April 2024 Newsletter

Busy season is behind us, so it’s time to forge ahead with repairing your company’s broken windows and building a personal financial statement.

Being Transparent Around Broken Windows

By Lisa Blankman, CPA
Senior Manager, Audit & Assurance Services
Email Lisa

The criminological theory of “broken windows” suggests that when people see a building with shattered glass, they may be tempted to destroy it entirely. As social scientists George L. Kelling and James Q. Wilson wrote: “If the windows are not repaired, the tendency is for vandals to break a few more windows. Eventually, they may even break into the building.”

So, how does this apply to you and your business? If you ignore your company’s flaws — its “broken windows” — more problems will spread throughout your entire operation. Your employees will be less confident in the company, and clients will take their business elsewhere — and they may trash you on their way out. This is why honesty is the best policy when giving your business a makeover. The windows are already shattered, so you might as well acknowledge why people threw bricks at them.

Before patching up its broken windows, Domino’s Pizza made its repair efforts more meaningful by validating its customers’ damaging complaints. The company launched the Pizza Turnaround campaign with a video featuring real customers criticizing the company’s “cardboard crust” and “ketchup-like sauce.” Domino’s took those comments into consideration and crafted better pizza with a new and improved recipe. By being transparent about its flaws and its efforts to win back customers, Domino’s shot to the top spot on the list of the most successful pizza chains in the world, where it remains to this day.

Another memorably public revamp was the redesign of Sonic the Hedgehog following the fan backlash after the video game character’s appearance in the first trailer for his big-screen debut. As this Wired article states, “Remaking computer-generated characters is an unprecedented step for any film studio,” but Paramount Pictures moved forward with the redesign. Despite adding on to the film’s budget and pushing back its release date, this work paid off, as Sonic fans flocked to theaters, making Sonic the Hedgehog one of the highest-grossing films of 2020. Filmmakers listened to moviegoers’ complaints and came out on top.

Like Paramount Pictures, Atlassian considers its customers’ feedback during the behind-the-scenes process of developing its project management tool, Trello. Atlassian’s public roadmap shows users which Trello features the company is working on, and its website publicly addresses common user concerns and issues.

As a user testing and research platform, Maze couldn’t really grow without transparency and open collaboration. It depends on users to contribute to its software development. As Maze’s VP of People, Culture and Experience April Hoffbauer said: “Transparency is central to how we work together at Maze. Since we are a fully distributed and remote team, over-communicating, documenting everything, approaching questions with humility, and remembering that we are human-first makes our asynchronous work possible. Sometimes a response of, ‘I don’t know, let’s figure it out together,’ is the best answer, and that honesty and internally-public discussion empowers folks across teams and time zones to join in the conversation any time.”

A vital part of successful transparency is embracing the humility Hoffbauer mentions in the statement above. While acknowledging customer complaints and admitting lack of knowledge may seem weak and risky, it’s also the best way for a company to truly grow. Businesses are fluid. When Domino’s fell down, it not only got back up, but it reached the top ranks of pizza chains. Your business can do the same!

If we can assist you further with achieving success in your business or personal affairs, please call us at (317) 608-6699 or email Lisa.

Building a Personal Financial Statement

By Christine Wong
Audit Staff
Email Christine

Since your taxes are paid and you probably still have your vital financial information handy, now is a good time to prepare a personal financial statement.

Avoiding this assessment of your personal financial condition may put you and your family at risk of financial instability, both for the short term and long term. You should analyze it and make sure your personal assets and level of liabilities are consistent with your goals and objectives. Oftentimes people don’t want to prepare a statement, as they are fearful of what it might tell them. You must face reality.

When working with clients to help build their personal financial statements we typically get asked two questions:

How far back in time should I go when gathering financial information? A personal financial statement should be your balance sheet as of a certain date. The balance sheet is a summary of what you own and what you owe. Once completed the personal financial statement will show your total assets, liabilities and net worth.

How is my net worth measured? The mathematical difference between your assets (what you own) and liabilities (debts you owe).

Assuming December 31, 2023 has been selected as the date of your personal financial statement, all statements and support should be as of that date, or as close as possible. Below is an example request list we provide to clients as a starting point to gather information:

Assets

Account statements (bank, investments, retirement accounts etc.)
Support for estimated fair market value of assets owned personally, such as primary residence, vacation houses, vehicles, boats, land, personal property etc.
The value of investments in privately held companies, such as LLCs and S-Corps
Statements for all life insurance policies with a Cash Surrender Value for which you are the beneficiary
Support for all money owed to you from individuals or companies

Liabilities and Net Worth

Credit card statements
Mortgage statements for primary residence or investment properties
Statements for any loans on personal property such as vehicles, boats and equipment
Home equity line of credit statements

Taking a bird’s-eye view of your financial standing not only provides peace of mind, but it helps you learn from spending habits and budget better for the future. Many people procrastinate on personal financial planning either because they don’t understand it or they’re afraid to face the reality of where they stand financially. But hey, you already filed your 2023 federal and state tax returns! Keep on trucking!

If we can assist further in helping you prepare your personal financial statement, please call us (317) 608-6699 or email Christine.

Sponsel Named Six-Time Best Place to Work

Sponsel CPA Group is once again honored to be recognized for the sixth year in a row as one of the Best Places to Work in Indiana, as part of the 19^th edition of the Indiana Chamber of Commerce initiative. With nearly half of this year’s honored companies being new businesses, Sponsel CPA Group is humbled to remain in the ranks. This year, Sponsel joins 87 organizations in the Small Company Group (less than 75 employees).

Lisa Purichia, a partner of the firm’s executive committee, offered this reflection: “Every local business that started from humble beginnings like ours aims to make a lasting impact. Making this list validates our efforts, and for that, we are grateful. In addition to our excellent team, we thank the Indiana Chamber of Commerce for continuing to encourage us, and we applaud our fellow honorees, especially those we’re also proud to know as clients and friends.”

The final company rankings will be unveiled on May 8 at the annual awards ceremony.

Track Your Tax Refund More Effectively

By Leslie Munas
Manager, Tax Services
Email Leslie

Waiting on a refund of any kind is usually a stressful situation. Fortunately, the IRS has made it easier when it comes to tax refunds, which should provide some relief right now in the midst of tax filing season.

Among other things, the new and improved Where’s My Refund? tool alleviates anxiety by providing a more detailed refund status. While the previous version of the tool noted only that a tax return was accepted or in process with a refund issued, the current iteration allows users to see:

The refund amount
The date the refund is scheduled to be sent to their bank
Whether they’ll be receiving the refund via mailed check or direct deposit
Whether the IRS needs them to respond to a letter requesting additional information

The Where’s My Refund? tool is now available through the quick and easy IRS2Go app. You can check your refund status within the following time frames:

24 hours after the IRS receives your 2023 e-filed return
Three to four days after you e-file a 2022 or 2021 return
Up to four weeks after mailing a paper return

To use Where’s My Refund?, taxpayers must enter their Social Security or Individual Taxpayer Identification number, filing status and the exact whole dollar amount of their expected refund from the original tax return for the year they’re checking.

While the IRS issues more than nine out of 10 refunds in less than 21 days, it’s important to note that they may get delayed for the following reasons:

The tax return has errors, requires additional review or is incomplete.
The return needs a correction to the Earned Income Tax Credit (EITC) or Additional Child Tax Credit.
The time between the IRS issuing the refund and the bank posting it to an account may vary since processing times fluctuate.

If we can assist you further with refunds or any other tax-related matters, please call us (317) 608-6699 or email Leslie.

February 2024 Newsletter

This month’s newsletter is all about tax time — from outsourcing options for accounting to ways you can protect your information as you file.

Need Outside Help with Your In-House Accounting?

By Lisa Purichia
Partner, Director of Accounting Services & Retirement Plan Services
Email Lisa

With tax filing deadlines rearing their heads and more than a month of the new year’s business transactions behind you, now is a good time to step back and evaluate your accounting department’s performance. As the business owner, are you getting the accurate data you need on a timely, regular basis? Consistency of practice is crucial. Even daily “Flash Reports” of critical operating data are common in today’s business world.

Is your accounting department meeting these demands? Failure to manage cash flow or to take advantage of early pay discounts, paying invoices late and incurring late fees, or not delivering accurate, comprehensive reports can severely harm your company’s reputation and result in decreased credit worthiness, issues with your suppliers, etc. Lack of consistency, planning, transparency and oversight can also quickly lead to untimely financial reporting and poor management information systems. The risk of fraud is also increased in an undisciplined accounting environment.

When evaluating your accounting department, also consider the size of your business. Are you outgrowing your bookkeeper but not big enough to fund a full-time Controller/CFO position? Whether this or poor accounting performance is this case, you may want to consider outsourcing accounting functions to a firm like Sponsel CPA Group. Now would be a good time to make this change, as you continue to find your footing upon stepping into the new year.

Delegating accounting tasks to financial experts like us allows business owners to focus on sales, marketing and strategies for building your reputation and revenue. It relieves managers of the responsibility to supervise one more department and meet the deadlines within it. Outsourcing also cuts the costs of in-house hiring, training and infrastructure.

Here are some of the many ways in which our CPA firm can help:

Monthly, quarterly, bi-annual and annual financial reporting
Controller-on-loan services to cover any gaps on a permanent or interim basis
Family Office Services (personal bill paying, personal financial reporting, and investment tracking)
Bookkeeping and payroll services
QuickBooks ProAdvisor installation, maintenance, training and support
Outsourcing solutions customized to meet your specific internal accounting needs
Human Resource services

If you’re experiencing accounting issues in your company, it’s time to step back and determine the source of the problem. Is it your people? Is it your systems or lack thereof? Or do you simply not know? If you need a fresh set of eyes on your accounting function, Sponsel CPA Group can help! Whether you’re seeking consultation or thinking about outsourcing your accounting and finance needs, we can offer support and counsel to make your business better!

If we can assist you further with your business or personal affairs, please call us at (317) 608-6699 or email Lisa.

Protect Yourself with an IP PIN

By Liz Belcher, CPA
Partner, Tax Services
Email Liz

Before you file your taxes this year, don’t forget: Sign up for an IRS account and request an Identity Protection Pin (IP PIN)!

A secret between you and the IRS, this six-digit number is vital in preventing an identity thief from filing a tax return using your Social Security number or Individual Taxpayer Identification Number. The IP PIN helps the IRS verify your identity and accept your electronic or paper tax return. Freshly generated each year, an IP PIN is valid for one calendar year, and it can be used only on Forms 1040, 1040-PR and 1040-SS. It is also unique to each taxpayer and only for their individual use, meaning spouses or dependents would need to request their own separate number.

Be wary of any phone calls, emails or texts asking for your IP PIN — the IRS will never make these requests.

The IP PIN was initially reserved for confirmed victims of identity theft, but now all taxpayers can opt in to the IP PIN Program. And said victims will receive a CP01A Notice with a unique IP PIN each year.

The easiest and fastest way to receive an IP PIN is through the online Get an IP PIN tool, but you must have an IRS.gov account. The IP PIN tool is available now through mid-November.

Alternatively, you can file a Form 15227 application for an IP PIN if you have the following:

A valid Social Security number or Individual Taxpayer Identification Number
An adjusted gross income on your last filed return below $79,000 for Individuals or $158,000 for Married Filing Joint
Access to a telephone for the IRS to call for identity verification

Lastly, you can make an appointment for an in-person meeting at a local Taxpayer Assistance Center. Just be sure to bring two forms of identification.

Opting in to the IP PIN Program is opting in for protection. Don’t pass on this measure of security. You have nothing to lose by requesting a PIN but a whole lot to lose by not doing so. If you lose your IP PIN, review Retrieve Your IP PIN for information on what to do. Do not file a Form 15227 to apply for a new IP PIN.

If we can help you further with the IP PIN or tax filing process, please call us at (317) 608-6699 or email Liz.

January 2024 Newsletter

This month’s newsletter is all about team spirit, from articles about strengthening your firm to an introduction of our new interns!

New Year, Better Relationships

By Eric Woodruff, CPA, CCIFP
Partner, Director of Audit & Assurance Services
Email Eric

As you enter the new year and think about resolutions to make, consider improving the quality of the time you spend with colleagues.

One of the main reasons people quit their jobs is because of an inadequate relationship with their immediate supervisor. Here are some ways to strengthen your rapport with employees:

Make time for small talk. You don’t have to sit down with your colleagues for hours and tell them your whole life story. Just ask how they’re doing as you pass them in the hallway or take a few minutes to chat with them during your lunch break. Focus on subject matters that are important to them. You’d be surprised how much of a difference it makes just to have these short, simple conversations. You open the door to easier conversations when the topics become more challenging.

Openly show appreciation. Studies show that three out of four employees believe their mental health would improve upon receiving more appreciation for their work. The employee recognition software Motivosity is a great place to start. A “social feed full of gratitude,” the Motivosity platform allows your entire business team to recognize members through messages and monetary rewards — users can choose from hundreds of unique gift cards, local experiences or custom company rewards. Building profiles and recognizing employees for their contributions also helps amplify everyone’s voice and visibility, creating a close-knit work community. Another way to do this is through the software platform Slack, where employees can post messages, organize virtual meetings and build a corporate “culture.”

Incentivize feedback. To motivate employees to fill out monthly surveys, give them points toward a prize or reward them with a gift card to their favorite coffee shop. (Here’s where Motivosity can also come in handy.) Or schedule monthly one-on-one feedback sessions, and the reward for their participation in the session is a free lunch or the rest of the day off!

Encourage extra-curriculars. Taking employees out to lunch is a good way to get to know them, but try to engage in activities more specific to their interests as well. If someone’s in a bowling league, for instance, challenge them to a game after work. Or ask your resident movie buff to select an afternoon showtime for your whole team to enjoy. Gestures like this can go a long way in building strong bonds with co-workers.

Provide training / career advancement opportunities. Hosting one-on-one training sessions or a bi-monthly lecture series for employees interested in moving up shows you’re seriously invested in their growth. And it proves you care about their long-term future with the company — you see them as more than daily or weekly contributors. In addition to providing these advancement opportunities, help set goals that both you and your employees can measure, build upon and use toward a future promotion or transition to a different position.

The more you show your employees that you care about them, the more motivated they will be to deliver the results your team seeks from them. Don’t let your relationship with them get lost in the daily grind or flurry of emails. It’s a new year — time for different, stronger connections!

If Sponsel CPA Group can assist you further with achieving success in your business or personal affairs, please call us at (317) 608-6699 or email Eric.

What’s the State of Your Business?

By Liz Belcher, CPA
Partner, Tax Services
Email Liz

January is when our political leaders deliver a “state of” speech, letting everyone know how we’re doing as a nation or state. As a business owner, you might consider the idea of giving a “state of the company” speech — an Accountability Report.

Consider a company-wide meeting in which leaders review the business’ 2023 performance and set department goals for 2024. The Sponsel team did this last month with our annual “firm retreat.” Seeing the whole team there in person encourages the idea that we’re all in this together, working toward a common goal. That can be hard for business teams to realize when employees are glued to their laptops or lost in the daily hustle and bustle. Joining everyone in taking a step back from the grind provides a clearer perspective of accomplishments and pain points.

Your Accountability Report should include financial and non-financial results. Many private businesses tend to keep most financial information confidential, for understandable reasons. But there should at least be some key performance indicators that you are able to share with your team.

By showing your employees you trust them, you have a much better chance of having that trust reciprocated. When workers have a sense of ownership in a business — a feeling that their actions have a direct impact on the collective success — they tend to be happier and more loyal. Although it’s not possible everywhere, an “open book” style of management is gaining in popularity.

Possible key metrics to review:

How well did the company do against plans, such as a budget?
How well did we do compared to previous years?
What internal or external factors influenced our financial performance?
How have we motivated our workforce?
How can we measure Employee Morale, and what can we do to boost it?

Here at Sponsel CPA Group, we conduct this kind of review twice a year, with the aforementioned firm retreat followed by a six-month update. We lay out our accomplishments and challenges with equal candor. And we make our expectations of team members clear.

By giving your employees a “state of the business address” to measure the organization’s yearly performance, they will have the sort of buy-in that is critical at times when they are expected to go above and beyond. In other words, they will better understand the stakes involved.

We find this is especially beneficial for younger employees. Younger Millennials and Gen Z employees have a deep desire to feel like they are part of something greater than themselves. They want to know that the company is moving forward in a way that is consistent with their vision of their professional life.

As CPAs, we help a lot of people with their end-of-year financial reporting. We know there are business owners who think they’re accountable only to third-party entities — banks, clients, investors, etc. We think these leaders are leaving out the most critical stakeholder to their success — employees!

Whether your results for 2023 were good or bad, share as much of that information as you can with your team. Knowing where you’ve been will help you build upon where you aim to go.

If we can assist you further with your business or personal financial affairs, please call us at (317) 608-6699 or email Liz.

December 2023 Newsletter

As we approach the end of 2023 and the start of the New Year, here are some ideas of plans to make and things to wish for this holiday season!

Be Specific About Your New Year’s Goals

By Lisa Purichia
Partner, Director of Accounting & Retirement Plan Services
[email protected]

As the holidays approach and the year comes to a close, it’s easy to lose sight of the future. We tend to focus on wrapping up current projects and putting bows on presents.

Although it’s important to end 2023 on a high note, it’s also vital for you to plan and craft a clear vision for next year. You will need to review the data metrics and key performance indicators of 2023’s successes, knowing you and your team can always do better. Make measurable improvement one of your main goals for 2024!

Of course, practical planning methods such as budgeting and annual performance reviews are essential. But the more specific your vision, the better.

Some CEOs set a theme for the coming year. If you’re building a new website, for example, make it the main focus across all departments. Task your social media manager with promoting and linking to it as much as possible on all your platforms. Add QR codes to the business cards you hand out at conferences or trade shows. Make all your team members include the web address in their email signatures.

Your theme could revolve around any number of things — increasing sales by a particular amount, implementing regular training sessions throughout the year, launching a new product or service, etc. Of course, you don’t have to ignore other goals, but focusing on one to begin with will speed up the planning process and make the segue into next year much smoother.

As a leader, you’re responsible for creating the energy and enthusiasm around the vision for the company’s future. People like working toward a common goal, so make sure it’s crystal clear and attainable.

Establishing unrealistic initiatives and vague expectations is the worst way to enter a new year. That’s why New Year’s resolutions like “getting in shape” or “reading more” fall by the wayside — they’re not clear enough. Wouldn’t goals like that be more satisfying to chase if they were more specific? Think about running a mile in 7 minutes or finally reaching the last page of Stephen King’s It.

Starting the new year with a focused, clearly communicated vision will lay a foundation for a great 2024!

If we can assist you further with achieving success in your business, please call us at (317) 608-6699. or email Lisa.

What’s on Your Holiday Wish List?

By Tina Kelly
Manager, Accounting Services
[email protected]

Amid the gift cards and kitchenware, what are you longing for this yuletide? Think of the intangible gifts that would enrich your life.

These things aren’t just rewards for the end of the year — they can be great tools for unlocking success in 2024 as well. Here are some ideas of what to wish for this holiday season.

A New Work Habit: This could be the practice of making a daily to-do list to prioritize tasks. Or taking more breaks from your computer screen to keep your eyes fresh and focused throughout the work day. Don’t be afraid to branch out of your comfort zone with this wish list item. For example, if you’re usually a quiet worker and you want to stand out, maybe aim to start making at least one comment a week during staff meetings, and go from there. This work habit could also be something fun — like trying a new restaurant once a week on your lunch break.

Education: Whether you’ve been with your current employer for a year or a decade, there’s always room to learn and grow. Treat yourself to a learning opportunity before the end of the year. Are any webinars or conferences coming up that strike your interest? Or maybe ask your loved ones for a book that could teach you some new tricks of your trade.

Hobbies: Take up a new after-work activity. Join your colleagues on the racquetball court, go out to a billiards bar. If it’s not too cold out, walk around town catching and battling digital creatures on the mobile game Pokémon GO. (This game is a great guide through Indianapolis, as the city has plenty of PokéStops and community-wide get-togethers for Hoosier gamers.) These activities might make for great team-building exercises for your business!

A New Friend: How about connecting with a business consultant before the end of the year? Or a life coach? They can help put things into perspective as you wrap up 2023 and head into 2024. An outsider’s perspective might help you realize what you’ve accomplished as well as what strengths and weaknesses you need to focus on in the future. Or maybe grab a nice, hot cup of coffee with a colleague on a wintry afternoon, and start meeting with them on a regular basis to discuss personal and professional goals.

Happy holidays! We hope your wishes come true!

If we can assist you further in your business or personal affairs, please call us at (317) 608-6699. or email Tina.

New Accounting Standard Recognizes Losses Earlier

By Eric Woodruff, CPA, CCIFP
Partner, Director of Audit & Assurance Services
Email Eric

The last of the Financial Accounting Standards Board’s “Big Three” Accounting Standard Updates — (ASU) 2016-13, Measurement of Credit Losses on Financial Instruments — is now in effect.

Under generally accepted accounting principles (GAAP), the old standard delayed recognition of credit losses until it was probable they had been incurred. The new standard, commonly referred to as Current Expected Credit Losses (CECL), allows for earlier recognition by incorporating historical loss information, current market conditions and reasonable, supportable economic forecasting in the process of measuring and reporting losses.

The final measurement reflects an organization’s current estimate of all expected credit losses over the contractual life of financial assets.

When measuring the allowance for credit losses (formerly known as the allowance for doubtful accounts), entities should pool assets that share similar risk characteristics, including location, age, term, industry or credit ratings.

In terms of the scope of the CECL standard, it applies to the following financial assets measured at amortized cost:

Loans
Trade receivables
Contract assets (including retainage)
Net investments in leases as a lessor
Held-to-maturity debt securities

It excludes:

Loans and receivables between entities under common control
Pledges receivable for nonfarm payroll (conditional and unconditional)
Notes receivable for employee benefit plans
Operating leases of lessors

The CECL standard is effective for fiscal years beginning after December 15, 2022. Institutions should implement this guidance with a cumulative effect adjustment to retained earnings in the adoption period. In other words, private entities with a calendar year-end initially adopt the standard on January 1, 2023. The cumulative effect adjustment enables entities to increase their allowance for credit losses through an adjustment to equity rather than impacting net income.

Entities should start assessing their asset pools based on risk characteristics, reviewing their historical loss rates and identifying whether an additional allowance for credit losses is necessary at the date of adoption.

If we can assist you further with your business or personal affairs, please email Eric or call us at (317) 608-6699.

November 2023 Newsletter

With this month’s newsletter, we offer some tips on how to approach the upcoming holidays a bit differently this year.

Celebrate the Holidays Differently This Year

By Jayme Yoder
Manager, Accounting Services
Email Jayme

Holidays should be times you enjoy rather than merely endure. But we can get so lost in the hustle and bustle of the season that we forget the true meaning of it. We turn into Scrooges as we burn the midnight oil trying to get everything done in time for the festivities, which can feel like obstacles.

Don’t be afraid to approach the holidays differently this year. Stop, take a breath and appreciate what’s around you. And don’t just save the holiday spirit for your time off work. Here are some ways to incorporate it into your business hours …

Put it in the background. Play holiday music in the workplace to lift your team members’ spirits and put them in a cheery mood while they work. If you have a TV in the workplace, maybe even play A Christmas Story on a loop! You could also deck the halls of your office to create a more festive environment, lowering everyone’s stress levels and boosting morale.

Go virtual. Have pre-Thanksgiving and Christmas Zoom gathering with clients and team members during the workday to share holiday recipes, show off the decorations in your homes, etc. Taking just half an hour to break from work and get in the holiday mood can go a long way in revitalizing and motivating you all. Another idea is to virtually bring outside celebrations into the workplace. For example, if someone’s going to the Carmel Christkindlmarkt, ask them to livestream their trip to the holiday market.

Give thanks. Take your team members out to lunch or set up stockings filled with goodies in the break room. This is a time of showing gratitude and tapping into your generosity.

Share traditions. Invite your team members to make the company part of their favorite holiday pastimes. Encourage them to bring in their homemade cider for everyone to share, or use your whiteboard as a place for people to list their favorite holiday songs, movies, TV specials, etc. Take and share pictures of these activities on your company’s social media page to spread the holiday spirit!

Don’t let the holidays flurry past you this year. Take the time to truly cherish them. Trust us, you won’t regret it.

If we can assist you further with your personal and business affairs, please email Jayme or call us at (317) 608-6699.

Take a Detour from the Big Box Store

By Mary Ferguson
Manager, Accounting Services
Email Mary

The holiday season tends to sneak up on us. We always say we’re going to prepare in advance, but those jingle bells start ringing before we know it, and we end up following the herd to the mall or Amazon. It’s still early, so you have time to do something different this year that we heartily recommend as a small Hoosier business — shop local!

Sure, you could go to a crowded entertainment store and nervously, hurriedly leaf through vinyl records. Or you could go to a flea market and discover rare, retro treasures among the trendier stuff. You could wait in a long line at Starbucks or Dunkin’ for a gift card — or you could get one from a mom-and-pop coffee shop your loved ones have yet to visit.

Shopping locally isn’t just a way to save time and money. It’s a means of meeting new people, discovering new things and becoming more engaged in your community. Isn’t that also part of what the holidays are about? There’s nothing wrong with shopping at the mall or big-chain department stores, but they run like well-oiled machines. They’re focused on getting people in and out. Shopping at a small, family-owned store can be a more personal, memorable experience.

Sponsel CPA Group started with just four partners and a small team of employees. As we first began acquiring clients, it felt like we were forming special relationships. Local business owners understand and appreciate how precious new customers can be. Some of those first business transactions lead to lifelong partnerships.

And if that doesn’t sway you to the local side, here are some statistics:

Small businesses generate a $68 local economic return for every $100 customers spend with them.
If every family in the US spent just $10 a month at a local business, more than $9.3 billion would be directly returned to our economy.
Small businesses donate 250% more than large businesses to community causes.
Local businesses generate 70% more local economic activity per square foot than big box stores.

Take a detour from the big stores this holiday season, and discover a whole new world.

If we can assist you further with your personal and business affairs, please email Mary or call us at (317) 608-6699.

October 2023 Newsletter

Just in time for Halloween, let’s conquer some financial fears and help you decide if you need some assistance with accounting!

What’s Your Financial Frankenstein Monster?

By Christopher Sargent, CPA/ABV, AM
Senior Analyst, Valuation & Litigation Services
Email Chris

With Halloween creeping around the corner, it’s time to face your fears. As a business owner, what’s your financial Frankenstein monster? What haunts your dreams like Freddy Krueger the night before a busy workday?

To get into the Halloween spirit, let’s embrace some business boogeymen the same way we open our doors to trick-or-treaters. Here are some common financial fears and how to overcome them.

Competition: Few businesses around these days are truly unique. That’s evident in the number of fast-food burger joints and coffee shops standing right next to one another on every street. They stick out with a slight twist on the same product. For example, Burger King stands out from McDonald’s with bigger, flame-grilled burgers while Dunkin’ stands out from Starbucks with its wide selection of specialty donuts to complement its coffee drinks. Lean into the differences that set you apart from your competition, however small they may be. Perhaps you could collaborate with social media influencers to emphasize those differences to your audience. If you’re struggling to stand out, don’t be afraid of change. Introducing a new line of products or services could give you the competitive edge you need. Look at what happened when Amazon started selling more than just books!

Stagnation: This is what happens when you don’t stay ahead of the competition. That’s why you need to make your company a continuous learning environment. Ask for honest feedback from customers and employees, attend workshops and webinars, introduce a department dedicated to research and development. You should also stay connected with current and prospective clients through social media. Maintain a consistent online presence, and always be moving forward toward innovation and improvement.

Crises: In the wake of COVID, you should have more confidence in this area. But a good way to curb remaining anxiety around it is to have an emergency savings fund as well as risk management and disaster recovery plans in place. Investing in business insurance is also a great step toward protecting your assets, ensuring business continuity through coverage during workplace closures, and minimizing the risk of property damage, employee injuries, etc.

Dependence and Delegation: Some business owners get stuck in the habit of trying to do everything themselves. It’s hard for them to step away and leave the company in others’ hands, no matter how capable they know they are. A good compromise is to delegate tasks to others but require them to report back at the end of the workday so business owners can have peace of mind. Another idea is to break projects down into subtasks so owners can have a clear sense of their team members’ progress. A project management system like Trello is a great tool for overseeing all the steps involved in certain projects and where employees are in the process of completing those projects.

If we can assist you further with achieving success in your business or personal affairs, please call us at (317) 608-6699 or email Chris.

Accounting: Is It Time to Outsource?

By Lisa Purichia
Partner, Director of Accounting & Retirement Plan Services
Email Lisa

This time of year is tough on businesses, as it requires a balance between finishing the year on a high note and setting yourself up for success come next quarter. You may have time for only one. If that’s the case … consider outsourcing!

Outsourcing CFO/accounting functions to firms like Sponsel CPA group is becoming a popular option for businesses of all sizes. It allows companies to focus on client growth and engagement while we lend a fresh set of eyes to their financial status and future. We’ve crunched the numbers for many businesses across a broad spectrum of industries, so we have a different perspective that could help you budget and allocate resources in new — and perhaps more effective — ways.

Don’t worry — outsourcing your accounting needs doesn’t mean losing control of your finances. You can be involved as much or as little as you like. Here are some outsourcing options:

As needed — Retain a CFO to assist on a regular basis (for a few days, a week, a month).
For a specific task
Staff augmentation — Require greater skills than what your in-house staff members possess.
Temporarily — Your controller quits, and you need help until you can secure a replacement.
Permanently — Outsourcing doesn’t have to be a Band-Aid solution; you can hand over all of your accounting and financial reporting responsibilities to an independent party.

Here are some of the many other ways in which a CPA firm can help:

Developing annual budgets
Evaluating current results against the budget
Preparing financial projections
Identifying key performance indicators that measure your company’s progress
Providing access to databases with resources that show how your company is operating and performing financially compared to others
Coordinating audits

We’ve seen what works best for many different businesses, and we bring that knowledge and experience to the table when companies come to us for their accounting needs. Plus, our accountants are continually trained, using the latest technologies and means of reducing risks and streamlining operations.

If we can assist you with outsourcing some or all of your company’s accounting functions, please call us at (317) 608-6699 or email Lisa.

September 2023 Newsletter

Summer’s over and it’s time to focus, professionally and ethically. Join our team for a look at how you can best prepare for the fall.

Summer’s Behind Us: Focus on Business Ahead

By Lisa Blankman, CPA
Manager, Audit & Assurance Services
Email Lisa

Was your phone buzzing off your desk after Labor Day? That was Telephone Tuesday calling! Historically, studies show a 30-50% increase in calls on the Tuesday after this long holiday weekend, marking the unofficial end of summer breaks and the shift in focus back to business. The end of the year is just around the corner, and procrastination is catching up on everyone as they look upon what’s left on their plate.

You must be proactive in order to finish the fourth quarter strong and hopefully wrap up a successful year. Now is the time to move with a stronger sense of urgency. It’s also time to prepare for 2024 and position yourself to take advantage of the opportunities open to you and your company.

The hardest part of pulling yourself out of procrastinating is renewing your commitment to a positive plan of action while you still have the time to impact the current year’s operating results. One of the simplest ways to start is with an old-fashioned to-do list. What seems like a mountain of tasks will shrink into a molehill when you put them down on paper and proceed to check them off. But you should prioritize that list and break it into sub-tasks, thus making it easier to multitask and chip away at several projects at once. That’s the best way to complete the biggest project on the list. Don’t save all the hardest work for last.

Ask the tough questions throughout this analytical process. What operational factors aren’t generating the strategic results you were hoping for by this time of year? Do you need to make personnel changes or alter the responsibilities of certain team members? Do you need to push junior employees into higher positions? Analyze your vendors as well and think about whether they are meeting your business needs and making it easier for you to accomplish your goals. Are their pricing and services commensurate with their cost?

While you’re at it, take a look at your budget, too — both what is remaining for 2023 and what you should plan for in 2024. Do you need to tighten it up a bit or build upon it? Make specific, measurable financial goals for both periods. Think about how much revenue you aim to rack up in 2024. Do you need to raise prices in order to keep pace with your cost structure? When was your last price increase?

Remember: Great leaders have an idealistic, big-picture vision, but they focus on realistic, manageable execution.

Don’t let yourself fall behind! There is still plenty of time to ensure a great fourth quarter and plan for an even more successful 2024. Start right now! Develop a plan of action that will help you achieve your goals!

If we can assist you further with achieving success in your business or personal affairs, please call us at (317) 608-6699 or email Lisa.

Do the Right Thing — It Pays Off!

By Jason Thompson, CPA/ABV, ASA, CFE, CFF
Partner and Director of Valuation and Litigation Services
Email Jason

We take ethics seriously here at Sponsel CPA Group. In fact, we regularly undergo ethics training and must pass an ethics exam before obtaining a CPA license. But the fact of the matter is that every company should conduct their business in a transparent, ethical manner. Younger professionals and consumers especially like to see businesses wearing their social values on their sleeves. And in the end, ethical business practices pay off bigger than greedy methods.

Take the clothing company Patagonia, for example. In a move that seemed counterproductive to marketing and sales, Patagonia launched the “Don’t Buy This Jacket” campaign. But it ended up only helping — and not just the company. The campaign promoted the durability of Patagonia’s products, increased sales and raised awareness of consumerism’s negative impact on the environment — thus also revealing the company’s values. Patagonia took a big financial risk in telling people not to buy excess clothing, but it was the right thing to do for the sake of protecting the environment.

Business ethics are really no different than the ethics you employ in your personal life. Always ask yourself, “Am I doing the right thing?” You should do the right thing regardless of pecuniary consequences. If a customer returns a faulty product or expresses disappointment with a service, making it right with them is the only solution. If that means giving out refunds, you may find yourself worrying about your short-term financial results. Start thinking about the long-term benefits instead. You’re establishing your business as one with integrity, one that cares about its customers and stands behind their product or service. Those are the businesses that stick around for the long haul.

Your employee group will also rally around this honorable practice. They will be proud to work with a company that values the customer experience and, more importantly, its relationship with customers. In many cases, these same companies have an above average relationship with their team of employees, as people like to work in environments with which they can take pride in being associated.

If you operate with best practices, employees and customers will respect you and pledge their loyalty. Think of the regulars at mom-and-pop coffee shops. They would probably prefer the convenience of a drive-thru Starbucks, but they keep going to the family-owned store because it has a sense of history and character. They like the people pouring their coffee. That personal touch. They value the trusted relationship.

A business can’t run effectively for its employees or customers without a strong sense of ethics. If you’re not doing what’s right for your customers, employees and other stakeholders … what are you doing exactly? Stay focused on what’s right, and your business will keep booming.

If we can assist you further with achieving success in your business or personal affairs, please contact us at (317) 608-6699 or email Jason.

August 2023 Newsletter

This month, read about how to spike productivity, the benefits of company outings, new Sponsel team members and more!

Back to School But Not to Business As Usual

By Lindsey Anderson, CPA
Senior Manager, Tax and Accounting Services
Email Lindsey

With kids going back to school and parents returning to work in full force, now is the time to get business booming again! How can you ensure a spike in productivity and profitability?

Consider hiring interns or new employees. Young blood can revitalize a business, keeping longtime team members on their toes and making them see the company from a fresh perspective. Showing the ropes to new staffers is a good way of reigniting the spark in seasoned employees that made them fall in love with the business in the first place. Also, interns and new employees can bring diversity of thought and innovation to the table. And after a couple of months’ rest post-graduation, young people fresh out of college are hungry for professional opportunities.

Reinvent yourself. Now that everyone’s had a chance to recharge their batteries over the summer, maybe it’s the right time to launch a new product line or service. (This is something interns and/or new staffers can help with as well.)

Save for the winter. As Jessica Stillman writes for Inc.com, summer is a good time to “be a business chipmunk” in preparing for the winter. Rather than foraging for nuts, this involves “reviewing the deals you have with service providers, insurance companies, your payroll services company, office-supply sellers, equipment lessors, or credit card and bank companies — basically anywhere you could save yourself a couple of dollars.”

Support your local community. Now that schools are back in session, take advantage by sponsoring high school football games! Take out an ad in the back of a high school playbill. Or offer after-school business learning opportunities for seniors. These are all great ways to get eyes on your company.

Although this point right before the fourth quarter is naturally a good time for evaluation, you should be assessing your business and financial status three to five times a year. Hope for the best, but prepare for the worst, especially when it comes to running a company in this ever-changing economy. So step away from the daily grind and take some time to map out the future.

All business owners should take time periodically to work on their business rather than just in their business!

If we can assist you further with your business or personal affairs, please contact Lindsey Anderson at (317) 608-6699 or email her here.

Take Your Team Out on the Town

By Leslie Munas
Manager, Tax Services
Email Leslie

Since people still line up out the door for its caffeinated creations, you’d be surprised what Starbucks CEO Howard Schultz considers the secret of its success.

“Anyone can open up a coffee store,” he said. “The only thing we have is one another. The only competitive advantage we have is the culture and values of the company.”

In other words, Starbucks’ secret ingredient is the chemistry between the employees that turns their store into a home away from home. Considering how much time we spend at work versus our homes, a company’s staff should ideally feel like a second family. Employees want the comforting sense that they belong, not only professionally but personally and ideologically as well. In fact, Millennials — which represent 35 percent of the U.S. workforce — “prioritize ‘people and culture fit’ above everything else.”

So, how do you create a tight-knit work culture and sense of community? One way right now is by taking advantage of this warm weather and going on a company outing!

If you’re in Indy, head on over to the driving range at Back 9 Golf & Entertainment. Getting to know people in a more casual setting like this after work helps improve collaboration in the workplace. As a matter of fact, “a Kenexa Research Institute study found that 50 percent of the positive changes in communication patterns within the workplace can be credited to social interaction outside the workplace.” It only makes sense that the more comfortable you are with someone personally, the easier it is to interact with them in the office.

Another way of opening up around people is by tapping into their creativity. Pottery by You allows your staff to engage in art in various ways — from painting stoneware and carving wood to creating signature scented candles and more!

Escape rooms are a particularly popular destination for companies across the country. In this fun team-building activity, you and your colleagues have to put your heads together to break out of fantasy settings ranging from haunted mansions and Wild West saloons to sinking submarines, volcanic islands and runaway trains, to name just a few. An escape room can be a refreshing retreat from the daily grind of the workplace.

All of these events encourage employees to reveal their interests and senses of fun, which are integral parts of any culture. Other crucial elements are history and community spirit. Engage with both by visiting local museums and learning about the people and places surrounding your business. Even if you work for a big, national chain, consumers appreciate local pride and a small-town touch.

You can also make a personal investment in your community and staff by hosting fundraisers or team volunteer / outreach events. The bottom line: Sometimes, the best thing you can do to strengthen your company culture is to get out of the workplace!

If we can assist you further with your business or personal affairs, please contact Leslie Munas at (317) 613-7857 or email Leslie.

July 2023 Newsletter

In this month’s newsletter, learn about the audit services we offer, how to reinvent your business and more!

New Vehicles for Driving Success

By Lisa Blankman, CPA
Senior Manager, Audit & Assurance Services
Email Lisa

Now is a good time for a mid-year review of your business to prepare for the fourth quarter and the start of 2024. Business may be booming in these summer months, but it’s always a bright idea to set aside time for reflection and preparation.

As you reflect on your company’s condition, you should also ponder whether past drivers of success hold the same potential they did a few years ago. Should their place in your planning remain? Are any of them falling short? Do they require some re-engineering?

Maybe it’s time to add vehicles that could steer you toward success. Don’t be afraid to think outside the box here. Look at Scarlet Lane Brewing Company, an Indiana-based beer seller that embraced its employees’ eerie interests and started showcasing artwork, hosting horror film events and serving as the official beer sponsor of the HorrorHound Weekend convention. Through this convention, the brewery crew has been able to travel across the country and expand its business into five locations.

Another brewery that went against the grain is our client, Ash Elm & Cider Co. While the seeds of their business plan lied in brewing beer, the craft beer industry seemed to be crowding the market in Indy, so owners Aaron and Andréa Homoya shifted their focus to hard cider.

This summer don’t let the daily grind get in the way of your own forward thinking. Schedule a specific time on your calendar each week to take your mind off your daily tasks and think about the other potential success drivers of your business. Which ones are steering you toward your goals? These success drivers could be your employees — their work ethic, talents and leadership skills — or your offering of products and services. The list goes on and on. Determine which current drivers deserve the most investment of resources as well as new ones that have less potential for the results you seek.

Remember that you’re not alone in your mission. Business owners who find themselves stuck behind their desks are the ones who shoulder too much responsibility and don’t depend on other forces to help drive the business toward success. Encourage your team members to identify the company’s best success drivers and think of new ones.

By stepping back on a regular basis and enabling yourself to analyze your business away from day-to-day distractions, you will be able to see a better path forward. And therein lies the success you seek!

If we can assist you further with your business affairs, please contact Lisa Blankman at (317) 613-7856 or email Lisa.

Conduct Your Summer 401(k) Audit With Us!

By Eric Woodruff, CPA, CCIFP
Partner, Director of Audit & Assurance Services
Email Eric

Summer is an ideal time for a 401(k) audit. First, summer months tend to be a better time for CPA firms to take on these audits, as the hustle and bustle of tax filing season is behind us. Second, for 401(k) plans with calendar year ends, Form 5500 and the auditor’s report are usually due at the end of July, unless an extension is filed.

Need an audit? We’re here to help!

As an employer, a common deficiency in employee benefit plans that you should keep in mind is related to the timely remittance of employee contributions. When an employee withholds funds from their paycheck and designates them for their 401(k) account, it is the responsibility of the employer to remit those funds in a timely manner. Holding those funds for a week is basically the same as the employer taking an interest-free loan from their employees.

The U.S. Department of Labor has been clear in their guidance that if payroll taxes can be remitted in the matter of a few days, they expect 401(k) contributions to be remitted in the same timeframe.

Sponsel CPA Group is a member of the American Institute of CPAs (AICPA) Employee Benefit Plan Audit Quality Center and is qualified to perform audits of most 401(k) plans. We are also available to help management teams prepare for an outside audit of their plan. And we have a team that can provide third-party administration services for your benefit plan throughout the year, should you wish to outsource this function entirely.

Benefits of working with our team include:

Experienced auditors with specific knowledge of your industry/profession
Stable audit team that delivers a consistently smooth audit process for your company
Improved business decisions based on reliable data
Gaining competitive analysis through key performance indicators (KPI)
Ensuring reliability and credibility of financial reporting and analysis
Ensuring compliance with industry regulations and standards
Providing accountability to your Board of Directors and other stakeholders

If we can assist you further with your 401(k) plan, please contact Eric Woodruff at (317) 613-7850 or email Eric.

Summer Camp for You

By Jason Thompson, CPA/ABV, ASA, CFE, CFF
Partner, Director of Valuation and Litigation Services
Email Jason

Success is about continuous learning, not crossing a finish line beyond which there is nothing but smooth sailing. (A smooth sea never made a skilled sailor!) Many of those at the supposed top of their game keep striving to reach greater heights. For instance, many Academy Award-winning actors still turn to coaches and take acting lessons to improve their versatility.

This summer, as your kids head to camp and your company welcomes new interns, think about what new skills YOU should acquire. While it can be easy to get lost in the daily grind and think you’re doing just fine at your current skill level, continuous learning and improving are important not only for professional success but for personal satisfaction, confidence and self-esteem.

As a business leader, you should budget time for personal improvement. 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 your staff to maintain skills and quality? Do you invest in training?

What is your own personal black belt you’d like to earn this summer? In this time of remote working, maybe you need to brush up on your communication skills. There are lots of online courses for effective email communication and etiquette. Media training could also help you — not only with communicating in general but in creating a relationship tailored to your audience/clients’ needs. If you know anyone who does a lot of writing or speaking for a living, maybe ask them to be a mentor.

A coach can provide a unique perspective that allows you to more clearly identify areas in which you could improve. As esteemed actor Hugh Jackman said, “The coach can see what you can’t see because you’re in the forest, they’re outside of it.”

With summer just around the corner, maybe it’s time for outdoor team-building activities. Enhance your team’s chemistry and refine their collaboration skills by working together in settings outside the workplace.

Your personal growth as a business owner and your company’s progress go hand in hand. Growth is not just measured in revenue dollars but also in expanded capabilities and talent, and development of new products or services. Investing in human capital, both yours and others, can make these things possible and If done effectively, growth in revenue dollars and net income will come naturally.

HR professionals often refer to their sphere of responsibility as “Talent Management.” Think of that term in another way: How are you managing your personal talent, and are you adding to your skills to reach your full potential? Only YOU can answer that question!

If we can assist you further with your business or personal affairs, please contact Jason Thompson at (317) 608-6694 or email Jason.

Balms for Zoom Burnout

By Eric Woodruff, CPA, CCIFP
Partner, Director of Audit & Assurance Services
Email Eric

At the height of the COVID-19 pandemic, Zoom was an emergency alternative to in-person meetings. Now, it appears it’s here to stay.

But are you “Zoomed out?” Totally understandable!

Video meeting tools like Zoom, Microsoft Teams and WebEx have their ups and downs. The biggest upside is their recreation of a face-to-face meeting when not everyone can get together in one place. The downside is that we can have trouble being present in the moment when we’re distanced from people. When we meet in cyberspace, we don’t think anyone can see our eyes shifting to our inboxes or looking down at our phones. All in all, you may not be as focused during a Zoom call as you are within the four walls of your office’s conference room.

Here are some tips for keeping virtual meetings fresh and your mind sharp:

Make sure all participants are on video in a place where they can concentrate — don’t drive and Zoom!
Start the call with an amusing anecdote or an engaging picture / video to ease everyone into the meeting.
Make time for questions and comments at the end of the call; give each participant a turn to speak.
If you have control over the timing of the meetings, avoid lengthy back-to-back virtual meetings.
After the meeting, move around, go outside, take a break from your computer screen and revitalize your eyes and body.
Abide by the 20-20-20 rule: After looking at a screen for 20 minutes, shift your focus for 20 seconds toward something 20 feet away. This will relax your eyes and prevent strain.
Spice things up! Try out fun filters or backgrounds. Host a meeting with a themed dress code. Introduce your pets or give virtual tours of your home offices! Break up the monotony of seeing the same grid of faces each week. To that end, bring in surprise guests for a few minutes — your kids, your spouses, a CEO that may not often get to attend your regular meetings, etc.

Don’t beat yourself up about burnout. Zoom fatigue is real, and it happens to the best of us. Even the founder of Zoom, Eric Yuan, reported fatigue after he once had 19 video calls back to back.

There are simple solutions for alleviating burnout. Give the ones above a try before your next virtual meeting! We wish you the best of luck!

If we can assist you further with your personal or business affairs, please contact Eric Woodruff at (317) 613-7850 or email Eric.

May 2023 Newsletter

In this month’s newsletter, you can read about the importance of vacation time and a thorough onboarding process as well as news about our firm’s team members and recent success!

Making Time for R&R A Priority

By Lisa Purichia
Partner, Director of Accounting Services & Retirement Plan Services
Email Lisa

Now that the weather is warming up and the traditional time to plan for vacations is upon us, you might want to make it a priority to plan for some well-deserved Rest & Relaxation (R&R)!

As HR specialists have told us again and again, one of the critical ways of improving personal productivity and providing for positive mental health is to make time for periods away from the daily hustle of work and everyday family life. A change in environment with the intent of doing something “different” is healthy for both you and your family. Removing the daily stress is important to preventing burnout, and in re-energizing yourself, you will find the same by-product benefit for your spouse and family.

