A Time for Change

Effective May 1, 2010, I will leave R&A CPAs and become an equity partner in the CPA firm Eide Bailly, LLP (EB). There are numerous times in everyones life when change is inevitable. Then there are those times when we seek change. In most cases I would say change is good for all parties involved. I have reached one of those times where I have sought change AND I believe the change is good for all parties.

After 10 wonderful years at R&A CPAs in Tucson, AZ I came to realize it was time for a change! The last 10 years have without a doubt been my most professionally productive, educational, emotional and rewarding of my life. I took on many new challenges personally and professionally and, as usual, some of those worked out and some did not...oh well that's how life goes. Because of my experience at R&A I have some great connections with some incredibly talented CPAs (the remaining partners) and have some special friends (all the past and current staff) too. Those relationships are invaluable to me.

So why is this change good for all parties? Well I have become the "square peg" within the R&A senior management group, so with me out of that picture R&A will have a more cohesive vision to execute...big winners! I, on the other hand, will be involved with a much larger organization whose management is much more inline with my professional business management philosophies. I also get to pursue the development of a service I am passionate about using today's technology over a large enterprise with total support of senior management...huge win for me too! Finally, EB gets me, my dedication, passion and knowledge but probably the most important thing they get is someone with the passion and leadership skills to take on a service area that needs some attention...another huge win!

I'm going to miss R&A but I relish the opportunities that lie ahead. As a final note, I hope everyone gets to experience change in their life. Whether change is good or bad is based on your attitude and ability to seek out opportunity. Make the best of your life every day!

Victor

Does Your Bookkeeper Know What Your CPA Needs

How many employees are asked to handle the basic bookkeeping needs of their employer even though they aren't technically trained to do so? For the small business, my estimate is about one in every office. After all, they have Quick Books. Unfortunately, the assumption that once you can create an invoice and print a check does not mean your accounting system is functioning properly.

Most business owners don't understand accounting and many of them are quite successful. Seems logical then that they believe a bright employee of theirs should be able to figure it out, especially with a highly touted computer program like Quick Books. Well I can tell you from 25 years of personal experience that 80-90% of those situations cost that employer when it comes time to work with his/her accountant or CPA. There seems to be so little focus or importance placed on the accounting records even though every business owner knows they need them. At the very least the business owner knows they need to file tax returns every year. They also know the tax return is derived from their accounting records but yet the importance placed on those records is so little.

When importance is place on a function, it normally performs well. When it isn't functioning well, people are trained or hired that have the skill set to make sure it is performed well. I guess thats what the CPA is for...they/we should be able to figure it all out. And figure it out we do, but at what cost? Doesn't it make sense to spend a few dollars training your bookkeeper to do a better job so that the CPA can focus on high value services like tax planning instead of cleaning up Quick Books files?

I have trained many bookkeepers during my 25 years but never developed a training program for them. With the recession in full force I have put together a series of three webinars that teach bookkeepers the practical side of bookkeeping and finally explaining to them exactly what the independent accountant/CPA needs from them. The goal is for employers to get more for the dollars they are spending on their staff and more for the dollars they are spending with their accountant/CPA. As good as Quick Books is, it falls way short on explaining how crucial it is you understand the accounting that happens on the on the back side of those invoice and check transactions and how expensive it is for a trained professional to clean it up.

The first webinar, titled "Understanding What Your CPA Needs From You", launches this month and the rest will launch in January, stay tuned for the details. Get your house in order, invest training dollars wisely and I wish everyone a fantastic holiday season and a tremendously prosperous new year!

Share The Knowledge

One of the most important things we can do to help our organizations, associates, employees, and any one else we care about is to share what we know with them.  After all, that is what teaching is.  At R&A we have recently taken this to a new level.  Just this month, our efforts in an international collaboration with other CPA firms went "live".

R&A is a member of an international organization that teaches CPA firms how to provide consulting services to small and mid-sized businesses.  This group provides us with phenomenal training and "best practice" tools and techniques to deliver these services.  With Ran One's

assistance, a group of about 12 CPA firms from across the globe launched a new website to assist business all around the world during the horrific economic crisis.  Please visit the site at http://www.economicrecoveryresourcecenter.com.  The information on this site is as valuable as you can find any where.

Keep the American dream alive, stay focused and use the resources around.  We are all in the same boat, and we all need each other to make it through to better days!

Victor Puchi, CPA

Managing Shareholder

R&A CPAs

www.RandAcpas.com

Position for Tomorrow

If you watch any news channels, ready any newspaper or just listen to the chatter at the water fountain at work, you are going to hear the bleakest news of the US economy since the Great Depression.

Owners and executives of businesses both small and large and working day and night to manage through this crisis. Businesses are streamlining operations to conserve cash (major layoffs), and cutting back in every expense category possible. This isn't enough. Crisis time is also the best time to reposition your business for the needs of tomorrow.

