Most people know what they do. Some understand how they do it. Few people take the time to understand why they do what they do. (And no, the answer is not to make money!) As an organization committed to inspiring others to enrich their career, the team at Merit Career Development conducted a “Why” exercise at our annual planning session.
In order to better understand “why” we, the Merit team, we began by reviewing the TedTalk of Simon Sinek, on “Start With Why.” We then tasked each member of our team to consider three important questions:
Why do we do what we do?
How do we do what we do?
What do we do
The results were simultaneously surprising and unsurprising because we were all quite precise and remarkably similar in our expressed thoughts. We agreed...
Why do we work at Merit:
Education changes the world
Education empowers people to take control of their lives
We are improving people's lives through education
We can and do make a difference in people's lives through education
How we do our work
…by designing and delivering engaging and interactive courses that center around techniques that increase retention. Using proven research grounded in adult education theory, our courses are designed for people to experience the learning in a hands-on, practical, and engaging medium so they can immediately put the knowledge they learn into practice.
What we do:
With a very talented, highly educated team, we design and deliver relevant professional education and training using engaging and memorable techniques.
Merit Career Development hopes to have the opportunity to work with your organization in 2016. We believe that we can make a difference in your life and in your organization.
From emotions to the time of day, it is often the little things that impact our ability to make a swift and accurate decision. A range of factors can compound the challenges in making good choices, both directly and indirectly.
The framing effect is what happens when an individual applies a specific perception to a given scenario, which can have both positive and negative impacts on decision-making. For example, while an accountant will view an issue through his or her fiscally oriented frame, a lawyer would examine the same issue through a legal frame of reference.
While these frames can be effective when used in the appropriate scenario, the wrong frame in the wrong situation can negatively affect an individual’s perception and lead to poor decisions.
Studying the Brain's Frame
The ways that options are presented to us has an effect on the choices we make. Benedetto de Martino, M.D., a cognitive neuroscientist at University College London, sought to measure brain activity during the decision-making process and published his results in Science magazine. With 20 volunteers, Martino and his colleagues told participants – while positioned under the imaging equipment – that they had received a considerable amount of money, and assigned them one of two hypothetical scenarios: Keep a chunk of money or gamble, or lose a chunk of money or gamble.
The participants who were told that they could keep a portion of the funds or gamble were hesitant of the risk involved. On the other side, those who were informed that they would lose a bit of their money were less averse to risk. The individuals who were affected by framing had greater activity in the amygdala, a region of the brain associated with learning and emotions. Those immune to framing had increased activity in their orbital and medial prefrontal cortex, which, when impaired, can lead to behavior driven by impulse and feelings.
Martino’s study showed that emotions could play a significant role in decision-making when the information is incomplete or complex. When working on projects, employees need to examine issues outside of their context to eliminate the effects of framing.
Closing the Framing Gap
As demonstrated by Martino’s research, frames are a part of the brain’s structure and can be shaped by various influences, such as education, upbringing, socioeconomic status, friendships and family. Failure to recognize active and subconscious framing can negatively impact important decisions and ultimately, a company’s future.
Consider this classic example: About 250 years ago, Encyclopedia Britannica founded and became one of the top resources for information on practically any subject possible. However, as the rest of the world began transitioning to the Internet and digital media, the organization staunchly insisted on selling print versions of its materials. Encyclopedia Britannica’s frame was of print publications – it refused to broaden or look outside that frame, and it hurt the company. Once CDs and the Web became the go-to sources for educational tools, Encyclopedia Britannica disappeared from bookshelves and went into bankruptcy before finally re-emerging as an online resource. They published their first online encyclopedia in 1994 and in 2012 completely stopped producing print versions.
Playing Devil's Advocate
Subsequently, managers learned from Britannica’s mistakes. To improve the decision-making process in project management, they learned to analyze the frames of stakeholders and see how they apply to given scenarios.
Managers need to create a decision frame that benefits both the company and the overall objectives of the project. They could have stakeholders with disparate frames play devil’s advocate in order to identify their own frames and discover and analyze others. From there, project managers can choose the best frame and proceed with decision-making.
