Insight Magazine - Summer 2019

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ILLINOIS CPA SOCIET Y

550 W Jackson Boulevard, Suite 900, Chicago, IL 60661

www icpas org

Publisher/President & CEO

Todd Shapiro

Editor Derrick Lilly

Creative Director

Gene Levitan

Copy Editors

Nancy Clarke | Mari Watts

Photography Derrick Lilly

Circulation

John McQuillan

ICPAS OFFICERS

Chairperson

Geoffrey J Harlow, CPA | Wipfli LLP

Vice Chairperson

Dorri C McWhorter, CPA, CGMA, CITP | YWCA Metropolitan Chicago

Secretar y

Thomas B Murtagh, CPA, JD | BKD LLP

Treasurer

Elizabeth Pittelkow Kittner, CPA, CGMA, CITP, DTM

International Legal Technology Association

Immediate Past Chairperson

Rosaria Cammarata, CPA, CGMA | Mattersight Corporation/Nice Ltd

ICPAS BOARD OF DIRECTORS

John C Bird, CPA | RSM US LLP

Brian J Blaha, CPA | Wipfli LLP

Jennifer L Cavanaugh, CPA | Grant Thornton LLP

Jon S Davis, CPA (AZ Ret ) | University of Illinois

Stephen R Ferrara, CPA | BDO USA LLP

Mary K Fuller, CPA | Shepard Schwartz & Harris LLP

Jennifer L Goettler, CPA, CFE | Heinold Banwart Ltd

Jonathan W Hauser, CPA | KPMG LLP

Scott E Hurwitz, CPA | Deloitte LLP

Joshua D Lance, CPA, CGMA | Lance CPA Group

Deborah K Rood, CPA, MST | CNA Insurance

Seun Salami, CPA | Teachers Insurance and Annuity Association of America

Stella Marie Santos, CPA | Adelfia LLC

Andrea K Urban, CPA | ThoughtWorks Inc

BACK ISSUES + REPRINTS

Back issues may be available Articles may be reproduced with permission

Please send requests to lillyd@icpas org

ADVERTISING

Want to reach 25,000 accounting and finance professionals? Advertising in INSIGHT and with the Illinois CPA Society gives you access to Illinois’ largest financial community Contact Mike Walker at mike@rwwcompany com

INSIGHT is the magazine of the Illinois CPA Society Statements or articles of opinion appearing in INSIGHT are not necessarily the views of the Illinois CPA Society The materials and information contained within INSIGHT are offered as information only and not as practice, financial, accounting, legal or other professional advice Readers are strongly encouraged to consult with an appropriate professional advisor before acting on the information contained in this publication It is INSIGHT’s policy not to knowingly accept advertising that discriminates on the basis of race, religion, sex, age or origin The Illinois CPA Society reserves the right to reject paid advertising that does not meet INSIGHT’s qualifications or that may detract from its professional and ethical standards

The Illinois CPA Society does not necessarily endorse the non-Society resources, services or products that may appear or be referenced within INSIGHT, and makes no representation or warranties about the products or services they may provide or their accuracy or claims The Illinois CPA Society does not guarantee delivery dates for INSIGHT The Society disclaims all warranties, express or implied, and assumes no responsibility whatsoever for damages incurred as a result of delays in delivering INSIGHT INSIGHT (ISSN-1053-8542) is published four times a year, in Spring, Summer, Fall, and Winter, by the Illinois CPA Society, 550 W Jackson, Suite 900, Chicago, IL 60661, USA, 312 993 0407 Copyright © 2019 No part of the contents may be reproduced by any means without the written consent of INSIGHT Send requests to the address above Periodicals postage paid at

today’sCPA

ICPAS

Leadership: The CPA Profession Needs You

Leaders are defined as the people who lead or command a group, organization, or country That’s a simple definition, because real leaders exhibit more than command; leaders exemplify courage, inspiration, vision, creativity, and innovation

When I think of some of the great leaders of our time, Abraham Lincoln, Franklin Delano Roosevelt, and our country’s Founding Fathers come to mind Today, we look back at these individuals and admire their courage and vision when leading our country through some of its most changing and challenging times Yet, in their day, many citizens were upset or scared by the changes they were advocating I see the same thing happening in the accounting profession now

In hindsight, it’s easy to look back and see who has proven to be a true leader The accounting profession has grown into a major component of our global capital markets thanks, in part, to driven leaders like Arthur E Andersen and Elijah Watt Sells and those who helped form international accounting firms Their leadership was, and is, not without controversy that’s OK Today, I view AICPA CEO Barry Melancon as a great leader in the CPA profession One may not agree with everything he says or does, but he has a passion for the profession and is visionary, creative, and innovative

The same can be said about many of the leaders of your Illinois CPA Society I recently came across the original minutes from the first meeting of the Illinois CPA Society’s founders in 1897 They had the vision to create a professional society for CPAs in Illinois that lives to this day Mary T Washington Wylie and Lester McKeever also come to mind because of their roles in helping African Americans start and advance in the CPA profession Bringing diversity to our profession in the 40s, 50s, 60s and still today was a challenge they stepped up to change

I talk about leadership not just because the Society recently held its Leadership Recognition and Awards Dinner to honor those who are trying to make real differences in the accounting profession, but because the need for leadership and great leaders in our profession is more critical than ever Our profession is at the precipice of change unlike any we ’ ve ever seen

Technology, over the next 10 years and beyond, will radically alter what CPAs do and how we define ourselves Yes, we ’ ve always been impacted by technology, from the adding machine, to the 10key, to calculators, to Excel, to tax and audit software It’s different this time, and I know that you have heard that before But these productivity tools only helped us do our jobs more timely, efficiently, and effectively Artificial intelligence, machine learning, and robotic process automation, on the other hand, will revolutionize not just how we do things but what we do these technologies won’t just help us, they can ultimately replace us in many ways We’re also witnessing the largest exodus of talent in our profession’s history as baby boomers (the largest working generation before millennials came along) move into retirement

This is where you come in The change we must make to remain competent, competitive, and relevant will be upsetting and scary, and some may balk or pushback on the direction of our profession The change ahead of us will require vision, courage, creativity, and innovation The change that is inevitable and unstoppable requires leaders to take command and guide us toward a profession of the future Will you be that leader?

The change that is inevitable and unstoppable requires leaders to take command and guide us toward a profession of the future.

INSIGHTS FROM TODD SHAPIRO, ICPAS PRESIDENT & CEO @Todd

INSIGHTS FROM

@GreenMarty

Illinois’ New Government Goes to Work

Inmy spring column (at the beginning of the spring legislative session), I openly questioned if newly installed Gov J B Pritzker would maximize the “honeymoon” period and goodwill associated with being a new Springfield politician to pass his comprehensive legislative program aimed at balancing the state’s finances I got my answer Pritzker easily scored early victories, signed executive orders, and muscled an impressive legislative agenda through the Democrat-controlled House and Senate

Included in the governor ’ s victories are passage of Senate Joint Resolution Constitutional Amendment 1, which allows for the amending of the Illinois Constitution to move from a flat income tax rate to a graduated income tax rate; Senate Bill 687, which establishes income tax rates if Illinois voters approve amending the Constitution in November 2020; House Bill 62, which puts in motion a $45 billion vertical and horizontal capital infrastructure program; Senate Bill 262/Senate Bill 1814, which establish the state’s FY 2020 “balanced” state operating budget; House Bill 1438, which legalizes recreational cannabis; and Senate Bill 690, which expands gaming and sports betting throughout the state

The General Assembly also passed legislation to pay for Pritzker’s $45 billion infrastructure plan with the passage of Senate Bill 1939 and House Bill 142, which raise the gas tax and vehicle fees to pay for the horizontal program of roads and bridges The vertical portion will be funded through the expanded gaming legislation, which restructures taxes on video gaming terminals and allows for expanding gaming terminals throughout the state and building six new casinos This is an impressive list of monumental accomplishments for a first-term governor, let alone it all came during Pritzker’s first legislative session

The Illinois CPA Society also had a good legislative session with the passage of Senate Bill 1806, an ICPAS initiative to amend the Municipal Audit Act, County Audit Act, and the Governmental Audit Act This trailer legislation updates the cited audit acts to reflect contemporary accounting and audit practices and terminology and follows ICPAS’ success in the 2018 spring legislative session where legislation was passed to grandfather units of local government who use cash basis accounting for financial reporting to the Local Government Division of the Illinois Comptroller’s Office

We also monitored over 6,000 bills filed during the spring session Here are a few highlights:

• Senate Bill 1379 – Cook County Assessor Data Reporting – A coalition of stakeholders attempted to work with the Cook County assessor to address our concerns about terminology and confidential taxpayer information and proposed making the data reporting program a pilot

With partisan gridlock largely dislodged, Illinois’ new governor and General Assembly score early victories in their first legislative session.

LEGISLATIVE

MARTY GREEN, ESQ , ICPAS VP OF GOVERNMENT RELATIONS

to evaluate the legislation’s impact Downstate counties would have had an opt-in option Ultimately, the stakeholder coalition prevented this legislation from being called for a vote

• Senate Bill 1881 – Local Government Recapture – As amended, this comprehensive legislation would allow counties and municipalities to contract with third-party vendors to perform analysis on business sales tax payments to the Illinois Department of Revenue and remit it to local governments The third-party vendors would have gained access to confidential taxpayer information ICPAS worked with a large stakeholder group, including the Taxpayers’ Federation of Illinois, Illinois Retail Merchants Association, State Chamber of Commerce, Illinois Department of Revenue, and the Chairman of the House Revenue Committee, Mike Zalewski, to include adequate safeguards for taxpayer information, registration of third-party vendors, and creation of a certified audit program for businesses to utilize in rebutting IDOR referrals There was a general agreement on legislative language during the closing days of the spring session when the proponents filed a last-minute amendment changing the effective date, thus moving us and the stakeholder group from neutral to opposed The bill was not called for concurrence of the amended language in the House and was not passed

• House Bill 2975/Senate Bill 1829 – Arbitration – As originally introduced, provisions in these bills would have prohibited preemployment arbitration agreements Many firms use arbitration clauses to resolve employment disputes and client disputes The U S Supreme Court also has recently opined that states cannot place restrictions on arbitration agreements In both instances, ICPAS worked with respective sponsors to generally preserve arbitration as a venue for resolution of employment disputes

• House Bill 2127/Senate Bill 1326 – State Procurement Vendor Spyware – These bills would require firms and professionals who provide services to the state through the procurement process to install spyware on their IT systems The spyware software monitors computer keystrokes to measure the amount of time a vendor employee spends on a state contract It is our position that this legislation is a solution looking for a problem (i e , to ferret out procurement fraud) There are adequate safeguards to address procurement fraud in state contracting This legislation is also opposed by the Computing Technology Industry Association, National Association of State Chief Information Officers, and Illinois State Chamber of Commerce This bill was not called in committee for a hearing

The business community also got a win with Senate Bill 689 This legislation gradually repeals the Corporate Franchise Tax and expands the Manufacturing Machinery Credit Exemption and other specific tax credits

Initially, it was doubtful that the General Assembly would be able to pass this long list of transformational legislation However, Pritzker and the legislative leaders did something we haven’t seen in some time they collectively worked together They passed an imperfect but balanced state operating budget and other legislation that marks the end of partisan gridlock under the Capitol Dome Now, let’s hope that the passed transformational legislation will allow the governor to restore fiscal stability in Illinois and position the state to be a Midwest leader again

Author’s Note: This column includes my personal observations of the evolution of the legislative environment and are not necessarily the views of the Illinois CPA Society

Growing a successful firm in today’s CPA industry requires two things: finding good clients and providing them with world class service Sounds simple, but the secret sauce that helps with both is finding a great niche and becoming an expert in it If you ’ re a CPA like me, you love the challenge of navigating complex accounting and tax issues, implementing systems and controls, and helping your clients manage the financial health of their business and maximize cash flow, which means you’ll love the opportunities available in the cannabis industry Think that’s taboo? Think again

I picked cannabis as my niche in 2015, and business has been growing exponentially The list of states which have legalized cannabis use is expanding rapidly as Americans increasingly support medicinal and recreational cannabis use, including in Illinois where lawmakers recently approved recreational cannabis sales and possession to become legal Jan 1, 2020 Simply put, cannabis is not just a niche, it’s a national movement with many passionate individuals who truly believe in the medical, social, and economic benefits And, cannabis is going to drive a multi-billion-dollar industry that’s going to need you

So, here are five reasons why to get familiar with the nuances, rules, and complex entities of the cannabis industry and start serving them today:

1 You’ll Make More Money

Several factors play into the fact that accounting professionals working in or with the cannabis industry earn more For one, it’s still a federally illegal industry more risk, more reward Cannabis is also a very complex industry with several types of businesses think cultivation, chemical manufacture, food and beverage production, labs, transportation, retail, and more Cannabis businesses are also high earners; the average “ mom and pop ” cannabis company will generate seven-plus figure revenues and are able and willing to pay higher fees for specialized professional services

Clients need help navigating several complex issues, including rapidly changing laws, business valuations, lack of access to traditional banking services, financial reporting, tax liabilities, audit and compliance, and more Couple this complexity with an extreme lack of CPAs serving the industry and you have a perfect storm allowing you to realize much higher fees

5 Reasons to Cultivate a Cannabis Practice

With full legalization coming soon, Illinois CPAs have a growing industry to capitalize on.

