Industry FocusCPAs

 

Accountants are among the most respected professionals in Nevada for their expertise and steady guidance. As businesses face turbulent times, this industry is working hard to stay on top of changing tax laws and implications for businesses with some of the new grants and loans available. Recently, CPA executives from across the state came together for a virtual roundtable hosted by Nevada Business Magazine and sponsored by City National Bank. At the roundtable they discussed everything from staffing challenges to advising their clients.

Connie Brennan, publisher and CEO of the magazine, served as moderator for the virtual event. The magazine’s monthly roundtables bring together industry leaders to discuss relevant issues and solutions.

What types of staffing challenges do you have?

Alisha McClellan: Our challenge really is supporting our people through these uncertain times. We have team members that have real and true challenges related to the pandemic. They have spouses that have become unemployed. Being able to provide staff with the support they need so they can continue to effectively service clients while we are in a remote environment is our current biggest challenge.

Daniel Gerety: Getting high level people that can handle the complexities of tax law, and help plan for our clients, especially with all of the changes that are happening so quickly [is challenging]. And, I’m finding planning for the future [to be difficult]. We probably have a third of our people working from home. What will our employees expect going forward? How do we design offices for the future? I don’t know, we’re trying to guess what it will be like.

Jessica Sayles: Part of the challenge we’re having in staffing is that the rapidly changing environment is moving from a compliance and commodity base to consulting analytics. I see it in the changes that are being made to the CPA exam. But, the skill set students are learning in college, the debit and credits of accounting, are no longer matching up to the needs of our clients. It’s difficult to find people who don’t have experience in reviewing business processes and technology, who have only dealt with compliance and strictly financial reporting, to understand the real needs clients have now. They don’t need a traditional CPA anymore. Some still do but, for the most part, they need CPAs who can integrate technology and rapidly changing economics to their businesses. There is a big gap in what students are coming out of college with and what we really need from them.

Curt Anderson: Basic, bookkeeping type accountants is not who we want. We are all trying to find intellectually inquisitive staff that want to expand their capabilities. That is not easy. We’ve found a pretty good compliment of people who think beyond paperwork and compliance activities, but we’ve had to train them into doing that. They don’t come out of school, or even come with one or two years of experience elsewhere, thinking that way. We spend a lot of time trying to get them to look beyond the paperwork and address what the client really needs. They’re not teaching that in school. It’s a grinding process to find the right mind set so we can train them.

Glenn Goodnough: Technical skills are important but business and leadership skills are critical to communicate that it’s not just completing a superior bank reconciliation that makes you successful as a CPA. Acquiring and retaining top talent is always a business imperative. We have found that the best way to do that is to get them as interns, identify talent and bring them in. We have more control over having a good internship program, identifying talent and growing our own, so to speak.

Mark Bailey: It’s critical you try to meet the needs of the staff. As accountants, we have a tendency to stick to three to five disciplines and try to put them in a box. For all of us to be successful, especially from a retention standpoint, we have to do things we enjoy doing. Sometimes it’s difficult to help that person and find what they really have a passion for. If they have a passion for [their work], they’ll do a good job, they’ll commit to it and be successful. If they don’t have a passion for it, they will go someplace else or not be happy in that job. It is really critical that we help them find that passion.

Leslie Daane: [We try] to grow our own and build a culture where people want to stay in public [accounting]. I think public’s gotten a bad rap for the hours and time people have to devote to it. I grew up in public and felt it was something that was actually very flexible. Providing flexibility to younger people that are having families has helped the retention piece. It’s a balance between trying to have the right culture. I think young people are actually very eager to come in and show their stuff and work with clients.

How do you fulfill the role of advisor for your clients?

Anderson: Fundamentally, it seems like clients want someone that they can talk with and ask, “What are my options, what should I do?” I don’t think that’s changed in 50 years of public accounting. The means by which we get information to help them make these decisions is important. But, at some point in time, this comes down to people looking at each other saying, “We have a problem here or an opportunity here, what can we do?” From an old school standpoint, I just see that being the same with different methods of getting that information together to be effective.

Goodnough: Intellectual capital is always imperative, but at the end of the day we are in the people business.

Anna Durst: We’re always ranked statistically as either first or second as the most respected profession. Clients respect their personal advisor because it is a people business. That’s why it is so important to have relationships. From what I’ve seen between our members and clients, the people you deal with day-to-day know who you are and respect you. That relationship is very valuable to them and they respect it.

Daane: With the pandemic going on right now, clients are needing our help more and more and reaching out to us. That in itself has shown the importance of what CPAs can do for their clients.

What advice are you giving businesses in regard to the Paycheck Protection Program (PPP)?

Gerety: A lot of the calls [we’re getting] are on the PPP right now. [People are wondering] how much will be forgiven. They want us to start running computations to see what they need to do, and what percent of that PPP loan will be forgiven. Most of our clients have received those loans and their applications have been successful. Now it’s figuring out what’s coming next. We really don’t know, it’s a hot topic.

Sayles: I agree, the majority of the CARES Act calls I get are related to the PPP program. The advice I give clients is to make good business decisions, don’t make loan forgiveness decisions. If you can’t live with the decisions you made as a business, don’t do it just for loan forgiveness. This loan has taught us that [things are] changing, sometimes hour by hour. If you were to make a rash decision today, you may be regretting that as a business decision. I have to remind my clients that they are first and foremost business owners. Any decision you make should be beneficial and relevant to your business regardless of loan forgiveness and if you get that it’s a perk. We can strategize how to align those two ideas but number one, make a business decision.

