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Grimbleby Coleman CPAs Blog
Archive for the ‘Accounting’ Category
What do you get when you put over 100 accountants in a room for 3 hours? Wait! It’s not a joke, even though this statement may bring to mind the old yarn “Why did the accountant cross the road? To bore the people on the other side.” On the contrary, you would actually be surprised to find a lively group of outgoing individuals, bubbling over with energy and sociability.
The annual IMA Student Night, hosted by California Chapter 384 of the Institute of Management Accountants, brings together a wide range of both professionals and students for networking and dinner. The evening concludes with a question and answer session fielded by a panel of individuals who are getting started in their accounting career. This year’s panel featured K-deep Dhaliwal, CPA, Business Assurance Manager for Moss Adams LLP; Shannon Ferrero, Staff Accountant for Foster Poultry Farms; Carmen Garcia, Administrative Analyst for the CSUS College of Business Administration; and Matthew Gurule, Financial Advisor for Merrill Lynch. Each individual brought a varied range of knowledge and insights, with Matt and Carmen having hiring experience, and K-deep and Shannon having recently gone through the job seeking process.
Here are just a few of the helpful insights young attendees left with:
- Take advantage of everything your school has to offer and get involved. Join community organizations, attend career fairs, and utilize internship opportunities. The more you do, the better it will look to recruiters. Keep in mind that there will be times where you have to burn the candle at both ends, both while you’re in school and in your career. “You’ll be amazed at how much you can do. You just have to manage your time well,” said Carmen.
- Work experience will give you a leg up on the competition. It’s the hands-on experience that teaches application of theory and the little intricacies that just can’t be learned in a classroom.
- Network, network, network, and do it sooner than later. “It’s all about who you know,” said Carmen. Shannon could attest, as her first two positions were attained by connections made at school career fairs. And “don’t wait to network,” said K-deep. “A lot of us think we can sit around until our junior and senior years, THEN start making connections, “ but your best bet for finding a position after graduation is by doing it early and often.
- How you present yourself is extremely important. Dress appropriately to job interviews, that is, suits, ties, and appropriate business attire for ladies. According to Matthew, if you “look like you’re getting ready to go out on a Friday night,” you’re not going to be taken seriously. Carmen stressed that this attention to attire should additionally go beyond just the work and interview environment. “Of course, you don’t have to wear a three piece suit every day, but you never know who you’re going to run into and when.” Stay well groomed and maintain a look of confidence and self respect.
- Use spell check, but don’t trust it. “If I see a spelling error on your resume,” says Matthew, “that shows me that you can’t pay attention to details.” Have a well put together resume that you’ve checked over more than once, and maybe had a friend or ten check over as well. And be sure to include your GPA, as some recruiters pay extra attention to those that do.
- Don’t expect to have a glamorous accounting job on your first time out. K-deep, for example, started out stuffing envelopes in a front office, but as supervisors began to gain confidence in his abilities, they gave him more and more responsibilities. Carmen began doing secretarial and bookkeeping work (“anything to do with numbers”) before formally moving into the accounting field. Sometimes you have to start at the bottom to get to the top.
- Learn about your potential employer before the interview and definitely before you accept a position. Do some background checking beforehand; the web is a great resource for researching a company. Use the interview as an opportunity to ask questions about work culture and expectations. “Ask what a day in the life would be like,” said K-deep. And Carmen stressed finding out what turnover rates are like. “If you go around the table and each person has been there only one or two years” that’s probably not a good fit for someone seeking a stable position. “I personally don’t want to be looking for a new job every year,” she said.
- When you finally meet that recruiter, be persistent. Say hello each time you meet them at a career fair or function, and reintroduce yourself if necessary. If you are truly interested in working for their company in the future, make it obvious! Send follow-up emails reinforcing your desire for an interview, and once you get that interview, follow-up again with a thank you. There are ways to be persistent without coming across as a nag.
For information about job opportunities at Grimbleby Coleman CPAs, please visit the career portion of our website.
Grimbleby Coleman Accountant Becky Austin was recently awarded her Enrolled Agent Status from the National Association of Enrolled Agents. Becky took a moment out of her busy tax season duties to answer a few of our questions about her new designation and what it means to clients.
 Becky Austin, EA
Becky, what is an Enrolled Agent, and what makes them different from other tax preparers?