BY ANDREW HUNZICKER, CPA

2 The Niche Is Underserved

The U S cannabis industry is only legal at the state level, which means most accounting firms, including the Big Four, are largely avoiding serving the industry I estimate 90 percent of existing cannabis businesses are using bookkeepers that have QuickBooks or Xero training but not the expertise to perform complex GAAP and cost accounting they truly require Meaning now is the time to establish your expertise in the industry

3 It’s the Fastest Growing Industry (Globally)

More than 35 states have legalized cannabis to some degree and each year more join the list Cannabis is a real solution for several medical issues, it provides jobs and tax revenues, reduces black market activity, and is one solution to the opiate crisis It’s no wonder billions of dollars are backing many of these companies, growth rates are extremely high, and M&A activity is picking up There’s a big book of business waiting for CPAs who can help these companies succeed in a highly competitive, complex, and regulated global business environment

4. You Can Streamline Your Practice and Clients Will Seek You Out

When your systems and practices are in place for use across similar companies, the work you do becomes easier and more efficient, which saves you time, makes you more money, and allows you to do better work for your clients It’s also much easier to market your services to a single industry and become established as an expert in it, which ultimately attracts clients to you

5. It’s Fun and Exciting

From the people you meet to the events you can attend, this industry is simply fun So, if you are looking for an industry that is innovating and growing with some of the most dynamic and brilliant minds in the country, then the cannabis industry is right for you

MARK YOUR CALENDAR!

Cannabis Industry Conference

Wednesday, November 6

Andrew Hunzicker, CPA, is the CEO and managing partner of DOPE CFO and CFO Bend He can be reached at andrew@cfobend com

Specialize and Humanize: Two Keys to Winning Clients as Tech Takes Over

Technology is driving two shifts that are set to shake your accounting world, and both require very human responses.

BY BRAD SARGENT, CPA/CFF, CFE, CFS, CCA, FABFA – THE SARGENT CONSULTING GROUP

Twomajor tectonic plate shifts in the accounting world are going to make a serious impact in your career and practice The first shift I initially detected long ago, but it’s on the move in a big way now: Specialization

“Find your niche” is now an industry-wide mantra Undeniably, there will always be a need for bookkeeping and basic accounting services, but increased competition and price wars are driving profits in this sector lower and lower Many firms are simply moving out of this space to focus solely on high-margin niche consulting services Most universities, who are motivated to place their graduates successfully in the market, have recognized this evolution and are providing more specialized classes in business valuation, financial management, forensic accounting, and accounting information services In my focus area, forensic accounting, the old adage was “get two-to-three years in audit and then come see me ” to be considered for an entry-level position Now, firms recognize the need to get professionals into a niche at the onset of their careers and recruit accounting students as early as their sophomore year for internships and potential long-term

positions This is more than a trend; this is a permanent movement in the U S accounting industry

The second major shift in accounting is the profession’s increasing reliance on technology Some will argue that we ’ ve already been impacted greatly by technology, while others will say the profession moves at a glacier’s pace in adopting new technologies No matter your take, the pace of change will never be slower than it is today And, there are more technologies at our disposal for every aspect of our business than ever before Take social media, which has forever changed how accountants from students to managing partners can, and will, connect and market themselves and their professional services Myriad tools are available to measure and manage social media engagement By recording visits to websites and professional profiles, accountants can track, tweak, and direct their branding efforts Even the term SEO, or search engine optimization, has become familiar to accountants across industries Technology has helped level the competitive playing field for small accounting firms by providing access to programs and software at a low cost (if not “ open source ” at no charge)

There is no denying that technology has made access to information faster and easier But as a service professional moves across the spectrum from commodity-service provider to specialized-service provider, consumers need more than just information and data to make decisions A deeper dive into a potential service provider is going to go beyond our technologydriven marketing and a simple Google search What I am saying here is that despite our growing reliance on technology to provide valuable services to our clients, more than ever, strong interpersonal skills are going to be required to capture an opportunity and retain that client over the long term Think of this scenario: A loved-one has suddenly become extremely ill This is a life-threatening scenario You need to find a specialist with just the right skills to perform an emergency procedure You enter key search terms into your search engine and find a list of individuals who all appear to be highly qualified How do you determine who you will consult or hire? Remember, this is life or death You will want to see this person and speak directly with this person If you ’ re younger or more tech savvy, you’ll research the individual online and read the available reviews A more traditional approach would be to ask for the doctor’s patient referrals While this may seem dramatic, I argue that the process for seeking specialized accounting services are the same The higher margin specialty services come with much higher client expectations Potential clients want to see and speak directly with the subject matter expert(s) They want to hear what past and present clients have to say, either in reviews or as direct references Great marketing concepts and execution can lead to more opportunities, but known and respected referral sources often

ultimately seal the deal Having a credible source vouch for you can be the difference between winning the engagement or not

If you ’ re just starting out with a specialized skill, how do you obtain these critical referrals and client reviews? Simply, do your very best work each and every day Great results lead to great relationships

But be prepared for mistakes we make them every day The lowest hourly rates, best education, and professional credentials won’t matter when a project goes sideways, and it was a problem you could have prevented Don’t shy away from mistakes; be willing and have the fortitude to ask a client for feedback when a project has not gone as well as expected It is my experience that the brightest and the best are continuous learners, and there is no better teacher than a preventable mistake Again, by employing the human touch you can strengthen your client relationships and find that clients are more willing to look past errors when they perceive a candid desire to correct the situation Low-tech communication (i e , a phone call) can rescue a relationship that’s headed toward the abyss

The day may come when specialized accounting services are available on Amazon or Craigslist, but we are simply not there yet Technology provides ever-evolving tools to help expand our services and brand awareness But don’t forget that in the world of accounting specialization, the personal touch still matters By combining new-school skills and technologies with old-school communication and relationship building, you can grow personally and professionally There is no substitute for relationship-building skills, so as you specialize skills and technologize your services, don’t lose sight of the importance of humanizing your work

CPA Endowment Fund of Illinois

Paving the Way for Tomor row’s CPAs

The CPA Endowment Fund of Illinois, the Illinois CPA Society’s char it able par tner, annually awards $200,000 in scholar ships and training prog rams to more t han 170 diver se and deser ving accounting students across the st ate

Ever y year, we have more qualif ied candidates than awards to give Your gif t will help us close that gap and provide additional oppor tunities to future CPAs

The Act of Improv(ing) You

CPAs can use improv-based sketch comedy to improve their business and communication skills all while having a little fun

BY BRIDGET McCREA

Whatif we told you that the place where some of the world’s most talented comedians cut their teeth including “Saturday Night Live” alumni John Belushi, Mike Myers, and Martin Short is where you can learn better business communication and development skills?

While many of us know The Second City as an improv-based sketch comedy club that opened in Chicago in 1959, what many don’t know is that the same organization which has grown into an influential comedy empire known for cultivating several generations of comedic superstars also helps professionals break out of their “all business” shells, become better listeners, and interact with others on a light, fun level In fact, through its Second City Works division, the organization handles both entertainment and content for a wide swath of companies

“When we first started doing classes, we were teaching people who wanted to either get on our stage or get on ‘Saturday Night Live;’ it was a lot of actors,” says Kelly Leonard, creative consultant at The Second City in Chicago “As we started to offer more beginner

classes, we were also attracting doctors, lawyers, and people who had just gone through a break-up They weren’t using improvisation to get onto ‘Saturday Night Live’ they were using it to make their day-to-day lives better ”

Second City Works uses the same methods as its sister division, based on the improvisational games developed by social worker Viola Spolin in the 1920s, to create professional development, content, and events that drive personal growth and organizational improvement “A lot of companies hire us to tackle all kinds of problems, be it poor communication, teams that aren't functioning well, or people who need to ‘unlock’ their ability to innovate,” Leonard explains, noting that the division has grown significantly since inception

Leonard says improv is the perfect platform for achieving those goals because it gives participants a non-judgmental environment in which to let loose and be themselves It also picks up where formal education leaves off “For most of us, the educational

experience is not about navigating the unknown,” he says “Yet, what gets thrown at you in business is nothing that you can figure out by doing well on a standardized test It’s something you ’ re going to figure out by being thrown to the wolves, and that’s hard for people ”

HUMAN BEING PRACTICE

We’re all terrible listeners In fact, most of us are thinking about what we ’ re going to say before the person (or people) we ’ re listening to is even finished talking Knowing this, Second City Works developed a workshop called Last Word to help people acknowledge and overcome this bad habit “The bulk of the time, we ’ re on autopilot,” Leonard says “We get the gist of what people are saying, but then we move into our own brains and basically cut off the last part of what they’re saying ” For the Last Word, individuals are paired up and asked to start a conversation The only rule is that Speaker B must include the last word spoken by Speaker A

The exercise is a lot harder than it sounds (try it sometime) “People have a very hard time doing this,” Leonard says, “because they’re not used to listening all the way to the end of other peoples’ sentences ” From this experience, students unlearn the bad habits they’ve developed over time and replace them with more thoughtful listening

“When you thoughtfully listen to someone, take it all in, pause, and then respond, it can be immensely gratifying,” Leonard says, “and much better than just rapid-firing back as if you haven’t even listened to what the other person has said ”

This is just one example of how Second City Works uses “human being practice” to help professionals improve their soft skills “We give people a very safe space to fall on their faces, laugh about it, and get up and try it again,” Leonard says in pointing out that people generally learn more from their failures than their successes “Unfortunately, both in education and in business, we don't give people enough space to fail their way to success ”

GETTING ENGAGED

Second City Works caters to a wide range of business professionals who want to know what it’s like to fall on their faces and then get back up on their feet and try, try again “Whether you ’ re a first job newbie or a grizzled exec, if you want to perform better, we can give you an edge,” the organization’s website states “Our offerings are designed to get people engaged and energized, and they’re unrivaled at driving action and improving critical skills like communication, collaboration, creativity, and agility ”

Leonard says accountants and CPAs are perfect candidates for the experience “Much like a doctor, a CPA’s training focuses on very specific tasks (i e , knowing the year-end numbers, performing audits, doing tax returns correctly, etc ) They weren’t schooled in the art of emotional intelligence (being aware of, controlling, and expressing one ’ s emotions) or storytelling ”

While CPAs may not immediately correlate feelings like empathy and the ability to tell good stories with success in the field, Leonard says being able to create a narrative for ourselves (or co-create a narrative with someone else) can give professionals a leg up in the business world

“As the world becomes more automated, and as we look at what the needs are for the future of work, those needs include storytelling, divergent thinking, problem solving, agility, and

resilience,” Leonard says “These aren’t skills that you ’ re going to get if you sit in front of a computer monitor all day ”

Improv also helps stoke inner happiness, even for introverted personality types that wouldn’t necessarily take an acting class or get up on stage “Improvisation gives you the ability to find the agency within yourself to be happier, and we usually get that in social settings,” Leonard says “Improv is great for people who are introverted because it gives them more agency and skills to navigate social situations and not get drained by those experiences ”

PRACTICE MAKES PERFECT

Getting up on stage with a group of people and doing things you normally wouldn’t do in your day-to-day life may sound daunting to anyone who hasn’t done it before, but breaking out of that shell can have a profound impact on the participant’s life and work

“It really boils down to giving people practice and helping them take the games and exercises into their day-to-day lives,” Leonard says By taking the improv experience with them and continuing to practice games like Last Word, students can continue improving their communication and people skills “I've seen so many people open up by doing this work,” he says “It’s one thing to hear it in a lecture or read it in a book, but when you ’ re physically practicing it in a room and looking someone else in the eyes that’s how you get to real behavioral changes and improvement ”

New at ICPAS SUMMIT19, The Second City Works Players will help you walk away with the skills and the confidence to deal with disruption head-on in their interactive keynote on Aug 28, “Innovation in Times of Change: Using Improv to Deal With Disruption!” Learn more and register at www icpas org/summit

Inheriting Heirs: How to Hold on to a Client ’ s Family or Survivors

CPAs often discuss their firm’s succession plans, but what about the smooth succession of your long-time client ’ s business to their heirs, business partners, and other beneficiaries?

BY JEFF STIMPSON

Imagineyou ’ re a tax or financial advisor whose long-time client just died You’ve never worked closely with the widow or widower and probably at least one of the surviving children doesn’t know you at all How do you have or even start hard conversations about aging, death, and what to do next, whether that be with a business or an estate? And, maybe more importantly to you, how do you become or remain a trusted and valued advisor to this family?

