By Ibi Ojo, EA.
The rapid evolution of accounting technology has automated traditional compliance work. Small businesses and accounting professionals, alike, are beneficiaries of artificial intelligence built into accounting software and apps.
As lower-level compliance work continues to be automated, tax and accounting professionals have to find meaningful ways their services can remain valuable to their clients—hence, the evolution of client advisory services.
We need to show, and help, clients understand that the automation of compliance tasks is just a tool to getting to the heart of the matter. Automation helps capture the data efficiently, which frees us up to perform tasks that will add value to our clients’ businesses. The data becomes a report, with the ability to read, understand, analyze, interpret, and communicate the information.
Reports provide valuable insights
The message of the report is the main objective of capturing the data in the first place, and this is where the real value of the professional lies. We have the ability to turn the report into a powerful tool to help a business achieve its goals, including more efficiency in operations and cash flow management. This is done by identifying shortages ahead of time, and making adequate provision for capital profitability, expansion, growth, and other areas.
Advisory work is future oriented, while compliance work is historical. Advisory work entails how to use the results of the compliance work to achieve a better future for the client. This is what is valuable to the client: “wanting a better tomorrow”—an assurance that their business can survive in the future and has the potential to withstand an adverse climate.
With these types of services, clients see their accountant/advisor as a partner in their businesses. Clients enjoy better service and have a more personal relationship with their advisors when the advisors are proactive in recommending strategies that lead to growth, profitability, and success.
The result? Increased client loyalty leads to long-term retainerships.
The reason? You can help your clients make more money through advisory services.
Efficiency for a florist
What’s right before our eyes can be somewhat invisible for a business owner. For example, an in-depth analysis of the financial statement might indicate a waste of materials, as in the case of a client of mine—a flower shop running at a loss. A thorough investigation into the high cost of goods sold, without a correlating increase in sales, indicated that the flower designer was ordering more materials than needed. Because the materials were perishable, they ended up in the trash.
This situation was quickly addressed: A system was put in place to order the right quantity of materials, eliminate waste, reduce cost of goods sold, and increase gross profit.
A comparison of the monthly income statement may even reveal more issues; for example, if the rent or a mortgage payment is not made. Timely payments of bills save late charges, interest, and penalties that could add up to a significant amount.
Using the appropriate ratios, inefficiencies in capacity would be revealed. Addressing this, and putting a system in place, would result in making more money with current capacity.
A cash flow analysis is also very important in making sure that funds are available through every stage of operation. When identified ahead of time, shortages can be remedied and also puts the client in a position to shop for the cheapest cost of capital.
Automate your processes
Any tasks you continue to do by hand that software can do more efficiently are costing you time, resources, and money. Cloud solutions enables us (the client and advisor) to optimize our processes. Assisting our clients to build a tech stack for their businesses allows them to operate more efficiently, profitably, and competitively. When clients automate some of their processes, it frees up their employees to apply their time and talents to income-generating activities.
When clients use a comprehensive suite of business applications, they can expect these five benefits:
- New operational efficiencies.
- Enhanced productivity.
- Increased profitability.
- Improved ability to scale operations.
- A greater potential for revenue growth.
While there are sophisticated reporting tools to capture every aspect of the business, insights from the reports enable our clients to make more informed business planning decisions that increase efficiency and profits. The reports need to be interpreted by an advisor. The ability to interpret these reports and effectively communicate what they reveal about the business includes the business’ performance, the client’s position in the industry, the opportunities and challenges in the future, and how to adequately and timely address them.
Providing this information is an invaluable service to the client. Our firms are successful and of greater value when clients can connect our services to an increase in their revenues and profitability.
Ibi Ojo, EA, is the owner of Fortune Accounting and Business Solutions, a full-service accounting, consulting, and training firm. An Advanced Certified QuickBooks ProAdvisor, the favorite part of work is when she gets to engage with clients and recommend strategies to help them attain their objectives. Ibi has been working with QuickBooks for more than two decades, loves all things QuickBooks Online, and uses Intuit ProConnect Tax. Her QuickBooks Training classes were born out of her passion to help small businesses keep better books and obtain reliable reports that can be used in making decisions that will enable them to grow and be profitable. In 2020, Ibi was nominated for ‘Top 50 Women in Accounting’ and recently became a member of the Intuit Trainer Writer Network.
By Charles Maniace.
Taxes may be one of the guarantees in life, but that doesn’t necessarily mean that they – or their purposes – are always understood. While sales tax is meant to be a means for states and local jurisdictions to pay for things like schools, roads and public services, there can be unintended consequences of these regulations. However, consumers can also end up with the short end of the stick when it comes to tax regulations.
For example, income disparity can skew percentages of spending on essential items such as food and housing. Sales tax can be considered “regressive,” especially when low-income taxpayers face greater impact than high-income taxpayers. Many jurisdictions will provide exemptions or reduced rates for basic necessities (e.g., food, clothing, prescription drugs). At the same time though, taxes may increase the cost of food among lower income areas.
Let’s take a closer look at some of the significant impacts between seemingly subtle differences in tax regulations.
More states are opting to exempt food purchased for home consumption to make food more affordable for everyone. State-enacted exemptions for food generally include items such as fresh produce and meats but typically exclude prepared foods and candy. Essentially, ingredients required for preparing meals from scratch may be exempt from sales tax. However, some types of prepared meals are not. And those are the types of meals those who don’t have access or ability to make a home cooked meal often purchase.
