  • On average has an 8-second attention span
  • Uses social media for research

Strategies for Successfully Dealing with an Aging Workforce

Pamela Williams of Fisher Phillips presented on strategies for dealing with an aging workforce. She indicates that while the baby boomers are aging, a significant percentage of them are remaining in or returning to the workforce. Whether it is for social or financial reasons, this presents challenges for many employers. For many of our members, the biggest issue rests in how to handle performance issues with employees and partners.

Pamela spoke a lot about the Age Discrimination Employee Act (ADEA). This act protects individuals age 40 and over from discrimination in hiring, firing, compensation and other terms and conditions of employment. It also forbids harassment and retaliation. The Act applies to all employees. While this protects an employee, it doesn’t prevent you from firing for performance issues.

There are exceptions to the ADEA that include limited mandatory retirement for executives and employee owners (like partners). This means that if you have a bona fide partner, the ADEA does not apply to them.

Regardless of the performance issue, Pamela offered up some advice on how best to manage these situations to limit your companies risk.

  • Document everything! This is the most important part of any performance issue. She suggested placing any employee with a performance issue on a progressive action plan or performance improvement plan. If you have questions on how this works, contact CPASNET for templates and guidance.
  • Evaluations must be objective, identifiable and quantifiable. This includes general evaluations as well as those for performance improvement. For example,
    • WRONG: “You are missing due dates and appointments.”
    • BETTER: “In the past three weeks you have missed four due dates. You have missed two appointments this week.”

Cyber Insurance/Professional Liability

William Thompson of CPA Mutual concluded our mid-year meeting with a presentation on cyber insurance and professional liability. Bill’s session was a real eye-opener to the threats CPA Firms are vulnerable to as we move from banker boxes to the cloud. The biggest takeaway is that cyber insurance is still relatively new for most insurance companies. It’s relatively cheap but expected to rise over the next few years as insurance companies figure out how to price the insurance. He suggests adding it to your policy now.

In addition to cyber security, he shared many horror stories and case studies. Bill covered what CPAs should approach with caution:

  • Digital files – almost everything is discoverable today and these have made or broken many claims cases.
  • Jury Trials/Legal System – there is a negative bias towards accounting firms before you even step foot in a courtroom. Settle when at all possible.
  • Inexperienced Staff & Partners – A majority of cases were made on the level of staff doing the work and the quality of review procedures.
  • SEC, DOL & State Board reviews
  • Wealthy Clients – there are more instances of lawsuits regarding the rich. They don’t like to let things go.
  • Bankruptcy Trustees
  • Estate tax returns
  • New legal theories such as fiduciary liability. It is that if you are a trustee to consider increasing your coverage.

If you would like more information or ask a question directly to our mid-year speakers, please let us know. All presentation files are available on our website. Click here for to access our mid-year meeting electronic materials.

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