Responsibility Breeds Motivation

By Tom Sponsel, CPA/ABV, CFF
Managing Partner
[email protected]

Every good manager knows that the key to improving productivity is to hire talented people with skill sets that are commensurate with the needs of the workforce. But as a business grows and more managers are necessary to supervise a larger number of employees, breakdowns can sometimes occur when it comes to delegating responsibility.

Good delegation requires adequate orientation to the task or duty, timely follow-up, meeting deadlines and holding the delegate accountable for the quality of the project. Where managers become frustrated is when they do not see the results they wanted at the end of the process.

A mistake often made is when the supervisor takes the project back and completes it himself or herself. While it may serve as a quick-fix, it only increases the burden on the manager, reducing their capacity to act in a supervisory mode. And it sends the message to the employee that they do not have your trust.

While it’s tempting to blame problems on a lack of drive on the part of the employee, in my experience responsibility actually breeds motivation. The majority of workers desire to do well in their endeavors, and will raise their level of performance to meet higher expectations.

The secret is that the delegation of authority must be performed in a way where the employee is held accountable to the level of expectations. When a project is turned in with sub-par results, the manager should explain where their work is lacking and have them fix what’s wrong, rather than the manager allowing it to boomerang back to them to fix or complete.

Good management is in many ways a teaching process, and that takes time and patience. By omitting the learning experience that comes with timely feedback and accountability, a supervisor is only setting the employee up for more failure.

I believe that when employees know they are solely responsible for the delegated project and that you’re depending on them to deliver at a commensurate level and on a timely basis, they will become more motivated to meet those expectations.

If you really want to motivate your staff, you should delegate liberally, providing clearly defined expectations and giving employees the autonomy they need to complete a task. And let them know they’ll be held accountable to that prescribed high standard.

The only way to build a capable and qualified staff that will help your company grow is by investing your trust in them, so managers feel comfortable delegating important duties, and employees are properly motivated to deliver polished returns.

In the end, you’ll find you have a stronger team of employees, a less frustrated manager, and a culture of coaching that workers will pass on as they move up the chain.

If we can assist you with achieving success in your business or personal affairs, please contact Tom Sponsel at (317) 608-6691 or email [email protected].

What Does Growth Look Like?

By Lisa Purichia
Partner, Director of Entrepreneurial Services

You’ve no doubt heard the old business adage, “If you’re not growing, you’re dying.” With the passage of tax reform, most experts say the outlook for improved growth is positive. When business leaders are more optimistic, they start making plans to grow their companies.

But what do we really mean when we say that? In other words, what does growth look like?

The most common meaning refers to growing revenue and profitability, or employees and locations. But positive growth doesn’t just mean expanding your bottom line or your roster. It can mean any number of ways to improve your organization’s processes and capabilities, as well as its reach.

For example, infiltrations into private data are now a constant threat. (For a good example, see the article below on the Meltdown vulnerability.) One form of growth would be to expand and improve your company’s technology and computer systems so it’s less prone to hacking.

Growth can also refer to increasing the skillset of your team, starting with the business leader. If you’re the owner or manager of a company, ask yourself if you have grown in your leadership skills. Have your coaching skills improved? Can you think of ways you can better apply technology to serve your customers? Do colleagues and employees viewing you as providing the right kind of leadership the organization needs?

Take a look at your interpersonal skills, and question if there is room for growth. Do you fully recognize your strength and weaknesses, and know how to best leverage those with employees, clients, stakeholders and everyone else important to the company’s success?

Another way to grow your organization is to look at the rules, regulations and best practices that pertain to your industry, to see if your business is up to competing in the marketplace. If the business environment has changed, do you need to bring your team up to speed? For example, the public accounting profession has largely moved away from paper records to digital ones.

If entering your office feels like walking back in time 20 years compared to your competitors, it’s time to grow your technological capability. Think about rotating in new computers, copiers and other equipment used on a daily basis. Is your workspace ergonomically suitable to attract and retain the best talent?

Are you making it as easy as possible for people to do business with you? For example, many companies use electronic signatures today instead of paper documents. If you’re making your customers physically mail in or fax their paperwork, your company is behind the curve. Look for growth in processes and procedures that can improve efficiency and make it simpler for clients to conduct business.

As you’re talking about what kind of growth your organization will pursue, include all your important stakeholders in the conversation – clients, vendors, employees, business partners, etc. People prefer to work with a company that is a growing, up-to-date enterprise. Top employees seek to work in such a place.

As you’re thinking about growing the company, make sure it is the type of growth that is responsive to the needs of those you serve. Sometimes bigger is better, but it’s also wise to grow your business’ capabilities. That can then lay the path forward toward a “better BIGGER!”

When you are experiencing the right kind of growth, your company will be one that people seek out to do business with, rather than one they run away from.

If you need advice on how to best grow your organization, please contact Lisa Purichia at (317) 608-6693 or email [email protected].

Employee Spotlight: Mary Ferguson

As a Manager in the Entrepreneurial Services department, Mary Ferguson has a wealth of experience helping clients with their internal accounting and bookkeeping needs. She is a QuickBooks Desktop and QuickBooks Online Certified Pro Advisor who helps businesses and organizations with the setup, installation and training of QuickBooks.

Mary also provides payroll processing, Family Office services, bookkeeping on loan services and financial statement review and analysis. She has a bachelor’s degree in business and accounting from IUPUI, having grown up in Indianapolis and attended school here, including Forest Manor Middle School and Arlington High School (which will become a middle school next year).

Like a number of other Sponsel CPA Group employees, Mary joined the firm at its inception, and has watched the company grow, helping foster new talent and expand the organization’s capabilities.

Mary has been married for 34 years to Stan, and together they have two sons, Pleas and Zachary, and one granddaughter, Tierra Renee. Their son Zachary and his wife, Brittany, married last June and are expecting a baby boy in January. In her spare time, Mary enjoys sewing, walking and serving on the board of the Greater Gethsemane Missionary Baptist Church Summer Youth Academy (SYA).

Have You Recommended a Good Book Lately?

By Lisa Purichia
Partner, Director of Entrepreneurial Services

Anyone who has or desires a leadership position within a business should have a strong motivation for self-improvement, both for the good of the organization and their own sense of personal ambition.

If you look at the traits of successful people, you will find several common themes: curiosity about things going on in the world and their immediate community; an attention to developments within their chosen industry/profession; a desire to improve themselves and their relationships. They’re also the type of personality that seeks out ways to further these goals, including reading self-improvement books and articles.

Think about your own reading habits: have your read – or recommended to someone else – a good book lately?

The “self-help” genre of nonfiction writing started as a venue for people to work on their interpersonal relationships, especially romance. But writers and readers quickly grasped the potential to assist businesspersons in how to envision, map out and reach their professional aspirations.

No matter what issues a person is dealing with – retirement, succession planning, investments, new ventures or products, communication, general leadership style – there are plenty of great books out there that can speak to them.

With the press of time, it can be a challenge to sit down and read a book, so look for little gaps in your schedule where you can consume self-improvement advice on your own schedule. Going to be spending a few hours on a plane? Have some downtime before that out-of-town business meeting? Going on vacation? Keep a good book handy for whenever you have time to spare, even if it’s a few minutes.