It’s important for business owners and managers to encourage (maybe mandate) employees to get away from the office, leave their workload behind and disconnect. They need to shut off their computers, tune out the emails and turn on “out of office greetings” and voicemail. Studies show that reducing screen time decreases stress, improves sleep, leads to a less sedentary lifestyle and lowers the risk of depression.

Of course, limiting our engagement with communication devices can be difficult in this age of constant contact. Employees may hesitate and ask, “But what about our great client relationships based on 24/7 responsiveness?” Customers understand the need for vacations (they take them too!), especially when they involve time with loved ones. Plus, most businesses are built with a certain amount of redundancy to ensure that other team members can help customers when an employee is out of the office.

Engage in activities outside of your daily routines. Go someplace different, maybe even exotic. Take long walks on the beach. Get lost in a good book. You’ll be amazed at what just a week (or a long weekend) away from the workplace will do for your wellbeing. You don’t even have to leave the Hoosier state. Ever been to the Indy 500? Make this year your first race! Or take your younger loved ones to the Children’s Museum. French Lick resorts are great, and Holiday World & Splashin’ Safari can be great for the kids or grandkids! Maybe just cherish more quiet time relaxing at home. Take a nap on your hammock, or cook hot dogs over your firepit.

Many of you may feel guilty about taking a vacation and view it as some kind of “disruption” of work. But it’s actually a boon for your business side. The regeneration of energy and perspective that comes from vacation boosts employee morale, increases productivity and ensures a stronger, healthier workforce.

You deserve — nay, need — a vacation! The sun is out, so plan for one!

However, it only happens if you ACT to plan it now!

If we can assist you further with your business affairs, please contact Lisa Purichia at (317) 608-6693 or email Lisa

When Orientation is Never Enough

By Lisa Blankman, CPA
Senior Manager, Audit & Assurance Services
Email Lisa

When your business is short-staffed, it’s understandable for you to want new employees to hit the ground running. You have a uniform orientation process (2-5 days) and then somewhat expect them to be “off and running”! Be careful not to short-change the onboarding process and turn it into a baptism by fire — you may cause a quick termination of a productive employee.

There are many benefits to devoting ample time to the onboarding process, including frequent and constructive feedback, and ongoing supervision and training, all within a supportive work environment and culture.

First, there’s only so much you can learn from the interview process, and it may be a limiting assessment. It’s good for gaining a surface-level impression of potential recruits and their skillsets, but the onboarding period is a chance to dig deeper and get a clearer idea of where they belong in your business. The onboarding process is a mutual assessment by both parties, as they are trying to determine if there is going to be a good “fit” long term.

Onboarding should be an ongoing, in-depth process. And it should include a buddy system or formal mentoring / shadowing program lasting anywhere from 90 to 180 days. This will help new employees feel like part of the team rather than outsiders. During this time, help them carve out their career path and visualize their growth potential. You should assess the new employee’s skillsets and determine where they best match your team’s needs — this should be the product of the onboarding process.

In addition to training and mentoring, you can get a sense of the behavioral aspects of new employees through tools like the Myers-Briggs Personality Test, which helps identify whether people are more introverted or extraverted, intuitive or rational, etc. There is also the DiSC Profile.

According to the DiSC Profile website:

People with D personalities tend to be confident and place an emphasis on accomplishing bottom-line results.
People with i personalities tend to be more open and place an emphasis on relationships and influencing or persuading others.
People with S personalities tend to be dependable and place the emphasis on cooperation and sincerity.
People with C personalities tend to place the emphasis on quality, accuracy, expertise and competency.

Such insights can be invaluable in understanding how the diversity of the team will breed success.

Younger professionals, especially those in Gen Z, appreciate employers who take a vested interest in their personalities and preferences. They want to feel valued as people, not just as employees. That’s what the onboarding process is all about — making sure new employees feel like they’re right where they belong, personally and professionally. They want to understand the purpose of their assigned task and how they fit in within the team.

I am aware of experiences where a new hire was hired and struggled, but a patient mentor realized they were better suited for a different position within the company, and when re-assigned, they thrived in a match of skillsets and need.

Make them feel welcome with a company lunch outing or give them a sense of your community involvement with an invitation to an outreach activity.

The bottom line is that the onboarding process should give you and your new employees a fair amount of time to make the best impression possible. This is a big commitment for you both. All businesses are seeking great talent, so you want your enterprise to rise above your competition for that talent. Best of luck!

If we can assist you further with your business or personal affairs, please call Lisa Blankman at (317) 613-7856 or email Lisa.

Employee Spotlight: Erika Dudley

Erika Dudley joined the firm fresh off the heels of graduating from Anderson University with a bachelor’s degree in accounting and business management. She always approaches all her tasks with great sense of professionalism and a desire to exceed expectations. Erika has assumed additional responsibility and is always open to new challenges.

As a Staff Accountant in the Tax Services department, Erika conducts tax research and prepares tax returns for individuals, businesses and not-for-profit clients.

Outside of work, Erika serves as the Treasurer for the not-for-profit organization Russell’s Building Camp, which aims to enrich children’s lives through construction-related activities. She also enjoys reading, hiking, playing volleyball and spending time with family.

April 2023 Newsletter

This is a special newsletter, as we bid farewell to our firm’s namesake and mark the close of busy season!

What a Ride … Thank You! — A Message from Tom Sponsel

I will be retiring from the firm effective May 31, 2023.

On September 2, 2009, we embarked on a journey of building a successful business enterprise that would be based on trust and mutually beneficial relationships with an energized entrepreneurial team that had a vision — which we believed included a better way of conducting business as a CPA firm.

Over the subsequent three to four weeks in September of 2009, we assembled a team of about 22 professionals who shared that vision and had every confidence that we could deliver on that vision together. After 13+ years, nine of the original team members remain engaged, and our total team now numbers 40.

When we started that journey, I pledged to my partners at the time that I would work until my 70^th birthday, which will occur on May 15, 2023.

We have been working on this transition for the past six years, and the leadership of the firm has been transitioned to the Executive Committee leadership team of my partners Lisa Purichia and Nick Hopkins.

We have grown from a startup in one of the most difficult and precarious economic conditions in recent times to a respected local CPA firm delivering a full range of CPA and consulting services — and doing it with the utmost conscientious professionalism. That will continue.

Annually, we receive many accolades and “thank yous” from our clients and friends. For the past five years, we have been awarded as one of the BEST PLACES TO WORK IN INDIANA (only 125 Indiana companies are awarded each year) in addition to our annual inclusion in the IBJ list of the 25 largest CPA firms in Indianapolis. These are not participation awards — we worked hard on these achievements.

Our secret … is caring about our people, team members, clients and friends!

I would like to thank all of those who helped in so many ways back at our inception and for the past 13 years. I personally was overwhelmed by the magnitude of support we have received, even from our competitors! Many, many friends were instrumental in our successful start and current operations.

I want to recognize my BIGGEST fan, my wife of 49 years — Barbara, whose love and support through these past almost 50 years allowed me to pursue my dream, as she oversaw the home front and caring for our children as they were growing up. My now adult children, TJ and Natalie, have also been supportive through the years. I now have MY MOST FUN with my five grandchildren: Maddi, Ali, Paige, Brock and Blakely!

I have been very blessed and very thankful for the values my parents Paul and Dorothy Sponsel instilled in me and my six siblings. Good roots do matter!

I am very appreciative of all the relationships I have built through the years. As I have told the young people entering our profession, we start out serving our clients and then we make them our friends and enjoy a much deeper and personal relationship — in many cases, we become a part of their family.

Please do not consider this a “goodbye” but rather a greeting to a new chapter in my and Barb’s life. I will still be available to help any and all clients, friends, co-workers and partners as I can. We love our trips to Florida, but Indy is HOME. Plus, it is where our grandkids are — only grandparents can fully appreciate that comment.

I have a few pending client projects to finish and a few remaining clients to complete the transition to another of the firm’s partners.

Risk Management — Lessons Learned

By Lisa Blankman, CPA
Senior Manager, Audit & Assurance Services
Email Lisa

At the beginning of the year, the global consulting firm Protiviti projected 2023 to be the riskiest year in the 11 years it has conducted its annual risk analysis survey. Top risk factors included talent acquisition and retention, increased labor costs, resistance to pandemic related changes (remote working, virtual meetings, etc.) and increased training time.

A prudent business leader proactively plans for managing risks like these. “Managing” is the key word, as leaders ideally need to stay ahead of those risks rather than waiting to recover from them.

The pandemic opened our eyes to risks that we could never imagine and ways of adapting that we never thought possible.

What did we learn?

The importance of critical analysis of the possible broad range of risks that may impact your business is imperative. A business operator must be proactive in assessing the likelihood of those risks occurring and then determine the best way to minimize and mitigate any possible damage to the enterprise. The cost v. benefit balancing act will be a part of that conclusion.

This should be more than just an informal annual discussion with your insurance agent. Writing a formal analysis and working with a professional risk manager may help you determine all the types of risks that you are exposed to — some may be able to be subject to insurance coverages, but many may not. But they represent true risks to the business that would have an impact on operations.

Knowing the breadth and depth of your exposure to risk is beneficial in mitigating risk and planning in the future. Risk management planning is something you should do on a regular, annual basis, specifically analyzing risk factors in all areas, including:

Financial
Operational
Cyber Security
Government Regulation

The key to managing risk is to be vigilant and expect the worst. Be prepared and aware!

Some of the takeaways of the pandemic experiences and the recent banking scare are proof that the unexpected and unthought of may occur. Will you and your enterprise be ready?

If we can assist you further with your business or personal affairs, please call Lisa Blankman at (317) 613-7856 or email Lisa.

Disaster Recovery: What Is Your Plan?

By Eric Woodruff, CPA, CCIFP
Partner, Director of Audit & Assurance Services
Email Eric

As of early April, a total of nearly 400 tornadoes had swept through the nation in 2023. Since we’re in the midst of tornado season, now is a good time to discuss disaster recovery planning in general.

Every company — big or small — should annually update a written Disaster Recovery Plan with clearly prescribed procedures to mitigate major disruptions to their business.

Examples of possible disruptions to your operations that you must be prepared to respond to include:

An IT security breach
Theft
Natural or man-made disasters that damage or completely destroy the business building and its contents (including business records)
Product recall
Employee misconduct
Loss of a key employee (incapacitation or death of owner)

Here are some of the steps you should take while developing a disaster recovery plan:

Create a list of possible disruptions and create a sub list of respective actions in the occurrence of each
Specific priorities should be stated:
1) Mitigate damages
2) Focus on steps to resume operations, even on an interim basis
3) Critical vendors that can help in restoration of operations
4) Steps to stabilize operations
5) Remediation steps
Identify what is essential to day-to-day business operations and put systems in place that allow the company to continue running smoothly — such as a backup server for crucial data — how much redundancy have you built into your IT Systems?
Compile contact information for those you should contact in the event of an emergency and identify who is responsible for making those calls.
Assign crisis roles to particular departments or individual employees.
Determine if a news release is warranted and prudent, and who else should be contacted.
Determine if legal counsel is required to mitigate any legal exposures the event may have created.
Be ready for the worst. Having multiple backup plans is prudent.
Your plan should project how quickly you can resume operations, even if in a temporary environment.
Most importantly, it will provide your team the confidence that your enterprise is ready for whatever the events may throw at your operations.

In times of trouble, strong leadership is critical. Calmly activating a clear recovery plan will give your team the confidence and peace of mind that you are ready to manage and move forward. Picture yourself as a coach, ready with a well thought out playbook.

Of course, the hope is that you will never have an event that triggers the use of your disaster playbook. But as the Boy Scouts motto goes … “be prepared.”

If we can assist you further with your personal or business affairs, please contact Eric Woodruff at (317) 613-7850 or email Eric.

Employee Spotlight: Grant Branson

Grant Branson started with the firm as a busy season intern and joined full time in 2021 as an Audit & Assurance Services Staff Accountant. Prior to becoming part of the Sponsel team, he graduated with a bachelor’s degree in accounting and finance from the Kelley School of Business at IUPUI.

As an Audit & Assurance Services staff member, his duties include audits, reviews and compilations for clients across a broad spectrum of industries. With his own experience as an intern, he has been extremely helpful in coaching our recent interns the past two busy seasons.

Outside of work, Grant enjoys running, hiking and spending time with his wife Madisson and their fur baby, Murphy.

March 2023 Newsletter

Read about best business practices, your personal financial condition, a recent achievement for our firm and more!

Best Places to Work: Sponsel CPA Group Scores Five for Five

Sponsel CPA Group is now “five for five” in the annual ranking of the Best Places to Work in Indiana, making the list every year since 2019, when they first applied. This year marks the Indiana Chamber of Commerce’s 18^th annual edition of this initiative, which annually recognizes only the top 125 Hoosier businesses ranging in size from 15 to 1,300 employees.

Sponsel continues to stand tall in the Small Company Group (less than 75 employees), even as more small businesses made the list this year than ever before.

Lisa Purichia and Nick Hopkins, members of the firm’s Executive Committee, offered this reflection: “We’re proud to be included on this list again, and we congratulate all the small businesses that are included on the list this year. It’s encouraging to see that our team is succeeding in maintaining the personal touch that makes clients favor small businesses over bigger companies. We thank the Indiana Chamber of Commerce for honoring us, and we applaud our fellow winners, especially those we’re also proud to know as clients and friends.”

The final company rankings will be unveiled on May 10 at the annual awards ceremony.

Make It Easy to Do Business with You!

By Lindsey Anderson, CPA
Senior Manager, Tax Services
Email Lindsey

Many business owners are so focused on growing their list of customers or products and services that they forget to assess whether it’s easy for prospective customers to do business with them. Have you ever called your office as a customer? Or tried to navigate your website to ask a question or order a product? You might learn a thing or two! Here are some factors to consider when building relationships with customers and trying to earn their loyalty.

Responsiveness: Don’t leave customers hanging from an inquiring email. Even if you don’t have sufficient time to talk to them immediately, touch base to let them know when you will be available for a more in-depth discussion. In this age of email and instant messaging, there’s really no excuse for not being responsive promptly. It is good to understand what the expectation is of the customer and their preferred mode of response.

Hours of Operation: If you’re having trouble keeping up with customers’ needs, maybe you need to consider breaking past the standard 8-5 work week and adding evening or weekend hours. You need to build a great support team that allows you to be responsive and flexible, even in times of excessive workload for your team. You need to serve the customer when they are in need of your service and it is convenient for your customer. Here’s where texting comes into play again. Being able to be in constant contact with clients gives you the upper hand over your competitors. You need to demonstrate that you are different from your competitors.

Payment Methods: New payment methods — such as PayPal and Venmo — not only speed up cash collections, but they appeal to younger generations of customers who prefer online banking. Does your website facilitate online payments?

The First Impression: In the business world, your first impression is your best impression. Now, that impression usually isn’t made in a brick-and-mortar business — it’s made online. Do you have a website? Cyberspace is the first place people go to now to get a sense of what you do and what you can offer them. Is your website user-friendly and easy to navigate? Is it visually appealing? Do you convey what the company’s culture is like through photos, videos and social media content highlighting the staff and the chemistry between co-workers? Is it easy to find your contact information on the site? Are your Google reviews up to date and commensurate with the product or service you offer?

Expectations: Be careful with deadlines. Don’t throw them out, unless you’re certain you can do something by the time you say you can complete it. It’s best to under-promise and over-deliver. Customers like pleasant surprises; they want you to exceed their expectations. And if you have to go the extra mile at the last minute due to your customer’s poor planning, don’t hesitate to charge more for the rush job.

Be Honest: Honesty includes telling people when something isn’t possible. Be straight with them. It’s OK to say “no” to hasty requests. A lack of planning on their part doesn’t constitute an emergency on your part. Instead of trying to pull tricks out of your hat at the last minute, provide realistic solutions that are workable in the long term. Good business isn’t about making a fast buck — it’s about building long-lasting customer relationships. Honesty sometimes means telling the customer what they do not want to hear, but honesty builds trust and credibility.

Some Customers Aren’t a Good Fit: As hard as you may try, you can’t please everyone. The customer isn’t always right. Don’t bend over backwards for those who have unrealistic desires and expect Cadillac service at a cheap price.

Character and integrity matter in the marketplace. Make sure you address these guidelines to build your reputation as a business of choice, the kind of commercial enterprise people consider it easy to do business with, and they will seek you out!

For further assistance with your personal or business matters, please contact Lindsey Anderson at (317) 613-7843 or email Lindsey.

Your Personal Financial Condition Is Important Too!

By Leslie Munas
Manager, Tax Services
Email Leslie

Business owners’ personal lives can often play second fiddle to their professional pursuits. But when it comes to personal finances, it’s risky to ignore the need to monitor and manage them.

Preparing a personal financial statement on a regular, periodic basis is of vital importance. Avoiding this assessment of your personal financial condition may put you and your family at risk of financial instability, both for the short term and long term. You should analyze it and make sure your personal assets and level of liabilities are consistent with your goals and objectives. Oftentimes people don’t want to prepare a statement, as they are fearful of what it might tell them. You must face reality.

If you’re not accustomed to organizing your finances, start by thinking of it as a simple inventory. It all boils down to keeping track of what you own and what you owe. What debts are lurking? Credit card and home mortgages? Money borrowed for business ventures? Are these at a level that is prudent and commensurate with your personal cash flow? Are these prudent levels given any changes in the macroeconomic environment?

Many people lack a clear understanding of net worth, which is basically every significant thing of value that you own (assets) minus your debts (liabilities). Assets include your home and any other real estate as well as cash, investments, cars, etc. Your net worth is important, but your access to liquidity may be of greater importance. How much cash or cash equivalents do you have access to in the case of an unexpected emergency?

Also think about what will provide you financial security in the future, such as retirement planning. Take advantage of the benefits of the Secure Act 2.0, which allows those approaching retirement (aged 50 or older) to make larger catch-up contributions to their workplace retirement plans, thus increasing their savings. Also optimize your strategy for withdrawing required minimum distributions (RMDs). To maximize your investment returns, you might want to keep money tucked away in your retirement account until the end of the year. Or you could make equal withdrawals throughout the year to ensure you receive a consistent retirement paycheck.

Take this time to brush up on your projected Social Security benefits and Medicare premiums. This year marks the first time in over a decade that Medicare premiums are not rising.

It’s easy to get caught up in the habit of living paycheck to paycheck, but you must focus on the long term, especially considering the unpredictable nature of the economy. It rarely, if ever, remains stagnant.

Keeping a close eye on your personal finances and taking a periodic, in-depth look at your financial condition will not only improve your financial stability, but it will also provide peace of mind.

For further assistance with your personal or business matters, please contact Leslie Munas at (317) 613-7857 or email Leslie.

Employee Spotlight: Andrew Albertson

Andrew started with Sponsel CPA Group as a tax season intern in 2021 and joined full time after graduating with a bachelor’s degree in accounting from Marian University. He works mainly within the Tax Services department.

Andrew has been part of the entrepreneurial world since he was just a teenager. At the ripe age of 17, he launched Furious Fireworks, which he still runs during the summers with his dad, brother and cousin in Huntington and an additional location in Marion. This summer marks the firework retail business’ eighth anniversary!

Outside of work, in addition to running his own business, Andrew enjoys a host of hobbies, including camping, hiking, fishing, car repair and real estate, to name a few. Most of all, he values time with family.

February 2023 Newsletter

In this month’s newsletter, you’ll learn about leadership, diversity, members of our team, and upcoming tax matters!

Leadership: Vision and Perseverance

By Jason Thompson, CPA/ABV, ASA, CFE, CFF
Partner, Director of Valuation and Litigation Services
[email protected]

Many business owners may believe they are good managers, but they often become frustrated that the progress and success they are seeking is only experienced by other owners of enterprises. They may toil investing many hours in their respective business operations, but that “next level” is fleeting to them.

One possibility may be that they are managing their business well, but they are not demonstrating the leadership to attain what they seek. In his book, The E- Myth, Michael E. Gerber refers to this in another way: You should be working on your business more than you work in your business!

Leadership is about your vision for all aspects of your business that, when applied in the aggregate, results in a growing, successful business. It is not an easy assignment and one that requires significant, intentional perseverance. As the leader, you will be challenged at every corner, but allow that vision to carry you through. Many managers show up every day to do their job, but the leader has that vison thing — looking months or even years down the road to the success for what she is creating! A leader is willing to make investments that may dent profitability in the short run but will result in exponential benefits to the enterprise in the long term.

We know it’s easy to get lost in the daily grind. But that’s management, NOT leadership. While managers operate in the trenches of the business, a leader takes a bird’s-eye view and maintains a vision for the future.

Excellent managers can become great leaders when they apply their many work experiences to provide solutions with a clear picture in their mind as to where they will end up.

While day-to-day operations are obviously important, sharpening your vision for the future is how leaders keep their businesses thriving. It is important to sustaining your desired culture within your team.

Confidence is also key. If you enter your workplace with an assured attitude, your demeanor will likely rub off on other stakeholders, and everyone’s spirits will lift up the company. Move forward cautiously and with prudent skepticism, but hold your head high as you do so. When challenges create darkness, allow your leadership to shine bright with solutions that deliver! Persevering through tough times can bring out the best in us.

If we can assist you further in your leading of your enterprise to success, please contact Jason Thompson at (317) 608-6694 or email [email protected].

Empower and Diversify Your Team

By Lisa Purichia
Partner, Director of Accounting & Retirement Plan Services
[email protected]

Given the hundreds of home runs he hit, you might not think legendary baseball player Babe Ruth would value teamwork. But he said: “The way a team plays as a whole determines its success. You may have the greatest bunch of individual stars in the world, but if they don’t play together, the club won’t be worth a dime.”

Listed below are some ways to strengthen your team and steer your business toward success.

Encourage transparency and listen closely! Encourage staff members to speak up, point out the company’s weaknesses and offer suggestions for improvement. Don’t let them think they’re going to hurt your feelings, face some type of retaliation or undermine your authority. Remind them that, while everyone has different duties across various departments, you’re all working toward the same goal of running a successful business. To that end, creating an open, honest and collaborative environment is vital. Reward their candid, constructive feedback.

The best way to inspire your employees is to make them feel like their goals within the company are part of your own vision for its future. Where do they hope to see themselves next month or next year? Raising these questions will let them know you have their best interests at heart and that they aren’t simply serving your needs. Encourage their independent thinking and empower them to act!

Promote and practice diversity. In the recruiting and hiring process, be cognizant of the benefits of increasing your team’s diversity in all its forms — gender, ethnicity, life backgrounds, talents and skills, etc. Diversity brings different perspectives on how to approach challenges to provide solutions and reach certain goals. As this Forbes article states: “A team that has a variety of worldview perspectives can educate employees and clients and reach untapped customer demographics. This opens the conversation to new, unexplored and different ideas. In fact, companies with greater diversity are 70% more likely to capture more markets.” Keep these statistics in mind and be sure to raise awareness of them within your talent management system. Maybe start including diversity presentations among your monthly meetings. Now would be a good time to start as we’re in the midst of Black History Month, and Women’s History Month is in March.

Invest in your people. Make sure they have all the necessary resources, including tools and training — not just in the beginning, but continuously throughout their time at the company. As more businesses are embracing a hybrid model of working remotely and in person, now is a great time to catch up on webinars, training programs, etc. The current workplace environment mandates continuous leaning and improvement, and your staff should evolve and advance in their respective fields. Coach your employees and motivate them to keep growing and thriving. But also be patient and give them the proper amount of autonomy and time to blossom. Focus on building upon each individual’s established strengths — don’t try and fit that square peg in a round hole!

Identify strengths and weaknesses. The most successful businesses have an effective talent management system for finding the perfect fits for each department. If competency gaps are opening up within your organization, perhaps you need to rethink recruitment campaigns, provide more training or delegate certain tasks to different employees. Many times you may find an employee who struggles and under-performs in one area, but they may thrive in another area of responsibility more suitable to their skills and behavior style.

Don’t try to carry the business on your shoulders. You don’t have to be the home run hitter. Running a business isn’t a one-person show — it’s an ensemble piece! A successful business owner will surround themselves with team members who have complementary skills that enhance the enterprise.

If we can assist you further with achieving success in your business or personal affairs, please contact Lisa Purichia at (317) 608-6693 or email [email protected].

Employee Spotlight: Rylie Burch

Initially a tax season intern in January 2022, Rylie Burch joined the Sponsel team full time in August of 2022. Rylie earned a bachelor’s degree in accounting and economics from Ball State University, and we are excited that she has become a member of our service teams.

As an Audit & Assurance and Tax Services staff member, her duties include audits, reviews and compilations as well as federal and state tax filing, including compliance and planning for clients across a broad spectrum of industries. We appreciate the enthusiasm and “can-do spirit” she brings to the workplace.

Outside of work, Rylie enjoys spending time with family and performing with the Meraki Dance Company. She is in the midst of her second season with the dance troupe.

January 2023 Newsletter

This is a particularly important newsletter, as it prepares you for the financial risks and benefits you face this year.

Your Talent Pool May Be Bigger Than You Think

By Eric Woodruff, CPA, CCIFP
Partner, Director of Audit & Assurance Services
[email protected]

One of the biggest obstacles companies currently face is a record-high shortage of talent. In this recent study, 75 percent of the 40,000 employers surveyed reported having difficulty hiring due to the low labor force. And that demographic represents people working in a wide range of industries across 40 countries and territories — from education, health and government to manufacturing, restaurants and retail.

While the global talent shortage is definitely a troubling issue, overcoming it is far from an impossible feat. In fact, this challenge is a valuable opportunity to open yourself up to recruitment strategies and certain types of employee candidates you’ve never considered before.

This is also an opportunity for you to serve as a beacon of hope — for disenfranchised workers who are looking for a stable loyal employer. Look at companies like Salesforce, which is cutting 10 percent of its workforce this year. Amazon, Meta and Snap have also made considerable workforce cuts. Companies like these appeal to young professionals, so make sure your recruitment campaigns cater toward fresh, skilled talent eager for new opportunities. What do you offer that bigger employers can’t? What’s inherently appealing about the culture of your company and your team members who show up every day?

The feasibility of remote working also opens up new avenues for recruitment. You’re no longer limited to your local area. If the work can be performed remotely, what difference does it make if the employee is five miles or 500 miles from your business? Now, the entire nation can be your talent pool. This not only helps you grow your business; it can lead to a more diverse team as well. People from different places and backgrounds bring their own unique perspective, which is especially valuable in times of economic downturn — when strategizing and problem-solving are vital.

Considering recruitment from different perspectives will help you find your much needed talent. Right now, you shouldn’t expect to find it in the usual places. As a leader, THINKING DIFFERENTLY is critical to your recruiting success. So think outside the box, and don’t give up hope. The right “fits” for your business are out there. You must utilize different approaches and recruiting avenues to secure the talent your enterprise desperately needs.

If we can assist you further with your personal or business affairs, please contact Eric Woodruff at (317) 613-7850 or email [email protected].

New Partner: Liz Belcher

Liz Belcher, who has been with the firm since its founding, is the latest addition to Sponsel’s Executive Leadership Team, which now consists of six Partners.

A graduate of Indiana University’s Kelley School of Business, Liz joined the Tax Services department in 2009 and rose to the role of Senior Manager, assisting fellow Partner and Director of Tax Services Nick Hopkins.

Her specialties include planning and compliance-related research for businesses and individuals, as well as in-depth experience in multi-state income taxation. She has a broad knowledge of various industries, including construction, manufacturing and professional services. Additionally, she heads up the not-for-profit tax group, encompassing public charities, membership and social organizations, and private foundations. She leads the firm’s Bloomington office but works out of the Indianapolis office as well.

Liz is a member of the American Institute of Certified Public Accountants (AICPA) and the Indiana CPA Society (INCPAS), the latter of which recognized her as one of the profession’s rising stars with its Emerging Leaders Award.

Outside of work, Liz is happily married with two adorable daughters, Madelyn and Chloe. She and her husband share a love of IU sports that is already rubbing off on their girls.

2023 Projected to Be a Riskier Year

As you enter the new year, it’s important to understand the risks your business faces. In a recent blog article for the National Association of Corporate Directors (NACD), Jim DeLoach — managing director of the global consulting firm Protiviti — provided a thorough breakdown of critical uncertainties we encourage our Central Indiana clients to keep in mind.

Here are a few risk factors DeLoach highlights that we think you should prepare for over the next 12 months:

Succession challenges: After three years of business obstacles stemming from the pandemic, many business owners and executive leadership members may be burnt out and want to retire, but attracting and retaining talent to fill their roles remains difficult.

The economic climate: Economic conditions, such as inflation and supply chain disruptions, could slow your business’s growth well below your projections.

Increased cost of labor: This not only affects recruitment efforts but your ability to turn a profit as well.

Increased dependence on digital technology: This requires new skills, which are in short supply due to labor/ new talent shortages, as well as more time dedicated to training your current employees. And as the adage goes, time is money.

Emergencies: Your business may not be resilient enough to manage a crisis that impacts your daily operations or overall reputation.

Because of the pandemic and government health protocols for businesses across the world, 2023 is marked as the riskiest year in the 11 years Protiviti has conducted its annual risk analysis survey. Talent acquisition and retention are considered the top challenges due to a number of factors, including increased labor costs, resistance to COVID-related changes (remote working, virtual meetings, etc.), increased training time, etc.

Even with increased risk awareness and preparation, there is no guarantee that any business will run smoothly. As DeLoach writes: “Uncertainty surrounding the viability of key suppliers and energy sources, unpredictable shipping and distribution logistical issues, and concerns over price stability in the supply chain ecosystem are impacting the ability to deliver products or services at acceptable margins.”

Having said all of this, don’t be discouraged. Always hope for the best, just prepare for the worst. Businesses must remain agile and responsive to our ever-changing business environments and the many challenges that exist.

The prudent leader proactively plans for all possible outcomes. After the unpredictable and unprecedented past three years, surely you’re ready for whatever 2023 throws your way. And if you ever need any assistance, please don’t hesitate to reach out to us for help. That’s why we’re here. Best wishes for a bright future and a successful 2023!

Please call us at (317) 608-6699 if you have any questions.

December 2022 Newsletter

Before the holidays, we’d like to discuss how to inspire your team, how to plan for succession and what we are thankful for this year.

Inspire to Be Aspirational

By Lisa Blankman, CPA
Manager, Audit & Assurance Services
[email protected]

At the end of any business day, your team members shouldn’t just have completed tasks to show for themselves; they should have learned something as well. Learn Something NEW Every Day!

Transitioning from the college classroom to the “Real World” can be intimidating to those joining the workforce for the first time. As a leader, it’s within your power to create a smoother segue by making your business feel like a continuous learning environment. One way to do that is to compile a reading list for employees and keep hard copies around — build a library of resources and suggested reading on one of your shelves and turn a section of your workplace into a resource center to LEARN MORE!

Your library should cover four topics — leadership, personal growth, successful business people, and business organization.

For those new to the workforce, it can be difficult to imagine themselves as leaders. Books on leadership can help that path seem less daunting and more attainable. Plus, you can’t be their sole source of inspiration and motivation. Pointing them toward other business experts will not only enhance your credibility, but it will also open their eyes to the vast world of resources at their fingertips. And it will provide them with examples of leadership they can easily visualize and imagine themselves emulating.

A lot of people say they don’t take their work home with them, but they don’t realize how much their workplace experience impacts their personal lives and vice versa. In both areas, you learn about building and maintaining relationships, earning trust and loyalty, operating within a team, etc. So keep some self-help or personal improvement books around for your team members.

Arguably the best kinds of books for young professionals to read are portraits of successful business leaders, whether they’re biographies, memoirs, etc. They’ll undoubtedly feel less alone and find inspiration after reading about these people’s humble beginnings. For instance, look at how Steve Jobs and Steve Wozniak started Apple in a toolshed Jobs converted into a bedroom before moving the operation to his parents’ garage.

They will discover that many prominent CEOs started right where they are now, at the so called bottom of the ladder. But they will learn how, through tenacity and perseverance with a long term vision, those people of success climbed that hill and assumed greater responsibility and achieved greater self-satisfaction.

Finally, get them thinking about the big picture — how to organize a business and crystallize a vision for its future. Get them thinking not just about the daily grind but about the long haul.

Working toward success is a lifelong process. That means there is plenty of learning left to do along the way. Your team members should learn something new every day … every journey starts with a first step!

If we can assist you further with your business or personal affairs, please call Lisa Blankman at (317) 613-7856 or email [email protected].

Succession Planning Must Be Intentional

By Liz Belcher, CPA
Senior Manager, Tax Services
[email protected]

Too often business owners find themselves backed into a brick wall when it comes to succession of their business enterprise … for most, “their child.” They get so lost in the day-to-day operations of their business that when it’s time for them to step away and perhaps enter retirement, they have no plan in place — or worse yet, the plan they have been carrying around in their brain for years is not realistic nor doable!

To ensure a successful transition, it’s best to plan five to 10 years in advance. Divide your plan into stages, writing goals for each year building up to your succession so it’s ready to activate by then. And be sure to remain in conversation with your partners and shareholders to keep these goals up to date. Seek out others who can give you a “sanity check” on your ideas.

Of course, life happens while we are making other plans. You never know what could sideline you in the future, whether it’s a disability, family tragedy, etc. It’s unpleasant to think about, but this is another reason why succession planning is vital. You need to have a contingent written plan in place.

There are two types of succession for which you need to consider planning — management of your business and equity ownership succession.

If you’re an integral, front-facing member of the business right now, you’ll want to consider who could best replace you and maintain the same sort of rapport with your team members, customers and other stakeholders. Maybe you’re keeping the business in the family, so which one of your loved ones takes after you the most? Or maybe consider a family member with a different touch who can tap into new markets and different demographics.

In regard to equity ownership succession, the first thing to determine is what type of transaction it will be: a total outright sale for the entire enterprise or a portion of the equity. Typically an outright sale occurs when the owner is looking to retire or start an entirely new venture. If they want to stay involved but move out of the hot seat of leadership, they might choose to sell only a part of their equity.

The next question is to whom the business will be sold. While sale to an outside party is common, other possibilities include a buyout by the current management, merger with another company, acquisition by an Employee Stock Ownership Plan (ESOP) or a similar vehicle in which the employees become the owners. You as the business owner should explore all options and decide what fits your situation the best. Sometimes a key long-term competitor can be an option.

Whatever you wish to do, make sure you start planning sooner rather than later. Don’t rush into retiring or transitioning away from your business. Give yourself plenty of breathing room to allow for the smoothest possible segue into the next chapter of your business and life outside of it. You will maximize your value received and make other stakeholders very satisfied.

If we can assist you further with your business or personal affairs, please contact Liz Belcher at (317) 613-7846 or email her at [email protected].

Employee Spotlight: Nick Hopkins

Nick Hopkins is one of the founding members of Sponsel CPA Group, and he is excited to be part of the firm’s growth over the last 13 years.

A CPA, Certified Financial Planner® and Director of the Tax Services department, Nick leads the tax team in providing financial, strategic and tax planning services to clients. He also specializes in acquisitions and mergers, multistate tax compliance and other complex tax challenges. Indiana Business magazine named him “a Super CPA.”

Nick has a passion for helping clients and is constantly looking for ways to provide practical solutions to complex problems.

Born and raised in Morton, Ill., Nick currently lives in Bargersville with wife, Natalie, and their three children — Ali, age 15, Brock, 12, and 8-year-old Blakely. In his spare time, Nick enjoys golfing and spending time with his family.

2023 Adjustments for Social Security & IRS Limits

The IRS recently announced changes set for next year that will affect cost of living, tax rates, and retirement plan limits.

First, social security beneficiaries are in for good news. Next year, you stand to receive the largest cost-of-living adjustment in 40 years! Roughly 70 million Americans will see an 8.7% increase in their Social Security benefits and Supplemental Security Income (SSI) payments. On average, Social Security benefits will increase by more than $140 per month starting in January.

Of course, with cost-of-living adjustments come adjustments to the threshold limits for pension plan and other retirement plan contribution- related matters. The contribution limit for employees who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan will be $22,500 next year, up from $20,500 this year.

The limit on annual contributions to an IRA will increase to $6,500, up from $6,000 in 2022. The IRA catch‑up contribution limit for individuals aged 50 and over is not subject to an annual cost‑of‑living adjustment and remains $1,000.

The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan is increased from $6,500 to $7,500. Therefore, participants in these plans who are 50 and older can contribute up to $30,000 starting in 2023. The catch-up contribution limit for employees aged 50 and over who participate in SIMPLE plans is increased to $3,500, up from $3,000. For more information, click here.

Lastly, in regard to income taxes, these changes affect standard deduction rates, marginal rates and the Alternative Minimum Tax exemption. For more information on those adjustments, click here.

What Does Success Look Like?

By Lisa Purichia
Partner, Director of Accounting & Retirement Plan Services
[email protected]

For the first time in history, there are five generations of talent in the workforce. Considering this unprecedented phenomenon along with the current labor shortage, the definition of a successful business is now more varied and malleable than ever before. Employees born in 1945 obviously have a vastly different vision of success than those from Generation Z (born in 2001).

As a leader, it’s in your hands to not only define success but effectively communicate that to your team members. Your communication must have clarity of purpose and include your mission, core values and connection to the community, among other things.

Be prepared to address what you might not expect when collaborating with team members on a mutual vision for success. For example, while you may focus more on revenue and profitability (yes, very important!), younger professionals might lean toward measuring the value of a business based on its community outreach and impact. To which local charities do you donate and for whom do you encourage employees to perform community service? How do you publicly encourage diversity in the workplace?

Outreach and diversity are two of the many metrics you can use to clearly define success. Other metrics that this multigenerational workforce emphasizes include net profit, corporate culture and team engagement. In regard to the latter, do you have a true TEAM or merely a group of employees? What can you do to form a stronger team?

If employee engagement and morale are down, maybe you can be more flexible with the work schedule and allow them more time to work remotely. Or maybe they’ll thrive with more time together in the office.

The faster you identify the metrics that most clearly define success, the faster you will know whether you’re making progress in your eyes and those of your team members. Above all, regardless of their generation, they look toward a confident leader with a clear vision.

If we can assist you further with achieving success in your business or personal affairs, please contact Lisa Purichia at (317) 608-6693 or email [email protected].

Employee Spotlight: Beth Terry

Beth Terry is soon to celebrate her first full year here at Sponsel CPA Group, as she joined the firm in November of 2021. As a Manager in the Audit & Assurance Services department, her duties include audits, compilations, reviews, 401(k) audits and agreed-upon procedures across a broad spectrum of industries.

Prior to joining the firm, Beth earned a bachelor’s degree in business administration from Dalton State College and a master’s degree in accountancy from the University of Tennessee at Chattanooga.

In terms of her professional background, Beth has more than 12 years of experience in accounting and auditing, mostly in public accounting. Her career includes working among top 50 CPA firms, serving manufacturers, service providers, financial institutions and more. She also spent six years working in a boutique Employee Retirement Income Security Act (ERISA) audit practice, performing and managing retirement plan audits. She’s a member of the American Institute of Certified Public Accountants (AICPA) and Tennessee Society of Certified Public Accountants (TSCPA). Beth has served on the TSCPA EBP Conference Task Force since 2016. She was among the first CPAs to receive the AICPA Intermediate EBP’s Audit certificate in April 2016, subsequently attaining the AICPA Advanced Defined Contribution Benefit Plans Audit certificate in October 2017.

When she’s not engaged in client assignments, you’re likely to find Beth spending time with her dog, hiking or reading.

Never Let a Crisis Go to Waste!

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

With COVID and the ever-evolving marketplace around it, the last few years have been quite an endurance test for businesses. But business isn’t just about getting through the daily grind and keeping up with crises. Don’t lose sight of where you’re heading in the long run and the lessons you learned in dealing with the unique challenges you have persevered through!

Never let a crisis go to waste! In other words, dealing with a crisis isn’t just about putting out a “fire.” It’s about making your business fireproof. For example, look at Florida’s reconstruction efforts in the wake of Hurricane Ian. New buildings will feature impact-resistant windows and roof straps that enable roofs to withstand 155-mile winds. They’ll be stronger not only for possible disasters, but for the future in general.

Look toward others’ resilience as you face your own problems. Think about Floridians right now or fast-food companies at the height of COVID. In regard to the latter, think about how mobile ordering, self-service kiosks and curbside pickup have not only made fast food safer for a health crisis, but more efficient on the whole. Always be cognizant of taking steps to make your business better for the long haul.

As you move forward and prepare for the years ahead, also take faith in how you and others have overcome obstacles in the more distant past. What did you do or other businesses do when the dot-com bubble of the ’90s burst in the 2000s? Or during the Great Recession of 2008? Or when the COVID pandemic hit? Did you partner with other organizations? Introduce new products or services? Offer more discounts? Increase online presence?

These big periods of changes and challenges prove that businesses are more than capable of adapting, surviving and thriving amid Goliath-sized issues. COVID has also shown that we can adapt quickly. You don’t have to get bogged down by processes of consulting and vetting. You can modify your decisions and plans as you make them. A crisis often highlights what must be done to make critical decisions and what “activities” can be eliminated to make the decision process more efficient.

As a leader, you have to set the tone for dealing with the long run. Establish a culture of forward thinking when it comes to decision making. Make your team members think, “Are we just dealing with today? Or are we making for a brighter tomorrow?” Build for a successful long-term future!

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

September 2022 Newsletter

In this 13th anniversary edition of our newsletter, we talk about planning in the fourth quarter, failing forward, innovation and more!

Innovation Can Be Found in Failing Forward

By Eric Woodruff, CPA, CCIFP
Partner, Director of Audit & Assurance Services
[email protected]

Our society places a high value on perseverance, especially in professional pursuits. The movers and shakers of the business world often point toward the metaphor of the stonecutter persistently chipping away at a rock until it finally cracks open. However, with some tasks, there’s a certain point at which you need to put down your hammer and chisel or pick up another tool — not to give up, but to find a more productive outlet for your energy. Otherwise, you’re engaging in what many define as insanity, expecting success while simply repeating the same fruitless act.

In certain processes, perseverance should give way to innovation. Take note here, business leaders! Rather than a setback, “failure” could be a step forward — if you’re willing to embrace a change in direction on the path to your future. Some have also described “failure” as simply the stepping stone to success.

Innovation found: Look at how Spencer Silver stumbled upon the invention of Post-It Notes. During his time as a researcher at 3M, Silver was trying to create a form of permanent adhesive for airplanes, but he ended up producing a much weaker glue that easily peeled off. Silver’s determination to turn this failure into a success eventually led to the substance being used on those colorful pieces of paper we now love sticking to our desks and bulletin boards or using as bookmarks, labels, etc.

Rather than waiting on the permanent adhesive to work out, Silver failed forward and put an idea into action. Think about how director Steven Spielberg pushed forward when the mechanical shark malfunctioned during the production of Jaws. Or how Milton Hershey bankrupted two businesses before he took a third swing and made his name synonymous with chocolate.

These successful innovators didn’t go it alone either. They weren’t afraid to let collaborators see them at their most vulnerable. Again, look at Spielberg, who depended on composer John Williams to make Jaws’ shark scary through musical cues when he didn’t have footage of the actual creature. Don’t be afraid to lean on your team!

For a more recent example of innovation in the face of adversity, look at fast-food restaurants using self-order kiosks to combat labor shortages. That is just one of many challenges we currently face in the workforce. In this period of high inflation, supply chain disruptions, a possible recession, etc., it’s time for business leaders to be innovative and to encourage those around them to embrace that mindset as well.

As one of the world’s most famous and successful innovators, Steve Jobs, told us, “Think different.”

As business leaders, we also need to think long-term, hopeful for the quick-fix, but realize significant permanent progress is earned through hard work, perseverance and a commitment to a vision — with a dedicated team around you!

If we can assist you further with your personal or business affairs, please contact Eric Woodruff at (317) 613-7850 or email [email protected].

Summer is Over … Now What?

By Jason Thompson, CPA/ABV, ASA, CFE, CFF
Partner and Director of Valuation and Litigation Services
[email protected]

This is a big week, as it marks the end of summer and the start of the autumn season. The days get sequentially shorter, temperatures will drop and leaves will fall. But now is your chance to rise toward a brighter future! How will you finish out this year and set yourself up for success in 2023?

As you look back on what brought you to this point and how you will move forward from here, it’s easy to focus on the macro influences of the economy, the IRS and the government at large. But don’t spend too much time on those forces beyond your control. Remember … the businessperson in the mirror is the only one you can control! Over the summer months, outdoor functions and activities allowed you the excuse to procrastinate on those important but not urgent initiatives. Allow this change of seasons to provide the focus and energy to address your specific success factors.

So, what should your main focus be as you put the final touches on 2022, laying the foundation and setting the momentum for 2023? Well, what’s left on your plate? Think of the strategic tasks you outlined at the beginning of the year and expedite them to completion. We’re in the fourth quarter of the game now — it’s no time to procrastinate! Your team and business are depending on your leadership!

Also remember the fact that you now have a bit of time before the holidays hit. Take advantage of it, and plan ahead! Or use the quiet moments of solitude during holiday vacations to think of new products and services your business can offer in the future. Reflect on employees who have gone above and beyond. Who would thrive in a higher position and crystallize your vision for the future? What team members will allow you to start 2023 with a bang?

Now is an ideal time to put on your thinking cap, as studies show that our brains work best in the Fall Season. In a study from Sunnybrook Health Science Center and the University of Toronto, “researchers tested the thinking and concentration of 3,353 participants throughout Canada, France and the US over the course of one year. They found that in the late summer and early fall, participants concentrated better and had improved memory, focus and thinking skills, which led to greater productivity.”

As the article linked above suggests, “fall back into your best state of mind,” focus on triumphantly crossing this year’s finish line and lay the groundwork for a great 2023! Hopefully we have all had a productive summer, full of many good experiences and memories. Now is a great time to focus on a successful future!

For further assistance with your personal or business affairs, please call Jason Thompson at (317) 608-6694 or email [email protected].

Employee Spotlight: Lisa Blankman

Lisa Blankman is a Manager in the Audit & Assurance Services department. Her duties include overseeing audits, reviews, compilations and agreed-upon procedures. She also assists the tax department in reviewing business returns. She works with clients across a broad spectrum of industries, including construction and non-profits, helping them find efficiencies and become more effective in the marketplace.

Lisa graduated from Marian University and is now attending various events as an active alum. She is also a member of the Indiana CPA Society (INCPAS) and the American Institute of CPAs (AICPA), and she is currently serving as treasurer on the board of AYS, Inc.

Outside of work, Lisa enjoys traveling various places each year, which typically includes an annual trip to Mexico. She is currently looking forward to exploring New Zealand and Australia with her family in 2023.

August 2022 Newsletter

In this month’s newsletter, learn about managing stress, asking questions, curbing loneliness and more!

Leadership and Accountability

By Liz Belcher, CPA
Senior Manager, Tax Services
[email protected]

Do you feel tightness in your shoulders, as if a heavy load is clinging to them like the straps of a backpack? In business, we refer to this weight as the invisible “monkey” clinging to your back — someone else’s task that you take on as your own.

Just like monkeys swing from one tree branch to the next, problems within the workplace have a way of hopping across the rungs of the corporate ladder. Then, issues that should be worked out within the confines at the lower level of a single department end up in the lap of the manager or owner to complete and expedite.