Enrolled Agents are equipped to advise, represent, and prepare tax returns for individuals, partnerships, corporations, estates, trusts, and any entities with tax-reporting requirements. Unlike other tax preparers, Enrolled Agents must fulfill continuing professional education requirements that exceed the IRS’ required minimum. This continued learning ensures they can effectively represent taxpayers audited by the IRS in lieu of continually changing tax laws.
How long have you been dabbling in taxes and tax code? What do you enjoy about it?
I have been involved with taxes for the past 20+ years in both the private and public sectors. Thoroughly knowing the tax code is a benefit I can offer our clients. I can help them by being aware of how changes will impact their filings and what possible tax credits they are not currently taking advantage of.
What are the top reasons companies and individuals seek the assistance of Enrolled Agents?
There are two unique benefits to using an Enrolled Agent:
- Emphasis on ethics – Our principal focus is honest, intelligent and ethical representation of taxpayers before the governmental agencies. Enrolled Agents adhere to a stringent Code of Ethics and Rules of Professional Conduct of the Association, as well as the Treasury Department’s Circular 230 regulations. In addition, we belong to a strong network of experienced, well-trained tax professionals who work to make the tax code fair and reasonably enforced.
- Proof of Expertise – Enrolled Agents are required to demonstrate their competence in matters of taxation before they may represent a taxpayer before the IRS. Unlike attorneys and CPAs, who may or may not choose to specialize in taxes, all enrolled agents specialize in taxation. In addition, Enrolled Agents are the only taxpayer representatives who receive their right to practice from the U.S. government (CPAs and attorneys are licensed by the states).
We all know what you’re doing January through April 15: tax prep, tax prep, and more tax prep! But what services can an EA offer in the other 8.5 months out of the year?
While tax prep is mainly completed during January through April 15th, an Enrolled Agent is busy throughout the year in advising clients on tax law changes, preparing tax returns that were placed on extension past the April 15th deadline, representing client before the IRS, and offering tax planning services to their clients.
What do you find most rewarding about helping companies and individuals with their tax concerns and preparations?
It is always personally and professionally rewarding when you can help a client through a troubling time of receiving a letter from the IRS or simply by preparing tax returns for business and individuals knowing they have confidence in your professional ability.
Learn more about the Enrolled Agent designation at www.naea.org
More information about Grimbleby Coleman CPAs, Inc. Tax Services can be found at www.grimbleby-coleman.com/services/tax-services or by emailing contactus@gccpas.net
In February 2012, Grimbleby Coleman Principal Martin Fox earned his Accredited in Business Valuation (ABV) designation from the American Institute of CPAs. We took a moment to ask him a few questions about the ABV, business valuation, and his relationship with both.
Marty, give us a brief overview: what is business valuation?
Business valuation is a complex process to determine the worth of a partial or full interest in a business or entity. This can include anything from a sole owner of an operating business to a minority interest owner in real-estate partnership. Business valuation requires knowledge of accounting, finance, economics and business, along with expertise in valuation methods.
When did you become interested in business valuation?
In the mid-‘90s I became intrigued with business improvement. Why were similar types of businesses so dissimilar in profitability? What made some successful and others just so-so? Using my many years of experience with business, I began to help owners make better decisions by focusing on the profit drivers. These same drivers affect the ultimate value of the business. If a business can be focused on the right drivers (and sustain that focus), it can achieve superior performance and significantly improve its value. Business valuation was a natural extension to tie together the profit drivers, sustainable performance, and exit value for the owner. Business valuation completed the progression.
What is required to earn your ABV designation?
A CPA who holds the ABV designation must demonstrate significant experience in business valuation, pass a rigorous 6-hour exam, and obtain a minimum of 60 hours of continuing education every three years.
What can a CPA with ABV accreditation offer that your average CPA cannot?
CPA/ABVs have demonstrated expertise in valuation methodologies and professional standards, in addition to competencies in accounting, taxation, financial analysis, and business operations. This expertise is often a requirement for valuation reports submitted to taxing authorities or courts of law, and offers additional assurance that the professional has an adequate understanding of current bodies of knowledge.
What are the top 5 reasons a business valuation expert should be contacted?
- I want to sell my business. How do I maximize its value and what’s it worth?
- I need to determine the fair market value for estate or gift tax purposes (including a thorough understanding of discounts for lack of control and marketability).