If you read a book you found personally helpful, it’s an excellent gesture to pass along a copy to a friend or colleague you think they could benefit from the information. Make sure to frame it as “this might help you” rather than “you have a problem,” and you will find most people are receptive to the gift of a book.

Between customer and client, peer to peer or boss to employee, recommending a book can be a form of knowledge-sharing that helps cement the relationship. It shows that you care enough about them to seek ways for them to become stronger and more successful in their current role, or even assist them in moving on to the next big thing in their life.

People can come to feel isolated by the myriad challenges of daily living. Often, we believe we’re the only one we know dealing with a particular problem. Offering someone a book that addresses that topic not only gives them possible answers to their questions, it can help enhance their relationship to the giver. You are actively demonstrating that you CARE!!!

So whether hardcover, paperback or electronic, pick up a good business book – and pass one along.

In that spirit, here are a few books I’d like to recommend:

“The New Retirementality” by Mitch Anthony – For those contemplating retirement.
“Thanks for the Feedback” by Douglas Stone and Sheila Heen – On how to accept criticism/advice and put it to good use.
“The 21 Irrefutable Laws of Leadership” by John Maxwell – Insights on leadership from a 40-year veteran.

If you have any questions or comments, please contact Lisa Purichia at (317) 608-6693 or email [email protected].

Woehler named Senior by Sponsel CPA Group

Aimee Woehler has been promoted to Senior accountant by Sponsel CPA Group, the company announced. She joined the firm’s Entrepreneurial Services department in 2014.

“Aimee’s expertise and devotion to meeting clients’ needs has been a real asset for the company,” said Lisa Purichia, Partner and Director of Entrepreneurial Services. “Sponsel CPA Group prides itself on offering a range of outsourcing services to help businesses and individual entrepreneurs focus on their core mission.”

In addition to public accounting, Woehler has an extensive background in the not-for-profit sector. She holds a bachelor’s degree in accounting from Clemson University. Her duties include setting up QuickBooks for clients and training their personnel in its use, plus handling payroll processing, quarterly payroll returns and monthly bookkeeping services.

Do I Need a Personal Coach?

By Lisa Purichia
Partner, Director of Entrepreneurial Services

If you’re the owner of a business, you probably have experienced times where it felt like the people who work for you expect you to know everything about every single aspect of the operation. But everyone has gaps in their knowledge and experience. The best managers not only recognize their shortcomings, they take steps to address them and fill in those holes.

It doesn’t matter how you came into ownership of your company – whether it’s a family-owned enterprise where you watched previous generations run it, you bought into the business or started it yourself and watched it grow. And no matter what fancy title you wear – President, CEO, etc. – everyone has areas of leadership they need to work on.

Once you’ve acknowledged the need to improve and have identified the areas where you need to be more proficient, the question becomes one of how to go about attaining those skills. Some people consume books on leadership development, or even biographies of noted business leaders.

One method growing in popularity is to invest in a personal coach. This is an expert you contract with, generally on your own time and your own dime, who gives you confidential advice and counsel on how to improve yourself as a professional. They point you to educational opportunities and help you keep on track with timelines, goals and milestones.

In short, a personal coach can help you formulate a path to individual excellence.

This is a route that more and more people are taking, from partners at the biggest law firms to middle managers in smaller enterprises. They’re seeking out an individual professional resource to make themselves better, and in turn make their businesses more successful.

A personal coach, also known as an executive coach, is someone outside of the business who can offer a fresh perspective and assess your personal needs and resources. This can extend beyond purely company-related concerns to tangential areas like your personal and social life.

Though the choice of scope is yours, oftentimes a deficiency you’re experiencing – such as trouble communicating your needs — can bleed through all aspects of your life. An outsider’s perspective can help you see where imbalances lie in your personal and professional endeavors.

As a leader, it can be easy to become distracted and unable to see if we’re doing well or not, because we’re in the middle of a swamp known as the day-to-day operations of an organization. It may well be that you’re doing a great job, but feel overwhelmed and lacking the feeling of success. It can also be there are areas where you’re falling down on the job, and are failing to acknowledge them.

Most assessments by a personal coach will show that the executive is doing pretty well overall, but identify specific areas that need to improve. I know of several business colleagues who have utilized a personal coach, and they say it really helped them be more effective at what they want to do.

A personal coach may not be for everyone. But if you find yourself struggling to meet goals that you have set for yourself, or feel overcome by the daily grind of leadership, consider the services of a personal/executive coach to help yourself improve on an overall basis. The disciplined approach to a personal improvement plan, facilitated by a personal coach, may let you realize the passion and fulfillment you thought had disappeared!

Your team members may think you know it all, but any good business owner/manager realizes it isn’t so. It takes a humble person to admit their faults, and it takes dedication to develop a plan to improve your skillset. If you’re one of those people who strives for ways to improve themselves, a personal coach can be a wise investment in pursuit of your personal happiness.

If you have any questions or comments, please contact Lisa Purichia at (317) 608-6693 or email [email protected].

CEO, Where Is Your Time Best Spent? Part 2

By Lisa M. Purichia
Partner, Director of Entrepreneurial Services & Employee Benefit Plan Services

(Part 2 of 2)

In last month’s article, we talked about why it’s important for the leader of an organization to regularly set aside time to think about strategy, rather than getting caught in the weeds of the daily grind. Now let’s drill down a little deeper into how you can drive your business, rather than having your business drive you.

One of your primary goals as CEO (or whatever title you have) is to make sure the organization runs as smoothly as possible while laying down a firm foundation for success. Ideally you will have instituted processes and procedures to the point the company operates almost automatically, without the need for a lot of direct supervision and input from above.

The idea is that if a key position was suddenly vacant for any reason, a new person could walk in the door, pick up a binder or boot up a computer, and have things continue without serious turbulence.

This can be a challenge for small businesses, which often don’t have the time, resources, or personnel to document everything needed to run the show. But if you at least have adequate processes and procedures in place, the trains will run on time without a lot of workday oversight — time that can be better spent strategizing about how to grow or improve the business.

A leader must promote a culture of accountability in their organization that seeps down to the most junior level employee. This includes making sure commitments are met, that internal and external projects are completed on time, and that the outcome is what was anticipated when they were initiated. Individual Team members know they can depend on their colleagues to deliver as promised.

When this happens, employees know what the standards of operation are and hold their peers to account. Everyone should feel they have the initiative to say to anyone else in the organization, “This just isn’t good enough” or “That’s not how we do things around here.”

Another thing a CEO should spend time on is thinking specifically about a timeline for enhancement. Where do you want the company to be one, three, or five years hence? Is there a new product or service you want to debut? A key client you want to land? A form of accreditation you want to obtain for yourself or team members? Are you innovative enough?

Whatever your goals are, constantly ask yourself how well you are progressing along the path toward them. Make precise plans with benchmarks to achieve and a calendar for doing so. This will help you decide how to reallocate resources to best achieve those goals. Perhaps you need to invest more in research and development, or spend more time talking directly to your customers to determine what their anticipated needs might be and how you could meet them. Your customers must know you personally care about your company’s relationship with them.

Regularly assess your personnel to decide if people are placed in the right positions. Talk to them about their personal goals and aspirations, and try to maximize the value of each and every employee. Look for ways to upgrade their skillset and confidence, and you’ll find they are ready and willing to shoulder more responsibility.

No matter how well your business is doing right now, it can always be better. The best companies are constantly assessing their processes and procedures, and changing them to suit the constant evolution of the organization.