There is also the issue of food deserts, which are communities with limited access to healthy and affordable food. Food deserts are borne from complex societal transformations, including the sales tax growth. However, narrow definitions of “food” do not ease the burden of sales tax in food deserts – even when there are food exemptions in place. For example, sales tax legislation pushed administrative difficulties and costs onto independent grocers in more urban areas. Many were forced to close. Comparatively, chain grocery stores in high-income suburban communities did not have as much difficulty absorbing those new costs.
From there, lower income communities saw higher growth of fast-food restaurants and convenience stores. United States Department of Agriculture (USDA) studies indicate that more than 23 million Americans live in low-income areas more than one mile from a large grocery store. Furthermore, 2.3 million of those households do not have access to a car. These communities are more dependent on convenience stores and fast-food establishments offering limited food choices that could be taxed differently than if sold at a traditional grocery store.
For example, in Maryland the sale of grocery food is taxable unless the sale is made by a “substantial grocery or market business.” Additionally, “a grocery or market business is considered substantial if sales of grocery or market food items total at least 10% of all sales of food.” If a Maryland convenience store meets that 10% threshold, then food purchased there may cost differently than if purchased at a grocery store.
The ‘pink tax’
Another consequence of tax regulations is the “pink tax,” which is the application of sales tax in a way that is considered disproportionally unfair to females. The “tampon tax” is another side of that same issue, with menstrual products being taxed disproportionately. That is because the taxable status of menstrual products often results in them being costlier for those who menstruate.
Menstrual products being subject to standard sales tax indicated to the public that they were seen as regular goods instead of necessities, especially in those states that give tax breaks to necessities. Being subject to tax, especially in VAT jurisdictions where rates can be as high as 27%, sometimes places these products out-of-budget for people with lower incomes.
However, some states (California and Louisiana) are working to fully exempt menstrual products from sales tax. Each bill exempts similar products (i.e., pads, tampons, menstrual cups and sponges, and sanitary liners), with Louisiana also opting to exempt panty liners. Hawaii’s bill specifically names many more menstrual items, like feminine hygiene syringes, and vaginal creams, foams, ointments, jellies, powders and sprays. Other states (Alaska, Iowa and South Carolina) accounted for all products used in connection with the menstrual cycle.
The definition of ‘necessity’ is changing over time
So where do we go from here? How can we ensure that sales tax does not negatively impact some groups more than others? With food, perhaps the definition of food should include any item made for consumption. That could perhaps level the playing field, placing less of an emphasis on ingredients.
Changes are already underway in numerous states when it comes to menstrual products, but as with the issue of food deserts, there is not a one-size-fits all approach. Legislatures pass rules due to differing opinions and varying public influences and priorities. And what about all of the other states that do not have such bills in place? Are they waiting to see results in other locations or are they waiting on something else? Whatever the reason, it’s especially clear that sales tax is only going to continue to evolve over time.
As vice president, regulatory analysis and design at Sovos, Chuck Maniace lives and breathes tax. For him, job No. 1 is ensuring Sovos customers remain fully compliant as rates, rules and requirements change around them. Chuck places a premium on making time to share his expertise, wisdom and insight as a means of facilitating career advancement within the Sovos organization and in increasing regulatory understanding in the broader Sovos community.
By Adrienne Barrett.
Just like medical professionals take care of patients’ physical and mental wellbeing, tax professionals are responsible for clients’ financial wellbeing. So how can tax professionals build the same strong advisory relationship and take a more proactive approach to the services we offer?
When someone hires a personal trainer because they want to get in shape, they don’t think twice about paying them for their services. After all, there’s nothing more valuable than health. So why isn’t it the same for tax professionals, who look after a client’s financial health?
This is the challenge tax professionals face when it comes to building strong advisory relationships. The reality is that many people only contact their tax professional when it’s time to file their taxes. Following the three points below can help tax professionals build stronger client relationships, change people’s perception of the industry, and empower the newest generation to take a more proactive leadership role with their clients.
1. Be Clear About the Importance of Advisory
My father has always told me: “You need two people in your life, a good best friend and a good CPA.”
That’s because, as a small business owner for the last four decades, he understands that a good tax professional is so much more than the source of a once-annual tax return. They are problem-solvers and confidants who clients trust to have honest conversations, make the best decisions with their money, and provide the most invaluable feeling of all: peace of mind.
Being crystal clear about these offerings is crucial for the long-term success of client relationships, and this is especially true when it comes to advisory services. Not every client will initially understand a fee-based structure or a line item bill for advisory offerings, so it’s imperative to sit down and define your role and the life-long resources you are bringing to the table.
Selling your services can be a challenging step for new tax professionals and career veterans alike, but starting this dialogue with your clients early will build the foundation for your role as an advisor who is always a phone call, text, or email away.
2. Beat the ‘Awkward Tax Pro’ Stigma
There’s no shortage of well known jokes about professions and the people who pursue them. Tax professionals aren’t exempt, and whether you’re in the industry or not, you’ve likely heard the stereotype of social awkwardness (queue the outdated pocket protectors).