For more information on framing, biases and other factors that can impact the quality of decision-making, please contact Jim Wynne at jwynne@meritcd.com or by phone at 610-225-0449. Take a look at Merit’s course catalogue for related courses and other leadership and project management workshops, all accredited for PDUs, CEUs and CPEs.
Supply chain executives are worried about a weak talent pipeline.
More than half of executives at US-based global companies say they are not confident their supply chain organizations have the competencies they need today, according to the 2015 Supply Chain Survey from Deloitte.
As a profession, supply chain management finds itself in something of a crisis. Just as the discipline is gaining stature within enterprises, many organizations are confronting critical shortfalls of talent. Some observers believe the demand for supply chain professionals might exceed supply by a ratio of six to one.
Years of headcount reduction, training budget cuts, and the retirement of highly skilled individuals have all contributed to the shortage of supply chain talent. At the same time, a combination of accelerating technology development and widespread experimentation with new operating models are expanding the scope of supply chain operations, creating a demand for new types of supply chain employees—a trend that is only expected to accelerate in the future.
“Margins are so thin in many industries that any technology or operational change that can provide a competitive advantage—whether its 3D printing or advanced analytics—is critical. And those capabilities are inherently dependent on talent,” explains Kelly Marchese, a principal and supply chain leader with Deloitte Consulting LLP.
It’s not a matter of sheer numbers, rather, it’s a matter of shifting needs as rapid changes in supply chain activities, tools, and goals call for new skills in management and leadership.
The Deloitte survey evaluated technical capabilities ranging from real-time shipment tracking to artificial intelligence. Optimization tools and demand forecasting are the most widespread tools currently in use, but that is predicted to change in the near future. The biggest gap between current strengths and anticipated need is competency in technical analytics. This is seen as the most important technical competency in the near future; only 46 percent of supply chain organizations in the study consider their skills in analytics to be “very good” or “excellent.”
A Cutthroat Technical Skills Market
It’s no wonder supply chain leaders are concerned about recruiting and retaining related technical skills. They’re competing not only with other supply chain organizations for that talent, but also with other functions in their own organizations—chiefly IT. “If you look at supply chain and technology, they’re two of the most strained areas of talent in the whole corporate ecosystem,” says Benjamin Dollar, a principal with Deloitte Consulting. “You need to have strong technology skills in supply chain, and CIOs increasingly need to enable sophisticated problem-solving within the supply chain. And neither one can do it with the people they have now.”
Supply chain managers are looking to science, technology, engineering, and math (STEM) graduates to fill new supply chain roles—but it’s a tough sell. “Most supply chain leaders would love to hire engineering grads from top schools, but a job in the supply chain at a manufacturer is pretty low on their list,” Dollar says. “There’s not enough sex appeal.”
Looking for Leaders
While a large majority of survey respondents (73 percent) said it was extremely or very important to hire employees with the required technical competencies in order for their company to meet strategic objectives, even more (79 percent) said leadership and professional competencies (such as problem-solving, change management, and talent development) were extremely or very important. Strategic thinking and problem-solving were deemed most critical in the future with 74 percent of respondents saying it would be rising in importance. But just 43 percent say they are very good to excellent at it today.
That may be an even bigger challenge for supply chain executives than locating technically skilled professionals. “You can at least take a class in analytics,” says Marchese. “Leadership characteristics take more time to develop.”
CIOs and COOs: A Talent-Sharing Opportunity
“A lot of what’s driving the supply chain talent problem is the need to implement new technologies, and that’s an issue for both the COO and the CIO,” says Marchese.
But to be successful in the future, IT and supply chain must be closely aligned. “You have to create an operating model in which the supply chain can make it clear what its requirements are and IT can show the supply chain the art of the possible,” says Dollar. “To do that successfully, you need a mix of strong supply chain talent combined with advanced technical skills.”
Build Internal Skills Augmented by External Expertise
Advanced supply chain management concepts must be matched by advances in talent management capabilities. The survey also found recruiting new talent is seen as a greater challenge than retaining existing talent, especially at higher levels, suggesting that building skills internally is becoming increasingly important.
The largest difference between the expectations of supply chain leaders and followers is something of a concession to reality. Leaders are more likely to believe their supply chain organizations will make increased use of specialized external expertise and staffing over the next five years. Supply chain talent may flourish best when it lives outside the walls of organizations supporting personnel inside companies where supply chain excellence is “the business of the business.”