Try to avoid having your company become too bureaucratic, where the controls hinder your ability to be nimble, flexible and responsive to customers in an entrepreneurial manner. The emphasis should always be on having systems in place that allow you to deliver a product or service efficiently and effectively. Empower your staff with the autonomy to exceed your customer’s expectations.

If a CEO or other leader can regularly devote time to thinking in these terms, you will find yourself well on the way to becoming a better and more profitable company, where everyone enjoys great job satisfaction because they’re functioning as a cohesive team.

If you need advice on how to more effectively drive your business, please contact Lisa Purichia at (317) 608-6693 or email [email protected].

Be Ready for Earlier W-2 and 1099 Deadlines

By Mary Ferguson, QuickBooks Certified Pro Advisor
Manager, Entrepreneurial Services

As businesses prepare for the holiday rush as well as year-end payroll and planning, many people may not be aware that the Internal Revenue Service has instituted earlier filing deadlines for W-2 and 1099 forms.

Beginning with the 2016 forms (those filed in 2017), Form W-2 and Form 1099-MISC reporting wages for employees and non-employee compensation, respectively, must be filed with the Social Security Administration or IRS by January 31.

Previously the deadline had been February 28 (or March 31 for electronic filing). So this will require some foresight and planning by employers and small businesses.

Copies must still be provided to employees and payees by January 31 – so the deadlines for reporting to the government and to employees now coincide. Also, beginning with the 2016 forms, only one 30-day extension to file Form W-2 will be available, and the extension is not automatic.

These changes came as a result of the PATH Act aimed at helping the IRS verify the legitimacy of tax refunds before issuing them.

If you have any questions about IRS filing deadlines, please call Mary Ferguson in our Entrepreneurial Services department at (317) 613-7847 or email [email protected].

Employee Spotlight – Lisa Purichia

Lisa Purichia is an original founding member of Sponsel CPA Group, joining Tom Sponsel and (then) two other partners in launching a new kind of accounting firm focused on helping clients find and achieve their own definition of success. She has deep connections in the Central Indiana business community spanning a quarter-century and multiple industries.

As Partner and Director of Entrepreneurial Services, Lisa provides executive-level consulting and advice, especially for new businesses and consolidations. She assists individuals with succession planning and frequently acts as an outsourced CFO/Controller for small to medium businesses. She also oversees implementing and maintaining strategic human resources services, including recruiting and benefit plans.

Lisa earned her bachelor’s degree in accounting from Indiana State University, and rose up the ranks at other area public accounting firms. She is an active member of her church, St. Christopher Catholic, and volunteers with a number of community and civic groups including the Speedway Area Chamber of Commerce, Speedway Kiwanis Club, the National Association of Women Business Owners, Athena Powerlink® and more.

Lisa and her husband, Mark, are avid Indy Car race fans and often travel to regional races throughout the year, in addition to attending every Indy 500 race, event and activity. They have two Labrador retrievers, Enzo and Timo. In her spare time she enjoys traveling, reading, spending time with her nieces, nephews and other family, and getting some sun at the beach.

Employers Need to Adapt to New Overtime Rules

By Lisa Purichia, Partner and Director of Entrepreneurial Services, Sponsel CPA Group and Stephanie Cassman, Employment Attorney, Lewis Wagner LLP

By now most employers are aware of changes in the U.S. Department of Labor’s (DOL) rule changes on overtime exemptions, which go into effect Dec. 1. If you don’t already have a plan of action for how your organization is going to adapt, it’s time to be proactive.

Many workers may still not be aware of the details of the change, which nearly doubles the threshold for exempt salaried employees to $47,476. Non-exempt workers must be paid overtime wages at time-and-a-half of their hourly rate for anything above 40 hours per week.

By substantially increasing the threshold, this means millions more employees will become eligible for overtime – and companies could be on the hook for a significant financial outlay. The impact could disproportionally affect small and medium businesses.

Employers have several ways they can respond to the change. They can find ways to offset paying the additional overtime. They could eliminate positions. They can convert hourly workers into salaried ones, or vice versa. They can reduce hours worked to avoid paying overtime. Or they can increase the salary of anyone under the new threshold up to that level.

The most important thing to do right away is conduct a thorough audit of every single employee in your organization. Look at their pay, number of hours worked and duties. If a salaried employee under the new threshold is already working lots of overtime, it may make more financial sense to give them a pay raise.

One smart move to make is to have all employee start tracking hours worked. There are plenty of software options to help do this. You may encounter questions or resistance from your team – especially those members who are currently salaried. They may enjoy the status of not having to “punch a clock” and preserving flexibility in their schedule.

Explain to them that the federal rules affecting overtime are changing, so your operation must change, too.

But it’s about more than just hours worked. There is another test for overtime exemption that is equally important but has garnered less notice.

The Fair Labor Standards Act addresses the “white collar” exemption from overtime rules, and describes what sort of duties the employee must perform to qualify. This includes administrative, professional, managerial, executive, computer and highly compensated workers.

It’s not enough to just give someone a title with the word “manager” in it. To be exempt, a manager must be shown to exercise discretion and a degree of autonomy, supervising other employees.

If employees do not meet the duties test, they are still eligible for overtime regardless of how high their salaries may be.

It may be possible to pay at least a portion of overtime as a quarterly or end-of-year bonus, as long as it is not considered discretionary. This mostly affects highly compensated employees, which previously had been defined as $100,000 per year, but will rise to $134,000 after December 1, 2016.

The stakes are very high. Since this change was made by presidential executive order with little public discussion, it’s unclear how tightly federal officials will enforce the new rules starting Dec. 1, i.e., if there will be a grace period. The smartest move is to assume there will not be, as the penalties incurred can be quite large.

If the DOL does receive a complaint from an employee, it’s likely they will investigate not just that person’s exemption status but examine the entire workforce. They will want to look at hourly data and job duties to justify exemptions. As the employer, the onus is upon you to be able to back up an exemption claim with facts.

Under the new rules, a violation of overtime rules means the company must pay double the wages owed, plus attorney’s fees. So even a failure to pay a few hours of overtime could translate into a very large bill.

After Dec. 1, there may be changes or reform of the new overtime rules. Until then, our advice is to follow the letter of the law.

Pay every bit of overtime owed, and ensure that exempt workers truly belong in that classification. You may need to adjust the compensation policy for many of your employees to find the most cost-effective solution.

If you have any questions or need assistance in formulating a plan to adapt to the new overtime rules, please do not hesitate to ask.

Lisa Purichia can be reached at [email protected]. Stephanie Cassman can be reached at [email protected].

Client Profile: Prime Car Wash

It’s great to be in an expanding business, but growth brings its own set of challenges. For Prime Car Wash, that meant juggling associated companies for each of their locations, dealing with complex financial issues and adding health benefits for their growing work force.

When your company is on the move, you need a partner that moves as quickly as you do. So Chris Galloway and his two partners turned to Sponsel CPA Group for help.

Prime Car Wash opened their first Indianapolis location in August 2012 and have since added two more. Galloway, who is CFO along with co-owner, says they’re on track to open another two by next summer – and their ambitions go further. “We’re not just limiting ourselves to Indianapolis. If we find good spots, we’ll go after them,” he said.