Of course, this isn’t the case. Like any industry, accounting is full of an incredibly diverse range of people with different backgrounds, interests, and personality types. Still, it’s important to acknowledge the impact these preconceived notions may have, and be sure to put your best foot forward when meeting a potential client.
If someone is new to advisory services, it’s also important not to let doubt or fear impact your willingness to find new clients. Remember that you have the experience and expertise to be a financial leader, and that people want to pay for those skills to help plan their futures.
While there may be tax professionals that are more gregarious than others, someone doesn’t have to be an extrovert to build strong relationships. They can go the extra mile by showing their passion and how much they care about the success of their clients.
3. Stay Open, Flexible, and Curious
To build the best relationships, tax professionals need to know who they are, how they want to work, and what clients fit their personal interests. Achieving this takes an openness to change and flexibility to follow new paths.
As more firms go digital and clients turn toward Internet-based services, tax professionals need to lean into these trends and invest in the future of cloud, advisory services, and assurance. This applies to even the most old-school CPAs, who can learn from this younger generation of tech-first tax professionals while teaching them the fundamentals.
More people are also moving into accounting, so firms dealing with staffing shortages should be open to hiring professionals with non-traditional backgrounds. Doing so can lead to finding the best fit for their business that they may not have found otherwise.
At the end of the day, it’s important to remember that joining the tax profession comes from a love of solving problems. The best way to do that is through cultivating and maintaining strong relationships with everyone from industry peers to clients, new and old.
Adrienne Barrett is a client success leader at Intuit. She also works with a fee-based personal trainer and happily pays her CPA for advisory services.
By Julio Gonzalez.
The Inflation Reduction Act (IRA) of 2022 is a substantial, $737 billion investment to help fight inflation and invest in manufacturing, reduce carbon emissions and invest in domestic energy production.
Many energy efficiency tax incentives that exist or are currently expired have been expanded, and these credits can greatly help your clients, including:
- Commercial building owners
- Multifamily building owners
Two significant items that you need to familiarize yourself with and explain to your clients are the 179D energy-efficient commercial building deduction and the 45L energy-efficient home and multifamily credit. Now before we go any further, it’s important to note that as of writing this on August 14, 2022, these regulations have not been signed into law and are subject to change.
Now, let’s get into the details.
Expansion of the 179D Energy-Efficient Commercial Building Deduction
The 179D tax deduction has increases and expanses under the IRA. Under current law, the permanent 179D deduction is increasing from the current $1.88 maximum up to $5 per square foot. Clients that deal with commercial building construction and multifamily buildings that span four or more stories will benefit from this reduction.
Older buildings that undergo retrofitting will also be eligible for the deduction.
Architects, engineers, and designers of energy-efficient buildings can also benefit from the new rules, which will allow tax-exempt building owners to pass the deduction to them. Under previous law, it was only possible for government building owners to allocate these funds for designers.
A few key notes of the 179D changes that are taking place and should be considered by all clients include:
- The current iteration of 179D will be extended in its existing form through December 31, 2022
- New increases and changes to the deduction will begin from January 1, 2023, onward
- Energy reduction (“ER”) will change from 50% to 25% based on the recent ASHRAE Standard
- The deduction will be reduced to $.50 per square foot on January 1, 2023, with a $.02 additional deduction per square foot for each point above 25% ER, up to a maximum of $1.00 per square foot; OR if the prevailing wage requirement is met, a bonus deduction of $2.50 plus $0.10 per square foot above 25% ER is possible with a maximum of $5.00 per square foot in deductions.
- Partial benefit allowances have been removed.
- New qualified retrofit plan qualifications are in place.
Under the expansion of the 179D deductions, your clients may also benefit from deductions if they’re REITs, trial properties, and non-profits. Publicly funded projections with existing provisions can also qualify for the deductions.
Changes to the 45L Energy-Efficient Home and Multifamily Credit
Next, major increases, extensions, and expansions have also been made to the 45L energy-efficient home and multifamily credit. These changes will be of significant interest to your clients if they’re homebuilders or multifamily developers, starting with the retroactive extension of the 45L credit through the end of 2032.
For 2022, no changes have been made to the:
- $2,000 credit for each dwelling unit
- Energy efficient criteria
However, in 2023, the tax credit maximum for a dwelling unit in both multifamily and single-family developments has been bumped up to $5,000. Criteria for what is considered “energy efficient” will align with the Energy Star and zero-energy ready home programs from the Department of Energy.
While low-rise residential developments were the only ones eligible for this credit in 2022, residential developments will be eligible for the credit in 2023.
The significant credits will be very beneficial for builders in 2023 that aim to help with the housing shortage and construct dwellings that are more energy efficient.
However, there are some changes to the 45L credit that may make it more difficult for clients to maximize their energy-efficient tax incentives. A key change to alert clients of is that wages for the project that they’re trying to claim credits on, in some cases, must be at or above the local rates determined Secretary of Labor.
45L credits can be claimed for all multifamily developments, including mid- and high-rise projects, which may qualify for:
- 45L tax credits
- 179D tax deductions
A few key changes to 45L credits include:
- Prior rules have been extended through December 31, 2022.
- Changes to the rules under the IRA will be from January 1, 2023 – December 31, 2032.
- Low-base credits are $500 per multifamily unit, OR a bonus credit increase to $2,500 per unit if prevailing wage requirements are met.