Business owners and CEOs can often be their own worst enemies. Their extreme work ethic and type-A personalities can push them to pick up other team members’ workloads and take on too many projects — some of which aren’t even urgent or important to the team’s success. So, they constantly allow a subordinate’s “monkey” to dig its claws into their own back. In the end, it dilutes the owner’s attention to the greater needs of the business and becomes an unwelcome distraction. How do business leaders avoid this scenario?

Lose the weight and delegate! Don’t just accept the pile of work on your plate — pass it off to others around the table. Hold fellow team members accountable for delegated projects and deadlines. To prevent more employees from relying on you to pick up their slack, maybe start identifying the non-performing members of the staff. Be transparent and let them know you’re relying on them. Maybe they’ve simply grown accustomed to unfinished workloads, ultimately completed by supervisors, with NO repercussions to them personally, so they’re now immune and ill-prepared for effective delegation.

Seeing tasks spread smoothly and people rise to the occasion will undoubtedly inspire the more passive employees to start stepping up and taking initiative. However, this depends upon the amount of encouragement and positive reinforcement in the process. As Stephen Covey wrote in this Harvard Business Review article: “To delegate effectively, executives need to establish a running dialogue with subordinates. They need to establish a partnership. After all, if subordinates are afraid of failing in front of their boss, they’ll keep coming back for help rather than truly take initiative.” As to the fear of failure, one must learn that failure is just a stepping stone to success!

In other words, delegation should serve as a reminder that everyone is part of a team and rooting for each other. It should demonstrate confidence in everyone’s abilities. Confidence is contagious. If you show your team members that you trust them, they’ll hold their heads up high when you ask them to step up and assume greater responsibility.

However, as Covey also writes, “Many leaders may subconsciously fear that a subordinate taking the initiative will make them appear a little less strong and a little more vulnerable.” But the strongest leaders don’t clip their crew members’ wings; they give them the room to soar, the autonomy to make impactful decisions.

A large part of being a business owner is about holding people accountable. If you constantly take on other team members’ workloads or make up for others’ mistakes, your team will never grow. Remember, there’s no “I” in team! Don’t be your own worst enemy or let incomplete tasks keep piling up on your back. Start spreading the workload around and joining forces with your staff. Work smarter, not harder. Hold your staff accountable!

If we can assist you further with your business or personal affairs, please contact Liz Belcher at (317) 613-7846 or email her at [email protected].

Ask Questions and Create Possibilities!

By Lisa Blankman, CPA
Manager, Audit & Assurance Services
[email protected]

Amazon’s dramatic evolution started with a simple question. In an email to 1,000 randomly selected customers, founder Jeff Bezos asked, “‘Besides the things we sell today (books, CDs, DVDs), what would you like to see us sell?’” Customers responded as if they were making shopping lists, and when one requested windshield wiper blades, Bezos began to see how the online book seller could become the massively successful virtual marketplace it is today.

In this American business world that constantly preaches confidence, approaching customers about how to improve your business could be viewed as a sign of weakness. But what if Bezos never sent that email out of the universal fear of asking a stupid question? Reminder: The only stupid question is the one you don’t ask!

“Fake it until you make it” is a popular piece of advice, but it might not be the best to follow in your professional ventures. Rising through the ranks of the workforce is about curbing your ego, being vulnerable and admitting what you don’t know. Being open about where you are and where you aspire to go will push you forward on the path to success.

In his book, Good Leaders Ask Great Questions, John C. Maxwell writes: “In life’s journey we face many doors. Hidden behind them are all kinds of possibilities leading to opportunities, experiences and people. Questions are the keys to opening these doors.” Once you walk through them, seek out the experts who can help you gain knowledge and climb the ladder to success. Soon you’ll find yourself speaking their language, fluently using industry-specific jargon and acronyms you couldn’t decipher at the start of your career path.

Asking questions early in your career is especially important, as it shows your leaders that you’re invested and eager to move up. Branching out of your comfort zone and asking for a challenge could land you a new position in your company. Asking customers what else they want from you could lead to the development of a new service or product — or the return of an old one, like Taco Bell’s Mexican Pizza, which it brought back after high customer demand on social media. There’s no end to the possibilities!

While your colleagues may perceive you as an experienced journeyman, you should always seek additional knowledge and keep asking GREAT questions! If you seek continuous learning, your level of self-improvement will soar to new levels.

Remember, you don’t have to seem like you know everything about the business world. There are plenty of doors left to open and many colleagues willing to help you. You just have to ask for the keys.

If we can assist you further with achieving success in your business or personal affairs, please call Lisa Blankman at (317) 613-7856 or email [email protected].

It is Lonely … But You Do Not Have to Be Alone!

By Brandon Cangany, CPA
Manager, Tax Services
[email protected]

When you were a child, you looked forward to adulthood so you could make your own decisions. Early in your career, you may have sought upper-level promotions so you could direct operations rather than being directed. Careful what you ask for!

If you’re the leader of a business, department, organization — your team members come to you to help them solve their problems, boost their confidence and assure them of their value to the team. For YOU, unlike your team members, you’re supposed to be impervious to bad news, always shining bright with positivity and the perfect solution for every problem. Unfortunately, you are human, and the utopia visualized above is NOT reality. Leadership can be very lonely — courage is very important.

Because of the pedestal on which we sometimes put leaders, their lives at the top can get lonely. In fact, a survey from RHR International found that 50 percent of CEOs experience feelings of loneliness in their careers, 61 percent of whom believe this negatively impacts their performance. More recent studies show that senior leaders are especially lonelier in and outside of work because of their demanding leadership roles.

So, to whom should business leaders turn when they are on the pinnacle of the leadership pyramid?

First, there are Executive Coaches. They serve as an impartial third party and fresh set of eyes on your management conduct and vision for success. Some Executive Coaches will perform an intensive 360-degree assessment at the outset, gathering information about how your employees, managers and other stakeholders perceive you. They’ll then refer to this assessment as you work together to set goals for improvement and dealing with challenges and stress. Many are professionally trained and have a wealth of broad-based experiences to assure the Executive they are NOT unique to the place they find themselves.

Creating a more open dialogue between yourself and team members could curb loneliness as well. They may be avoiding that dialogue out of fear and/or intimidation, but let them know you have an open-door policy, which will allow you to work together as peers. Many leaders fear the vulnerability that they may expose themselves to — for them it may be tough to admit what they do not know or what they may not be good at. BUT that is why you surround yourself with a dynamic, diversified skilled group.

Seek out other peers in leadership positions through business networking environments and roundtable discussions. Swapping your business challenges and successes with other manager/owners and CEOs will surely enable a critical ongoing resource. The great leader Nelson Mandela stated it well: “Courage is not the absence of fear but the triumph over it.”

As you climb the ladder of additional responsibility and accountability, do not believe you are alone, but along the way build relationships and resources that will make you better … every day!

If we can assist you further with achieving success in your business or personal affairs, please contact Brandon Cangany at (317) 613-7899 or email [email protected].

Employee Spotlight: Michelle Badger

Michelle Badger joined the Sponsel CPA Group family in the summer of 2019. With a business certificate from IUPUI and nearly 20 years of experience in the field of accounting, she brings a wealth of knowledge to the table.

Michelle serves as an administrator in the Tax Services department, facilitating the delivery of individual, corporation, partnership, fiduciary and other tax returns. She is the person “at the end of the funnel” who makes sure the returns are filed on time. She is a great asset to our entire team!

Outside of work, Michelle frequently travels to Arizona to spend time with her family. Her grandson is now 18 months old, and he’ll be a big brother come next year!

Ethical Behavior … Personally and in Business … Matters!

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

As a proud CPA for over 45 years, I was embarrassed to read recently that Ernst & Young, one of the top four accounting firms in the country, has been intentionally enabling its employees to cheat on ethics exams for years. They were required to pass these exams to acquire or maintain professional licenses, thus losing all credibility by cutting corners. It is like an oxymoron — cheating on an ETHICS exam? Ethical behavior should be a “non-negotiable” in your enterprise — it IS that simple.

The Indiana Professional Licensing Agency also requires a similar ethics exams and continuing professional education (CPE) in ethics every three years — the required CPE cycle in Indiana. At Sponsel CPA Group, we take ethical behavior very seriously and ingrain it in our regular operating procedures. Any business that’s not run ethically is hardly a valid business, and it will not achieve its desired level of success in the long run. Business isn’t just about making a buck any way you can. It’s about building relationships, loyalty and trust. If you lose those critical elements, you’ll soon have nothing left — professionally or personally.

Business ethics are really no different than the ethics you employ in your personal life. Always ask yourself, “Am I doing the right thing?” You should do the right thing even if it costs you money. For example, if you give refund to a dissatisfied customer, you may find yourself worrying about your short-term financial results. Think about the long-term benefits instead. You’re establishing your business as one with integrity, one that cares about its customers and stands behind its products and services. Those are the businesses that can be trusted and will be around for the long haul because their customers know they are in reliable hands.

Your employee group will also rally around this honorable habit of doing the right thing. They will be proud to work with a company that values the customer experience and is profoundly focused on the relationship with its customers. In many cases, these same companies have an above average relationship with their team of employees, as people like to work in environments that make them proud. They will be proud that you are a “man or woman of your word” — and can be unequivocally trusted.

If you operate with Best Practices, employees and customers will respect you and pledge their loyalty. Think of the regulars at mom-and-pop coffee shops. They would probably prefer the convenience of a drive-thru Starbucks, but they keep going to the family-owned store because it has a sense of history and character. They like good, honest people pouring coffee from a pot they brewed themselves. That personal touch.

Our competitive culture unfortunately leads to short-cutting customer service and sometimes corruption in the business world. But there are fortunately consequences for those misdeeds. (For the aforementioned ethics exam offense, Ernst & Young had to pay a $100 million fine.) We can’t let wrongdoing slide. Business owners especially need to step up and set an example of doing the right thing.

If you’re not doing what’s right for your customers, employees and other stakeholders … what are you doing exactly? Stay focused on what’s right, and your business will keep booming.

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

Retirement: Is It an Age, a Date or a Number?

By Leslie Munas
Manager, Tax Services
[email protected]

When it comes to retirement, too many executives and business owners make the mistake of thinking it will suddenly arrive when they hit the magical “65” or become eligible for Social Security benefits. But it’s not something that just happens when you reach a certain age or save enough money in your bank account. You won’t find a retirement plan neatly laid out in the latest issue of AARP The Magazine waiting in your mailbox.

You have to be very intentional in your planning for retirement, and you should start five to 10 years before you plan to clean out your office and say goodbye to the daily grind.

So, why all the preparation? Why can’t you just pack up and leave?

You might not know if you’re even ready for retirement. Are you financially prepared? Are you mentally prepared? What are your spouse’s needs/wants post-retirement? Are you in agreement? There are many questions to consider before making the leap. You may consider a two to three month sabbatical a year or two before you plan to retire — as a trial run to discern the many aspects of retirement and which options are best fit for you and your spouse.

You should think of what you want to do with your new chapter in life. The worst feelings to have in post-retirement are regret or boredom — the Retirement Blues! Because people often simply feel pressured to retire, they end up not knowing what to do with their free time. In your transition period, give yourself a test run — try out some hobbies or activities, figure out what you like, maybe join a club or start growing a garden. Plant the seeds for a fulfilling life after retirement.

Your business needs time to adapt. This is definitely the case if you’re leaving the company in the hands of a family member or executive leader. They need the guidance and supervised leeway to successfully transition into managing the daily operations of the business and forming their own long-term vision for it. After you leave, you’ll want your replacement ready to hit the ground running in a seamless fashion. From a business perpetuation standpoint, you need to consider all of the stakeholders you will impact by leaving and handing over your responsibilities to someone else with whom they will have to do business. How can you maintain their loyalty and build their trust in a new leader?

Above all else, retirement is a practical measure and very personal to each person. Some business owners think they are going to work forever, but you never know what hurdles life will put up in your path. Health issues, personal burnout, economic downturns. Even the most stubborn and determined business owners are susceptible to all of these obstacles. Don’t let them sneak up on you! Grab a pen and paper and start a written retirement plan today. Preparation is something you’ll never regret. Consider reaching out to a trusted friend or business associate for input and feedback — they might help you discover your blind spots in your retirement planning. Good LUCK!

For further assistance with your personal or business matters, please contact Leslie Munas at (317) 613-7857 or email [email protected].

Assemble a GREAT Diversified Team

By Lisa Purichia
Partner, Director of Accounting & Retirement Plan Services
[email protected]

Now that we’re more than halfway through the year, now is a good time to think about your team members and determine how you can strengthen your team. You want to attract talent that is Humble, Hungry and Smart, as noted in author Pat Lencioni’s book, The Ideal Team Player. You need diversity of thought to discover your blind spots. It is also okay if team members are better than the “boss” in certain talents and skills.

Maybe you need to build upon your existing staff. Look for complementary people who bring diversity in all its forms, whether it’s gender, ethnicity, economic backgrounds, talents and skills, etc. Diversity brings different perspectives on how to approach challenges to provide solutions and reach certain goals.

As this recent Forbes article states: “A team that has a variety of worldview perspectives can educate employees and clients and reach untapped customer demographics. This opens the conversation to new, unexplored and different ideas. In fact, companies with greater diversity are 70% more likely to capture more markets.

Here are some tips to help you get started on the path toward strengthening your team and your company as a whole.

Surround Yourself with People Who Make You Better. Who shows strength in areas where you are typically weak? Which team members keep your ego in check and realistic with practical solutions?

Listen closely! Ask your staff members about their goals within the company. Where do they hope to see themselves next month or next year? What do they want to improve? Raising these questions will let them know you care, but make sure your actions mirror your narrative and accordingly you will motivate them to be team players.

Invest in your people. Make sure they have all the necessary resources, including tools and training — not just in the beginning but continuously throughout their time at the company. The current workplace environment mandates that your staff is continually enhancing their skills or learning new ones. Coach your employees and make them hungry to grow and thrive. But also be patient, give them the proper amount of runway and time to blossom. Focus on building the individual’s strengths — what they do well. Don’t try and fit that square peg in a round hole!

Identify strengths and weaknesses. The most successful businesses have an effective talent management system for finding the BEST candidates to meet the company’s wide variety of needs. If there are competency gaps within your organization, perhaps you need to rethink hiring strategies, provide more training or assign certain tasks to different employees. You should ultimately strive to create an eclectic team. The more your team members are Hungry, Humble and Smart, the BETTER your team will become!

If we can assist you with achieving success in your business through staff enhancement, please contact Lisa Purichia at (317) 608-6693 or email [email protected].

Employee Spotlight: Karen Parson

Karen Parson joined the Sponsel CPA Group family about four years ago.

Equipped with several years of experience in the accounting industry, she provides support to the Audit & Assurance Services team, serving as an Administrative Assistant to Tom Sponsel, Jason Thompson and Eric Woodruff.

Outside of the office, Karen is happily married with two grown children and two grandchildren. She enjoys spending time with her family and volunteering in her community.

June 2022 Newsletter

In this month’s newsletter, read about the importance of taking some time for yourself this summer. Also learn how you can “sharpen your saw” and reach personal and professional satisfaction.

It’s Summer — Time for a Vacation!

By Lindsey Anderson, CPA
Manager, Tax Services
[email protected]

After the last couple of years, which have been quite erratic, we could all use a break. With summer in full swing, now is the time to take one!

But given the unpredictable, ever-changing nature of the business world, are you hesitant to step away from your work? With proper notice and planning, there’s no shame in taking a vacation. Just sit down with your manager to work out a schedule and determine who can take over your tasks while you’re gone. They’ll be grateful for the heads-up! If you don’t plan for a vacation, you may never take one.

This also applies to you, business owners!

Let your staff know that vacations are important by taking one yourself. For all the reasons stated below, everyone can benefit from some “R & R” to return renewed and refreshed!

It’s therapeutic to get away. Not only is it good to escape the hustle and bustle of your daily work life; it’s also refreshing to have a change of scenery outside of work. Discouraged by increased gas and travel costs? You don’t have to go to Paris — consider visiting one of your state’s parks or booking a hotel on the other side of town.

Time away sharpens your focus. Amid the rapid flurry of emails, texts and daily tasks, you may forget what is truly important, and you should not allow immediate but less important tasks to consume your calendar! Slowing down helps you gain perspective on your career path as well as your life outside of work. These long-term perspectives grow clearer when you step away from your workplace. Your home life shouldn’t just feel like the place you return to tired after work. Vacations can inspire ways to make your personal life more fulfilling.

Family time is important. You don’t want work to make you miss your loved ones’ milestones in life. Take time to celebrate those special events. (One of our own staff members is getting ready to visit his grandmother for her 100^th birthday!) Spending time with loved ones is often the best escape from the stress of our workday lives. It’s our happy place. So, reward yourself and have some fun with those you hold most dear. Time with them will remind you what you’re working for in the long run and the quality of life you’re striving to provide them as well as the importance they provide to you.

You’ll return to work ready to rock! Everyone needs time off. You shouldn’t feel guilty about it. In fact, you’ll be a stronger performer and your business will benefit if you give yourself a break every once in a while. So, kick back, take a load off and come back revitalized! Your respective stakeholders (employees, managers, customers, vendors, etc.) will appreciate your renewed energy and improved ATTITUDE!

For further assistance with your personal or business matters, please contact Lindsey Anderson at (317) 608-6699 or email [email protected].

Invest in Your Own Personal Growth

By Jason Thompson, CPA/ABV, ASA, CFE, CFF
Partner and Director of Valuation and Litigation Services
[email protected]

Learning is a lifelong process. In an interview with Moviemaker Magazine, even master filmmaker Martin Scorsese, who’s been making movies for five decades now, said he’s “still learning to tell stories with pictures.”

This summer, as your kids earn their merit badges and karate belts or take on internships, think about what new skills YOU should acquire. Although it’s easy to get lost in the daily grind and think you’re doing just fine at your current skill level, learning and improving are vital not only for professional success but for personal satisfaction, confidence and self- esteem as well.

As a business leader, you must budget personal improvement time. 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 your staff to maintain skills and quality?

What is your own personal black belt you’d like to earn this summer? In this time of Zoom, increased remote working, etc., maybe you need to brush up on your communication skills. Take a speech class or a writing course. If you know anyone who does a lot of writing or speaking for a living, maybe ask them to be a mentor. (Even Academy Award-winning actors have coaches throughout their entire careers.)

Your personal growth and your company’s growth go hand in hand. Growth is not always measured in revenue dollars, but rather growth in capabilities, talent, the frequency of trying new approaches, products or services. Invest in human capital! If you do that effectively, the growth in revenue dollars and net income will come naturally.

This isn’t just about creating a successful business. Investing in your personal growth is also about reaching a point where you feel confident and fulfilled with how you conduct yourself, which is a good way to feel in the summer. It’s time for you to shine!

HR professionals often refer to their sphere of responsibility as “Talent Management.” Think of that term in another way: How are you managing your personal talent, and are you adding to your skills to reach your full growth potential? Only YOU can answer that question!

For further assistance with your personal or business matters, please call Jason Thompson at (317) 608-6694 or email [email protected].

If You’re an Executive, Consider a Personal Retreat — BY YOURSELF!

By Lisa Purichia
Partner, Director of Accounting Services & Retirement Plan Services
[email protected]

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

Unfortunately, a lot of leaders in business reflect the beliefs of this short-sighted tradesman. They focus on working harder, not smarter. They’re too busy working in their business rather than on their business. They believe taking time for strategic thinking is a “luxury” that can be avoided, as there are too many “busy” things that must be done ASAP.

If you’re a business owner or executive, consider taking a personal retreat this summer (YES, all alone by yourself) so you can step back from your office and see it from a fresh, outside perspective. Go hiking in a state park for a couple of days or spend a weekend at a resort. As you’re hitting the trails or sunbathing by the pool, reflect on what you’re doing successfully as a business leader and what you could do differently. There may be blind spots in your leadership style that create barriers to greater success. Are there any departments in your organization which are growing dull like the lumberjack’s blade? It will probably be easier to assess yourself honestly while you’re relaxed, outside of your normal business environment and less distracted by all the “noise” of your business operations. Think of this time as a therapy session on a shrink’s couch — a chance to improve as a person, spouse or business owner and to find greater personal satisfaction.

If you look back over the past 12 months and 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 frustrated subject in the initial paragraph?

In addition to a long vacation, consider this short personal retreat this summer — treat it like a business task but just not in the office. Don’t feel guilty. Quiet time alone is a necessity in this era of constant communication and 24/7 work. Trust us — taking some time away will improve your time at work, your focus for yourself and your personal happiness!

For further assistance with your personal or business matters, please contact Lisa Purichia at (317) 608-6693 or email [email protected].

Employee Spotlight: Tina Kelly

Tina Kelly has been with Sponsel CPA Group from the very beginning. With more than 30 years of experience in the accounting industry, she is a vital asset to the team.

As a Manager in the Accounting Services department, Tina provides services to clients who require customized accounting solutions as well as general bookkeeping, payroll services, reviews and financial reporting. She is also a QuickBooks Desktop and Online Certified Pro Advisor, helping with the setup, installation and training process for this accounting software.

Tina and her husband, Bob, have two grown daughters and five grandchildren. Outside of work, Tina cherishes spending time with her family, camping, hiking and reading.

May 2022 Newsletter

In honor of the Indy 500, this month’s newsletter has a racing theme! Learn how you can go the extra mile and cruise toward success!

Going the Extra Mile by Giving Back

By Erika Dudley
Staff Accountant, Tax Services
[email protected]

A successful business doesn’t merely have a high profit margin. It also reaches a high level of respect and acquires new talent by giving back to the community.

A study from the research firm, Great Place to Work, “revealed that giving back is associated with greater employee retention, higher levels of brand ambassadorship on the part of workers and more enthusiastic employees.”

The study also found that “staffers who believe their organizations give back to the community are a striking 13 times more likely to look forward to coming to work, compared to employees who do not perceive their employers to be generous toward the community.”

Community outreach is particularly important to young professionals of the millennial generation. They want to work for companies whose social values align with their own — companies that help deliver Meals on Wheels or support cancer research through donations. In other words, companies that care about people … not just profits.

Volunteer opportunities can serve not only as acts of kindness but as team building exercises for your staff. You might even get some positive press out of it, which will further bolster your business and help put it in the public eye. People will associate you with your good deeds and be more likely to do business with you when they need the services you provide.

Now that we’re returning to some sense of normalcy and enjoying this warm weather, you should think about ways your team can get out and help your local community, either through volunteering or sponsoring events. Maybe gather your team of employees to run in a marathon for charity. Community outreach not only helps others but encourages team spirit and relationships among your team members.

You only get what you give. If you help your community, more people will want to work with and for you. Plus, you’ll be helping make the world a better place, which is ultimately the best reason to do anything!

If we can assist you further with achieving success in your business or personal affairs, please contact Erika Dudley at (317) 613-7861 or email [email protected].

Speed is the Key to Success

By Eric Woodruff, CPA, CCIFP
Partner, Director of Audit & Assurance Services
[email protected]

Indy 500 winner Mario Andretti once said: “Speed is relative. You have to live it. You can’t just jump into it. You have to live it all the time.” The same goes for business owners, especially in today’s ever-changing and challenging business marketplace.

With social media, texting, Zoom and businesses like Amazon delivering products to your door the same day you order them, people expect things quickly. And although current labor shortages and supply chain disruptions may slow down your delivery systems with customers, you must remain vigilant in communicating with them in a timely manner.

Right now, business owners and managers need to ask themselves:

Are we set up to be nimble and flexible in responding to our customers and stakeholders?
How quickly do we respond to communication contacts?
How fast can we adapt to new changes so we can beat our competition to the market?
Is our website mobile-friendly? Is it easy to find information about our products and services?
How can we make it easier to do business with our company?
How can we stay abreast of market trends and upcoming developments?
Can we meet the 24/7 demands of the e-commerce world?

As a rule of thumb, any inquiries from potential new customers should be responded to in the same business day. The staff member monitoring the phone extension or email address linked to your website’s “Contact Us” page should be your proactive point person. Even if a principal team member is not available, at least have a responder let them know when they can expect communication from them. Just a quick acknowledgement like this can give prospective customers the “personal touch” they need to feel that their concerns are important. They are a “person,” not just another number!

If you’ve ever participated in any customer feedback services, you probably know how important a quick response can be. A negative client experience can often be rectified with a timely attempt to make good on any failure to meet expectations. This kind of quick communication is especially important now, as it may be the best you can deliver in the face of a labor shortage, supply chain issue or any other challenges with which businesses have to deal. Customers can be patient, but lack of timely communication is a deal-killer.

Even worse than a slow response is none at all. If you’ve been asked to fill out a survey from, say, a car rental company and you gave negative ratings, you may have checked a box that asked if you would like to speak to a manager. Did that manager ever get back to you? If not, chances are you’re not using that car rental agency anymore. Today’s world of commerce demands immediate responsiveness.

It’s also wise to manage expectations for responsiveness, especially with existing customers. Have your voicemail message or out-of-office email function let people know that you will try to get back to them within 24 hours. If that’s not sufficient for their needs, provide an alternate contact within your business who can jump on the requested task right away.

Take inspiration from the Indy racing season and analyze whether your company is meeting the need for speed in this fast-paced business world. Don’t be afraid to ask for feedback on your performance. Call your clients and vendors and see if they think your staff is sufficiently responsive. And don’t get discouraged by negative answers. Use them as a springboard for growth and development. It’s time to live life in the fast lane!

One final Mario quote: “If you think you have everything under control, you are not going fast enough!”

If we can assist you further with any process improvement, please contact Eric Woodruff at (317) 613-7850 or email [email protected].

Race into the Future … with a VISION!

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

Most successful leaders not only have an idea of what they want from their day-to-day operations, but they also have a vision for what the company will become three-to-five years down the road.

A leader with a crystal-clear, long-term vision can win over the toughest crowds.

Take Roger Penske, for example. When he bought the Indianapolis Motor Speedway (IMS) in November 2019, he received widespread support, even from rival team owners. That’s because he talked about breaking the glass of longtime barriers and taking risks that will pay off in the long run. He also gained support by giving back to the community and hosting mass vaccination clinics at the Speedway.

Then in early 2020, when the Indy 500 race was postponed and ultimately held without paying fans, he did not panic. But when asked about the challenges of a pandemic, he understated in a media article: “Any time you buy a business, there are always unanticipated challenges in the first couple of years!” He did not panic in the face of a pandemic not experienced in over 100 years. He has an identified vision as the “new steward” of IMS as a racing institution.

Think about the barriers you face and the risks you’re compelled to take. Whether you’re a CEO, department head or manager, you may not know all the steps needed to achieve your vision. But can you assemble a team that will help you build that path toward your goals?

Think about your younger employees. What millennial and Gen Z team members consider a “success” isn’t what you’ve historically considered a success. For example, while you focus on revenue and profitability (yes, very important!), younger generations measure the success of a business based on its community outreach and impact. To which local charities do you donate and/or allow employees to perform community service projects for? How do you publicly encourage diversity (in all its forms) in the workplace? The acronyms of DEI and ESG are important to them.

If you are flexible and listen to your team members, they will let you know what aspects of their employment is important to them.

Confidence is also key! Your calm, confident demeanor can carry the team over hurdles that would otherwise kill a company. That’s the power of positive thinking. Your LEADERSHIP and VISION are critical components.

The business world is rapidly ever-changing — not just because of economic challenges and generational differences. Successful businesses have always been about innovation and adaptation. That’s why you should take time away from your day-to-day operations to crystallize the long-term vision for your enterprise or operating group within the larger business. You will need to disclose that vision and show your colleagues your plan to achieve that vision within your designated time frame.

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

Protect Your Identity During Tax Season

By Liz Belcher, CPA
Senior Manager, Tax Services
[email protected]

If you’re on an extension to file your taxes or you forgot about this before you filed, let us remind you: Request an Identity Protection Pin (IP PIN)!

Known only to you and the IRS, this six-digit number is vital in preventing an identity thief from filing a tax return using your Social Security number or Individual Taxpayer Identification Number. The IP PIN helps the IRS verify your identity and accept your electronic or paper tax return. Generated each year, an IP PIN is valid for one calendar year, and it can be used only on Forms 1040, 1040-PR and 1040-SS. It is also unique to each taxpayer and only for their individual use, meaning spouses or dependents would need to request their own separate number.

Be wary of any phone calls, emails or texts asking for your IP PIN — these are the tricks identity thieves have up their sleeves.

The easiest and fastest way to receive an IP PIN is through the online Get an IP PIN tool, but you must have an IRS.gov account. The IP PIN tool is available from mid-January through mid-November.

Alternatively, you can file an application for an IP PIN if you have the following:

A valid Social Security number or Individual Taxpayer Identification Number
An adjusted gross income on your last filed return below $73,000 for Individuals or $146,000 for Married Filing Joint
Access to a telephone for the IRS to call for identity verification

Lastly, you can make an appointment for an in-person meeting at a local Taxpayer Assistance Center. Just be sure to bring two forms of identification.

Opting in to the IP PIN Program is opting in for protection. Don’t pass on this measure of security. You have nothing to lose by requesting a PIN but a whole lot to lose by not doing so.

If we can help further with your financial affairs, please contact Liz Belcher at (317) 613-7846 or email her at [email protected].

Be Deliberate for a Bright Financial Future

By Brandon Cangany, CPA
Manager, Tax Services
[email protected]

You may have just completed your 2021 federal and Indiana tax returns, but now is the time to stay in your financial planning zone to make 2022 and beyond a “planned for” success. Keep all your tax forms and financial documents on hand to start preparing for a brighter financial future.

The best way to start is to prepare a personal financial statement. In layman’s terms, this is a list of all the assets you own as well as your liabilities (the things for which you owe a debt). Assets include your home and any other real estate as well as cash, investments, HSA accounts, retirement accounts and automobiles, etc. The next step is to measure your net worth, which is simply the mathematical difference between your assets (YOU own) and liabilities (debts you owe).

In addition to the cost savings you create through voluntary means like bargain hunting and coupon clipping, take a look at your forced savings, including your HSA, 401k, IRA plan or 529 plan for your children or grandchildren’s education. It’s important to invest in these personal retirement and savings plans because many financial experts believe Social Security, as we know it today, must change in order to maintain its financial integrity. It is better for you to control your personal savings than to rely on federal government programs.

In addition, this process may help you set a practical annual or monthly expense budget to keep your spending under control and possibly increase your savings. Taking a critical, objective look at your spending habits will help you better plan your future spending on those financial endeavors that are actually important to you and your family. Many who undertake this objective financial exercise are quite surprised how they actually spend their money. Planning for expenditures will implement discipline into your spending habits that might be missing. If you are married or have a significant other, this whole exercise must be a team sport — otherwise success will elude you!

Many people procrastinate on personal financial planning either because they don’t understand it or they’re afraid to face the reality of where they stand financially. Ignorance can be bliss. But as actor Christopher Parker said, “Procrastination is like a credit card: It’s a lot of fun until you get the bill.”

The earlier you hold yourself accountable for taking financial planning measures, the better off you’ll be for long-term financial security.

If we can assist you with achieving success in your business or personal affairs, please contact Brandon Cangany at (317) 613-7899 or email [email protected].

Successfully Managing as Normalcy Begins to Appear

By Lisa Blankman
Manager, Audit & Assurance Services
[email protected]

Now, in the third year of the pandemic and with restrictions diminishing, it’s important for business leaders to not let their guard down. As we slip into some sense of normalcy, it can be easy to get lost in the daily grind and lose sight of potential dangers ahead and the lessons learned from the prior years of challenges.

In these times, it’s incumbent on business owners and managers to have a plan in place to deal with the lingering and future challenges. With two years of experience in managing this crisis, there’s no excuse now for business leaders to go back to their old ways and ignore the current acute challenges, which include:

Labor shortages (Go to any restaurant for proof of this)
Talent shortages (In this case, you may have laborers, but they lack the necessary skills)
Inflationary pressures
Supply chain disruptions
Rising interest rates (which might not impact your business but will likely impact your customers)
Business disruptions that have never been contemplated

As a business leader, you must be proactive at all times — do not let your guard down! And that confident, proactive attitude should trickle down from where you sit at the top. Success depends upon not just you alone but upon a confident management team planning ahead with various alternative protocols in place. Again, after years of disruptions in business due to COVID, there’s no excuse for being unprepared if another variant, or mandated disruption appears — preventative measures should be ready and available for immediate implementation.

Decide now what you want to do with the financial resources you may have received when COVID hit. Are you going to use your PPP loans to invest in growing your company and broadening your services, or you going to set aside cash funds for another potential downturn in your business — whether by a potential recession or mandated restrictions to your operations? Be prepared and utilize your “lessons learned.”

As Alexander Graham Bell said: “Before anything else, preparation is the key to success.” And he invented the telephone, so he knows a thing or two!

If we can assist you further with achieving success in your business or personal affairs, please call Lisa Blankman at (317) 613-7856 or email [email protected].

Transcend Transactions and Create Experiences

By Beth Terry, CPA
Manager, Audit & Assurance Services
[email protected]

We live in a world where we can shop for virtually anything online. So now, when customers enter a brick-and-mortar business, they want more than a transaction — they want an experience. Customers crave human connections and the feeling that people in the marketplace care about them on a personal level. Rather than simply providing a product or service, businesses should ultimately focus on building relationships with people who come in contact with their enterprise.

Think about how movie theaters have evolved in the wake of streaming services taking over the film industry. We now have theaters like Flix Brewhouse, which offers a night out at the bar plus dinner and a movie all in one place. And theaters now have more reclining seats and IMAX screens to rival our entertainment centers at home. Seeing a movie on the big screen is already a vastly different experience from watching one at home or on your phone, so these additions to that experience go above and beyond and make moviegoers feel like they are in the caring hands of fellow film lovers.

So, what can you do to give your customers this warm, welcoming feeling?

First, take a fresh look at your company’s culture. Is the environment vibrant and positive? How do your staff members greet your customers? Remember that an employee can only share a positive experience if they themselves feel valued and appreciated … and THAT starts at the TOP! Make sure you institutionalize attentive friendliness within the culture of your operations on a daily basis. What do most customers of Chick-fil-A recognize: (1) the speed of their service delivery and (2) the departing greeting, “It is my pleasure!”

More importantly, be transparent with your customers. Tell them you want their honest feedback, criticisms and all. Also ask how they’d prefer you interact with them. Over the phone? Via email? In person? Customize your relationship to fit their needs.

Speaking of communication preferences, always be aware of generational differences among your customers. For example, Baby Boomers are often called members of the “show me generation,” as they place importance on body language and in-person interactions. Millennials, on the other hand, prefer digital communication. The attention span of millennials is roughly 11 seconds, so keep those emails short and sweet! Another fun fact: 78% of Generation Z members (born between 1996 and 2011) have never visited a brick-and-mortar bank. Imagine their expectations for face-to-face customer service. Rather than inviting them to your building, it may be better to meet them at Starbucks and conduct business over cappuccinos.

Every customer is different, but they all long for a positive personal experience tailored to their individual needs. Think about what you can do to leave a smile on their faces after they do business with you. If you are successful, they will value your relationship and tell others about your enterprise.

If we can assist you further with achieving success in your business or personal affairs, please contact Beth Terry at (317) 613-7860 or email [email protected].

Get Your Creative Juices Flowing

By Christopher Sargent, CPA
Senior Analyst, Valuation & Litigation Services
[email protected]

If something’s not broken, you shouldn’t fix it, right? If you’re talking about your business, the answer is wrong! Even if it seems like your business is doing just fine, you won’t continue to grow if you don’t challenge the status quo! You must instill a creative entrepreneurial spirit within your team.

First, don’t be afraid to identify weaknesses or shortcomings in your processes and procedures. Putting them under the microscope will shed light on what’s actually working versus what has simply and arbitrarily become protocol — or maybe outdated!

Create a culture of constant improvement. Perhaps you could dedicate monthly meetings to discussing areas in which you can implement changes that will make a positive impact. Be deliberate by putting someone in charge of affecting change. Appoint a Chief Innovation Officer (CIO) to develop ideas and long-term strategies for implementing them. This person could also help you identify these three important aspects of your business: what you should stop doing, what you should start doing and what you should continue.

Look at what happened when Amazon stopped solely selling books and started shipping CDs, DVDs, video games, groceries and more. Remember when Netflix was simply a DVD rental and sales company? Now it dominates the entertainment industry, producing original films and series that have won numerous Oscars and Emmys. Imagine where our culture would be if these businesses stuck to their initial services and never branched out beyond them.

On a local level, look at a business like Ash & Elm Cider Co. Initially conceived as a craft beer brewery, the business pivoted toward hard cider when the craft beer industry started crowding the market in Indy. In the business world, you can either adapt or close your doors. There’s always hope for successful adaptation.

In your own time of reinvention, you should turn to your customers. When was the last time you sat down with them and asked what they honestly think of your products and services? If they find them merely adequate, statistics show that you risk losing those customers to a competitor. Consider feedback from vendors as well. Outsider perspectives are crucial to helping you revitalize your business.

Don’t be afraid of change — embrace it! What you should fear is the idea of sticking to the status quo. So get back to the drawing board and start throwing bold, brave ideas at the wall. You’ll be surprised by which ones stick. All stakeholders will benefit, and your company or organization will shine bright with a new vitality.

If we can assist you further with achieving success in your business or personal affairs, please contact Christopher Sargent at (317) 613-7851 or email [email protected].

February 2022 Newsletter Part II

In this month’s newsletter, we have exciting news about our firm as well as expert advice on attitude and leadership!

Sponsel CPA Group Among Best Places to Work

For the fourth year in a row, Sponsel CPA Group has been recognized by the Indiana Chamber of Commerce as one of the “Best Places to Work in Indiana.” The firm is one of the 125 winning Indiana companies and one of the 53 companies within the Small Company Group (less than 75 employees). Sponsel continues to stand tall, even as 40 new businesses made the list this year. The actual rankings within the respective groups will be announced on May 12.

The 125 winning companies represent more than 35 cities and towns across Indiana, ranging in size from 15 to more than 1,000 employees. The top companies were determined through employer reports and comprehensive employee surveys. The Workforce Research Group facilitated the selection process.

Tom Sponsel, a member of the firm’s Executive Committee, offered this reflection: “We’re so proud we’ve been able to maintain our streak of receiving this honor for four consecutive years, especially considering the challenges of the last two years. It’s encouraging to us as a TEAM as well as to our clients, vendors and loved ones that our perseverance through those obstacles has paid off. We thank the Indiana Chamber of Commerce for this wonderful recognition.

We would also like to CONGRATULATE all of our fellow winners, but especially the five companies being honored who we are proud to serve as clients and to call friends.”

The final company rankings will be unveiled on May 12 at the annual awards event sponsored by Ivy Tech Community College.

Vision and Focus Keeps Businesses Thriving

By Eric Woodruff, CPA, CCIFP
Partner, Director of Audit & Assurance Services
[email protected]

“To the person who does not know where he wants to go, there is no favorable wind.” These ancient words from Roman philosopher Lucius Seneca still ring true for leaders today. They often fixate on the daily grind and lose sight of the big picture. A true leader not only has a clear idea of what they want when they walk through the door of their business every day, but they also have a vision for the company three-to-five years down the road. Long-term vision is what keeps businesses alive.

Whether you’re a CEO, department head or manager, you may not know all the steps needed to fulfill your vision. But you can build a team that will help you carve out a path toward your goals. And make sure they’re with you for the long haul. As French aviator and author Antoine de Saint-Exupéry said, “If you want to build a ship, don’t herd people together to collect wood and don’t assign them tasks and work, but rather teach them to long for the endless immensity of the sea.”

Of course, thinking ahead is difficult in this era of constant communication, dysfunction and distraction. We live in a world so saturated with social media and sensational news that we can easily lose sight of daily tasks and long-term objectives. Rise above the chaotic state of society and all the “noise,” and make sure you and your team are keenly focused on the critical ingredients of long term success!

A leader should maintain a laser-like focus that rubs off on those around them. Confidence is also key! Your calm, confident demeanor can carry the team over hurdles that would otherwise kill a company. That’s the power of positive thinking.

Be the kind of leader you would want to follow. Think of how you would want to be comforted and motivated in the face of obstacles, and, most importantly, define what success looks like for your enterprise.

As business guru Simon Sinek said, “So much of starting a business or affecting change is the confidence and courage to simply try.” And it’s easier to be brave when you have a strong team behind you. The new year isn’t so new anymore. It’s time to take larger leaps toward the future of your business. Make it a bright one!

If we can assist you further with achieving success in your business or personal affairs, please contact Eric Woodruff at (317) 613-7850 or email [email protected].

Adjust Your Attitude For Success

By Lisa Purichia
Partner, Director of Accounting Services & Retirement Plan Services
[email protected]

In the business world — and life in general — attitude is everything. As renowned motivational speaker Denis Waitley said: “Your attitude is either the lock on or the key to the door of success.”

When you start your day … what attitude do you bring in the door?

When it comes to attitude, you’ve probably heard all about “the power of positive thinking.” Well, it isn’t just a popular phrase among motivational speakers — there’s actual science behind it. Studies show a correlation between positive thinking and increased creativity, clearer thinking, enhanced problem-solving skills, etc.

In the movie Jaws, when the mechanical shark kept malfunctioning, did director Steven Spielberg give up? No, he took a less-is-more approach and created a classic. Can you imagine the opening scene being nearly as suspenseful if we saw the shark rather than just the frightened face of a woman as she’s tugged underwater? In another example, can you imagine what would’ve happened to Domino’s Pizza if its CEO got down in the dumps about customers’ criticisms and didn’t launch the Pizza Turnaround project?

Clearly, Spielberg and Domino’s CEO were operating with positive attitudes. And they were the ones calling the shots. Attitude trickles down from the top, so they had to rally their troops. Now think about yourself as a business owner. Do you need an attitude check? Think about how you interact with co-workers on a typical business day. Do you greet them in the morning with a smile? Do you ask how they’re doing? Do you emit an air of positivity?

A positive attitude not only helps you persevere through the pressures and challenges of the professional world, but it also attracts those who can help your company grow. Your passion and enthusiasm will likely rub off on fellow team members and persuade prospective clients to do business with you. It will also convince your current clients to stick with you for the long run. Business owners who treat people well and seem eager to join them on a road toward success are bound for bright futures.

Your attitude ultimately complements your brand image. A company with high morale will attract and retain employees and clients, which will ultimately help you build a rock-solid reputation in your community and beyond.

Amid business obstacles and economic ups and downs, it can be difficult to maintain a positive mood and optimistic outlook. Think of the bumps along your path not as bad signs but as steps on the road toward success!

For more advice on the importance of attitude or for assistance with achieving success in your business. please contact Lisa Purichia at (317) 608-6693 or email [email protected].

February 2022 Newsletter Part I

In this month’s newsletter, read about success drivers, ways to fix dysfunction in your accounting department and more!

What’s Steering You Toward Success?

By Lisa Blankman, CPA
Manager, Audit & Assurance Services
[email protected]

Right now is the time business guru Michael Gerber would tell you to “work on your business, not just in your business.” We’re still navigating the new year, so the time is ripe for reinvention.

First, step back and take a bird’s-eye view of your business. How’s it holding up, and is it sturdy enough to venture out into this year’s market? As you reflect on your company’s condition, you should also ponder whether the past drivers of success hold the same potential they did a few years ago. Should their place in your planning remain? Are any of them falling short? Do they require some re-engineering?

Maybe it’s time to add vehicles that could steer you toward success. Look at Chipotle, which opened its 100^th “Chipotlane” last summer. Adding these drive-thru digital order pick-up lanes not only increased sales and efficiency but also created 10,000 new jobs.

Don’t let routine get in the way of forward thinking. Schedule a specific time on your calendar each week to take your mind off your daily tasks and think about the other potential success drivers of your business. Which ones are steering you toward your goals? These success drivers could be your employees — their work ethic, talents and skillsets, the management team — the leadership they provide in the many facets of your business, or your offering of products and services. The list goes on and on. Determine which current drivers deserve the most investment of resources as well as new ones that have less potential for the results you seek.

By stepping back on a regular basis and enabling yourself to analyze your business away from day-to-day distractions, that will allow you to see more clearly a better path forward. And therein lies the success you seek!

If we can assist you further with your business affairs, please contact Lisa Blankman at (317) 613-7856 or email [email protected].

Is Your Accounting Department Dysfunctional?

By Lisa Purichia
Partner, Director of Accounting Services & Retirement Plan Services
[email protected]

Cash flow is the lifeblood of any business. That’s why the cornerstone of any company is an efficient accounting department and a financial reporting system that promptly measures and details the results of your operations. As the business owner, are you getting the data you need on a daily, weekly or monthly basis? Most business owners are very good in many aspects of their business, but many times finance and accounting is not one of them. They become very dependent on their bookkeeper or controller and not cognizant of whether their trusted employee is giving them all they need to manage their business.

Financial statements should be prepared on a regular, systemic basis, around the middle of the month. Timely, accurate information is essential to your management team. Even daily “Flash Reports” of critical operating data are not uncommon. Consistency of practice is crucial.

As a business owner, it’s vital that you determine the people, processes and discipline necessary to make your accounting function run as smoothly as possible. Your management team should be reviewing your financial statements and key performance metrics on a regular, MONTHLY basis! Your accounting department should be reaching out to other operating departments within your enterprise to make sure they are receiving the financial data they need to manage their respective areas. Any business not following this practice is setting itself up for hardship, which could ultimately result in failure.

If you’re experiencing accounting issues in your company, it’s time to step back and determine the source of the problem. Is it your people? Is it your systems or lack thereof? Or do you simply not know? If you need a fresh set of eyes on your accounting function, Sponsel CPA Group can help! Whether you’re seeking consultation or thinking about outsourcing your accounting and finance needs, we can offer support and counsel TO MAKE YOUR OPERATIONS BETTER!

If we can assist you further with your business affairs, please contact Lisa Purichia at (317) 608-6693 or email [email protected].

Employee Spotlight: Galen Monroe

Galen Monroe has been a member of the Sponsel CPA Group family for over three years now. He joined the firm in September of last year, shortly after graduating from Marian University with a bachelor’s degree in accounting and economics. (He transferred from Saint Joseph’s College after it closed its doors in 2017.)

As a Staff Accountant in the Tax Services department, his role involves preparing and reviewing tax returns. He has experience working with individuals, partnerships, S-corporations and C-corporations.

Outside of work, Galen loves hiking all over the country. His goal is to trek across every national park.

Management vs. Leadership

By Eric Woodruff, CPA, CCIFP
Partner, Director of Audit & Assurance Services
[email protected]

Managers are usually considered leaders within a business, but the difference between managers and leaders is more significant than you think.

Managers work IN the business while leaders work ON the business!

To put it another way, managers are in the trenches while leaders are operating from a bird’s-eye view. Managers spend more time grinding through the day-to-day standard operating procedures. Meanwhile, a leader always has an eye on what’s further down the road for the business, and she carries an inspirational vision of what is possible.

A good leader has a crystal-clear vision for the company and its future. While a manager may get caught up in keeping the status quo and doing things the way they’ve always been done on a daily basis, a leader steers the team toward innovation. She takes measured risks and maintains control of the wheel when those risks threaten to push the company off the rails.

A manager can grow into a great leader by rising above the micro level environment and looking at the business more from a macro view. What can they do to make the business run more smoothly? Leaders will seek to improve the current daily processes. She will also look out further into the future and ascertain how technology will impact her business. A leader never stops reaching for that higher level of aspiration and inspires the team to achieve what they may not think is possible.

