On Balance Magazine - November/December 2017

November | December 2017 | Vol. 13 No. 6 A publication of the Wisconsin Institute of CPAs | wicpa.org

The gift of giving Monica M. Hauser, CPA | 6

Plus: Developing leadership skills through volunteering | 10 10 ways to enhance business value | 20 Top 5 tech mistakes to avoid | 31

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A publication of Wisconsin Institute of CPAs | wicpa.org

6 November/December 2017 Vol. 13 No. 6

Features

Columns

6 The gift of giving

26 TAX

Monica M. Hauser, CPA uses her accounting skills to help La Crosse nonprofits.

Robotic process automation’s role in year-end tax planning Implementing automation in your tax department can create efficiencies and reassign time to focus on year-end tax planning and strategy.

By Cynthia M. Hodnett

10 Professional social responsibility: Nonprofit leadership Discover how serving a nonprofit can prepare you for leadership roles beyond your organization.

By Betsy Maciewjewski, CPA 28 INDUSTRY

Health care reform: Where we've been, where we're going, and what to expect

16 Teaching the teachers

By Cynthia M. Hodnett

20 Top 10 drivers to enhance company value Ten factors are essential to increasing cash flows and reducing risk, while enhancing a company's overall value.

Departments

By Scott K. Fuller, RHU

2 Odds & Ends | news briefs

31 TECHNOLOGY

3 Outlook | chair’s letter

Avoiding top 5 technology mistakes

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Explore five common technology mistakes and learn how you can avoid making them.

Membership Matters | member benefits

15 In Touch | president & CEO’s message 25 Kudos | members in the news

By Val Steed, CPA, MA, CITP

34 FINANCIAL PLANNING

Employee financial stress impacts your bottom line

Since financial stress among your workforce is a reality, consider creating a wellness initiative that promotes financial well-being as a primary pillar of your activities.

By Chris Mellen, ASA, MCBA, CVA, ICVS, ABAR, CM&AA and Bryan Browning, CFA, ASA wicpa.org

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As the health care debate continues, changes to the law are unlikely for 2017. So, employers need to take charge of their health plans and ensure they address rising costs under the current framework.

By David W. Gay, CPA

WICPA and AICPA train Wisconsin educators to teach high-level accounting subjects.

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By Joseph J. Topp, CPA

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Odds & Ends Watch your email for CPA license renewal notification

2017–2018 WICPA OFFICERS/BOARD MEMBERS Chair William L. Komisar, CPA, JD Chair-elect Michael D. Akers, CPA, CBM, CFE, CGMA, CIA, CMA, PhD Past-chair Steven G. Handrick, CPA, CGMA Secretary-treasurer Katherine L. Hauser, CPA, CGMA Directors Jon C. Gaines, CPA, CGMA, MBA Ryan J. Hanson, CPA, CGMA Patrick G. Hoffert, CPA Debra L. Lenz, CPA, CGMA, CIA, CRMA Terri M. Lillesand, CPA Matthew A. Los, CPA Steven A. Pullara, CPA Matthew J. Schaefer, CPA, CGMA Angela C. Thomas, CPA AICPA Council Rick E. Dreher, CPA, CGMA Neil R. Keller, CPA, ABV, CVA President & CEO Dennis F. Tomorsky, CPA, JD, CGMA Chief Financial & Operating Officer Tammy J. Hofstede Vice President of Communications Amy E. Gaeth Design & Layout Brett Stallman Advertising Tony Hofstede Copy Editor Joan Bahr

Effective immediately, the Wisconsin Department of Safety and Professional Services (DSPS) will now notify you by email to renew your CPA license. Watch for this email and check your spam filter to make sure you renew your license by Dec. 14, 2017. Renew your license online at DSPS. If you have questions, please call 608-261-2112 or email DSPSRenewal@wisconsin.gov. (https://tinyurl.com/y9pojnzp)

Are you ready for the FASB revenue recognition standard?

Many companies are required to apply the FASB standard to annual and interim reporting periods beginning after Dec. 15, 2017. The AICPA's revenue recognition webpage offers comprehensive resources. (http://tinyurl.com/aicparevrec)

Timothy Christen named chairman of Baker Tilly International Timothy L. Christen, chairman emeritus of Baker Tilly Virchow Krause LLP, has been named chairman of the board of directors of Baker Tilly International, one of the largest, member-driven accountancy and advisory networks in the world. Christen began a four-year term on Oct. 30 during Baker Tilly’s World Conference in Amsterdam.

Sikich LLP wins Microsoft Partner of the Year awards Microsoft recently named professional services firm Sikich LLP the SMB Central Region Partner of the Year and SMB Azure Central Region Partner of the Year. The Partner of the Year awards recognize Microsoft partners for innovation and successful implementation of Microsoft technology solutions for customers. Sikich was also recently named to the 2017–2018 Inner Circle for Microsoft Dynamics, which includes the top 1 percent of Microsoft Dynamics partners in terms of sales performance.

Smith & Gesteland Accountants and Consultants named one of best accounting firms to work for Accounting Today has named Smith & Gesteland Accountants and Consultants, Middleton, one of the 2017 Best Accounting Firms to Work For. This survey and awards program is designed to identify, recognize and honor the best employers in the accounting industry, benefiting the industry’s economy, workforce and businesses.

Printing Delzer

WANT YOUR BUSINESS MENTIONED IN ODDS & ENDS? Email your announcement to amy@wicpa.org.

Join us online!

On Balance is published six times a year by the Wisconsin Institute of Certified Public Accountants (WICPA).

Change of address should be sent to: Membership, W233N2080 Ridgeview Pkwy, Suite 201, Waukesha WI 53188; Phone: 262-785-0445 or 800-772-6939; Fax: 262-785-0838; email: jessica@wicpa.org.

Statements and opinions expressed are those of the authors and not necessarily those of the WICPA. Publication of an advertisement does not constitute an endorsement of the product or service by On Balance or the WICPA. Articles may be reproduced with permission. © Copyright 2017 On Balance.

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WICPA offices will be closed on the following dates: Thursday, Nov. 23 and Friday, Nov. 24 in observance of Thanksgiving Friday, Dec. 22 and Monday, Dec. 25 in observance of Christmas Monday, Jan. 1 in observance of New Year’s Day

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OUTLOOK | CHAIR’S LETTER “Whether you are honing your business advising or accounting skills, enhancing your leadership opportunities, or advancing your communication abilities, your efforts provide significant impact on others.”

Accounting for a cause

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his issue of On Balance focuses on community service—an important issue for our society and our profession. Community service is defined as “voluntary work to help people in a community, its people, or its institutions.” Some businesses provide community service by having a day of giving when the offices are closed and employees participate in volunteer work for one or more charitable institutions.

Many nonprofit organizations need support, whether it’s cleaning up a facility that houses a charity, sorting canned goods for a food pantry or reading to children at a nonprofit daycare facility. Community service brings people together to provide a positive influence on a specific charitable cause and the people it serves.

Some businesses and firms encourage their employees to serve the community by giving them time off to volunteer with a nonprofit organization. As CPAs and financial professionals, we're often asked to serve as treasurers, provide accounting advice, or serve on boards of directors. We gladly serve and put our skills and experience to work for others.

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As members of our profession age, it's extremely important that our younger members become involved to maintain the successes we have had at helping individuals who are less fortunate than we are. As with many things, young professionals learn by example. The WICPA and our volunteer leaders are happy to assist you in learning how to get involved.

economically and personally. I have met great people through working with the WICPA on various projects. I have enhanced my speaking skills for our board meetings and with large groups of CPAs and other individuals. I have also advocated for our profession to our state and federal government representatives.