The strong get stronger during difficult times because they know how to get ready for the turnaround. Study your markets and find the niche that has been created by the new crisis or that will exist when the turnaround comes. If you can't find one then make sure you are ready to handle the increase in business when the economy stabilizes. Invest in keeping the great people in your organization, improving your processes and communicating your efforts to your clients. Keep your ear open to your clients, they will tell you if you should be doing something differently or different things.

During these times, basic business management techniques are critical. Keep your operation simple, manage inventories, manage accounts receivable, collect, collect, collect and watch the key performance indicators for your business http://economy.aicpa.org/business-industry/.
Make sure you keep your staff involved and informed of your plans and how they can help. Your staff can be the best resource for ideas and the extra energy needed to make it through these tough times. They are more loyal than most realize. Stay positive and keep the focus. We are a great nation and the capitalistic nature of the American people will prevail. You are that people...Good luck!

Happy Holidays

As we rapidly approach the end of another incredible year and the holiday festivities get cranked up I wanted to wish everyone a very Merry Christmas and prosperous New Year!

Reflecting on my fortunate past comes so easy to me this time of year. Regardless of personal or professional struggles I may have had the super majority of my life has been blessed with loving family and friends and a very successful professional career.  I challenge everyone to put their own lives in perspective this holiday season.  Take a few moments to remember the tragedies that have occurred in our own back yard and around the world.  The victims of 911, the floods in New Orleans and surrounding areas, the fires in California, the thousands of children inflicted with life-ending disease and the millions inflicted with mental/psychological challenges.

Be grateful and appreciative, loving and caring, sensitive and honest.  Give with heart not only with money.  Give with respect not for respect.  Love those that are with you, inspire those that are influenced by you and offer a prayer for those you haven't met.

Merry Christmas and Happy New Year!

Victor Puchi, CPA

R&A CPAs

www.RandAcpas.com

   

Succession Planning

One of the biggest, if not the biggest, challenges small to mid-sized business owners face is that of succession planning.  Finding the right person or people to hand the reigns over to should be a process that lasts years not months.  It is difficult to accept that whoever that next person is, they won't be you and they won't run the place like you either.

So what can be done to increase the success of handing things over to the "next generation"? First of all, don't limit your options and plan plan plan.  One of the most important things I have learned over the 20 plus years of being a business owner and advisor is to make sure you have an exit strategy as early in the game as possible.  I now teach young entrepreneurs to make sure part of the business plan is an exit strategy.  What options are there?

For the most part there are 3 options to exit.  First is to hand it over to an insider.  That would be someone that has been working for you that understands how the business works and is willing to pay for the opportunity to drive the bus going forward.  Second, is a sale to a competitor or larger enterprise that has an interest in your market and your brand.  The third is a variation of the second and that would be to merge with a competitor or a complimentary business that gives both entities a benefit.  There is the option to liquidate or close the business but I don't think of that as succession planning even though it is an exit strategy.

Finding the right player is always the difficult part.  A successful business almost always has clearly defined core values and you want them to stay in tack so you need someone that understand and believes in yours.  You also want to make sure there is strong leadership and passion for the business along with aptitude, compassion and strong business acumen.  Now you start seeing why this is such a challenge!  The good news is that this happens all the time so you aren't the first person to have to do this.  The bad news is that at least half of these fail within the first 3 years.

The point here is to take your time and think about how you can best transfer what you know about the business, people, customers, process, market, industry, and all the tricks of the trade to that lucky chosen one.  Invest time and money to educate and edify or to investigate a potential buyer/merger candidate to find the best fit possible.  Understand that there is great value in mentoring, shadowing, selecting a protege, or whatever you want to call it.  The training for the next leader should be much different than any other position in the business because the business owner is a unique position.

Be aware that businesses, like people, have a period when they are in their prime so don't wait too long if you want to maximize the chance of success and value.

Victor D Puchi, CPA

vpuchi@randacpas.com

The New American Dream

The way I always heard the story was that people came to America from around the world to have freedom and financial stability....The American Dream!

Doesn't the word "dream" tell us that it might not always be reality or that the dream may be bigger than life?  Do you think the fat cats of our largest financial institutions or auto companies have lost site of this?  What about our political leaders?  They certainly must always have this in mind, as is it not their responsibility to keep this nation as great and greater than always?

Somebody needs to get all of these "leaders" and send them back to the basics.  Maybe they should all have to run their own businesses using their own money and credit for ten years.  Until they are able to prove they can grow a business and manage money and people they shouldn't be able to take a seat where they are responsible for TRILLIONS of dollars the rest of us spend a lifetime trying to generate. That way sex, color or political party preference would all be the same....Red, White and Blue.

What are we teaching our young "professionals-to-be"?  Go get the best degree you can from the most prestigious school around and latch on to a big company.  Don't disrupt anything, play nice and always make sure nobody knows what you're doing.  Pretty soon you can be the CEO of one our nations pride and joy companies and flush it down the toilet while you become a millionaire.  Don't worry, Congress will make the rest of America pay for it and you can travel the world on your private jet!

By Victor D Puchi, CPA

R&A CPAs