Innovations in information technology have enabled companies to adopt supply chain management as a critical element of their corporate strategies. Despite these breakthroughs, many companies have not fully realized the benefits of constructing collaborative relationships with supply chain partners.
Professor Jack Muckstadt of Cornell University and his colleagues Drs. Murray, Rappold and Collins point out that, as companies focus on their core competencies, they have made significant strides to integrate their internal business processes and information flows and are leveraging this capability to compete as part of a larger supply chain. This compels corporate leadership to better understand their customers’ needs:
What do they want?
Where do they want it?
When do they want it?
How do they want to receive it?
What are they willing to pay for our products and services?
Constructing and operating a competitive supply chain is the primary objective of supply chain management. Several obstacles must be overcome to achieve this goal:
Demand uncertainty is substantial and it can severely degrade anticipated performance in terms of unit cost, speed, quality, and responsiveness.
Long and variable response times due to the supply chain’s inability to respond to environmental changes in a timely manner.
Poor information infrastructures still lack the capabilities necessary to acquire, store, manipulate, and transmit data effectively and quickly.
Business processes are often not designed properly. Internal and external processes are required to adapt to evolving business and supply chain conditions.
Inadequately designed business metrics and decision support systems to contend with supply chain uncertainty.
Strategic and tactical modeling paradigms employed in supply chain decision support systems are insufficient. The manner in which uncertainty is treated in many operational environments is inadequate.
The Essential Foundation: Integrated Business Systems
It is essential to think of the supply chain in terms of five interconnected business systems: engineering systems, marketing systems, manufacturing systems, logistics systems, and management systems. Opportunities for supply chain efficiency tend to occur at the boundaries of these individual functions. The greatest competitive advantage comes to those companies that focus on both (1) integrating these five systems intra-organizationally, and (2) integrating these business functions as much as possible with their collaborating supply chain partners.
Supply Chain Operational Excellence: The Five Principles
A competitive advantage will exist only if several key attributes exist in a supply chain. Five guiding principles are necessary for effective supply chains. Applying all Five Principles of Supply Chain Management is necessary for the effective design and execution of supply chain systems:
Know the Customer.
Adopt Lean Philosophies.
Create a Supply Chain Information Infrastructure.
Integrate Business Processes.
Unify Decision Support Systems.
1. Know the Customer
Without a clear understanding and definition of customer requirements, a supply chain cannot be effectively constructed. One must construct an information infrastructure to capture customer transaction data, store the data, and analyze it from an operational perspective. The objective is to obtain a clear statement of the customer’s requirements. A supply chain’s requirements vary by customer, product, and location. These requirements must be thoroughly understood and form the foundation for constructing an efficient and effective supply chain.
2. Adopt Lean Philosophies
For the past 25 years operationally excellent companies have focused on creating lean organizations. These companies have shortened internal lead times and made them more predictable and repeatable. They reduced work-in-process inventories from months of supply to days. Firms implemented just-in-time delivery strategies for their most costly component materials, and have worked to dramatically reduce setup times. These actions have substantially reduced indirect costs and improved use of physical space. More importantly, they have created cross-trained, empowered and more highly motivated workers. For maximum supply chain efficiency, all partners must engineer, align, and execute their processes so that the entire chain has the above attributes. Lean supply chains must also be designed as tightly-coupled systems that quickly and profitably respond to market demand fluctuations. No combination of software systems can compensate for a poor physical operating environment. Therefore, lean philosophies must be extended beyond a company’s internal operations to its trading partners across the entire supply chain.
3. Create a Supply Chain Information Infrastructure
An effective information infrastructure, both intra- and inter-organizationally, is necessary for a supply chain to achieve competitive advantage. Today, internet enabled B2B collaboration makes it much easier for supply chain partners to share timely demand information, inventory status, daily capacity usage requirements, evolving marketing plans, product and process design changes, and logistics requirements — to mention just a few. However, true collaboration requires joint planning of inventory and production strategies and the reliable joint execution of operational plans on a continuing basis. How capacity is used daily must be considered from an overall system perspective, not just a local viewpoint. Simply passing data (even customer demand data) among partners does not realize the true economic potential of collaboration.