I strongly encourage everyone to give back to the community. I have found that my personal involvement with various charitable endeavors over the years has been personally and professionally rewarding. For example, my involvement with the WICPA has been a great opportunity to give back to a profession that has helped me succeed

Whether you're honing your business advising or accounting skills, enhancing your leadership opportunities, or advancing your communication abilities, your efforts provide significant impact on others. Community service is truly a win-win proposition, and I strongly encourage you to be proactive and help others while you help yourself.

William L. Komisar, CPA, JD is a principal at CliftonLarsonAllen LLP in Milwaukee. Contact him November | December 2017 at 414-238-6800OnorBalance bill.komisar@CLAconnect.com.

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Join the WICPA Educational Foundation Board!

The WICPA Educational Foundation is seeking members to serve on its Board of Directors.

Some of the opportunities include: • Assisting in efforts to attract students to the profession • Providing strategic governance in accordance with the WICPA Educational Foundation mission

• Attending Educational Foundation Board of Directors meetings and being involved in subcommittees The foundation plays a pivotal role in supporting educational programs to improve awareness and perceptions by educating students, educators and the public about the exciting opportunities available to CPAs.

To apply, visit wicpa.org/EFBoardApplication through Feb. 28, 2018.

Questions? Contact jessica@wicpa.org.

Who wants FREE conference registration?

Join a Conference Planning Task Force and you’ll receive: • • • •

Free conference registration ($300-$400 value depending on conference) Valuable interaction with peers, speakers and vendors to build your professional network Leadership skill development Recognition for your WICPA involvement

To join one of our seven task forces, visit wicpa.org/taskforce 4

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MEMBERSHIP MATTERS “We appreciate our members’ contributions and continuously explore ways to acknowledge our members.”

Be recognized!

B

eing a member of the WICPA is about belonging to something more. Whether it’s to volunteer, network or further your career, membership has its advantages.

Another advantage is being recognized by your peers.

By being a member of the WICPA, we can make that happen!

As a membership organization, we understand that our members are responsible for making the WICPA a vibrant and strategic organization. We appreciate our members’ contributions and continuously explore ways to acknowledge our members.

The “Kudos” section in On Balance highlights new jobs, promotions, speaking engagements, awards and notable news about members. We encourage all members and companies to submit news to be included in Kudos.

On Balance also features a cover story in each issue about a member around the state. A personal interview and photo shoot connects members to learn more about each other. Whether it’s highlighting a career path, unique hobby, inspirational story or tackling life challenges, we want to showcase our diverse members with different experiences and talents that got them where they are today. We are always seeking members to highlight!

The Annual Membership Banquet and Excellence Awards is an inspiring event that recognizes members who have been nominated by peers to receive an award for their accomplishments. We have added new categories, including a Business & Management Award, CPA in Public Accounting Award and a Diversity & Inclusion Impact Award. Long-time members are also recognized at this event for their loyalty to the organization and the CPA profession.

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The second issue of the Thank You publication made its way into your homes and offices last month. This publication was created to recognize our members’ personal commitment, passion, and time and energy to be actively involved in the many activities and strategic direction of the WICPA. Numerous photos of members are taken throughout the year specifically for this publication.

Feature articles of members and their WICPA involvement as well as several member testimonials are also included.

We have photographers at all committee meetings, conferences and special events. Member photos and live interviews are

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posted on social media and highlighted in Frequency, our monthly membership e-news. Collages of our members’ photos are being used on social media and at the WICPA membership booth at events.

We will continue to create new marketing materials and areas to promote members in print, social media and on our new website.

We will be looking for opportunities to highlight YOU, our members, and will be reaching out for new testimonials to promote throughout the organization.

Would you like to be recognized? Contact me with your Kudos, story, testimonial or questions about volunteering for our many opportunities!

UPCOMING PROGRAMS: Nov. 15, Nov. 17 Wisconsin Tax Update (Eau Claire, Appleton)

Dec. 7 Advanced Excel (Waukesha)

Nov. 17 Federal & Wisconsin Tax Law Changes (Madison)

Dec. 13, Dec. 15 Individual Income Tax Update (La Crosse & Green Bay)

Nov. 29, Dec. 7 Tax Advisors Update (Waukesha & Green Bay)

Dec. 14 Preparing Individual Tax Returns for New Staff & Para-Professionals (Waukesha)

Nov. 30 Advanced Personal Leadership Skills (Waukesha)

Dec. 15, Jan. 10 Anatomy of a Tax Controversy (Wausau & La Crosse)

Nov. 30 - Dec. 1 Technology Conference (Pewaukee) Dec. 1 Cases in Corporate Ethics (Appleton) Dec. 6 How to Support Your Boss (Waukesha)

Dec. 15 Wisconsin Tax Update (Madison & Milwaukee) Jan. 5, Jan. 12 Individual Income Tax Update (Milwaukee & Waukesha)

Go to wicpa.org/register for all your CPE! Tammy J. Hofstede is the chief financial & operating officer at the WICPA. Contact her at 262-785-0445 ext. 4518 or tammy@wicpa.org.

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Photography by Rory O'Driscoll

The gift of Monica Hauser, CPA, her 7-year-old son, Ben, and 9-year-old son, Alex, enjoy a morning of fun at the Children's Museum of La Crosse.

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giving wicpa.org

Monica M. Hauser, CPA uses accounting skills to make a difference in the lives of children

By Cynthia M. Hodnett

M

onica Hauser, CPA has a big heart for helping children. When she decided to volunteer with a nonprofit, the mother of two young sons wanted to serve at an organization where she could combine her passion for accounting with her love for children.

Hauser’s research led her to the Children’s Museum of La Crosse, which provides hands-on exhibits and activities for children. She initially joined the museum’s finance and operations committee in 2011 and now serves as its treasurer.

She will serve as president of its board of directors in 2018.

“The museum is a great place for kids in our community,” she said. “I bring my kids here all the time because, as a mother, I believe it's important for them to have hands-on activities that don't involve electronics.”

Gaining personal fulfillment Hauser is a partner at Hawkins Ash CPAs in La Crosse.

She specializes in audit services for housing authorities, municipalities and school districts. She is also a member of the firm’s Governmental Service Group, HUD Services Group and Executive Committee.

“Helping an organization with their mission, being able to use my background and seeing how that can help an organization be successful is a good feeling,” she said.

“Monica has been a great asset to the board,” said Anne Snow, executive director at the museum. “She is great with the financials, and being treasurer seems like second nature to her.

Monica gives a lot of her time and talent to the museum, and we hope she gets something back from volunteering with us.”

Hauser is one of about 62 million Americans who volunteer and contribute more than 7.8 billion hours of time each year, according to a 2016 study from the Corporation for National & Community Service.

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Hauser has volunteered on the Children's Museum of La Crosse's board of directors since 2011.

Most individuals volunteer to make a difference in their communities and for personal satisfaction. Hauser said her volunteer work not only has been personally fulfilling but also has contributed to the development of her practice, helped develop her professional skills and expanded her areas of expertise.

“One benefit is that it helps me see an organization from the inside,” she said. “I’m an auditor by trade, so I’m used to looking at an organization from the outside. So it helps me see the day-to-day operations and how things within the organization affect other things. By seeing how an organization operates, I’m able to share with other clients and show them examples of what I can do."

“We just went through a $2 million capital campaign, and we met our goal,” she said. “Some of the items that we want to

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Hauser stands near one of several exhibits at the Children's Museum. The nonprofit museum recently reached its $2 million capital fundraising goal to provide these and other exhibits.

do through our capital campaign aren’t in place yet. But some things, like developing a traveling exhibit, will help generate revenue for the museum years down the road.”

Networking is another benefit that Hauser gains by volunteering.

Volunteering often produces personal contacts that can be developed with leaders and volunteers at nonprofits, she said.

Plus, community service can enhance a CPA’s and employer’s public image and improve skills.

“Typically on a board, you're meeting people from diverse backgrounds,” she said. “Also, it makes you feel like you’re a part of something and are able to contribute something to your community.”