From a business development perspective, attracting heirs as clients seems important, but it’s also important to have the soft skills to empathize with a family member in that position especially if your goal is to build a relationship that lasts another lifetime

“Too often CPAs aren’t proactively bringing this topic up to their clients” amid the chaos of compliance work, says Jason Vanden Bosch, CPA, senior managing director in the Chicago office of CBIZ MHM “Consider if the CPA’s entire relationship with a client consists of the client showing up once a year to have a tax return prepared, the client may trust the CPA to do a good job filling out tax forms but will generally not trust the CPA with key business or personal decisions or other matters ”

“Most people are concerned with transitioning control of their business over to the next generation or the next group of ownership,” Bosch says “Our clients have spent years building up their businesses and they won’t easily turn the keys over to someone else, especially when it has financial implications for their future So, a key factor is figuring out how to have an orderly transition in both control and financial ownership Topics like this, and the hard discussions that come with them, truly separate valueadded CPAs from compliance-oriented CPAs The CPA needs to show they’re a part of the client’s advisory team and involved in the client’s business and life beyond compliance work ”

SCARY STATS

Figures vary, but some $30 trillion in wealth is expected to change hands from aging baby boomers to their children or other beneficiaries over the next few decades That’s a potentially rich prize for CPAs and advisors who are prepared Consider the following:

• Some two-thirds (and some estimates point to more than 95 percent) of younger investors leave their parents’ financial planners when they inherit wealth

• Many long-time clients’ children feel that their parents’ advisors haven’t established a relationship with them

• Three-quarters of investors say their children have never met their financial advisors

• Nearly half of benefactors avoid discussing inheritance plans with their children, many because they don’t want their children to feel entitled to wealth

Yet, personal succession planning and the related estate and tax planning are big issues for many clients, according to Cory Gallivan, CPA, a principal of Scheffel Boyle in Alton, Ill Retiring based on the value of assets, tax cost of liquidation of those assets, timing to claim Social Security benefits, and how to pay for health insurance, among other issues, are all things aging clients and their heirs must know how to navigate, Gallivan stresses

“Health concerns can certainly ignite conversations with heirs on a myriad of topics, including medical directives, power of attorney, burial planning, and legacy planning,” says Dean Mioli, Oaks, Pa -based director of investment planning for Independent Advisor Solutions by SEI, which has an office in Chicago “Any communication is far better than no communication, and it can come in various forms not necessarily face-to-face The one thing parents don’t want their children to say is that they haven’t been told about their parents’ wishes ”

One initial challenge for CPAs and other advisors is often the lack of communication within a family “Family members who aren’t involved with the client’s business or financial affairs are probably not taking part in the current crucial decisions and conversations we ’ re having with our client, so they don’t know the value we are bringing,” Bosch says “They may know our name in conversation, but they have no experience with us ”

Gallivan points out another challenge: “Family members may have different plans or expectations with the business or assets than their parents did ”

And, of course, there’s the common issue of “quarrelling siblings,” warns Meg Al-Qassas, CPA, a senior manager in the Skokie, Ill office of MichaelSilver and chair of the Illinois CPA Society’s Taxation Estate, Gift & Trust Committee In these situations AlQassas admits that “ we sometimes lose one, ” referring to a client’s heir But, if there’s a conflict of interest in one of these situations, “It may be just as well,” she says

REACHING OUT, HOLDING ON

While CPAs and advisors should note that reaching out to a family member needs prior client approval due to confidentiality, Gallivan says, that a client’s family is often the first to reach out if they see a sign of the client needing help in the future “The family members would usually call or attend meetings with a parent in those situations With business clients, it’s common that meetings are held with both generations present ” This is a good opportunity to form relationships with your client’s family or business partners

“If mom or dad trusts the CPA, it is likely that the children or other family members will put a lot of faith in them as well,” Gallivan suggests “In general, if the client is happy with us, this translates to the child and, as they become adults, we try to provide them the level of service that retained their parents,” Al-Qassas says, noting that her firm tries to pair “the kids with staff who are closer to the same point in life to foster a relationship at the generational level ”

Adopting modern tools and tactics also can help advisors accelerate the transition to working with clients’ heirs Advisory

firms often offer financial literacy courses or guidance on investing and taxes for young adults And as more firms roll out new automation software and cloud-based solutions that free up advisors’ time, more of their focus can go toward bringing valueadded services to the complex needs of older clients Further, adopting virtual practices, like utilizing Skype or other virtualmeeting technologies, can help make connecting with clients’ tech-savvy children easier and get them to put a face with an advisors’ name and voice much sooner

Whichever way you decide to approach the client succession topic, there is one constant tip: Don’t wait

“Start early and have discussions with your client regarding transition of their business and/or personal financial matters to the next generation These aren’t decisions that can be made in six months or even a year, ” Bosch says “This will generally involve the older generation slowly giving up control and decision-making authority to the younger The same is true with personal financial matters estate planning, trusts, and so on sometimes take a very long time ”

The decision to begin these discussions shouldn’t rest solely with one advisor, either, Mioli suggests “It may or may not be the CPA’s role to take point on succession planning,” Mioli says “The financial quarterback should coordinate with the client’s other professionals, such as the CPA and estate planning attorney ”

FINDING THE RIGHT WORDS

If you struggle with what to say following the passing of a client or when your client experiences a loss of their own, Conversational com ’ s “How to Write a Meaningful Condolence Letter to Your Client” offers this advice to help you reach out during this difficult time:

Acknowledge the loss. “Your condolence letter should open with you acknowledging the loss as you understand it Depending on the relationship with the client, you could write the letter from a personal point of view as the business owner (using ‘I’ statements) or from your business’ perspective (using ‘ we ’ statements) ”

Express your condolences “Once you ’ ve acknowledged the loss your client is experiencing, you should express your condolences It doesn’t have to be a lengthy or emotional expression simply iterating your sympathy for your client during this time will be appreciated ”

Discuss the relationship “Next, it’s appropriate to discuss the relationship you have to the deceased, even if it’s only through your client You don’t have to have a personal relationship with the deceased to be able to comment on the effects they’ve had in your clients’ or your life ”

Offer assistance “You may choose to close your condolence letter to your client with an offer to lend assistance, depending on the length and depth of the relationship you ’ ve built with the client Including a statement about your willingness to help or provide additional assistance will be appreciated by your client Chances are, they’ll never call on you for help, but letting them know you’ll be there if they need you is an exercise in building trust and offering meaningful condolences ”

H i d d e n G e

s i n t h e Ta x C ut s a n d J o b s A ct

By NATALIE ROONEy

Illinois hasn’t had a lot to tout from an economic standpoint in recent years. It has the fifth largest GDP in the nation, but stories of fiscal woes and a worsening tax and business environment dominate the headlines. Now, a provision in the new U.S. tax law (Pub. L. No. 115-97, enacted Dec. 22, 2017) that created 8,761 “Opportunity Zones” across the U S may bring a breath of fresh air to the Illinois economy while giving blighted communities a badly needed boost.

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Finding the Opportunity

Opportunity Zones are census tracts composed of economically distressed communities, according to criteria outlined in the Tax Cuts and Jobs Act People and businesses can get federal tax breaks on capital gains they put into special funds that then invest in these designated zones Opportunity Zones have been designated in all 50 states, the District of Columbia, and five U S territories, including hundreds across Illinois

“Opportunity Zones are areas where residents need more employment opportunities and higher wages, ” explains Charity Greene of the Illinois Department of Commerce & Economic Opportunity (IDCEO) “Receiving an Opportunity Zone designation puts these areas on the map for a national network of investors that may not have previously considered them ”

In Illinois, 1,305 qualifying census tracts were originally identified by the federal government Illinois under then-Gov Rauner was able to nominate 25 percent (327 total, of which 181 are in Cook County) of these tracts to be formally designated as Opportunity Zones, which were chosen based on their poverty rates, unemployment rates, total number of children in poverty, violent crime rates, and populations The Federal Reserve Bank of Chicago also points out that a unique feature of the Opportunity Zones designation process is that tracts contiguous to low-income tracts are allowed to be designated, provided they meet other parameters; a state’s designated tracts may contain up to 5 percent non-low-income contiguous tracts

IDCEO is working with the governor, the General Assembly, local partners, and the business community to encourage broad-based investment and growth in Illinois “In the process, we strive to take advantage of any opportunity to leverage federal programs, like Opportunity Zones, as well as support from the nonprofit and private sectors,” Greene says “Opportunity Zones are one important part of a larger coordinated effort to encourage investment in low-income communities ”

The Nuts and Bolts

The Opportunity Zones provide tax benefits to investors under certain conditions:

• Investors can defer tax on any prior capital gains invested in a Qualified Opportunity Fund (QOF) until the earlier of the date on which the investment in a QOF is sold or exchanged, or Dec 31, 2026 If the QOF investment is held for longer than five years, there is a 10 percent exclusion of the deferred gain If held for more than seven years, the 10 percent becomes 15 percent

• If the investor holds the investment in the QOF for at least 10 years, the investor is eligible for an increase in basis of the QOF investment equal to its fair market value on the date that the QOF investment is sold or exchanged

A QOF is an investment vehicle that is set up as either a partnership or corporation for investing in eligible property that is in a Qualified Opportunity Zone Investors can get the tax benefits, even if they don’t live, work, or have a business in an Opportunity Zone Investors just need to invest a recognized gain in a QOF and elect to defer the tax on that gain

The best thing? These opportunities aren’t just for those with millions of dollars of capital gains to invest Anyone with a business idea or

who has recently made a return on their investments can take advantage of the program in any Opportunity Zone in the country Investment options include retail stores, grocery stores, research facilities, hotels, restaurants, office buildings, and manufacturing and mixed-use developments Creating a QOF is as simple as checking a box on IRS Form 8996 and submitting it to the IRS

The Sleeper in the Tax Law

For a month or so after the passage of the TCJA in December 2017, Opportunity Zones hovered under the radar, playing second fiddle to all the news coverage on tax reform lowering the corporate tax rate

Then, in January 2018, Dan Rahill, CPA, a tax partner with BDO in Chicago and a former chair of the Illinois CPA Society Board of Directors, received a phone call from a friend who sat on the board of a company and wondered if they could rezone in an Opportunity Zone The new Opportunity Zone provisions had not received much attention to date, so Rahill took a closer look at this new tax provision What he saw was intriguing

“Up until then, none of us really saw the opportunity that was buried within the law,” Rahill says “I started reading and discussing the possibilities with other advisors and potential investors It became the topic of the day Opportunity Zones could be the most talked about opportunity for investors to come out of the tax act for the next decade ”

Opportunity Zones are intended to release the private investment potential of over $6 trillion of captive capital gains into distressed communities to help jump-start growth, create jobs, and lift incomes Treasury Secretary Steven Mnuchin has predicted that more than $100 billion dollars in private capital will be invested in Opportunity Zones

“If that’s true, this could really have an impact,” Rahill says “Hopefully the Opportunity Zones hit the mark of their intended purpose to drive investments into areas that need revitalization ” He offers the former Michael Reese Hospital site and the long vacant South Works on Chicago’s South Side as examples

While there is now plenty of enthusiasm from investors, many delayed spending because of uncertainty about how the incentives would work On April 17, 2019, the Treasury released the second tranche of regulatory guidance, providing answers to many questions, to help guide investors, fund managers, and others

Full Speed Ahead

Rob Nowak, CPA, a partner in Baker Tilly’s Chicago office, says Opportunity Zones led to a new subset in the firm’s real estate practice “Our clients and their investors recognized that a financial model for an Opportunity Zone deal is significantly different because of the tax benefits,” he says “As a result, we ’ re gearing our services toward helping clients develop financial models that highlight the benefits Opportunity Zones bring to table ”

Nowak calls Opportunity Zones the most significant change in the real estate industry in 20 years “The market is excited about it, and clients are excited about it,” he says, adding that clients aren’t looking only at projects in Illinois; Chicago clients are looking at Denver, Nashville, Phoenix, Cleveland, and Houston “This isn’t just a local incentive ”

Chris Boehm, co-founder and managing partner of Cresset Partners, says from the outset, the economics of the Opportunity Zones program were not only compelling from an investor perspective, but also because of the underlying policy of making an impact where investment is needed to create growth “We saw equal applicability in real estate development and operating businesses that were already running,” he says “It’s a really interesting opportunity to raise and deploy capital into Opportunity Zones on behalf of our investors ”

Cresset Partners recently announced the completion of an investment in a multi-family development in Houston The firm is exploring the range of opportunities for real estate and operating companies now that the second tranche of regulatory guidance has been released

Community Impact

Even with all the apparent positives that Opportunity Zones offer, there are still concerns that local communities won’t benefit to the extent that has been promoted At the last minute, specific reporting requirements were dropped from the bill In April, the Treasury asked stakeholders to offer feedback about how to measure the community impact from Opportunity Zone investments

“We also need some method of measurement as to the effectiveness of the law,” Rahill says “How do we know that investment is being driven by Opportunity Zone development? The cities and states don’t know where funding is coming from Was it because of the Opportunity Zone or not? The investment may have happened anyway ”

The lack of accountability at the local level is especially concerning to Mohammed Elahi, deputy director for the Cook County Bureau of Economic Development “There is no requirement for investors to deal with the local government for any purpose aside from traditional permitting,” he says “The second tranche of regulatory guidance didn’t cover reporting requirements or the role of local government or economic development representatives ”

Elahi suggests that if Opportunity Zones are truly meant to benefit the local communities, the qualified investment dollars wouldn’t be limited to only capital gains “Why can’t ordinary investible dollars enjoy the same tax benefit of at least not paying taxes on future capital gains if the investments are held in an Opportunity Zone for 10 years?”

He also questions why the investment clock starts arbitrarily ticking in 2019 for a seven-year hold to enjoy a 15 percent reduction on an adjustable basis instead of when the actual investments are made As of now, Opportunity Zones will sunset in 2047 “Why shouldn’t investors of future years be allowed to count the years from the date of their investment to enjoy the reduced adjustable basis of 10 percent and 15 percent for five-year and seven-year holds, respectively, along with deferment of taxes accordingly?” he asks “The limitation on the source of qualified investible dollars to capital gains only will widen the gulf between the ‘haves’ and ‘havenots’ because average people don’t have capital gains to invest I might have 50 friends with $100,000 each It’s just their savings, but why can’t they have the same tax benefit if they’re investing in an Opportunity Zone?”