A chiropractor by training who still practices, Galloway joined with his medical partner and a sales veteran to dream up a new kind of car wash. In addition to a high-end conveyor wash and bays, they offer “express details” in around 30 minutes that clean every nook and cranny of the car, even leather seat treatments and carpet shampoo. Customers can pass the time in their in-house café.

Prime has also spearheaded the use of memberships, with nearly half of their business coming through monthly fees in exchange for unlimited washes. “We didn’t invent the membership system, but we brought it to the forefront of the Indianapolis market,” Galloway said.

Referred to Sponsel CPA Group by a vendor, Galloway and the other owners met with Partner Lisa Purichia and her Entrepreneurial Services team. They were impressed with the way Sponsel put together a package of services custom-tailored to their needs. Their bookkeeping, payroll and other needs are taken care of quickly and accurately. Coming from a medical background, Galloway often finds himself having questions on a particular financial issue – and needing an answer right away.

“With Sponsel I never feel like I’m a burden. I can access them by phone or email anytime,” he said. “We’re able to pivot quickly, and with a company that’s growing like ours that is very important. They do a great job for us.”

What the New Overtime Rules Mean for You

By Lisa M. Purichia
Partner, Director of Entrepreneurial Services & Employee Benefit Plan Services

Last month President Obama announced changes in overtime pay rules that could see more than 4 million U.S. workers become eligible for “time-and-a-half” wages who currently aren’t. And that means business owners are scrambling to see how the sudden shift will affect their payroll and bottom line.

Currently anyone who makes more than $23,660 a year is exempt. The Obama administration’s change roughly doubles that threshold to $47,476. Bonus payments can count toward the total. The rule change is set to take effect Dec. 1 of this year.

Overtime rules date back to the 1930s, requiring employers to pay 1½ times a worker’s regular salary when they exceed 40 hours of work in a single week. Overtime rules are also regulated by individual State Regulations, which do vary. Since their inception the rules have been gradually relaxed to exclude management and most salaried employees. Roughly 62 percent of full-time U.S. workers qualified for overtime pay in 1975, compared to just 7 percent today.

Many industries are cyclical, requiring long hours during crunch time and a more regular schedule during the offseason. I can certainly assure you that during the tax filing season, there isn’t a CPA in the land working less than 40 hours!

The White House estimates the rule change will raise wages by $1.2 billion over the next decade – which obviously means companies will have to come up with a way to pay for the increase, or adjust their business model to compensate.

The most likely outcome is businesses will reduce employees’ hours to avoid paying overtime. There is also concern among small business owners they will be burdened with increased paperwork and scheduling issues because they’ll have to more closely track working time. Salaried workers may be converted to hourly ones.

Retail stores and restaurants appear to be the industries most immediately impacted by the change.

Expect this to be a difficult and emotional transition for many impacted employees. That’s why it’s important to start analyzing how the new rule will affect your company, and develop a communication strategy to tell your workers how you’re going to implement it.

Many employees perceive being paid a salary instead of having to track their time worked as a preferred status. Others who are now paid hourly will resent being moved to a salaried position above the new threshold, perceiving their pay as being “capped” with a limitless demand on the number of hours they’re expected to work.

If you choose to raise the salary of some employees above the $47,476 threshold, this may produce “compression” with other job positions and pay scales. For instance, a manager may find herself earning the same or little more than the people she supervises.

The first thing you should do is undertake an audit of your workforce and make a list of currently exempt salaried employees who fall under the cap. Ensure the job descriptions of these positions are up to date – it would be advisable to do this for the entire organization.

Communicate the rule change to your employees and let them know you’re developing a plan for implementation. It would also be wise to have your Human Resources team (or provider) evaluate your entire benefits package to ensure rewards programs are meeting their objectives.

If you need advice on preparing your organization for the changes in overtime rules, we recommend you seek legal counsel with an attorney who specializes in employment and labor law.

If you do not currently have a relationship with such a resource, please contact Lisa Purichia at (317) 608-6693 or email [email protected] and we can refer you to names of attorneys who specialize in employment and labor law.

The Baby Boomer Challenge: Planning for Retirement

By Tom Sponsel, CPA/ABV, CFF
Managing Partner

(Part 1 of 4)

In 2016 the first wave of Baby Boomers turns 70. The youngest are already in their 50s. So if they have not already taken the off-ramp to retirement, they should already be thinking seriously about it.

This article is the first in a four-part series we’re calling The Baby Boomer Challenge. It’s a mental call-to-arms for the generation that helped change the world – as well as those who came after.

A group that has been defined by passion and a thirst for exploring new things should apply that same zeal toward planning their post-career life – financially and psychologically.

Whether you’re 50 or 70, you need to start thinking about the retirement you want while you’re still working. Talk to your spouse or significant other. Seek counsel from people you trust. Tap expert advisors! And start asking a lot of questions.

These should include:

When do I want to stop working? When does my spouse want me to stop?
Do I want to keep working, but not full-time?
What kind of lifestyle do I want post-retirement?
Where are we going to live? The same city or move elsewhere? Urban or Suburbia?
Do we want to downsize to a smaller place now that our homestead seems oversized?
If we do move, is it better to rent or buy? House or apartment?
What steps do I need to take to get ready for retirement?

For entrepreneurs or business owner/managers, it may well be that they don’t ever see themselves completely leaving the company. If you have good health and truly enjoy the work, there’s nothing to prevent you from continuing into your 70s or even 80s.

But maybe step away from a top leadership role. Talk with your business partners about coming in a day or two a week in a support or advisory role. You may find that your presence and experience is still a valued asset they want to retain. Can you allow yourself to participate without being “In Charge”?

If you are prepared to walk away entirely, changing where you live can help you make that mental “break” between your old life and the new – and may make good financial sense as well.

Many successful people already find themselves having a second home, whether it’s a house they own in Florida or Arizona, an apartment near children/grandkids or just a time-share in a popular vacation destination.

If that’s already the spot you go to relax and unwind, it may be the place where you should spend most of your time. If you do take the “snowbird” path of migrating with the seasons, consider whether it makes sense to maintain Indiana resident status or not.

Also consider any looming health and medical issues that may impact you or your loved ones’ lifestyle. Weigh how that might affect your retirement picture, such as needing to work longer and save more. Or, conversely, retiring early to lighten the physical and mental load.

As you’re hashing through these questions, make sure to talk to your extended family, too. Think about what you want to do in retirement – and what you don’t want to do. Some people want to travel the world. Others want to stay close to family.

Retirement is all about making choices. And the more prudent Baby Boomers invest in significant planning and they find that results in more choices for a successful retirement.

Look for next month’s article, which will focus on the financial aspects of retirement planning.

If you need advice on preparing for retirement, please contact Tom Sponsel at (317) 608-6691 or email [email protected].

How Much ‘Parenting’ Do Your Employees Need?

By Lisa Purichia
Partner, Director of Entrepreneurial Services

It’s not unusual for a manager or business owner to feel like a mom or dad to their employees. After all, they are generally younger than you, less experienced, and look to you for leadership and guidance. In turn, a good supervisor enjoys watching their workers grow professionally, build new skills, and acquire new capabilities and responsibilities.

So how much “parenting” should you provide to your employees when it comes to managing their own benefits and finances?

Many business owners feel justifiably proud of the benefits package they provide workers. Some feel that merely offering them should be the extent of their effort. But for younger employees, especially those just out of school, it might be wise to coach them to take better advantage of these benefits.