A traditional collaborative planning and forecasting initiative is merely a starting point; it barely scratches the surface of the financial rewards and competitive advantages that are possible through a true collaborative supply chain. Our recommendation is much more substantive and comprehensive.
Figure 1 - Integrated Information Systems and Business Processes
4. Integrate Business Processes
Business processes must be established both intra- and inter-organizationally to support the supply chain’s strategic objectives, as illustrated in Figure 1, above. These processes, coupled with the information infrastructure, support the efficient flow of material through the supply chain. While much attention has been placed on understanding business processes within organizations, it is essential to build processes inter-organizationally to leverage and enhance partners’ capabilities. These inter-organizational processes must be designed to take advantage of the increased information that drives daily supply chain decisions.
5. Unify Decision Support Systems
Academics and software providers have designed and built Decision Support System (DSS) environments for individual companies and supply chains. These environments are based on different philosophical models. Also, they differ in how they forecast demand, and how they drive production and allocation decisions. Their goal is to generate plans that simultaneously consider all elements of the supply chain. No matter which approach is taken, these systems and their embedded rules drive many daily supply chain activities. Therefore, they have a substantial impact on the operating behavior, and consequently, on overall supply chain performance. How much they enhance this performance depends on both the accuracy of their input data and the modeling approaches employed. These decision support systems need to address uncertainty in an explicit manner—and most do not.
A New Decision Modeling Paradigm
Commercially available Advanced Planning and Scheduling (APS) systems have led to considerable improvements in supply chain efficiency in many companies. Success in implementing these systems depends on the extent to which the Five Principles of Supply Chain Management are followed. Strategic and tactical modeling paradigms employed in supply chain decision support systems are inadequate. Supply chain manufacturing and distribution systems are often not appropriately designed and operated.
Typical consequences of poor design are inventories concentrated in the wrong products at the wrong locations, and production metrics that do not match projections or meet management’s performance expectations. A fundamental cause of this failure is the environment’s uncertainty and the inability to construct accurate demand forecasts for most items. Given that creating accurate forecasts is difficult, entirely new paradigms like the No B/C Strategy must be used to ensure responsiveness. An integrated supply chain needs to be created that quickly and repeatedly moves the right quantities of materials to customers for those items that experience highly uncertain demand.
A New Operating Philosophy: The No B/C Strategy
When considering how much inventory to carry and in which products, it is essential that inventory be carried in those items for which it will be most useful. Inventory held centrally by manufacturing is nothing more than stored production capacity, or stored time. Most companies have significant inventory write-downs each year, and have to sell off inventory at less than cost. This occurs because it is virtually impossible to predict customer demand over a short lead-time.
So why are companies generating forecasts that are so prone to error? Inventory fundamentally exists in supply chain systems because customer order lead-times are shorter than manufacturing and delivery lead-times. If companies have long lead-times, then they must stock some inventory. This is where traditional planning systems fall short.
When considering the attributes of a new planning paradigm, the planning philosophies must include uncertain demand, customer lead-time requirements, finite production capacity, and inventory stocking decisions for different products and different customers. Not all products and customers behave identically. Not all customers for the same product behave identically, either.
The answer is a hybrid make-to-stock and make-to-order planning strategy that stores inventory in products while considering finite production capacity and highly uncertain demand. Called the No B/C Strategy, it categorizes products into ABC categories using a new method. Inventories exist only for products where there is a low risk of not selling them quickly.
Conclusion
Installing advanced information systems and streamlining business processes will not overcome a poorly designed physical operating environment, and vice versa. Business processes and rules must be tailored to the specific nature of the operating environments and to the supply chain’s objectives. Finally, decision support systems and business processes must be capable of explicitly dealing with uncertainty. One such approach is to employ the No B/C Strategy.
A client company applied all five of the Five Principles and realized a 60% decrease in finished goods inventory for its top 10 products. Concurrently, finished goods stock levels dropped 40% across the product family. Simultaneously, customer service levels (on-time delivery) increased to 95.2%. Most notably, the on-time delivery performance for make-to-order products increased from 37% to 60%, and is still increasing to this day.