‘Go and ask them what you can do to help them’ Hauser often encourages her peers to volunteer.

“I’ve tried to talk about my experiences with my staff,” she said. “I tell them about my experiences here at the museum

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“Also, it makes you feel like you're a part of something and are able to contribute something to your community.”

— Monica M. Hauser, CPA and how it allows me to spend time with my kids and do something positive for the community. I encourage them to find something they’re passionate about and get involved with it.”

Joseph P. Fee, CPA, a manager at Hawkins Ash in La Crosse, said Hauser’s volunteerism enhances her role as a leader at the firm. Knowing about Hauser’s volunteerism has motivated him to consider volunteering at his children’s school in the future.

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“As a leader at the firm, she demonstrates the message that all new hires at the firm receive about getting involved in the community,” Fee said. “She doesn’t just talk about it, she does it, and I think others here definitely notice. As a leader at the firm, she has a lot of responsibilities. She shows how important it is to give back to your community and how it will help you network and develop relationships.”

In addition to the Children’s Museum, Hauser serves as treasurer for The Parenting Place. The La Crosse-based nonprofit provides education and support to individuals and parents caring for young children. She also participates in WICPA's Reading Makes Cents, a financial literacy program for children.

“All accounting professionals should consider volunteering as a way to give back to the profession,” Hauser said.

“A lot of nonprofits have a hard time finding people with an accounting and finance background to help them,” she said.

“Don’t wait for them to come to you for help. Go and ask them what you can do to help them.”

Volunteering at the Children's Museum allows Hauser to support a cause she's passionate about.

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Cynthia M. Hodnett is the former editor of On Balance magazine.

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Professional social responsibility:

nonprofit leadership

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or many of us, a key part of our professional careers is giving back to our communities. Others may be interested in getting engaged in the community, but don’t know how to start. Just over a decade ago, I was fortunate to work for a leader who helped me find my path to giving back. He

By David W. Gay, introduced me to United Way CPA and a new leadership program it was developing to engage young professionals. Through that connection, I joined the newly formed Emerging Leaders Council.

Shortly thereafter, I served as a co-chair for the Council and eventually joined the board of directors for the United Way of Greater Milwaukee & Waukesha County, where I have served on various committees and currently serve on the executive committee of the board. As I continue my work with United Way and other organizations around Milwaukee, I believe it’s important to share how other professionals can become leaders at nonprofit organizations and the benefits this service has on our lives, our careers and the organizations we represent.

Find your passion When I help others begin engaging in nonprofit leadership, I always start with one question: what are you passionate about?

The answer is critical to identifying a nonprofit organization with a mission that aligns with your values and where you’ll make a real difference, rather than just checking the corporate

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responsibility box. If you work for a company that encourages employee volunteerism, try to identify a nonprofit that aligns with your company’s values. This will maximize the support you and the nonprofit organization can receive from your employer, such as financial contributions, volunteer opportunities for other employees and a more flexible schedule for your engagement.

Leverage existing strengths and identify opportunities for growth Once you find an organization, don’t expect to immediately start on the board. While a leadership position may be your ultimate objective, it's not your first stop. Instead, take time to introduce yourself to the organization, and it to you, by volunteering or joining a committee. For many accounting professionals, a logical starting point is on the finance or audit committee. This is comfortable territory and an excellent way

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to begin understanding the organization while being confident in your contribution.

However, don’t feel you need to limit yourself based on your skill set. Another benefit of working with nonprofits is the opportunity to broaden your perspectives, both personally and professionally. By exposing yourself to a discipline you don’t experience every day, you can learn to address problems from a different viewpoint. Some of my most valuable nonprofit leadership experiences have been serving on committees or initiatives unrelated to accounting. I’ve been able to learn from business leaders in marketing, human resources, legal and more.

At the same time, I’ve been able to bring my own professional lens to an organizational issue that might not otherwise be addressed by an accountant.

“Giving back to the communities that have helped us succeed is an essential part of our profession.

To ensure we all have the ability to do so, the companies we work for must foster a culture of service and encourage professionals at all levels to give back.”

Understand the responsibilities of leadership Once you identify your nonprofit leadership opportunity, ensure you understand the expectations of the role. All organizations will seek your professional expertise, but there will likely be additional expectations as well. Those may include: hands-on volunteering, fundraising, board recruitment, corporate sponsorship, committee participation or introductions to others in your network. Don’t worry, you won’t be expected to do it all. But you will be expected to do some of it, so understand what’s being asked, and challenge yourself up front to ensure you have the passion and capacity to give what’s needed for the role. Throughout your tenure, it’s important to periodically take stock of your ongoing contributions and gauge how you’re helping move the nonprofit forward. If that contribution

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slows, it may be best to step back and let others engage. Remember to continuously assess and ask yourself, “Am I making an impact?”

One charge for board members at all nonprofit organizations is advocacy. This means championing the organization and engaging with others to spark their interest in getting involved. Don’t forget the underlying reason the nonprofit exists—to help others, to solve a problem, to better our community. If you find the right organization, all of your own personal and professional growth as a board member will be dwarfed by the impact you can make by being a

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passionate advocate. Light a fire under others. Better yet, set their soul on fire so they are driven to make a difference. It’s how I got my start, and likely how you got yours.

Giving back to the communities that have helped us succeed is an essential part of our profession. To ensure we all have the ability to do so, the companies we work for must foster a culture of service and encourage professionals at all levels to give back.

I’m proud our EY Milwaukee office leaders serve on more than

30 boards and committees for nonprofits. But that’s just a small fraction of what our industry is doing throughout Wisconsin.

By collectively supporting our professionals in their volunteer efforts, we can help make a true difference in our community and build a better world.

David W. Gay, CPA is the managing partner at EY in Milwaukee.

Contact him at 414-223-7092 or david.gay@ey.com.

YOU have the opportunity to impact thousands of students and educators in Wisconsin.

Through your contribution to the WICPA Educational Foundation, Inc., you can help us reach students and educators in high school and college to create awareness about the accounting profession.

As the end of 2017 draws near and you are thinking about tax planning, consider donating to the WICPA Educational Foundation.

Visit wicpa.org/EF to contribute online. Thank you to our past contributors. Find a list at wicpa.org/EFContributors.

Questions? Contact Tammy J. Hofstede, WICPA Chief Financial and Operating Officer at tammy@wicpa.org.

To contribute, visit wicpa.org/EF. wicpa.org

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2017 WICPA Past Chairs Dinner Past chairs of the WICPA Board of Directors and the WICPA Educational Foundation Board gathered for an annual photo at the WICPA Past Chairs Dinner on Sept. 28 at the Abbey Resort in Fontana.

WICPA Board of Directors past chairs Front row L-R: William Heinrich (‘10-‘11), David Benner (‘83-‘84), Kim Tredinnick (‘97-‘98), Danica Olson (‘12-‘13), Douglas Haag (‘00 -‘01), Karin Gale (‘03-‘04) and Gary Berger (‘89-‘90).

Back row L-R: Steven Handrick (‘16-‘17), Theodore Hart (‘08-‘09), Linda Dicks (‘06-‘07), Daniel Heerey (‘07-‘08), Robert Albrecht (‘80-‘81), Marion Wozniak (‘94-‘95), Eugene Miller (‘90-‘91) and LeRoy Schmidt (retired executive director).

WICPA Educational Foundation Board past presidents L-R: James Miller (‘08-‘10), Robert Albrecht (‘90-‘91) and William Komisar (‘12-‘15).

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IN TOUCH | PRESIDENT & CEO's MESSAGE “Serving as treasurer of a nonprofit organization is a natural fit for WICPA members to help such organizations succeed.”

Serving others improves success, happiness and health

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e’ve all experienced positive feelings from helping others. Perhaps those positive feelings influenced our decisions to become members of a service profession that contributes so greatly to others’ success.