- I’m converting my C corporation to an S corporation and I have to establish the goodwill value.
- I have a buy-sell agreement with my co-owners and now one of us wants out. What’s the buy-out price?
- I need to obtain financing for a new or existing business. The bank needs an independent appraisal.
What is the most rewarding part of doing business valuation?
I love numbers and I love business. Every business is unique because every owner has imprinted a unique personality and philosophy on the business. Each business is a creation of its owner (or successor) and a strong emotional bond exists between them. My job is to understand what makes the business tick and how that translates to sustainable cash flow and perceived risk. There are many ways to build a sustainable business, but it comes down to focus. Business valuation is about understanding how that focus impacts the cash flow and risk of the business, how it is positioned in the market place, and how it appeals to the prospective pool of buyers.
For more information about the ABV Credential, please visit the AICPA ABV overview page.
View the press release regarding Marty Fox’s ABV Designation here.
View Marty Fox’s bio and resume here.
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On April 15th of this year, our firm joined the BDO Seidman Alliance, a nationwide association of independently owned local and regional accounting, consulting and service firms with similar client service goals. The Alliance gives us an opportunity to expand the services we provide our clients – without jeopardizing our existing client relationships or our autonomy. We asked Nate Miller, one of our newer shareholders, to tell us what membership in the alliance means to him.
What does the BDO Seidman Alliance mean to you personally?
Being a member of the BDO Seidman Alliance means our firm can quickly reach experts on almost any subject. Knowing that I have access to Alliance resources gives me greater confidence with current and prospective clients.
We just met with several BDO partners from the San Jose and San Francisco offices. The partners made it clear that whatever experience or expertise they have, we now have as well. The Alliance really means something to member firms.
How will it benefit your clients?
Even in this sluggish economy, clients are continuing to grow and improve their businesses. They are looking for ways to gain a competitive advantage and expand their customer base. Their search for an edge has caused some companies to expand beyond state and country boundaries. Thanks to our membership in the BDO Alliance, we can now provide services well beyond our local market – and can better address multi-state and foreign issues. We can also serve larger, publicly-traded companies who require more complex services.
BDO also offers tax specializations including R&D Credit services and Cost Segregation studies. We’ve already invited members of these teams to meet with several of our clients who might benefit significantly from a specialized study. These are just a few of the additional services we’ve explored so far, but there are many more areas that we plan to explore in the future.
Clients expect us to provide basic services in a timely and accurate manner. Our goal is to exceed their expectations by providing solutions they might not have even considered. These specialized tax areas can be of great value to our clients and I’m excited about bringing BDO in to help us continue delivering exceptional client service.
What did you learn from others at the Alliance conference you just attended?
The most important thing I gained at the BDO Seidman Alliance conference was access to the BDO staff. I’ve already contacted them after the conference for guidance on several key issues. With the size of the BDO firm, they are able to have staff and partners specialize in specific areas so they can become experts. This has been a huge resource for us – now we are able to go to a specific person with a specific issue and they know the answer.
What can you contribute to other members of the Alliance?
For starters, we plan to share our expertise in agriculture in the Central Valley with other members of the BDO alliance. We expect to be a key resource for member firms who work with agricultural clients.
Why this alliance and not others?
BDO seemed to us to be the premier alliance for CPA firms. As part of our research, we spoke with partners from several firms who have been BDO Seidman Alliance members for many years. We left the meetings with a sense that these firms shared our views on practice management and client service. They were drawn to the BDO Alliance for similar reasons.
Since the BDO Seidman Alliance is a client of the firm BDO USA, the staff and partners of BDO USA treat the Alliance members as one of their top clients. We take pride in providing excellent service to our clients and they do as well.
We polled everyone on our team for some ideas that would help our current and future clients begin 2011 on the right track. Here are the resulting suggestions.
The number one suggestion, according to our unscientific, non-secret vote, was for businesses to update their 2011 Strategic Plan and decide where they want to be financially in 2011. We also suggest every individual prepare his or her personal financial budget. (If you don’t have a Strategic Plan or a personal financial budget, now would be the time to sit down and create one. Ask us for a $COPE grid that you can use to start the process.)
Here are some other resolutions you might want to add to your list.
Retirement and Estate Planning
- Review your estate plan. Recent tax law changes and asset revaluations may have substantially impacted your planning.