Leaders also actively encourage those around them to aim higher. THEY make the team better! They initiate training and team-building sessions throughout the year to keep employees sharp, on their toes and building new skills. Propelling people to improve creates a culture that encourages continuous learning and experimentation. It keeps the company alive and thriving!

You determine which role you aspire to fill: manager or leader. Most successful companies need talented team members in both roles. Are you as successful as you want to be?

If we can assist you further with achieving success in your business or personal affairs, please contact Eric Woodruff at (317) 613-7850 or email [email protected].

Setting Expectations and Mutual Goals

By Liz Belcher, CPA
Senior Manager, Tax Services
[email protected]

A workplace is a melting pot of diverse experiences, expectations, perspectives and personalities. Therefore, you can’t always expect everyone to share the same vision for the organization and their roles and responsibilities within the team. So, how do you effectively set expectations and mutual goals?

When you talk to employees, you’ll want to make sure you don’t just dictate your expectations. In other words, talk with them, not at them. A good rule of thumb would be to ask them for their interpretation of your expectations to make sure you’re both on the same page. Identify where there are differences and help them reconcile those differences within your corporate culture. Diversity of thought should be cherished and sought after.

This type of interaction is particularly important now, as you rally your team for end-of-year planning and setting your company up for a successful 2022.

Conflict arises most often from unclear communication and subsequent lack of understanding of the various roles of team members within a successful enterprise. And if clarity comes from the top, it will trickle down and minimize the risk of confusion in each department. Everyone needs to see eye to eye from the corporate level to middle management and the employees they oversee.

Setting expectations can be tricky because sometimes they’re subjective. Take expectations of a fun, friendly office environment, for example. Some people’s definitions of fun and friendly are different than others — this is very true among the five generations found in most workplaces. However, some expectations are based on the cold, hard figures of key performance metrics.

Once you set clear expectations, make sure you establish mutually accepted goals. Encourage employees to share their own goals in this process. How can you combine your employees’ visions for the company with yours?

If we can help you enhance the performance of your team, please contact Liz Belcher at (317) 613-7846 or email her at [email protected].

When Communication Breaks Down …

By Lindsey Anderson, CPA
Manager, Tax Services
[email protected]

We’ve all had a communication breakdown, whether it was an email battle, a text-off or a brief, uncomfortable in-person encounter in passing. As alternative forms of communications have become more acceptable in the workplace, the risk of misunderstanding and perceived conflict is heightened. Information can easily get lost in translation and unnecessary anxieties are created. How do you avoid these misunderstandings in a workplace?

First, establish a strong sense of trust across all departments. Trust encompasses honesty, integrity and respect. TRUST must exist both vertically and horizontally within your sphere of influence. As a leader, you need to walk the talk. Don’t just say you care about your team members. Go up to their desk and ask how they’re doing — sincerity is the key here; shallow attempts will be apparent and defeating. If they seem to have a case of the Mondays, cheer them up with a joke or funny anecdote. Be careful with humor though. You don’t want to miss their funny bone and hit them the wrong way.

The point is that trust leads to open, earnest communication. Another way to avoid breakdowns is to choose the right medium for your message. You’ll want to favor effective communication over efficient communication. While it may be more comfortable and convenient to fire off an email, it’s probably better to walk across the office and have a chat. The tone of an email or text can be easily misunderstood, in various unintended ways.

Always have a conflict resolution model in mind. Maybe before you establish a disagreement in cyberspace, you should keep the matter down to earth and have a face-to-face conversation. You might end up realizing you’re closer in agreement than you initially thought and discover the subject of conflict was sourced with a simple misunderstanding

Despite having the luxury of time to communicate largely in writing these days, we have a habit of sending knee-jerk responses. Maybe ponder your response for 24 hours before sending. Another helpful hint is to draft out your response, wait 24 hours, reread your draft response and challenge yourself if the draft response is still appropriate.

Behind a keyboard, you have the privilege of being able to take a breath, process your thoughts and communicate in the clearest way possible — heck, you have a dictionary, thesaurus and spellcheck at your disposal as well! Take advantage of those tools, and if they’re not working for you, you still have the old-fashioned but reliable face-to-face talk.

If we can assist you further with your business affairs, please contact Lindsey Anderson at (317) 608-6699 or email [email protected].

November 2021 Newsletter

In this month’s newsletter, read about family succession planning, how to avoid retirement anxiety, the importance of embracing the holiday season and more!

Making Your Family Business Your Legacy

By Jason Thompson, CPA/ABV, ASA, CFE, CFF
Partner and Director of Valuation and Litigation Services
[email protected]

Like any successful entrepreneur, most business owners look upon their company as not just their livelihood, but as part of their identity. As they approach retirement, it’s a natural instinct to want to protect that legacy and pass it on to worthy successors. This desire can be complicated when the business in question is family-owned.

The thought of relinquishing control to the next generation of the family may seem reasonable when you’re looking far down the road. But when the day actually arrives, control is often the last “asset” owners are willing to give to someone else.

Sponsel CPA Group has extensive experience with assisting the successful transition of family-owned businesses. Many of these clients are first-generation owners, but we also have some that are in the fourth generation of ownership succession.

The statistics can be alarming: most family businesses do not survive through the third generation of owners. The initial generation of owners are often the most “transition” challenged, as they have no experience “passing the baton.” Subsequent generations tend to better understand the challenge of ownership transition because they have personally lived through that experience. They know what a successful transition looks like and what pitfalls to avoid along the way.

The challenge of successful family business ownership compounds when there are multiple generations and lines of family descendants.

A succession strategy must address numerous areas, including management transition, financial transactions related to ownership transfers, and the ultimate question: when will control actually transfer?

In some cases, companies are transferred via “gifting” shares of ownership from one generation to another. Right now is an excellent time to take advantage of the historically high limit of the Lifetime Gift Tax Exemption, currently at $11,700,000. Given the political turmoil in Washington, the future of this exemption amount is highly uncertain.

In addition to gifting, there are other strategies for transferring wealth while retaining control of the business. These options can be beneficial because value is transferred out of the owner’s estate, but he/she maintains control of the asset transferred — in this case, the family business.

If you are family-owned company and desire to perpetuate the enterprise, Sponsel CPA Group recommends the following steps:

Communicate your exact desires directly with the future generation of owners, often and openly.
Seek their feedback and reaction to your family succession plan for the business.
Start the process early — at least 10 years before the elder generation wants to retire.
Be open-minded about the direction the company may take after transition. The next generation could have more energy and inclination for implementing major changes to the business model.
Provide the future business operators the benefit of your experience, but allow them to make their own mistakes — so long as they’re not detrimental to the business.
Use professional advisors to assist in counseling sessions designed to discuss difficult issues and the financial aspects of the business, both in good times and economically challenging ones.
Develop a plan to address family members who are not involved in the business.
Actively engage in the process — before, during and after transition.

Often we encounter older business owners who do not have a succession plan in place because of a misguided desire to avoid family conflict. In fact, the opposite is true: dealing with the issue of transition while you are still among the living is more beneficial to familial harmony than leaving your heirs to speculate what you wanted after you are gone.

Unfortunately, we have seen many families permanently and tragically divided over the settlement of estate and business ownership issues. But this doesn’t have to be the case with your family.

Become proactive in working with your trusted advisor (CPA, attorney, etc.) to develop a succession plan. Conduct family meetings to explain and implement a plan that is best for your family-owned company’s situation. And take the necessary steps to ensure your business becomes your lasting legacy.

If we can be of any assistance in helping your business with succession issues, please call Jason Thompson in our Valuation and Litigation Services department at (317) 608-6694 or email [email protected].

“…Retirement?….Retirement?!”

By Liz Belcher, CPA
Manager, Tax Services
[email protected]

As COVID-related disruptions continue and the economy keeps shifting, you’re probably not in the most comfortable headspace to focus on your personal retirement planning. But then again, retirement looks different for everyone. It doesn’t have to mean a life of binge-watching Netflix shows or lounging in the sun. You may find yourself busier in your retirement than you were in the working world. Retirement can be whatever you want it to be!

You’d think most people would relish the thought of retiring, but it can be anxiety-inducing for some, as it marks the start of a whole new lifestyle for them and their loved ones. Don’t allow the status quo expectations of retirement at age 65 corner you into a decision you aren’t ready to make. In addition to financial planning, you need to make time for activity planning, so you don’t become bored and aimless. After all, there are only so many seasons of The Office to watch, and they might just remind you of work!

In order to avoid retirement anxiety, here’s a checklist of questions you should consider as you start the planning process.

When do you want to retire? (A specific year or season?)
What are the major steps you need to take to prepare for retirement? (Who will take over your responsibilities in your business? Are you financially prepared? Are you mentally prepared?)
What are the main things you want to do with your free time? (Make a list of 5-10 activities.)
Do you want to move your homestead?
Do you want to travel?
What are your spouse’s needs/wants post-retirement? Are you in agreement?

If you are a business owner, you may not want to walk away entirely. Think about how active and involved you want to remain. Consider stepping down and taking on a lighter advisory role. Maybe limit your time in the office to one or two days a week.

Most importantly, don’t let retirement sneak up on you. Be proactive and intentional. Retirement anxiety comes from lack of consideration and preparation. So be sure to plan ahead of time and craft a crystal-clear vision of what you (if applicable — your spouse) want your retired life to look like. Also, be realistic. Know your limitations and be conscious of when it’s time for you to take a break from the business world. And make sure that break is exactly what you want it to be!

For further advice on preparing for retirement or assistance with your personal and business affairs, please call Liz Belcher in our Tax Services department at (317) 613-7846 or email [email protected].

Employee Spotlight: Jo-Ann Lewandowski

Jo-Ann Lewandowski has been serving Sponsel CPA Group since the firm was born. A Manager in Retirement Plan Services, she focuses on serving clients in managing their benefits packages, retirement plans and related compliance issues.

With a bachelor’s degree in financing from Millikin University and several years of work experience under her belt, she has a great deal of familiarity with DOL and IRS compliance requirements, including creating plan documents and preparing appropriate government filings, as well as processing participants’ loans and distributions.

Jo-Ann and her husband, Roy, have four grown children and two grandchildren. (They adore little Aubrie and Adi.)

Outside of work, Jo-Ann cherishes time with her family, especially time spent out in the great outdoors and cruising along Lake Monroe on their beautiful boat.

Embrace the Spirit of This Holiday Season

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

Given all the noise — vaccines, supply chain disruptions and political upheaval — you may not hear the holiday bells ringing at the moment. Don’t let the holidays sneak up on you. Tune out the negativity and plan to embrace the positive spirit of the season.

With Thanksgiving just around the corner, now is the time of year to focus on what’s really important and the things for which you should be grateful. Who are your rocks of support during shaky times like these? Set time aside to spend with them. The holiday season is all about fellowship. But those gatherings around the fireplace don’t happen automatically. You must deliberately plan visits with friends and family. Don’t wait until the last minute.

If you can’t get together in person, schedule a Zoom meeting or a Facetime call! With all of this cutting edge communication technology at our fingertips, we no longer have excuses for avoiding social situations. You wouldn’t want to be a Grinch, would you?

Trust us when we say that time with loved ones will be good for your emotional wellbeing in this chaotic climate. It will undoubtedly be a welcome distraction from the discouraging news cycle, giving you a fresh, strong focus for 2022. Although it feels like all the distractions are slowing us down, we need to keep pushing forward. Perseverance is the victor!

Whether you’re celebrating Christmas, Hanukkah, Kwanzaa or Festivus for the rest of us, be sure to live in the moment and cherish it. The pandemic restrictions have made us realize what we take for granted. If that includes the holidays for you, now is the time to start embracing them again.

Many of us are concerned about the division highlighted in the media. But most of us in our everyday lives experience the unity that brings us together. Make a difference in someone’s life — maybe just a smile, a friendly greeting or a word of encouragement to a person struggling in some manner … the Spirit of the Season!

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

Delegate to Be Great

By Lisa Purichia
Partner, Director of Accounting Services & Retirement Plan Services
[email protected]

Every good manager knows that the key to improving productivity is to hire talented people with skillsets matching the needs of the workforce. But when a business faces challenging times like these, issues can arise 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.

As any writer will tell you, writing is rewriting. For filmmakers, it’s all about editing. The same principle applies to any business project, especially now, as COVID continues to throw curveballs at us. You can’t expect your employees to knock it out of the park on the first swing.

If something doesn’t turn out as you expected, don’t just take it upon yourself to fix it. Work with your employees to reach the desired results. While completing the task yourself may seem like a quick solution, it only increases the burden on you, reducing your 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 our experience, responsibility actually breeds motivation. The majority of workers — especially young professionals — want to do well in their endeavors, and they will bring their A-game 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 clearly explain where their work is lacking and have them fix what’s wrong. Perhaps you could open the discussion with positive reinforcement to cushion the blow of the constructive criticism.

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.

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 you’re holding them accountable to that prescribed high standard. But be encouraging as well and clearly demonstrate patience and confidence in their personal ability to deliver.

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 can 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 further with your business affairs, please contact Lisa Purichia at (317) 608-6693 or email [email protected].

Don’t Be Afraid to Ask Questions!

By Eric Woodruff, CPA, CCIFP
Partner, Audit & Assurance Services
[email protected]

Many students don’t want to raise their hand in class, as they think asking questions is a sign of weakness. This can carry over into the working world, with employees and even business leaders creating a deafening silence in the conference room. Professionals don’t want to appear as though they don’t know what they’re doing.

“Fake it until you make it” is a popular piece of advice, but it might not be the best to follow in the long run. As leaders ourselves, we can say that we prefer when people ask questions, as it shows an interest in the business and a dedication to improving for the sake of helping themselves and their team thrive.

Think about it this way: Where would Steven Spielberg be if he didn’t ask himself and his crew how they could deal with the malfunctioning mechanical shark on the set of Jaws? Maybe he wouldn’t have taken the brilliant, less-is-more approach of signaling the shark’s presence through ominous music and underwater shots from the creature’s perspective. Or what if business owners didn’t ask themselves how they could adapt to COVID? Restaurants wouldn’t have survived if they didn’t lean more heavily on delivery and drive-thru business.

In his book, Good Leaders Ask Great Questions, John C. Maxwell writes: “In life’s journey we face many doors. Hidden behind them are all kinds of possibilities leading to opportunities, experiences and people. Questions are the keys to opening these doors.” Once you walk through them, seek out the experts who can help you gain knowledge and climb the ladder to success. Soon you’ll find yourself speaking their language, fluently using industry-specific jargon and acronyms you couldn’t decipher at the start of your career path.

Asking questions not only helps you learn; it can help you climb the corporate ladder as well. Branching out of your comfort zone and asking for a challenge could land you a new position in your company. Asking customers what else they want from you could lead to the development of a new product or service. There’s no end to the possibilities!

While your colleagues may perceive you as an experienced journeyman, you should always seek additional knowledge and keep asking GREAT questions! As the adage goes, the only question NOT asked is the “stupid one.”

If Sponsel CPA Group can assist you further with your personal and business affairs, please contact Eric Woodruff at (317) 613-7850 or email [email protected].

Customer Service — (Re)setting Expectations

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

Among other things, COVID has made us realize what we take for granted. One example is going out for dinner or drinks. We’re used to walking in to a restaurant or bar and finding a seat right away. Now, restaurants are so short-staffed that you may find yourself waiting an hour or more for a table even if the dining room is half empty.

The best way for restaurant owners to keep customers coming back is to be transparent about their limitations. They warn customers of wait times rather than pretending they’re operating normally. They even post a note on the door if they must close because they have no staff to work that day. You’ll be surprised at how forgiving customers can be if you’re open and honest with them — transparency is the key!

All business owners should take a cue from the food service industry right now. With supply chain disruptions and labor shortages, you have to drop your poker face and be realistic with your customers. Let them know your business isn’t what you’d like it to be right now, but you will do your best to keep them satisfied despite any delays. Give them a reason to return at another time, perhaps a discount coupon for their next visit. Be proactive in communicating with them and resetting their expectations based on the level of service you’re currently able to provide. Don’t shy away from the harsh reality of that current level of service. People respect honesty. That’s what makes them loyal customers in the end.

When a business isn’t running smoothly, there’s an understandable temptation for owners to ignore customers or give them the silent treatment. This is the wrong way to go. You may not have good news to report, but reporting something — such as a delay or a shipment failure — is better than nothing. Responsiveness is crucial in times like these. Always think of your customer first, no matter how “bad” your day is going. Timely communication and respect for one another are critical.

Sometimes, admitting weakness is the strongest thing you can do. You may lose prospective customers along the way, but if they respect your forthright nature and sincerity in upholding your desired level of service, they will come back.

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

Client Profile: Smock Fansler Corporation

Now celebrating its centennial, Smock Fansler Corporation has contributed greatly to the growth of Indianapolis. Founded by Kenneth Smock in 1921, the company started as a small trucking and excavating operation and evolved into a full-service general contractor responsible for constructing and renovating many of the city’s landmark buildings and structures, such as the Sunken Garden at Garfield Park, the Glick Peace Walk, the Ruins at Holliday Park, the Taggart Memorial Amphitheater, and the Komodo Dragon Exhibit at the Indianapolis Zoo.

“Kenneth Smock Excavating built most of the levees in Central Indiana, did excavating during the construction of the City-County Building, hauled cinders for Indianapolis Power and Light,” said President Thomas Fansler III. “It’s grown a lot from there and since my father took over operations.”

Fansler III’s father, Thomas Fansler Jr., went to work for the company in 1967 and ended up purchasing it within six months on the job, owning his own business at the tender age of 29. He steered the company toward the services it provides today. And he quickly established it as a family business, letting his sons work alongside him during the summers and after school.

“I think the first time I helped estimate a project with my father, I was 12,” Fansler III said with a chuckle.

Fansler III has loved the company ever since, taking pride in such award-winning projects as the White River State Park Visitors Center, the Central Indiana Riverfront and the JW Marriott Art Plaza.

“Our bread and butter is building places people want to be,” he said. “We love making a positive difference in people’s experiences. We build projects as if we’re building them for ourselves.”

Fansler III attributes the company’s longevity to its close-knitted employee and client relationships.

“We think of ourselves as one big family, and we’re all dedicated to doing the right thing for each employee, customer and project,” he said.

Smock Fansler now has three generations of leadership, with Fansler III’s son — Tom Fansler IV — and his brother David’s son — David Fansler, Jr. — stepping into roles as leaders and proving to be instrumental in the growth of the business.

The company considers Sponsel CPA Group part of its family as well. In fact, Smock Fansler was one of the firm’s first clients, and Sponsel CPA Group currently helps with its budgeting, tax preparation, strategy reviews and family succession planning, among other things.

“Tom Sponsel has so many well-vetted contacts,” Fansler III said. “If we need to connect with a specialized individual in a particular area, Tom does a fantastic job of finding the right fit for our company. But what I love most about Sponsel CPA Group is that they treat us like they’re a part of who we are. The same level of care we provide to our customers is what they give to us.”

What Drives Success? — Now and in the Future

By Liz Belcher, CPA
Senior Manager, Tax Services
[email protected]

Today, the business world looks like an alternate dimension compared to 2019. With companies operating in cyberspace and hosting virtual events to managing labor shortages and supply chain disruptions, this is a time of evolution for business owners.

Many of these current challenges are projected to remain for 12 to 24 months, and then what is your future?

What drove your business to success a few years ago may be vastly different going forward. A pandemic leaves lingering results, some of which will remain permanently. In this ever-evolving economy, it’s vital to step back and take a bird’s-eye view of your business. Now is the time to take a cue from business guru and author Michael Gerber and “work on your business, not just in your business.”

As you reflect on your business condition, you should ponder on whether the past drivers of success hold the same potential they did two or three years ago. Maybe your business functions more efficiently as a virtual company. Many of the changes made in business operations over the last 18 months have improved efficiencies and, in some cases, profitability!

As we continue to adapt to COVID, your customers may prefer digital, contactless business transactions.

Taco Bell is already ahead of the game with its Go Mobile drive-thru concept, which aims to provide completely contactless food service through two-way audio-video communication and a lift system that delivers food from the elevated kitchen on the second floor of the restaurant.

The point is that you need to consider the latest trends and look toward the future. Innovation must be encouraged, and evolutionary changes embraced. Think about your younger employees. What millennial and Gen Z professionals consider a successful business probably isn’t what you’ve historically considered a success. For example, while you focus on revenue and profitability (yes, very important!), younger professionals measure the value of a business based on its community outreach and impact. To which local charities do you donate and/or allow employees to perform community service projects for? How do you publicly encourage diversity in the workplace?

The business world is changing — not just because of COVID and generational differences. Business has always been about adaptation. That’s why you should take time away from your day-to-day operations to crystallize the long-term vision for your business and plan for changes along the way.

If we can assist you further with achieving success in your business or personal affairs, please call Liz Belcher at (317) 613-7846 or email her at [email protected].

From Person of Influence to Thought Leader

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

A person of influence within a company is like a great basketball player, inspiring their team members to bring their A-game to the court. Like Michael Jordan and Larry Bird, they made even the shortest member of the team feel like they could soar up to the hoop and score a slam dunk. Their influence makes everyone better!

A person of influence isn’t afraid to speak up and add to the long-term vision for the business. In staff meetings, they’re the ones pitching the exciting, innovative, big-picture ideas. They’re constantly networking, gaining knowledge from others, keeping up with the latest trends and current events, and using that info to shake up the culture of their company. They challenge the team to stretch themselves and grow.

People of influence often go on to become thought leaders — casting a much broader net. In that position, they are humble, and their intelligence is respected — not only in the academic sense, but also in implementing successful applications in the real world!

By the time they’re considered thought leaders, others come to them for ideas and advice. As a leader, you’ll want to reach a point in which peers and younger professionals seek you out for counsel and guidance. Reaching this point provides validation that you’ve been doing something right all these years! Thought leaders also allow themselves to be vulnerable, acknowledging what they don’t know but also recognizing the opportunity to learn new data and theories.

Thought leaders are particularly important now. In these divisive times, people from all disciplines want leaders who can see both sides of an issue and bring an impartial balance to the discussion. Thought leaders provide calm, civil discourse amid the contentious rhetoric spreading these days.

How can you grow to be regarded as a thought leader? Express yourself! Post your professional tips and ideas on LinkedIn. Start a blog on your company’s website. Look for opportunities to speak at events within your industry and community. Provide honest and constructive feedback when asked.

It’s one thing to be a leader; it’s another to be a respected leader. So, whenever you have the chance, be sure to speak up, help out and lend your thoughts to business matters.

In times of heightened emotions, you need “an adult in the room” to move discussions to a fruitful conclusion. Good luck!

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

Client Profile: Kennedy Tank

Since its birth way back in 1898, Kennedy Tank & Manufacturing Company, Inc. hasn’t stopped growing. In fact, Indianapolis Business Journal recognized it in its 2019 list of the top 25 fastest-growing companies in the city.

A fifth-generation family-owned business, the company’s namesake dates back to 1898, when Patrick Washington Kennedy began repairing boilers and fabricating steel products. His son, William Kennedy, joined him in the early 1900s and moved the enterprise in the direction of manufacturing gasoline tanks for fueling automobiles. The diversity of products and services grew from there, leading to what the company offers today.

“While our competitors might build tanks or heat exchangers, we build tanks, pressure vessels and heat exchangers, and field erect large diameter tanks” said Business Development Specialist Jim Kennedy. “We’re one of the only companies in the United States that can build those four types of equipment as well as maintain and repair it.”

One of Kennedy’s favorite aspects of being in the family business is the vast variety of projects that keeps everyone on their toes.

“One day we might be building a 300-gallon stainless pressure vessel, and the next we’re building a two inch-thick, 150 foot-long column,” he said. “The diversity of products that flow through our shop and the challenges we take on for our great customers are always entertaining.”

This is just one of the reasons the Kennedy Tank team has stayed together so long.

“A significant percentage of our employee base has been with us for over 20 years,” Kennedy said. “We treat people like family and are constantly promoting from within. Several teammates joined the company as night shift welders and then worked their way up to foremen, production manager, vice president of manufacturing. And several folks have started in production and gone on to positions in our corporate office. Our team has some of the highest character, intelligent, and hardest working folks in the city of Indianapolis.”

Kennedy Tank considers Sponsel CPA Group part of its team and success as well.

“About a year-and-a-half ago, we followed up on a referral to inquire about using their tax planning services, and that turned out to be one of the best decisions Kennedy Tank has ever made,” Kennedy said. “They’ve kept our best interests in mind and delivered 100 percent for us in regard to responsiveness and overall effectiveness. It’s a true partnership. We look forward to continuing that collaboration.”

As it nears its 125-year anniversary, Kennedy Tank continues to evolve. For the past five years, it has made great strides in its digital journey, connecting the company’s enterprise resource planning system to Microsoft Business intelligence, allowing instant access to project materials and thus increasing efficiency and productivity which purchasing manager, Dan Yoder has overseen.

“It takes a true village to produce the kind of results Kennedy Tank has accomplished over the past 123 years,” Kennedy said. “We strive to go above and beyond to ensure all teammates are treated well and growing in their career here at Kennedy Tank.”

Spotlight: Tom Sponsel

Tom Sponsel is a “we” person. Although his name is on the business, he credits the entire Sponsel CPA Group team for making the firm what it is today.

Twelve years ago, with the help of his founding partners, Tom aimed to launch a new kind of CPA firm, gathering a team of trusted professionals with a diverse set of skills for the mission of providing clients not just financial acumen but executive-level counsel to bring more value to their endeavors.

Now, Sponsel CPA Group is one of the most highly regarded businesses in the state. The Indiana Chamber of Commerce has recognized it as one of the “Best Places to Work in Indiana” for the last three years. It’s also listed in the Indianapolis Business Journal’s Book of Lists as one of the top 25 Indianapolis CPA firms.

“We’re respected in the community, we provide a high level of service, and people enjoy doing business with us,” Tom said. “That’s incredibly gratifying, but I’m even prouder of the fact that we reached this level as a team.”

Growing up with six siblings, Tom learned the importance of teamwork early in life. He considers Sponsel CPA Group an extension of his family, and he enjoys seeing staff members find success in and outside of the firm. For him, the office is no different than home, as he loves his work and colleagues. But when he leaves for the day, he cherishes spending time with his wife, their two grown children and their five grandchildren.

For Tom, both his personal and professional lives are all about the people around him.

Back to School, Back to Business

By Lindsey Anderson, CPA
Manager, Tax Services
[email protected]

August is usually a slower time for business, as parents shift their focus toward getting their kids ready for the return to school. While they shop for class supplies and recalibrate their personal schedules, you should also consider what your focus should be as a business owner. Now that we’re more than halfway through 2021, it’s time to take a step back and think about how you can successfully close out the year, given your current business conditions.

It’s always better to be proactive than reactive. Take this time to make contingency plans as you continue to navigate COVID and the ever-evolving economy around it. How will you deal with labor shortages and supply chain disruptions? Will you limit the products and services you offer? Where will you cut costs to handle higher inflation and wage rates? Is there elasticity in your marketplace to increase your prices?

Perhaps you need to work toward completely renovating your business model and give your enterprise a “refresh.” Given the unpredictable nature of the pandemic-stricken world right now, maybe you can’t sustain as a brick-and-mortar business and need to prepare for seeking more e-commerce business. With so many staff members in school mode, now might be the perfect time to explore the flexibility of your staff working remotely a day or two a week?

It’s important not just for business owners but for consumers to assess their financial standing right now too. How will inflation and higher tax rates affect your buy/sell decisions? Do you need to increase your savings rate to prepare for future uncertainties?

Although the midway point in the year is naturally a good time for evaluation, you should be assessing your business and financial status three to five times a year. Hope for the best, but prepare for the worst, especially when it comes to running a business in a time of uncertainty. So step away from the daily grind and take some time to map out the future.

All business owners should take time periodically to work on their business rather than just in their business!

If we can assist you further with your business affairs, please contact Lindsey Anderson at (317) 608-6699 or email [email protected].

Mentors Do Matter

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

Graduating from college and landing a job in the business world only means your education is just beginning, now in the REAL WORLD. You will quickly find that your new job demands a lot of “new things” that were never discussed in any classroom. You may quickly find that you need a resource, someone behind the scenes to help show you the ropes. That resource may be a mentor who can make a difference in your pace of learning. Some mentorship programs are formal while other mentor relationships just grow out of working with more senior people in your organization — they have “been there, done that.”

It’s important when you’re starting out in your career, but also as you climb the ladder of increased responsibility, to connect with the seasoned managers who are willing to help you see what all you can be. Their life experiences have given them a long-term perspective in a world of “I want it now.” That sense of perspective (“It will be OK”) can assist you when you are most frustrated and on the edge of despair in your career. Be receptive to feedback and advice from everyone, but accept it with discerning ear.

Younger employees tend to let their emotions get in the way of business. It’s understandable to be sensitive to criticism of your work, especially early on, but constructive criticism is vital for growth. Mentors can help open you up to being vulnerable and accepting of constructive criticisms and suggestions. All businesses require teamwork, collaboration and renovation. If you played sports, you may recall that your toughest athletic coaches made you better!

Mentors can impact the speed at which you excel. They can give you tips on how to keep moving forward and what pitfalls to avoid. That may mean handing off stalled ideas to co-workers, changing your approach to certain projects or communicating with managers in a different manner. Sometimes it even means sharing tough messages with you like: You need to change YOUR attitude.

While mentees can quickly see the rewards of their apprenticeship, mentors might not realize their own impact until years or decades down the road. They may not even realize they were someone’s mentor! This goes to show that you never know what kind of effect you can have or what kind of impression someone can make on you. So be cognizant of your interactions and relationships with colleagues. Those encouraging words or random acts of kindness may end up being more important and lasting than you think!

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

July 2021 Newsletter

In our July newsletter, learn how to cherish life outside of social media, dig deep into the definition of success, explore how to evolve as a business and much more!

Cherish Life Outside of Work and Social Media

By Lisa Purichia
Partner, Director of Accounting Services & Retirement Plan Services
[email protected]

Amid the hustle and bustle of our professional lives, many of us rely too heavily on social media to catch up on personal matters. Scrolling through the Facebook newsfeed and reading loved ones’ statuses just isn’t the same as connecting with them in person.

In many ways, COVID forced us to hit the pause button on life. Now that we’re moving forward, it’s time to live it to the fullest!

Prioritize what’s really important. If you can afford to duck out of the office early for an anniversary dinner with your significant other, you should do so! If your grandmother is celebrating her 100^th birthday, you shouldn’t miss that! She has decades of life experience from which you could learn a lot. Sure, you could text or call her, but you’ll gain so much more from visiting. Sit by the fireplace and let her tell you what it was like watching the moon landing on TV.

Living in the moment and truly appreciating your time with loved ones outside of work will boost your spirits and productivity when you’re at your place of business. If you work on a computer and take breaks only to check on friends and family through Facebook, Instagram or Twitter, you’re just moving from one screen to another. You need to unplug and recharge.

One major reason to unplug is that living vicariously through people on social media can be frustrating. You may see pictures of them on the beach and think, “I wish I were there.” Well, put your phone away then and pack your bags! In fact, studies suggest that spending less time on social media can reduce risk of depression. An article from The Jakarta Post states: “Researchers suggest that spending too much time on social media might displace time that could be spent forming more important in-person relationships, achieving personal or professional goals, or just having valuable moments of personal reflection. They also highlight the fact that social media is skewed towards showing the positive aspects of people’s lives, and that this kind of social comparison can affect self-esteem.”

So, once you finish reading this article on your phone or laptop, go grab coffee with a colleague or family member. Celebrate a professional or personal milestone. Plan a vacation. Whatever you do outside of work, be sure to cherish it!

The personal connection will not only bring joy to a friend or family member, but you will again appreciate the importance of that human connection and how “random acts of kindness” can embellish life’s purpose!

If we can assist you further with your business affairs, please contact Lisa Purichia at (317) 608-6693 or email [email protected].

Are You Winning or Losing?

By Lisa Blankman, CPA
Manager, Audit & Assurance Services
[email protected]

In the business world, we tend to get in the habit of defining success too simply. We ask ourselves, “Are we winning or losing?” But there is a lot of gray area to explore in the middle of this black-and-white definition of success. Many times, a “loss” is a future pathway to future success!

First, make sure you’re using the right metrics to measure your success. For a business owner, those would include gross sales, net profit, return on investment, etc. If you’re an employee, you’ll want to look at your hourly wage or salary over time as well as the number of bonuses you’ve earned in a specific period and when you will be eligible for a promotion.

Focusing on those specific metrics will help you form more specific, manageable goals. Manageable is the key word. Don’t get hung up on hitting home runs or hunting down that great white whale of a client. Aim toward scoring singles or doubles and catching the smaller fish in the sea. Remember, you’re in this for the long haul, so take baby steps. You wouldn’t want to exhaust yourself by always reaching for the top. Plus, remaining realistic in your efforts will help your whole team stay energized and build the confidence you will require to persevere!

Your goals should be objective and subjective. So, when you ask whether you’re winning, don’t just think about profits. Think about whether you’re learning, gaining new skills and forming stronger chemistry with clients, among other things. As an employee, you may assess if you are aligning for that next promotion or learning new skills that will enable you to earn a higher wage.

Try to think about losing in more subjective terms as well. Let’s say you lost a bid for a project. Don’t lose sight of the competitive intelligence you may have gained in the process. So, while you lost the battle, you’re in a better position to win the war.

The next time you sit down to consider whether you’re winning or losing, please let these points serve as a source of inspiration and encouragement. And remember, in the end, what’s most important is that you give everything your best shot. Your sincere “BEST” is all anyone can expect of oneself.

If we can assist you further with your business affairs, please contact Lisa Blankman at (317) 613-7856 or email [email protected].

Know What You’re Good At — Stay Focused!

By Brandon Cangany, CPA
Manager, Tax Services
[email protected]

In the wake of COVID, the business world is facing many challenges. Chief among them is the limited number of talent resources — all business owners are experiencing a shortage of labor at all levels. Given this shortage of labor along with supply chain disruptions, it may be important for you to narrow your scope of offerings and possible modify your business model. Customers still expect great service, so focus on those products or services that you are best at delivering and have the capacity to do so.

If you find yourself in the position of having limited talent right now, you’ll obviously need to limit the products and services you offer. Focus on the ones that bring in the most gross margin and push the others to the side for the time being — or at least invest less time and energy in them.

It can be hard to let go of a primary product or service and realize that it’s no longer as relevant as you once thought. But look at what CVS did. To grow and thrive as a healthcare company, it stopped selling cigarettes and tobacco products, despite the fact that its gross revenue from those products was in excess of a billion dollars. “The sale of tobacco products is inconsistent with our purpose — helping people on their path to better health,” said former CVS President and CEO Larry Merlo.

Take a cue from CVS. Don’t stubbornly stick to the same path as your competitors. Be open to detours and a wider purpose for your business. Here’s a popular related observation on the lack of a perpetuated success of the railroad industry: “Railroad industry folks thought they were in the railroad business when they should have understood they were in the transportation business.”

Right now, you have to hope for the best, prepare for the worst and persevere. Don’t be afraid of modifying or adopting a different business model. Remember, CVS is doing just fine without tobacco products behind the counter. And after all, evolution is key to survival. Embrace your business makeover!

If we can assist you further with your business affairs, please contact Brandon Cangany at (317) 613-7899 or email [email protected].

Employee Spotlight: Wyatt Althoff

Staff Accountant Wyatt Althoff Wyatt Althoff joined our firm last September upon graduating from Anderson University with a bachelor’s degree in accounting and finance.

As a Staff Accountant, Wyatt’s duties include audits, reviews and compilations as well as federal and state taxation, including compliance and planning for clients across a broad spectrum of industries.

When he’s not in the office, you can find Wyatt enjoying the great outdoors, whether through fishing, hunting, horseback riding or harvesting livestock. Raised on a farm, he went on to show livestock at 4-H fairs, and he’s looking to get back in the game. He’s starting with a horse and a few chickens. Best of luck, Wyatt!

You Need a Vacation

By Lisa Purichia
Partner, Director of Accounting Services & Retirement Plan Services
[email protected]

Remember that scene in Terminator 2 when star Arnold Schwarzenegger rises from the rubble of a robot battle and sleepily says, “I need a vacation?” Many of you probably feel the same way now, in the wake of the incredibly stressful past 18 months. Over this time, we’ve been through a pandemic, quarantine, business setbacks and reinventions, nationwide protests, the presidential election, etc. And now we’re gradually returning to a sense of normalcy.

As HR specialists have told us again and again, one of the critical ways of relieving stress and easing back into professional life after a difficult period is to take a vacation.

Now more than ever, it’s important for business owners and managers to encourage employees to take a break, get away from the office and disconnect. They need to shut off their computers, tune out the emails and set up voicemail for business calls. Of course, that can be difficult in this age of constant contact. Employees may hesitate and ask, “But what about our great client relationships based on round-the-clock responsiveness?” Customers understand the need for vacations, especially when they involve time with family. Plus, most businesses are built with a certain amount of redundancy to ensure that other people can help customers when an employee is out of the office.

When you get out and about with your family and friends, you’ll realize what you’ve taken for granted in this peculiar period of social distancing. Engage in activities outside of your daily routines. Go someplace exotic. Take long walks on the beach. Get lost in a good book. You’ll be amazed at what just a week away from the workplace will do for your wellbeing.

Many of you may feel guilty about taking a vacation and view it as some kind of “disruption” of work. But it’s actually a boon for your business. The regeneration of energy and perspective that comes from vacation boosts employee morale, increases productivity and ensures a stronger, healthier workforce.

We’ve all been under an enormous amount of stress and pressure since 2020. Take a deep breath, call your travel agent or head over to Tripadvisor. You deserve — nay, need — a vacation!

If we can assist you further with your business affairs, please contact Lisa Purichia at (317) 608-6693 or email [email protected].

Your Personal Network … Leads to Personal Success

By Eric Woodruff, CPA, CCIFP
Partner, Audit & Assurance Services
[email protected]

One of the first steps young professionals should take on their path toward success is becoming aware of the importance of building a personal network. They will learn to think of this network as the safety net that lies below them as they climb the corporate ladder. These networked colleagues can catch them when they fall and hoist them back up, as well as provide a bridge to get to the next level!

However, building a personal network should not be a one-sided effort. In other words, you shouldn’t foster relationships merely for your own personal gain, but recognize and respect the importance of reciprocity.

The strongest and most successful personal networks aren’t comprised solely of people with whom you do business. They can consist of friends, neighbors, fellow church members, golf buddies. When you focus simply on creating those authentic long-term relationships and truly connecting rather than viewing an interaction as a sole transaction, you will have greater success. When you better their lives, they will better yours. As famed minister and author Norman Vincent Peale said: “When you become detached mentally from yourself and concentrate on helping other people with their difficulties, you will be able to cope with your own more effectively.”

The bottom line: Ask not what they can do for you; ask what you can do for them, to borrow the philosophy of another famous American leader, President John F. Kennedy.

When it comes to constructing this network, don’t overthink it. You’ve been networking practically since you were born. It’s simply about making connections with people, introducing yourself, finding common ground, chatting over lunch, learning about the important people in their lives, etc. Reunite with former high school and college classmates, see what they’re up to now, tap into the personal networks they’ve built.

Always be aware of how you carry yourself and the impression you leave on people, even in non-professional ways. For example, if you play fast and loose with the rules on the golf course, your golf buddies may think you do the same in your workplace.

Building a personal network is about showing people your best, most authentic self and becoming part of their lives in ways beneficial to everyone.

If Sponsel CPA Group can assist you further with your personal and business affairs, please contact Eric Woodruff at (317) 613-7850 or email [email protected].

Your Personal Financial Standing After the Storm

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

It’s safe to say we’ve all been preoccupied for the past 18 months, but now is the time to step back and assess your financial situation with a clear mind. Personal Financial Planning includes many facets:

Preparing a Personal Financial Statement
Analyzing Your Household Budget and Cash Flow
Education Needs Planning
Retirement Planning
Risk Management and Needs for Insurance of All Types
Estate Planning

We have come through a period of great disruption and uncertainty. In some cases, mere survival was in question. You should now take the proactive step of rejoining your many planning initiatives as a prudent manager of your personal finances. This, at a minimum, should be a regular annual analysis.

If you haven’t looked at your estate plan in a while, it’s definitely an appropriate time to do so, especially as we wait to see what happens with the various White House proposals. Ideally, you should review your estate plan every three to five years.

Now is also a good time for business owners to look at their financial condition after the challenging past year. Review what you did to survive in your marketplace and think about what you could have done differently so you can be better prepared as you move forward toward future challenges. History is a great teacher.

You know now what it’s like to be thrust into rough, unpredictable storms. So, take this time amid the calm to evaluate your personal financial situation and determine what you need to protect your net worth as well as your family’s overall financial wellbeing.

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

Failure is Just a Step Toward Success

By Brandon Cangany, CPA
Manager, Tax Services
[email protected]

Failure is a touchy topic. Many people, especially young and hungry professionals, don’t like to think of it as a possibility in this “can-do culture.” But in the business world, people are vulnerable to failure on all levels — from new employees and frontline team members to managers, executives and the owners up at the top.

Many think of failure as getting knocked out in a boxing match. They think it kills momentum. But it could be a sign that they’re not pushing themselves far enough. You need to get up and learn from the times you are knocked down, not out!

As leadership expert John C. Maxwell wrote in his book, Failing Forward, “If you’re not failing, you’re probably not really moving forward.” In other words, you’re not stretching yourself to grow. When you rip apart at the seams is when you learn what NOT to do on the path toward success. It’s when you learn the most about yourself and your team. You realize each other’s limits and where you show the most potential.

Your failure isn’t a setback or a sign of a wasted effort. It’s an opportunity for a comeback and a chance to learn. As Maxwell also wrote, “Failing forward is the ability to get back up after you’ve been knocked down, learn from your mistake and move forward in a better direction.”

Look at how McDonald’s and Taco Bell picked themselves up during the pandemic. When their indoor dining areas closed, they streamlined their menus to simplify kitchen operations, increase speed of service and focus on items best suited for carryout and delivery.

A smooth sea never made a skilled sailor. No matter where you are on the career ladder, failure isn’t a defeat; it’s a chance to learn, improve and thrive. In the business world, battle scars show that people took risks and gained experience and knowledge. As hardened rock star Henry Rollins said, “Scar tissue is stronger than regular tissue. Realize the strength and move on.”

If we can assist you further with your business affairs, please contact Brandon Cangany at (317) 613-7899 or email [email protected].

Effective Communication is … ?

By Lindsey Anderson, CPA
Manager, Tax Services
[email protected]

In this digital age of constant communication, you probably think we are all experts at communicating by now. However, when you examine most sources of conflicts, you’ll recall the iconic line from the classic film Cool Hand Luke: “What we’ve got here is a failure to communicate.”

How does communication fail? Information can get lost in translation or taken out of context, especially in this culture of communicating online in 140 characters or less. Perhaps you’re relying too much on internal shorthand or jargon, thus alienating your audience.

To ensure that you’re communicating effectively, a good first step is to ask people for their preferred method of communication. Email? Phone calls? Texting? Be responsive to their personal preference. This is especially important with customers and fellow co-workers, including your managers.

Another way of properly communicating is through practicing active listening. When you’re actively listening, you’re not just smiling and nodding along. You’re making the speaker feel truly heard by repeating what they say back to them and giving them a chance to correct you if there is a misunderstanding. In order to be effective and fruitful, communication requires this kind of thorough back and forth. But in this day and age, we’re quicker to fire off a cryptic email or text, which only increases rage and provides no solutions!

In the same way that reading makes you a better writer, active listening makes you a better communicator. It takes practice and discipline.

You can’t take communication for granted. Effective communication is vital because it can lead to opportunities that can help you grow. In his book, Good Leaders Ask Great Questions, leadership expert John C. Maxwell writes: “In life’s journey we face many doors. Hidden behind them are all kinds of possibilities leading to opportunities, experiences and people. Questions are the keys to opening these doors.”

Whether you’re talking to customers, vendors, employees or the higher-ups within your company, every interaction you have is an opportunity to learn and improve. So listen closely and don’t be afraid to ask questions!

You will find that a little bit of extra effort and patience can provide exponential benefits, rather than increasing frustrations and destroying productivity.

If we can assist you further with your business affairs, please contact Lindsey Anderson at (317) 608-6699 or email [email protected].

Now Hiring … Your Workforce

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

Do you see all the NOW HIRING signs everywhere? The single most current challenge to all businesses is adequately securing the talent to run their businesses — at all levels! We hear this from every business owner and manager we talk to. Alert: Your competitors are coming after your workforce!

With the COVID-related federal unemployment benefits and multiple stimulus payments, many people aren’t eager to re-enter the workforce. And because in many cases these enhanced benefits are surpassing normal earned wages, job seekers are wanting more money to come to work. In addition, the economy is predicted to boom in the second half of the year, which will drive up wages and increase competition for the needed talent to serve the growth.

Finding new talent will be extremely difficult in the coming months.

Right now, prudent business owners should focus on retaining the talent they currently have — as they seek the talent to grow their business operations.

How do you make your business one that employees won’t want to leave? Connect with them! Don’t just delegate tasks and explain daily goals. Make meaningful connections. Share your long-term vision for the company and ask about theirs as well. Talk about how you can help each other grow and thrive. The current term is referred to as “engagement,” but this is no fad, as the new generations of talent will require — nay, demand — new thoughts and new leadership skills.

Don’t just connect with people individually either. Build a team. When people become part of a team with a strong sense of collaboration and camaraderie, it’s hard for them to quit. You can strengthen your team outside of work as well, with company outings, bonding activities, etc. If you think about it, most people spend as much, if not more, time with their co-workers than their family and friends. So, you should make your work environment feel like a comfortable second home.

In addition, the younger generations want to feel that the company they work for is connected to the broader community, so in your team building endeavors, seek activities that add benefit to the broader community.

Your team members will only be as loyal as you are to them. If you communicate and make meaningful connections, they’ll surely stick around for the long haul, which is vital in this ever-changing marketplace.

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

Client Profile: GroundBreakers, LLC

Andrea Sloan is “always up for a challenge and going down the path less followed.” That’s evident in how she went from serving in the United States Army Reserves to owning GroundBreakers, LLC, one of Indiana’s leaders in hydrovac excavation services.

Next week, Andrea will own 100 percent of the company, making it an official woman and veteran-owned business.

After six years of service for the Army Reserves, Andrea went on to work for the Indiana Department of Veteran Affairs, where she served the Next Level Veterans initiative, connecting veterans to employers in a wide variety of industries. (This was her introduction to the construction field.)

During a meeting with the Indiana Construction Roundtable, Andrea met the owner of GroundBreakers, who was looking to sell a portion of the business and transition out of it. Before this point, Andrea had never heard of hydrovac excavation, but the business intrigued her.

For more than 10 years, GroundBreakers has been providing the safest means of uncovering underground utilities — hydrovac excavation, the use of high-powered water and vacuum systems. The company serves a variety of industries including utility providers, industrial site owners and construction services.

“As more and more things go underground, there will always be a need for our services,” Andrea said.

Andrea stepped into the role of president in the fall of 2018 before purchasing 51 percent of the company in the summer of 2019, earning it national certification as a Women’s Business Enterprise (WBE) by the Great Lakes Women’s Business Council (GLWBC), a regional certifying partner of the Women’s Business Enterprise National Council (WBENC).

