July 2011

In turbulent financial times such as these, many businesses find that simply maintaining the status quo is challenge enough. But for a far-sighted few, unusual times mean unusual opportunities.

CPE Link instructor Tom Tubergen
, the managing director of Mentoring Success Group LLC, points out that it’s necessary to not shy away from the “issue of gut-wrenching, strategic changes in direction” that can mean the difference between defeat and not only survival, but a flourishing survival.

We find this true in our personal lives as well. The loss of a job, end of a contract, illness of a spouse, college education of a child – the endless fluctuations of life mean that we must constantly be on our guard: watching where we need to retrench, seeing opportunities to expand, looking for ways to improve our lives.

Those who can’t move with the flow and adjust to changing life currents find themselves bogged down, going stagnant. But knowing which current to ride and which to avoid is a challenge.

Tubergen cites the famous Chinese general, Sun Tzu, who observed a timeless truth many centuries ago: “Strategy without tactics is the slowest route to victory. But tactics without strategy is simply the noise before defeat.”

Tubergen recalls that just a few years ago, “running a business was relatively straightforward. Buy low. Sell high. Join the local Chamber of Commerce. Carefully manage your expenses. The Internet, and the massive trends toward globalization in recent years changed all of that. Now we’re faced with an overwhelming amount of information about our business environment every day. Competitive threats emerge and disappear daily.”

What to do?

He advocates “leading yourself to lead others” as the perfect starting point. From there, he looks at ways to create the right strategy and manage “disruptive strategic change.” His insights have been put to use by accountants, attorneys, consultants and trade associations to help clients find that competitive advantage.

“Theory is great for academics and college professors,” Tubergen notes. “Where I operate, the rubber’s got to meet the road.”


I know I could use some fine-tuning in learning to schedule my days — more often than not it seems like my days schedule me.

We all have those long “must do” lists: Work commitments, family duties, personal chores — the items go on and on.

CPE Link instructor Laura Stack, a productivity expert and best-selling author, says your to-do list “should be full of clear, actionable ideas — in other words, things you can actually do. If you have a vague goal, like ‘Have a sale,’ you’ve still got a lot of thinking to do before you can hit the ground running and make real progress.”

One thing I’ve learned recently is that using software to maintain my schedule helps tremendously. I eyed it with suspicion for a few years, thinking about the extra time it would take to open my computer, figure out how the heck to use the scheduling software, enter the data, and then remember how to access it.

At that point I’d just give up and scribble my to-do list on the back on my electric bill envelope, as usual.

Stack points out that using software “can turn into a real waste of time for you and everyone else involved” if it’s not done right. She says that most users only know about 20 percent of scheduling software’s capabilities, and waste hours every day “playing with it” rather than getting the most out of it.

And learning to schedule your day doesn’t mean an endless list of work-related chores, she adds. Your day must include – and in fact must capitalize – on non-work activity.

“Successful people don’t want to trade personal satisfaction for professional achievement,” she says. “They know high performance depends on both. Professionals must be able to balance work and family without sacrificing either.”

Remember the days when we conducted business in close proximity to where we lived? The world is a different place now. The Internet has enabled businesses to have employees located in foreign countries and to find customers in very remote locations throughout the world. The challenging U.S. tax system makes doing business in the United States difficult. However, when a business goes offshore, the confusion grows geometrically.

Tax planning is critical for an international business. While a decision about which form of business organization to use might be right in the United States, the decision may generate terrible tax ramifications because of the differences in another country’s tax system. For example, setting up an S corporation, one of the most prevalent forms of business organization in the United States, to operate in another country could devastate the business due to the its inability to claim foreign tax credits. The limited liability company, which is hot and often promoted by attorneys, is still not understood by many governmental authorities in the U.S., but worse yet this form of business organization is not even recognized in foreign countries.

For many years the Internal Revenue Service did not pay attention to taxpayers doing business offshore. Now the IRS is increasing its staff of specialists in the area of international business.

There is nothing wrong with tax avoidance and nothing wrong with trying to save money legally through tax planning. Because of the inconsistencies among tax systems in foreign countries, tax planning poses great challenges. Brazil has very high tax rates; Poland and Hungary have very low tax rates. The U.S. tax rate is one of the highest in the world. Legal ways exist to shelter income from tax in the United States, but it must be planned so that, when the money is brought back to the U.S., the repatriated income will be taxed. Planning requires the realization that while the U.S. government is not taxing the income when it is initially earned, the foreign countries are taxing it. Therefore it is critical to understand the tax systems in the countries where business is conducted.

Other issues apply to the employees of a U.S. business who are located in a foreign country. Planning is essential to help these employees obtain the maximum benefits of income tax exclusion for their foreign-based income.