Companies with sophisticated and complex supply chains that are willing to embrace change can gain a great competitive advantage. Looking at their supply chain operating paradigm in an innovative way can positively impact bottom line results. By adopting a new operating philosophy, the No B/C Strategy, and adhering to the Five Principles of Supply Chain Management, these companies will see new supply chain efficiencies that previously have not been possible.
This article was adapted, with permission, from Guidelines for Collaborative Supply Chain System Design and Operation; Muckstadt, Murray, Rappold and Collins; Technical Report No. 1286, School of Operations Research and Industrial Engineering, College of Engineering, Cornell University, 2001.
For more information about Supply Chain Leadership, or to attend one of Professor Jack Muckstadt’s courses, visit Excellence in Supply Chain Design + Operation or contact Jim Wynne, Merit Career Development, at jwynne@meritcd.com.
Are you giving your staff the training they need to best serve your clients? Sure, you’ll pay for the tax courses, but are you giving them the people skills—like problem solving, customer service and supervisory skills—that they need to make your firm the best it can be?
You may be surprised to learn that your accounting staff hungers for more training. Consider some findings from a recent CPA Trendlines Career Outlook survey:
Less than a quarter of respondents agree that their firm always pays for the courses they want, not just what they need.
Fewer than 20 percent of respondents say their firms pay for soft skills learning. Offering your staff an expanded menu of training that includes soft skills and other education can improve client relationships and staff retention, as well as develop future leaders.
“Solid communication and interpersonal abilities are becoming just as important to accounting professionals in addressing client needs” as traditional training, writes Paul McDonald, senior executive director with Robert Half in a recent CPA Practice Advisor article. “Your team members also need business acumen that extends beyond accounting to understanding clients’ bigger-picture business goals and concerns.” McDonald identifies desirable soft skills: diplomacy, customer service, problem solving, adaptability, and communication.
These important skills are also the ones that staff wants to learn. For instance, problem solving gives accounting and finance professionals the most career satisfaction, according to recent a Robert Half survey. In fact, problem solving outranked number crunching in the results, which is pretty amazing given the importance of numbers for accountants!
Soft skills learning can help accountants at any stage of their careers, says Kathy Ryan, CEO, CFO and co-founder of RoseRyan, a CPA firm serving the San Francisco Bay area, in an Accounting Today article. “I challenge anyone who feels they are being held back in their career but is not sure why, to get a reality check on their soft-skill set and do some fine tuning. I also encourage those in leadership positions to consider ways they can cultivate the ‘softer’ side of their teams’ abilities (and their own).” It isn’t a surprise to learn that Ryan’s firm regularly teaches soft skills.
Asking staff about the courses they would like is now a trend at accounting firms, the AICPA says in its white paper, The Evolution of CPA Firm Learning:
Staff can learn better when they have a say in their learning plans. - The white paper cites an American Society for Training & Development article, “The Amazing Era of Self-Service Learning,” that suggests your firm may see as much as a 500 percent increase in learning benefits when staff manage their own training.
Real knowledge rather than “getting training hours in” is becoming the focus. - More experience-related, simulation, and “mock” programs build real-life skills.
Succession needs require staff to learn more than technical topics. - Firms are including more leadership, management and other personal development courses, and they’re introducing them earlier in their staff members’ careers.
Staff who are hungry to learn about running the firm, interacting more efficiently with clients, managing support staff, and the other ingredients of a successful CPA firm should be consuming the appropriate soft-skills training. Serve staff what they want, and your firm will have a banquet of talented professionals to build your firm.
Soft skills training is critical for both your staff accountants and your firm. Merit Career Development offers leadership and communication courses specifically designed for accountants plus the opportunity to earn CPEs. For more information, please contact Jim Wynne at jwynne@meritcd.com.
We've all done it. You're standing talking with a coworker, and she asks a question. Suddenly, you realize your mind had wandered as she continued to talk. The little voice in your head said it was time for lunch...reminded you to follow up with a client...or maybe you were distracted by a colleague walking by. You weren’t paying attention. You weren’t listening.
Most people think they know how to listen, but although you hear the words, you may not fully understand the meaning behind them. Listening actively takes concentration and practice. It’s important in all interpersonal relationships—in the workplace and in our personal lives.