In the winter of 2019, Andrea won the National Association of Women Business Owners (NAWBO) Emerging Entrepreneur Award. She met fellow NAWBO member and Sponsel partner Lisa Purichia, who went on to guide her through the purchase of GroundBreakers and bring the Sponsel firm onboard as its financial controller.

“As a fellow female business owner, Lisa has been a great mentor,” Andrea said.

In addition to Lisa, Andrea credits her military background for carrying her through the difficult process of taking over a business.

“It takes grit and endurance to be a business owner,” she said. “In the military and in business, when times get tough, the tough get going.”

What Makes Your Business Different … and Better?

By Eric Woodruff, CPA, CCIFP
Partner, Audit & Assurance Services
[email protected]

As we continue to face COVID-related restrictions and challenges, it’s vital to do everything you can to stay ahead of the competition. And to do that, you need to think outside the box — innovate to succeed, or in some cases, to merely survive. The hospitality industry has been decimated, but look at those that are surviving, and understand how they have had to change to merely stay in business.

Don’t be afraid to be different from your competition. Many times, it’s the differentiating factors that make you BETTER!

One way to be different is to truly get to know your customer — keep a keen focus on their wants and needs. Make your meetings with them more than a mere business transaction. Ask about their broader objectives and how they want to be served and what type of relationship they are seeking. It’s all about going above and beyond, and yes, that takes time and commitment, but the effort is usually rewarded.

One area in which it’s especially important to exceed expectations is responsiveness. A good rule of thumb is to respond as soon as possible, even if you can’t help the customer with their particular need at that moment. Just respond to let them know you saw their message and will assist them as soon as you are able. Also ask them their preferred method of communication: email, text, phone call, etc.

To stand out from the competition, maybe you need to consider breaking past the standard 8-5 timeframe. Keep in communication during the evenings and on weekends. And don’t assume that your clients are business-as-usual when it comes to communication.

Again, being a different and better business is about doing more than what’s expected. As an example, in our business, if there are extenuating circumstances, we will hand deliver a work product to our clients rather than relying on the post office or FedEx. We do this because we want clients to know they can have confidence in us to deliver results and serve them in the manner they prefer.

We also want them to know that we want to make it very easy for them to do business with us, and to do that, we know we must be accommodating.

Times like these put businesses to the test. To survive and thrive, you need to stand out. Don’t be afraid to change. With change comes opportunity! You should seek to stand out from the crowd.

If Sponsel CPA Group can assist you with your business needs, please contact Eric Woodruff at (317) 613-7850 or email [email protected].

Client Profile: VisionQuest Eyecare

Since its founding more than 20 years ago, VisionQuest Eyecare has gone on to treat several generations of patients’ families.

“Not a day goes by that I don’t see a patient who’s related to another patient,” said Co-owner Chris Browning, O.D. “Sometimes we take care of three or four generations of the same family. I’m now treating the children of the millennials working in our practice.”

VisionQuest’s compassionate, personal touch has kept families coming back for a wide variety of services. The clinic offers more medical services than the typical private practice. In fact, it is one of the few practices in the state to provide laser treatment for glaucoma care. (Dr. Browning was one of the first optometrists in Indiana to be certified in this treatment.) Among other conditions, VisionQuest treats dry eye, cataracts, macular degeneration and myopia management for children.

Childhood myopia (nearsightedness) affects one in three children and is the sixth leading cause of blindness. This is an issue near and dear to Dr. Browning, as his own myopia inspired him to pursue eyecare. Because he visited his eye doctor so often when he was growing up, the VisionQuest Eyecare office is familiar ground — like a second home.

Dr. Browning played a key role in facilitating the practice’s partnership with Treehouse Eyes, the country’s leading myopia management service. This partnership formed at a perfect time, just as e-learning and increased screen time amid COVID was leading to a rise in childhood myopia cases.

VisionQuest entered into another important alliance during COVID, teaming up with Sponsel CPA Group, which handles the practice’s accounting, financial reporting, tax preparation and more.

“We look forward to working with Sponsel in the future to reevaluate our corporate structure,” said Dr. Browning.

That structure certainly keeps expanding. With locations in Indianapolis, Geist and Greenwood as well as the recent addition of two new doctors and four staff members, VisionQuest is growing to serve many more generations of Hoosiers.

February 2021 Newsletter

In this month’s newsletter, we talk about coping with COVID, succession planning, the benefits of visiting downtown Indy and more!

Don’t Get Left Behind

By Lisa Purichia
Partner, Director of Accounting Services & Retirement Plan Services
[email protected]

Although COVID is continuing to leave its mark on all of us, you can’t let it push your business further behind. You have to get out in front of the issue. As the adage goes, “the only way out of the fire is through it.”

During the past year, it’s understandable for businesses to be more reactive than proactive. But with COVID cases declining and the promise of vaccines going into arms and supporting therapeutics, you must prepare for getting back to business in a proactive manner.

Now is the time to focus on growing rather than just adapting. Don’t lose sight of marketing and business development. Take a cue from Burger King, which recently revealed its first rebrand in 20 years. Among other things, the fast food company simplified its logo to make it look clearer and cleaner on the mobile devices with which more people are ordering food now, especially amid COVID.

Another example of a company embracing change and focusing on marketing efforts is Panera Bread, which went from conducting large on-set L.A. commercial productions with large crews to working with actors and editors remotely. For this ad, a Panera delivery driver filmed herself on a delivery route and delivered the footage to the director.

Nike has a great attitude about how it can change in ways not only appropriate for now but for the future as well. President of Consumer and Marketplace Heidi O’Neill said: “We’re thinking a lot about the reopening of stores and how we create safe environments. But we flipped it and we’re not saying, ‘Okay, here’s what we have to do.’ We’re asking, ‘What are ways that can make the consumer experience better now — that might be better forever?’”

B2B consumers are increasing their activity, so it’s time for you to follow suit! Spread the word about what you can offer them and implement measures that are not only safe and convenient during COVID but efficient for where you’ll be days, weeks, months or years down the road. Don’t let your proactive competition leave you in the dust. Get your business development engine ready, and start racing toward the future … NOW!

The one thing the COVID restrictions and disruptions taught most of us was that we are more adaptable than we originally thought, and we can adapt much quicker than we ever planned!

If we can assist you further with your business affairs, please contact Lisa Purichia at (317) 608-6693 or email [email protected].

Succession Planning Must Be a Constant Priority

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

With COVID disruptions and distractions, and the start of a new business year, succession planning is probably not at the top of your priority list right now, but you should never lose sight of it. It’s important to plan for the perpetuation of the business both from an equity ownership standpoint as well as the transfer of the executive management of your enterprise.

For a successful transition, it’s best to plan five to ten years in advance, but it is never too late to start! You’ll want to have a clear vision for the future of your business. However, if you are passing the business onto a younger colleague or family member, you may need to collaborate and compromise in order to bridge the generational gap and decide upon a vision that suits both of your respective objectives.

Determining who is promising or capable now will ensure a smoother transition in the future. You’ll want someone who shares your leadership values and corporate culture, but who is also in touch with the times, connecting with the younger workforce and easily adapting to the latest market trends, use of technology, etc.

If the family member designated to take the helm is too inexperienced, you can have them shadow a more experienced manager during a prescribed period of transition. An alternative would be to keep ownership within the family but hand over management duties to a longtime, trusted leader within the company. This allows for the current family ownership to retain their stake while giving up day-to-day oversight of operations to a more experienced management team, at least for a period of time..

The current owners might want to divest themselves from the company and reap profits from their prior years of investment. They can accomplish this either by an outright sale to a third party, a management buyout, an Employee Stock Ownership Plan (ESOP) or other alternative, customized structures.

Whatever you wish to do, make sure you start planning sooner rather than later. Time passes quickly and you do not want an unexpected health crisis or other unexpected tragedy to greatly diminish the value of the enterprise you have built!

If we can assist you with any issue related to succession planning, please contact Tom Sponsel at (317) 608-6691 or email [email protected].

Head on Back Downtown!

Indianapolis has come a long way. Known in past decades largely for its racetrack, this once sleepy town fittingly nicknamed “Naptown” is now a bustling metropolis. Well, maybe not so bustling at the moment.

After the impact of COVID, downtown Indy turned into a shadow of its former self. But we’re closer to warmer weather and the light at the end of what’s become a very long tunnel. As we slowly but surely return to some partial sense of normalcy, we encourage you to visit and revitalize our beautiful city. Local businesses need your support. Our restaurants and related hospitality merchants are struggling and NEED OUR SUPPORT!

There’s plenty of fun stuff coming up around the corner. This year, we’re blessed to make history as the first state to host the entirety of the March Madness men’s basketball tournament. A local health provider is partnering with the NCAA to facilitate COVID testing and maintain a safe, controlled environment for players, coaching staffs, administrators and officials. The NCAA is also working to promote health and safety with the “Mask Madness” initiative, which will include the distribution of thousands of masks throughout the state in the time leading up to the tournament.

As we get further into spring and summer, consider the wealth of outdoor activities the city has to offer. Take a trip to the zoo and marvel at the wondrous wildlife. Enjoy a nice stroll or take in a concert at White River State Park. Or visit Crown Hill Cemetery, the largest urban greenspace inside the beltway. While you’re there, you can stop by John Dillinger’s grave, hike to the top of Crown Hill or break out your binoculars to get a closer view of the gorgeous flora and fauna surrounding the cemetery.

The level of citizen and consumer activity in any given city makes an impression on businesses old and new, as well as visitors to our community. It determines which ones stick around and which ones decide to plant themselves elsewhere.

Of course, we all need to stay safe, but that doesn’t mean you can’t still have a fun time out on the town! Mark your to-do list with a reminder to visit downtown Indy. Let’s keep our city from becoming a sleepy place again. Come on downtown and make it thrive!

What is Appropriate Focus for Leadership?

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

As unprecedented political events flood your newsfeed these days, you may find it difficult to focus on tasks at hand. Your most critical objective should be to focus on what you can control — within your business and your personal life.

In the midst of political upheaval and the continuing impact of COVID, your stakeholders are looking toward their leader for inspiration and the confident, proper path forward.

Confidence is key, especially during times like these. If you brush away the dust of 2020 and enter this year with an assured attitude, your demeanor will rub off on stakeholders and everyone’s spirits will lift up the company. Move forward cautiously and with prudent skepticism, but hold your head high as you do so.

Persevering through tough times can bring out the best in us. As renowned psychiatrist and author Elisabeth Kübler-Ross said: “People are like stained-glass windows. They sparkle and shine when the sun is out, but when the darkness sets in, their true beauty is revealed only if there is light from within.”

Don’t discount your impact on your team and individual members thereof. A leader’s positivity can go a long way, not only in motivating team members to be more productive but in helping them through personal struggles as well. We all hoped that once the ball dropped on 2021 that a new day would spring up, but the past couple of weeks have been very dismantling for many. This is when a TRUE LEADER rises to the occasion.

Set your company up for the positives you were expecting for 2021. What initiatives did COVID disrupt that you can get back to work on now? What alternative services did you offer during quarantine that you can expand upon? What did you learn about yourself and your team that you previously thought would be impractical to implement? Whatever you do, keep moving forward. A body in motion stays in motion. Think about this quote from actor Robert Downey Jr., who knows a thing or two about getting knocked down and picking yourself up: “Moving forward, as though you have the confidence to move forward, eventually gives you confidence when you look back and see what you’ve done.”

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

Keep Tomorrow in Mind as You Deal with Today

By Lisa Blankman, CPA
Manager, Audit & Assurance Services
[email protected]

Given the disruptions of last year, you’ll naturally want to hit the ground running in 2021, but don’t get lost in the daily hustle and bustle. Routine can get in the way of reflection, clouding your long-term vision for your company. As business guru Michael Gerber said, you need to take time to “work on your business, not just in your business.”

Stepping back and taking a 360-degree evaluation of your company is essential for it to evolve and thrive. Adaptation and evolution are vital right now, as we continue coping with what COVID throws at us. As these hurdles pop up, you may wonder when you’ll even have the time to think about the long term.

Schedule a specific time on your calendar each week to take your mind off your daily tasks and think about the other potential success drivers of your business. Which ones are steering you toward your goals? These success drivers could be your employees — their work ethic, their talents and skillsets, the leadership they provide in the many facets of your business — or your offering of products and services. Determine which current drivers deserve the most investment of resources as well as new ones that have less potential for the results you seek.

As you reflect on your business condition, you should also ponder on whether the past drivers of success hold the same potential they did last year before COVID hit. Should their place in your planning remain? Should you stay focused on the alternative business practices you established amid COVID?

By reflecting on a regular basis and enabling yourself to analyze your business outside of day-to-day distractions, your vision for long-term success will improve. During this time of uncertainty, it’s important to always keep tomorrow in mind as you deal with the challenges of each day.

If we can assist you further with achieving success in your business or personal affairs, please call Lisa Blankman at (317) 613-7856 or email [email protected].

The IRS Expands Identity Protection PIN Program

By Nick Hopkins, CPA, CFP®
Partner, Director of Tax Services
[email protected]

At the start of the new year, the IRS will expand its Identity Protection PIN Opt-In Program nationwide to all taxpayers who can confirm their identity. Taxpayers with either a Social Security Number or Individual Tax Identification Number are eligible for an identity pretention PIN (IP PIN).

An IP PIN is a six-digit number assigned to eligible taxpayers that protects their Social Security number from being used to file fraudulent federal income tax returns. Through this number, the IRS can easily verify a taxpayer’s identity and securely accept their tax return.

In mid-January, taxpayers can obtain an IP PIN through the Get An IP PIN tool, which is the only method of receiving an IP PIN that immediately displays the six-digit number once the process is complete. The number is valid for one year and must be renewed every January. Before using the Get An IP PIN tool, taxpayers should review the Secure Access requirements.

For those unable to pass the Secure Access authentication, there are alternative ways of obtaining an IP PIN. Taxpayers with an income of $72,000 or less can complete Form 15227 and submit it to the IRS via snail mail or fax. An IRS employee will then verify the taxpayer’s identity over the phone through a series of personal questions. Those who pass authentication will receive an IP PIN the following tax season.

Taxpayers who cannot verify their identities remotely or who are ineligible to file Form 15277 should visit a Taxpayer Assistance Center and bring two forms of picture identification for an in-person identity verification. After the taxpayer passes authentication, they will receive an IP PIN in the mail within three weeks.

Taxpayers should share their IP PIN with their tax provider only. Sharing with anyone else poses a serious risk. The IRS will never call to request the taxpayer’s IP PIN, and taxpayers must remain vigilant of potential IP PIN scams.

There is no change in the IP PIN Program for confirmed victims of tax-related identity theft. These taxpayers should still file a Form 14039 if their e-filed tax return rejects because of a duplicate SSN filing. The IRS will investigate their case and once the fraudulent tax return is removed from their account, they will automatically receive an IP PIN by mail at the start of the next calendar year.

IP PINs will be mailed annually to confirmed victims and participants enrolled before 2019. For security reasons, confirmed identity theft victims can’t opt out of the IP PIN program. Confirmed victims may use the Get an IP PIN tool to retrieve lost IP PINs.

For more information, visit the IRS newsroom.

Planning for 2021 with 20/20 Vision

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

As COVID continues to change our daily lives both personally and professionally, you may feel as though it’s impossible to plan for anything. However, planning for the future is absolutely critical as this chaotic year comes to a close.

In prepping for 2021, you should find plenty of hope and inspiration in how you’ve handled this year’s many hurdles. You undoubtedly had to change your plans and adjust your expectations. Keep the spirit of adaptation and evolution alive as you head into this next year. The opportunity for successful operations and financial stability will be the result!

Think of how many of us successfully turned our homes into offices and communicated via virtual meeting platforms like Zoom and Microsoft Teams. Think of how quickly businesses put up plexiglass in their locations to safely provide the same friendly, face-to-face transactions with their customers. The ability of the business owner to innovative and use her ingenuity in many new disciplines has been an eye opener.

Even with vaccines in development, you shouldn’t expect the current state of COVID to change overnight. Plan with COVID in mind. Your vision for the future should include focusing on safety, working remotely if you can and being flexible. Maintaining that confidence will lead your team in a positive direction.

Remember: Your customers and vendors are dealing with COVID-based challenges as well. So, you don’t want to cause further disruption. Work flexibly with them. Take the time to show support and share how you’ve overcome your own challenges. Patience, compassion and flexibility will always mean more to your stakeholders than the products and services you provide. These values are especially meaningful and appreciated during difficult times. Now is your chance to rise to the occasion and show your true colors!

If you could survive 2020, you certainly have the strength, fortitude and perseverance for whatever 2021 has in store. Hope for the best, but prepare for the worst. And if you need any help from Sponsel CPA Group, we’re just an email, phone call or Zoom meeting away!

Accounting: DIY vs. Outsourcing

By Lisa Purichia
Partner, Director of Accounting Services & Retirement Plan Services
[email protected]

Right now, amid the economic upheaval of COVID, business owners should be focusing on streamlining their business. During times like these, bookkeeping and financial reporting probably take a backseat in favor of efforts to sustain and possibly grow the business.

Are worries about your accounting department looming over your head as you try to keep your business afloat? Now may be the time to take some weight off your back as you focus on the management tasks you do best and delegate the operational tasks at which you are less skilled.

Consider outsourcing!

Outsourcing accounting and/or bookkeeping functions is becoming a popular option for businesses of all sizes. You can outsource in multiple ways to meet your needs:

As needed — Retain a CFO to assist on a regular basis (for a few days, a week, a month).
For a specific task — Your relationship ends once the project is complete.
Staff augmentation — Require greater skills than what your in-house staff members possess.
Temporarily — Your controller quits, and you need help until you can secure a replacement.
Permanently — Outsourcing doesn’t have to be a Band-Aid solution; you can hand over all of your accounting and financial reporting responsibilities to an independent party.

Delegating accounting tasks to financial experts allows business owners to focus on sales, marketing and strategies for growth. It relieves managers of the responsibility to supervise one more department and meet the deadlines within it.

Here are some of the ways in which a CPA firm can help with your outsourcing need:

Developing annual budgets
Evaluating current results against the budget
Preparing financial projections
Identifying key performance indicators that measure your company’s progress
Providing access to databases with resources that show how your company is operating and performing financially compared to others in your industry

Outsourcing a department’s functions not only helps a business run more smoothly; it also provides peace of mind. Developing a customized approach to a problem with a tailored solution is the number one goal of outsourcing!

If we can assist you with exploring outsourcing for your business, please contact Lisa Purichia at (317) 608-6693 or email [email protected].

Working Remotely: Mutual Goals & Expectations

By Mike Bedel, CPA, CGMA
Partner, Director of Audit & Assurance Services
[email protected]

For many people, the weekly work routine is quite different these days. Rather than driving to the office and settling in at their desk, they clock in at their kitchen table and interact with co-workers through cyberspace.

Do you find yourself wondering why things don’t feel the same with your team interactions? Even as you work remotely, you can still maintain your company’s corporate culture.

A good leader is proactive in situations like the COVID-19 pandemic — both at the onset and throughout the prolonged timeline. Regardless of physical workspaces, good team leaders continue to communicate with their team. They will touch base with employees early on and serve as a source of stability and support. They will also create an encouraging, collaborative environment for setting mutual expectations and goals in the midst of any situation, including an economic downturn and a disruptive work environment. Just as technology is used as a tool to facilitate the operations of your company during this time, it can also be useful in recreating the friendly warmth of your office with virtual platforms like Gather, which allows users to design their meeting space and utilize digital whiteboards, podiums, conference tables and cubicles. This is one way to maintain your company’s culture during this unusual transition period.

Of course, expectations and goals will change as COVID restrictions evolve. If your company is operating remotely, you may want to focus on increasing online business. Owners and CEOs should stay in close contact with clients and managers to set expectations for deliverables and timetables. Safety should be your first priority for your employees, customers, vendors and guests. You should establish CDC-recommended protocols. Goals and expectations established at the beginning of this disruption were set more than six months ago. If they have not yet been revisited, this leadership task is past due. This is true for goals and expectations set for sales and customers as well as goals and expectations for your corporate culture and team members.

While working remotely, some team members may have to tend to children and pets or other distractions from their tasks at hand. Staying flexible during this time will help them adjust to this new normal. Effective coaching on how to adapt and remain productive may also be warranted. In addition to the flexibility and coaching, maintaining clear goals and expectations is essential for success in this (or any) setting.

Communication is key right now. Keeping in touch with your staff members will help them feel like they’re not drifting alone through cyberspace. Teamwork defines a company’s culture. Even if the office is empty and you’re all working apart, you can still keep that team spirit alive!

If we can assist you with achieving success in your business or personal affairs, please contact Mike Bedel at (317) 613-7852 or email [email protected].

Your Attitude Sets the Course

By Lisa Purichia
Partner, Director of Accounting Services & Retirement Plan Services
[email protected]

Attitude is vital in leading your organization through the challenging times we have experienced this year. As the leader, your attitude and approach to problems will set the stage for what happens next. Without the appropriate response, your team will either rise to the challenge or fall into despair.

Amid COVID and the general upheaval in the world right now, it’s sometimes hard to put on a happy face. But as the leader of a company, you must maintain composure and keep your team motivated. Now more than ever, it’s important to pump up your efforts to boost employee morale. Your demonstration of a confident response to these many challenges in somewhat unchartered waters will solidify your team’s response.

Maybe at the start of every workday morning, you could post a positive story on your office’s newsfeed. You could also share fun family photos, pictures of pets and videos of weekend activities. Pull everyone out of the funk that this year is causing. Let your clients know that you’re still here for them 24/7! Remind them through weekly or monthly e-blasts about how you’re managing to safely stay open and offer the same great products and services. Most importantly, keep an optimistic outlook! Your reassurance will energize them.

Positive thinking not only helps you persevere — it also attracts people who can help your company grow. Positivity begets more positivity. Have a sense of gratitude; there are still things to be thankful for every day. Your enthusiasm during arduous times will likely rub off on prospective clients and persuade them to do business with you. It will also convince your current clients and employees to stick with you for the long run.

Your attitude ultimately complements your brand image, which will help you build a rock-solid reputation in your community and marketplace.

From a professional and personal standpoint, we’re on a rocky road right now. But if you keep on trucking with a smile and a heart full of hope, you’ll get over the hurdles. Just remember what the renowned motivational speaker Denis Waitley once said: “Your attitude is either the lock on or the key to the door of success.”

For more advice on the importance of achieving success in your business, please contact Lisa Purichia at (317) 608-6693 or [email protected].

Surround Yourself with a Strong Team!

By Eric Woodruff, CPA, CCIFP
Partner, Audit & Assurance Services
[email protected]

A leader is only as strong as the team behind them. As you continue adapting to how COVID’s changing the business world, you might want to step back and consider your team. Now is the time for your ego to take a backseat. During challenging periods like this, you shouldn’t try to do everything yourself. Admit your weaknesses and surround yourself with people who have the strengths you don’t possess.

Listed below are some tips to help you get started on the path toward embracing and strengthening your team.

Listen closely! Encourage staff members to speak up, point out the company’s flaws and offer suggestions for improvement. Don’t let them think they’re going to hurt your feelings or undermine your authority. Remind them that you’re all in this fight together. Creating a collaborative environment is vital, especially during a crisis like the COVID pandemic.

Invest in your people. Make sure they have all the necessary resources, including tools and training — not just in the beginning, but continuously throughout their time at the company. As more of us are working remotely, now is a great time to catch up on webinars, training programs, etc. The current workplace environment mandates that your staff continues to evolve and advance in the field. Coach your employees and motivate them to keep growing and thriving. But also be patient and give them the proper amount of autonomy and time to blossom. Focus on building upon each individual’s established strengths — don’t try and fit that square peg in a round hole!

Identify strengths and weaknesses. The most successful businesses have an effective talent management system for finding the perfect fits for each department. If competency gaps are opening up within your organization, perhaps you need to rethink recruitment campaigns, provide more training or delegate certain tasks to different employees. You should ultimately strive to create an eclectic team. Diversity of thought and expertise breeds success. Bold strategies and actions may be required in order for you to survive and thrive!

Again, keep your ego in check and lean on your team for support. Running a business isn’t a one-person show — it’s an ensemble piece! The successful business owner will surround themselves with team members who have complementary skills that enhance the enterprise.

If we can assist you with achieving success in your business, please contact Eric Woodruff at (317) 613-7850 or email [email protected].

September 2020 Newsletter

In this month’s newsletter, we explore innovation, executive coaching, the best practices for productive Zoom calls and more!

Innovation Amid COVID-19 and Beyond

The concept of innovation is critical to any organization. Some business leaders will fall into the habitual pattern of doing things the same old way. And not without reason: if the status quo has worked well for a long time, there is fear of disrupting a pattern of “success.” But right now, change is vital amid COVID-19 disruptions and restrictions.

Several different types of business — restaurants, retail stores, theaters — are now opening at limited capacity with social distancing and mask-wearing protocols in place — their very survival is in question! Over the course of this pandemic, Sponsel CPA Group has discussed internally what makes sense for our own business. Since we are a business more dependent on communication than the delivery of a product or service in a physical setting, we decided to operate more via email, teleconference, video conference and other online platforms in lieu of face-to-face meetings, thus driving the remote workplace as an effective tool.

Business owners shouldn’t think of these changes as disruptions — adapting is simply part of running a business. A prudent leader must be intentional in driving new ways of thinking into their organization. You must create a philosophy and corporate culture of continuous innovation. That mindset needs to be a component of everything you do. “Change” is the only constant in your strive to be superior to your competition.

Now is the time to get creative and innovate the way you interact with customers and vendors. Just as an example, a recent article on a local family business focused on Sahm’s family of restaurants, which are turning into marketplaces and allowing customers to order groceries in addition to enjoying hot meals inside.

Examine your internal processes during this time and ask yourself if they are up to speed. Look at what others in your industry are doing, especially those who have recently adopted new methodologies. Are they working? Can they be improved upon? In March of 2020, we were forced to “shelter in place.” Many businesses changed their working platforms within 48 hours — those processes sans COVID-19 restrictions would have taken 24 months to implement in a “past normal environment.” Maybe that experience showed you what is really possible!

Talk to your customers and vendors, and ask for their advice. See what their needs are, and task your team with coming up with better ways to satisfy them. For example, in the accounting/bookkeeping world, it was once a universally accepted practice to make a daily run to deliver deposits to the bank. Now, that’s virtually all handled with online tools. And that came to be because some people thought about ways to make the process faster, simpler and more reliable. Improved productivity!

If you’re a business owner or manager, thinking innovatively means being responsive to what the market demands. Now more than ever, you should want your company to be seen as creative and dynamic. When your organization is viewed as being proactive in adopting new ways of doing business, it’s easier to maintain and attract customers, especially during a time of crisis. Utilize your “lessons learned” to facilitate meaningful innovation within your business! You can then share those benefits with your business stakeholders, customers and vendors.

Even Those at the Top Need Tough Coaches

For business owners and CEOs, it can get lonely at the top. While everyone comes to you for direction, you may need advice yourself. No one has the golden touch — not even those in the highest positions of power and responsibility. Behind every successful business owner are strong confidants and harsh critics whose candor contributes to personal success. Your colleagues are likely to sugarcoat their feedback, as they may perceive you want the compliant “YES!” You need someone to shoot it to you straight and challenge you with diversity of thought and perspective. We all have blind spots!

Here’s where an executive coach comes into play. This impartial third party serves as a fresh set of eyes on your management conduct and vision for success. Some executive coaches will perform an intensive 360-degree assessment at the outset, gathering information about how your employees, managers and other stakeholders perceive you. They’ll then refer to this assessment as you work together to set goals for improvement.

You should meet with your coach on a biweekly or monthly basis. Together, you will set measurable goals over a manageable amount of time, such as the next six months. Currently, amid COVID-19 restrictions, it’s especially important to stay connected and be responsive. Maybe one of your goals could be to meet with your staff via Zoom once a week, if you’re working remotely. Not only check on their workload but also assess their wellbeing during this stressful time.

An executive coach not only helps you become a better business leader; they strive to help you reach personal improvement as well. And that involves pointing out weaknesses, which can be too much for some. The best coaches are often the toughest and most frustrating. But it’s tough love. Don’t forget that they’re in your corner rooting for you.

Now is as good a time as any to step back, take a fresh look in the mirror and commit to self-improvement. Your business, colleagues and family will all benefit as you make personal, positive changes for the better!

Are You Zoomed Out?

With many businesses — including big ones like Google — working remotely well into next year, we need to accept virtual meetings as “the new normal” for the moment.

Video meeting tools like Zoom have their ups and downs. The biggest upside is their recreation of a face-to-face meeting at a virtual conference room table. Of course, the downside is that you’re actually at home, surrounded by distractions: children playing, dogs barking, spouses having their own meetings. We also have trouble being present in the moment due to multitasking — checking and responding to emails or text messages or even taking a call on your cellphone. All in all, you may not be as focused during a Zoom call as you are within the four walls of your office’s conference room.

In meetings outside of cyberspace, it’s much easier to read body language, call people to attention and collaborate on hashing out issues. It’s difficult to do that with people muted and screens blacked out. If you’re a business owner, you may find yourself bombarded with emails after a Zoom meeting — colleagues commenting on what was said during the call, asking you to catch them up on certain issues, critiquing different sides of the discussion. You then ask yourself, “Why didn’t they bring this up during the call?”

Here are some tips for making the best use of virtual meetings:

Encourage everyone to stay focused; discourage multitasking.
Make sure all attendees understand how to use the technology.
Make sure all participants are on video in a place where they can concentrate — don’t drive and Zoom!
Start the meeting with an amusing anecdote to ease everyone into the meeting.
Make time for questions and comments at the end of the call; give each participant a turn to speak.
If it is a lengthy meeting, allow for breaks.
If you have control over the timing of the meetings, avoid lengthy back-to-back virtual meetings.

With the world in upheaval due to COVID-19, we’re all on edge and preoccupied these days. We may be faster to fire off knee-jerk responses or steer toward the negative. During Zoom calls, it’s important to provide a sense of comfort, hope and business as usual. If you bring a positive attitude to each meeting, it will rub off on others and make for a more productive call.

As a leader, it is your primary responsibility to keep the group focused and maintain composure. Patience is mandatory, as is taking decisive action if required. Establishing a “code of conduct” for virtual meetings may be necessary to keep them productive and effective.

Employee Spotlight: Aimee Woehler

Aimee Woehler joined the firm six years ago as a Staff Accountant in the Accounting Services department after an extensive background in the not-for-profit sector. In July of 2017, her hard work and dedication to finding value for clients was rewarded with a promotion to Senior Accountant.

A Certified QuickBooks ProAdvisor, Aimee sets up QuickBooks for clients and trains their teams with using it. Her responsibilities also include processing payroll, quarterly payroll returns and ongoing bookkeeping services. In addition, Aimee enjoys being a member of Sponsel recruiting team where she has the opportunity to represent the firm on local college campuses.

Aimee volunteers her time extensively, including the past 17 years with the Juvenile Diabetes Research Foundation, co-chairing their annual Walk to Cure Diabetes and lobbying lawmakers for diabetes research and education. She serves as volleyball coordinator for the girls’ team at St. Barnabas Catholic School. Aimee also serves on the House Corporation Board for Kappa Delta Sorority at Indiana University.

Born and raised in Columbus, Ohio, Aimee moved to South Carolina to finish high school and attend Clemson University, where she earned a bachelor’s degree in accounting. She and her husband, Terry, have two daughters, Gwen and Grace, and live on the Indianapolis southside.

Your Personal Financial Condition: Is Action Required?

While you’re analyzing your business goals and objectives, don’t forget about your personal financial condition at home as well. Many times, personal finances are the most often ignored aspect of very busy business owners’ lives. A mid-year review is warranted.

Preparing a personal financial statement on a periodic basis is of vital importance. Avoiding this assessment of your personal financial condition puts you and your family at risk of financial instability. You should not only prepare it but also analyze it and make sure your personal assets and level of liabilities are consistent with your goals and objectives. Oftentimes people don’t want to prepare it, as they are fearful of what it might tell them. You must face reality.

If you’re not accustomed to organizing your finances in this manner, start by thinking of it as a simple inventory. It all boils down to keeping track of what you own and what you owe. What debts are lurking? Credit card and home mortgages? Money borrowed for business ventures? Are these at a level that is prudent and commensurate with your personal cash flow?

You must also be committed to taking action if warranted; for example, if you own a home with a mortgage — 30-year fixed rate mortgages are at an ALL-TIME low — refinancing your current mortgage could reap significant interest cost savings over the long term.

Think about what will provide you financial security in the future. Is it time to start making (or increasing) 401k contributions or simply setting aside more emergency funds in a savings account? It’s easy to get caught up in the habit of living paycheck to paycheck. Spending can easily be more tempting and FUN than saving. But, down the line, you’ll definitely be glad you SAVED.

Keeping a close eye on your personal finances and taking a periodic, in-depth look at your financial condition will not only improve your financial stability, but it will also provide peace of mind.

If we can assist you further with achieving success in your business or personal financial matters, please reach out to us.

Retirement Planning 101: Avoiding the Post-Retirement Blues

Welcome to Part 3 of a multipart series on Retirement: Planning, Executing and Enjoying! In Part 1, we talked about spending. In Part 2, we explored risk management. In this final part, we’re going to discuss avoiding the post-retirement blues and having fun in retired life.

Ask anyone who has retired recently, and you’ll discover a real phenomenon — the post-retirement blues. This can be especially true for a go-go Type A person from the business world who has invested so much of themselves in their career that it has come to define them.

If you’re married or in a committed relationship, the first person you should be talking to is your significant other. Whatever career phase they are in themselves, understand that your retirement also impacts them. First and foremost, don’t expect them to automatically change their working life or daily pattern of activities just because you have.

Finding another activity about which you are passionate is a must, whether it’s looking after grandkids, volunteering for a charitable group or something else. Your other activity could be a “second career” that you pursue at your own pace and intensity. Be aware, though, that just as during your working life it’s easy to become overloaded. People realize you have a lot more time on your hands, and soon look to fill it with their own needs and wants.

It’s OK to learn the power of gently and politely telling people, “No.”

Make sure to carve out some time for things you’ve always wanted to do but never had time: travel, take up a hobby, fix up an old car, create a work of art, go back to school and dive into a new fresh area of knowledge that you have always been interested in! Everybody has a “bucket list” — it’s time to start emptying yours out!

For some, that could even be starting a second career. If you are going to make that move, do it with your eyes wide open – especially if it’s something you want to do full-time. Consult with a trusted advisor on how any earnings could impact your social security benefits.

Socialization is also an important ingredient in avoiding the post-retirement blues. Get together with friends, attend religious services, join or start a social group like a book club. It’s as easy as picking up the phone or sending an email or text message.

Whatever you do, avoid the situation where you find yourself sitting at home with nothing to do. A sense of purpose is key to your feelings of self-worth. Before retirement, self-worth was probably largely tied up with your business or the company you worked for.

Now it’s time to transition to something new. Seek out activity and engage with other people, and you will discover a fulfilling retirement where the blues stay at bay.

Employee Spotlight: Mary Ferguson

As a Manager in Entrepreneurial Services, Mary Ferguson has much 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 is now a middle school.

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 37 years to Stan, and together they have two sons, Pleas and Zachary, two granddaughters — Tierra and Zoey, ages 5 years and 8 months — and one grandson, Edward, who is 2 ½-years-old. In her spare time, Mary enjoys sewing, walking and serving on the usher board and education ministries of the Greater Gethsemane Missionary Baptist Church.

June 2020 Newsletter

In this month’s newsletter, you can read about where Indiana stacks up in the best states for business, why you should take a break from work, how you can adjust your vision for the future and more!

Indiana Remains Among Best States for Business

Despite the impact of COVID-19, Indiana still stands tall as one of the best states for business. For the fifth year in a row, Chief Executive magazine recently ranked the Hoosier state near the top at the number five spot.

Although manufacturing reigns supreme here, Indiana strives to diversify with a stronger focus on innovation and technology, welcoming such companies as ActiveCampaign, eHealth and Zotec.

Indiana boasts many tax incentives for businesses, along with low tax rates, business-friendly state government and prudent fiscal responsibility — all of which make the state a great place to start and grow a business.

So, as you can see, it makes sense that Indiana was listed in Business.org’s list of the 15 Top States with Most Business-Friendly Taxes. In addition to Chief Executive, Indiana ranked number 11 in CNBC’s 2019 America’s Top States for Business and Forbes’ 2019 Best States for Business.

While 2020 business lists are still upcoming, the recent Chief Executive ranking should provide much encouragement during this time of economic uncertainty. We can’t forget the strength of Indiana’s financial foundation amid the current chaos. Although COVID-19 is taking a toll, it’s important to remember that we live in a state well-equipped to recover and keep business booming.

It’s Time to Take a Break … You’ve Earned It!

For some, the year 2020 cannot end soon enough! The world is pretty chaotic right now, and it’s undoubtedly taking a toll on you. You may also feel that, with the pressures of dealing with the daily “chaos,” you cannot allow yourself to be away from these challenges … but you MUST! Given COVID-19 risks, you probably shouldn’t comb a crowded beach, but you should plan some type of vacation. Rest and recuperation are the sources of your energy and focus to deliver on your goals for the second half of the year.

With so much negativity in the news these days, you’re bound to have the blues. A University of Pittsburgh study showed that taking a vacation can alleviate depressive symptoms and elevate positive emotions. In addition to your mind, vacationing is good for your heart as well. A Syracuse University study showed that vacationing lowers the risk of metabolic syndrome, thus making people less susceptible to cardiovascular disease.

Everyone in the workforce needs a break — a time to refresh themselves and recharge their batteries. Your business will be better off for your team members taking vacation time. You don’t want burned-out employees, and you don’t want to be a worn-out manager/owner yourself. After some much-needed rest and relaxation, you’ll all come back to work ready to rock and roll! It’s amazing how a week away from your workplace will regenerate your enthusiasm and direction for the tasks at hand.

Remember, especially right now, that a vacation doesn’t have to be a big trip. You could rent a cabin somewhere here in Indiana or even take a staycation at home. Shut off the emails and cell phone, as much as possible, and let your other team members carry that load for a brief spell. Get lost in a good book. Take on a personal project you’ve been putting off that brings you joy. Spend quality time with your loved ones. They’ll remind you what you’re working for, the quality of life you’re aiming to provide and what is REALLY IMPORTANT!

Many of you may feel guilty about taking vacation time. You may worry about being away from your desk and work piling up on you. Remember that there’s a bigger picture when it comes to success. Consider this quote from successful actor and comedian Zach Galifianakis: “Reject the idea that you have to be constantly working or grinding in order to be successful. Embrace the concept that rest, recovery and reflection are essential parts of the progress toward a successful and happy life.” It is a critical part of our annual business operating cycle on which we often short-change ourselves!

LEADERS: Stay Focused on the Future

With COVID-19 cases still in existence and protests breaking out across the country, you may find yourself stuck in an anxious state. If you go downtown, you will see businesses, restaurants and other hospitality businesses boarded up all around you. This is very upsetting to the everyday Hoosier, but leaders must respond, react and put plans in place that will lead to a better future for all!

As always, don’t lose sight of the long-term vision for your company. Just realize that you’ll have to adjust your vision a bit. COVID-19 undoubtedly disrupted your plans for 2020, in a very unprecedented and unique manner. Like most businesses, you probably spent more time reacting daily than being proactive about anything else. But don’t beat yourself up. Now that we’re slowly reopening businesses, adjusting our workplaces and looking at our businesses through a different lens, it’s time to start fresh for 2020, recalibrate your expectations and move toward the future.

Think of this period from summer to winter as a “new year.” Talk to your staff about what may be the best return-to-work policy — be specific and communicate often, even overcommunicate. You should also work with your team in redefining your idea of success for 2020. Attack this period with a positive attitude but with conservative and realistic expectations.

Business may not be booming for a while, so how should you benchmark success? Think about meeting an adjusted revenue goal. Consider the successful, non-financial aspects of your business — the loyalty of your customers, your relationships with them and your staff members, employee morale, etc.

As to your customer relationships: underpromise and overdeliver. Your team’s attitude will set you apart!

Navigate the negative noise and focus on the positive. Maybe even send weekly or monthly updates to your team and customers about your small victories along this bumpy road to recovery. As the late, great Stephen Hawking said: “However difficult life may seem, there is always something you can do and succeed at. It matters that you don’t give up.”

Maintaining a positive attitude as a leader, holding others accountable and planning for an improved last six months of 2020 will lay a foundation for what your future holds!

Employee Spotlight: Lindsey Anderson

Raised in Crown Point, Lindsey Anderson moved to the east coast after graduating with a bachelor’s degree in accounting from the University of Indianapolis. Fortunately she returned to her Hoosier roots and joined the Sponsel family in 2012.

As a Manager in the Tax Services department, her duties include tax compliance, projections and consulting with clients across a wide spectrum of industries. She also delivers outsourced CFO services.

Outside of the office, Lindsey loves spending time with her family, including her two fur babies, Freeney and Vinny. In addition to being the best dog mom, she’s working on earning the title of “World’s Best Aunt.” Lindsey also loves, traveling, going to concerts and exploring the city of Indianapolis.

May 2020 Newsletter

In this month’s newsletter, we’ll help you navigate COVID-19 and introduce you to one of our many dedicated staff members!

When the Only Thing That’s Certain … Is Uncertainty

By Jason Thompson, CPA/ABV, ASA, CFE, CFF
Partner and Director of Valuation and Litigation Services
[email protected]

Who knows what is next in this pandemic? Initially what started as a national emergency with a 15-day stay-at-home order has now dragged on for weeks with more restrictions and concerns as time has passed. Easter came and went in untraditional fashion. Memorial Day, the official start of summer, is here, yet most of us will again celebrate this holiday differently than we have in the past.

So much of what’s happening is out of our hands. That’s why, as a business owner and leader of your organization, it’s important to recognize what you CAN control.

First, you can control your attitude. As your business’s leader, others are going to be watching how you handle things. Confidence that your business will make it through this is what many of your employees need to see. Demonstrate your confidence in them to ensure there will be a pathway through this.

Communication is critical. Communication is always an important task when managing a business. In today’s environment, with remote work and socially distancing in an office, contact with others has declined. A lack of contact promotes anxiety on top of heightened levels of anxiety we are all feeling from the pandemic. Communicating regularly with your employees about both important business issues and decisions as well as day-to-day experiences is now more important. Develop your process for this communication, make it happen and be consistent.

Make a plan. That is always easier said than done, but spending time to focus on what you do know and the potential alternatives you see for your business in this environment will prepare you for the road ahead. Is it time to go back to work? Does the current environment require a new business model? Are there other businesses we can work/partner with? The planning process in many instances prepares you for the uncertainty you will face, as you will have thought through potential alternatives and can thus adapt as the uncertainties unfold.

Uncertainty is definitely upon us and yet uncertainty has always been around, just maybe not in our face as much as it is today. In many ways, uncertainty is just a form of change and where there is change there usually is an opportunity to make things better. Evolution is the key to survival!

If we can assist you further with achieving success in your business or personal affairs, please contact Jason Thompson at (317) 608-6694 or email [email protected].

When Your 20/20 Vision for the Current Year Has Become Clouded

By Eric Woodruff, CPA, CCIFP
Partner, Audit & Assurance Services
[email protected]

When the New Year’s Eve ball dropped in Times Square, business owners’ minds probably flooded with a vision for a very prosperous 2020. Little did they know that the streets of New York and cities across the country would be barren just a few months later due to a pandemic.

The COVID-19 outbreak has wreaked havoc on all businesses — large, small, domestic and international. There has been no place to hide! Now, the businesses still standing — especially smaller businesses — are in survival mode, doing whatever they can to maintain the financial wherewithal needed to keep running.

Before you start crunching the numbers, you need to adjust your expectations and redefine success. Maybe success in the current climate means maintaining 75 percent of your customer base. Or it could mean increasing online sales. Perhaps it means the development of a new product or service. Adapting and evolving will put your company in the right position for a comeback. For some, the innovation of American enterprises has been challenged, and they are answering the call.

Obviously, you’ll need to adjust your annual budget. This involves modifying your cash flow planning, which may require additional dialogue with your bank, shareholders and other stakeholders. You might need to set up more lenient payment plans with vendors and clients. Times are tight; they will understand. The common saying at the present time is, “We are all in this together,” but some are looking in their boat and they are the only ones rowing!

Unfortunately, you must make difficult decisions now in order for your business or organization to survive for long-term success. Under the current circumstances, the unthinkable is now reasonable. We’re talking about making significant budget cuts, furloughing employees and shrinking your service hours or offerings to make it economically feasible to operate. You must plan and act as if this disruption will last longer than we hope, and pray that the duration is much briefer.

As you’re making these difficult sacrifices, remember the adage, “This too shall pass.” Hardship and failure are part of the journey toward success. Hang in there! You’ll be glad you did in the long haul. Many believe that the lessons learned and experienced in these turbulent times will make you a better manager and your team stronger!

If Sponsel CPA Group can assist you with achieving success in your business or personal affairs, please contact Eric Woodruff at (317) 613-7850 or email [email protected].

Employee Spotlight: Skyler McCool

Skyler McCool first joined the firm as an intern amid the busy tax season of 2018. He went on to graduate with a degree in accounting and finance from Marian University in 2019. Last fall, he became part of our full-time family.

As a Staff Accountant in the Tax Services department, Skyler works with individuals, C-Corporations, S-Corporations, LLCs and Partnerships. His duties and responsibilities involve a variety of areas within federal and state taxation, including compliance, consulting and planning.

Outside of work, Skyler enjoys spending time with family and friends as well as cheering on his favorite sports teams, the Cincinnati Reds and Las Vegas Raiders.

April 2020 Newsletter

In this month’s newsletter, we explore how to lead during a crisis, tax return deadline extensions, business recovery, our COVID-19 Resource Center and more!

Are You Leading?

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

In the midst of this crisis, it’s all too easy to grow overwhelmed and lose sight of the long-term vision for your company. You may find yourself in that predicament now, amid the COVID-19 pandemic. But you have to rise above your anxiety and push forward as a leader. Your employees and their families, customers, and vendors are counting on YOU!

Stay confident. Part of leading a company is putting on a poker face during difficult times. It will rub off on employees and stakeholders, thus boosting morale and keeping the business up and running. Pessimism won’t get you anywhere. There’s more power in positive thinking. Confidence with an assertive attitude toward action can be contagious.

Be empathetic. Your employees and stakeholders are depending on you as a source of comfort and support right now. Be cognizant of their new normal. For example, some may be working from home and simultaneously caring for children. Young, single employees may feel like they are in a lonely silo and yearning for socialization! An effective leader anticipates their challenges and offers supplemental support — you must be flexible to their diverse needs.

Consider the community. Support your broader community to the extent you are able and be respectful of the CDC’s Social Distancing guidelines. Provide financial assistance to organizations feeding those who are food deprived. Check in on an elderly neighbor and see if they need assistance in some manner.

Be realistic. Hope for the best but prepare for the worst. Although you need to move toward the light at the end of the tunnel, it’s important to examine what’s lurking in the darkness. Here at Sponsel CPA Group, we’re staying tuned to COVID-19-related economic impacts and compiling the information in our COVID-19 Resource Center. Staying informed is the best line of defense against a crisis like this. As you prepare for the negative impacts to your business, plan for your solutions to those challenges. Monitor your cash flow and revise your budgets for the changing economic environment. Don’t assume your vendors and customers are in the same shape as you — they may be in worse shape! You MUST be proactive in facilitating your business’s survival in this unprecedented period during which a health crisis has been the source of an economic crisis. Four weeks ago, we would have never envisioned what we are living through today!