- Consider meeting with an estate attorney if you don’t have an estate plan.
- Review your retirement portfolio. Is it time to change your investment allocation?
- Review your retirement contributions. Is it time to increase the amount or frequency of your contributions?
Pension Plan Fiduciaries
- Review pension plans to ensure that all fees are reasonable. (To comply with new rules that take effect in July 2011.)
Employees and Employers
QuickBooks users
- Use the QuickBooks budget feature.
- Use the Accountant’s Copy to securely share files with your accountant – it will save you time and money.
- Review your chart of accounts. Is it too detailed or not detailed enough?
Closely held businesses
- Avoid paying personal expenses with company credit cards.
- Review related party loans between owners/partners and the business.
- Establish or review your business succession plan. Who is next in line? Are your processes documented?
Businesses
Planning and budgeting
- Establish or update your 5 year plan.
- Create both an Income Statement and a Cash Flow budget. (Ask us how our $COPE It! Software can help.)
- Focus on building more business now.
- Review and communicate your company’s break-even point.
- Create a capital expenditures budget to capture any planned projects or expected investments in furniture, fixtures, buildings, equipment or other similar items.
- Prepare a monthly budget to actual analysis (check your software for reports that provide this view.)
Accounts Payable
- Start capturing 1099 vendor information early. Formalize the process each time you add a new vendor.
- Contact your top vendors and suppliers to see if you can negotiate a better deal based on volume purchases.
- Look for ways to improve your accounting system.
Banking/Collections
- Review your lending relationships to see if you can lower your interest rates on debt.
- Look for business expansion opportunities – is it time to add a new product or to acquire a new business?
- Review your Accounts Receivable. Now is the time to take action on any amounts that are older than 60 days.
Expense Management
- Review your advertising and marketing expenses. Investigate new marketing ideas and evaluate the success of your past efforts.
- Review and improve your internal controls.
- Look for ways to reduce your expenses. Make sure your expenses are broken out in enough detail to provide clear insight.
- Improve profitability. Review all components of your Cost of Goods Sold for opportunities to lower costs.
Analysis and Systems
- Learn and apply significant financial ratios.
- Determine if you can pay down some extra debt.
- Take time to research your clients’ needs and measure their satisfaction with your products or services.
- Review your software for opportunities to update, enhance, or expand its use in your business.
As accountants, one of the hardest concepts we have to explain is the difference between cash and profit. (There’s also that whole Debit versus Credit thing but don’t get me started. ) I can’t tell you how many discussions have centered around the subject of cash. The discussion with a client can go in one of two directions: 1. “If I made this much money, why don’t I have any cash in the bank? ” or 2. ” I have cash in the bank, so why don’t those financial statements of yours show a profit?”
In the past, I have resorted to drawing on the financial statements, creating elaborate flow charts, building multi-tabbed excel spreadsheets, and one time I tried hand-puppets to make my point. But it’s just not a subject that makes sense to most people. The missing cash can usually be found hiding in the balance sheet as an investment in customer receivables, increased inventory, or additions to fixed assets. The ins and outs of the missing cash can be tracked on the statement of cash flows, but no one ever reads it. (Except fellow accountants and sometimes bankers who are looking for evidence that their loans will be repaid.)
Part of the problem in explaining this concept and many others is the language barrier between us as accountants and the language of normal people like our clients. We tend to think and speak in a linear, numerical fashion while most business owners think visually and speak conceptually. After many years spent wrestling with this issue. we have found a tool that lets us bridge the communication gap. It’s called $COPE It!. It’s a new iteration of similar products we have been using for a couple of years. The beauty of this tool is that you can bring in financial statements, convert them into pictures, and then make changes to your results. So now, rather than telling you that selling more products and services at the same margin (with other factors unchanged) will generate NOT more but LESS cash, I can change one number on the screen and show you the impact on your cash. I can also enter your targeted cash balance, and show you where to focus to achieve it.

After making one simple onscreen change to a set of numbers, I have had even marketing people proclaim that the blanket of confusion has been lifted from their eyes. Suddenly they understand why cash and profit are not the same thing. It really changes the dialogue when you’re doing business planning, negotiating loans, or evaluating new sales strategies.
But you really have to see it to believe it – just ask a member of our team to show you how it works.
Now let’s talk about Debits versus Credits…
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