A surprising percentage of people in their 20s and even 30s do not participate in their company’s 401k program. They don’t fully grasp the idea of compounding interest or the automatic rate of return on an employer’s matching contribution — seeing any deduction on their paycheck as withering their ability to pay for their current “wants” after the living expenses, student loans, car payments, etc.

Not to mention their disposable income that can be applied to relaxing and partying. (C’mon, you remember your own 20s, right?)

When you first hire a new employee of any age, make sure to explain the benefits package and encourage them to participate. If you have current employees who have not yet signed up, sit them down for a friendly conversation.

Make them understand that any company match on a retirement plan is essentially “free money” that they’d be crazy to turn down. Tell them the sooner they start saving for their “someday,” the less they’ll have to contribute when they’re in their 40s and 50s.

It can be hard for someone who’s 23 to visualize being 53, so use personal experience and anecdotes (if you feel comfortable doing so) to illustrate potential missed opportunities for long term financial security.

Over time these employees will transition into homeowners, married couples and parents. If they make saving a habitual practice at a young age, they will have a larger degree of financial security in their personal lives. This will also translate into a more stable workforce with less stress on the home front related to financial responsibility.

You should also consider offering financial planning counseling to your employees – either through your own expertise or that of a vendor. Teach them the basics of making a household budget and living within it, the amount of savings (“Pay yourself FIRST”) they should be setting aside, contributions to a 401k or similar retirement plan. Lay out the benefits of a Health Savings Account (HSA) and encourage them to think like a consumer when securing healthcare services.

This can also extend to non-monetary benefits that your company may offer, such as wellness programs that help pay for gym memberships and such.

Of course, not every employee will heed your advice. And you don’t want to keep offering input if an individual worker has made it clear they’re not receptive. But you may find that young professionals who look to you for wisdom in business matters may be inclined to also listen to your word about personal financial affairs.

The benefit to you the business owner is that by fostering a culture in which people feel like the company is looking out for them in the long term, you will become an employer of choice. You’ll have a better record when it comes to retention and recruitment.

This is especially true of Millennials, who have consistently shown they want to work for businesses that view them as valued individuals.

By providing encouragement and stimulus, and helping employees take full advantage of the benefits package you offer, you will find yourself with a happier, motivated workforce that is much more inclined to stay with the company.

If you need any advice about guiding your employees’ benefits decisions, please call Lisa Purichia at (317) 608-6693 or email [email protected].

ACA Reporting and Extended Due Dates

By Lisa Purichia
Partner, Director of Entrepreneurial Services

At the end of 2015, the IRS and U.S. Treasury Department issued extensions on the due dates for Form 1095 reporting, which requires employers to furnish statements to employees on their healthcare plan coverage.

This is a provision of the Patient Protection and Affordable Care Act (ACA), also known as Obamacare, that goes into effect for the first time in 2016. Employers are required to provide the form to employees in written form by a date certain, and also file this form with the IRS, either electronically or hardcopy.

This applies to all employers with 50 or more full-time (or equivalent) employees during calendar year 2015, or are members of a controlled or affiliated service group that collectively has at least 50 full-time employees. It also applies to any size company that offers employer-sponsored self-insured coverage.

Because this is the first year they’re mandated to file, many businesses may not be aware of their reporting obligations, which are complex and may be confusing.

The deadline for providing form 1095-B or Form 1095-C to employees has been moved from Feb. 1 to March 31. For businesses filing electronically – either Form 1095-B, 1095-C, 1094-B or 1094-C — the deadline has been delayed from March 31 until June 30. For those businesses not filing electronically, the new deadline is May 31 (from Feb. 29).

The extended due dates could make it difficult for employees who may not receive the information in time to file their individual returns. The IRS is providing relief to these taxpayers by eliminating any requirement that they file amended returns, if they receive their Form 1095 after they have filed their own return. They should still retain the statement with their tax information.

As a result of these extensions for information returns, the normal provisions for requesting extended due dates for these forms will not apply. If an employer cannot meet the extended due dates, the IRS encourages them to file the returns anyway, and will take into account any reasonable attempts to comply — in determining whether to abate penalties.

Due to the complexity of these new requirements and the adjusted due dates, employers should be aware of their responsibilities under ACA so they are not subjected to any fines that could have easily been avoided. The IRS forms should only be prepared by someone knowledgeable with compliance and reporting aspects of the ACA requirements.

If your company would like help with filing Form 1095 or any other ACA compliance issue, please call Lisa Purichia at (317) 608-6693 or email [email protected] and I will refer you to professional resources who will be able to assist you.

Quick Tips for QuickBooks

QuickBooks is one of the most powerful and popular accounting software packages available today, and here at Sponsel CPA Group we assist many clients with installation, training and support for their business or organization.

It is a complicated program, and can be intimidating to uninitiated users. Fortunately, we have several staff members who are certified QuickBooks ProAdvisors, including myself.

We’ve put together a list of Frequently Asked Questions and answers to help with your company’s QuickBooks operations. These are commonly faced obstacles, so don’t feel bad if you stumble at first!

Q. Why is the beginning balance on the QuickBooks reconciliation different from my bank statement beginning balance?
A. It is the first time the account has been reconciled, or a previous reconciliation has been “undone.”

Q. Why can’t I use department codes (01, 02 etc.) when creating a chart of accounts?
A. It is best to utilize the “CLASS” option instead.

Q. Can I void/delete stale dated checks (from prior periods)?
A. No. Voiding and/or deleting them will zero the check out and change information on the financial statements. If the check is from a prior period, it is best to remove it by Journal Entry (JE).

Q. How do I import changes from the Accountant’s copy of QuickBooks into my QuickBooks?
A. File, View, Import Changes

Q. Why is there a need to have my closing date password protected and can I remove it?
A. QuickBooks does not use a hard close to zero out income and expense accounts from prior periods. Setting a password protects or restricts access so that changes cannot be made to a closed period.

Q. What are the advantages and benefits of using QuickBooks’ Online versus Desktop version?
A. You can access Online QuickBooks from any computer at any time; it is friendly for either Apple or PC systems; no backup is required; you can invite up to two accountants at no extra cost; and there is no software to install and keep up to date.

Q. What is the undeposited funds account and why is there a balance?
A. These are payments received from customers that have not yet been deposited. It is a “holding account” until a deposit entry is created.

Q. How do I write off payables that we are not going to collect?
A. By Journal Entry (JE). Credit Accounts Receivable: select an offsetting revenue account to debit. You will need to choose the customer’s name.

Q. When purchasing new vehicles or machinery, how do I enter it correctly?
A. If you utilize the Fixed Assets List, enter them on the ITEMS tab when writing the check. Otherwise, they can be entered using a Journal Entry (JE).

Q. Can I open an accounts transfer file in a newer version of QuickBooks for prior years?
A. Yes.

Q. Why is there a balance in the Accounts Receivable account on a cash basis Balance Sheet?
A. A deposit has been made but not linked to an invoice.

Q. Why can’t I see all of the columns on the input screen for Write Check?
A. Your computer’s resolution setting may need to be adjusted. Try 1440 x 900.

If you have any additional questions about QuickBooks, we are happy to help! Please call Mary Ferguson in our Entrepreneurial Services department at (317) 613-7847 or email [email protected].