We’re definitely in the midst of a tough time. Hang in there, hold your chin up high and keep your eyes focused on the future of your business in recovery — it may take longer than you wish!

We are here to help you, so please reach out to any of our Partners and team members to assist you in your time of need.

What Will Your Recovery Look Like?

By Lisa Purichia
Partner, Director of Accounting & Retirement Plan Services
[email protected]

As you cope with the continuing impact of COVID-19, you’re probably struggling with day-to-day operations rather than planning for the long-term recovery of your business. But it’s vital to move toward a brighter future and proactively assert your plans for recovery.

You must understand that a lot has changed in a relatively short period of time. What did you learn about yourself and your team? What new processes and procedures make sense to implement after this mandated crisis is over? What innovations have you utilized during the crisis that will make you more cost-efficient going forward? Do not plan to automatically revert to your old ways without first contemplating if there is a better way. Again, what did you learn from this crisis? As a notable politician once quoted, “Never let a crisis go to waste!” The same — but with a whole different meaning — goes for your business. Take something positive from this experience; it will make your team stronger and more confident of future success.

What will your recovery look like? Will it be V-shaped, crashing to a sharp decline but quickly rising to a peak? Or will it be a U, gradually declining before moderately picking up momentum? Or will your business flatline and have to reinvent itself? Will you have to introduce new products and services? Innovation and perseverance will be the key to your future success.

Now is the time to develop, monitor and stress-test your recovery plan. In what areas can you cut costs? How can you expand your line of services to meet your customers’ current and post-COVID-19-related needs? During this time, also make sure to take advantage of the Small Business Administration loan programs, and consult your accountant, bankers, etc. about the best practices for moving forward and maintaining financial stability.

Always think about the long-term, especially when it comes to the relationships you’ve built. Many of your customers may not be able to pay you in full right now. Set up payment plans with those customers; they will reward your loyalty in the long term. The same goes for your vendors. Work with them on a proactive basis, and I am sure they will appreciate the respect you demonstrate for a long-term relationship. You’ll need these stakeholders’ support in the long run, so being more flexible now will strengthen your credibility with them and ensure steady business in the future.

Focus on the road ahead. You’ll hit some speedbumps, but if you keep a forward momentum, you will eventually find yourself back to business as usual. I like what one newscaster signs off nightly during this period: “We are one day closer to this being over!”

If we can assist you further with achieving success in your business, please contact Lisa Purichia at (317) 608-6693 or email [email protected].

March 2020 Newsletter

In this month’s newsletter, you can read about our Coronavirus policy, tax filing and payment extensions, Sponsel’s recent accomplishments and more!

How We Are Handling Coronavirus

At Sponsel CPA Group, we are keenly aware of the potential impact of the coronavirus (COVID-19). As many of you are, we are taking steps to provide for the continuity of our client services and the safety of our employees and clients as we navigate through the uncertainty of the outbreak, along with the potential health and economic ramifications.

We are staying up-to-date on the latest developments. The actions we are taking include monitoring resources such as the Centers for Disease Control and Prevention (CDC); the World Health Organization; the Occupational Safety and Health Administration (OSHA); and our local public health department.

As you know, this is one of the busiest times of the year for accounting firms with tax filings and financial statement regulatory deadlines rapidly approaching. Disaster preparedness is an integral part of our firm’s risk management program. Below are some of the features of the plan and the actions we are taking:

Understanding the risk: This is a rapidly evolving situation, and we are monitoring reports from the CDC and other health agencies to enhance our knowledge and understanding of the spread of the coronavirus. We are tracking regional transmission in affected areas, and are actively taking steps to support our employees, clients and our surrounding communities.
Ensuring access to our firm: We are taking additional precautions within our work environment to help keep our employees and visitors healthy. We plan to communicate more via email, teleconference, video conference, and other forms online communication, in lieu of face-to-face meetings whenever possible, but we will remain available to meet in person to the extent necessary to service your needs. Currently our physical offices remain open; however, we are preparing in the event we need to operate remotely. We remain committed to maintaining our firm’s quality control standards.

Our top priorities are the health and safety of our employees and clients. We will continue to monitor guidance from health experts and government recommendations, and we will do our very best to maintain the quality and timeliness of our services to you. We appreciate your flexibility and support during this time, and our thoughts remain with everyone affected by the COVID-19 crisis.

Do You Make It Easy to Do Business with You?

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

Many business owners are so focused on growing their business they forget to stop and assess whether they’re easy to do business with. Here are some things to consider when building relationships with customers and trying to earn their loyalty.

Responsiveness: Don’t leave customers hanging. Even if you don’t have sufficient time to talk to them, touch base to let them know when you will be available for a more in-depth discussion. Better yet, ask what other times they will be around to talk business. Communication is key! But get back with them as promised!

Hours of Operation: If you’re having trouble keeping up with customers’ needs, maybe you need to consider breaking past the standard 8-5 work week and adding evening or weekend hours. You need to adopt a 24/7 mentality, especially if you’re a small, self-owned business. You need to serve the customer when they can access you.

Payment Methods: New payment methods — such as PayPal and Venmo — not only speed up cash collections, but they appeal to younger generations of customers.

The First Impression: Your first impression is your best impression. Is your service truck clean? Are your employees in a uniform with an ID badge? Do your service techs put on shoe covers before entering a residence? Do you greet customers with a smile and a firm handshake? Think of your first impression as your audition. Make customers want to give you a callback and then offer you the role! Building trust starts with you. You can apply the golden rule here. Treat customers how you would want to be treated. Be the kind of business owner you would trust.

Expectations: Be careful with deadlines. Don’t throw them out, unless you’re certain you can do something by the time you say you can complete it. It’s best to under-promise and over-deliver. Customers like pleasant surprises; they want you to exceed their expectations. And if you have to go the extra mile at the last minute due to your customer’s poor planning, don’t hesitate to charge more for the rush job.

Be Honest: Honesty includes telling people when something isn’t possible. Be straight with them. It’s OK to say “no” to hasty requests. A lack of planning on their part doesn’t constitute an emergency on your part. Instead of trying to pull tricks out of your hat at the last minute, provide realistic solutions that are workable in the long term. Good business isn’t about making a fast buck. It’s about building long-lasting customer relationships. Honesty sometimes means telling the customer what they do not want to hear, but honesty builds credibility and trust.

Character and integrity matter in the marketplace. Make sure you follow these guidelines to build your reputation as a business of choice, the kind people consider easy to do business with.

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

February 2020 Newsletter

Welcome to the first Sponsel CPA Group newsletter of the new year! Read about onboarding, benchmarking, new year legal policies and more!

Talent Management: Start with a Great Onboarding!

By Lisa Purichia
Partner, Director of Accounting & Retirement Plan Services
[email protected]

As the adage goes, your first impression is the best impression. In this tight labor market, that impression is critically important in recruiting and retaining talent. Are you enabling your newly recruited staff with the information and tools to be successful hires?

The best way to leave a lasting impression on new team members is through an organized, comprehensive onboarding process. This should go far beyond a day or two of introductions and paperwork. It should be a deep dive into the company’s culture that opens their eyes to the broad depth and breadth of your business as well as the long-term vision for it. Make your expectations of new employees crystal-clear and easy to understand.

Employers often don’t invest enough time in developing this process and connecting with new employees. Younger professionals are particularly hungry for this kind of connection. They not only want to know how your company can benefit them and clients, but also how it contributes to the greater society. What are your social values? What are your community outreach efforts?

Of course, as you grow, the more difficult this process becomes, but stick with it! Again, this isn’t like college orientation day; it should be an ongoing, in-depth process. And it should include a buddy system or formal mentoring / shadowing program lasting anywhere from 90 to 180 days. This will help new employees feel like team members rather than outsiders. It will also allow the new team member to learn the unspoken do’s and don’t’s that are not formally documented anywhere. During this time, help them carve out their career path and see their growth potential. Ask them what level of the respective career ladder they ultimately want to reach, and let them know how you can help them achieve their goals.

All of these steps in the onboarding process will help you build a reputation as a business with a friendly, collaborative environment that attracts and retains talent. You will have an energized workforce that is engaged to deliver your desired results. You’ll be known as a business that immediately pops up in the minds of young professionals eager to enter the workforce. You’ll be an employer of choice!

If we can assist you further with achieving success in your business, please contact Lisa Purichia at (317) 608-6693 or email [email protected].

What Your Financials Don’t Tell You: Benchmarking Your Financial Results

By Lisa Blankman, CPA
Manager, Audit & Assurance Services
[email protected]

Many business owners find that their financial statements do not always allow them the ability to truly understand their business operations. They read all the numbers, but how does that help them manage their business day-to-day and equip them to know what adjustments to make? In addition, many times they focus too much on the “now” and not enough on the future and their respective position in the marketplace.

Key Performance Indicators (KPIs) can be helpful in measuring your company’s revenue growth, customer engagement and future potential. The KPIs should include financials ratios of liquidity, operating efficiencies, leverage, etc., as well as specific ratios unique to your business industry or profession. For example, if you’re in the retail industry, you’d want to look at sales per square foot of floor space.

In order to keep growing, you must look beyond your company’s progress and compare it to industry benchmarks. In other words, are you keeping up with your competition in the marketplace? Dig deep for the information that is key to you and your managers.

More and more businesses are reaching out to us for assistance with the process of benchmarking those KPIs, and we have a number of data resources to help!

Here are some data points to measure and compare to industry standards:

Average revenue per customer
Hourly labor rate for particular part or service module
Gross profit by service line
Net profit margin by customer
Employee turnover rate
Salaries of Business Controller, CFO, COO, CEO, etc.
Monthly website traffic
Percentage Revenue Growth
Current ratio
Inventory Turnover
Pre-Tax Income as percentage of sales

These are just a few KPIs for you to consider as you examine how well your business is competing with the marketplace. In addition to measuring your company’s place among competitors, these metrics will help you gauge customer engagement, identify underutilized space and tap into new revenue streams. Perhaps you need to lease vacant office space or boost sales by adding new staff members and/or products and services. If your employee turnover rate is high, you may want to consider enhancing your company’s culture and improving employment satisfaction.

We recommend looking at KPIs on a regular periodic basis (monthly, quarterly, annually) over a 10-year period of time to understand fluctuations created by economic cycles. Your focus should be on the long term but with a bias for action that you must take TODAY!

Make sure you are closely monitoring the metrics that will have the most impact in gauging your business’s performance and your position in the marketplace.

If we can assist you further with achieving success in your business or personal affairs, please call Lisa Blankman at (317) 613-7856 or email [email protected].

Employee Spotlight: Jason Thompson

Jason Thompson has been with Sponsel CPA Group from the very beginning. One of the founding Partners of the firm, he has led the the Valuation and Litigation Services department since its inception, helping clients find innovative solutions to challenging financial and legal issues. He provides executive-level counsel to business owners and investors across a broad range of industries, specializing in the valuation of privately held businesses, ownership interests and intangible assets.

Jason routinely provides consultation related to business valuation in mergers and acquisitions, in estate and gift tax compliance and planning and for an array of litigation related reasons. In addition to his skills as a valuation professional, he also performs the firm’s fraud and forensic accounting investigations and serves as an expert witness from time to time in accounting and financial related matters.

In 2008 he was named a Super CPA award by Indiana Business magazine. Active in the community, Jason volunteers his time as a board member for Noble of Indiana, a not-for-profit organization serving people with disabilities and their families.

December 2019 Newsletter

Before we head out for the holidays, join us for this look at how to prepare for 2020, retirement planning, Sponsel community outreach efforts and more!

Do You Have a 20/20 Vision for the Coming Year?

By Lisa Purichia
Partner, Director of Accounting & Retirement Plan Services
[email protected]

Do you have a crystal-clear vision for 2020, or are you losing sight of the coming year amid the hustle and bustle of the holiday season and end-of-year business activities?

Although it’s important to wrap up this decade in a timely and orderly fashion, it’s also vital for you to plan and craft a vision for next year. You will need to review the data metrics and key performance indicators of 2019’s successes, knowing you and your team can always do better. Make incremental improvement one of your main goals for 2020!

Of course, practical planning methods such as budgeting and annual performance reviews are essential. But the more specific your vision, the better. For example, some CEOs set a theme for the coming year. Themes can be effective in terms of rallying your team around clear goals and thus making the New Year seem less overwhelming and more manageable. Communication of expectations is critical.

Your theme could revolve around increasing sales, improving training and skills, the launch of a new product or service, etc. Of course, you don’t have to ignore other goals, but focusing on one to begin with will speed up the planning process and make the segue into next year much smoother.

As a leader, you’re responsible for creating the energy and enthusiasm around the vision for the company’s future. Make sure you have the right people, resources and procedures in place to get the momentum going toward turning that vision into a reality.

Starting the new year with a focused, communicated vision will lay a foundation for a great 2020!

If we can assist you further with achieving success in your business, please contact Lisa Purichia at (317) 608-6693 or email [email protected].

Retirement Planning 101: Risk Management and Plan to Have Fun

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

Welcome to Part 2 of a multipart series on Retirement: Planning, Executing and Enjoying!

In Part 1, we talked about spending and how to make sure you have enough retirement funds as well as how to plan to “control” your spending both before you retire (so you have adequate savings) and after retirement, when the paychecks stop! Now, we’re going to explore two other critical factors: (1) risk management and (2) how to plan to have fun in retired life.

Given the fact that most people retire around age 65 (mainly due to that being the minimum age to qualify for Medicare), healthcare is a key concern in retirement. For many people, Medicare is their primary form of healthcare insurance. More than likely, upon retirement you will need prescriptions or procedures not covered by basic Medicare. You will also need to consider securing Medicare supplement insurance, which can be very confusing with all the options and coverage available. If you were proactive in your pre-retirement planning, you may have built up funds in a health savings account, which are very helpful to pay medical costs.

Aging comes with risks, and insurance is about transferring the cost of those risks to a third party. There is a vast ocean of options out there; don’t try to navigate them on your own. Talk to a specialist well versed in Social Security and Medicare benefits and the various private supplemental plans available to provide the health insurance coverage you will require.

You may also want to consider life insurance (to maintain, discontinue or secure coverage), which can help with such issues as remaining debts in your estate, support a loving spouse upon your death or funds to provide for your last settlement upon death. Life insurance needs are facts and circumstances specific, so you should analyze with an independent professional.

Long-term care insurance is another issue, as you may need to seek rehab, physical therapy, assisted living, etc. Sit down with a trusted financial advisor to analyze Medicare and Social Security benefits that will cover these needs and allow you to protect assets remaining in your estate.

After all of this is done, you get to do the fun part — making your Bucket List.

Write down all of the things you felt like you never had the time or money to do while you were working. Whether you want to spend more time with your grandkids or visit the Egyptian Pyramids like Jack Nicholson and Morgan Freeman in the movie The Bucket List, enjoying more out of life is what retirement is all about!

Remember that retirement and what you do in retirement is a very personal decision process for you and your spouse. Do not allow yourself to be to be swayed by the generalizations that some of your friends may mandate on you in your retirement! Anything is open to you, and you should make the most of your retirement phase of life. For many it is only the beginning of a new chapter in life! May you have many new chapters yet to write!

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

Employee Spotlight: Karen Hume

Karen Hume’s first experience with Sponsel CPA Group was as a client. Knowing it was a great team of people to work with, she happily joined the firm as a Manager in the Accounting Services department about a year ago. Karen came equipped with more than 20 years of accounting experience in positions varying from Senior Accountant and Controller to Vice President of Finance.

As a Manager, Karen oversees and directs our services to clients that require customized accounting solutions, and she also assists with general bookkeeping, payroll services, and monthly, quarterly and annual financial reporting.

Outside of the office, Karen is a movie buff and bookworm. She also enjoys spending time with family and friends — some from as far back as elementary school!

November 2019 Newsletter

In this month’s newsletter, read about leadership and turning your company into a classroom. Learn more about our team members as well!

Does a Good Manager = a Good Leader?

By Mike Bedel, CPA, CGMA
Director of Audit and Assurance Services, Partner
[email protected]

Managers are usually considered leaders within a business, but the difference between managers and leaders is more significant than you think. Managers work IN the business while leaders work ON the business!

To put it another way, managers are in the trenches while leaders are operating from a bird’s eye view. Managers spend more time grinding through the day-to-day standard operating procedures. Meanwhile, a leader always has an eye on what’s further down the road for the business, she carries an inspirational vision of what is possible.

Leaders also actively encourage those around them to aim higher, THEY make the team better! They initiate training and team-building sessions throughout the year to keep employees sharp, on their toes and building new skills. Propelling people to improve creates a culture that encourages continuous learning and experimentation. It keeps the company alive and thriving!

You determine which role you aspire to fill: manager or leader. Most successful companies need talented team members in both roles. Are you as successful as you want to be?

If we can assist you further with achieving success in your business or personal affairs, please contact Mike Bedel at (317) 608-6699 or email [email protected].

How Much Time Did You Spend in a Classroom This Year?

By Lila Casper, CPA
Senior, Audit & Assurance Services
[email protected]

It’s easy to get lost in the daily grind, especially as the holidays sneak up on us. We focus so much on getting through the work week that we lose sight of the big picture. Is your business prepared for 2020? Is your business prepared in general? What new skills have you added?

Inventor Alexander Graham Bell said, “Before anything else, preparation is the key to success.” Preparation isn’t only important for the upcoming year, but your long-term success is dependent on a skilled workforce. With the technological changes we are experiencing, you and your workforce cannot stand still.

A company should be a continuous learning environment, a “classroom” that encourages constant growth. With the ebb and flow of the marketplace along with ever-evolving technology changing the way we do business, we need to specifically allocate time toward improving our collective skills bank. Oftentimes that will require you to actually enroll in a specific training course … in a classroom for learning. You would be foregoing a productive labor “hour” today for long-term success.

If you haven’t spent time in skill building this year, you must add this to your 2020 operating plan and budget. What are your team’s major areas of weakness? What skills do your competitors have that are superior to yours? What kind of skill improvement programs should you develop?

Make it fun by turning team-building exercises into opportunities for company outings! Take your crew to an escape room or a gaming and entertainment center. This will go a long way in boosting employee morale, retaining talent and unlocking the creativity gene they didn’t know they possess.

Another good way to retain talent is to make sure you are helping your team members reach their professional goals. Lend a hand in plotting their career development. They should envision their employment as a “Career Path” and not just a J-O-B!

Encourage them to sharpen their skills and keep improving, and be willing to fund their training costs. Team members appreciate leaders who truly care and advocate for their employees. Taking the time to invest in your team members’ professional lives will pay off for your business.

As Benjamin Franklin said, “By failing to prepare, you are preparing to fail.” Hit the “books,” so to speak, learn new skills and spend quality time in building your own personal skills and the skillset of your employees to realize a successful business result.

If we can assist you further with achieving success in your business or personal affairs, please contact Lila Casper at (317) 613-7860 or email [email protected].

Employee Spotlight: Lisa Purichia

Lisa Purichia is a founding partner of Sponsel CPA Group. She joined Tom Sponsel and fellow founding partners in launching a new kind of accounting firm — focused on lending a personal relationship touch to helping businesses turn their vision of success into a reality.

Before becoming a member of the Sponsel CPA Group family, Lisa earned her bachelor’s degree in accounting from Indiana State University and rose through the ranks at other public accounting firms. Her deep roots in the Central Indiana business community date back a quarter-century and spreads across a wide variety of industries.

As Partner and Director of Accounting Services and Retirement Plan Services at Sponsel CPA Group, Lisa provides executive-level consulting and advice, especially for new businesses. 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. Thanks to her leadership, our team can design a corporate employee benefit plan that gives clients a significant edge over the competition when hiring, retaining and giving employees a wide variety of options.

Outside of Sponsel CPA Group, for the 2019-2020 operating year, Lisa serves as the President of the National Association of Women Business Owners – Indianapolis Chapter (NAWBO Indianapolis), the second largest chapter in the nation. She has been a board member since 2013, gradually working toward her current leadership role. As President, Lisa strives for diverse and inclusive membership, inviting entrepreneurs across Indiana to #ThinkNAWBOFirst as they consider partners who can support them and their business goals.

In addition to her involvement with NAWBO Indianapolis, Lisa is an active member of her church, St. Christopher Catholic, and she has volunteered in the past for a number of community and civic groups including the Greater Speedway Area Chamber of Commerce, Speedway Kiwanis Club, Indiana Sports Corp President’s Council, Governing Body of Athena Powerlink®, Mid-American Pancreatic Disease Foundation, American Institute of Certified Public Accountants (AICPA) and Indiana CPA Society.

With her decades of experience and inspiring, selfless leadership, Lisa serves as a role model for newer Sponsel CPA Group staff members as well as businesswomen all over Indiana.

When she’s not working, Lisa and her husband, Mark, enjoy traveling to regional Indy Car races throughout the year, in addition to attending every Indy 500 race, event and activity. They also love playing with their two Labrador Retrievers, Enzo and Timo. In addition to these furry members of their family, Lisa and Mark cherish time with their nieces, nephews and other relatives.

October 2019 Newsletter

In this month’s Sponsel newsletter, you can learn about business ethics, the difference between stakeholders and shareholders, and so much more!

The Same Ethics in Life Apply to Business

By Jason Thompson, CPA/ABV, ASA, CFE, CFF
Partner and Director of Valuation and Litigation Services
[email protected]

We take ethics seriously here at Sponsel CPA Group. In fact, we regularly undergo ethics training, and must pass an ethics exam before obtaining a CPA license. But the fact of the matter is that EVERY company should conduct their business in an ethical manner. Ethical behavior is a critical foundation for all stakeholders, especially your team of employees.

Business ethics are really no different than the ethics you employ in your personal life. Always ask yourself, “Am I doing the right thing?” You should do the right thing regardless of pecuniary consequences — that is the hard part! If a customer returns a faulty product or expresses disappointment with a service, making it right with them is the only solution. This investment in the customer experience is the right thing to do, and long term benefits will be richly achieved!

If you’re giving out refunds, you may find yourself worrying about your short term financial results. Think about the long-term benefits instead. You’re establishing your business as one with integrity, one that cares about its customers and stands behind their product or service. Those are the businesses that stick around for the long haul. Your customers know that you will do them right!

Your employee group will also rally around this honorable habit. They will be proud to work with a company that values the customer experience and is profoundly focused on the relationship with its customers. In many cases, these same companies have an above average relationship with their team of employees, as people like to work in environments with which they can take pride in being associated!

If you operate with best practices, employees and customers will respect you and pledge their loyalty. Think of the regulars at mom-and-pop coffee shops. They would probably prefer the convenience of a drive-thru Starbucks, but they keep going to the family-owned store because it has a sense of history and character. They like the people pouring their coffee. That personal touch. They value the trusted relationship.

A business can’t run effectively without a strong sense of ethics. If you’re not doing what’s right for your customers, employees and other stakeholders … what are you doing exactly? Stay focused on what’s right, and your business will keep booming.

If we can assist you further with achieving success in your business or personal affairs, please contact Jason Thompson at (317) 608-6694 or email [email protected].

Employee Spotlight: Brandon Cangany

Brandon Cangany joined the Sponsel family as an accounting intern in 2013, after graduating with distinction from IUPUI’s Kelley School of Business at IUPUI with a double major in finance and accounting.

As a Manager in the Tax Services department, he specializes in tax compliance, strategy and planning for clients in a wide variety of industries. With a focus in privately-held, family-owned businesses as well as not-for-profit entities, he provides strategic solutions to businesses and their owners.

Brandon has a CPA license and is a member of the Indiana CPA Society (INCPAS).

Outside of the office, Brandon enjoys cheering on the Indiana Pacers and the Indiana University Hoosiers.

September 2019 Newsletter

In this month’s newsletter, you can learn about financial planning for now and far into the future, meet one of our partners and catch up on Sponsel office news.

Dear Procrastinators … Summer is Over!

By Lisa Blankman, CPA
Manager, Audit & Assurance Services
[email protected]

Was your phone ringing off the hook after Labor Day? That was Telephone Tuesday calling! Studies show a significant spike in business calls after this long weekend, the unofficial end of summer and relaxing! You may have found yourself dialing up a storm as well. Why, you ask? The end of the year is just around the corner, and procrastination is catching up on everyone as they look upon what they have NOT gotten done but planned to.

You MUST be proactive in order to finish the fourth quarter strong and hopefully wrap up a successful year. Now is the time to move with a stronger sense of urgency. It’s also time to prepare for the coming year and position yourself to take advantages of the opportunities that will be offered to you and your company.

The hardest part of digging yourself out of the futile pit of procrastination is renewing your commitment to a positive plan of action while you still have the time to impact 2019’s operating results. One of the simplest ways to start is with a good, old-fashioned to-do list. You’ll feel much less overwhelmed as you write down your tasks and proceed to cross them out. But you must prioritize that list and in most cases put the MOST difficult tasks at the top, as many times those are the most mission-critical endeavors. That is why you have procrastinated about them — they are not easy!

“If it were easy to become the best, everyone would do it.” — Lou Holtz

Ask the tough questions throughout this analytical process. What operational factors aren’t generating the strategic results you were hoping for by this time of year? Do you need to make personnel changes or alter the responsibilities of certain team members? Do you need to push junior employees to step up to the plate? Analyze your vendors as well and think about whether they are meeting your business needs and making it easier for you to accomplish your goals. Are their pricing and services commensurate with their cost?

While you’re at it, take a look at your budget, too — both what is remaining for 2019 and what you should plan for in 2020. Do you need to tighten it up a bit or build upon it? Make specific, measurable financial goals for both periods. It is NEVER too late to set reasonable goals. Think about how much revenue you aim to rack up in 2020. Do you need to raise prices in order to keep pace with your cost structure? When was your last price increase?

Remember: Great leaders have a VISION, but they focus on EXECUTION!

Don’t let yourself fall behind! There is still plenty of time to ensure a great fourth quarter and plan for an even more successful 2020. Start right now! Develop that plan of action that will help you achieve your goals!

If we can assist you further with achieving success in your business or personal affairs, please call Lisa Blankman at (317) 613-7856 or email [email protected].

Your Personal Financial Condition: Do You Know Yours?

By Eric Woodruff, CPA, CCIFP
Partner, Audit & Assurance Services
[email protected]

While you’re analyzing your business goals and objectives for next year, don’t forget about your personal financial condition at home as well. Many times, personal finances are the most often ignored aspect of very busy business owners’ lives.

Preparing a personal financial statement on an annual basis is of vital importance. Avoiding this assessment of your personal financial condition puts you and your family at risk of financial instability. You should not only prepare it but also analyze it and make sure your personal assets and level of liabilities are consistent with your goals and objectives. Oftentimes people don’t want to prepare it, as they are fearful of what it might tell them. You must face reality.

Keeping a close eye on your personal finances and taking an annual, in-depth look at your financial condition will not only improve your financial stability, but it will also provide peace of mind.

If we can assist you further with achieving success in your business or personal financial matters, please reach out to us. We can also assist you in preparing your personal financial statement and consult with you to interpret your financial condition, to ascertain if you are on the path that you have planned for. Please call Eric Woodruff at (317) 613-7850 or email [email protected].

Retirement Planning 101: Spending

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

Welcome to Part 1 of a multipart series on Retirement: Planning, Executing and Enjoying!

It’s never too early to start planning for retirement. Most advisors believe you should start your analysis at least 10 years before your desired retirement date. Of course, you should consider such questions as when you’ll be retiring, where you’ll be living then and what an enjoyable retirement looks like for you and your spouse. Another vital first step is looking at your current spending habits and what those similar expenses will look like in your retirement phase of life.

You’re probably spending more now than you think. Perhaps you should dial it back a bit and focus more on saving so you can have the retirement style of living you desire. Most people think they know their spending and where their money goes, but those same folks refuse to put it down on paper as proof and expose it for further analysis.

Most people spend a significant amount of time worrying about their retirement income, but they spend very little time on really analyzing their spending habits. They take a look at what kind of income they will have in retirement, but they do not prepare themselves for reducing their spending in order to “financially survive” in retirement. They seek to travel but make no provisions for such in their planning and retirement budgeting.

Analyze your social security benefits, 401k account and any other investments you may have. If you can afford to make more contributions now, you should. Maybe cut back on those Starbucks lattes and make eating out a weekend treat rather than a nightly dinner.

We recommend preparing a summary of expenses; one with a column for Current Spending and another column for Post-Retirement Spending. When placed side-by-side, the comparative analysis can be eye-opening, especially if both columns total the same and you expect less income in retirement. But you have time to change that projected result!

Tightening up your household budget now will allow for a more enjoyable retirement lifestyle. Do you plan on traveling, going out on the town, taking up new hobbies? Also consider the cost of healthcare, as that becomes one of our biggest expenses as we grow older.

Start tracking your spending on a monthly basis and make a personal financial statement. Go over it with someone other than your spouse so you have an impartial opinion. Sit down with a trusted financial advisor to determine what income you’ll generate during retirement and how you can better save now.

It’s better to be safe than sorry. Start planning now to ensure a bright future ahead! You have worked hard, so you should be able to enjoy retired life with peace of mind.

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

Employee Spotlight: Nick Hopkins

Nick Hopkins is one of the founding members of Sponsel CPA Group, and he has been excited to be part of the firm’s growth over the last 10 years.

A CPA, Certified Financial Planner® and Director of the Tax Services department, Nick leads the tax team in providing financial, strategic and tax planning services to clients. He also specializes in acquisitions and mergers, multi-state tax compliance and other complex tax challenges. He was named a Super CPA by Indiana Business magazine.

Nick has a passion for helping clients and is constantly looking for ways to provide practical solutions to complex problems.

Born and raised in Morton, Ill., Nick currently lives in Bargersville with wife, Natalie, and their three children – Ali, age 12, Brock, 9, and 4-year-old Blakely. In his spare time, Nick enjoys golfing and spending time with his family.

What We’ve Learned On Our Journey

Our firm had a humble beginning, starting with four partners and a team of just 18 employees. We had a vision for a better way to serve the clients we hopefully would secure, and we wanted to be a “New Kind of CPA firm.” Our enthusiasm lit the way in the shadow of the Great Recession, which was definitely a risky time to give birth to a new business. (Many were doubtful of our potential for success). As we celebrate our 10^th Anniversary, Sponsel CPA Group stands as a testament to the power of perseverance, working as an unselfish team, the drive of an entrepreneurial spirit and withstanding the risk of failure!

The Sponsel Team is now 36 strong, with a reputation as one of the Best Places to Work in Indiana. We’re also proud to be listed in the Indianapolis Business Journal’s Book of Lists as one of the top 25 CPA firms in Indianapolis.

This growth and recognition is encouraging, as it means we’ve lived up to our vision of bringing a personal touch that keeps clients and team members happy. These relationships are of the utmost importance to us. Strong bonds form the bedrock of an effective business.

We’ve learned many lessons while traveling down this long road to success. First, trust is key: trust in your vision, your team and your gut. Don’t let the speedbumps along your path discourage you from pushing forward. Stay patient for the long-term results. Don’t be distracted by the temptations of short term windfalls, but keep your focus on the long term success that carries much greater rewards.

This recalls what social reformer Jacob Riis famously said: “When nothing seems to help, I go and look at a stonecutter hammering away at his rock, perhaps a hundred times without as much as a crack showing in it. Yet at the hundred and first blow it will split in two, and I know it was not that blow that did it but all that had gone before.”

Don’t QUIT, as SUCCESS may be just around the corner.

We’ve certainly spent a long time — with great effort, much humility and great people — to build a great team and a great business.

We thank everyone, past and present, for helping us construct a firm we’re proud to call our own.

We look forward to building on the foundation of our first 10 years in the decade ahead!

Celebrating Our Team

Our firm has evolved significantly over our first 10 years, and our talented team of professionals becomes stronger every day. (We have four new college recruits starting in September!) Our vision for a relationship-based business came to fruition, as we’ve grown into a company where relationships with co-workers and clients start with a business purpose, but friendships quickly grow out of those relationships.

The compassionate culture here has helped us recruit and retain terrific talent. No one takes a backseat at Sponsel. We encourage every staff member to chart their own course. Their aspirations become our own, and we cheer them on as they climb the ladder toward their career goals. We’ve been proud to see team members excel within the firm and grow into leaders in the community as well. For example, take Lisa Purichia, who was recently installed as the President of the National Association of Women Business Owners – Indianapolis Chapter (NAWBO Indianapolis). Our first college intern is now an experienced Audit & Assurance Manager. Two of the original 18 employees have been promoted to partners. We help people GROW!

We’re building a diverse team of skilled and talented people who want to find a purpose in and out of the office. Helping them balance their personal lives and ambitions is important to us. As we strive to emphasize in our recruiting campaign, this company cares about the people who keep it running.

Happy Sponsel team members make happy clients!

While a great line of products and services can certainly help keep any company alive, the people behind the scenes are vital. They make a milestone like 10 successful years in business possible.

We wouldn’t be here without all of our team members from our humble beginnings up until now. Thank you to everyone who has made Sponsel CPA Group what it is today.

We are NOT done but just getting started. Watch our team grow and achieve greater success, as we serve our clients in the way they want to be served — in a customized manner!

Our Vision for the Future — IT IS A BRIGHT ONE!

With our reputation as one of the top accounting firms and one of the Best Places to Work in Indiana intact, we’re confident that a bright future lies ahead for Sponsel CPA Group. We’ve accomplished much in the last 10 years, planting the seeds for the firm in an economically challenging period and growing into a powerful team of capable and passionate professionals.

Challenges are inevitable — for us and our clients — but we strive to remain a steady hand in both booming economic times and economic downturns. Building our business is about providing impactful solutions, responding to the current challenges of our clients and maintaining an optimistic outlook as we help our clients focus on their long term success.

To us, clearing the hurdles in your path is not a cause for discouragement but a source of motivation and inspiration. We’re committed to helping others overcome their own obstacles and realizing the dreams and goals they have laid out for themselves and their respective enterprises.

We will continue to deliver excellent service as a relationship-based firm that brings a personal touch to every business exchange. We will make it easy for our clients to do business with us. We will endeavor to enhance our relationships with other professionals (attorneys, insurance, investments, etc.), as they see us as a complementary professional resource in serving our mutual clients — we make the team BETTER! We seek to be viewed as a credible resource that always acts in the BEST INTEREST of our clients. We don’t view each new client matter on a transactional basis, but rather as a relationship on a continuum of success.

We will continue to hone our skills and utilize new technology to deliver our services in an even more efficient manner. We will innovate and try new things. Even after 10 remarkable years, there is always room for continuous learning and improvement, from the greenest employee to the senior partner!

We must continue to enhance our brand. The Sponsel brand is still a work in progress, but we’re quite proud of what it stands for now. After a whirlwind decade, the Sponsel name is synonymous with high-quality service, high employee morale, a commitment to the Central Indiana business community and a spirited group of people to work with.

We pledge to work even harder for our clients and business colleagues in the next decade.

Thank you for joining us in our journey!

July 2019 Newsletter

This month’s explores the best states for business, the importance of asking questions and the recent accomplishments of Sponsel team members!

Indiana Rises Through Ranks of Business-Friendly States

In a recent CNBC study, Indiana was ranked among the top 20 states for business. In fact, since last year, it has moved up five spots on the list — from 16 to 11.

This score was determined based on input from a wide variety of business experts, government sources and the states themselves. CNBC scores the states on 64 metrics across 10 main categories: economy, workforce, infrastructure, cost of doing business, quality of life, education, technology and innovation, business friendliness, access to capital, and cost of living.

As in previous years, the Hoosier state scored well in cost of doing business and business friendliness, ranking fourth in the nation in both categories. What’s even more impressive is that it’s now ranked first in infrastructure.

As CNBC’s state profile shows, Indiana also boasts low individual and corporate income tax rates, topping out at 3.23% and 5.75%, respectively. The Tax Foundation’s 2019 State Business Tax Climate Index ranked Indiana in the top 10 states with the best tax structure for business.

Although CNBC’s list is the most watched, many other sources produce lists of state business and economic rankings. Here’s where Indiana stacks up in a few of those:

#5 Best in 2019 Best & Worst States for Business, ChiefExecutive.net
#11 in Best States for Business, Forbes.com
#15 in 15 Top States With Most Business-Friendly Taxes, Business.org

Sponsel CPA Group is proud to do business in the Hoosier state. We believe these rankings will keep fellow Hoosier businesses motivated and also attract new businesses and talent to share in their success.

It is also very important that as responsible Hoosier citizens, business owners and entrepreneurs, we continue to build on our past successes and position our communities for a great quality of life for all stakeholders and our employees! We should strive to be participants in our shared success and not merely spectators.

If You Don’t Know … ASK THE QUESTION!

By Lisa Purichia
Partner, Director of Accounting & Retirement Plan Services
[email protected]

An image of confidence seems crucial in the business world, and perhaps that’s why so many businesspeople hesitate to ask questions. They don’t want to appear as though they don’t know what they’re doing.

“Fake it until you make it” is a popular piece of advice, but it might not be the best to follow in the long run. Rising through the ranks of the business world is about curbing your ego, being vulnerable and admitting what you don’t know. Don’t be afraid to ask questions!

Asking questions early in your career is especially important, as it shows your leaders that you’re invested and eager to move up. Branching out of your comfort zone and asking for a challenge could land you a new position in your company. Asking customers what else they want from you could lead to the development of a new product or service. There’s no end to the possibilities.

While your colleagues may perceive you as an experienced journeyman, you should always seek additional knowledge and keep asking GREAT questions! You are demonstrating that you are serious and are seeking the additional lessons that your life experiences have not taught you … YET! There is an old saying: the only question NOT asked is the “stupid one.” Seek continuous learning and your level of self-improvement will soar to new levels.

If we can assist you further with achieving success in your business, please contact Lisa Purichia at (317) 608-6693 or email [email protected].

Employee Spotlight: Michelle Badger

Michelle Badger joined the Sponsel CPA Group family around this time last year. With a business certificate from IUPUI and 15 years of experience in the field of accounting, she brings a wealth of knowledge to the table.

Michelle serves as an administrator in the Tax Services department, preparing individual, corporation, partnership, fiduciary and other tax returns.

Outside of work, Michelle loves spending time with her three grown children — two sons and a daughter. She also enjoys traveling and cheering on the Pacers.

June 2019 Newsletter

In this month’s newsletter, we talk about innovation, people of influence — including one of our clients, DK Pierce — and recent Sponsel accomplishments.

Are You a Person of Influence?

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

Owners and CEOs aren’t the only movers and shakers in the business world. Anyone in your company can be a Person of Influence (POI), and you should strive to not only earn that title yourself but inspire others to live up to it as well.

What makes for a person of influence? This person is like the Larry Bird of your company — they make everyone around them better! They inspire fellow employees to bring their A-game to every task. They do this through their demonstrated work ethic, professional success, can-do attitude and commitment to persevere through the challenging times.

A person of influence speaks up, emitting a sense of enthusiasm that rubs off on everyone around them. In staff meetings, they’re the ones spewing out big-picture ideas. They could be a chief creative person, a production guru, a manager, an accountant — you name it!

Among other things, a person of influence brings an attitude that drives motivation, mobilizes resources, generates value and affects change. They always deliver the goods!

How do you ensure that your business has many persons of influence? Talk to your employees! Inspire them with your vision for the company, encourage them to offer their own ideas, make them feel like they can make a considerable impact. Don’t just engage them in large staff meetings — meet with them one-on-one! If you show faith in them, they will rise to the occasion and become strong forces of influence for many years to come. A person of influence makes the whole team better and is an integral part of the success. The more POIs you have on your team, the faster you will grow and achieve success.

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

Change the Status Quo — Get with Your Creative Side

By Eric Woodruff, CPA
Partner, Audit & Assurance Services
[email protected]

Surrendering to routine is all too easy, especially in a well-established successful business, but that does NOT guarantee you FUTURE success! You may find yourself continuing to do things in a certain way simply because that’s the way you’ve always done them. Why is this a problem? Why try and fix something “not broken?” Even if it seems like your business is doing just fine, you won’t continue to grow if you don’t challenge the status quo! You must instill a creative entrepreneurial spirit within your team.

Create a culture of constant improvement. Perhaps you should dedicate monthly meetings to discussing areas in which you can implement impactful changes. Be deliberate by putting someone in charge of affecting change. Appoint a Chief Innovation Officer (CIO) to develop ideas and long-term strategies for implementing them. This person could also help you identify these three important aspects of your business: what you should stop, what you should start and what you should continue.

Look at what happened when Amazon stopped solely selling books and started shipping CDs, DVDs, video games, groceries and more. Think about how movie theaters are getting rid of their stiff chairs and offering luxurious recliners. Change proved to be successful in these cases.

On the other hand, in the early years the railroad companies believed they were in the “railroad business” — think where they may be if they considered themselves in the “transportation business?”

In your time of reinvention, you should also turn to your customers. When was the last time you sat down with them and asked what they honestly think of your products and services? If they find them merely adequate, statistics show that you risk losing those customers to a competitor. Consider feedback from vendors as well. Outsider perspectives are crucial to helping you revitalize your business.

You shouldn’t be afraid of change. Embrace it! You should fear keeping with the status quo. So get back to the drawing board and start throwing bold, brave ideas at the wall. You’ll be surprised by what sticks. All stakeholders will benefit and your company or organization will have a new vitality that becomes contagious.

If we can assist you further with achieving success in your business, please call Eric Woodruff at (317) 613-7850 or email [email protected].

Client Profile: DK Pierce

DK Pierce & Associates, Inc. has grown a great deal since it launched nearly 20 years ago. It was recently named one of the Best Places to Work in Indiana for the third year in a row, ranking among the top five companies on the list. Currently equipped with 21 employees, this certified Women’s Business Enterprise (WBE) started with the vision of one woman — Denise K. Pierce.

Pierce has more than 30 years of experience in the biopharmaceutical and healthcare consulting industries, working for such corporate giants as Pfizer and Bristol-Myers Squibb. Her vision for DK Pierce was to build a business that would eventually be recognized as the most respected U.S. consulting organization for complex medical conditions.

DK Pierce’s main mission is to grant patients access to the best and latest treatments available, especially in the areas of oncology and rare diseases. This involves developing products and providing clinical data to support insurance coverage. In just the past five years, the company has guided the launch of a dozen biopharmaceuticals, medical devices and diagnostics, opening up a world of options and possibilities for patients in need of care.

“The best part of this job is breaking barriers for patients,” Pierce said. “Helping them over the hurdles in the healthcare marketplace and widening that world is why I started this business.”

DK Pierce continues to grow and thrive at Creekside Corporate Park in Zionsville, which bridges the gap between the office setting and the great outdoors. Employees are able to enjoy walking trails, a communal firepit and the opportunity to bring their dogs to work. This warm, welcoming environment plays a large role in making the company one of the best places to work in Indiana.

Pierce believes the key to success is “surrounding yourself with strong partners.” When the company was looking for a strong financial partner, Sponsel CPA Group “quickly bubbled to the top of the list.”

“We had immediate chemistry with them,” Pierce said. “The Sponsel team members not only provide valuable information for our current needs, but they’re also very intuitive in anticipating what we might need several years from now.”

Based on its incredible growth over the last few years, DK Pierce is bound for a bright future.

Click here for more information about the company.

Employee Spotlight: Karen Parson

Karen Parson started at Sponsel CPA Group around this time last year. (Happy anniversary, Karen!)

Outside of the office, Karen is happily married with two grown children and two grandchildren. She enjoys spending time with her family and teaching a Bootcamp fitness class every morning before work.

Confessions of a Tax Filing Procrastinator

By (Name withheld at request of author)

Be honest: Were you like me and waited until the last minute to file your taxes this year? Even though I promised myself a year ago that I would start anew? Or did you miss the deadline entirely and have to apply for an extension — again, at the very last minute? Some of my procrastinating groupies even dropped their tax information to their preparer a couple days before the deadline and then were upset they had to file an extension! It’s like they think the tax filing deadline changes every year and they don’t understand the significance of APRIL 15! But I would like to help you make your tax filing process less stressful in the future, by sharing advice that I have never heeded.

If you found yourself anxiously digging through a year’s worth of paperwork and scrambling to find your W2 and 1009 forms, here are some tips to make the whole process run more smoothly for 2019 — BUT YOU MUST START NOW!

Start as soon as possible — LIKE TODAY. I recommend you organize your data and keep a file or large envelope as a central gathering spot for all your tax related documents and receipts. Starting early will also give you time to consult with a CPA in order to make sure there’s nothing you overlooked. Getting your tax information to your CPA in late February or early March will provide adequate time for preparation. This also allows time to consider IRA contributions and other tax savings matters that may be available to you.

Keep the tax law changes in mind. Study them closely. Click here for thorough guides and articles covering individual aspects of the 2017 Tax Cuts and Jobs Act and how the new law might affect you or your business. Given that most taxpayers cannot understand the IRS code, let alone interpret it, a professional — like a CPA — can deliver better value, if utilized properly. Fun Fact: The instructions for the 2017 FORM 1040 EZ (the simplest of forms) was 184 pages — how is that for simplicity?

Take advantage of your 401(k). Increase your personal contribution by at least one percent per year to reach your savings goal and experience the benefits of your employer’s matching contributions. The accumulation of those rather smaller amounts begins to compound quite nicely! And it grows on a tax-deferred basis.

Pay yourself first before wasting dollars. Segregate your money on a regular basis to fund tax payments. A good way to do this is to set up an automatic transfer to your “tax savings” account. For taxpayers that are required to make quarterly estimated tax payments, segregating those funds into a separate bank account — maybe even at a different bank — will give you peace of mind when it comes time to remit to the federal and state governments that the funds are there, minimizing the risk of penalties and interest.

Be deliberate in managing your finances. Don’t be like me, the Procrastinator. Gather and organize all of your tax forms in a file where everything is labeled clearly. Take that difficult first step in developing a plan to reduce your credit card debt (credit card interest is not tax deductible) or pay off your student loans. Set weekly or monthly goals for paying off a certain amount. These are just a few of the many things you can do to make your financial situation less overwhelming, especially come tax filing time. Review your tax saving activities monthly to make sure you are adhering to your personal plan.

Of course, you can always file a six-month extension with the IRS, but it’s better to rip the Band-Aid off and take care of your taxes as early and easily as possible. Remember that filing an extension is only an extension of time to file. You are still required to pay the taxes due as of the filing deadline of April 15.

Conclusion: You know the saying: There only two things certain in life — DEATH and TAXES! One you can control, the other you cannot. Take control NOW, to not only make filing your 2019 taxes more efficient, but to enhance your ability to make timely financial decisions that have a tax impact. Many times there are alternative ways to minimize a transaction from a tax standpoint, and advanced planning with a CPA is regularly advised.

If we can assist you further with achieving success in your business or personal affairs, please contact Sponsel CPA Group at (317) 608-6699.

Employee Spotlight: Tina Kelly

Tina Kelly has been with Sponsel CPA Group from the very beginning. With more than 30 years of experience in the accounting industry, she is a vital asset to the team.

As a Manager in the Accounting Services department, Tina assists clients with bookkeeping, payroll processing, personal property tax preparation and financial reporting. She is also a QuickBooks Desktop and Online Certified Pro Advisor, helping with the setup, installation and training process for this accounting software.

Outside of work, Tina is happily married with two grown daughters and five grandchildren. She loves spending time with her family, whether they’re camping, hiking or just enjoying a quiet afternoon of reading together.