Congress makes it clear with the passing of the IRA that energy efficiency and climate change are two main points on their agenda. Tax credit and deduction extensions and incentives are increased significantly, allowing for more of your clients to claim them than ever before.
As mentioned before, this isn’t law yet; however, it’s expected to be signed into law by President Biden shortly. You should take this time to understand the changes under the IRA and be prepared to discuss the impacts with your clients.
Named Top 100 Most Influential People by Accounting Today, Julio Gonzalez is the CEO of Engineered Tax Services, The Growth Partnership, ABLE: CRM for Accountants, and INSIDE Public Accounting, the founder of Rockerbox, and the developer of the Engineered Tax Services cost segregation app.
Additionally, Julio works weekly with the Administration, Congress, and Senate to advise on tax reform. He is the go-to tax expert, representing many national organizations and associations. He is a regular national public speaker regarding tax reform and tax sophistication for wealth preservation. To get in contact with Julio or learn more about how you can partner with Engineered Tax Services to grow your firm, please contact Julio through his website.
AuditClub, the Audit Service Center for CPA Firms, announced today the launch of its new auditors-as-a-service model, designed to provide top 10, regional and local CPA firms with instant talent and fractional flexibility.
AuditClub and its team of chief auditors bring extensive credentials to offer strategic insights and deliver solutions in key areas that matter to accounting firms, enabling them to satisfy client demand without the typical investment required to hire and train an expensive partner, director or manager.
Founded and led by former audit partners with a unique and valuable mix of Big 4, regional and local firm experience, AuditClub is a licensed accountancy corporation based in the United States and registered with the Public Company Accounting Oversight Board (PCAOB). On a mission to make public accounting better, AuditClub provides flexible access to a seasoned team of Chief Auditors with broad and deep professional experience that benefits AuditClub members.
“Our goal is to provide responsive, high-quality audit and assurance services for CPA firms that may not have the in-house talent or expertise to deliver these services efficiently and effectively,” said Chris Vanover, CEO and Chief Auditor of AuditClub. “Many firms are experiencing a critical shortage of qualified human capital, or their partners and managers are well beyond capacity, and even turning down new opportunities. Rather than reaching out to a recruiter or an independent contractor, now they have AuditClub to bring them peace of mind with immediate access to an entire team of experienced CPAs and specialists on demand.”
“As we continue to expand our audit practice, we seek creative ways to grow our resources and enhance the quality of our audits,” said Bob Armstrong, Audit Partner with McConnell Jones. “We’re excited to continue partnering with AuditClub. In addition to AuditClub conducting multiple trainings, our recent collaborations with their Chief Auditors provided the precise level of support our team needed in the form of consultation on engagement quality and PCAOB matters.”
AuditClub services are delivered through a unique membership model. In addition to unlimited email access via AuditClub Care, members also benefit from exclusive access to a team of Chief Auditors through technology-enabled and flexible month-to-month passes. With three levels of passes, AuditClub is tailored to meet firm service needs and scalable for varying budgets.
“The innovative offering from AuditClub breaks new ground in the pricing for professional firms,” said Ed Kless, co-host of “The Soul of Enterprise” podcast. “It allows for periodic recurring payments for ever-increasing value and serial customer transformations.”
To become a member or learn more about AuditClub, visit https://auditclub.cpa/.
AuditClub is transforming how public accounting firms deliver audit and assurance services by turning their traditional staffing model upside down. A licensed accountancy corporation based in the United States and registered with the PCAOB, AuditClub provides on-demand AICPA and PCAOB audit and assurance support to top 10, regional and local CPA firms throughout the United States via its membership access model. AuditClub services include support for audit and assurance, quality control, regulatory matters, training and transformation. Learn more at AuditClub.cpa.
The American Institute of CPAs (AICPA) and The Chartered Institute of Management Accountants (CIMA), representing the unified voice of the Association of International Certified Professional Accountants (Association), has presented Elaine M. Howle, CPA, of El Dorado Hills, Calif., with its 2022 Outstanding CPA in Government Career Contribution Award, honoring her dedication to the accounting profession.
The AICPA & CIMA also presented its 2022 Outstanding CPA in Government Impact Award at the state and local level to:
- Joseph R. Morrissette, CPA, of Bismarck, N.D., with the 2022 Outstanding CPA in Government Impact Award at the state level.
- Charles W. Warren, CPA, CGMA, of Fort Smith, Ark., with the 2022 Outstanding CPA in Government Impact Award at the local level.
“Elaine, Joseph and Charles are among the most talented and prominent leaders in government accounting and auditing today,” said Anoop Mehta, CPA, CGMA, chair of the AICPA and the Association. “We are delighted to recognize and celebrate these outstanding individuals for their significant contributions and exceptional leadership to our governments and communities.”
The Outstanding CPA in Government Career Contribution Award recognizes an AICPA member’s significant contributions to the CPA profession through government service at the local, state or federal level over a candidate’s career. Award winners must have demonstrated exceptional leadership, high ethical standards, and a track record of professional excellence.
Howle began her career with the California State Auditor’s office over 35 years ago. She advanced through the office’s leadership roles and was appointed California State Auditor in 2000 where she served for 21 years. Under Howle’s leadership, the California State Auditor’s office served a vital role in the State’s system of checks and balances, by examining the fiscal health and performance of state and local entities, to ensure that government provides the essential services to the public in the most efficient and effective manner.