What’s Keeping You Up at Night?

If you’re a business owner/manager, no doubt some of these thoughts have kept you up at night at some point:

Is the company lacking timely financial information?
What is the company’s cash position?
Do you continually receive excuses why monthly reports are not complete?
Are you concerned that your current controller might unexpectedly quit?
Are you working overtime on tasks that are unrelated to growing the business, such as determining what bills to pay, preparing for meetings with accountants, lawyers, bankers?
Are you worried about the direction of the business?
Are you concerned about the company’s gross margins and profits?
Do we need help for strategic planning?

If so, have you considered outsourcing the CFO or Controller for your business?

Quite often, small- to mid-size companies are unable to afford the cost of a full-time Chief Financial Officer. Outsourcing CFO services on a part-time basis is becoming an increasingly popular option. Outsourcing a part-time CFO allows many smaller and mid-sized companies access to expertise from a financial and operational perspective. Additionally, outsourcing eliminates the risk of hiring a CFO before your company has the resources to support it.

Outsourcing can be tailored to your individual circumstances or needs:

As needed basis — Retain a CFO on an as needed basis; it can be 8 hours/week or 3 days/ month.
Specific project or assignment basis — Engagement is complete once project is complete.
Interim basis — Temporarily fill CFO position until permanent CFO can be found.

At Sponsel CPA Group, we can provide your organization with an experienced CFO or Controller on an outsourced, part-time basis at a fraction of the cost of a full-time employee. We will work with you to determine the best fit for your organization.

What can our CFO/Controller services do for you?

Work on providing timely and accurate financial statements.
Evaluate the company’s internal controls and assist in implementing improved controls to help minimize the risk of fraud and embezzlement.
Assess processes and procedures in the accounting and finance department, i.e. “Are the right people in the right seats?”
Generate analysis reports using metrics relevant and useful to non-financial managers.
Create a dashboard of key financial and operating information for CEO and staff, tailored to the company’s unique business drivers and financial indicators.
Develop a 90 to 180 day rolling cash forecast.
Prepare financial projections.
Find and negotiate financing as needed.
Help manage working capital.
Develop an annual budget.
Evaluate current results against budget.
Select and implement accounting software.
Coordinate audits.

Think about what is keeping you from growing your business – about the things that are keeping you up at night, and how to obtain peace of mind. Perhaps outsourcing your CFO/Controller is the right move for you.

CFO Services a Good Fit for Growing Companies

It’s good to be growing – something we know well here at Sponsel CPA Group. But growth also brings challenges to a company, particularly when it comes to managing finances and keeping the books properly.

That’s why we offer CFO Services; to help striving businesses keep their financial picture in clear focus. Essentially, they can outsource as much or as little of this function as they want so they can put their maximum effort toward keeping their business on a growth track.

Unlike some other accounting firms that offer only standard packages for financial management, Sponsel CPA Group custom tailors our CFO Services to fit each individual client. Some companies keep the bookkeeping function in-house but rely upon us for financial reporting and oversight. Others wish to outsource their entire accounting function.

Speaking broadly, though, clients who find a need for these services fall into three general growth stages.

The first is the startup company that is still establishing itself in the marketplace. In most cases, the lead entrepreneur was handling the books themselves. Now the cash is beginning to flow and they need an improved system for understanding their financial condition.

In this case, we would typically help establish a system for filing accounts payable and receivables, and put in a system of prudent financial management procedures. We can help set them up with QuickBooks or expand their knowledge of how to use QuickBooks, for everything from billing invoices to printing disbursement checks.

Next is the established company that needs more rigorous financial oversight, but doesn’t yet have the revenues to justify hiring a full-time controller. Our team can come in to assess the accounting function and the employees performing it. We would make suggestions for changes and could then effectively manage the client’s accounting department going forward.

Here we’re trying to enhance functionality and increase productivity. Typical things include using remote capture for incoming checks rather than physically running them over to the bank, paying employees via direct deposit, and streamlining financial reporting.

Finally there are small- to medium-sized businesses that need detailed analysis of their expenditures and revenue sources. Here we can provide a “CFO for hire” who physically comes to your workplace on a regular basis to oversee the accounting function and provide executive-level counsel to the business owner(s).

In this case, the business owner often has expertise in areas other than accounting – marketing, sales, technical – and prefers to hand off financial management to a trusted partner. We can provide all the benefits of a CFO without having to expand the “C-Suite” of executives.

Our team is quite experienced at handling outsourced CFO Services, and would be happy to provide a more detailed picture of how we could assist your growing company.

If you’d like to know more about how our CFO services can be customized to your organization, call Lisa Purichia at (317) 608-6693 or email [email protected].

How to Recognize and Utilize Teaching Moments

In the CPA profession, it’s well recognized that February through April is by far our busiest time of year as tax filing deadlines approach. But the lesson we try to impart from this challenge can transfer to any type of business: don’t let the press and stress of everyday business get in the way of teaching moments for your team. Make the time to enhance your staff’s performance.

Here at Sponsel CPA Group, we endeavor to hold one another accountable, from partners to the newest staff member. As a manager, you have to realize that the most stressful times are also those with the most opportunities for teachable moments.

Too often the only feedback an employee receives is negative. We try to focus on both positive and negative behaviors for teaching. Don’t miss a chance to praise a worker for a job well done, and help them understand how hitting their mark helps everyone around them.

The somewhat tongue-in-cheek shorthand we use is, “Catching an employee in the act of doing something right.” Especially with Millennial generation workers, that positive affirmation will go a long way in encouraging them to continue to improve.

It will also help them react more appropriately when mistakes do occur. Because the truth is blunders will always happen in any human endeavor. The key is to catch them before they’ve done real damage, and learn from them so they are not repeated.

In this scenario, sit down with the employee and discuss their mistake in the greater context of the company’s mission. For example, if a report is prepared improperly and others use that for their work product, everything down the line will be faulty, too. Focus on opportunities to enhance your quality of service and thus enhance relationships with clients.

There really are two kinds of mistakes: those that are caught internally, aka ones that don’t “get out the door,” and errors detected when the product or service has been delivered to the client. Though the latter is obviously more damaging, it also presents a chance to interface directly with a client and reinforce significant customer service.

In our experience, a client is more willing to forgive a mistake when you acknowledge it and present a timely plan to correct the problem. Be proactive, and set your automatic response to be leaving every client satisfied. Empower your staff with this autonomy and responsibility to do so.

Acknowledge to your client that you’re aware you didn’t meet expectations, and solicit their ideas for improvement. In most client discussions, you should do 80% of the listening and 20% of the talking. It can be as simple as asking, “How can we do better?” Open-ended questions require a narrative explanation.

When things are busy and the stakes are high, leaders should strive to function effectively under stress, and pass those lessons on to those they manage. Your employees will take their cue on the appropriate behavior from you, especially when mistakes occur, and how the firm’s culture defines the appropriate remedy.

Don’t be the “road rage” type of leader who flies off the handle when the chips are down. Keep a check on your emotions, and share your thinking and goals with those below you in the hierarchy. You’ll be rewarded with increased efficiency and loyalty. Your actions will always be more impactful than the spoken word — especially in stressful times.

Your staff wants to respect the leader who is knowledgeable in a crisis and decisive with an appropriate course of action.