WICPA members perform community service for many organizations that positively impact individuals’ lives in various ways. My prior service as president of the Elmbrook Education Foundation began with a neighbor’s invitation to join him on the foundation’s board where I could apply my CPA skills as its treasurer. This eventually led to my serving as foundation president and collaborating to expand the foundation’s mission from providing only college scholarships to supporting a wide variety of innovative school district educational needs. My community service experience with the Elmbrook Foundation and the WICPA led to many new professional contacts and also enhanced my leadership skills with respect to communication, collaboration and change management, among others.

The increased happiness and health you experience from your community service has recently been the subject of neuroscience research. The 2007 report, “The Health Benefits of Volunteering,” published by the Corporation for National & Community Service, cited research documenting that those who gave social support to others had lower rates of mortality than those who did not. This report also noted that these studies demonstrate that volunteering also leads to improved physical and mental health. Scientists believe that altruistic behavior releases endorphins in the brain, producing the positive feeling known as the “helper’s high.”

Thomas H. Sander, executive director of the Saguaro Seminar at Harvard University, said in one study: “Civic engagement and volunteering is the new hybrid health club for the 21st century that’s free to join ... Social capital research shows it miraculously

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improves both your health and the community’s through the work performed and the social ties built.”

Serving as treasurer of a nonprofit organization is a natural fit for WICPA members to help such organizations succeed. Please consider asking your local school district or a local nonprofit organization if there are opportunities for you to share your business acumen in a way that enhances your community. Also consider volunteering for a WICPA committee, task force or board. You’ll find that your community service accelerates your leadership skill development, provides positive visibility for you and your employer, and improves your health and happiness.

Dennis F. Tomorsky, CPA, JD, CGMA is the president & CEO of the WICPA. Contact him at 262-785-0445Onext.

4519 or dennis@wicpa.org.

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WICPA, AICPA partner to teach educators how to inspire future CPAs

By Cynthia M. Hodnett

K

yle Ebel, a business education teacher at Dodgeville High School, wants to inspire the next generation of CPAs by bringing engaging curriculum into his classroom.

Ebel recently traded in his role as a teacher—for student— by participating in the Accounting Pilot & Bridge Project (APBP). He and 32 other Wisconsin high school educators spent three days at the WICPA’s office in Waukesha, learning how to teach high-level accounting topics.

“This has been an amazing program,” Ebel said. “I’ve learned several strategies that I can apply in my classroom this year. One of my biggest takeaways is to encourage students to think beyond debits and credits.”

Challenging teachers, students The APBP was created based on a need for a better accounting experience in the high school classroom, said Joanne E. Fiore, JD, vice president - professional media, academic and student engagement with the AICPA. The project is modeled on a class accounting professor Dan Deines

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developed at Kansas State University. The AICPA collaborates with state CPA societies and/or state departments of education to offer the APBP. More than 1,300 high school teachers in 42 states have completed training over the past decade, according to the APBP website.

“Students wanted to be challenged and teachers wanted to provide a college-level experience,” Fiore said. “The purpose of the APBP training program is to provide a higher-level accounting curriculum for high schools to better prepare their students for a career in accounting.”

The APBP gives educators materials similar to entry-level college courses, focusing on financial and managerial accounting. According to AICPA research, 44 percent of high school students in the U.S. have either taken an accounting course or plan to take one, showing the potential impact of the APBP. “Exposing students with a positive accounting experience, in a setting that is comfortable to them, will create confidence

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and a positive outlook as they progress through their education,” Fiore said.

Educators who participate in the program gain an advanced accounting curriculum, tips and ideas on how to incorporate teaching activities, and direction on how to implement the course within their school, she said.

During the program, teachers work in groups to go through the curriculum and share best practices.

“During the first day of class, we learned how teaching philosophies have changed,” said Tina Trumbower, business information and technology High school educators collaborate in small groups during the three-day training. teacher at Waunakee Community High School. “We learned about the language of accounting, and the value of analyzing financial statements early in the school year.”

Kimberly Dwyer, a teacher at Ashland High School and a former APBP training participant, attended this year’s event to prepare for the current academic year.

“The biggest takeaway for me is that this is a really powerful, inquiry-based learning style for students,” Dwyer said. “I hope to implement it in my classroom this year.”

Promoting the CPA profession After completing the program, teachers are given the opportunity to join the APBP community, Fiore said. They become a part of an elite group of teachers who are motivated to enhance a student’s accounting experience. They can access a private website space to obtain supplemental teaching materials, webinars and a private chat forum to share ideas.

“The training has enabled teachers to increase awareness of the CPA profession,” she said. “Teaching a course more closely aligned with the CPA profession and less ‘bookkeeping’ gives students a better understanding of accounting as a career path.”

The AICPA also provides scholarship opportunities for high school students who have taken courses taught by teachers who participated in the APBP training, Fiore said.

“The profession is benefiting,” she said. “We are seeing students move from these classrooms and into accounting as a major in college. Some universities are accepting the qualifying exam and allowing students to count their APBP accounting course as their first undergraduate accounting course—much like they would for an Advanced Placement course.”

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Dan Deines, professor at Kansas State University and founder of the APBP, trains educators on advanced and engaging accounting curriculum.

Fiore said the AICPA will continue to enhance the program in the future.

“We plan to look at the training model and ensure we are able to train more teachers while maintaining the integrity of the training,” she said. “Resources provided to the APBP teachers continue to grow. The AICPA wants to create a sense of community for these teachers and continue to increase support for them in the classroom.”

Cynthia M. Hodnett is the former editor of On Balance magazine.

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YOUR WISCONSIN TAX RESOURCE The Tax Section of von Briesen & Roper, s.c. has the knowledge and experience to address any state and local tax matters. Our strategic approach to state and local tax issues allows us to minimize the impact of property tax valuations and assessments, provide tax audit support, handle Resolution Unit appeals, litigate cases in the Wisconsin Tax Appeals Commission and resolve collection issues. The bottom line?

We get results.

To learn more about our Tax Section, please contact Robert Mathers at rmathers@vonbriesen.com.

vonbriesen.com/tax Milwaukee • Madison • Waukesha • Oshkosh • Green Bay • Appleton

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On Balance

November | December 2017

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M

By Chris Mellen, ASA, MCBA, CVA, ICVS, ABAR, CM&AA and

Bryan Browning, CFA, ASA

erger and acquisition activity continues to be robust as the U.S. economic recovery is in its eighth year. With the continuation of strong valuations, anticipated favorable changes to tax policies, and the prospect of rising interest rates, now is an ideal time for private company owners to focus on factors that will improve their business value in the event of an opportunity to sell.

Ideally, business owners and their management teams should begin monitoring the value of their business at least five to seven years before considering an exit. Monitoring value is something that should be done in any economic environment, but the urgency to do so is greater when an economic upswing is several years old.

While valuation appears to be a quantitative science about financial statements, forecasts, multiples, and rates of return, it is actually more qualitative in nature. Valuation is a prophesy of future expectations for a business.

To accurately reflect those expectations, it is critically important for a business owner to identify and understand the value drivers, which are factors that increase cash flows and reduce risk associated with business. There are many value drivers attributable to a business, some of which are industry-specific.

For brevity, we will discuss 10 of the most universal factors we consider essential to increasing cash flows and reducing risk, thereby enhancing overall company value.

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1

Capital access

The smaller the company, the more limited its access to debt and equity capital. The company will need to assess the kind of capital needed to achieve its goals.

Questions to ask: How is the company currently leveraged? How do bank covenant restrictions impact the business and its future plans? Do shareholders have to provide equity or personally guarantee loans? Is bringing in an outside investor and issuing preferred stock a viable option?

2

Customer base

A solid and diversified customer base is essential for the ongoing viability of a business. When companies grow and prosper by catering only to their largest customers, dependency may increase to the point where too great a percentage of revenues are concentrated with too few customers. Companies must manage the allocation of customer concentration to reduce the risk of losing a large source of revenues.