Those are all fair questions As is, will Opportunity Zones create jobs and revenue at the local level? Elahi isn’t sure He uses the

data storage boom as an example Large amounts of real estate are needed to build data storage facilities “They’re great for investors,” he says “You’ll never run out of tenants But even though a physical facility will pay property taxes to the towns, how many jobs will they create for those towns? Half a billion dollars will be spent to construct a data storage building, but it will only employ four or five people That’s it And in 10 years ’ time, that building is gold [for the investors] Yes, towns are happy because new property taxes will be paid, but it only creates four to five jobs There’s no ‘community development’ test for this as the law is written now Community development organizations are unhappy because there is no measurable and defined public benefit for Opportunity Zone investments ”

Elahi is hopeful a potential third tranche of proposed regulations will address these issues In the interim, he says, “I’m not optimistic about the actual community benefit ” He has heard this same sentiment expressed by his peers in other states “They’re also frustrated that accountability isn’t there ”

Nowak says Baker Tilly clients who have projects in process are hearing positive feedback from communities: “New investments and new jobs in a previously underserved area are well received ”

Boehm comments that Opportunity Zones aren’t a silver bullet “They certainly won’t solve all the problems, but it’s a way of bringing progress and investment to underinvested areas, and that’s a positive thing Opportunity Zones are one of a range of tools ”

Greene says the IDCEO is committed to ensuring that all residents have a chance to benefit from new investments and economic growth in Illinois “We will continue to partner with local governments and economic development organizations throughout this process, and we will prioritize state investments that accomplish community goals and lead to sustainable growth ”

In early May, lawmakers in the U S House and Senate took a step toward addressing the lack of transparency, proposing requirements for information the Treasury would have to collect about Opportunity Zones

Opportunities for CPAs

The body of law surrounding Opportunity Zones will continue to evolve, Nowak says “There’s no fixed body of knowledge It’s critically important for CPAs in any market to recognize that as the law continues to evolve, so must their understanding of the law ” Rahill encourages CPAs to understand the rules, especially those business-focused guidelines released on April 17 “We should be prepared to discuss these opportunities with our clients, because in most cases, they haven’t identified the opportunity for themselves,” he says “It’s an education process, and more importantly, a very viable investment alternative with significant tax benefits It won’t apply to everyone, but you need to be able to recognize when it will apply to your clients and bring it to the table Opportunity Zones are a very legitimate planning topic Even if the fact pattern doesn’t end up being right for a client, now you ’ re having a tax and investment planning discussion, and that’s our goal ”

Family offices and high-net-worth individuals are sitting on trillions of unrealized capital gains, Rahill adds “For them, this discussion is an absolute no brainer ”

Creating an Unconsciously Inclusive Business Culture

By ANNIE MUELLER

Here’s a scenario that’s becoming increasingly common in the accounting and finance industry: the conference table is full, the people around it diverse, with a wide range of backgrounds, genders, ethnicities, beliefs, orientations, and life experiences. A senior partner raises a question, and three people provide ideas. The ideas are sound, but eerily similar. There’s a brief discussion, a mild backand-forth that results in consensus within 30 minutes. Everyone leaves the productive meeting for a culturally inclusive celebration, where they exchange pleasantries and don’t ask each other too many questions.

It’s easy to reach consensus when the options are similar: it’s like choosing between three brands of vanilla ice cream There are slight differences in quality and variations in taste and texture, but in the end, it’s all vanilla When diversity in hiring is considered a final achievement, and diversity in thinking is treated as an organizational threat, the only ideas offered will be vanilla ideas. Organizations will suffer from a lack of diverse thinking and employees who aren’t satisfied with vanilla thinking will find the nearest exit.

Inclusivity begins with conscious, intensive efforts; over time, efforts become habits, and inclusion becomes the cultural default. Imagine what that can do for your firm or company operating in an anything but vanilla business world.

“Often, if someone feels that the culture of the organization is not one where diverse opinions and ideas are welcomed, they will not say anything,” says Mary Morten, president of The Morten Group, a national consulting firm focused on racial equity and customized approaches for organizational development Morten, a lifelong activist dedicated to providing a voice for marginalized communities, explains that in many cases, employees from underrepresented communities are treated as the “token representative” for entire groups and communities, if not excluded altogether from high-level conversations that involve organizational planning It’s not uncommon for them to be “routinely passed over for promotions and, in some cases, even asked to train the person who has less experience for a new position,” Morten adds “Some employees may have hope that things change; others just leave and hope it is better at the next organization ”

EMPLOYEE EXODUS

As a result, firms large and small face a reddening bottom line when it comes to talent: the costs of hiring, on-boarding, and training new, diverse employees can’t mature into an investment with a positive return if employees leave six months after hitting productivity

“At a high level, what prevents businesses and people from being inclusive is a lack of knowledge,” says Suri Surinder, cofounder & CEO of CTR Factor, which advises organizations in leadership, diversity, and inclusion Surinder, with 30 years of business experience in various C-level roles and as a consultant in multiple industries, argues that lack of knowledge and lack of self-awareness together form “the single biggest cause for absence of inclusion in the workplace ”

At heart, most people want to do what’s right They have empathy for others They understand the pain of exclusion There’s just one big barrier to expressing empathy, making new connections, and stepping into unfamiliar territory in order to create a more inclusive workplace: nobody seems to know how “People are hungry to learn how to interact with those who are ‘Other,’” says Ellie Krug, lawyer, writer, activist, and founder of Human Inspiration Works “Companies do not get inclusivity because they can't see it They get diversity because they can see it,” she explains Krug, who has presented on diversity and inclusion to governmental entities, court systems, Fortune 100 companies, law firms, and organizations across North America confirms that “ a company will spend a lot of time to bring in diverse people And then they’ll forget about it ”

Diversity is not an item on a checklist that, once achieved, will cause a firm to evolve into the innovative, inclusive company it wants to be Further, there are different types of diversity, and

only when both types of diversity are valued can a company shift to a culture of inclusivity a culture that actually receives the full potential from its diverse hires

ATTRIBUTE VS ACTIVE DIVERSITY

Attribute diversity is a familiar concept for most: it’s what people mean when they say things like, “We need more diversity in the accounting industry ”

“Attribute diversity is really all of the aspects of who we are that are driven by either intrinsic things or explicit things or organizational variables,” Surinder says Intrinsic variables, he explains, include things that are visible but not changeable: race, ethnicity, generation, sexual orientation Extrinsic variables, on the other hand, are not always visible, but they are changeable: education, experience, marital status, so on Then there are organizational attributes, such as functional expertise and specialization

“All of these attributes intrinsic, extrinsic, organizational will result in our thinking and our behaving differently,” Surinder explains Variations in thinking can, and often will, lead to more disagreements, longer meetings, more intense discussions, and more opportunities for conflict That’s the perfect opportunity to welcome and support active diversity the missing ingredient for many companies but it often feels like an organizational step backwards It might become harder to reach consensus, which feels inefficient And relating to people who are “other” makes many people uncomfortable “Our natural instincts are to gravitate toward people like ourselves,” Surinder says “That's the herd mentality for safety, built into our psychology ”

Krug calls this instinct grouping and labeling “We need to have tribes that provide for identity and security,” she says “But it’s also very problematic In my training sessions, I will identify the tribes that are in the room You’ll have all the accounting people sitting with each other All the people in the sales team sitting together ”

In other words, companies can do everything right to increase diversity, and still end up with distinct groups, stifled individuals, and little to no real communication

Surinder points out that there also are two different types of inclusion cultural inclusion, and leadership inclusion and many organizations focus solely on the first Human Resources adds a few “diverse” holidays to the company calendar and calls it a day But inclusion must extend beyond an organization’s social activities Inclusion, Morten explains, “is the act of creating environments in which any individual or group can be and feel welcomed, respected, supported, and valued to fully participate ”

Cultural inclusion is good, but it’s a first step, not a final one Leadership inclusion asks the question: “What do you want to be included in?” and then responds to the answer with action

“There are 20 different shades of inclusion from financial to recognition to decision-making that we have discovered as part of our research,” Surinder says Leadership inclusion requires an individualized approach, and that’s where most organizations hit a wall

TOOLS AND TRAINING

To break through that wall, people need tools they can use and understand, tools that make sense, and tools that can become second nature And, in most cases, they need training Be warned that a cookie-cutter approach won’t work One-size-fitsall programs and methodologies are, in a sense, the antithesis of what inclusivity truly is Individuals and companies are asked to conform to a certain set of parameters, regardless of size, resources, mindset, culture, history, and previous efforts Not only are such programs often ineffective and costly, they also give many organizations a “free pass ” mentality that, they feel, excuses the need for further effort “A lot of diversity and inclusivity training becomes one-off,” Krug cautions

D&I (diversity and inclusion) or DEI (diversity, equity, and inclusion) training that works is customized, clear, and action oriented Morten’s work starts with an organization-wide assessment and targeted training, and results in a customized plan of action Krug uses an approach called Gray Area Thinking™ to give individuals and companies a toolset that includes increased awareness, risktaking (consciously moving away from what is familiar and toward what is perceived as “other”), and compassionate acts Surinder teaches from a model that asks and helps individuals and organizations to apprehend, assess, and act

Their approaches are memorable, adaptable, and focused on specific, measurable changes Further, they come from a personal passion and long-term interest in the ongoing work of creating inclusive workplaces A minimally trained rep, reading a dry inclusivity presentation from a three-ring binder, won’t inspire change Consultants and trainers who have life experiences and deep interest in the process of cultivating inclusivity bring enthusiasm and curiosity to their work, which motivates others to participate fully Their experiences also enable them to answer questions, solve problems, and help organizations develop the individualized plans of action that will make a difference

If finding and implementing the right training down to the level of individual customization recommended seems overwhelming, there’s help The answer is to handle it the same way any complex, organization-wide task would be handled: with technology

AUTOMATING INCLUSIVITY

“Companies will micro-segment customers,” Surinder points out “But they don't spend the time to segment their own employees

and say, ‘We have five different segments of employees in this organization, all wanting a different type of inclusion Now let's put in place some methods and processes, some actions, and some initiative to address these inclusion needs of employees ’’’

The same tools that enable customer segmentation to the furthest degree enable employee segmentation as well A company-wide survey could ask employees to rank the different types of leadership inclusion according to what is most important to them After the data is collected, the results can be sorted and prioritized according to importance Once the needs are known, it’s a process of addressing them, one by one Even the process of addressing needs can become a means of creating inclusivity; when companies present a transparent plan of action, diverse employees can breathe a sigh of relief Knowing that there is a plan, and that the organization’s leadership supports it, can keep dissatisfied employees from walking out the door

To meet the needs, there must be support from leadership and a willingness to invest resources “An individual department manager or supervisor will have nominal impact, if any, without the support of leadership,” Morten says The cost of employee turnover is often enough to convince hesitant leaders Every employee who leaves, frustrated by the exclusion and limitation they feel, costs thousands of dollars upwards of 33 percent of an employee’s annual salary, according to a 2017 Employee Benefit News report

Until the problem of exclusionary culture is corrected, the same scenario will repeat If there’s no buy-in from the top tiers of management, Krug says, that’s where you go to convince them of the need for individual, thoughtful inclusivity training that helps people understand why, what, and how to change Go to the money Make it talk

“Your employees are your first customers,” Surinder says “Take care of your employees and they'll take care of your customers ”

Support from leadership, willingness to invest resources, and truly valuing employees indicate organizational readiness Organizational readiness paired with individualized, actionoriented training can result in real culture shift, the kind that turns attribute diversity into active diversity, and makes inclusivity the normal mode of the workplace

The goal may seem daunting, but the only requirement for any organization is to start somewhere and start now Diverse employees who feel unheard and overlooked are not asking for miracles they are asking for clear changes and defined processes “The initial efforts are high,” Surinder agrees “But once you focus on it long enough, it becomes an unconscious habit That is really the progression of a successful leader and organization: they become unconsciously inclusive ”

Put the Past Behind You

Companies demanding deeper insights and better business strategies are focusing their finance teams on the future.

BY KRISTINE BLENKHORN RODRIGUEZ

“No amount of sophistication is going to allay the fact that all of your knowledge is about the past and all your decisions are about the future.” The words of GE’s former strategic planner and founder of its “future studies” group, Ian Wilson, still hold true But finance profes sionals today have more tools at their disposal than ever to help them think like futurists and plot their companies’ futures as well as their own.

The question remains, are ar tificial intelligence (AI), robotic proces s automation (RPA), machine learning, predictive analytics, and other digital technologies the cr ystal balls and magic bullets so many have wished for?

Bots & Bytes

Finance roles and responsibilities are expected to be among the most impacted by digital technologies like AI and RPA For now, though, many finance departments are planning for the 21st century while working with methods still belonging to the prior

The average corporate finance team spends roughly 80 percent of its time on non-value-added manual processes like gathering, verifying, consolidating, and formatting data, leaving just 20 percent of their time for higher-level financial planning and analysis, according to findings in Adaptive Insights’ CFO Indicator Report So much for being futurists

The risk is that many of today’s finance professionals are focusing most of their time on tasks that could soon be automated, leaving them vulnerable as more sophisticated forms of AI and RPA creep into daily finance functions and organizations increasingly ask for deeper business insight and strategy from the finance team “Very quickly we ’ re going to be in a world where, if you don’t have skills in robotics and the related technologies, you will be obsolete as a finance person, ” KPMG CFO David Turner recently told CFO com

At the beginning of 2019, Turner, an RPA bull, said the firm was about 55 percent of the way toward achieving an initial goal of creating 200,000 hours of workforce capacity savings

Bots can process transactions, monitor compliance, and audit processes automatically And many of the bots being developed today learn as they go Through machine learning, bots improve all on their own, based on new data and new experiences, which cuts down on the manual work finance professionals have previously done and, arguably, has held them back from largely becoming more strategic business advisors

Accenture’s David Axson, global lead of CFO strategies, says some executives are surprised when they see just how much of corporate finance’s day-to-day can be done by technology: “Many are dismayed because they’ve traditionally seen their job as the preparer of financial reports and now technology is usurping that role What they don’t realize is that in today’s digital era, finance’s job begins when they deliver the report or analysis Their role is now primarily an advisor on major business decisions, not a report compiler ”

The scenario is increasingly playing out In “Bots, Algorithms, and the Future of the Finance Function,” McKinsey & Company highlights how AI can outdo veteran talent: “At a heavy-equipment producer, managers had long used spreadsheets to forecast monthly sales and production Frustrated with the time consumed and the imprecision of manual forecasts, they tasked a team of four data scientists with developing an algorithm that would automate the entire process Their initial algorithm used all the original sales and operations data, as well as additional external information (about weather and commodities, for example) In this case, within six months the company eliminated most of the manual work required for planning and forecasting with the added benefit that the algorithm was better at predicting market changes and business-cycle shifts ”

Another case in point: Willis Towers Watson’s use of RPA “Intelligent automation boosts both day-to-day finance functions and the

quality of finance’s strategic insight,” says Willis Towers Watson CFO

Michael Burwell in an interview with CFO com “We use robotics to retrieve invoices in response to various queries by state and local tax authorities It’s an important step, because both the number of reviews per day and the amount of data requested is growing exponentially My tax team can assign the robot a task and time to retrieve invoices in advance of a tax examination A key advantage of using robots is their ability to work off-peak hours when staffers are home When they arrive in the morning, they have invoices and a status report to review ”