If you need advice on getting the most out of your team, call Lisa Purichia at (317) 608-6693 or email [email protected]

Sponsel CPA Group adds Woehler

Sponsel CPA Group is pleased to announce the addition of Aimee Woehler as a Staff accountant in the Entrepreneurial Services department. A graduate of Clemson University with a bachelor’s degree in accounting, she has extensive experience from the not-for-profit sector.

Her duties will include assisting clients with setting up Quickbooks and training their personnel in its use. Woehler also will provide financial statement review and analysis, prepare individual and corporate tax returns, and handle payroll processing and bookkeeping on loan services and Family Office Services.

“Aimee’s background in nonprofits and experience working with a variety of clients will be a huge boon to our firm,” said Lisa Purichia, Partner and Director of Entrepreneurial Services. “Sponsel CPA Group is continuing to offer more and more services to businesses and organizations who wish to outsource some or all of their accounting needs.”

Jackson joins Sponsel CPA Group

Tanika Jackson has joined Sponsel CPA Group as a Staff accountant in the Entrepreneurial Services department. An experienced accountant who previously worked in the organized labor field, Jackson will provide bookkeeping and accounting services to clients across a wide spectrum of industries.

Jackson holds associate and bachelor’s degrees in accounting from Knoxville Business College and Tennessee Wesleyan College, respectively.

“More companies are looking to outsource some or all of their accounting functions in order to focus on their core business plan,” said Lisa Purichia, Partner and Director of Entrepreneurial Services. “Sponsel CPA Group is stocking up on talent to meet those needs, and Tanika’s experience and knowledge will be a key asset in servicing those clients.”

Leaders: How Sharp is Your Saw?

In Steve Covey’s seminal book “7 Habits of Highly Effective People,” there is a chapter that refers to “sharpening your saw.” It tells of a lumberjack who is trying to cut a large tree, and not making much progress because the dull saw is not very effective. Someone tells him he should stop and sharpen the blade to expedite his task, but he believes the time lost stopping to sharpen the blade will prevent him from completing the task in a timely manner.

Unfortunately, a lot of leaders in business reflect the beliefs of the short-sighted lumberjack.

They spend too little time in their own professional development: learning new skills, new approaches, new technologies or analyzing the changing trends in their respective industry. They immerse themselves in their day-to-day operations, dealing with the same problems and challenges without ever stopping and evaluating the situation to investigate a possible improved process or procedure.

Remember the definition of insanity: utilizing the same failed process or procedure over and over, but expecting a different result!

As a leader of your enterprise or organization, how much personal improvement time (as in hours) do you budget for yourself and your top managers each year? How many dollars did you allocate to improve your personal skills or for your management team to attend outside educational resources?

As Indiana CPAs, we are required to attend a minimum of 120 hours of continuing professional education every three years in order to maintain our licenses. What do you require of yourself and staff to maintain their competence? Their skills? Their value to your business?

Our business environments exist in a sea of constant change, and that condition will only grow more turbulent in the future. We must endeavor to commit our organization to a strategy of continued learning and improvement, and imbed the concept of adapting to our changing industries as a critical requisite component to the success of our operations.

There is a cliché that states: If you are not growing … you are dying! As leaders, we must commit ourselves and our organizations to self-improvement, adapting to changing environments and, most importantly, enhancing our human capital – our most critical asset.

I would challenge you that if you look back over the past 12 months and you cannot list at least five actions where you attempted a new approach, attended a class or broadened your insights into your company – are you any different than the short-sighted lumberjack?

Growth is not always measured in revenue dollars, but rather growth in capabilities, growth in talent, growth in the frequency of trying new approaches, products or services. If you do those effectively, the growth in revenue dollars and growth in net income will result.

So, as a leader, whether that be your company, your department or your personal efforts – commit yourself to continue learning by budgeting for it and planning to make it happen. Do it now! Do not procrastinate.

As a leader, challenge yourself to set a higher standard. If you are successful in demonstrating a commitment to continuous improvement, you will find your leadership infectious; and that is a positive attribute.

If you need advice on how to sharpen your company’s saw, call Lisa Purichia at (317) 608-6693 or email [email protected].

Purichia featured on RTV6

Partner and Director of Entrepreneurial Services Lisa Purichia was recently featured in a segment on RTV6 about her work with the National Association of Women Business Owners (NAWBO). The group has launched the Young Entrepreneur Academy (YEA), which Purichia chairs, to provide middle and high school students with the knowledge and skills to become entrepreneurs.

Click here to watch.

Outsourcing CFO Functions an Attractive Option

Many businesses today struggle with whether or not to hire a Chief Financial Officer and perform their accounting functions in-house. And it’s not just small companies – medium and even large businesses sometimes find that ensuring proper financial reporting, supported by prudent accounting systems, is just beyond their abilities.

A growing trend is to outsource CFO/accounting functions to a third party. In the past, this has commonly been done on an interim basis – such as when a company is looking for a new CFO, or the business hasn’t grown enough to support such a position. Essentially, it was seen as a Band-Aid approach.

But more and more, businesses are finding outsourced CFO functions to be a permanent solution to their accounting and financial reporting needs.

Outsourcing can come in many different forms. Some companies may keep their own CFO on staff but delegate the nuts-and-bolts bookkeeping work to a CPA firm. Others may have an accounting department, but look to someone else for management and oversight. And some prefer to have all their accounting and financial reporting responsibilities handled by an independent party.

Here are some common circumstances in which outsourcing is used:

The company lacks the ability to hire and retain a qualified CFO.
A business has outgrown its bookkeeper and needs controller-level oversight, but isn’t yet big enough to fund a full-time CFO position.
The previous CFO leaves employment, and while the search is ongoing for a permanent replacement, they need someone to stabilize their accounting functions for several months.
The business wants to outsource its entire accounting needs.

In the latter scenario, companies generally want turnkey solutions that take the entire accounting burden off the plate of the CEO or other senior management, so they can focus on things more warranted by current business demands — such as sales, production, marketing, etc.

As a resource many of our clients have turned to for this executive-level service, Sponsel CPA Group can put together a highly customizable package of services responsive to the needs of the company, including facilitating financial reporting requirements. In most cases, fees are billed on an hourly basis using a monthly retainer system based on an agreed-upon scope of services.

The benefits of this approach are obvious. Management is rid of the responsibility for meeting financial deadlines in favor of a third party, allowing them to concentrate onmore critical endeavors to build on their success. They know they can pick up the phone and hold one person accountable for all their bookkeeping and financial reporting needs. The working relationship with the outsourced accounting firm is strengthened, lending trust for any other types of engagements.

It should be noted that when a CPA firm is providing outsourced CFO functions for a client, ethics rules prohibit them from performing attest functions such as audits or reviews of financial statements, since these services must be executed by an independent CPA.

Once a stopgap solution, more and more companies of varying sizes are finding that outsourced CFO/accounting functions are a fruitful arrangement that fits their needs on a permanent basis.

If we can assist you with outsourcing some or all of your company’s accounting functions, please contact Lisa Purichia at (317) 608-6693 or email [email protected].

Important Accounting Changes for Private Companies

The Financial Accounting Standards Board (FASB) has released two important updates that could change accounting for some private companies, and may potentially result in cost savings in their financial reporting.