Questions to ask: What percentage do the top five customers contribute to the company’s revenues? What amount of revenue is recurring? What is the economic useful life of its entire customer base, as well as its largest customers?

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3

Economies of scale

As production output increases, businesses typically achieve lower costs per unit. Whether through quantity discounts or spreading capacity costs over higher volumes, larger companies possess distinct advantages in certain operations and markets.

Questions to ask: Is the company effectively exploiting its internal economies of scale (i.e. cost savings that accrue regardless of the economic environment or industry in which it operates)? What are the company’s growth opportunities to realize additional or larger economies of scale? Can the company enter into a consortium, joint venture, or outsource to increase buying power and reduce expenses?

4

Financial performance

Financial analysis aids in measuring trends, identifying the assets and liabilities of a company, and comparing the financial performance and condition of the company to other, similarly-positioned firms.

Internally prepared and compiled financial statements may hamper management’s assessment of performance, causing potential buyers to possibly question the quality of this data.

Questions to ask: How does the company compare in terms of liquidity, activity, profitability, and solvency measures?

What financial controls are in place? Are the financials audited or reviewed by an outside CPA?

5

Human capital

A company’s employees are the heart of an organization. Key value drivers include the knowledge, skills, experience, training, and creative abilities employees bring to a business and the health of its company culture.

Questions to ask: What are the quality control procedures?

How effective are the production and service capabilities? How is the company managed? What is the depth and breadth of management? Are there any key person dependencies in terms of technical knowledge, production skills, or customer contacts?

Is there a management succession plan? What rights do individual shareholders have?

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6

Market environment

Each business is impacted by economic trends and developments in the industry in which it operates.

Management must understand how the industry is impacted by economic factors and how the industry is structured to minimize the impact of macro trends on the business.

Questions to ask: What is the company’s market share?

Where is it positioned in the market? Does management have an understanding of its niche and unique offering?

Does it have diverse offerings that can modulate the impact of economic swings?

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7

Marketing strategy and branding

Marketing is the link between customers’ needs and their response to a company’s products and services. Strong branding won't only improve company sales by increased market recognition, it will also provide a clear direction that will improve operational efficiency when tied to the company’s mission.

Questions to ask: How does the company market itself ?

What are its marketing and sales capabilities and shortcomings?

How effective and known is its brand? What is its social media presence? How effective is its website? Is the brand tied to the company’s mission statement and its strategic direction?

8

Product and service offering

Specialty companies frequently derive their strength from focusing in niche fields, but concentration may create risks from lack of diversification and overdependence on limited markets. Some specialty companies may find their largest customers adopt a policy to deal only with suppliers who offer a broad range of products, forcing them to either expand product offerings or sell out to a larger company. Increasing the diversification reduces risk, which generally improves value.

Questions to ask: What is the company’s mix of offerings?

Are any concentrated offerings subject to economic and industry swings? What products and services can be offered that differ from existing ones but use similar human capital, production capability and customer base to diversify? What opportunities exist for vertical or horizontal integration?

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Strategic vision

Most companies put together a one-year budget, but few attempt to put together a business plan or longterm forecast. Valuation is all about future expectations and company management needs a strategic vision to create value.

Management must take a look at all the information they’ve gathered from reviewing their company to divulge a strategic vision that can be passed along to the future owner, providing additional support and assurance of continuity, and even increase, of sales.

Questions to ask: What is management’s long-term outlook? When did the company last write a formal business plan? Is the company’s strategy in tune with its customers’ demographics, tenure, needs and demands?

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10

Technology

Companies with fewer monetary resources often lack adequate research and development resources, finding it difficult to keep pace with technological changes in their markets. Such companies often face an inescapable need to incur large amounts of capital expenditures in the near future or allocate resources to a limited number of product development projects. This inevitably results in product or service obsolescence, adverse impact on future growth, and loss in market share. In the meantime, larger companies are in a better position to demonstrate technological expertise by developing products that address emerging customer needs, leading customers to choose the state-of-the-art products, despite the eventual availability of lower cost, lower performance technology.

Questions to ask: How many resources does the company allocate to research and development? Is their use of technology up-to-date? Are there impending technological changes that could negatively impact the company’s product and service offering?

Conclusion Ongoing assessment of a company’s value drivers is integral to its success. The valuation process involves both a quantitative and qualitative assessment of a company that should be part of any business owner’s standard operating procedure as a useful and important business management exercise. A valuation assessment can provide the business owner with meaningful information that highlights the real intrinsic value of the firm and ultimately maximize returns.

Chris Mellen, ASA, MCBA, CVA, ICVS, ABAR, CM&AA is the Boston managing director at Valuation Research Corporation.

Contact him at 781-501-1382 or cmellen@valuationresearch.com.

Bryan Browning, CFA, ASA is the Milwaukee managing director at Valuation Research Corporation. Contact him at 414-221-6249 or bbrowning@valuationresearch.com.

This article is excerpted from the book “Valuation for M&A: Building Value in Private Companies,” (published by John Wiley & Sons, Inc. 2010) which Mellen co-authored.

On Balance

November | December 2017

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Earn CPE by Speaking at WICPA Breakfast Programs Speakers are needed for Eau Claire, La Crosse, Madison, Milwaukee, Northeast Wisconsin, Waukesha and Wausau.

Earn CPE while sharing your expertise, developing leadership skills and promoting your organization.

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On Balance

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kudos Kevin C. Block, CPA, an accountant at MBE CPAs LLP in Sun Prairie, enrolled in the 21st Leadership Sun Prairie Class, supported by and financed by the city of Sun Prairie, the Sun Prairie Area School District and the Sun Prairie Chamber of Commerce, according to The Star.

Holly L. Breien, CPA was promoted to audit principal at Vrakas CPAs + Advisors in Brookfield.

Holly L. Breien, CPA

James D. Broughton, CPA

James D. Broughton, CPA was promoted to tax principal at Vrakas CPAs + Advisors in Brookfield.

Scott M. Cattanach, CPA was named president and CEO of Peoples State Bank in Wausau, according to The Northwoods River News.

Joe Fischer was hired as a member of the audit team at Sattell, Johnson, Appel & Co. SC in Menomonee Falls.

Want your

Rick Gaumer, CPA, CFE

Rick Gaumer, CPA, CFE, chief financial officer at Emory & Henry College in Emory, Va., was recently nominated for a Virginia CFO Award sponsored by Virginia Business.

Michael J. Galvin, a senior accountant at Chamberlain & Henningfield CPAs LLP in Lake Geneva, received his certified public accounting license.

Brian J. Kraus, CPA, chief financial officer at Greenfire Management Services LLC in Milwaukee, received the Milwaukee Business Journal C-Suite Stars award, according to the Milwaukee Business Journal.

Christopher F. Mueller, CPA was named partner at BDO USA LLP in Milwaukee.

Matthew D. Neu, CPA, a senior manager at Hawkins Ash CPAs LLP in Manitowoc, joined the board of directors of Shady Lane, Inc., Senior Living Services, according the Herald Times Reporter.

Christopher F. Mueller, CPA

Michelle I. Pollack, CPA was promoted to senior accountant at Vrakas CPAs + Advisors in Brookfield.

Mark Rhode, CPA, chief financial officer at Penfield Children’s Center in Milwaukee, received the Milwaukee Business Journal C-Suite Stars award, according to the Milwaukee Business Journal.

Michelle I. Pollack, CPA

Melissa S. Schwartz was promoted to manager at KerberRose SC in Appleton.

Melissa S. Schwartz

Betsy J. Smith, CPA, MST was recently named president of Association Acumen LLC, according to The Freeman.

Scott M. Syrjala, CPA was promoted to a tax principal at Vrakas CPAs + Advisors in Brookfield.