More CFOs seem to be catching on to what the future can hold for their finance teams According to Grant Thornton LLP’s 2019 CFO Survey, 38 percent of senior financial executives currently implement advanced analytics, while 30 percent have adopted machine learning And over the next two years, an increasing number of CFOs will invest in AI (41 percent), RPA (41 percent), blockchain (40 percent), and drones and robots (30 percent)

When Axson maps out the task list for corporate finance teams in the pre-digital and post-digital worlds, it becomes clear that the traditional role of finance must change “Intelligent machines can sift and sort through vast data sets sets far too large for humans to accomplish And those same machines can identify patterns we humans simply can’t because of the volume of data Machines also do things like this with far less error than humans do If you want to know the impact of changing pricing or building a new factory, AI can help faster and in ways humans can’t,” Axson explains (See chart on page 27 )

That said, Axson makes it a point to note that humans empathize, ideate, create, and converse with each other for better solutions far more effectively than any bot “AI is not a cure-all For example, AI is not great at predicting black swan events,” he explains

Ultimately, “CPAs need to think of themselves as more than accountants,” Axson says “They are moving up the value chain to become more of a business partner and a strategic enabler providing solutions versus simply transactions To do that well, it helps if they have a strong grasp on what lies ahead for their companies ”

Becoming a Finance Futurist

Futurist, economist, and self-proclaimed human spark plug and brain shaker, Rebecca Ryan, smiles to herself when executives think what she does is shrouded in mystery “’Futurist’ is a wonky term, I know, but we ’ re all futurists of a sort If you ’ re trying to figure out retirement savings or the weather for your vacation, you ’ re doing what I do I just do it with a lot more training and tools,” she says

When it comes to corporate futures, Ryan says a surprising number of the business leaders she works with hesitate to shine a light on it “Most of us tend to think the future is a dark room And we don’t want to go in there because we don’t know what awaits us We’re afraid of the bogeyman ” Her job is to prove the bogeyman is a myth and that what leaders plan for has more power to help than to hurt

In practice, Ryan uses “The Foresight Wheel” to walk business leaders through a futurist’s thought process, a multi-step method of developing strategic foresight by asking “Where is the world likely to be?” and then working backward from there

Step 1: Frame the domain. Here, specificity is required What do you want to explore or accomplish and by when? Think of the future of your company by 2025 or 2030

Step 2: Scan for forces and trends. This is where a good futurist helps Ryan says she looks for forces and trends that move leaders beyond their own biases, like the common availability bias, where we over-rely on sources we remember instead of what’s true In this step, Ryan takes executives through what she calls the STEEP areas: society, technology, economics, environment, and politics

First, look at society Are your customers changing? Are their attitudes different as a new generation comes to the fore? Second, technology What’s on the horizon AI? Robotics? Third, economics How is the gig economy or unemployment impacting your workforce? Are your customers or clients being hit by tax regulation or trade conflicts? Fourth, environment With climate change, are carbon taxes and environmental credits going to become a business concern? Fifth and finally, politics How will changing leadership impact your regulatory and business environment?

Step 3a: Forecast scenarios. Many businesses plan on their bestcase scenario or what Ryan calls “rainbows and fairy dust ” It’s aspirational, but no professional futurist will let you get away with that scenario alone She usually walks people through a “watch-andwait” future What happens if we don’t do anything differently? Then, an aspirational, best-case-scenario future What happens if we have all the right people doing the right things with the right resources? For the third future she asks business leaders to imagine a negative disruption This future is filled with black-swan events What if a client that accounts for 20 or 30 percent of your revenue makes a sudden change in leadership and your firm is no longer working for them? And the fourth future envisions a positive disruption What if two of your biggest clients double in size?

Imagining all these futures gets people out of their boxes optimist, pessimist, etc and considering a wide range of possibilities

Step 3b: Identify crossover issues. This is where you look at the four scenarios you ’ ve just laid out and say, “What are the things we can control that would help us regardless of which scenario plays out?” You can’t control the economy or who comprises a major client’s C-suite, but you can control other things like your hiring practices, R&D, or investigating new areas of business

Step 4: Envision the future. What is our highest vision of the future, and what will success look like in that future?

Step 5: Backcasting. Starting from your end domain (whether that’s 2030 or just three years out), work backward to fill in your strategic plan What actions and outcomes need to take place to achieve your business’s goals?

Step 6: Implement. What are the steps to take now to set your strategic plan in motion and get you headed toward your future state?

Sparking the Conversation

Don’t mistake strategic foresight as being reserved for the C-suite It’s not just about how executive groups think

“Bring some weirdos into your planning sessions,” Ryan encourages “And I say ‘weirdos’ in the most positive way You should have a stable or ecosystem of talent to choose from ” Ryan says she has seen chief innovation officers, entrepreneurs, and young college teaching assistants and professors fill this role, but the options are endless even interns could contribute

“Have them sign an NDA and then bring their creativity and ingenuity to your table They will take you out of groupthink, out of the mode in which your ‘ new ’ plan is just last year ’ s plan with slight updates,” Ryan stresses

She recalls one organization she worked with that had turned to its next-generation employees to help identify ways to better attract and retain employees This young talent set brought six projects to the company ’ s leadership team Leaders had to green-light, yellow-light, or red-light the ideas, but they had to give clear reasons as to why “I was in the restroom during a lunch break when I heard one of the female partners at this firm exclaim that she had no idea the firm had such talented young employees with such innovative ideas Sometimes, your brilliant nonconformists are right under your nose ” While strategic foresight is still a little “out there” for many organizations, Ryan says it can’t stay like this much longer In a world that is constantly changing, strategic planning will only take you so far Instead, be the “human spark plug” that ignites the impetus for overcoming organizational inertia It certainly beats the crystal ball approach

Tim Jipping, CPA, CGMA Owner, Journey Advisors & CPAs tim@journeycpas com

Turning Small Tech Bets Into Big Wins

From costs to awareness the reasons are many I’m willing to bet you or your firm (or maybe both) are underutilizing technology But I submit that it’s time to overcome any unwillingness to change and begin to challenge every element and understanding of how you do what you do to keep moving forward in a technology-driven future

Us CPAs, we ’ re technicians, specialists

Our creativity is most often exercised in solutions for our clients rather than for ourselves And while it’s great to be client-focused, improving our workflow is an extension of client service Not only will our clients benefit from a more efficient process, we will be able to better converse with them as business operators, supplementing our technical expertise with business advisory even in its most simple forms This brings us a step closer to obtaining or retaining that coveted “trusted business advisor” moniker

It’s said that doctors make the worst patients and, in similar fashion, we CPAs shudder at the thought that we might not already be operating our firms at the highest level; so, we often avoid asking the tough questions Heck, we ’ re making money and business is good Maybe we aren’t leveraging technology fully, but it’s not that big of a deal Right? Wrong

The reality is that not keeping up with the times could be diminishing the perceptions of us being the most trusted and most valued business advisors that we strive to convince our clients that we are

Don’t feel too bad, yet We are largely products of a system that has traditionally placed minimal value on creativity and innovation and leveraging technology to become more impactful business advisors Fortunately, we don’t need to remain prisoners to SALY (same as last year)

While I can’t possibly cover even the tip of the iceberg in technology offerings that could dramatically improve you and/or your firm’s performance in this column, I’d like to present a handful of tools that I know of that can help boost your productivity today

Survey Software: Survey GIzmo and Survey monkey

If you ’ re still using paper tax organizers, you must begin to phase them out especially for newer (younger) clients Modern survey and questionnaire software, like Survey Monkey and Survey Gizmo, allow you to electronically capture the same types of client data and responses you want without any need for pushing, managing, tracking, or scanning paper forms And while certain tax products have begun dabbling with versions of electronic organizers, many outside applications are more customizable and allow you to apply the technology beyond the traditional tax organizer questionnaires and checklists From onboarding new clients to capturing performance feedback, these services allow you to rinse and repeat with the click of a button

From time management to business development, there are several cost-effective technologies than can boost the bottom line for CPAs willing to make change for a tech-driven future.

Crm: HubSpot and InSIGHtly

Even if you ’ re not in marketing or driving business development activity within your firm, at minimum you should utilize a database of some sort to organize your current, past, and potential client data At worst, think of customer relationship management (CRM) software as a glorified spreadsheet that allows you to call up client information quickly At best, a CRM solution could help facilitate mass client communications, drive prospecting and business networking, and create other connections Some of the loudest groans I hear about utilizing a CRM solution are the maintenance aspects (data entry, activity updating, etc ), but as you’ll see in the next point, when you use the right platforms, almost all these steps can be automated

automatIon toolS: zapIer and automate Io

If you remember only one section of this piece, let it be this one Automation tools have the power to revolutionize your practice and your life This is not hyperbole but may in fact be an understatement!

What I’m referring to when I write of automation tools is building a system, or systems, of rules (think if/then formulas) that are automatically executed to follow certain actions or triggers You may even use a form of this with your email application For example, you can set a rule that when you receive certain email messages (by sender, subject line, etc ), they are automatically routed to a predetermined folder (even the trash bin!)

It may seem simple enough, but there are applications available that allow you to automate between disparate systems, not just within them This could be as simple as creating a rule that automatically takes a post you make on one social media platform (say, your Facebook page) and shares it across all your social media accounts One post becomes many, with no additional time

otHer

effICIenCy toolS

The following is a rapid-fire list of other miscellaneous tools that, when used effectively, can save you massive amounts of time and energy on some of the most mundane and tedious administrative tasks:

1. DocuSign allows you to automate and authenticate how your agreements, contracts, and other documents are prepared, signed, and managed quickly, securely, easily, and paper-free

2. Slack, at its core, provides cloud-based chat and collaboration functionality for your teams and clients to help cut down on email

3. Calendly saves you time by monitoring your calendar and automating call and meeting scheduling with your contacts

4. Asana is an online application for managing workflows, projects, to-dos, and more for you and your team

5. Zoom offers business solutions for your phone, video and web conferencing, webinar, and screen sharing needs

6 Practice Ignition is a client engagement, proposal, and payments software solution that can serve as the backbone of your practice, whether you use it as your engagement letter library, CRM, billing module, collections manager, etc puttInG It In

praCtICe

Just to get your creative juices flowing, I thought I’d provide a simple example of how some of this technology could be used in practice

To set the scene, imagine a good client refers a colleague of theirs to your firm to help them with their personal tax return You receive this referral via email and immediately respond with a templated response containing a quick summary of your practice and process In that templated email response, there’s a link to a short survey

the prospect will fill out that provides you with enough background to understand their situation in order to best advise on next steps

Once they complete that survey (which is customized and wrapped with your firm’s logo and branding), several things will automatically happen simultaneously:

1 A new folder was created on your network with the name of this new client as they entered it in the survey (this is where you can begin to store relevant client information instead of in that paper tax organizer)

2 A copy of the survey results is added to the newly created folder

3 An email is sent to you letting you know the survey has been completed with a copy of the results

4 Considering the new client has entered their name and contact information, they are automatically entered in your CRM

5 The client is routed to a webpage (or receives an email) inviting them to set up a 15-minute introductory call with you through your scheduling software, meaning they can see when you ’ ve blocked out time for such calls and can select the slot that works for them

6 Once they’ve chosen this, both of you receive a calendar appointment that includes the call-in number (or link) Within that invitation, you may have chosen to include a templated message regarding information to have available for the call, or even a copy of the results of the survey they submitted

While there are many other tasks we could have automated in the above situation, you can see that when you set up your system properly, you could eliminate hours of administrative work with a simple 10-second email reply Now that’s ROI!

CALLING ALL PRESENTERS!

With ICPAS SUMMIT19 just around the corner, we’re already planning for next year And we want you to be a par t of it

Do you have a stor y to tell, or best practices and innovations to share?

Then share them at ICPAS SUMMIT20, and gain recognition from your peers as a presenter at the largest learning event for accounting and finance professionals in Illinois

To learn more or submit a proposal, visit: www icpas org/summitspeaker s

7 Steps for Assessing Your Company’s Technology Needs

Here’s what to consider when trying to position your organization to capitalize on new technologies.

All we hear about lately in accounting and finance is how new technologies and different software and applications are going to reshape our finance departments, functions, and organizational roles While this is proving to be true in many ways, and as exciting (or frightening) as that may be, a lot needs to be considered before implementing a new enterprise-wide technology besides the trendy acronyms think AI, CRM, ERP, IoT, ML, RPA being thrown at us daily

It’s great that we have more tools available to us today than ever to help drive our organizations forward, but as strategic as we must be with our business finance decisions, we must be as strategic with our technology choices So, as you ’ re likely to be tasked with evaluating the state of your organization’s technology and how it can be improved to drive better business performance, here are some points to consider that will help you put your organization in a strategic position to take advantage of any new technologies your organization decides to pursue

Think about the pain points first. Sales pitches and marketing copy will make you think every new technology will solve all your business woes Just because a technology sounds good doesn’t mean you need it Listen to and document the pain points of your technology users What are the great ideas you or they have that just aren’t feasible with your existing solutions? Can this new technology help those ideas be realized? Also consider the time and resources that are expended month after month on manual tasks or supplementing existing business processes because your current technology does not fully support your needs or allow for automation

Avoid groupthink. Every company, even though it might be like others in some respects, is unlike any other because of its processes and human capital Therefore, each company ’ s technology needs and requirements differ dramatically As you assess the pain points identified in your organization, dig deeper into how technology may make your processes more efficient Pay particular attention to the processes that require a lot of time from your users or cause delays over and over again Generally, the more users impacted and the more repetitious a process, the more leverage you will gain from technology that automates those processes

Anecdotally, there will always be tales of technology problem areas in your organization, but as a finance leader, you are in a position to assess which technologies are going to touch the most people and help drive organizational and bottom line improvements Mind the pace of change. You’ve likely heard several times now that the pace of change will never be slower than it is today That doesn’t mean you should rush through a technology change in an attempt to keep up While it might be tempting when looking at new applications to implement everything immediately, this can overwhelm and exhaust both your users and your IT team Organizations can only absorb a certain amount of change in a given time and you want your users to accept and be excited about the new application Further, maintaining roadmaps identifying when applications

were implemented, upgraded, when they might be in danger of obsolescence, the number of users impacted, and what benefits you could gain from upgrading or changing can help provide a framework for identifying which applications or technologies should be prioritized by your organization Knowing when major upgrades are supposed to happen to which technologies is key to successful implementations

Think long term Your roadmap can also help you identify other relevant criteria in your technology timeline, like, is this an application that you plan to keep only two years, or is it something that you will need to maintain for 10 years? Knowing this will help determine the level of investment and development appropriate for the lifespan of the technology For instance, if you are only going to support an application for the next two years because another change is coming down the road, does it really make sense if it takes a whole year to fully customize, develop, and implement? If you intend to keep the application for 10 years, are you going able to update or customize areas to adapt to any foresee unforeseen) business changes?