The major need of any business that is planning to or operating in another country is a plan to do it right.

By guest blogger and CPE Link instructor, Stuart P. Sobel, EA

Tax law seems more uncertain than ever; however, what is a sure thing is the importance of CPAs and other professionals moving their clients to update and improve their succession planning.

The Tax Relief Act of 2010 (enacted 12/17/10) gives CPAs and other tax professionals an outstanding “window of opportunity” for 2011 and 2012 (the law sunsets January 1, 2013, absent additional tax legislation).

The new $5 million lifetime gift tax exemption gives families a real opportunity to shift values of investment assets and family businesses to younger generations – all without any gift tax and with the opportunity for future income and appreciation to go to the younger generation family members. Outright gifts, installment sales, self-cancelling installment sales, sales to grantor trusts are among the techniques worthy of consideration. It is important, also, to review existing estate plans, especially where there are “formula clauses” that are impacted by changes in exemption levels.

According to CPE Link author-instructor Owen Fiore, JD, 2011-2012 is a critical time period for really getting the family wealth succession planning job done right and with the necessary flexibility. Now is the time for action, before Congress either fails to act or acts in a manner adverse to wealth accumulation and preservation important to our clients. Especially as to valuation discounts and the use of entities to shift wealth within the family, timing is essential due to the possibility of adverse tax legislation at any time, even before 2013.

What firms want from CPE has changed. It’s not just about getting credits toward maintaining certification anymore. Firms need CPE to do much more.

This was a recurring theme in the corridors of the recent Association for Accounting Administration (AAA) Practice Management Conference, says CPE Link’s Christine Fraser. Firms want help from CPE in two key ways.

Talent management. They are concerned about competing for and winning top talent to their firms. “Job seekers are asking firms ‘what’s in it for me to work here?.’ It’s getting so that firms can’t recruit successfully unless they have an impressive program of professional and career development and exciting practice niches to grow into. Both require increased intelligence as well as talent management. “CPE is the catalyst to achieve both,” says Fraser.

Business growth. Firms are tying continuing education to the business strategy. Firms are recognizing that technical education alone isn’t enough because technical education doesn’t drive the growth of the firm. “It’s the so-called softer skills that help the firm and human capital grow. Things like communication, customer service, negotiation and business development, and knowing how to share knowledge through coaching.” says Fraser.

“Last decade, the talk was about getting rid of C and D clients and focusing on the most profitable A and B clients. Now firms are talking about shedding even the B clients for tighter alignment with the firm’s strategy and ultimate business model. Firms need CPE that helps them become more specialized and differentiated in growth niches. CPE is also an effective tool for effectively implementing progressive strategies.”

Like it or not, the economic slump is driving major changes in accounting firms. Firms are:

  • Merging or acquiring—or preparing for it
  • Rehiring with a new focus after having pared down
  • Investing in new technology that changes how the firm works and interacts with clients
  • Accelerating new business development

“Change is not just a buzz word, it is a necessity to understand how to use it to your advantage in today’s economic climate,” says CPE Link instructor, Sandra Wiley, COO, Boomer Consulting, who consults and teaches about managing organizational change.

“It isn’t enough to make a change,” adds Wiley. “Change must be managed carefully to minimize resistance and optimize adoption.”

Firms making significant changes need to understand that people resist change for many reasons:

  • They perceive changing as riskier than doing nothing
  • They feel loyalty to people associated with the old way
  • They have no models for the new way
  • They fear they lack competence in the new way
  • They feel overwhelmed
  • They fear that reformers have hidden agendas
  • They feel that the change threatens their identity
  • They fear a loss of status
  • They fear a loss of quality of life
  • They are skeptical and want proof that the new way is sound
  • They genuinely believe the change is bad idea
  • Then firms need practical strategies for managing the change that is already taking place.

    What’s the most challenging change facing you and your firm today? How are you managing it?

Don’t you just hate performance appraisals? Too often–

  • They discourage teamwork and collaboration
  • They’re inconsistent
  • They don’t address communication issues
  • They are one-directional
  • Feedback is too subjective
  • They produce negative emotions

Those are some common knocks on performance reviews. Whether you’re getting them or giving them, they can be painful experiences, right? Well, they don’t have to be if there is a quality performance management system in place, says Sandra Wiley, COO of Boomer Consulting, who teaches seminars on performance management and managing change in organizations.

What makes a quality performance management system? For one thing, says CPE Link instructor Wiley, “Individual goals should link to the firm’s broad, strategic objectives. A quality appraisal system will not only drive staff members to a higher level of commitment and achievement but will ultimately drive the firm to superior results.”

What is your beef with performance appraisals? What do you think would make them better experiences for all concerned?