Bruce Ford: This is evolving so quickly, even on the banker’s side. We get information from the SBA (Small Business Administration) constantly, and there’s more coming from Congress. It sounds like you guys are giving the right advice. We advise our clients to talk to their CPAs, their attorneys and go to the SBA website because it’s ever evolving and changing quickly.

Durst: My role in all of this is not to advise clients but to rather help my CPA members get clarity so they can help their clients. I try to do some homework for them when possible, so they don’t spend the time doing the research, but instead advise their clients. I’m involved on legislative and planning calls, determining the issues that need to be clarified. Unfortunately, there is so much political play in this, there’s little things in the bills that one side or the other doesn’t care for that could cause the entire bill to be unaddressed. They could just choose not to take something up as opposed to trying to negotiate. I keep telling people to wait to throw out the paperwork, advise about good business decisions and start planning. As CPAs, we like to get things done timely when possible, and not wait until the very last second. Right now, the advice I’m getting is actually to wait to apply for the loan forgiveness because it could change from 8 to 24 weeks. The percentages could change, and you don’t want to help your client do that whole application just to have it be negated and have to start all over again.

Chris Wilcox: You hit the nail on the head of what business owners are frustrated about. They can’t plan. They call and ask us what to do and we don’t have an answer, then we tell them wait two weeks. Well two weeks is beyond their eight-week period and so they don’t know how to plan. In many ways the PPP was a great program, it has been a great blessing in a lot of businesses’ lives, but in a lot of ways it’s really caused some challenges for them. They simply don’t know how to plan for the future. We don’t know what the rules are yet.

What other regulatory changes should businesses be aware of?

Durst: From a state level, since we don’t have income tax, we have to look at other state taxes that may be increased or even created. We may see sales tax on services, a modified business tax created to pay for things we need, or we may have other taxes. Our state is going to be operating at a deficit since we rely so much on gaming and mining taxes.

Daane: One of the challenges we’ve had for years on end is, a lot of law changes don’t happen until the ninth hour of the year. We’re having difficulties trying to do really effective planning with clients because we don’t know what the law’s going to be until almost December 31st.

Sayles: And now so many laws that did change two years ago have been retroactively put back with the CARES Act. We’re going back in and doing changes that we changed already two years ago. There’s a lot for businesses to consider.

Anderson: It’s going to be a couple of years before they really start trying to muddle with the tax laws because there’s such an impact on business right now. Politically, that’s going to be very difficult. They have modified some changes to allow more flexibility. It’s going to be coming, but I don’t think it’s going to happen in the next two years.

Bailey: At the state level, I’m a bit more concerned because we don’t have an income tax. I am fearful that government will impose additional taxes at some level. We have a very desirable economic climate here in Nevada and we certainly don’t want to follow in the footsteps of some of the other states that are heavily taxed. That concerns me a great deal.

How does technology help your industry?

McClellan: Where we’re seeing technology being leveraged is data mining for opportunities in some of those tax law changes that have come out with the CARES Act. [Technology provides] opportunities to automatically identify clients that would be eligible tax planning opportunities. That’s where we are seeing some positive impacts from technology.

Wilcox: Technology is streamlining a lot of lower end work that we used to have brand new staff do. Now, we’re asking staff to do work that I didn’t get to do until I was maybe a second-year person. So, our staff are growing professionally significantly faster today than they were five years ago. We’re asking them to learn new things. We have some staff that are going into data analytics to learn so we can provide new services. There are some real positives CPAs need to be prepared to take advantage of because that accounting function is going to continue to be more and more streamlined than it has been in the past. That brings a lot of opportunities.

Bailey: For us there’s been more of a shift to consulting. Of course, we do business evaluation and forensics, but we don’t have that lower level work that we do anymore. Things like Intuit and Quickbooks are giving us quality documentation from clients that we didn’t use to have. We now have flexibility to do more at the higher level. That is good for staff retention as well. Technology has helped us immensely. Even being able to work remotely has been a blessing for our profession. That’s not something we could have done too many years ago.

How can clients avoid mistakes in accounting?

McClellan: Emotional decision making is the number one mistake I am seeing clients make and it’s tough for them not to do that. For a lot of them, their business is who they are, it is what they have done, and it is their livelihood; it is everything to them. [I advise them to] take a deep breath and make decisions that make sense from a long-term business preservation perspective.

Wilcox: It is easy for me to identify the most value I bring to a client and that is when I have the opportunity to sit across the table, or Zoom, with a client. Clients that call us, talk to us and bounce things off of us, that’s when we’re most valuable to them. Even if we don’t have an answer, sometimes we can ask the right questions and they find their own answer. Clients that give us an opportunity to weigh in, we can bring a lot of value to them. The ones we don’t get a chance to talk to are the ones that miss out.

Goodnough: You know to Chris’ point, as executives we like to grab issues by the vest and deal with them and make a decision and be done. The difference with all of this is that it’s just not over. It continues, and there are additional chapters. You have to stay engaged and keep good communication with your CPA, with your banker and with all of the relevant parties.