Define your business and technology requirements and e you have the right stakeholders involved Specifying all organization’s requirements is imperative to ensuring that yo looking for and selecting the most appropriate techno

Discovering midstream during implementation that an applic cannot fulfil a key business requirement can throw your w project off plan, impacting users ’ enthusiasm and morale creating unnecessary costs and delays

Account for customization. If customization is a forbidden when it comes to technology, skip this step Otherwise, it is c to determine if customization is necessary and then whether be done by your own developers or if it will be led b technology’s vendor In either case, internal resources with the and expertise to guide the customization and resulting bus processes are integral Again, think long term and consider wh necessary future updates, patches, or operating system cha from the vendor could cause issues with your customizations

Another thing to consider prior to starting a new techn development project, especially if your organization has eng in significant automation and customization efforts to re manual effort, is whether the human talent for those bus processes still exist internally Who is going to ensure technology is functioning without errors or respond troubleshooting is necessary?

Strategize your data conversion. Changing ERP, CRM, tax, or other software solutions, or moving from physical data storage to digitized cloud back-ups, might require vast data conversions that could leave you feeling like you ’ re rewriting history If this is the case with your company, know ahead of time how far back you need to go, the level of detail and accuracy required, and how you will protect the data in case something goes wrong in conversion

When planning for a conversion, try to bring over only as much data as necessary If you must tie back transactions for the last five years, for example, recognize ahead of time that it will require significant effort and resources and will impact your implementation timeline

From prioritizing which applications are most critical to update, to ensuring successful implementation that remains on schedule, on budget, and within the originally defined scope, considering all these items will help you when assessing your current and new technology needs Better, you’ll come away with a framework for smooth, surprise-free upgrades that leave you and your company future-ready

Jon Lokhorst, CPA, ACC Executive Leadership Coach, Lokhorst Consulting jon@lokhorstconsulting com

3 Keys to Attracting and Retaining Accounting and Finance Talent

Winning top talent in a tight labor market is one of the CPA profession’s biggest challenges, but it doesn’t have to be

It comes as no surprise to me that “finding qualified staff ” and “retaining qualified staff ” were among the top five issues named across all size CPA firms in the most recent AICPA Private Companies Practice Section survey Truth be told, attracting and retaining top talent has always been a massive challenge in our profession, but even our corporate peers are facing a tougher time on the talent search For only the second time in its 21-year run, Duke University’s and CFO Magazine’s survey of business and industry leaders identified “attracting and retaining qualified employees” as a top concern Considering our current historically low unemployment rates and demographic trends, we ’ re all going to be scrambling to secure talent for some time But, does it have to be a challenge or chore to attract and then retain top talent?

Mark Miller shares three essential ingredients in his recent book, “Talent Magnet: How to Attract and Retain the Best People ” His approach is unique in that he sought out what “top talent” wants from their employer and how that differentiates from “ average talent ”

Miller and his team mined employee databases for performance evaluations, surveyed 7,000 employees online, and interviewed workers identified as “top talent” by their employers The research spanned a variety of industries, business sizes, and employee age ranges to ultimately reveal that all talent wants fair pay, a safe work environment, equitable treatment, healthy culture, and an organization with a positive reputation No surprises there, but workers identified as “top talent” want three additional elements compared to their “ average talent” counterparts: a bigger vision, a brighter future, and a better boss So, how can the accounting and finance professions tap into this insight?

a bIGGer vISIon

Your top talent is concerned about where your organization is going and what it’s all about: vision, mission, values, and impact This desire is especially powerful among Generation Y and Z workers They want to know their work matters and that they’re not just crunching numbers; they want to make a difference in the world and have a purpose-filled vision to serve

Now, how do you articulate a greater sense of vision and purpose as an employer? How do you differentiate yourself from other employers?

Mississippi-based Horne LLP describes itself as “The Wise Firm” and states their purpose is “creating value and making a difference ” HubSpot has achieved a reputation as a top employer through its founder’s passion for a mission “bigger than any sort of profit objective ”

Real estate firm Keller Williams celebrates RED Day every May, a day to renew, energize, and donate in the communities they serve In 2019, Deloitte marks 20 years of its Impact Day, an annual day for their teams to serve together in local communities Providing opportunities for your team to serve together in the community is a significant way of promoting a bigger vision

a brIGHter future

Top talent is also looking for a clear career path and opportunities for professional development For too long, CPA firms have shrouded the road to partner in ambiguity Staff move through the ranks to senior and manager, wondering about the process, timeline, and expectations to become a partner Leading firms now offer structured partner development programs to retain their top people, those identified as future firm owners

Corporate accounting and finance staff are looking for similar clarity, asking questions like the following: What does it take for me to advance to the next level? What are the benchmarks and milestones to be eligible for promotion? How do I gain the experience necessary to succeed in this organization? Who will walk alongside me to help navigate the career path here?

In-N-Out Burger seems to have gotten this right Beloved for its burgers, the California burger chain is also beloved by its employees As one shift leader wrote on Indeed, “This company gives us opportunity to work with others and also to guide others in their careers It gives us opportunity to train and gives us a reason to come back to work ” The company has become a top employer because it prides itself on developing team members, which is something we can all take note of

The best leaders show team members the potential that lies ahead and create pathways to success They offer training, mentoring, coaching, and stretch assignments to help staff succeed in their current roles and prepare for their next ones These leaders provide regular, specific feedback to help employees build skill sets, even at the risk of seeing them leave for other opportunities They know that offering a brighter future keeps the leadership pipeline fresh and enhances succession planning

a better boSS

Providing top talent with a better boss is essential to close the exit doors that increase turnover statistics, which we know run quite high in public accounting firms Top talent simply doesn’t tolerate bad bosses or bad relationships with their bosses Today, especially, there are too many other workplaces for them to go

So, here are four suggestions to help you become a better boss and build better bosses in your organization:

1 Pursue leadership development opportunities CPAs tend to gravitate toward technical skills for training and CPE Pay more attention to non-technical skills as you move to new leadership levels within your organization Over time, you will rely less on your technical skills and more on those of your team members At the same time, developing non-technical skills will build your leadership capacity

2. Integrate producer and leadership roles. As CPAs, we have a get-it-done mindset It’s easy to think, “If it wasn’t for all these people I supervise, I could get my own work done ” Shift your mindset to see people as an essential part of your work and beyond just completing tasks yourself Improve your delegation

skills to better leverage your time and energy, which will free you up for more leadership functions

3. Prioritize your schedule for leadership activities. The whirlwind of deadlines, due dates, and daily operational demands often pushes leadership to the back burner Put time on your calendar for leadership activities, like staff development, strategic thinking, and change management Treat that time like you would your most important meetings with clients, investors, analysts, etc

4. Get to know and care for those you lead. Holding a regular check-in meeting with each team member is like hitting the trifecta: it makes you a better boss and enables you to provide a bigger vision and brighter future for each of your team members

Attracting and retaining top talent shouldn’t be a challenge or a chore to you or your organization It should come naturally as you build your reputation as a top employer The key to winning in a tight labor market isn’t more perks or gimmicks, it’s showcasing how you provide a bigger vision, a brighter future, and a better boss Do this while engaging your existing team to share their experiences in your recruiting efforts and you will master the challenge of attracting and retaining top talent today

Meet me at ICPAS SUMMIT19 I’ll be leading two leadership sessions on Aug 27-28: Multiply Your Value With Strategic Thinking Skills and 3 Keys to Attracting and Retaining Top Talent Learn more and register at www icpas org/summit

Art Kuesel President, Kuesel Consulting art@kueselconsulting com

The Risk of Trading Relationships for Technology

“But services are still different ” “The accounting profession is different ” Right? Maybe Technology’s creep into nearly every transaction we make as consumers is inescapable As CPA firm leaders, we need to embrace the fact that technology can make client interactions and transactions with our businesses easier, more convenient, more efficient, and can result in transactions with less overall friction for us and our clients But at the same time, the relationships we build with clients still have real value

Relationships create context, make the client feel valued, add a personal touch, and demonstrate value received These things cannot yet be replicated or replaced by technology Would I love to have a relationship with my CPA firm that is easier, more convenient, and has less friction? As any consumer would say, you bet But there must be a balance in how we navigate the relationship versus technology conundrum

I can personally relate to this conundrum; technology has directly influenced my personal interactions with my CPA firm and my personal investment of time in getting ready for tax time

Four years ago, my firm sent me a paper tax organizer and a large business reply envelope I compiled and organized a small mountain of documents and mailed them back to the firm That probably took me close to six hours to handle My guess is that it was rather time consuming on their end to get everything sorted and organized and manually entered into their tax software But this was the way it has been done since 1913 (I’m exaggerating here), so no one was the wiser of more efficient ways to manage this tedious process

Then, three years ago, I sent in the same items via email via my scanner Yes, I scanned all the documents requested and sent them over as email attachments This probably took me upwards of three hours, and who knows how many emails, to complete That was a nice time savings on my end Sure, it was less secure, but I have a Life-Lock membership And it was easier for the firm to drag and drop the documents into their software and databases But we all know early generation OCR capabilities required significant human intervention, so maybe it didn’t help them that much after all

Last year, my firm moved everything into a secure portal I admit as a client it was a bit confusing to navigate And, I recall it being so secure that all the layers of security frequently locked me out because of forgotten passwords and missing reset emails It probably took me three or four hours to get all my documents into the system, meaning it took me more time and gave me more frustration (despite the technology being “better”) I’m a fairly typical client, and I’d guess I wasn’t the only one with this experience Some typical clients probably even barked and bit or reverted to the old ways of submitting their tax documents in revolt Me? I just had a call with my “ guy ” at the firm to vent my frustrations, and he smoothed it all out Two steps forward and one step back

As technology touches more of what CPAs do, CPAs can’t lose their grip on the human touch they bring to the profession

This year, my firm tried a new tool that enabled more seamless document management for my tax return I could snap pictures of documents and upload them via an app I could upload statements and records directly to the firm from my laptop It was intuitive and easy to use I looked at a list of requested documents, scanned some, took pictures of others, and could upload them directly into the correct spot I was on track to be back down to two or maybe three hours of prep time or so I thought Several of my files were rejected They were too large, not of the right format ( jpg, pdf, etc ), or not in the right location I was frustrated and capitulated; I emailed everything in like I had done in years past My personal preparation time was jumping toward six hours, with much of that being aggravation time Two steps forward and two-and-a-half steps back

If not for my pre-existing trust-based relationship with my CPA firm, I would have declared the relationship over and sought a less friction-laden experience Instead, I called my team and they took care of me They assured me that I wasn’t the only one having trouble and apologized for the issues I stay with my CPA firm because I know they value my business, and they always put context around the numbers, make me smarter for next year, and often add a personal touch to our interactions This can include things like asking about Graham, Colleen, upcoming travel, recent wine, or barbecue adventures Technology can’t replicate this!

My cautionary tale isn’t meant to diminish the role technology can or should play in our firms Rather, it is meant to remind us of what we need to think about when evaluating technology: client relationships We often forget the downside of technology, which is that it increasingly takes the place of human interactions I’ll argue that human interaction is the glue that keeps our clients stuck to us and our firms

The relationships we build with our clients influence so much of our success as accountants, but only if they are made a priority Technology and relationships can and should exist hand-in-hand So, don’t forget this the next time you are evaluating your next technology upgrade Perhaps at the same time you should plan on some relationship upgrading as well just in case

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Can Secure Choice Secure Illinoisans’ Retirements?

