25th Mid-Year Meeting Takeaways

Our 25th Mid-Year Meeting concluded on November 9th, 2018. Over 15 attendees including members, prospects, and partners attended the one-and-a-half-day conference in Scottsdale, Arizona. Below is a synopsis of the session highlights.

The 2018 Rosenberg Survey

Sarah Dobek, President of CPAsNET, facilitated a highly interactive session that utilized results from the 2018 Rosenberg Survey to help attendees understand the financial metrics that are most important in driving firm profitability.

First, Sarah brought to mind the reasons why we benchmark; to:

  • measure your firm’s performance,
  • understand what you do well and where there is an opportunity for improvement by analyzing your performance against peers and best in class, and
  • change your firm’s performance by setting goals and taking actions.

Next, we moved on to the Top Findings from the 2018 Rosenberg Survey (based on 2017 numbers):

  • Revenue growth was down from last year and is overall dropping. CPAsNET member firms should aim for 6 percent growth.
  • Mergers are continuing to impact revenue growth. This year, 39 percent of firm revenue increase was from mergers.
  • The income per partner (IPP) was 3 percent higher than the prior year. Firms that formally develop their partners on average have a higher IPP and growth rate.
  • There was an undeniable correlation between leverage and billing rates in 2018.
  • Elite status is possible! In 2018, 96 firms achieved more than $500,000 in IPP versus 94 firms in 2017.
  • The percent of firms >$20 million that offer investment advisory services grew from 45 percent to 52 percent. The percentage of firms who are either very likely or somewhat likely to offer these services in the future also increased from 11 percent to 29 percent.

This session concluded with key observations of what the elite firms are doing and a member roundtable discussion around CPAsNET member firm results.

Not-for-Profit Update

We welcomed Robert Durak of the AICPA to deliver an NFP update that focused on the FASB accounting standards that significantly affect NFPs. Robert is the AICPA’s lead person on accounting and attestation matters affecting private companies.

Much of Robert’s presentation focused on the FASB ASU 2018-08, which provides guidance on determining whether a transaction should be accounted as a contribution or as an exchange transaction. This determination is crucial because significantly different accounting and financial reporting rules apply to each transaction.

Robert spent time explaining that guidance is needed because it was unclear how to make the contribution/exchange determination. According to Robert, The ASU 2018-08 could result in more grants and contracts being accounted as contributions than under current U.S. GAAP. It could also make accounting for the grant or contract as a contribution less costly than applying FASB ASC 606.

Robert also addressed the importance of determining whether a contribution is conditional or unconditional. Throughout the presentation, Robert posed realistic scenarios that allowed attendees to understand how to make such a determination.

Robert explained the key points in determining between a contribution and an exchange transaction. To review Roberts key points, please refer to his slide deck, found here.

Becoming a Best Firm to Work For

Recruiting and retaining top talent is a significant struggle for accounting firms. We invited Daniel Hood, Editor-in-chief at Accounting Today, to review the results of Accounting Today’s 2018 Best Firms to Work For Survey. Dan highlighted the management practices, HR and benefit policies, firm cultures, and retention strategies that can make a firm an employer of choice.

Dan talked about the value to firms of being named to a Best Firms list.

Next, Dan explored benefits, such as help with earning credentials, family inclusion, personal development, parental leave for birth/adoption, financial education, exercise and fitness programs, and paying vision plan premiums that set Best Firms apart. If you are interested in a breakdown of the numbers, you can find Dan’s slide deck here.

There are specific characteristics of Best Firms. Dan provided examples of some of the activities and programs Best Firms to Work For offer. These include stability, clarity and communication, flexibility, a sense of community, individuality, career development, elements of fun, and of course, a competitive compensation and benefits program!

CPAsNET is excited to announce that we will be participating in the 2019 Best Firms to Work For Survey. More details will be released soon. The survey will open in the Spring of 2019.

Cyber Security: Best Practices for Accounting Firms

Martin Straub of SimplePowerIT led a session on cybersecurity best practices for CPA firms. Martin led a career in the accounting profession as an auditor for Weyerhaeuser until he decided to combine his passion for information systems and financial audits. Martin served as Technology Director for our Washington member firm, Cordell Neher and Company for twelve years before venturing out to start his own company. SimplePowerIT delivers frustration-free technology solutions to regional businesses and nonprofits. Martin also provides internal IT support for Cordell Neher and Company.

Martin began this session with an overview of the cybersecurity landscape, including the threats and challenges to CPA firms. Martin challenged attendees to think about

  1. all the bad things that could happen to a CPA firm,
  2. how likely it is that any given thing could happen, and
  3. how bad it would be if it did happen.

Martin provided a framework and formula for calculating risk. If you would like to see it, you can find it on Martin’s slide deck here.

Firms should be proactive about cyber security:

  • Do you have a cybersecurity plan?
  • Does it address all cybersecurity components?
  • Do you carry cybersecurity insurance?
  • Do you have an IT security policy? Are employees required to read and acknowledge it? Is it modified periodically?

Both interactive and informative, this session was an eye opener for attendees that are not being proactive about their network security. Martin stressed the importance of incorporating cybersecurity into your firm culture and training employees on how to identify and respond to cyber threats.

Cybersecurity can be overwhelming for firms with limited resources. Martin suggests the following next steps:

  1. Appoint a Chief Security Officer (CISO)
  2. Appoint an incident response team
  3. Implement an employee awareness program
  4. Evaluate current security either through an external vendor or self-assessment
  5. Periodically monitor and revisit your cybersecurity plan

While Martin shared many tips for CPA firms, two crowd favorites were 1) adding the phishing button to your Outlook toolbar and 2) branding your Office 365 landing page to prevent employees from logging into spoofed accounts.

If you would like to talk to Martin about cybersecurity, we are happy to provide an introduction!

Leadership Training Toolkit

Mickie Lara, Senior Consultant at GiANT Worldwide, closed our mid-year meeting with a training session around leadership – specifically addressing how to lead teams in the digital age.

Mickie provided attendees with the essential tools every great leader needs to become a leader that people want to follow. If you missed this session but are interested in leadership development yourself, we can provide you with a link to the recording.

If you would like more information or have a question for one of our speakers, please let us know. Our 26th Annual Meeting will be June 19-21, 2018. More details are coming soon!

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