Luke W. Walsh, CPA was named Best Accountant by Jefferson County Union's “Best of the Area" readers’ poll, according Jefferson County Union.

Scott M. Syrjala, CPA

new job, promotion, speaking engagement or award mentioned in Kudos?

Email your announcement and photo in JPG format to amy@wicpa.org.

memorials Michael J. Hager, CPA (1950–2017)

Michael J. Hager, CPA, a partner at Anderson-Hager & Moe SC in Hayward, died on Sept. 6, according to the Sawyer County Record.

He was 66. Hager earned an accounting degree from the University of Wisconsin-Eau Claire in 1972. He later moved to Hayward, where he took a position with Cliff Hanson CPA. Hanson-Hager CPA was formed a few years later, and after Hanson’s passing, the firm became what is now Anderson-Hager & Moe SC. Hager served on the boards of the Hayward Chamber of Commerce, Knights of Columbus and as treasurer of the Lumberjack World Championships. The Hayward resident both earned his certified public accountant designation and joined the WICPA in 1975.

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On Balance

November | December 2017

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{ Tax | Automation }

ROBOTIC PROCESS AUTOMATION’S ROLE IN YEAR-END TAX PLANNING

R By Betsy Maciejewski, CPA

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On Balance

obotic process automation is logic-driven robots executing pre-programmed rules on structured data. While you may not expect to see robots in tax departments, the opportunity for robotic process automation is real. The goal of automation in tax is to free up time from repetitive tasks and allow tax departments to focus their time and resources on more complex tax areas.

There are many things tax departments may want to consider in anticipation for year-end planning to help year-end processes with the incorporation of automation.

November | December 2017

What role does automation play in tax?

In preparing tax returns, and year-end tax provisions, there are many tasks to be completed to arrive at the total tax expense that may be considered repetitive in nature.

For year-end provisions and annual tax returns, tax departments need to be able to calculate permanent and temporary book-to-tax adjustments. These calculations can be tedious to complete depending on the size of data to be analyzed. With automation, tax departments can identify which book-to-tax adjustments are driven on reliable sources of data, like the trial

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{ Tax | Automation }

balance. Once identified, tax departments can automate these adjustments so they can spend time on more complex tax areas. Tax departments can apply the same principles to other tasks, such as gathering relevant data, reviewing the trial balance and converting data to a tax basis, preparing returns, and accounting for taxes.

Automation’s role in tax departments is to create efficiencies and redeploy resource time to focus on tax planning and strategy.

Automation allows more time to focus on tax analytics, which in turn give tax departments the ability to deliver critical insights and value-added benefits to the company.

What can tax departments do now?

In preparation for year-end, tax departments should consider assessing the tax technology currently being used and the opportunity for automation. Tax departments may want to assess how long they're spending on manipulating data. If data gathering and data manipulation is taking time and resources, the tax department should consider if automation could assist to redeploy the tax department’s time to the analysis of the data rather than data gathering and manipulation. Additionally, tax departments should determine the tasks that are taking significant time during the reporting process and brainstorm if those tasks can be automated. Departments may want to challenge each other to get creative with automation solutions.

Additional areas where tax departments can incorporate automation include: • • • • •

Tax metrics and reporting; Benchmarking, trends and visualizations; Predictive analytics and tax planning; Prescriptive analytics; and Tax modeling and automated decision making.

Benefits to incorporating automation in tax Tax departments can use automation to their benefit to lead business discussions. Automation will help departments react to real-time forecasting and result in sharable data at a faster pace, without sacrificing quality of data.

Automation also relieves resource constraints, while allowing current resources to use their time on tax strategy and other complex tax issues. Automation will help alleviate pain points around tight deadlines without sacrificing the quality of data. Automation also allows the integration of staff who are excited about technology to be part of the brainstorm and implementation for automation processes.

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Tax departments can use automation to their benefit to lead business discussions.

Additionally, if tax departments embrace automation, they can make projections based on past performance. Automation examples include forecasting the company’s effective tax rate and cash taxes based on real-time changes to the company’s forecast data. Automation may allow tax departments to review their tax planning strategy, and easily identify areas of focus for year-end planning.

Tax departments no longer need to spend their days manipulating, calculating and analyzing data in spreadsheets, or depend primarily on manual efforts. Companies want the ability to include data quicker in their analytics. Tax departments should look to drive solutions in integrating automation and cross-functional data into their operations. Automation will allow for a more efficient compliance process, reporting, analysis, and overall value drivers to companies.

What’s next?

While automation can’t replace the human review, it can save time on tasks to allow tax departments to think through the more complex tax issues and strategy.

Tax departments may want to get creative in processes currently being executed, and consider automation. Think through leveraging current software already in place to automate data, and allow for tax analytics. Incorporating automation further into tax departments will continue to allow tax to move away from being reactive and shift to getting insight from data to drive significantly more company value.

Betsy Maciejewski, CPA is a manager at PricewaterhouseCoopers LLP in Milwaukee. Contact her at 414-212-1890 or elizabeth.m.maciejewski@pwc.com.

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{ Industry | Health care reform }

Health care reform: Where we’ve been, where we’re going, and what to expect

S

By Scott K. Fuller, RHU

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On Balance

ince 1929, when the first employer-based health insurance plan was created, more and more employers have offered health insurance to ensure their employees are healthy enough to do the work, and to aid in recruitment and retention.

Offering health insurance to employees—including type of benefits, to whom, and for how much—is a unique blend of cost, compliance, and culture.

Before we can discuss those three components, we need to start at the beginning of health care reform.

By way of history, the Patient Protection and Affordable Care Act was born after President Barack Obama signed it into law on March 23, 2010. Today we’ve come to know this as the ACA or “Obamacare.” The intent was to provide affordable health care coverage, improve access to primary care, and lower costs.

November | December 2017

To meet these objectives, several major changes were made: • Individual mandate, requiring individuals to have health insurance as of 2014 or face a penalty.

• Employer mandate, requiring large employers (more than 50 employees) to provide affordable health coverage to employees or face a penalty.

• Reporting requirements were added to enforce those penalties.

• Insurance coverage improvements, including a prohibition on pre-existing conditions exclusions, requirement to cover adult children through the age of 26, mandating 100 percent coverage for preventive care, and removing annual and lifetime limits.

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{ Industry | Health care reform }

• Medicaid coverage was expanded to cover those at or below 133 percent of poverty level.

• Premium subsidies were created to help individuals purchase health insurance if they did not have access to affordable health coverage through their employer.

• Health insurance exchanges were created to purchase individual insurance.

• Taxes and fees were added to help pay for components of the law, including the “Cadillac” tax, which would provide an excise tax of 40 percent for plans with richer benefits exceeding a certain threshold.

This law was implemented in several phases between 2010 and 2015. To date, the Cadillac tax still hasn't gone into effect and has been pushed to 2020.

“Repeal and replace” A bill passed the House and Senate in 2016, but was vetoed by then President Obama. Following the November 2016 election, President Donald Trump took office and Republicans held a majority in the Senate and House, with an anticipation that the ACA would be modified or repealed shortly.

On President Trump’s first day in office, he issued an executive order that, among other things, gave agencies permission to “waive, defer, grant exemptions from, or delay the implementation” of regulations behind the ACA. However, the order didn't specifically require action. Even if agencies wanted to act on this order, they were obligated to comply with the Administrative Procedure Act, which means that current regulations continue until a rule can be proposed, comments received, and a final rule issued to amend the prior one.

While some believed this order meant non-enforcement, the IRS issued a report in April 2017, indicating that a system created to identify employers that may owe a “play or pay” penalty was delayed, but was expected to be complete in May 2017. The message to employers was that penalties haven't gone away and the IRS soon would be capable of auditing the reports employers began filing in 2016.