Recognized nationally as a leader in her profession, Howle has received various awards including the National State Auditors Association’s William R. Snodgrass Distinguished Leadership Award (2016). Additionally, the Institute of Internal Auditors’ American Center for Government Auditing honored Howle as among 2014’s 15 Most Influential Professionals in Government Auditing. She was also named Public Official of the Year by Governing Magazine in November 2012 and received the national David M. Walker Excellence in Government Performance and Accountability Award in June 2012. After a rewarding career in state service Howle, retired on December 31, 2021.
The Outstanding CPA in Government Impact Award recognizes the impact of recent significant contributions of CPAs to the efficiency, effectiveness, or innovative service delivery of their respective local, state, or federal employer organizations.
Morrissette brings nearly 30 years of experience working with the state budget, revenue forecast, and tax policy. He was appointed Director of the Office of Management and Budget in February 2018 where he oversaw the leadership and support of the state government through five divisions: Fiscal Management, Human Resource Management, Central Services, Facility Management, and Risk Management. Prior to his appointment as Director, Morrissette served four years as the Deputy Tax Commissioner. He has also served as a member of the state’s Revenue Forecasting Advisory Council since 2002.
Warren has more than 34 years of experience, beginning his career as a CPA in Fort Smith with Baird, Kurtz & Dobson, CPAs. He also worked for ERC Properties, Inc. for 15 years and another two years for Hankins & Company, CPAs in Fort Smith. During this time Warren garnered a leadership position in the Fort Smith Council of Parent Teacher Associations. Here he worked closely with the Superintendent of the Fort Smith Public Schools and was named Chief Financial Officer in 2009.
By Michael Hirtzer and Victoria Cavaliere –
Bloomberg News (via TNS), with additions.
U.S. Energy Secretary Jennifer Granholm said gasoline prices should fall further after dropping to less than $4 a gallon for the first time since March. In the Midwest, including Oklahoma, Kansas, Texas and the Gulf States, gas prices have already dipped to near the $3.00 per gallon mark.
“We hope that that’s true but, again, it can be impacted by what’s happening globally,” Granholm said on CNN’s “State of the Union” on Sunday.
Sliding fuel costs have helped slow inflation that has run at four-decade highs this year, hitting consumer spending and prompting Republicans to hammer President Joe Biden for rising prices. The nationwide average U.S. gasoline price hit a record of $5.016 in June.
Biden has been touting the decline in gasoline prices ahead of the midterm elections in November, where Democrats are defending a narrow House majority and a one-vote advantage in the Senate.
The administration took “unprecedented steps to moderate supply and demand,” such as releasing oil from the U.S. Strategic Petroleum Reserve, Granholm said.
She pointed to the Inflation Reduction Act, a package of climate, energy, health care and tax measures passed by Congress and awaiting Biden’s signature, that will give rebates to people buying new electric vehicles and promote charging stations.
Conservis, a global leader in solutions-driven farm management systems (FMS), and Eide Bailly, a top 25 CPA and consulting firm, have announced a partnership to promote deeper understanding around the benefits of farm data optimization and the related financial decision-making strategies on the farm.
The revolution surrounding agriculture data, beyond spreadsheets, is here to stay. Conservis is providing clients with real-time farm data across the operation, including per acre and per bushel breakouts, revenue by crop, and instant snapshots of grain contracts.
“CPA firms can help growers extract maximum value from farm data,” said Scott Schmidt, Conservis VP of Business Development & Partnerships. “When a grower shares their FMS data, it allows the CPA to provide better informed and more comprehensive insights that improves fiscal planning and optimizes outcomes.”
Producers can share timely reports with their CPAs on anything from inventory to land rental expenses, resulting in a comprehensive financial picture. Conservis and Eide Bailly believe that accurate, insightful financial advice requires this kind of data that an FMS provides.
“Growers are fantastic at taking care of their crops,” said Steve Troyer, Eide Bailly CPA, Partner-in-Charge of Ag producers. “Why should they spend extra hours on paperwork and bookkeeping? CPAs can help them interpret their FMS data, empowering them to make timely, insightful decisions.”
The collaboration is an opportunity to bridge the gap between farm data and farm decisions while emphasizing the unique strengths of both organizations. With real-time data from Conservis, Eide Bailly can help clients better interpret data, make analyses, and ultimately enhance their financial decisions.
Looka Inc., a leading AI-powered design platform, and Xero, a global small business platform, has announced a new collaboration to deliver accounting solutions for businesses through Looka’s Partner Marketplace – a curated list of best-fit partners designed to maximize business services for small business owners globally.
This collaboration makes a significant value-add for Looka’s customers who are looking to take control of their finances in one location so small business owners can confidentially understand their financial data.
“At Looka, we are changing the game for small businesses by building a world-class partner marketplace program and featuring exclusive offers from select partners,” said Dawson Whitfield, CEO & Founder, Looka Inc. “We are pleased to partner with Xero, one of the leaders in cloud accounting software, and aim to help Looka users connect with real-time visibility of their financial position and performance in a way that’s simple, smart and secure.”
Looka’s Brand Kit subscribers can now take advantage of Xero’s accounting solutions through an exclusive offer. The offer is available to new US-based small business subscribers to Xero (additional terms apply). Users can access the offer through their brand kit dashboard.