Failure is the First Step Toward Success

By Eric Woodruff, CPA
Partner, Audit & Assurance Services
[email protected]

“When one door closes, another opens; but we often look so long and so regretfully upon the closed door that we do not see the one which has opened for us.”

So said Alexander Graham Bell, the father of the telephone. This month not only marks his birthday but also the date he patented this groundbreaking invention. When he tried to sell the patent to Western Union, the company’s president turned his nose up at the idea, dismissing the telephone as a toy. But that didn’t discourage Bell. He pressed on with the development of the communication device, which is now a vital part of our everyday lives.

Failure is a possibility in any venture. Bell faced technical difficulties, naysayers and lawsuits, but every speed bump ultimately pushed him further on the road to success. Keep this in mind as you pursue your professional goals.

As you build your business, be willing to take risks. If your company’s not growing, it’s dying. And the only way to foster growth is to think outside the box and try new things. Bring different perspectives to the table. Expand your products and services. Think about what happened when Netflix shifted from DVD rentals and sales to online streaming. Or when Amazon went from exclusively selling books to offering albums, DVDs, video games, software, kitchen supplies and more.

When you’re in the midst of business development, know your limits. Don’t try to carry the load on your own. Surround yourself with an encouraging workforce and find people who can succeed where you fail. Not every leader has the Midas touch. There’s no shame in leaning on others to carry the company forward.

The most important thing to remember is that failure isn’t the end point. It’s part of the learning experience. Discovering what doesn’t work in your business is an essential step toward its success.

These ideas apply to leaders on any level — from CEOs to managers. As we continue transitioning into the new year, now is a good time to step outside your comfort zone and start thinking about how to grow more successful. Don’t be afraid of failure along the way!

If we can assist you further with achieving success in your business or personal affairs, please call Eric Woodruff at (317) 613-7850 or email [email protected].

Client Profile: Indianapolis Children’s Choir

As the executive director of the Indianapolis Children’s Choir (ICC), Don Steffy often finds himself reflecting on his own youth when he watches the young performers. His mind drifts back to the days of being a child actor, and he remembers what made him fall in love with performing.

“The commitment these young people make is incredible, and they don’t realize how hard they’re working because they’re having so much fun,” he said. “When I was their age, I didn’t realize I was making such a strong commitment. I was just totally enjoying what I was doing. When I started doing plays as a kid, I was in two or three productions a year, which meant that 9 to 10 months of my year were spent in rehearsals and performing on stage.”

Steffy went on to spend much of his life bathed in theater lights. Before stepping behind the scenes, Steffy enjoyed a long and illustrious career as a professional classical ballet dancer alongside his wife, Marylou. They performed in ballet companies across America and Europe and danced together in the original Broadway cast of Seven Brides for Seven Brothers, among many other prestigious productions.

Prior to assuming his position with the ICC, Steffy served as the artistic director/CEO for the Montgomery Ballet. He also opened and created operations for the Pike Performing Arts Center. His leadership role there led him to join the board of directors for the ICC and eventually step in as the organization’s executive director.

Steffy serves as a liaison between the community and the ICC, spreading the word about the organization, securing funds, acquiring new talent, and helping people advocate for the choir.

Each year, the ICC serves 5,500 young people across the state, including more than 2,500 singers between the ages of 18 months and 18 years who are enrolled in the organization’s weekly, comprehensive music education programs. Headquartered on the Butler University campus, these programs show the diversity of central Indiana with participants from nearly 20 counties, representing more than 359 schools and 56 school districts. The ICC holds 110 rehearsals and music classes each week at locations throughout Central Indiana.

Founded in 1986, the ICC is now a cultural staple of Indiana. The choir has performed for gubernatorial and mayoral inaugurations and many other landmark events, including Super Bowl XLVI in 2012 and the 100^th running of the Indianapolis 500 in 2016. But the ICC isn’t just a Hoosier treat. The choir has performed on every continent except Antarctica.

“One of the biggest rewards of my job comes when I sit in the audience of a major concert, relax and listen to the beautiful music that these young artists can produce, knowing that behind the music is a process and personal journey that impacts a child for a lifetime,” Steffy said. “It’s really remarkable. Raising funds is also satisfying in the sense that we’re ultimately engaging businesses and individuals to invest in these kids’ futures.”

As it states in its list of core values, the ICC aims to “enrich the lives of children from all religious, racial, cultural and economic backgrounds.” And this mission goes beyond offering the gift of music. Through its philanthropic initiative, “Children Helping Children,” the ICC teams up with not-for-profit organizations throughout the state to provide children with food, clothing, school supplies, etc.

Steffy credits Sponsel CPA Group as one of the advocates that keeps the ICC running and serving Indiana through “more than just singing” — the organization’s byline.

“Whenever we have a financial question, the Sponsel team gives us insightful perspectives,” he said. “And they offer helpful advice on the best practices of soliciting financial support and connecting to communities all across Indiana.”

Employee Spotlight: Kendra Koerting

Kendra Koerting took on the receptionist role at Sponsel in the spring of 2015. She is the first person that clients and team members face when they walk through our doors.

In addition to greeting people and setting a friendly, professional mood, Kendra assists the administrative team with anything that helps the firm continue to thrive.

Outside of work, Kendra is happily married with a grown daughter and son, both of whom are now newlyweds. In addition to spending time with family, Kendra enjoys cheering on her favorite sports teams — the Chicago Cubs and Dallas Cowboys.

Customers Want … “Experiences”

By Lisa Blankman, CPA
Manager, Audit & Assurance Services
[email protected]

In 2019, when customers enter any business, they are seeking more than a transaction — they want an experience. Customers crave human connections and the feeling that people in the marketplace care about them on a personal level. Rather than simply providing a product or service, businesses should ultimately focus on building relationships with those that come in contact with their enterprise.

Think about when you visit a Chick-fil-A. It’s not just the hot and tasty food that makes you come back. It’s the personal touch of the customer service, specifically the way their staff members subvert expectations by saying “my pleasure” rather than “you’re welcome.” The phrase was embedded into the company’s culture after founder Truett Cathy heard it uttered by an employee of the Ritz Carlton. It filled him with a warm feeling that he wanted to bring to his restaurants.

So, what do you do to give your customers this feeling?

First, take a fresh look at your company’s culture. Is the environment vibrant and positive? How do your staff members greet your customers? Remember that an employee can only share a positive experience if they themselves feel valued and appreciated — and THAT starts at the TOP! Make sure you institutionalize attentive friendliness within the culture of your operations on a daily basis.

More importantly, be transparent with your customers. Let them know you want them to have an exceptional experience, and ask for honest feedback about your performance. Also ask how they’d prefer you interact with them. Over the phone? Via email? In person? Customize your relationship to fit their needs.

Speaking of communication preferences, always be aware of generational differences among your customers. For example, baby boomers are often called members of the “show me generation,” as they place importance on body language and in-person interactions. Millennials, on the other hand, prefer digital communication. The attention span of millennials is roughly 11 seconds, so keep those emails short and sweet! Another fun fact: 78% of Generation Z members (born between 1996 and 2011) have never visited a brick-and-mortar bank. Imagine their expectations for face-to-face customer service, or even walking into your business. You may have to go to them!

Every customer is different, but they all long for a positive personal experience tailored to their individual needs. Think about what you can do to leave a smile on their faces after they do business with you. If you are successful, they will crave your relationship and tell others about your enterprise.

If we can assist you further with achieving success in your business or personal affairs, please call Lisa Blankman at (317) 613-7856 or email [email protected].

Estate Planning Isn’t Just a Once-In-a-Lifetime Responsibility

By Nick Hopkins, CPA, CFP®
Partner, Director of Tax Services
[email protected]

Estate planning is a critical component of personal wealth management. Unfortunately, this important issue is often addressed just once and then buried under other tasks.

As your trusted advisors, the team here at Sponsel CPA Group strongly encourages you to dust off that plan every two to three years and review it in detail with your accountant, attorney and financial advisor. If you put this off, you’ll probably find that the estate plan you spent so much time and money on 10 years ago is far from perfect.

Here are a just a few of the many scenarios that can occur in a decade, many of which are real-life examples that we’ve encountered with dated estate plans:

The back-up corporate trustee you designated (such as a bank) no longer exists.
You’ve fallen out of contact with the friend or family member you named the personal trustee and/or executor of your estate.
Your designated bequests to specific charities are outdated, and you have a new list of passionate causes you want to support.
Your children have matured into responsible young adults who are now in a better position to take on roles in facilitating your desires.
The carefree daughter you thought would never have children now has three beautiful babies you adore, but your plan makes no mention of grandchildren.
Your children and/or grandchildren have developed specific health or education needs not considered in your original plan.
Your investments have far exceeded your expectations, and you’re not comfortable leaving your substantial net worth without limitations to your college-age son.

Additionally, there may be new estate planning tools available that were not applicable to your original estate situation. If your family has grown as quickly as your portfolio — with new in-laws and grandchildren — it is well worth going over any new options.

Another reason to review your estate planning on a regular basis is the fact that estate tax laws have been constantly changing, which may have a profound effect on the plan you’ve put into place.

You want to make sure the wealth you worked so hard to create and save is passed on in a responsible manner consistent with your current personal directives and passions.

Sponsel CPA Group is here to consult and help you brainstorm solutions for any wealth transfer dilemmas you may have. If we can assist you with achieving success in your business or personal affairs, please call Nick Hopkins at (317) 608-6695 or email [email protected].

The Benefits of Tapping into Opportunity Zones

By Liz Belcher, CPA
Senior Manager, Tax Services
[email protected]

As part of the Tax Cuts and Jobs Act, Congress created an incentive for new long-term investments in economically distressed areas. Established as Opportunity Zones, these areas are designed to boost economic development and job growth in struggling communities by providing tax benefits to investors. Opportunity Zones have been designated by census tracts and were selected by each state’s governor. (Click here for a complete list of qualified Opportunity Zones throughout the country.)

Eligible investors include businesses and individuals with realized capital gains. Unlike 1031 exchanges, which only allow deferral on real property transactions, Opportunity Zone investments allow investors the ability to defer tax on almost any capital gain until the earlier of the date on which the investment in a Qualified Opportunity Fund (QOF) is sold, or Dec. 31, 2026. This applies to any gain realized after December 22, 2017 in which the proceeds (or a portion of the proceeds) are properly invested within 180 days. The types of gains that may be deferred include actual or deemed, sale or exchange and any other gain that is required to be included in the computation of capital gain.

Beyond tax deferral, QOF investments may also be eligible for permanent tax exclusion, a highly-desired, but rarely-offered benefit. If the QOF investment is held for longer than 5 years, there is a potential 10% exclusion of the deferred gain. If held for more than 7 years, the 10% becomes 15%. Second, if the investor holds the investment in the QOF for at least ten years, the investor is eligible for an increase in the basis of the QOF investment equal to its fair market value on the date that the QOF investment is sold or exchanged.

To qualify for deferral and potential exclusion, the capital gain must be invested in a Qualified Opportunity Fund — any investment vehicle organized as a corporation or partnership for the purpose of investing in a qualified Opportunity Zone property. The QOF must hold at least 90 percent of its assets in this property and report to the IRS annually to ensure eligibility is maintained. There are a number of private real estate investment firms accepting investments through eligible QOFs, or an investor may choose to create a new fund meeting the QOF standards.

Investments in Opportunity Zones are intended to be long-term in nature. Listed below is a breakdown of tax benefits based on the length of time invested in Opportunity Zones.

For more information on Opportunity Zone regulations and benefits, visit the Tax Reform page on the IRS website.

If we can assist you further with achieving success in your business or personal affairs, please call Liz Belcher at (317) 613-7846 or email her at [email protected].

Speed is the Key to Success in 2019

By Eric Woodruff, CPA
Partner, Audit & Assurance Services
[email protected]

In the business world, technological advances bring both opportunities and challenges. Just a decade ago, a phone call or an email from a customer was usually returned in a day or two. Now, with social media, texting, Skype, etc., any communication response that isn’t almost instant risks alienating a client and sending them running to a competitor.

Our society is undeniably a speedier one. Therefore, a company’s success now depends upon its degree of responsiveness to customers. In the same way that Facebook users scroll through their newsfeeds and anxiously wait on notifications, consumers move through the marketplace at a rapid-fire pace, eagerly anticipating connections with businesses.

The speed factor also makes it harder for your company to set itself apart with its products and services. If everyone’s customer service is expected to be lightning fast, the marketplace will be like the cavemen running from a sabre-tooth tiger — the slowest one will be the loser.

Think about Amazon. People have grown accustomed to ordering something at noon and finding it on their doorstep as soon as they get home. That mentality is now spreading to every customer interaction and every industry. Business owners and managers need to ask themselves:

Are we set up to be nimble and flexible in responding to our customers and stakeholders?
How quickly do we respond to communication contacts?
How fast can we adapt to new changes so we can beat our competition to the market?
Is our website mobile-friendly? Is it easy to find information on our products and services?
How can we make it easier to do business with our company?
Can we meet the 24/7 demands of the e-commerce world?
How can we stay abreast of market trends and upcoming developments?

As a rule of thumb, any messages from potential new customers should be responded to the same business day. The staff member monitoring the phone extension or email address linked to your website’s “Contact Us” page should be your proactive point person. Even if a principle team member is not available, at least have a responder let them know when they can expect communication from them. Just a quick acknowledgement like this can give prospective customers the “personal touch” they need to feel that their concerns are important.

If you’ve ever participated in any customer feedback services, you probably know how important a quick response can be. A negative client experience can often be rectified with a timely attempt to make good on any failure to meet expectations. On the flip side, a late, apologetic response is usually considered disingenuous.

As you ring in the new year, analyze whether your company is meeting the need for speed in this fast-paced business world. Don’t be afraid to ask about your performance. Call your clients and vendors and see if they think your staff is sufficiently responsive. And don’t get discouraged by negative answers. Use them as a springboard for growth and development. It’s 2019 now — time to live life in the fast lane!

If we can assist you with any process improvement, please contact Eric Woodruff at (317) 613-7850 or email [email protected].

Client Profile: Hoskins Interior Design

Beyond their family bond, Kathy Hoskins shares a professional passion with her mother-in-law, Deanna. Back in 1998, they got the chance to share their love of home interiors when Deanna founded Hoskins Interior Design.

Kathy was working in commercial interior design when Deanna invited her to join the team and “learn the ropes” of residential interior design. When Deanna retired in 2017, Kathy bought the business from her and continued to serve as lead designer.

Hoskins Interior Design is a full-service interior design studio that assists clients who are building, remodeling or furnishing their homes. Kathy takes pride in how the business works closely with people in creating homes perfectly tailored to their individual tastes and personalities.

“I love getting to know our clients and guiding them methodically through the bazillion decisions they are asked to make throughout a home improvement project,” Kathy said. “We also have a fun-loving business culture and hope to make this often daunting process enjoyable for our clients. My favorite part of my job is helping clients plan for a space that they absolutely love and that could only belong to them. The new challenge of becoming a business owner has also been very rewarding. I am enjoying planning the path forward for Hoskins Interior Design.”

Kathy is grateful to Sponsel CPA Group for helping her pave that path. When she took over the business, she was looking for financial guidance beyond tax preparation and year-end planning. She found exactly what she was looking for in her close collaboration with one of the firm’s partners, Lisa Purichia, and tax services manager, Lindsey Anderson.

“They helped me determine what I could afford in terms of office space and other similar budgeting decisions,” Kathy said. “Lisa helped me find a good banker, and she has been a great source of referrals for other business professionals. Now that I have completed a successful first year, we are strategizing to plan for increased profitability in the years ahead.”

Click here for more information about Hoskins Interior Design.

Employee Spotlight: Galen Monroe

Galen Monroe joined the Sponsel team in September of last year, shortly after graduating from Marian University with a bachelor’s degree in accounting and economics. (He transferred from Saint Joseph’s College after it closed its doors in 2017.)

As a Staff Accountant in the Tax Services department, Galen performs projections, research and tax returns for individuals, businesses and not-for-profits all across Indiana.

Outside of work, Galen volunteers as a wrestling coach, and he loves venturing out into the great outdoors. He looks forward to hiking in the various Hoosier state parks once the weather warms up.

Recapping the 2017 Tax Cuts & Jobs Act

By Nick Hopkins, CPA, CFP®
Partner, Director of Tax Services
[email protected]

The 2017 Tax Cuts & Jobs Act brought some of the most sweeping changes to the U.S. Tax Code in three decades. We’ve previously made sure to timely communicate these changes to our clients, but we think they are worth repeating again! And we’ve also published a series of articles (The Deep Dive) that provide an in-depth look at specific aspects of the new tax law and how they might affect you and your business.

Individual Taxpayers: Here you can find an overview of key provisions affecting individual taxpayers. Changes include a new tax rate structure with seven tax brackets, a standard deduction increase, a child and family tax credit increase, limitations on itemized deductions, an increase in the Alternative Minimum Tax exemption and more.

Business Taxpayers: This breakdown details such changes as a new deduction for qualified business income, reduced corporate tax rates, limits on business interest deductions, new fringe benefit rules and a new general business credit for employers that’s equal to a percentage of wages they pay to qualifying employees on family and medical leave.

As you undergo year-end tax planning, we encourage you to review these changes in order to prepare for the new year. Take a look at the tax summaries mentioned above as well as The Deep Dive, which has six entries that elaborate upon the new tax law changes.

If you have any questions about the new tax law and its effects on you and your business, please call Nick Hopkins at (317) 608-6695 or email [email protected]. Our Tax Team stands ready to assist in the implementation of these changes for your benefit!

What Your Financial Statements Don’t Tell You

By Lisa Blankman, CPA
Manager, Audit & Assurance Services
[email protected]

As CPAs, we believe in accurate financial reporting in accordance with Generally Accepted Accounting Principles (GAAP), but what we also know that most business owners are not proficient at understanding those same financial statements. Accordingly, we promote the idea of focusing on the Key Performance Indicators (KPIs), in order for them to judge the performance of their company’s operating results.

KPIs are data points evaluated at a point in time over several periods, either compared with your respective industry benchmarks or against your company at that same point last year. What can they tell you? The KPIs should include financials ratios of liquidity, operating efficiencies, leverage, etc., as well as specific ratios that are unique to your business’s industry or profession ( i.e. if retail, sales per sq. ft. of floor space).

When you analyze your company’s progress to see how it can grow further, you need to look beyond financial statements and dig deeper for the information that is key to you and your managers.

First and foremost, make sure you seek out Key Performance Indicators that are relevant to measuring the benchmark results you are seeking. What is your average revenue per customer? What is your actual fully burdened hourly labor rate for that particular part or service module? What is your gross profit by service line? These are just a few examples. We also believe in looking at these over a 10 year period of time in order to understand the fluctuations due to economic cycles. Your focus should be on the long term but with a bias for action that must be started TODAY!

Among other things, monitoring these metrics will help you gauge customer engagement, identify underutilized facility space and explore new revenue streams. Perhaps you need to lease vacant office space or boost sales capacity by adding new staff members and services. Speaking of staff, look at your employee turnover rate as well. If it’s high, you’ll want to examine your company’s culture and employment packages to figure out how you can improve.

Taking a close look at these Key Performance Indicators will help you determine whether your business is living up to its potential. Learn from your strengths and weaknesses and focus on how you can improve financial results as you set your goals for 2019.

If we can assist you further with achieving success in your business or personal affairs, please call Lisa Blankman at (317) 613-7856 or email [email protected].

Client Profile: George Thomas Florist

George Thomas Florist has been a second home to Sam Smith for his entire life. When he was a little boy, he helped out around the shop. His parents, Tom and Pat, bought the business in 1962, taking over for the previous husband-wife team of George and Helen Schatzlein. Keeping the family-run tradition alive, Sam now operates the store alongside his wife, Melissa.

Sam serves as vice president while Melissa designs the wide variety of beautiful floral arrangements. With a staff of 20, it’s a small but flourishing business. Sam appreciates running a shop with a product that plays an important and deeply personal role in people’s lives.

“We deal in emotions,” he said. “People buy flowers for all sorts of ups and downs in life. Flowers bring joy, comfort, nostalgia. They can conjure up fond memories and spark romance. It’s a special line of work.”

George Thomas Florist is located in the heart of Irvington along the Washington Street corridor. It’s a lovely piece of local history. The solid oak cabinets that line its walls are the original pharmacy cabinets from the old Rexall Drugstore that was located at 10th & Arlington.

Sam is proud to work for one of the longest-running family-owned businesses in Indianapolis. And he’s happy to see his mother still working in the store as well. She started the relationship with Sponsel CPA Group, and Sam and his wife happily keep it going.

“We’re very confident in the Sponsel team,” Sam said. “They’re a great source of support for our business, and they help us continue to grow and thrive.”

Click here for more information about George Thomas Florist.

Employee Spotlight: Meg Nowak

A new Valuation Analyst in the Valuation & Litigation Services department, Meg Nowak joined the firm in September, shortly after graduating from Millikin University with a bachelor’s degree in accounting.

As a Valuation Analyst, Meg will assist in valuation services ranging from data gathering, financial analysis, industry research and application of Valuation methodologies. She will also assist in Litigation Services and Forensic Accounting engagements.

Outside of work, Meg proudly serves as one of the youth academy coaches for the Zionsville Youth Soccer Association. She enjoys staying involved in this sport she played throughout her college career and guiding young girls toward the kind of competitive playing she fell in love with at their age. Whether playing soccer or hanging out with family, friends and dogs, Meg cherishes time in the great outdoors, whenever Indiana weather allows for it.

Your 2019 Potential Depends on What You Do NOW!

By Mike Bedel, CPA, CGMA, MBA
Partner, Director of Audit & Assurance Services
[email protected]

Now that we’re in the fourth quarter of 2018, you’re likely focused on wrapping up the year and ringing in the holidays. But in order for your business to continue thriving, it’s imperative for you to shift focus and start laying a firm foundation for 2019. To make next year successful, it’s vital that deliberate efforts are made NOW in order to adequately allocate your company’s resources for the coming year.

Any business owner should be proactive rather than reactive. Instead of allowing yourself to get struck down by unexpected setbacks, build a plan for success that allows you and your business to withstand the many challenges that are bound to occur. Now is the time to identify the obstacles you may face in the upcoming year and develop a contingent strategy for how to overcome them. The less planned may see failure, but the savvy entrepreneur sees an opportunity for profit!

One step toward building strength in the next year is to increase recruiting efforts of top talent and skillsets! Think of new ways to keep employees engaged. What can you plan and promise now, or in the near future, that will compel them to stay committed through 2019 and beyond? And don’t just focus on vetting incentives for your employees; think of all the stakeholders in your business. How can you more effectively manage and motivate your human capital?

In addition to adding talented members to your team, you may find that you need to expand your line of products and services. And in that case, you’ll want to be sure and develop an operating and capital expenditures budget. During this process, take inventory of the resources you have at your disposal and determine how to effectively allocate them.

Financial planning and budgeting in particular is crucial this time of year. Be realistic in your planned assumptions, but also utilize stretch goals to energize your team. If you’re not prepared, the new year will only deliver mediocre results, and no one aspires to be average! Stay ahead of your competition!

If we can assist you with achieving success in your business or personal affairs, please contact Mike Bedel at (317) 613-7852 or email him at [email protected].

What Drives Success in Your Business?

By Lisa Blankman, CPA
Manager, Audit & Assurance Services
[email protected]

It’s all too easy for business owners to get lost in the hustle and bustle of their workday lives. Routine gets in the way of reflection, clouding their long-term vision for the company, or even the effort to focus on it! As business guru Michael Gerber said, you need to take time to “work on your business, not just in your business.” That will be the cornerstone of you finding your SUCCESS!

Stepping back and taking a bird’s-eye view of your company is essential for it to evolve and thrive. Business owners who find themselves stuck behind their desks are the ones who shoulder too much responsibility and don’t depend on other forces to help drive the business toward success. As an owner, you need to realize you’re not alone in your efforts. You also need to identify the barriers to your company’s success and develop a plan to overcome them.

Schedule a specific time on your calendar each week, to take your mind off your daily tasks, and think about the other potential success drivers of your business. Which ones are steering you toward your goals? These success drivers could be your employees — their work ethic, talents and skillsets, the management team — the leadership they provide in the many facets of your business, or your offering of products and services. The list goes on. Determine which current drivers deserve the most investment of resources, as well as new ones that have less potential for the results you seek.

As you reflect on your business condition, you should also ponder on whether the past drivers of success hold the same potential they did a few years ago. Should their place in your planning remain? Are any of them falling short? Do they require some re-engineering?

If we can assist you further with achieving success in your business or personal affairs, please call Lisa Blankman at (317) 613-7856 or email [email protected].

Client Profile: Prime Car Wash

When Chris Galloway co-founded Prime Car Wash in 2012, he was far from the car wash industry. He was in the midst of his chiropractic career at ProWellness Chiropractic in Fishers.

Galloway co-founded the practice in 2008 with fellow chiropractor Robert Hatfield. When one of their patients, Brent Oakley, brought up the idea of creating a higher-end, full-service car wash, Galloway and Hatfield looked into it and became intrigued. They saw a gap in Indy’s full-service car wash market and grew eager to fill it after discovering the successful financial records of such a car wash in Baltimore, Maryland. Galloway and Hatfield joined forces with Oakley to create what eventually became Prime Car Wash.

The business stands out from the competition by offering express detailing, cleaning every inch of the car within 30 minutes. From removing scuff marks on the outside to shampooing the carpets inside, Prime Car Wash makes vehicles look brand new. Better yet, it has an in-house café where customers can sip coffee and surf the internet while they wait.

Since the first Indianapolis location opened in 2012, Prime Car Wash has opened three more locations in the state along with one in Florida.

As the business grew, Galloway and Hatfield decided to dedicate more of their time to it. They sold their chiropractic practice in 2015.

Galloway took on all financial responsibilities at Prime Car Wash.

“This job aligns with my personality more,” he said. “I’m very math-oriented and like working with numbers, so it allows me to focus on what my brain seems built to do.”

However, given his largely medical background, Galloway finds himself needing help navigating through the financial field. This is why he values Prime Car Wash’s relationship with Sponsel CPA Group, as the accounting firm took the majority of financial responsibilities off his back. This leaves him with more free time to manage his team and Prime Car Wash’s lending relationships as well as time to grow the business.

“They understand our complex financial structure,” he said. “And they understand the individuals in our business as well.”

In addition to providing financial management, tax consultation and audit and assurance services, Sponsel brings a personal touch that Galloway appreciates.

“They’re great people, first and foremost,” he said. “They’re incredibly responsive, always getting back to us right away. I always feel supported and like our business is in good hands.”

Click here to learn more about Prime Car Wash.

Your Physical Presence is No Longer Required

By Courtney Morin
Senior, Tax Services
[email protected]

As our economic and social landscapes continually change through products purchased and consumed, so do the regulations as well as the way business is conducted. This can be demonstrated by the US Supreme Court’s recent ruling of South Dakota v. Wayfair, Inc., which overturned a previous 1992 decision related to sales tax. This latest ruling states that a physical presence is no longer needed, making remote sellers obligated in collecting and remitting sales tax.

Effective October 1, 2018, Indiana will begin enforcing the state’s economic nexus law, requiring remote sellers to start collecting sales tax for purchases made within Indiana. Under Indiana law, sellers not having a physical location in Indiana are required to obtain a registered retail merchant’s certificate if a seller meets either one or both of the following two conditions in either the previous calendar year or the current calendar year:

Has gross revenue from sales within Indiana in excess of $100,000 or …
200 or more separate transaction within Indiana

What does this mean to online consumers? For purchases made online, where sales tax has not yet been charged or collected, the submission of use tax may be required. In some states imposing an income tax such as Indiana, consumers can report this portion of sales taxes on a transaction, not charged by the seller on their income tax return. The applicable rules and rates may vary from state to state.

Even as Indiana has provided explanation and guidance of the modified stance on this specific sales tax issue, how are other states examining this development that could affect your business? The progress made in regard to this change — along with requirements — vary from state-to-state. If you are a remote seller to other areas outside of Indiana, your business potentially has exposure of additional tax that may be required based upon this Supreme Court case. This is where a trusted advisor is crucial in steering you through the complexities of these matters.

Sponsel CPA Group can offer assistance and consultation related to the recent sales tax changes and answer questions such as:

Is my business required to register as a remote seller?
What are the steps for registering as a remote seller?
What steps are required in other states related to this recent court case?
How should retroactive sales from my business be treated?

In addition to updated laws in multiple states, this recent change and the court case ruling add another level of complexity that business owners need to be made aware of and understand. Feel free to contact a Sponsel CPA Group professional to assist with your questions related to this topic or other financial areas at (317) 608-6699.

Do You Need to Pivot? — Adapt to the Market

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

Life doesn’t always go as planned, especially in the business world. But don’t be afraid of change! Use any detour or setback as a springboard toward new and exciting opportunities. As the year slowly draws to a close, you may want to ask yourself if your business needs to pivot in a different direction — which may include changes in product or services, marketplace, management, salesforce, maybe even the go forward vision for your company!

Many companies have done this with great success. Take PayPal, for instance. After operating as a subsidiary of eBay for more than a decade, it went on to thrive as an independent company. It changed its business model to attract users across multiple platforms outside of the eBay auction community. It smoothly stepped out of eBay’s shadow and formed its own identity.

Ash & Elm Cider Co., the start-up business featured in this month’s client profile, also adapted in a similar way. The founders, Aaron and Andréa Homoya, originally wanted to tap into the craft beer industry. But as they saw it crowding the market in Indianapolis, they decided to stand out by making and selling hard cider instead. (Read more about them and their company here.)

Other companies that successfully changed their business models include: Yamaha, which started as a piano company and went on to manufacture motorcycles, car engines, boats and more; Nokia, whose roots as a paper mill grew into the start of a mobile communications brand; and Abercrombie & Fitch, which detoured from sporting goods to focus on selling clothes. These are just a few of the many examples of booming businesses that have evolved for the better.

The bottom line is that you shouldn’t stubbornly stick to your initial vision if your results are disappointing — a brighter opportunity may be around the corner. Strive for innovation and challenge the status quo. And most importantly, prepare for failure. But don’t think of it as a final step — it’s just part of the pathway toward success.

This advice is very true for “start–ups,” which are trying to bootstrap their way to financial stability, as well as mature companies. Do you recall that IBM (the largest mainframe computer company at the time) thought the personal computer was not going to be an acceptable product in the marketplace and left the marketplace wide open for young startups at the time — like Dell!

Be OPEN to the PIVOT: Listen to your customers and the marketplace!

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

Client Profile: Ash & Elm Cider Co.

Ash Elm & Cider Co. is a relatively new family business run by the husband and wife team of Aaron and Andréa Homoya. After roughly two years of planning, they opened the craft cidery in the summer of 2016.

Aaron, the chief fermentation officer, has been brewing beer at home for more than a decade. But as the craft beer industry seemed to be crowding the market in Indy, he and Andréa decided to shift their focus to hard cider. A particularly tasty cider they tried in Ireland inspired them to start making their own. And they wanted to stand out from the local competition.

“No one in Indianapolis was making craft cider the way we wanted to, and as a category, cider was really becoming a lot more popular nationwide,” Andréa said. “The skills transferred pretty well between brewing and cider-making, so we decided to go for it.”

Aaron kept his day job as an electrical engineer, moonlighting as the manager of Ash & Elm’s cider-making process. As CEO, Andréa oversees the daily operations, making sure everything in the tasting room and kitchen runs smoothly and working with local bars and restaurants to get the company’s ciders on taps and retail shelves all around town.

Everything at Ash & Elm is local — from the Indiana-grown apples used to make the ciders to the meats and cheeses on its delicious pressed sandwiches. Aaron and Andréa take pride in the company’s Hoosier roots.

The Homoyas’ relationship with Sponsel CPA Group began when Ash & Elm was still in its infancy.

“Our lawyer, Dave Castor, recommended Sponsel back when we were still a business in planning,” Andréa said. “We were looking to secure some bank financing and needed help with our business projections. We hired Sponsel to help us with that project, and then we decided to continue the relationship after finding them great to work with and very knowledgeable.”

Ash & Elm continues to grow and thrive. Keep an eye out for its upcoming seasonal ciders — pumpkin, raspberry and winter spice. Click here to learn more about the company.

To Be Successful, You Must Be Intentional

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

Some leaders seem to simply have a golden touch. But success is no accident. The best leaders don’t stumble into it — they take a specific path. Here’s how you can follow suit.

Don’t be afraid of failure. Learn from it! The best leaders treat failure as a launching pad rather than a roadblock. In other words, fail forward. Figure out what didn’t work, determine what you can do to improve and keep pushing to achieve your goals. Keep in mind that you may need to modify those goals along the way.

Be intentional. Operate in a deliberate manner. Effective leaders come to decisions through careful and extensive analysis. They always ask questions and hold themselves and their team members accountable. They keep track of goals, evaluate progress and sometimes even bring in a third party to oversee the company’s practices with a fresh set of eyes.

Maintain a healthy balance. Great leaders seamlessly juggle personal and professional responsibilities. And they never lose sight of their long-term goals in and outside of the office. They have a specific vision for their work and home lives.

Whatever kind of leader you are — manager, supervisor, CEO, etc. — and whatever sort of business you’re in, this advice applies to you. Hopefully it helps you on your path to success!

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

Making Your Staff Better than You

By Lisa Purichia
Partner, Director of Entrepreneurial Services & Employee Benefit Services
[email protected]

A leader is only as strong as the team behind them. With just a few months before the end of the year, now is a good time to evaluate your staff and determine areas in need of improvement. Listed below are some tips to help you get started on the path toward strengthening your team and your company as a whole.

In the long run, taking these steps will enhance your ability to achieve desired results and make you a better leader as well. Most successful leaders surround themselves with a diverse, skilled group that in many cases encompasses individuals who have select skills that are better than the leader’s in certain tasks. But the group’s collective skills ultimately enhance the team’s ability to achieve success!

Invest in your people. Make sure they have all the necessary resources, including tools and training — not just in the beginning, but continuously throughout their time at the company. The current workplace environment mandates that your staff is continually enhancing their skills or learning new ones. Coach your employees and make them hungry to grow and thrive. But also be patient and give them the proper amount of runway and time to blossom. Focus on building upon the individual’s strengths and what they do well — don’t try and fit that square peg in a round hole!

If we can assist you with achieving success in your business through staff enhancement, please contact Lisa Purichia at (317) 608-6693 or email [email protected].

Is Your Accounting Department Dysfunctional?

By Mike Bedel, CPA, CGMA, MBA
Partner, Director of Audit & Assurance Services
[email protected]

Cash flow is the lifeblood of any business. That’s why the cornerstone of any company is an efficient accounting department and financial reporting system that promptly measures and reports the results of your operations.

Financial statements should be prepared on a regular, systemic basis, around the 15^th of the month. Timely, accurate information is essential to your management team. Consistency of practice is crucial.

Is your accounting department meeting these demands? Failure to pay invoices on time or deliver accurate, comprehensive reports can severely harm your company’s reputation and result in late payment fees, decreased credit worthiness, issues with your suppliers, etc. Lack of consistency, planning, transparency and oversight can also quickly lead to untimely financial reporting and poor management information systems. The risk of fraud is also increased in an undisciplined accounting environment.

If you’re experiencing accounting issues in your company, it’s time to step back and determine the source of the problem. And if you need a fresh set of eyes on your accounting function, Sponsel can help! Is it your people? Is it your systems, or lack thereof? Or do you simply not know? Whether you’re seeking consultation or thinking about outsourcing your bookkeeping needs, we can offer support.

If we can assist you with achieving success in your business or personal affairs, please contact Mike Bedel at (317) 613-7852 or email [email protected].

Client Profile: ProSource Wholesale

When Dave Grande took over as the owner of ProSource Wholesale of Indianapolis, he had no experience in the commercial and residential renovation industry. But he hit the ground running and helped the franchise business continue to grow as one of North America’s largest trade-only wholesale suppliers for commercial and home improvement projects.

Established in 1991, ProSource boasts more than 140 showrooms across the U.S. and Canada. Grande owns the franchise rights to the entire metro Indianapolis area, overseeing three showrooms that offer flooring, kitchen and bath products for builders, remodelers, real estate agents and other trade professionals.

After 28 years as a manufacturer’s representative in the machining industry, Dave took a risk and jumped onboard the ProSource team, buying the first north Indianapolis location from his wife’s former neighbor in the spring of 2005.

Tom Sponsel immediately sprung to Grande’s mind when he was in the process of financially positioning himself to purchase the location.

“Tom and I go way back,” Grande said. “We went to Cathedral High School together. He was the first guy I called, and I’m so glad I did. Sponsel CPA Group was extremely instrumental in helping us acquire the business. Their relationship with the local banks persuaded people to take a chance and give us the loans we needed to start.”

After overcoming the economic downturn of the housing industry in the mid-2000s, Grande went on to open two more Indianapolis locations, one of which is currently managed by his son.

Sponsel CPA Group is proud to play a role in helping Grande run this growing family business.

Click here for more information about ProSource Wholesale.

How to Avoid Retirement Anxiety

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

It’s never too early to start thinking about retirement. What’s especially important to consider is the fact that it’s different for everyone. It doesn’t have to mean a life of hanging out on the golf course or lounging in the sun. You may find yourself busier in your retirement than you were in the working world. Retirement can be whatever you want it to be!

The thought of retiring can also be overwhelming, as it marks the start of a whole new lifestyle for you and your loved ones. Don’t allow the status quo expectations of retirement at age 65 corner you into a decision that you are not ready to make. You need to not only include financial planning in your plan but also activity planning so you don’t become bored! In order to avoid retirement anxiety, here’s a checklist of questions you should consider as you start the planning process.

When do you want to retire?
What are the major steps you need to take to prepare for retirement? (Who will take over your responsibilities in your business? Are you financially prepared? Are you mentally prepared?)
What are the main things you want to do with your free time? (Make a list of 5-10 activities.)
Do you want to move your homestead?
Do you want to travel?
What are your spouse’s needs/wants post-retirement? Are you in agreement?

For further advice on preparing for retirement or assistance with your personal and business affairs, please contact Tom Sponsel at (317) 608-6691 or email [email protected].

Be Intentional … Take a Vacation

By Brandon Cangany, CPA
Manager, Tax Services
[email protected]

As the summer sun peeks out of the clouds, now is perfect the time to plan a getaway! But are you hesitant to step away from the office and worried about leaving your work behind? With proper notice and planning, there’s no shame in taking a vacation. Just sit down with your manager to work out a schedule and determine who can take over your tasks while you’re gone. They’ll be grateful for the heads-up!

This also applies to you, Mr. or Ms. Business Owner!

It is not only important to reinforce to your workforce that vacations are important, but the business owner should take time away as well. For all the reasons stated below, everyone can benefit from some “R & R” to return renewed and refreshed!

Time away recharges your batteries and sharpens your focus. When you’re deep in the hustle and bustle of the business world, you can lose sight of larger goals and priorities — especially those personal goals and objectives that get lost in the daily press of responsibilities. Amid the rapid flurry of emails and daily tasks, you may forget what is truly important, and you should not allow immediate but less important tasks to take over your calendar! Slowing down helps you gain perspective on your career path as well as your life outside of work. These long-term perspectives grow clearer when you step away from your desk.

Fun with family soothes the soul. Spending time with loved ones is often the best escape from the stress of our workday lives. It’s important to reward yourself and have some fun with those you hold most dear. Time with them will remind you what you’re working for in the long run and the quality of life you’re striving to provide them and the REAL importance they provide to you.

You’ll return to work refreshed and ready to rock! Everyone needs time off. You shouldn’t feel guilty about it. In fact, you’ll be a stronger performer and your business will benefit if you give yourself a break every once in a while. So, kick back, take a load off and come back revitalized! Your respective stakeholders (employees, managers, customers, vendors, etc.) will appreciate your renewed energy and improved ATTITUDE!

If we can assist you with achieving success in your business or personal affairs, please contact Brandon Cangany at (317) 613-7899 or email [email protected].

Are You Ready for Your Next Crisis?

By Lila Casper, CPA
Senior, Audit & Assurance Services
[email protected]

As business slows down a bit this summer, now is an opportune time to focus on non-financial issues. Chief among them should be crisis management.

Even when business is booming, it’s important to prepare for the unexpected. As the old saying goes, “If you fail to plan, you plan to fail.”

Every company out there — big or small — should have a Disaster Recovery Plan in place with clear procedures to mitigate major disruptions to their business.

Examples of possible crises to consider include:

Natural or man-made disasters that damage or completely destroy the business building and its contents (including business records)
Cyber attack
Failure of IT technology and inadequate backup of stored data
Product recall
Employee misconduct
Loss of a key employee

During your down time this summer, you should collaborate with your staff in determining the risks you face and developing standard protocols to ensure that your business bounces back from these obstacles. You should not hesitate to bring in an outside risk management consultant. They will see the risks you miss on a day-to-day basis, and they can also share the horrible war stories of companies that incurred a loss and didn’t have a contingency plan to protect them. You should also conduct a review of your insurance coverage to minimize the financial loss exposure. The losses may be great but the physical and mental toll they take on the business owner and managers are much worse!

Here are some of the first steps you should take in the planning process:

Determine worst-case scenarios.
Calculate the likelihood of particular crises occurring. (This will help you prioritize and determine high and low-probability crises.)
Identify what is essential to day-to-day business operations and put systems in place that allow the company to continue running smoothly — such as a backup server for crucial data.
Compile contact information for those you would have to notify in the event of an emergency situation.
Assign crisis roles to particular departments or individual employees. (For example, you’ll need a spokesperson to gauge media interest and issue press statements in certain crisis situations that would likely garner attention from the public.)
Be ready for the worst. Having multiple backup plans is prudent.
Your plan should project how quickly you can be up and running, allowing you to recover from various disasters that could harm your livelihood.

In the business world, you should always hope for the best and prepare for the worst. It’s better to be safe than sorry. So, take some time this summer to make sure your business is as sturdy and resilient as it can possibly be.

If we can assist you with achieving success in your business or personal affairs, please contact Lila Casper at (317) 613-7840 or email [email protected].

Does Your Enterprise Need to Pivot?

By Mike Bedel, CPA, MBA, CGMA
Partner, Director of Audit & Assurance Services
[email protected]

As the old adage goes, the definition of insanity is doing the same thing over and over again and expecting different results. People are hesitant to jump out of their comfort zones — especially when it comes to turning a profit — but pivoting in a different direction is sometimes the best way to improve your business.

Could your company use a boost? Let’s dive in and explore how you can switch things up and turn toward success!

Expand your market. Do you have a target audience in mind but can’t seem to reach it no matter how hard you try? Don’t get hung up on the same region or demographic. Broaden your horizons! Make your product or service available to a wider geographic area. Launch a virtual store on your website or try selling through different e-commerce channels. Now, in this digital age, there are countless ways to reach your audience. The sky is the limit!

Turn failure into success. One of the most compelling comeback stories in the history of business is the origin of Post-It Notes. This product, which became a staple of offices across the world, started as an accident. Spencer Silver, a researcher at 3M, was trying to create a form of permanent adhesive for airplanes, but he ended up producing a much weaker glue that easily peeled off. Silver’s determination to turn this failure into a success eventually led to the substance being used on those colorful pieces of paper we all love sticking to our desks and bulletin boards.

The lesson here is that if something doesn’t turn out as you intended or expected, don’t give up! Think of ways you can adapt your products or services to meet other demands, which leads to our third point …

Innovate, innovate, innovate! Don’t be afraid to reinvent your business. Whether you change your product line, delivery methods, messaging or the way you approach and interact with your customers and vendors, giving your company a makeover can make a massive impact in the marketplace. If you’re not hitting your stride, wipe the slate clean and make a fresh start. Get back to the drawing board and develop a new product or service. Don’t let setbacks get you down — think of them as opportunities for a comeback. Just get back up on the horse and ride toward a new frontier!

If we can assist you with achieving success in your business or personal affairs, please contact Mike Bedel at (317) 613-7852 or email [email protected].

What Can Business Owners Learn from the Electoral Process?

By Jason Thompson, CPA/ABV, ASA, CFE, CFF
Partner and Director of Valuation and Litigation Services
[email protected]

Last Tuesday, voters cast their ballots in a round of primary elections for federal, state and local offices. In the business world, people vote every day, selecting products and services based on how effectively companies tailor their campaign to customers.

If you want to breathe new life into your business, put on your campaign hat and start running it like a political race! Here are some things to consider and ways to win your customers’ vote!

Build a campaign staff. Surround yourself with people who will represent your company in the best possible light. Just as politicians need fans waving signs of support, business owners need a team of folks who firmly believe in their company, spreading the good word about how it can benefit customers.

Keep your campaign promises. Business owners are like politicians in the sense that they set high expectations and build a buzz around themselves. They present a grand vision for the public to rally behind. Once you’ve won over your audience and gained their support, don’t lose sight of that vision. Always remember what you’ve promised and evaluate whether you’re living up to the portrait you’ve painted of your company.

Learn from your opponents. Think of your competitors as fellow candidates in the race and see what you can do to distinguish yourself from them. Do you need to change your brand image, your messaging, the way you interact with customers? What is the public’s perception of your company at the moment? Is it time to improve your reputation? These are just a few of the questions that should be rattling around in your head as you hike up the campaign trail.

When you go into work every morning, your first thought should always be: How many votes am I going to win today? In your world, every day is Election Day!

If you have questions about the value of a business or the valuation process, please call Jason Thompson at (317) 608-6693 or email [email protected].

Engage with Your Employees

By Lisa Purichia
Partner, Director of Entrepreneurial Services & Employee Benefit Services
[email protected]

The job market in Indiana has been remarkably healthy. The state’s unemployment rate recently dropped to 3.2 percent and has remained below the national rate for more than four years. As a result, valued employees are very hard to attract and retain! We can honestly state that maintaining a capable workforce is the #1 problem for most of our clients. As more and more people enter the workforce, the demands of growth make it mandatory to focus in a very specific manner on how to keep employees committed for years to come.

Embrace the idea of engagement. There are several ways to keep your employees committed to your workplace in their specific assigned tasks and eager to help grow the company! One key way is to help them understand how their day-to-day tasks contribute to the company’s larger overall mission. Let them know they’re an important part of the big picture and how their specific task creates a more valuable product or service when coupled with the efforts of the whole team.

Always keep employees in the loop: Communicate, Communicate, Communicate. Sharing the latest operating results, challenges met and overcome, new businesses signed, short-term goals, as well as the long-term vision for the company will make them feel like they are closely connected to the team and working toward a common purpose. Managers may have to sometimes bridge the understanding between the short-term efforts and how they are stepping stones to the BIGGER long-term goals and measures of success.

Ask employees about their own goals. Are they carving out a specific career path? Talk to them about their plans and how you can help them achieve personal success in their work life and in their personal affairs. Many may have never considered a “Career Path” or a “Personal Improvement Plan.” Taking an interest in their hopes and aspirations will keep them motivated to give their best. Encouragement is crucial — as is coaching and mentoring! You must make your employees feel like you’re always rooting for them to excel. You must be sincere and genuine in your efforts to help them achieve their goals.

The more they know you care about them, the more they will care about their tasks. Engagement occurs when the employees are in sync and working together in a seamless fashion to accomplish the goals of success! For more advice on how to engage your employees and grow your organization, please contact Lisa Purichia at (317) 608-6693 or email [email protected].