In March 2017, Republicans announced a three-tiered strategy to repeal and replace the ACA: 1. Legislation using the reconciliation process 2. Regulatory changes 3. Piecemeal legislation to address other parts of the law Typically a bill requires the votes of 60 senators to pass the Senate. Presently, the Senate is made up of 52 Republicans,

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46 Democrats, and two Independents. Fearing the Senate would lack the necessary 60 votes and a filibuster would tie up the process, Republican strategy was to use the reconciliation process to pass a bill. This means the Senate would only require a simple majority (51 votes) and the debate would be limited to 20 hours.

Out of this framework, the American Health Care Act (AHCA) was introduced in the House in March 2017. Although a vote scheduled for March 24, 2017, was canceled, the bill was resurrected and passed the House on May 5, 2017. On the Senate side, a similar, yet slightly different bill—the Better Care Reconciliation Act (BCRA)—was introduced on June 22, 2017.

The vote on this bill was pulled when it was clear the bill lacked the necessary votes to pass the Senate. Debates began on several measures on July 25, 2017, including an unsuccessful effort to simply repeal ACA without a replacement.

So now what?

Here are some things that may happen: • Another repeal bill. There could be another effort to get a repeal, or a repeal and replace, through both chambers. This is unlikely to happen given the current administration’s focus on other measures, including tax reform. Moreover, Congress isn't able to use the reconciliation process any longer this year, so the Senate would need 60 votes for any measure to pass.

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{ Industry | Health care reform }

What can employers do?

Offering health insurance to your employees requires a careful blend of cost, compliance, and culture. While the intent of the ACA was to decrease costs, studies show that health care costs continue to rise and most employers haven't seen significant relief.

While the ACA reduced the number of uninsured individuals, it also greatly increased compliance concerns.

Working with a trusted advisor can make a difference as you set a strategy moving forward. A benefits advisor can provide coverage options to match your culture in a compliant manner while also addressing cost. Moreover, benefit consultants are your best resource for identifying cutting-edge cost containment measures. For example:

• “Medicare for All” and similar efforts. Additional legislative efforts to overhaul have already been proposed, but are just as unlikely to gain traction as a new reconciliation bill. One example is Sen. Bernie Sanders’ “Medicare for All” bill that proposes to expand Medicare and create a single payer system in an effort to reduce costs, but would likely result in increased taxes.

• Smaller changes to the ACA. Some efforts to modify the existing ACA are gaining bipartisan support, like stabilizing the health care markets. We may expect to see funding for changes in the upcoming budget bill.

Other more focused bills are also being proposed, such as modifying the definition of “full time” to 40 hours, instead of 30, or allowing use of HSA or FSA funds to pay for over-the-counter medications.

• An executive order repealing the ACA. However, given the limitations on the executive branch, a complete repeal through executive order may be overreaching and likely to face a court challenge.

• Non-enforcement. Agencies could choose not to enforce current regulations. This was essentially the message President Trump sent with his executive order on day one of his presidency, yet we haven’t seen any significant changes yet as a result.

• New regulations. Agencies could propose new regulations.

As noted previously, this would require proposed and then final regulations before anything could change and is unlikely to get done in 2017.

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1. Value-based health care. An integrated approach consisting of consumerism, on-site and/or near-site clinics, bundled pricing, more aggressive chronic disease management strategies and funding alternatives.

2. Wellness strategies, including biometric screening to proactively identify chronic conditions or risk factors among your population, programs to attack risk factors, and incentives to promote healthy behavior and lower the long-term costs to the plan.

3. Pharmacy Benefit Manager (PBM) review. This may mean identification of PBMs and the different costs and services they provide or changes in formulary or increases in cost sharing.

In short, the ACA made some significant impacts to reduce the number of uninsured, and most agree that certain components (like the preventive care and adult child mandates, and prohibition on preexisting condition exclusions) were good for all. However, it generally failed to reduce costs for employers.

Changes to the law could still happen but are becoming increasingly unlikely for 2017.

So for those reasons, employers need to take charge of their health plans and ensure they address rising costs under the current framework. While there are plenty of possible strategies that exist, working with an advisor can ensure you find the best strategy that fits with your culture, is compliant, and does the best job to reduce or mitigate costs.

Scott K. Fuller, RHU is senior vice president and Employee Benefits Practice Group leader at Associated Benefits and Risk Consulting.

Contact Scott at 262-446-5412 or Scott.Fuller@AssociatedBRC.com.

wicpa.org

{ Financial Planning | |Investing { Technology Training}}

AVOIDING TOP 5 TECHNOLOGY MISTAKES I ’ve been using accounting technology and other forms of technology for more than 30 years, both in my business and personal life.

I’ve taught countless classes on the business benefits of using technology, but I’ve also seen all kinds of mistakes that users make. I’ve compiled a list of the top five technology mistakes I see on a regular basis and how you can protect yourself from making them.

By Val Steed, CPA, MA, CITP

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{ Technology | Training }

1

Out-of-date anti-virus and anti-spyware I can’t tell you how many times people tell me they’re unsure or have no idea which anti-virus or anti-spyware they’re currently using—if any at all. Many users run out-ofdate software or let their licenses expire because they forget to update. Some even say they're too busy working on a project to allow the update to happen. This is extremely dangerous.

Every computer should run anti-virus and anti-spyware software at all times. You should check and update your software daily and allow it to scan for malware at least as often, to ensure that you’re protecting your system and your information. Many top products will have multiple updates per day so you need to make sure to adjust your settings and allow your software to update and scan daily.

Identifying if you’re at risk

Daily scans can also help identify whether or not your system has been compromised. If your system doesn't allow an update for your anti-virus, it could be an indicator of a problem. The No. 1 hint that you have a problem is when your anti-virus software will not update. If you notice your anti-virus won't update, get help immediately and shut down that system.

Know your software

Familiarize yourself with the software you’re running.

Learn what the update, scan, and diagnostics screens look like and how to read them so you can pick off spyware scams before they install a virus on your machine. This includes Mac users not running anti-virus software.

Ask any Mac user and you will probably hear some comment about how secure the Apple OS is compared to Windows. While I generally agree, there are a few things to keep in mind. Although Apple isn't as big of a target as Windows, it still has vulnerabilities.

Almost all Mac users will begrudgingly tell you they're not running any anti-virus software. This is a big mistake.

Many Mac users handle Windows files on a regular basis, without knowing—or caring—whether these files are infected because a PC virus won’t harm a Mac. Although

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the individual Mac isn’t affected, they can become a carrier of Windows viruses in their environment. I recommend fixing this issue by installing one of two, free anti-virus solutions for Mac: www.sophos.com and www.avast.com.

Mac users reading this will find that these two products run very well and will not muck up their machine. Many Mac users actually report finding multiple Windows trojans and viruses during their first scan after installing these anti-virus solutions. Dear Mac folks, please trust me on this one.

I'm an Apple person, myself.

2

Allowing unwanted location services to track you When you allow technology to track your location, you're proclaiming your location to the world. This is most common with social media, like Facebook or Instagram. Even text messages can be tracked to GPS origins if you don't turn off that feature on your mobile device.

You may think you’re only sharing with your own contacts or friends, but many times when those friends “like” or “share” your original post it broadcasts to a wider network of people. This means people you don’t know learn if you’re on vacation or away from your home, opening yourself up to potential risk.

Be extremely careful with location services. Monitor and choose exactly which applications will be allowed to use location and which ones won't.

wicpa.org

{ Financial Planning | |Investing { Technology Training}}

3

Poor password management Poor password management may be the most common account technology mistake I see. And a lot of it stems from needing to remember so many passwords.

Here are a few examples of poor password management: • Using the same password on multiple sites; • Using weak or common word passwords; and • Using obvious passwords like family or pet names.

Probably the best advice is to look to a password manager such as Password Depot, RoboForm, or the like.

These will help you keep your passwords secure and allow you to differentiate your passwords across all your log-ins.