“We strive to make life better for people in small business and recognize that developing partnerships within the small business ecosystem can help meet customers’ needs as they become established and grow,” said Carol Haverty, VP, Partnerships, Americas at Xero. “We look forward to working with Looka to provide small businesses with the tools they need to manage their finances so they can make smarter decisions about growth and refocus their time on running their business.”
Thus far, Looka has built a logo maker, brand kit, business name generator, print shop, website builder, and domain registrar and is now expanding its brand kit services with exclusive offers from leading global companies in multiple categories: Business Services & Tools, Customer Success & CRM, eCommerce, Finance & Payroll, and Sales & Marketing.
For more information on creating a logo and bringing your brand to life with Looka’s Brand Kit, visit: Looka – How it works.
Jan Jahosky, Ledgible.
For the crypto industry, many are looking for 2022 to be the year of comprehensive regulatory and legislative clarity regarding crypto assets for the United States. Indeed, President Biden’s Executive Order earlier this year actually mandated and directed federal agencies to provide this kind of clear, ordered, and meaningful guidance.
We’ve seen in the past that parts and pieces of legislation that most would not consider crypto-focused sometimes actually contain very meaningful laws affecting the crypto ecosystem. For instance, the Infrastructure Act, signed into law last year, has changes in the definition of broker that will fundamentally mandate tax information reporting for many companies involved in the transacting of crypto. Now, yet another piece of legislation has appeared in headlines that would not appear to involve crypto assets, but actually does.
The Senate has now passed the Inflation Reduction Act which has a number of sweeping changes in a wide variety of areas of the federal government, including the Internal Revenue Service.
As part of the Act, the IRS is receiving an allocation of approximately 80 billion dollars over the next 10 years. To put that into perspective, the IRS yearly budget is approximately $12.6 billion dollars for 2022, so this represents almost a 75% increase on a yearly basis. Simply put, a tremendous increase in spending on IRS operations and activities.
In terms of the uses for the billions of dollars, you might ask what is the IRS going to be using these funds for? The answer is that the largest amount of funding will be going to the efforts of compliance and enforcement. That could mean greatly increasing the level and number of audits performed and the number of audit candidates pursued by the Service.
Here is an excerpt from the relevant section from the act describing the IRS activities for the 80 billion dollars. One very interesting item to note in this section is the explicit call out for Digital Asset monitoring and compliance activities – in short crypto enforcement.
…(ii) ENFORCEMENT.—For necessary expenses for tax enforcement activities of the Internal Revenue Service to determine and collect owed taxes, to provide legal and litigation support, to conduct criminal investigations (including investigative technology), to provide digital asset monitoring and compliance activities, …
How and when these directives get implemented still remains to be seen. However, with this amount of funding and the naming of digital assets in the Act, it seems clear that individuals and institutional investors alike need to be even more certain about all tax obligations relating to their digital asset activities.
According to the 2022 Financial Maturity Study from Paro, a Chicago-based startup disrupting the way companies access on-demand financial expertise, 93% of senior finance executives say investing in finance and accounting is essential for sustaining business growth. However, only 24% of executives say they are investing in these functions to drive growth. Rather, they say they are focusing resources on efficiency, resulting in potentially limited expansion opportunities.
Efficiency Leads Reasons for Investment
The study found senior finance executives see finance and accounting as a critical component to their company’s long-term success. When asked to select which function provided their company the greatest opportunity to build core competencies, a majority (52%) selected finance. This is followed closely by operations and people management at 49% and accounting at 46%.
However, 38% of senior finance executives state that when their company does invest in resources for the finance and accounting team, they’re focused on being more efficient. Another 33% noted investments focus on raising money, and 5% say investments focus on recovery efforts, such as turnaround strategies or combating the effects of macro-economic situations.
“Finance and accounting is a critical business growth center, and companies that place too much focus on efficiency without appropriate resourcing to leverage it will impede their own growth,” said Anita Samojednik, CEO of Paro. “As businesses consider current recession concerns, those that prioritize a flexible model that can drive both efficiency and growth will be best positioned to navigate economic challenges and build long-term competitive advantages.”
Low Bandwidth, Lack of Strategic Guidance and Profitability Present Challenges
Senior finance executives say a lack of bandwidth to take on new opportunities is the most common challenge they face (38%). This is followed closely by responding to investor demands (36%) and a lack of strategic advisory for decision-making (34%). Furthermore, 60% of senior finance executives also say profitability is a financial challenge their company faces.
To combat challenges, financial service providers are often viewed as a solution. When evaluating these providers, the most important criteria include having a system that provides an innovative tech platform (36%), providing data and insights to help make decisions (34%), helping to plan and optimize for the business’ next steps (34%), and providing customized solutions for a business problem (32%).
Recruitment Still Seen as an Obstacle for Growth
Many senior finance executives (39%) cited staffing, hiring and retention as a main obstacle when it comes to growing the business. This may explain why 79% are open to increasing their company’s headcount to take advantage of surges or expand solutions offerings. However, only a small fraction (16%) are already doing this.
A majority (53%) see flexible staffing and resourcing as an effective strategy for protecting their company against marketplace volatility threats. In fact, 69% of senior finance executives say their company relies on fractional resources for their finance and accounting teams, while only 19% say their company’s finance and accounting team is fully composed of dedicated full-time resources.