The first update introduces an alternative accounting for goodwill, whereby private companies are permitted to amortize goodwill over a period up to 10 years. Prior to this update, goodwill could not be amortized under Generally Accepted Accounting Principles (GAAP).

The second allows an alternative accounting for certain interest-rate swap agreements entered into by private companies. This modification introduces the option to utilize a simplified hedge accounting approach as a substitute for the current standards.

Both of these updates are in response to calls for a modified set of accounting standards for privately held companies; both are elective. These alternative options are intended to reduce the complexity and cost burden some private companies felt was excessive under the current standards, without departing from accounting principles generally accepted in the United States.

Public companies, non-profits and employee benefit plans are not permitted to adopt these two accounting alternatives.

If you have questions about how these updates might apply to you, or whether adopting these alternative accounting policies can really reduce complexity and cost burdens for your private company, please contact Mike Bedel, Director of Audit & Assurance Services.

Compliance Reminder on Health Care Notices

Sponsel CPA Group would like to remind all of its clients about the October 1, 2013 deadline to give notice to employees about healthcare coverage options under the Patient Protection and Affordable Care Act (ACA or Obamacare). Even though the employer mandate has been delayed until 2015, most other provisions of healthcare reform will take effect as originally passed.

This notice requirement applies to all employers covered by the Fair Labor Standards Act (FLSA), even if the employer does not offer a health insurance plan to its employees.

Does FLSA apply to my company?
The FLSA applies to any employer engaged in interstate commerce that employs one or more people and has sales greater than $500,000 per year. It also covers hospitals, institutions primarily engaged in healthcare, schools and government agencies. The Department of Labor offers an online assessment tool to help determine if FLSA applies to your business: www.dol.gov/elaws/esa/flsa/scope/screen24.asp

Who should receive the notice?
FLSA-covered employers must provide a notice of coverage options to all current employees (full- or part-time). Employers are not required to provide a separate notice to dependents or any other non-employees covered or eligible for the health plan.

The notice should include:
The notice must inform employees of their coverage options and should include information about the new Health Insurance Marketplace, commonly known as state exchanges. The notice should include:

Services provided by the exchanges
Information on how an employee may be eligible for a premium tax credit if they purchase coverage through the exchange
A statement that if an employee purchases a plan through the exchange, they could lose their employer contribution to any health benefits offered by the employer
Contact information for the exchanges

A sample notice can be found here for companies that currently offer plans: http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf.

And go here for a sample notice for companies that do not offer plans: http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf.

What is the deadline to provide the notice?
The employer must provide the notice to all current employees (full- or part-time) by October 1, 2013. Any new employee hired on or after October 1, 2013 should receive the notice no later than 14 days after their start date. The notice must be in writing and can be delivered to the employee in one of three ways:

Hand delivered
First-class U.S. Mail
Electronic mail (but only if Department of Labor’s electronic disclosure safe harbor requirements are met (29 CFR 2520.104b-1(c))

If you need any assistance with healthcare compliance, please contact Lisa Purichia at (317) 608-6693 or [email protected].

Lisa Purichia tapped for NAWBO board

Lisa Purichia, a Sponsel CPA Group Partner and Director of Entrepreneurial Services, has been selected to the Board of Directors for the Indianapolis chapter of the National Association of Women Business Owners. Her term begins June 27.

Purichia has been an active member and volunteer for NAWBO, participating in various conferences and events in recent years. She is one of four founding partners at Sponsel CPA Group, where she leads the firm’s outreach to business innovators.

“This is such a tremendous honor, and I’m so humbled to join the board,” Purichia said. “More than 40 percent of privately-held businesses in the U.S. are now owned by women, thanks in no small part to the efforts of NAWBO. I pledge to help further their mission of promoting female entrepreneurship.”

Founded in 1975, NAWBO seeks to propel women entrepreneurs into economic, social and political spheres of power worldwide by promoting economic development and creating effective change in business culture.

Sponsel CPA Group welcomes Michele Wilson

Sponsel CPA Group has added Michele L. Wilson to its team as a Manager in the Entrepreneurial Services department.

She will provide CFO and Controller services for clients plus audit and assurances services, as well as tax and consulting services.

A graduate of Indiana University’s Kelly School of Business with a Bachelor of Science degree in Accounting, Wilson has nearly two decades of accounting experience working with a wide range of industries. She previously was Chief Financial Officer and Chief Compliance Officer for an Indianapolis investment management firm.

A CPA and CGMA, Wilson is a member of the American Institute of Certified Public Accountants (AICPA) and Indiana CPA Society (INCPAS).

“Recruiting a savvy veteran like Michele is a huge boon to our Entrepreneurial Services team,” said Managing Partner Thomas J. Sponsel. “She will bring executive-level experience and advice to our business clients.”

Inside Indiana Business Reports On Better Ways to Provide Accounting Services

As some of you may have seen over the weekend, I was a guest on Gerry Dick’s Inside Indiana Business TV show. First of all, let me say “thank you” to Gerry and his team for inviting me to be a guest.

Gerry asked me why I am not focused on retirement, why after over three decades in the business did I choose to launch a new company. The answer was quite simple – I knew there was a better and different way to provide accounting services. Please view the entire video and my interview with Gerry Dick.

Sponsel CPA Group, located in downtown Indianapolis, is one of the region’s most experienced full service accounting firms. Providing much more than traditional accounting services, Sponsel CPA Group specializes in Entrepreneurial Services, Auditing and Assurance, Valuation and Litigation, Mergers and Acquisitions, Tax Services, Financial Planning/Wealth Management , Employee Benefit Plan Administration and Technology Services.

More Than Bookkeeping: Visibility Into Your Financial Statements

I spend a great majority of my time reviewing and advising clients on the importance of having and maintaining strong, solid financial statements. The more I thought about it, I realized that many executives and management teams can’t fix what they can’t see. Often times executives don’t have a clear, complete “view” of their financial statements and their books leaving them extremely vulnerable. The more you know, the better you and your management team will be in making strategic decisions and capitalizing on opportunities.

Read my entire article in the Winter edition of the Indianapolis Chamber of Commerce’s magazine Catalyst.

Indianapolis Chamber of Commerce to Feature Article on Good Accounting Practices

Many executives use a balance sheet to guide their strategic business decisions and capitalize on opportunities. However, they may be missing more opportunities than finding new ones. As the director of the entrepreneurial services department, it is my responsibility to ensure clients understand and maximize the value of their balance sheet.

A balance sheet is merely a snapshot in time of assets and liabilities — it does not offer the level of detail or historic perspective necessary to gauge the business’ long-term financial health. By pairing a balance sheet with a strategically-developed chart of accounts and P&L statement, business leaders gain more visibility into the holistic performance and potential of the organization.

Watch for the complete article in the upcoming issue of Catalyst, published by the Indianapolis Chamber of Commerce. I’ll be sure to post it here too so check back in early 2010.

Our Entrepreneurial Services are Ideal for Businesses of All Sizes

As partner and director of entrepreneurial services, I am honored to be a member of this exciting team. Myself, along with Mary Ferguson and Tina Kelly, bring significant financial experience and business leadership to Sponsel CPA Group. In my role, I work directly with business owners and executives to provide consulting and entrepreneurial services. I partner with clients to develop and implement financial and business strategies, models and processes that enable them to become more scalable, efficient, productive and profitable.

To learn more about what the entrepreneurial services team can do to help you, schedule a consultation today.