If you want to improve communication between you and your colleagues or clients, become more efficient in your work, or create more rewarding personal relationships, then listening effectively is critical. The good news is that these skills can be learned just as effective public speaking skills are learned. And here’s how:
Ssshhh - Stop talking and just listen. Many business cultures reward speaking - no matter what. But when we are talking - even inside our heads - we can’t hear and process what is being said to us. Even if it means there is a silence after the speaker finishes—while you prepare your response - let it be.
Body Language - According to Forbes, making and keeping eye contact is essential in Western cultures, where good eye contact equals paying attention. Face the speaker and fight the urge to check your cell phone or computer.
Practice - Listen to challenging material that requires concentration, such as a lecture or a sermon. Use these to sharpen and improve your vocabulary and your understanding of nonverbal cues - those you give as well as those you observe. Lean toward the speaker, nod, and give smiles and verbal cues (uh-huh, hmm, yes) of encouragement.
Study Up - Read about the topic of a presentation or an important meeting ahead of time. Leave any preconceived perceptions of a speaker, colleague, or topic at the door.
Be Attentive - Don't interrupt or jump to conclusions. And don't sketch out your response while he is still talking or think about what you want to say next. You run the risk of giving a reply that will be off the mark, and then your disinterest will be obvious.
Focus - Focus on the big picture as well as on the small details, watching for ways you can personally relate. Also, listen intentionally, consciously steering your mind back to the speaker when it wanders (because it always wants to stray).
Do Unto Others - According to Dr. John A. Kline, who has written extensively on leadership and communication, using a form of the Golden Rule is effective. Ask yourself, “How would I want someone to listen to me?” And then listen as if you were going to have to repeat the conversation in an hour - this time, as the speaker.
Ask Questions - Everyone listens through their past experiences and reacts accordingly. Take responsibility for understanding what’s been said. If you don’t, always ask, don’t assume. And, according to Sklatch, open-ended questions are the best way to gain clarity, such as, “Can you give me some examples of that?”
We all want to be heard and understood, and taking the steps to ensure we are doing the same for others is the best way to achieve this.
Technology has its roots in everything we do, from our weekdays at the office to our evening and weekend night activities.
Even with the widespread impact of technology on the business world today, few industries have felt the effects as much as accounting. This is due to the data-driven nature of this work – CPAs and other professionals rely on information, and leveraging technology to improve data collecting, sharing and storing data in all aspects of the accounting industry.
To stay ahead of the curve, accountants must understand the new trends in technology, and how they will affect the profession.
Today’s Top Technology Trends That Improve Efficiency
The trends shaping the accounting industry today will benefit professionals in a number of ways over the coming year. One of the biggest improvements will be related to efficiency – new technology can not only make the job easier, but it will streamline operations and improve client relations.
In an article for WIRED’s “Innovation Insights,” Jeremy Roche outlines five of the top technology trends facing the accounting industry:
Cloud Computing
Social Collaboration
Mobile Devices
Real-time Analytics
Risk of the Shared Computing Environment
These trends are great for streamlined business operations. Take the cloud, for example. This remote data storage and sharing network has been one of the biggest boosts to efficiency in recent memory. Users can upload information to the cloud and access it from anywhere, on any device, whether at the office, at a client site, or working from home. This trend has been driven by cost savings, but it also allows businesses to be more flexible and adaptable.
Using Big Data and Analytics to Improve Decision-Making
Another key trend on Roche’s list involves analytics. For the accounting industry, success often hinges on access to data and the ability to piece together information to make educated decisions.
Technology helps and using analytical tools will improve business efficiency by reducing research time, aggregating information to form trends and saving money. According to the Pennsylvania Institute of CPAs, big data is another trend changing the accounting industry.
In terms of efficient business operations, CPAs should turn to big data for:
Information - Analytics will help any professional learn current events and understand future trends.
Diagnosis - Analytics can save time by outlining what has happened and why.
Prediction - Analytics can help professionals determine what will happen in the future.
Solution - Analytics can highlight the ideal solution moving forward.
Technology has its grip on the accounting industry. In 2015, it is likely that new devices, tools and resources will allow for easier collaboration, information sharing, data storage and much more, all improving the business efficiency of today’s professionals.
CPAs devote their services to helping clients with complicated accounting and tax needs. It is a revered profession and expertise must extend beyond numbers—the subjective and intimate elements behind this type of advice increase the potential for problems.