“It’s evident senior finance executives recognize the importance of flexible operational models to capitalize on market opportunities and shield against volatility,” said Samojednik. “However, there’s a clear activation gap between the desire to do so and the ability to actually harness and deploy an agile talent management strategy that can allow them to grow to their potential.”
The national advisory, assurance and tax firm CohnReznick LLP and Guidepost Solutions LLC, a provider of investigations, compliance solutions, monitoring, and security and technology consulting, have been selected to jointly perform integrity monitoring for the construction of Terminals 1, 4, and 6 – a key facet of the John F. Kennedy International Airport Redevelopment Program (the Program). The selection follows a rigorous evaluation by the Port Authority of New York and New Jersey (the Authority).
The award, supporting New York’s $13 billion plan to transform John F. Kennedy International Airport into a modern 21st century airport, involves performing integrity monitoring services for the Program. This will include creating, implementing, and monitoring policies and procedures that will help ensure that the entities engaged in the Program comply with relevant laws and regulations. The CohnReznick and Guidepost Solutions teams will also be responsible for helping to deter, detect, and report unethical and illegal conduct.
“Upholding the public trust and helping to ensure fiscal integrity are at the core of what we do,” said Frank Banda, Managing Partner, Government and Public Sector, CohnReznick. “We are honored to be selected for this significant monitoring project with Guidepost Solutions and continue our valued relationship with the Authority.”
“The size and scope of this project is also significant,” notes Thomas A. McShane, President, Monitoring and Investigations at Guidepost Solutions. “Through this alliance with CohnReznick, we are excited to bring world-class compliance and monitoring capabilities to this historic, multi-billion-dollar Port Authority project.”
Both CohnReznick and Guidepost Solutions bring considerable experience to the Program. This includes CohnReznick’s seven-year integrity monitoring engagement for the $4B LaGuardia Airport Central Terminal Redevelopment Program along with Guidepost Solutions’ integrity monitoring projects for many noteworthy capital construction projects. These include the World Trade Center Vehicular Security Center Project, the George Washington Bridge Suspender Ropes and Ramps project, the Bayonne Bridge Navigational Clearance Project, the Goethals Bridge Modernization Program, the Lincoln Tunnel Access Program, and the JFK Terminal 8 Redevelopment Project.
Leaf Software Solutions has announced a new Strategic Partnership with the Indiana CPA Society. Indiana CPA Strategic Partners are companies that support the Society and work closely with its members throughout the year.
Leaf Software Solutions works with accounting and finance professionals to create and/or customize a software solution that best fits their organization’s specific needs.
“Our cloud accounting solutions are designed to automate processes leading to better decision making with more robust reporting,” said Chad Hankinson, president of Leaf Software Solutions. “This partnership allows us to create new relationships and add value to businesses in Indiana.”
The Indiana CPA Society is a statewide professional association representing nearly 7,000 CPAs and related professionals who will be able to benefit from this new partnership. “Working with Leaf Software Solutions will enable us to provide relevant new tools and service offerings for our members,” said INCPAS President & CEO Courtney Kincaid, CAE. “As the role of the CPA continues to evolve, having the right technology in place can help free up their resources to spend more time on the strategic skills that are most meaningful to the organizations or clients they serve.”
John C. Cornell, CPA, has joined the UHY LLP M&A practice as a principal working out of UHY’s Long Island office.
In this role, Cornell will deliver both buy- and sell-side advisory services to private equity and strategic clients. He is a CPA with over 16 years of diverse leadership experience as both an advisor and operator. He is a prior Big Four auditor and due diligence professional, a former CFO, a former General Manager at a leading private equity backed carbon accounting SaaS business and a former Senior Vice President of M&A Integration.
Cornell has provided a range of pre and post M&A services, including but not limited to due diligence, financial analysis, cash flow modeling, contract negotiation support, vendor negotiation and capital raise efforts and developing and executing pre and post-close integration plans.
In addition, Cornell joins UHY’s ESG Leadership Committee, to help UHY develop and implement accounting and advisory services to support clients’ needs.
“We are thrilled to have John come on board as a Principal in our Long Island office as part of our M&A practice and as a member of our ESG Leadership Committee,” said Mehmet Sengulen, Office Managing Partner of UHY’s Long Island Office. “Demand for M&A services and ESG expertise has only continued to grow in the past year, with companies adjusting to and preparing for the current economic climate, and potential ESG regulatory requirements. John’s depth as well as range of M&A experience at every stage of the cycle – from pre- to post- M&A to M&A integration – and in-depth knowledge of the ESG space will only help bolster the services we are able to provide clients and ensure we can wholly meet their needs in the coming years.”
Cornell received his bachelor’s degree in accounting and finance from the Villanova School of Business. He is also a member of the American Institute of Certified Public Accountants (AICPA) and the New York State Society of CPAs (NYSSCPA).
The American Institute of CPAs (AICPA) submitted a letter to the Internal Revenue Service (IRS) addressing the plummeting level of service for the Practitioner Priority Service (PPS) telephone line and providing recommendations for improvement. Despite recent efforts by the IRS to ease the burden the backlog has caused for taxpayers and practitioners, the AICPA notes that service levels for the practitioner priority service phone line have been in continuous decline for several years.