As America’s savings crisis persists, Illinois acts to move employers and employees toward secure savings habits

You’ve probably heard the startling statistics on Americans’ savings for retirement so many times that you ’ ve become numb to them But I’ll put some out there anyway A 2018 study by Northwestern Mutual found that 31 percent of Americans have $5,000 or less in savings The same study discovered that 33 percent of baby boomers, the working generation closest to retirement age, have $25,000 or less in savings A 2016 survey of baby boomers by the Insured Retirement Institute found that among those with little confidence in their retirement plans, 68 percent wished they saved more money, and 67 percent wished they had started saving earlier in their lives

Clearly the need and desire to save for retirement is great And IRAs and employersponsored plans like 401(k) plans, in their present formats, have been around for at least 30 years Yet, statistics like these prove something is lacking

We know one problem People save best when their funds are withheld from their paychecks and are deposited into appropriate savings accounts before they have access to those funds That is an inherent weakness of saving through most personal IRAs 401(k) plans are funded largely by salary deduction contributions, which solve the problem with most IRAs, but a 401(k) plan is costly for an employer to administer and is still an elective for employees Perhaps that is why, according to a 2018 report from the Stanford (University) Center on Longevity, only about half of American workers are participating in a retirement plan at work

The long-term consequences of this failure to save might be dramatic Not only could one ’ s standard of living be negatively affected, but overall U S and global economic consumption and GDP growth could stall, impacting the saving and investment goals of even those who have been able to accumulate savings

It stands to reason that if saving for retirement could be made easier for both employers and employees, the severity of the problem could be lessened In Illinois, one such solution has been available since November 2018: Secure Choice

tHe baSICS

Secure Choice has been designed as a simple-to-administer program for employers, as well as an easy-to-access savings program for employees for whom an employersponsored retirement plan is not available The program, enacted through state legislation in 2015, is overseen by the Illinois state treasurer and managed by a selected program

administrator Under the Secure Choice law, Illinois employers with at least 25 employees (generally) must offer eligible employees participation in either an employer-sponsored retirement plan (like a 401(k) plan) or in the Secure Choice plan, which is a Roth IRA

Under Secure Choice, employers must withhold five percent of an employee’s gross pay and remit the funds to the program administrator for further deposit into investment accounts established by the employees, unless the employee elects a different percentage or opts out of the program altogether Unlike qualified employer retirement plans, Secure Choice is not preempted by ERISA This means that there is substantially no liability on the part of the employer to educate participants or monitor investment fund performance

for employerS

Employers are required to participate in Secure Choice if they (a) employ at least 25 employees as reported to Illinois Department of Employment Security for unemployment insurance purposes, (b) have been operating for at least two years, and (c) do not offer an employer-sponsored retirement plan

The state has organized employers into three groups for purposes of getting the program up and running The first group consists of employers with at least 500 employees This group was mandated to register with the program by Nov 1, 2018 and commence payroll deductions for enrolled employees in January 2019 The second group, consisting of employers with 100-499 employees, was required to register with the program by July 1, 2019 and commence payroll deductions for enrolled employees in September 2019 The third group, which includes employers with 25-99 employees, must register with the program by Nov 1, 2019 and commence payroll deductions for enrolled employees in January 2020

The treasurer’s office has already notified, and will continue to notify, employers about the program and their required participation In most cases, eligible employers have received multiple notices, according to a timeline prior to the employer’s registration deadline Generally, notices have been prepared and sent to those employers for whom the office believes there are no employer retirement plans in place as evidenced by a lack of a Form 5500 filed with the IRS in recent years

for employeeS

Employees are eligible for Secure Choice if they (a) are at least 18 years old, (b) are working in Illinois, (c) are not offered an employersponsored retirement plan through their employer, and (d) are full-time or part-time employees but not full-time students in a workstudy program

Employees can direct the rate at which contributions are withheld, including 0 percent Because Secure Choice is a Roth IRA, annual contributions are limited to $6,000 in 2019 or $7,000 when the employee is at least age 50 In addition, income limits (defined as modified adjusted gross income) apply to further limit the maximum contribution amount to an employee’s Secure Choice account For single filers, a full Secure Choice contribution is allowed if MAGI falls below $122,000 in 2019 For married filing jointly, a full contribution is allowed for MAGI of up to $193,000 in 2019

Employees also direct how their contributions are invested There are four broad investment categories to choose from: The Target Retirement Fund (consisting of 11 BlackRock target date mutual funds,) the Capital Preservation Fund (including two money market

funds), the Conservative Fund (1 mutual fund), and the Growth Fund (1 mutual fund) The default investment options under the Secure Choice program include one of the money market funds (from day 1-89 after the initial contribution) and the age-appropriate target date fund for the employee (90 days after the initial contribution)

Secure Choice represents a commonsense solution to the growing problem of Americans saving too little for retirement From the employer’s perspective, after registering the company and enrolling the employee in the program, ongoing maintenance is about the same as any other payroll withholding or deduction Most importantly, there are none of the ERISA responsibilities as with qualified employer retirement plans or testing requirements as with 401(k) plans From the employee’s perspective, retirement savings funds are withheld from payroll and deposited in appropriate investment funds that do not require employee direction unless desired Thus, Secure Choice features some of the best characteristics of retirement plans while avoiding some of the most burdensome regulations

I believe Secure Choice will provide a meaningful portion of the retirement savings for many Illinois workers in the years to come While Secure Choice is not a substitute for a well-thought personal retirement savings plan, it can be one component of that plan a component that is often missing for many Americans

Elizabeth Pittelkow Kittner CPA, CGMA, CITP, DTM Head of Finance, International Legal Technology Association ethicscpa@gmail com ICPAS member since 2005

The Importance of Ethics in Change Management

Leading change takes tact and integrity Here is how to ingrain the right ethics in your approach to change management.

Today’s pace of business is rapid, and change is more of the norm than not Organizational change, from business structure (merger, acquisition, dissolution, spin-off, etc ) to strategy initiatives, system or process improvements, and personnel changes, is almost guaranteed to impact you and the people you lead sooner or later Do you see ethics threaded through your change management processes? You should, because it is one of the key elements to successful adoption and execution of change your orGanIzatIon’S approaCH and our IndIvIdual reSponSeS to CHanGe

When you consider how necessary it is for businesses to implement changes to stay competitive, increase efficiency, and develop people, it is clear that business leaders must be the ones to inspire and champion positive change Organizations can approach change in a couple of ways

First, top leaders can decide upon change and push it down to the rest of the organization In some instances, like a merger or acquisition, this approach makes the most sense due to the confidential nature of these deals

Second, top leaders can involve other leaders and staff in the business to help decide what change to make A system or process improvement change is a good example where weigh-in from the other leaders and staff will help with buy-in of the overall decision

While most good leaders know that significant technical components are involved when change happens, they also need to consider the non-technical components like ethics, relationship management, and communication

As humans, we generally like routines because they feel safe We know how to do our jobs a certain way and adapt our style to the circumstances If we remain in the same state for several months or even years, it becomes difficult to see change as good for us as individuals Change can often create fear of the unknown about how our responsibilities will be different We show different responses to change: embrace it and move forward enthusiastically, accept it and get by, or actively resist it As a leader, you must be able to recognize and respond to these behaviors in yourself and in your staff

manaGInG tHe rISkS of CHanGe

Change brings uncertainty, and employees may feel pressured to agree with the change or risk being terminated Some management behaviors that lead to this environment include bullying people into change instead of motivating them or not being truthful about the

reason for change If this type of environment exists, change can bring negative behaviors, such as job dissatisfaction, lack of innovation, groupthink, forced conformity, lack of productivity, conflict, and turnover

If you want to lead change with integrity, you must ingrain ethics in your approach to change management How do you accomplish this objective? Consider the tips below:

1. Communicate honestly and transparently the reason for the change

a An acquisition will help the company be more competitive

b A system change will improve accuracy and speed of data

2. Treat employees as an essential part of the change process

a Employees are not a means to an end Some may view them as hammers to get the job done; ensure the company and its leaders care about the hammers as people

b Employees can develop new professional skills when playing a role in managing change

3 Offer change management and ethics training before and during a change

a Change management training shows employees that the organization is invested in their adaptation to business changes

b Ethics training specifically further instills why doing something right the first time is important to implementing change

4 Distribute information about the changes and give people a chance to comment

a An organization’s intranet is a good place to post communication about change and an FAQ document for employees to reference for communicating with outside stakeholders

b Provide opportunities for both open discussion and private feedback

5. Manage the change and assign clear expectations and responsibilities

a Encourage teamwork and celebrate accomplishments of meeting milestones

b Incentivize employees throughout the change to give them a stake in the success of the change process CHanGe: tHe dIffICult, tHe poSItIve, tHe Small but mIGHty

Many people associate change with a negative emotion when they hear it is looming An abrupt personnel change, for instance, may be tough for you to communicate, especially if you did not initiate the change or agree with it In this situation, you may not be the best person to communicate the change to others People can read our micro expressions and evaluate if they are congruent or incongruent with our speech If you need to communicate a personnel change, or another difficult situation, stick to the facts and ensure people are feeling supported If they are not at risk of losing their jobs in the near-term, tell them Lying to staff will only

lose you and the organization credibility more importantly, telling the truth, even when it is difficult, is the right thing to do

Hopefully, more often the organizational change you experience will be positive and improve the organization and the lives of the people it impacts For example, perhaps a vendor is underperforming and a switch to a new one will be easier once the transition is completed While the change itself may be tedious, the result of the change will be good for the individuals involved with the relationship management and administration relating to the vendor When the impacts of this change are appropriately communicated, it is easier for employees to endure short-term hardship for long-term improvement

The point with these examples is that it is important for leaders to remember that change comes in many forms While large changes take more management and leadership, small changes can still have significant impacts on a business and its people Something as simple as moving a recurring meeting from 9 a m to 8 a m may impact a colleague’s commute, family schedule, interaction with other team members, and morale

As with organizational change, even small changes in your leadership approach can have mighty outcomes Awareness of effective change management techniques in all types of change can help you build better habits and make larger change management projects easier As a leader, you must take part in the transition activities to show you are invested in the work to make change happen Always be honest about the work it will take to implement change Your accountability and honesty will motivate others to work toward the change you want and the change your organization needs

par t of t he

Keith Staats, JD Executive Director, Illinois Chamber of Commerce Tax Institute kstaats@ilchamber org

ICPAS member since 2001

Weighing the Taxes on Legal Weed

Illinois legislators have rolled out the foundation for a legal recreational cannabis industry with no shortage of taxes to go along with it.

In Illinois’ ongoing effort to cultivate new revenue sources, the state has joined a growing number of others across the nation in legalizing recreational cannabis use in hope of sparking a new industry and the economic benefits that could follow With Illinois’ medicinal cannabis program being deemed a success, and Gov J B Pritzker’s budget counting on significant cannabis revenues, the Illinois General Assembly passed the Cannabis Regulation and Tax Act, HB 1438, which legalizes sales and possession of adult-use recreational cannabis

The new legislation establishes a tiered tax structure that imposes a variety of taxes at both the wholesale and retail levels that will be administered and collected by the Illinois Department of Revenue (IDOR)

CultIvatorS and Craft GrowerS

The first tax is imposed on licensed cannabis cultivators and craft growers Beginning Sept 1, 2019, a tax of 7 percent is imposed on their gross receipts of cannabis sales The statute provides that a cultivator must be licensed by the state to be eligible to register with the IDOR What’s notable here is that the legislation allows the IDOR to set the selling price if it determines, for some reason, that a cultivator’s or craft grower ’ s transaction is not an arm ’ s length sale

Cultivators may recover the tax by stating it as a separate charge on the bill to their customers This right of reimbursement is a recognition that the tax is not a tax that is the responsibility of the purchaser In that respect the tax is like locally imposed retailers’ occupation taxes the tax is on the seller with a right of reimbursement from the purchaser What this means as a practical matter is that a purchaser with enough bargaining power could actually decline to reimburse cultivators

Cultivators are required to file tax returns monthly with the return and payments both due on the 20th of the month following the month in which the sales were made All returns and payments are required to be filed electronically However, the legislation allows for cultivators to petition the IDOR for an exemption to the electronic payment requirement based on hardship in recognition that entities in the cannabis business have a difficult time establishing traditional banking relationships Because cannabis remains a Schedule I drug under the federal Controlled Substances Act of 1970 deeming the use, sale, and possession of cannabis illegal federally insured banks must follow federal laws governing banking that involves illegal activities Meaning most banks currently cannot serve, or choose not to serve, the legal cannabis industry

Cultivators are also subject to specific requirements for invoices The invoices must be maintained in Illinois and must always be subject to IDOR inspection

InfuSerS

The next tier in the tax process applies to companies that infuse cannabis into other products, like edibles “Infusers,” as they are known in the legislation, may be required by the IDOR to file information returns with the department The requirement of information returns by infusers appears to be a mechanism by which the State of Illinois can ensure that all cannabis raised and sold by cultivators and craft growers is not diverted to the black market

retaIlerS

The next tax imposed is the Cannabis Purchaser Excise Tax This tax is imposed and collected by cannabis retailers on sales to end users The tax rate varies by the type of product, and in the case of smokable cannabis, by the amount of THC

All cannabis-infused products are taxed at 20 percent of the purchase price Other cannabis with a THC level of 35 percent or less is taxed at 10 percent of the purchase price Cannabis with a THC level of greater than 35 percent is taxed at 25 percent of the purchase price

The Cannabis Purchaser Excise Tax must be stated separately on customers’ bills It is also worth noting that the Cannabis Purchaser Excise Tax is not a portion of the tax base used for calculation of the Retailers’ Occupation Tax, aka sales tax, on cannabis purchases Sales of cannabis to end users are still subject to all general state and local retailers’ occupation taxes The state tax rate is currently 6 25 percent of the selling price and local tax rates obviously vary by location

The Cannabis Purchaser Excise Tax is also required to be electronically reported to the IDOR under requirements that mirror those for cultivators

Another point to be mindful of is that the legislation contains a specific prohibition of bundling cannabis sales with non-cannabis products In other words, cannabis retailers cannot bundle sales of cannabis with smoking paraphernalia

HB 1438 also imposes two new local retailers’ occupation taxes on cannabis sales to end users The first is the Cannabis County Retailers’ Occupation Tax The tax can be imposed in 25 percent increments, and the maximum tax rate that may be imposed by a county depends on the seller’s location Sales in an unincorporated area of a county may be taxed at a maximum rate of 3 75 percent Sales made in a municipality located in a home rule county, namely Cook County, may be taxed at a maximum rate of 3 percent Sales made in a municipality in a non-home rule county (every county other than Cook) may be taxed at a maximum rate of 75 percent These county taxes are also collected and enforced by the IDOR

The legislation also authorizes the imposition of the Municipal Cannabis Retailers’ Occupation Tax These taxes can be imposed in 25 percent increments up to 3 percent of gross receipts

In effort to satiate Illinois’ craving for legal cannabis revenues and the broader social and economic benefits of a newly legal industry, the Illinois General Assembly has attempted to develop a recreational cannabis taxing scheme that will maximize state and local revenues At the same time, the state is attempting to avoid setting tax rates that are so high that, when combined with the cost of cannabis, consumers continue to find black-market cannabis more attractive from a price standpoint We will have to wait and see whether the drafters of the taxes got it right

Cr

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Kathy Brents Christy Hud son