Even with a public accountant’s best efforts, clients’ future actions can prove to be unpredictable. That’s why the best lawyers and insurance experts stress the importance of protective engagement letters for CPAs. According to the Pennsylvania Institute of CPAs, a lack of a quality engagement letter is a common thread among liability claims. While plenty of CPAs write these letters, each document must include the right elements in order to be effective.
While you are familiar with an engagement letter, there are specific points to include in this document that can shore up any weaknesses, protect against liabilities and clearly outline the services that will be exchanged between a CPA and client.
Here are three critical points to remember the next time you are reviewing an engagement letter:
1. Customize the Content
An engagement letter is a valuable tool in the accounting field, but it isn’t always a versatile one. This type of document is on the front line in the battle against malpractice, but it must be customized for each client in order to be effective. According to The CPA Journal, an engagement letter loses its benefits if it isn’t tailored for specific circumstances. Each client brings his or her own set of needs and using a boilerplate letter can miss these nuances. That will leave the accounting firm vulnerable should things not go as planned.
2. Be Clear and Comprehensive
An engagement letter must protect the interests of the accounting firm. It cannot do that if it doesn’t include every detail about their professional relationship with the client. According to the Journal of Accountancy, the letter’s author must be clear and comprehensive. For example, outline every return individually, including the year it will be prepared and the number of years that service will be completed. Include clauses and disclaimers to further protect against malpractice, wherever possible.
3. Highlight the Dates
Dates matter. In many cases, the CPA will work with the client for an extended period of time. For example, helping a business owner file their professional and personal returns will take place over many months. An engagement letter must highlight the dates these services will be exchanged. Typically, it will only cover the current year, but it is crucial to make this distinction. When other public accountants executed previous years’ returns, make sure the document clearly states that those previous year’s returns are not the responsibility of the current CPA.
Unfortunately, not every professional relationship goes smoothly. While CPAs never approach clients with this thought in mind, it is always smart to use effective communication skills to implement quality risk management procedures.
Coordinating virtual instructor-led training courses can be challenging when participants are literally signing in from around the world. Timing and coordination are hurdles, but one of the most common barriers to learning is simple communication.
According to Jim Spaulding, Ed.D., technical instructor at Merit Career Development, managers can make training come alive through calculated decisions. With international employees, trainers can facilitate connections and communication through personal experiences, stories and insight.
Bringing Classmates Together
The immediate benefit of virtual training is obvious: global reach. But that geographic range necessitates fluid communication for effective learning. Conversation is much more than just discussing ideas among peers. By talking with one another, participants create meaning out of the information being presented and can glean valuable conclusions from the data.
Additionally, Spaulding recommends that instructors encourage sharing pertinent personal stories and insights throughout the lesson. Integrating participants’ perspectives as much as possible can help form connections between students, which can lead to deeper and more practical discussions. Generally speaking, when learning is couched in stories, participants learn better. Even digressing into interesting off-topic conversations can tie the class together and allow participants to be more engaged.
Making real connections in online international training environments can make the difference between wasted resources or effective learning that translates back to the workplace and creates viable business solutions.
Why do we work at Merit:
From emotions to the time of day, it is often the little things that impact our ability to make a swift and accurate decision. A range of factors can compound the challenges in making good choices, both directly and indirectly.
Innovations in information technology have enabled companies to adopt supply chain management as a critical element of their corporate strategies. Despite these breakthroughs, many companies have not fully realized the benefits of constructing collaborative relationships with supply chain partners.
Are you giving your staff the training they need to best serve your clients? Sure, you’ll pay for the tax courses, but are you giving them the people skills—like problem solving, customer service and supervisory skills—that they need to make your firm the best it can be?
We've all done it. You're standing talking with a coworker, and she asks a question. Suddenly, you realize your mind had wandered as she continued to talk. The little voice in your head said it was time for lunch...reminded you to follow up with a client...or maybe you were distracted by a colleague walking by. You weren’t paying attention. You weren’t listening.
Technology has its roots in everything we do, from our weekdays at the office to our evening and weekend night activities.
CPAs devote their services to helping clients with complicated accounting and tax needs. It is a revered profession and expertise must extend beyond numbers—the subjective and intimate elements behind this type of advice increase the potential for problems.