“We are hearing from tax practitioners everyday regarding their significant PPS line challenges and the impact those challenges have on their interactions with IRS on behalf of taxpayers,” the letter states. The AICPA submitted comments on the specific PPS line challenges and provided suggestions for improving the experience for tax practitioners and IRS customer service representatives in the following areas:
- Power of Attorney (POA) Issues
- If, at the start of a PPS call, the practitioner indicates that his/her POA likely is not on file, provide a fax number to the practitioner at the start of the call.
- Where a delegated POA is presented and appears in order, do not require the first POA be posted to the central authorization file before recognizing the delegated POA.
- Ensure PPS customer service representatives are consistently educated in proper taxpayer business entity titles.
- IRS should allow use of POAs that are signed by the taxpayer and the representative calling in – even if it is not yet signed by the other listed representatives.
- Restore providing internal screen-print type transcripts over the phone during PPS calls.
- Restore the IRS message line (transcripts).
- Eliminate the “law line” – the line used to provide interpretations of law.
- Accounts Management versus Automated Collection System
- Restore the ability to grant cycle holds with accounts management staff.
- Empower automated collection systems to resolve more account issues.
- Authorize PPS customer service representatives to grant 180-day holds where correspondence was sent in.
- General Recommendations
- Staff the PPS line again with highly trained, highly empowered personnel.
- Discontinue asking practitioners for their social security numbers and birth dates.
- Enhance the new automatic return call system.
- Empower PPS customer service representatives from one line to handle all types of calls, whether Business Master File, Individual Master File or Exempt Organization.
- Require that all PPS customer service representatives accept and consider submission of correspondence, documentation and other communication by taxpayers or their representatives through e-services or facsimile.
- Allow PPS customer service representatives to process and post extensions.
- Provide more supervisor availability.
- Enable PPS customer service representatives to handle international issues and international taxpayers and enable representatives to apply first-time abatement in international situations, such as international penalties.
- Prohibit PPS customer service representatives from answering a call when their shift ends within the next 15 minutes.
- Investigate certain systemic call answering issues.
“The recommendations we’ve provided to the IRS are important adjustments that could drastically improve service for countless practitioners and their clients. They would also serve to empower customer service representatives and enable them to perform their duties more efficiently,” said AICPA Vice President of Tax Policy & Advocacy, Edward Karl, CPA, CGMA. “We strongly urge the IRS to consider implementing these recommendations as part of their plan to reduce the backlog and improve services and believe that doing so will have a significant positive impact on services provided by the IRS.”
Veteran financial crimes leader Sven Stumbauer has joined Grant Thornton LLP as an Advisory Services managing director and leader of the firm’s Anti-Money Laundering (AML) and Sanctions practice within the Integrity, Investigations and Restructuring solutions group. Based in Miami, Stumbauer will use his extensive cryptocurrency, AML, sanctions and Foreign Corrupt Practices Act acumen to further bolster and expand Grant Thornton’s growing financial crimes capabilities.
“As we grow the firm’s services to address anti-money laundering and sanctions, it’s important we bring in proven leaders with a track record of helping clients stay ahead of the increasing exposure to risk across the globe,” says David Hazels, national managing partner of Advisory Services at Grant Thornton. “Sven’s wealth of knowledge and extensive financial investigations experience make him the ideal leader to build on Grant Thornton’s already robust forensic risk solutions.”
Stumbauer has more than 20 years of experience focusing on financial crime, regulatory risk and forensic investigations. He has extensive practice in leading complex global projects and providing advisory services to clients in more than 60 countries around the world. Stumbauer has also worked closely with various regulatory bodies in the United States, Europe, Latin America and Asia — and he has led many of the largest global regulatory investigations and remediation programs in the area of financial crime, AML and sanctions.
Paul Melville, national managing principal of Integrity, Investigations and Restructuring solutions at Grant Thornton, adds that Stumbauer will be a crucial asset for companies as cryptocurrency continues to gain traction in the global markets.
“Sven possesses tremendous anti-money laundering and sanctions experience with deep roots in cryptocurrency,” Melville says. “As interest in crypto continues to skyrocket among the business community, Grant Thornton will be keenly suited to deliver the high-quality, pragmatic services and financial insights our clients expect and deserve.”
Mark Margulies, Grant Thornton’s office managing partner for South Florida, adds that Stumbauer will be an integral asset in driving the firm’s growth and global business perspective in South Florida and, by extension, Latin America.
“Miami has developed into a dynamic financial services hub,” adds Margulies. “Sven offers the skillset and business acumen our clients need, and he will serve as a critical link for banking and international trade with Latin America and other parts of the world.”
Prior to joining Grant Thornton, Stumbauer served in various leadership roles in several professional services firms. Most notably, he established and led AlixPartners LLP’s Global AML and Sanctions Compliance practice. Prior to that, he led KPMG LLP’s Forensic practice expansion, where he focused on corporate governance matters, regulatory compliance and investigations across Latin America. Stumbauer began his career in financial crimes with the Financial Industry Regulatory Authority (FINRA).
A published thought leader and frequent speaker at leading industry conferences, Stumbauer regularly provides briefings to U.S. and foreign regulatory bodies and governmental agencies on emerging issues pertaining to financial crimes. He received a master’s of business administration degree with a concentration in international business and finance from the Georgia Institute of Technology and a bachelor’s degree in international commerce from Georgia Southern University.