Tomorrow Is Another Day

BY JULIA M. HARIED

A lot can be gained from Audrey Hepburn’s words In the beginning of her career, people were sure she was destined for failure She was too skinny, did not dance well, suffered from depression and malnutrition, and the list goes on I don’t want to compare myself or the girls and women I work with at MakerGirl and the Big Four public accounting firm where I work to her, but I do see a powerful similarity between us all In life and work, we must learn how to fail but not stop, how to persist, and how to be resilient in order to succeed

Thus far in my career, I have failed and persisted and generated resilience Women like me who have not been accepted into the colleges of their choice, who have received a sub-par work review, who have not been offered a promotion, who have stuck it out in an unpleasant and unsatisfying work assignment, who have failed CPA exams but persevered these are the ones who pave the way for an unknown but potentially bright future for women and girls

One of the most recent failures that I’ve dealt with is the CPA exam My strengths include my attention to detail, work ethic, easy demeanor, and ability to work with anyone and to work longer hours My strength is definitely not test taking So, I have failed a few CPA exams Failing these exams is not what people talk about around the water cooler; however, I have discovered that many people have failed In fact, it seems as if these exams are designed for people to fail and to quit altogether In my opinion, it is how the profession remains somewhat exclusive and maintains its stature in the business world During these failures, my persistence and resilience have come in handy, because I have chosen every moment to continue despite wanting to stay in bed until it is all over I was raised to win and to succeed; however, it is very clear that it is my failures and not my successes that make me valuable to any company, board, friend, or family member As individuals, we need to recover and carry on if we are to be represented in fields in which we have been held back, and we must actively work to close the wage and position gaps that we have with men The resilient are the ones who pave the way for a brighter future for girls and women

With hindsight, we can look at Audrey Hepburn’s career and say, “What an extraordinarily successful actress she was ” What gets lost in that are her persistence and resilience despite the failures and struggles in her life things she also should be known for, including her powerful commitment to UNICEF and to the children of the world

So, in reading Audrey Hepburn’s wonderful quote in the newspaper, I am inspired and commit myself to be the woman I want to be Like Audrey, I believe tomorrow is another day, another opportunity to focus and work hard Subsequently, to you I say, don’t be afraid to fail, persist through the pain, and discover your resilience I have You can And we can make a difference for the next generation of women in business

2019 Time and Talent Public Service Volunteerism Award

CliftonLarsonAllen LLP

2019 Women to Watch Awards

EMERGING LEADERS

Julia M. Haried, Audit & Assurance In-Charge, Deloitte & Touche LLP and Co-Founder, MakerGirl

Charlene Rhinehart, CPA, Managing Director, CEO Unlimited LLC and Founder & Editor-in-Chief, Wealthy Women Daily

EXPERIENCED LEADERS

Rebekuh Eley, CPA, MST, Senior Manager, RSM US LLP

Kristen L. Fitzpatrick, CPA, Managing Principal, Miller Cooper & Co., Ltd.

2019 Young Professional Leadership Award

Nicole Presperin, CPA, Senior Director, New Ventures Group, Aon plc

2019 Outstanding Educator Awards

Terese Kasson, CPA, MSBA, Accounting Instructor/Academic Advisor, McKendree University

Bridgette E. Mahan, CPA, MBA, Instructor and Co-Chair of Business Department, Harold Washington College

Margaret M. Tower, CPA, MBA, Instructor of Accounting/Director of the Office of Student Engagement and Mentorship Program, DePaul University

2019 Lester H. McKeever Jr.

Advancing Diversity Awards EMERGING LEADER

Chinedu C. Iwuora, CPA, Audit & Assurance Manager, Deloitte & Touche LLP

OUTSTANDING LEADER

Gregg S. Woodruff, CPA, PhD, Department Chair, Western Illinois University

2019 Lifetime Achievement Award

Lee A. Gould, CPA/ABV, JD, CFE, CFF, Managing Member, Gould & Pakter Associates LLC

2019 Distinguished Service Awards

Linda Abernethy, CPA, RSM US LLP

Governmental Executive Committee

Christopher Beaulieu, CPA, MST, Blue Money Strategy Inc.

Taxation State & Local Content Advisory Group

Joseph F. Bigane III, CPA, MST, BSC, JFB Tax Consulting LLC

Taxation State & Local Content Advisory Group

Tony Boras, CPA, Crowe LLP

Governmental Report Review Committee

Jeffrey D. Butler, CPA, MST, Wipfli LLP

Taxation Flow-Through Entities Content Advisory Group

Anthony M. Cervini, CPA, CFE, Sikich LLP

Governmental Report Review Committee

Frank Cesario, CPA, CTI Industries

Corporate Finance Content Advisory Group

Tim Crosby, CPA, Marcum LLP

Corporate Finance Content Advisory Group

Cary Drazner, CPA, Marcum LLP

Corporate Finance Content Advisory Group

James Eisenmenger, CPA, Martin Hood LLC

Taxation Flow-Through Entities Content Advisory Group

Richard F. Gaul, CPA, RSM US LLP

Governmental Report Review Committee

Amy S. Jenkins, CPA, CIA

Governmental Report Review Committee

Sean Kruskol, CPA, CGMA, CFE, Cornerstone Research Audit and Assurance Services Committee

Patrick C. McCarthy, CPA, O’Connor, Brooks & Co. P.C.

Governmental Report Review Committee

Kathy Musial, CPA, Wipfli LLP

Employee Benefits Committee

Jason Parish, CPA, MST, Plante Moran PLLC

Scholarship Selection Committee

Daniel F. Rahill III, CPA, JD, LLM, CGMA, BDO USA LLP

Taxation Business Content Advisory Group

Deborah K. Rood, CPA, CNA Insurance

CPA Endowment Fund of Illinois Board of Directors

Michael J. Singer, CPA, Michael J. Singer & Co. PC

Taxation Practice & Procedures Committee

Jonathan R. Sniegowski, CPA, MST, Mowery & Schoenfeld LLC

Taxation Flow-Through Entities Content Advisory Group

Keith Staats, JD, Illinois Chamber of Commerce Tax Institute

Taxation State & Local Content Advisory Group

Matthew Vertin, CPA, MST, Baker Tilly

Virchow Krause LLP

Taxation Flow-Through Entities Content Advisory Group

The Illinois CPA Society is proud to recognize these individuals on their accomplishments.

Mary K. Fuller

Managing Partner, Shepard Schwartz & Harris

By Eric Scott

Mary K Fuller, CPA, considers herself a people person Caring about her colleagues and the clients her firm serves has always been the priority in her career This is a trait that her clients know well, as Mary shares a story from years ago

“We had a long time client who thought he needed to switch to a larger accounting firm to serve his business as it grew He tried to fire me, but also told me how much he enjoyed working with me because of the personal touch I/our firm offered I told him we could do everything the larger firms could but with the personal attention he might not experience elsewhere ”

Fuller’s “personal touch” and focus on people have been the constant in her 37-year career at Shepard Schwartz & Harris (SS&H), a CPA and business advisory firm in Chicago She started at the firm after graduating from the University of Illinois at Chicago (UIC) and is now the managing partner She also recently began her first term as a member of the Illinois CPA Society’s board of directors Given her success, it’s fair to say that her career path has come a long way from the days of serving ice cream at her first job, though the life and career lessons she learned then still ring true

Q: Serving ice cream sounds like a pretty sweet gig?

During high school, I was a waitress and hostess at Maloney’s ice cream parlor at Oak Mill Mall in my hometown of Niles, Ill Working there taught me the importance of customer service and the value of how to interact with people in a way that made them feel welcomed I learned how to work with different personalities and developed people skills that I carried throughout my career

Q: So, when did accounting come to mind?

I took an accounting class in high school and really liked it I thought it might be something I wanted to pursue, so I took more accounting classes when I got to college It was my dad who eventually influenced me to consider accounting as a career, even though he was not an accountant

Q: Can you tell us about your career path since then?

While I was in college, I also worked at LaSalle Partners (now JLL) in their property management accounting department I learned a great deal about basic accounting, how it worked, and how to follow through This gave me a good baseline but after I graduated from UIC, I decided I wanted to gain public accounting experience, so I interviewed with Mr Harris at SS&H

When I first started at SS&H, I was on the audit track but shifted to tax since many of my clients at the time had more need in tax than financial statements The firm also took advantage of my prior property management real estate accounting experience and sent me to real estate clients, which further developed my area of expertise

While working full-time, I was married and started a family After my daughter was born, I asked if I could return to work on a part-time basis instead of giving up my career, which was unheard of more than 30 years ago I embraced the opportunity and worked three days a week while raising my daughters I was determined to be successful The hard work paid off I continued to work my way up from staff to supervisor and eventually manager

Q: What’s kept you at one firm for so long?

I truly care about the people who work for us and it’s one of the biggest reasons I was asked to fill my current position I enjoy sharing my knowledge with them, being on their side, and helping them become successful I also care tremendously about our clients and their businesses, which range from family businesses to privately held companies and high net worth individuals SS&H has been around for almost 85 years and we ’ ve been successful as a firm because we put our clients first

Q: You’ve also been an ICPAS member for a long time. Why is that important to you?

I’ve been a member for more than 30 years, and I’m honored to join the board and serve my first term this year I love this profession and want to give back to the community I care about the young professionals starting their careers and I want to be an inspiration to them

Q: What career advice do you have for today’s CPAs? Several things come to mind

1 Raise your hand for the challenge When you see something that’s important, volunteer to do it; don’t wait to be asked or you might miss out on a great opportunity

2 It’s important to be in the moment Be engaged in the conversation, know your audience, and actively listen

3 Make connections with people and actually follow-up with them instead of just collecting business cards You never know where the next business opportunity will come from or who your next client will be

4 It’s becoming a big part of our profession, so stay in tune with the latest technological advancements impacting our industry and seek opportunity to continue learning

5 Finally, volunteer Join organizations and committees because you want to make a difference Don’t do it to build your resume

Stay Smart

Conferences

Sept. 25 Financial Reporting Symposium (In-person & Simulcast)

Sept. 26 Tech Innovation Conference (In-person & Simulcast)

Oct. 30 Construction Conference (In-person & Simulcast)

Nov. 6 Cannabis Conference (In-person & Simulcast)

Nov. 14 IRS/Tax Practitioners Symposium (In-person & Simulcast)

Nov. 21 Not-for-Profit Conference (In-person & Simulcast)

Courses

July 24 Basis/Distribution for Pass-Through Entities: Simplifying the Complexities (In-person & Simulcast)

July 25

Construction Contractors Advanced Issues

July 29 Time Management and Personal Effectiveness Skills

July 30 MS Excel: Formulas and Functions

Aug. 5 Coaching and Counseling Skills: Having the Difficult & Crucial Conversations

Aug. 13 New Businesses - Advising Clients on Related Tax Issues (In-person & Simulcast)

Aug. 13 Core Communication Skills: Best Practice Interpersonal & Assertive Communication Skills

Aug. 13 Getting to the K-1 - Partnership Allocations Under Sections 704(b) and 704(c) (In-person & Simulcast)

Aug. 14 Upcoming Peer Review: Is Your Firm Ready? (In-person & Simulcast)

Aug. 14-15

Staff Training: Semi-Senior

Aug. 15 Becoming an AICPA Peer Review Team or Review Captain: Case Study Application

Aug. 19 Form 990: Mastering Its Unique Characteristics (In-person & Simulcast)

Aug. 19-20 Staff Training: Beginning In-Charge

Aug. 19

Special Events

Aug. 21 Young Professionals: Lagunitas Brewery Tour

Aug. 22 Women’s Mixer at Rock Bottom Brewery

Aug. 28-29 ICPAS SUMMIT19

Nov. - Dec. Town Hall Forums (statewide)

Sept. 9 Essential Leadership Skills for Front Line Managers and Supervisors

Sept. 11 MS Excel: Database Analysis & Pivot Tables Made Easy

Sept. 16 Project Management Skills for Non Project Managers

Sept. 23 The Strategic CFO (In-person & Simulcast)

Sept. 23 Influencing Without Authority: Achieving Results Regardless of Your Positional Power

Sept. 24 Pricing for Profitability (In-person & Simulcast)

Sept. 26 Real-World Fraud Found in Governments and Not-for-Profits

Sept. 27 Create a Digital Office with Microsoft Office 365 (In-person & Simulcast)

Oct. 4 Essential Course for Preparing Not-For-Profit Financial Statements Under ASU No. 2016-14 (In-person & Simulcast)

Oct. 4 Strategic Planning and Goal Setting

Oct. 7 Time Management and Personal Effectiveness Skills

Octo. 16 The Bottom Line on the New Lease Accounting Requirements (In-person & Simulcast) (Morning)

Oct. 16 Interpreting the New Revenue Recognition Standard: What All CPAs Need to Know (In-person & Simulcast) (Afternoon)

Customer Service Skills & Excellence: The Competitive Advantage and Differentiator

Aug. 26 Basic Trusts: Taxation of Trusts and Preparing Form 1041

Aug. 26 TCJA: Lessons Learned From the First Filing Season (In-person & Simulcast)

Sept. 6

Effective Presentation Skills: Delivering Presentations With Power, Persuasion and Impact

For a full listing of all upcoming education programs visit www.icpas.org/education

Oct. 16 Performance Management: Conducting Effective and Results Driven Performance Conversations

Oct. 21 Situational Adaptability, Being Mindful: Adapting the Approach to Match the Shifting Demands to Different Situations

Oct. 24 The Best S Corp, Limited Liability, & Partnership Update Course (In-person & Simulcast)

Oct. 25 The Best Individual Income Tax Update Course (In-person & Simulcast)

HIRE FASTER. AIM HIGHER. GO FURTHER.

The most qualified accounting and finance professionals are in high demand and won’t tolerate a protracted interview process. If you delay, you may miss out on top talent. At Accounting Principals and Parker + Lynch, we employ a Priority Hiring Process in order to find your organization the best fit fast From temporary talent to executive search, and everything in between, let our team provide your business the personnel edge it needs to beat the competition Contact one of our four Chicagoland locations today.