4

Ignoring software updates Many software updates fix known vulnerabilities in the existing software. Simply updating your software can go a long way in keeping your information secure. This is most critical with Windows but most applications become more vulnerable to attack when not updated on a regular basis.

I often hear “tech experts” claim that it's best to turn off Windows and Office updates. Unless you’ve been specifically instructed by your IT department, I don’t recommend this. There are some cases where an update can cause problems with corporate applications and the IT department may have other protective measures in place for your company, but as a general rule, always check with your IT department before ignoring software updates.

For the rest of us, it’s in our best interest to keep the updates flowing for Windows, Office, and other applications. There are times when I will manually control QuickBooks, Adobe products, and tax software updates, but I make sure to update QuickBooks and Adobe products at least once a month, and tax software at least once a week.

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5

Lack of professional training Proper training on solutions and software that you use every day will make your job easier and more productive. Obviously, this may seem a little self-serving because we sell training, but I’ve seen the difference between a professionally trained user and someone who has used Google to “self-train.” That’s not a knock on Google. It's a fantastic resource for many things. But to ensure that you’re not selling yourself short, I recommend seeking professional training for accounting technology and here’s an example of why I do.

Let’s say you attend a full-day class on Excel. This class gives you skills to save you five minutes of work per day. With an annual salary of $70,000, working 208 days per year, the ROI for a $350 out-of-pocket class looks like this:

Results Return On Investment For One Year

106%

Return On Investment For Two Years

212%

Return On Investment For Three Years

319%

Return On Investment For Four Years

425%

Return On Investment For Five Years

531%

This is just a very small example of the power of professional training. Clearly, in the bigger picture it’s worth the investment to ensure you have the knowledge and skills to help you succeed.

This training can be anything from how to use Excel to the top five technology mistakes to avoid.

Val Steed, CPA, MA, CITP of Centerville, Utah, is a shareholder at K2 Enterprises in Hammond, La. Contact him at 985-542-9390 or val@k2e.com.

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{ Financial planning | Financial wellness }

Employee financial stress impacts your bottom line

F

inancial stress impacts most of your employees and the consequences are silently eroding your bottom line.

While the financial team of most organizations is focused on growing top-line revenues, managing costs, and improving productivity, some additional attention to the people side of your business might help accelerate the gains that you're working so hard to produce.

Corporate movement toward financial wellness

By Joseph J. Topp, CPA

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On Balance

After all these years of retirement plan education, there remains a high level of financial uncertainty among American workers. Every survey we’ve seen shows that more than 70 percent of American adults acknowledge feeling stressed about their money and financial position at least some of the time. This stress impacts them in all facets of their lives and one casualty is the cost and productivity challenges it creates in the workplace.

November | December 2017

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{ Financial Planning | Investing { Financial planning | Financial wellness} }

The growing recognition of the impact financial stress is having on their employees and their bottom lines has 84 percent of employers surveyed by Aon Hewitt creating or expanding their financial wellness initiatives.1 This doesn’t mean just beefing up the retirement plan education; it means including financial wellness as a pillar of a wellness initiative that includes physical, mental, and financial well-being.

The employee condition A recent PwC survey revealed that for 46 percent of the employees surveyed, finances caused the most stress in their lives.2 Of the employees stressed about their finances, 67 percent struggle to pay their bills each month, 70 percent consistently carry a balance on their credit cards, and 40 percent struggle to make the minimum monthly required payment. It would come as no surprise that these stressors manifest themselves in other aspects of your employees’ lives such as health, relationships, and productivity in the workplace.

Most American adults have a good sense of what they should be doing to manage their personal finances, but as industry study after study reveals, they're struggling to find real success. Since their employment benefits account for the vast majority of their financial resources, employees look to the workplace for help in understanding and managing their employment benefits, as well as other aspects of their personal finances. Employees trust the benefits and guidance provided by their employer and often have no other resources to turn to for help.

Costs of employee financial stress Financial stress shows itself in several ways, many of which serve to rob your organization’s bottom line and often go unnoticed.

The most obvious—an adverse impact on your employees’ overall health and resulting health care claims experience. Coping mechanisms for stress often result in poor lifestyle choices such as overeating and elevated use of alcohol and tobacco. Stressed individuals often are less physically active. Physical symptoms associated with high levels of stress include anxiety, headaches, high blood pressure and depression.

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Financial stress shows itself in several ways, many of which serve to rob your organization’s bottom line and often go unnoticed.

The Purchasing Power study reported that, on average, financially stressed employees incur an additional $400 per year in medical claims costs.3 Most employers have implemented wellness programs designed to change these behaviors, but where most have fallen short is a failure to address one of the primary factors driving these symptoms: financial stress.

One of the sneaky costs of financial stress impacting your organization is the cost of presenteeism. Presenteeism refers to employees who report for work, but aren't fully present and engaged in their assigned duties. Financially stressed workers acknowledge that their finances distract them while on the job, and 46 percent of those employees self-report that they spend three hours or more each week dealing with personal financial issues when they should be focused on their work.2 Not only is the distracted employee’s productivity reduced, but others in your organization, such as those further along the manufacturing process, are likely impaired as well. The cost to your organization is far more than the wages paid to your distracted employee.

Numerous studies exist attempting to quantify the impact of absenteeism, delayed retirements, and turnover. While the actual cost impact to each organization differs, until you study and truly understand your population, you will never know the true impact on your organization.

On Balance

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{ Financial planning | Financial wellness }

Today’s reality – Employees need more help Financial stress among your workforce is a reality, and with it comes a cost to your organization that creeps in and attacks your bottom line from many fronts.

Progressive organizations are moving to expand their wellness programs to include a financial component as a primary pillar of their activities. To rely solely on the education and resources offered with your retirement benefits has proven to be inadequate to address the severity of this issue. An investment by your organization to offer employees expanded financial education and planning resources can have a positive impact against this multi-faceted attack on your profitability.

Understanding how your organization is impacted The first step is getting to know your employees and their financial concerns. Incorporate into your existing communication questions to gauge employee attitudes and needs.

Exit interviews, performance evaluations, new hire onboarding, and focused surveys could be the starting point.

Next, review the utilization data provided by your retirement plan provider. Information about loan activity, hardship withdrawal requests, changes in deferral rates, and utilization of features such as Roth offers insights into more than just the employee’s understanding of the retirement benefits. Your payroll department will have information about the prevalence of wage garnishments, utilization of health savings accounts, and even frequent changes made to employee withholding levels.

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Combined, this information should help you confirm that what you are hearing about financial stress’ impact on organizations actually applies to your organization.

And finally, to appease the true accountant in all of us, put pencil to paper and calculate the potential cost to your organization of increased health care costs and presenteeism using your demographics and employee compensation data. The return on investment to employers from comprehensive health wellness programs is reported to range from $1 to $3 or more per dollar invested.4 We would suggest that a sustained financial wellness program could prove even more effective.

The material in this column is provided for informational purposes only.

Francis Investment Counsel does not offer personal tax or legal advice.

Joseph J. Topp, CPA is vice president – Investment Consulting of Francis Investment Counsel LLC, a registered investment adviser based in Brookfield. His firm has extensive experience assisting clients in the development and implementation of workplace financial wellness programs. He can be reached at 262-781-8950 or joseph.topp@francisinvco.com.

1Aon

Hewitt, “2017 Hot Topics in Retirement and Financial Wellbeing”

2PricewaterhouseCoopers, “2017 3Purchasing

Employee Financial Wellness Survey”

Power, “Financial Wellness: Addressing the ‘9-5’ Impact of 24/7 Financial Stress”

4Stephen

Miller, Study: “Wellness Programs Saved $1 to $3 per Dollar Spent” Society for Human Resource Management http://www.shrm.org/hrdisciplines/benefits/articles/pages/wellness-dollarssaved.aspx

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