Focus on the Long-Term Vision

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

Convincing stakeholders (employees, managers, shareholders, vendors and customers) to invest resources in your business can be a daunting task, especially if you are focusing on a Long-Term Vision over numerous operating business cycles. Staying committed to building a company isn’t always easy, as the day-to-day headaches can get in the way of the leader’s vision! But with a little time, perseverance, focus of a committed team and faith, you can work toward creating a consistent pattern of growth and keeping your stakeholders committed and energized!

In order to keep growing as a company, it’s important for everyone involved to never lose sight of the BIG PICTURE — that vision thing! Look beyond the ever-moving peaks and valleys of your place in your respective marketplace and focus on goals for the future. Perseverance is the key. The Stock Market ebbs and flows, but in the closely held business world, don’t get distracted by what goes on in the Publicly Traded Company world. Always be aware and vigilant over the macro-economic environment, but focus on the Key Performance Indicators for your respective industry and most importantly your business enterprise.

A good start is to develop a three-to-five-year plan. Determine the most essential resources you’ll need to reach the level of success you desire and have planned for. Outline your goals and the course of action you will take to achieve them. Establish a timeline with milestones to measure your progress. Share your vision with all your stakeholders and set realistic expectations. Remind them that the seeds of investments take time to germinate. The most beautiful flowers don’t bloom right away, so to speak.

Building a business takes patience and a positive attitude. Don’t let minor setbacks get you down. You’re bound to hit a few bumps on the road toward a bright future. Allow your LONG-TERM vision to be your “Guiding Light!”

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].

Employee Spotlight — Abigail Hedges

Abigail Hedges started at Sponsel in September of last year, right on the heels of her graduation from Taylor University, where she earned a bachelor’s degree in accounting and management.

As a Staff Accountant in the Tax Services department, her role involves preparing individual, business, non-profit, fiduciary and other tax returns.

Two months after she started at Sponsel, Abigail tied the knot with the love of her life. Outside of work, she enjoys cooking, reading, working on puzzles and watching movies with her wonderful husband.

Are Relationships Really That Simple?

By Eric Woodruff, CPA
Manager, Audit & Assurance Services
[email protected]

Spending a little quality time with your colleagues can make a huge difference! Just look at what happened when New England Patriots coach Bill Belichick offered to spend more time mentoring offensive coordinator Josh McDaniels. This gesture reportedly played a large part in convincing McDaniels to stay in New England and pass on the head coaching position for the Indianapolis Colts. McDaniels considered the extra time with Belichick to be “extremely valuable.”

One of the main reasons people quit their jobs is because of an inadequate relationship with their immediate supervisor. The best way to build a strong rapport with your employees is to be like Belichick — pencil in some one-on-one time with them and show that you care. Even a brief, sincere interaction can leave a lasting impact.

Remember — it’s all about quality, not quantity. You don’t have to sit down with your colleagues for hours and tell them your whole life story. Just ask how they’re doing as you pass them in the hallway or take a few minutes to chat with them during your lunch break. Focus on subject matters that are important to them. You’d be surprised how much of a difference it makes just to have these short, simple conversations. You open the door to easier conversations when the topics become more challenging.

These days, we tend to forget about the value of face-to-face communication, or even picking up the phone. We get lost in cyberspace, always sending texts and sifting through emails. Although it may be more convenient, digital communication just doesn’t make the same impression as talking to someone in person. We’re so accustomed to dashing off messages that we lose sight of how much it means to people when we take the time to have a more intimate, meaningful interaction with them. You should make the interaction impactful but in a casual and informal manner.

Please note: Efficient communication rarely results in EFFECTIVE Communication

The more you show your employees that you care about them, the more motivated they will be to deliver on the results that your team seeks from them. Don’t let your relationship with them get lost in the flurry of emails. Make it flourish with a caring relationship, based on mutual respect and achieving the goal of the whole team!

If Sponsel CPA Group can assist you with achieving success in your business or personal affairs, please contact Eric Woodruff at (317) 613-7850 or email [email protected].

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.

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.

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.

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].

Beware of Meltdown Computer Vulnerability

By Chris Edwards
Manager, IT Services

A critical new vulnerability in computer systems has been revealed that could pose a significant threat at any person or organization that wants to safeguard its private information. Called Meltdown, it’s the hottest topic right now in information technology circles.

Meltdown lets an attacker access any information in your computer’s memory, including passwords, financial data and anything else you’ve accessed or used on your computer. It is severe, and it can be executed remotely. This vulnerability may also affect some smartphones and tablets.

Meltdown is not a virus, but a vulnerability in the processing chips made by Intel after 1995, which are used in many computers running the Microsoft, Apple or Linux operating systems, as well as some mobile devices.

Without getting too deep into the technical weeds, Meltdown breaks down modes and processes running on the same device, allowing a rogue process (possibly triggered by a website) to access memory it shouldn’t be able to. A similar but less severe vulnerability called Spectre was revealed around the same time, but it is much more difficult to perform.

The major operating systems are all working furiously on patches to address the Meltdown and Spectre vulnerabilities, and should be available soon. Look for an alert with instructions from your company’s internal IT team or contractor about how to install this important patch.

The downside is that fixing this vulnerability will significantly reduce the performance of the computer. You can expect anywhere from a 10% to a 30% performance reduction, based on current estimates.

Google discovered these vulnerabilities six months ago, and notified the manufacturers and operating system creators. AMD processors are not affected by this particular vulnerability. Some ARM processors are affected, but most are not.

If your Android device has the latest security patches, it should already be protected, but Android phone manufacturers often do not issue updates in a timely manner. Apple iPhones and iPads use their own processors, and are not listed on the vulnerability list.

In the meantime before the patches are released, remain extra vigilant about clicking on strange links or opening unfamiliar files. To execute Meltdown, someone has to be able to run a program on your computer, generally through some other vulnerability.

Keep running ad-block software in your web browsers, or install it if you don’t already have it. And don’t visit websites that ask you to turn it off. Be wary of all files sent to you via email, including through ShareFile or similar file transmission services.

If you need to consult with an information technology expert about the vulnerability of your organization’s systems, please call Chris Edwards at (317) 613-7855 or email [email protected].

Tips to Maximize Tax Benefits of Charitable Giving

By Lindsey Anderson, CPA
Manager, Tax Services Group

Year-end is an ideal time to give to charity, both for the spirit of the holiday season and the ability to include those deductions on this year’s return. Here are some tips on how to maximize the tax benefits of your charitable donations:

Donate Highly Appreciated Stock Instead of Contributing Cash

When it comes to charitable giving, the IRS allows you to take a tax deduction for the fair market value of donated stock held for more than one year, even though you may have paid substantially less for the stock originally. By donating the stock directly to the charity, you will avoid capital gain tax that would have been owed if you had sold the stock directly.

Depending on your tax bracket, this strategy could result in up to an extra 23.8% tax savings on the gain. The charity will usually sell the stock as soon as they receive it to use the proceeds for their mission purposes. You save money by avoiding taxes on the gain and by receiving a charitable deduction for the fair market value of the donated stock.

When selecting this strategy, it is important to choose investments with significant unrealized gains – the higher the better.

Fund a Donor Advised Fund

Long gone are the days when you had to be part of the ultra-wealthy in order to create a charitable legacy through funding and running a Private Family Foundation. Maintaining a Private Foundation does still have its benefits — such as retaining control and involving family members in charitable giving — but it can be a costly endeavor.

A more cost-efficient strategy has arrived in the charitable world known as a donor-advised fund. These individual accounts are maintained by a qualified Charitable Foundation set up through your investment advisor. (Think Schwab Foundation or Fidelity Charitable Fund.)

Taxpayers can receive the same tax benefits of receiving an up-front deduction when funding their donor-advised account, but this method allows the money to stay in the account until ready to advise on its disbursement to the applicable charities. Donor-advised funds are an excellent strategy for tax savings in a year in which you enjoy significant taxable income, such as proceeds from the sale of a business.

Time Major Donations for When Income Is High

Most charitable contributions may be deducted up to 50% of adjusted gross income. Contributions to certain private foundations, veterans’ organizations, fraternal societies and cemetery organizations are limited to 30% of adjusted gross income. With that being said, timing charitable contributions when income is high will help save tax dollars. If you were to sell your business for a large gain, time your charitable contribution to occur in the same tax year as the gain from sale to maximize your contribution.

Consider Sending Your RMD Directly To Charity

A qualified charitable distribution (QCD) is a direct transfer of funds from your IRA custodian payable to a qualified charity. If you are age 70½ or older, you can transfer up to $100,000 to charity tax-free each year, even if that is more than your required minimum distribution (RMD).

By sending funds directly to a qualified charity of your choice, you do not have to include the withdrawal in taxable income for the year. This is especially advantageous for those who must take their RMD but do not itemize their deductions, or have their itemized deductions phased out.

School Scholarship Granting Organizations

The state of Indiana allows for a very generous credit for donations made to a Qualified Scholarship Granting Organizations (SGOs). Qualified SGOs receive funding for scholarships from private, charitable donations. Each year, the Indiana Department of Revenue indicates the total amount of credits to be awarded. For fiscal year ending June 30, 2018, there are $12,500,000 in credits to be awarded by the Department of Education.

You should check on the remaining balance of available credits prior to donating to an SGO fund to ensure there are enough available for your donation. By donating to a SGO, you receive a charitable contribution for your donation on your Federal return as an itemized deduction. In addition, you receive 50% of your donation as an Indiana state tax credit to offset your state tax liability.

Indiana College Credit

Plan on supporting your favorite Indiana college or university? There’s also a credit for that! Indiana allows a credit of 50% of any donation made to an Indiana college or university, up to $200 per tax year. Tuition paid to a college or university is not a contribution and does not qualify for this credit.

Indiana Neighborhood Assistance Program

Indiana offers Neighborhood Assistance Program (NAP) tax credits annually for distribution by non-profit organizations. Organizations that focus on affordable housing, counseling, child-care, educational and emergency assistance, job training, medical care, recreational care, downtown rehabilitation and neighborhood commercial revitalization are typically granted NAP tax credits.

These credits allows the organization to incentive donations to their organization. By donating to an organization with an eligible NAP tax credits program, you receive a charitable contribution for your donation on your federal return as an itemized deduction in addition to an Indiana state tax credit in the amount of 50% of your donation amount.

Summary

A couple of warnings to keep in mind for all of these strategies. First, always make sure that you donate to qualified 501(c)(3) organizations; otherwise, your contribution will not be allowable as a tax deduction. Furthermore, the IRS has some stringent documentation rules that must be met depending on the type and value of your contribution.

Many taxpayers have lost out on large tax deductions because they didn’t obtain the proper documentation on the front end or realize that the charity was not actually a qualified organization with the IRS.

If you need assistance with your charitable giving plans, please call Lindsey Anderson in our Tax Services department at (317) 608-6699 or email [email protected].

A Simple Solution to Increased Productivity: Multiple Monitors

By Chris Edwards
Manager, IT Services

One of the simplest and least expensive methods of increasing an information worker’s productivity is to provide them with more screen space in which to work. This seems like it would be obvious: if you have more workspace, you can do more work.

A study from the University of Utah, first published in 2003 and then updated in 2008, shows that an increase in virtual desk space increases productivity. But the productivity increases taper off after a total screen size of approximately 26 to 30 inches on the diagonal, or 2560 x 1440.

At the time that study was first reported, multiple monitors were uncommon and generally considered expensive. This is no longer true. Almost any computer can be fitted with a USB video card to allow another monitor at a cost of around $50, plus the cost of the second monitor you choose. It’s easy to find lower-end or refurbished models for under $100.

I would recommend you try to keep all the monitors about the same size, shape and height from the desktop. Horizontal or vertical alignment seems to help the eye keep more focused on the information.

Technically, you can provide this screen space with one single, larger monitor. Multiple monitors provide added bonuses, however, in the way they treat applications.

If you’ve been using the latest versions of Windows on multiple monitors, for example, you know how easy it is to drag a window into another screen and have it maximize, making things like comparing documents or referring to references easy. Windows does have a method of performing this action in a similar way on a single monitor, but it is not as intuitive or quick.

If your employees use laptops, a second screen can immensely improve productivity easily. Most laptops already provide the needed connection; you just need the additional monitor and a cable.

Additional monitors are even a viable option for workers who are often on the move. Portable USB monitors, powered via the cable directly from the laptop, can be found in 17-inch screen sizes for approximately $150 on Amazon, and can be easily transported for your workers who travel. They can be set up and broken down very easily.

As noted above, productivity gains do fall off after a certain amount of additional space. It becomes a case of too many things to pay attention to, or the specific tasks do not benefit from the additional room.

You should tailor the setup for the particular task at hand. If your worker needs to review multiple documents at the same time, perhaps two or more additional monitors will allow them to view all the documents simultaneously without printing them out and laying them across their desk. The degree of productivity improvement is highly dependent on the sort of tasks required of your staff.

If your organization hasn’t moved to multiple monitors for its information workers, it can be a great low-cost option to explore in the new year. It’s a good bet they’ll find it to be a very positive benefit to their workflow.

If you need to consult with an information technology expert about increasing worker productivity, please call Chris Edwards at (317) 613-7855 or email [email protected].

Don’t Wait to Put Your 2018 Plan into Action

By Eric Woodruff, CPA
Manager, Audit & Assurance Services

Now is the time of year when people look back on 2017 to take stock of the good and the bad, both personally and professionally. If you’re the member of an organization, whether as an employee, manager or owner, this is the season for things like performance evaluations, making goals for the new year and setting budgets.

If you really want to feel satisfied when this time rolls around at the end of 2018, you need to develop a strong bias for ACTION, and avoid accepting the status quo of yesterday! Put together your plan for improvement, and put it into action – TODAY!

Not long ago we were speaking to a client who was talking about how 2017 was such a bad year for their company, but they had high hopes for 2018, with a list of plans to start doing in January. Our reaction was, if those steps will make a significant improvement in your operations and outcomes, why aren’t you doing them right now instead of waiting for New Year’s Day?

We all know how New Year’s resolutions tend to fade if you procrastinate about putting them into action right away. Without accountability and follow-up, they get put in a drawer and forgotten. So don’t wait for January 1 to get started!

If you’re an employee looking to move up the ladder at your firm, reflect on the things you’re not happy about from your last performance review, and set out a plan for improvement. Think about the skillset you want to build upon. Set benchmarks, such as monthly self-evaluations, to help measure your progress.

If you’re the owner or leader of a business, perhaps your plan of action is about increasing revenue or net profits, or articulating a vision for the future of the company. For a manager, your goals may have to do with improving operational efficiency and meeting the aspirations of the owners, or enhancing the working relationship you have with the team you supervise.

Most people find it difficult to truly hold themselves accountable. Endeavor to step back from your daily duties to give yourself some frank self-analysis that allows you to look for barriers to personal performance. Identify mistakes you’ve made, and take proactive plans not to repeat them.

If you start right away to set a really strong foundation for action in 2018, you’ll be better poised to ask the big question – “Am I satisfied?” – and come away with a positive answer a year from now.

Take the first steps now, even if it’s something as simple as scheduling time every month next year to do a self-evaluation of your progress, and perhaps asking colleagues and supervisors to give you feedback, too. Match their views with the self-assessments you perform to see where you are lacking.

The challenge is to open yourself up, be transparent and be willing to accept constructive criticism. If criticism is delivered in a positive way, it should be focused on ways of making you better. It can be hard to hear, but it gives you a solid plan going forward.

And don’t wait – start right now!

If you need any assistance with helping improve your organization, please call Eric Woodruff at (317) 613-7850 or email [email protected].

Are Property Losses from Hurricanes Deductible?

By Jennifer McNett, CPA
Manager, Tax Services Group

As residents in Texas, Florida and Puerto Rico recover from a trio of deadly hurricanes and the humanitarian crisis has started to ease, people’s thoughts have started to turn to practical matters. One question that has come up amongst those who own property in those regions is on the deductibility of losses due to hurricanes.

Hopefully, they carried property insurance, including a hurricane policy, to guard against damage from natural disasters. There are still bound to be some property losses that are unreimbursed, due to deductibles or because they fall outside the specific terms of an insurance policy. Is there any tax relief available for these losses?

The short answer is yes – but don’t expect it to be a simple process, or receive a huge amount of relief. Here is an overview.

In general, the federal tax code is not very generous when it comes to deductions for damages from disasters such as hurricanes, also known as casualty losses. In order to have a chance of recovering those unreimbursed losses through tax deductions, one usually must have low adjusted gross income (AGI), poor insurance coverage and be able to document the loss.

For personal use property, the loss is measured by the lesser of the adjusted-basis of the property or the economic loss. The adjusted-basis is usually the purchase price or value upon acquisition, adjusted by any subsequent capital improvements. The economic loss is calculated by the change in the property value immediately before and after the event.

From the lesser of those two values, we subtract the insurance payment or other reimbursement/mitigation. For personal use property losses, the IRS makes two reductions: first a flat $100, then a further 10 percent of the owner’s AGI. If there is still a loss after these reductions, it can be reported as an itemized deduction on the taxpayer’s federal return. Itemized deductions can also be limited depending on income, and on most state tax returns, including Indiana, federal itemized deductions are not allowed.

As an example, let us say Martha sustained $5,000 of post-insurance losses from a hurricane and has an AGI of $40,000. The IRS reductions of $100 and 10% of her AGI ($4,000) leaves her with a net casualty loss deduction of $900.

With for-profit business property, the casualty loss is similarly determined by computing the difference in fair market value immediately before and after the event. However, each identifiable property is treated separately, and the loss is not subject to the $100 or 10% of AGI reductions. For example, damages to a building, landscaping or vehicles parked there would be viewed and computed separately. Obviously, this makes the process more complex for businesses.

Inventory losses from hurricanes are not generally reported as casualty losses, but are deducted as a cost of goods sold expense under the general provisions relating to inventories.

The biggest challenge in claiming casualty loss tax deductions is being able to determine and document the pre-event value of the property and its diminishment as a result of the hurricane or other disaster. Usually a qualified appraiser is necessary who has knowledge of the region and type of property. In certain cases, the cost of repairs can be used to document the decline in value, but you are still required to start your calculation with the value before the loss.

The IRS and state taxing authorities do often give further concessions to taxpayers when the loss occurs in a federally declared disaster area – which is usually the case with severe hurricanes like Harvey, Irma and Maria. The primary concession is to allow the owner to obtain economic relief sooner than normal by permitting them to report the loss on the tax return for the year in which the loss occurred, or on an amended return for the immediately preceding tax year. In other words, if you are able to document a casualty loss from the 2017 hurricanes, you could file an amendment to your 2016 return right away.

If you want more information about casualty losses, you can visit the IRS webpage on that topic, or contact Jennifer McNett in our Tax Services department at (317) 608-6699 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).

Does Your Business Have Any ‘Broken Windows?’

By Tom Sponsel, CPA/ABV, CFF
Managing Partner

You may have heard of the “broken windows” theory, but probably in connection with politics and law enforcement. Former New York City Mayor Rudy Giuliani famously employed this philosophy in the 1990s to clean up his city.

The basic idea of broken windows, which was first introduced by George L. Kelling and James Q. Wilson in The Atlantic in 1982, is that if you let the little problems slip, like broken windows, vandalism and rampant graffiti, bigger problems eventually become insurmountable. Ignoring tiny errors or mistakes, invites ambivalence to much larger problems!!

Some years later author Michael Levine adapted the theory to the business world in his book, Broken Windows, Broken Business: How the Smallest Remedies Reap the Biggest Rewards. His take was that if you let the little things degrade in your operation, particularly how you treat your customers, it will eventually impact the entire company.

When problems go unaddressed, they tend to repeat themselves. Soon a mistake becomes standard operating procedure. That sets the bar even lower for other areas of your operations. Employees start to take less pride in what they do, impacting productivity and morale. Clients notice they aren’t getting the level of customer service they’re accustomed to, and begin to look for other partnerships.

Say you’re walking by a restaurant and you’re hungry. You notice the windows are so dirty you can hardly see inside. Would you want to go in? Or you do enter and notice there is flaking paint and chipped plaster on the walls near the cooking area. Does the grumbling in your stomach suddenly stop?

Even though these things may have no impact on the quality of the meal you receive, they send a signal to customers — that management doesn’t care about the details and makes you wonder what else are they cutting short and ignoring a commitment to quality.

Transfer the example to a professional office setting. Is the carpet in the reception area worn? Is there nobody manning the front desk, or the person there seems disengaged and bored? Do your employees dress and behave in a professional manner? When people call your office, are they put on hold for long periods with an automated message telling them, “Your call is very important to us?”

If you are the owner or manager of a business, you have to take on an almost obsessive-compulsive personality when it comes to how the organization runs on a daily basis. You must manage the organization in a very meticulous, deliberate way so that any problems are quickly discovered and addressed.

Take the initiative to see your company from the perspective of a current or potential customer. Are they getting the experience they want from the engagement? Are there shortcomings, even minor ones that could be remedied to improve how they view your organization and their overall experience in interacting with your company?

The best way to determine how people see your business is to ask your customers. Reach out to them for feedback from time to time, and ask them to report flaws in what you do. Invite constructive criticism—to make your operation BETTER!! Some industries even use secret shoppers or other monitoring services to report back with unfiltered information you can use.

We can apply the broken windows idea to virtually every aspect of a business. Is your website up to date and easy to use on every platform? Is it simple for people to find and contact your company? Is the method for receiving incoming inquiries monitored constantly and professionally?

In finding the little flaws in your business – and keeping them from becoming big ones – the secret is to think about the type of brand you want to build for your organization, and then work to make it reality. Envision the customer service experience you want your customers to have, then find out if that’s what they are actually getting. As the owner– it is OK to be OCD about customer service and your customer’s experience!!

If you find there are any broken windows in your business, even teeny cracks the customer can’t yet see, fix them quickly before they become the new normal. Duct tape may keep the glass from shattering, but replacement allows the customer to enjoy the experience.

If you need any advice about how to find and fix any issues challenging your organization, please call Tom Sponsel at (317) 608-6691 or email [email protected].

Lingenhoel, Sargent join firm

Sponsel CPA Group is pleased to welcome two new Staff accountants to the team. Abigail Lingenhoel will work in the Tax Services department, preparing individual, corporation, partnership, fiduciary and other tax returns. She has dual bachelor’s degrees in Accounting and Management from Taylor University. Christopher Sargent will be part of the Audit and Assurance Services team, performing audits, reviews, compilations and agreed-upon procedures for a wide variety of clients. He is a graduate of Ball State University with bachelor’s and master’s degrees in Accounting. Both are currently in the process of taking the exams for their CPA certification. Welcome to them both!

Lease or Buy?

By Jennifer McNett, CPA
Manager, Tax Services Group

One of the most frequent questions we encounter as business advisors is whether a client should lease or buy an expensive piece of business property. This can pertain to virtually any kind of asset, from real estate and vehicles to factory equipment and laptop PCs for the staff.

This is a seemingly easy question with a multifaceted answer, as the best course of action is specific to each organization’s circumstances. Depending on your company’s needs – maximizing deductions, preserving cash flow, maintaining newer equipment, etc. – leasing or buying can each lend their own advantages.

In general terms, if cash flow is an issue then leasing is generally the best option. For tax deductions, buying is usually more advantageous, especially when you use accelerated depreciation to expense the full amount up front.

Leasing is more complicated, and you should ask plenty of questions before signing a contract. These include the length of the lease, whether property must be insured, who’s responsible for property taxes, and options for modifying the lease and penalties for early termination.

You should also learn whether the lease is a capital lease or an operating lease. A capital lease is similar to a loan, and the property is considered an asset on the balance sheet, so you obtain the tax benefits of ownership. An operating lease (the more common type) means you rent the equipment or property and the lessor retains ownership. Historically operating leases were expensed and not reported on the company’s balance sheet but new standards beginning in 2020 will require most privately held organizations to record an asset representing the right to use the underlying leased asset over the term of the lease along with a liability for the present value of the lease payments.

Another option is the buyout lease, which can apply to everything from vehicles to computers, in which the lessee agrees to purchase the property at the end of the lease period, sometimes at less than present market value. This is considered a capital lease since you essentially own the equipment at the end of the contract. A buyout lease is generally more expensive than a standard lease, but the company can still take advantage of accelerated depreciation, especially if they are showing profits.

The type of property is also important to consider when choosing between lease or buy. For instance, vehicles are a rapidly depreciating asset in which leases usually include mileage limitations that incur overage fees when exceeded. On the other end, real estate is appreciable instead of depreciable, and control factors can be more important in determining whether you want to be the owner or merely the tenant.

There are many factors to consider when choosing lease or buy, but there are a few general rules of thumb.

The benefits of leasing include:

Ensuring your equipment is up-to-date.
Predictable monthly expenses.
Low cost up front.

Downsides of leasing include:

You generally pay more in the long run.
You have to keep paying even if you no longer need the asset.

Benefits of buying include:

Less complicated than leasing.
Generally cheaper in the long run.
Equipment is tax deductible.

Drawbacks of buying include:

Higher initial cost.
Getting stuck owning outdated equipment.

If you are unsure whether to lease or buy, seek the advice of a trusted counselor who can look at the practical and fiscal impacts of each and help you weigh which option makes the most sense for your organization.

If you have any question or comments, please call Jennifer McNett in our Tax Services department at (317) 608-6699 or email [email protected].

Employee spotlight: Amber Hoover

Amber Hoover is another one of the firm’s “first day” employees, joining the company upon its founding in 2009. She graduated from Indiana University Kelley School of Business in Indianapolis, and soon found her calling in financial analysis and valuation. She is both a CPA and holder of an Accredited in Business Valuation (ABV) certification.

Now a Senior Valuation Analyst in the Valuation and Litigation Services department, Amber performs many different varieties of valuations, focusing mostly on privately held businesses, and also specializes in fraud investigation, lost profit analysis, forensic accounting and economic damage analysis.

Amber has been married to Andy Hoover for six years, and they have an energetic 1-year-old boy, Miles, who will be joined by a baby sister in the very near future. Amber also volunteers with Food Rescue, a charitable group that distributes food to those in need, serving as their treasurer and member of the board of directors.

Multi-factor Authentication Critical to Protecting Your Information

By Chris Edwards
Manager, IT Services

Today’s digital world can often feel very alarming and insecure. Stories abound of identity theft, hackers stealing information from hundreds or thousands of victims, and email scams to swipe your account passwords.

How can you protect yourself and your organization?

Identity theft and hacked information often stem from circumstances outside your control, but losing your accounts and other access points is something you can protect yourself from with plenty of diligence and a touch of skepticism.

One powerful tool in guarding against hacking is the use of multi-factor authentication (MFA). Simply put, this means requiring more than one step or piece of information to access an account. More and more services and websites are offering this as an option, and it’s something you should definitely take advantage of.

You likely already use MFA in your regular personal banking. If you’ve ever used an ATM, you’ve used multi-factor authentication. Possession of the card and knowledge of your PIN act as two separate ways of verifying your identity to access your accounts. If a thief has your PIN but not your card, or vice-versa, they can’t get into your bank account.

Online banking has long been at the forefront of this, from asking for multiple pieces of information to separate physical tokens like bank cards or even devices which generate a second password.

But now, as our online and social media accounts become more valuable and thus more likely to be attacked, more and more providers are offering similar services to help protect your account. Facebook and Twitter both offer MFA options to help protect your account. Chances are your email provider does as well.

Using these methods to increase the security of your accounts does make them slightly more ponderous to access. It often involves having a temporary access key sent to you via text message in addition to your regular login information. If your bank requires an application on your smartphone to access your online account, you must have a smartphone, and you must have it with you in order to do online banking.

But having a vastly improved layer of security can be well worth the price of adding a few seconds every time you access critical accounts.

There are also quite a few services you can utilize to provide two-factor authentication to your staff and even to your customers, depending on your needs. Some of this would require a dedicated professional to implement, but the additional protection provided by ensuring that it takes more than a username and password to breach your security is worth that expense.

A hacker can potentially obtain an accounts password, but how would they also obtain that user’s cellphone?

When a service provider offers this additional layer of security, you should take advantage of their offer. If you provide online services, either to staff or to clients, it is well worth your time to provide the same offered security to them.

While multi-factor authentication cannot solve all of your digital security issues, it provides an easy-to-use method of determining that a person is who they say they are when they try to access an account online, and blocking nefarious people looking to do you or your organization harm.

If you need to consult with an expert about protecting your company’s information systems, please call Chris Edwards at (317) 613-7855 or email [email protected].

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].

Will salesforce Impact Your Company Culture?

By Lisa Blankman, CPA
Manager, Audit & Assurance Services

Indiana has been blessed with the arrival of a number of high-profile companies in recent years, either through acquisitions or organic growth. These include many information technology firms that represent the second wave of the Dot-com boom, such as salesforce, a cloud computing company that acquired ExactTarget in 2013.

The entrance of salesforce is having a rippling effect on the Indianapolis marketplace beyond the highly visible Salesforce Tower (rechristened from Chase Tower), with its name beaming from the top of the tallest building in Indiana.

It and other companies are bringing new ideas to the workplace that could spread to other businesses and alter their culture – not the type of work they do, but how they do it. This may make it more challenging for others to acquire and retain top talent, especially the Millennial generation that will soon dominate the U.S. workforce as Baby Boomers pass into retirement.

In short, Silicon Valley is invading Central Indiana with new ideas about the workplace and desirable concepts.

Cummins and other businesses have made a big splash with tours of new facilities that include onsite amenities that are now standard on the West Coast – coffee bars, exercise stations, lounge areas, laundry service, even things like video game consoles. The “new casual” atmosphere may seem shocking to older generations, but you can believe that locals in their 20s and early 30s know about the sort of accommodations their peers are being offered.

Beyond the actual worksite, the dot-com wave is also impacting old ways of how businesses conducted their human relations operations. Things like flexible hours, remote work days and casual dress codes are slowly seeping into the expectations workers have for their employers.

Younger generations also desire to work somewhere that mirrors their own values, so things like sustainability and diversity in the workforce become important.

If you’re in the leadership of an organization, you need to be thinking about how you are going to hire and keep the best talent, especially Millennials, given this new paradigm. Because our expectation is it’s only going to accelerate. HR practices that may seem bleeding-edge in the Indianapolis market now will be standard operating procedure in five or 10 years.

As with any aspect of your operation, if you don’t adapt to the changing times you will quickly find your organization left behind.

Start engaging with your HR department and think of ways your business can be proactive about offering accommodations to your team that will enhance their work experience. The goal is to build loyalty and encourage them to stay and develop their skillsets to benefit your organization, rather than seeing that talent drain away to more nimble competition.

You may not be able to replicate everything a salesforce or Cummins is doing, especially if you don’t have the resources of a Fortune 500 company. But you may be surprised how easy it can be, for example, to allow some of your staff to work remotely a few days a week. Or wear jeans and casual shirts in the office when they’re not out meeting with clients.

By making your company’s workspace inviting and flexible, thoughtful managers/CEOs can make their organizations a destination where talented people want to work, grow and become the next generation of leaders themselves. Talent management will be the critical success factor for the growing business in need of energetic talent to take the company to the next level of success!

If you have any questions or comments, please contact Lisa Blankman at (317) 613-7856 or email [email protected].

Board appointments for Sponsel team members

Sponsel CPA Group has always made civic involvement a cornerstone of our company culture. Many of our team members serve in a voluntary capacity with local nonprofit groups. We are pleased to recognize three new board appointments of our staff:

Lila Casper was appointed to the Audit Committee for Second Helpings, which repurposes unused food for the hungry.
Josie Dillon was recently elected as Treasurer of the Center Grove Education Foundation, on whose board she also sits.
Jennifer McNett was elected Treasurer by her fellow board members of Dress for Success, which provides professional attire for those in need.

Thanks to all three for their service to the community!

“What Do You Expect?” is a Good Question to Ask

By Nick Hopkins, CPA, CFP®
Partner, Director of Tax Services

What is expected of us in our position within a business or organization? It’s a question people tend to ask when they’re first hired or promoted, but not afterward – especially those in an executive or management role.

If you want to excel on a personal basis as well as make the company better, it’s a good idea to regularly ask others, “What do you expect of me?” And not just your supervisors, but also those under you within the hierarchy.

What we often see in a lot of work environments is that in order for a person to achieve excellence, they must have a clear set of expectations for themselves in terms of what their responsibilities and duties are. Sometimes these can be different from the expectations your superiors and subordinates hold. When your sense of expectations varies too far from those you work with, invariably conflict or disappointment arise.

If you’re the CEO or leader of an organization, this disparity can be even more acute. Clearly someone in this position has a lot of responsibilities for having a vision, setting direction and holding people accountable. Because there’s no one “above” you other than shareholders and/or a board of directors, the leader has to have a robust set of expectations for him or herself.

But have you flipped it around and asked the people under you – the department heads, the managers, the rank-and-file – what they expect of you?

If you do so, you may find things they demand of their leader that are not currently a top priority for you – or that are even on your radar at all.

If a leader is proactive in seeking out the feedback of a broad spectrum of people within the organization, it can not only reveal hidden opportunities or challenges, it will also help them improve on their relationships – which opens the door wider to improving on results.

Likewise, if you’re a staff member in a company who reports to someone, it’s wise to focus on setting goals, doing well on performance reviews and identifying unmet expectations. If you’re not meeting the requirements of your position, it’s possible there has been poor communication between you and your supervisor about clearly outlining those expectations.

It’s common in any type of human relationship to fall into the trap of assuming too much about the activities in which we are engaged, such as how our colleagues regard what we’re doing. And we all know the old joke about “assume.”

Gaining feedback about what others expect of us is especially important for employees who have stayed in a single position or department for a long time. They may have become very effective doing things a certain way, so they stick to that modus operandi – because it’s comfortable and because it’s always worked for them.

But the world is always changing, nowhere more so than in business. If an employee fails to recognize that change and adapt to it, it’s easy for a gap to grow between their expectations for the job and what others have. By asking one another what their expectations are for us, it assists us in realizing that we often must change how we deliver a product or service to best serve the customer’s needs.

The benefits of asking for feedback on what others expect of us translates to every facet of life – our bosses, those we supervise, coworkers, spouses, best friends, etc. It never hurts to ask another for a frank appraisal of what they see as your duties and responsibilities.

Whether it’s part of an official performance review or just a quick check-in, keeping the lines of communication open about our expectations of one another is the best way to maximize productivity and performance, not to mention enhance the way we work together.

If you have any questions or feedback, please call Nick Hopkins at (317) 608-6695 or email [email protected].

Indiana Moves Up Ranks of Business-Friendly States

By Eric Woodruff, CPA
Manager, Audit & Assurance Services

Indiana has moved up to two spots in CNBC’s rankings of “America’s Top States for Business,” according to the new list for 2017. The Hoosier State now comes in at #14, compared to the 16^th slot last year.

The annual list looks at a variety of factors, economic and otherwise, to determine which states are the friendliest to starting and growing businesses — and which are not. For 2017, Washington ranked #1 and West Virginia came in dead last.

“Low costs and a solid infrastructure meet at the Crossroads of the World, but quality of life tends to lose its way,” CNBC said about Indiana.

As in previous years, Indiana scored very well on Cost of Living and Cost of Doing Business (both #2 in the nation). The quality of the state’s Infrastructure also buoyed their standing with the #3 ranking. The state also tied at 8^th for Business Friendliness, tied for 10^th in overall Economy and 24^th in Access to Capital.

The state got dinged by coming in 45^th on Quality of Life, 35^th on Workforce and 29^th on Education.

The state profile by CNBC noted that Indiana has a very strong bond rating and outlook (Aaa by Moody’s and AAA by S&P), low individual and corporate income tax rates (topping out at 6.25% and 3.23%, respectively) and a very low unemployment rate of 3.2% as of this May. Economic growth for the fourth quarter of 2016, at a feeble 0.8%, was down compared to the rest of that year.

After Washington, Georgia, Minnesota, Texas, North Caroline, Colorado, Virginia, Utah, Tennessee and Massachusetts rounded out the CNBC’s top 10.

Although CNBC’s list is the most watched, other sources also produce their own lists of state business and economic rankings. Here’s how Indiana stacks up in a few of those:

5^th – Best & Worst States for Business, ChiefExecutive.net

8^th – Top States for Doing Business, Area Development

8^th — 2017 State Business Tax Climate Index, The Tax Foundation

13^th – Best States for Business, Forbes

We are proud of our state for business environment. We also believe these ranking will assist our state economy as we grow and develop our existing Hoosier businesses, as well as attract new businesses and talent to share in our success.

If you need any assistance with helping your business move up, please call Eric Woodruff at (317) 613-7850 or email [email protected].

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].

Cybersecurity: Beware of Sophisticated Phishing Attacks

By Chris Edwards
Manager, IT Services

Phishing attacks are nothing new, but lately they’ve reached such a level of sophistication that they have even fooled information technology experts.

Phishing, which is mostly encountered via email, tricks people into clicking on a link that appears legitimate in order to steal confidential data – or even your identity.

How bad is the problem? As many as 100,000 new phishing attacks are reported every month, according to the Anti-Phishing Working Group. The FBI even believes a phishing email is how Russian hackers infiltrated the Democratic National Committee servers, according to Wired.

The most common form of phishing involves convincing you to login to an existing account you already have, such as your bank or email. It might say something like, “You need to update your account” or “Log in to see your benefits.” This is known as the “worm,” i.e. the bait that catches your eye and gets you to strike.

(In phishing, you are the fish!)

Clicking on their link takes you not to the actual website, but a dummy site the phishers have set up to mimic the real one. It can even have the same design and logos of the one you’re used to. Once you put in your username and password, they’ve caught you.

Lately phishing scams have been coming through Dropbox or other popular file-sharing services. We’ve even encountered them on lesser-known paid services like Sharefile.

Earlier in May, there were widespread media reports of a phishing scam that prompted receivers to open a Google Docs file. Since this is such a commonplace activity, many people clicked on the blue “Open in Docs” button without thinking. It would then take them to a site where they were asked to login to their Google account.

Unfortunately, there really isn’t a strong defense against phishing other than warning your team to be vigilant. Spam filters will catch some of them, but since phishers change email addresses so often, many will get through to your inbox.

The simplest defense is to be wary. If something seems wrong about a message, it probably is counterfeit. You may receive an email from someone you know, asking you to open document. But if you weren’t expecting a file from them, be cautious.

This is a good example of using existing technology to bolster another one. If you receive an email from a colleague you suspect is bogus, pick up the phone and ask them if they sent it.

Another option is to use a two-factor authentication when logging into a secure site. This can be an automated phone call or text message to your phone in addition to the login you use on your computer. It’s much more difficult from phishers to infiltrate your identity this way.

Also, be suspicious if a website asks you to login to an account that you’re already automatically logged into when your computer boots up, such as the Google account you may use for Gmail. Take a look at the URL web address at the top of your browser. Or, you can mouse over a web link without clinking on it to obtain a preview of where it will take you.

If the web URL looks strange or doesn’t conform to the normal address you’re used to, that’s a big red flag. Talk to your company’s in-house IT professionals, or whoever your vendor is, if you’re unsure.

They key is not to clink blindly on every web link that shows up in your email inbox or on websites to which you’re directed. The best way to avoid getting phished is to not take the bait.

If you need to consult with an expert about protecting your company’s information systems, please call Chris Edwards at (317) 613-7855 or email [email protected].

Should I Fire My Largest Customer?

By Tom Sponsel, CPA/ABV, CFF
Managing Partner

Everyone who’s ever run a business understands the concept of having a customer who’s more important than the rest. After all, nothing happens without a sale, and no sale occurs unless there’s a customer. But a very large customer may not always be the best thing for your company.

Often we find that a business owner/manager hasn’t performed adequate analysis to see if their biggest customer is really producing the outcomes they desire. They may look at the top line and see that their largest client is responsible for a huge chunk of total revenue. What they don’t realize, is that single customer may be eating up a disproportionate share of resources and thus not having the impact on the bottom line as assumed.

It’s also not healthy when a firm has a customer so big that they are economically dependent on them. When this happens, we even see the customer starting to dictate policies, procedures and prices. They monopolize resources and hinder the ability of a company to grow and evolve. Soon your business becomes a mere extension of their business. They many times become a barrier to growing the enterprise with new customers, even some which may have greater bottom line potential impact!

The corporate world is littered with people who built a great company, but depended on a single client for 60 or 70 percent of their revenues. When that went away …the firm floundered.

Leaders should strive to have a customer base that is large and diverse enough, that the sudden loss of any single customer would not threaten their continued viability as a going concern. Always preserve your independence to the point you have the freedom to “fire” your biggest customer, if the relationship is no longer mutually beneficial.

It’s easy to become bedazzled by a big client. You enjoy the prestige of partnering with a high-profile company, and the numbers on your gross revenue spreadsheets are eye-popping.

But when is the last time you performed a gross profit analysis, looking at not only sources of revenue, but how much you are spending to serve them? Explore beyond the topline numbers to reveal the true cost of having them as a customer. Are there other initiatives you’ve been wanting to explore, but your team is so monopolized there isn’t time pursue them?

There’s nothing wrong with having a big client who generates profits for your business. But a prudent business leader will look at the longer term, and manage clients so as best to perpetuate the sustainability of your own organization, including your overarching mission and the welfare of your employees. You want every relationship between your company and its customers to be win-win for both parties.

The example of one of our clients best illustrates this point. During the Great Recession, they lost a major customer and as a result a big portion of their topline revenue. But they were surprised to find that their profitability actually INCREASED! That’s because they had lost sight of how much it was costing the business to serve that one client. By being forced to explore other opportunities, they were able to make up the difference – and more.

In another case, the largest customer demanded and was provided terms which allowed payment of invoices within 75 days rather than the normal 30 days. Thus company was being “the Bank” for the large customer thus requiring the company to increase their working capital line of credit to fund the accounts receivable extended terms, thus increasing their risk and interest costs.

This is why it’s prudent to run an analysis from time to time on your customers. Take a look at not just the benefits, but also the risks of having a large customer.

If the overall profitability of a customer is not commensurate with the level of services they are demanding, or if you find yourself unable to adequately meet other customers’ needs, or if you find yourself economically dependent on the leadership of another company, you might want to consider severing or altering that relationship.

It’s better to fire your biggest customer than become beholden to them, which may stifle your own ability to GROW! Because when that happens, for all intents and purposes, they own your company as well as their own. They may squeeze your profit margins that they become razor thin, and/or demand additional services that further squeeze your profitability. You find yourself in a vicious cycle of trading dollars, but not realizing an adequate rate of return on your investment.

In every healthy business relationship, it must be mutually beneficial for both parties. Just make sure your well intended desire to hang on to that BIG customer, does not get in the way of other growth objectives of your business!!

If you need any advice about how to analyze your customer profitability, please call Tom Sponsel at (317) 608-6691 or email [email protected].

What Is Your Continuous Improvement Plan?

Many occupations start out with initial requirements for training or certification. For instance, a Certified Public Accountant (CPAs) needs a master’s degree in accounting, then must study for, take and pass an exam to get a CPA license. An electrician begins as an apprentice, then progresses to a journeyman before becoming a master electrician. For many, education and training are something you do at the start of your career, rather than a life-long endeavor toward self-improvement regardless of where you are in your career.

Whether you own the business, are managing it or a new staffer, consider developing your own Continuous Improvement Plan (CIP). Your CIP can be as simple as a list of goals, prioritized with a plan of action and timetable. If you’re in a position of influence in your organization, encourage other team members to each write their own CIP.

Start with what makes sense for your chosen occupation. For example, in addition to being CPA, I have obtained an Accreditation in Business Valuation (ABV), and am also an Accredited Senior Appraiser (ASA), a Certified Fraud Examiner (CFE) and Certified in Financial Forensics (CFF).

From there, think about the knowledge and talents necessary to help you become a more valuable member of your company’s team. This knowledge and experience will not only help you rise within the ranks of your organization, it can also focus your interests and assist you in planning your career goals for the next five, 10 or 20 years.

Some companies have a formal process for CIPs, including assigning each employee a coach to help them develop their skills and expand their base of knowledge. The goal of this process should be to have each employee develop into a well-rounded person as they move up the chain of responsibility. Too often, newly promoted employees are found to be lacking skills their new position requires.

For example, many if not all Millennials joining the job market today are more technologically savvy than any generation before them. They’re digital natives who grew up with the Internet and mobile devices. Many however, tend to be weaker on the “soft” skills necessary to advance into senior leadership roles: writing, speaking and communicating objectives.

Companies with a formal CIP process may need to allocate time and money for their employees’ improvement plans, and even provide a curriculum.

Some mutual benefits of a corporate CIP process are; team members realize they are valued by their organization, climb to higher positions with increased responsibilities, and realize their personal goals. The employer gains a stronger and more valuable workforce with more diversified capabilities, which in turn can translate to greater employee morale and loyalty.

As you and your team develop CIPs, don’t forget to talk to customers about the products and services they desire to assist them in their operations. Use their input to tailor the improvement plans, balancing individual preferences with the skills needed to deliver on what your clients want.

Your company may already be great at what it does. To continue or even prolong its greatness consider encouraging employees to hunger for improvement of themselves and their capabilities. This can lead to growth and evolution from new opportunities.

If you have questions or comments, contact Jason Thompson at (317) 608-6694 or [email protected].

Innovation Will Set You Apart!

By Lisa Blankman, CPA
Manager, Audit & Assurance Services

The concept of innovation is very critical to any organization that wants to grow and evolve. Some business leaders will fall into the pattern of doing things the same old way, almost out of habit. And not without reason: if the status quo has worked well for a long time, there is fear of disrupting a pattern of “success” by changing. A feeling of safety and consistency is comforting.

But the only truly consistent thing about the marketplace is that it is always changing. If you’re not looking ahead, you’re already at risk of falling behind. A “success” of the year 2005, may lead you to a false sense of accomplishment. A prudent leader must be intentional in driving new ways of thinking into their organization.

In order to build a business that will be successful for the long term, you must create a philosophy and corporate culture of continuous innovation. That mindset needs to be a component of everything you do. “Change” is the only constant in your strive to be superior to your competition.

When we talk about innovation, most people think of a specific product or service that is ahead of the competition. And that can be critical to your success, given the rapid changes in technology and social engagement. Devices and ways of doing things can quickly become obsolete.

Remember standalone GPS devices? Ten to 12 years ago, they were the hot new gadget everyone wanted. Now they’re in the technological dustbin. And how about fax machines? It’s difficult to even find one nowadays that’s not incorporated into a printer/scanner.

So beyond finding that next product or service, try to be innovative in the way you deliver that to the marketplace. Innovate in the way you interact with your customers, be creative in how you deal with vendors, employees and other stakeholders.

In short, focus on making innovation not a one-off event but a continuous theme that is driven into the heart and soul of your organization’s culture.

Examine your internal processes from time to time and ask yourself if they are up to speed. Look at what others in your industry are doing, especially those who have recently adopted new methodologies. Are they working? Can they be improved upon?

Talk to your customers and vendors and ask their advice. See what their needs are, and task your team with coming up with a better way to satisfy it. Solicit your team of employees: “Is there a better way to do this?”

For example, in the accounting/bookkeeping world it was once a universally accepted practice to make a daily run to the bank for deposits. Now that’s virtually all handled with online tools. And that came to be because some people thought about ways to make the process faster, simpler and more reliable. Improved Productivity!!

The reality is that new products and service follow innovation, not the other way around. Innovation is a mindset that constantly questions how you’re doing things, and looks for ways to do it better.

If you’re a business owner or manager, thinking innovatively means being responsive to what the market demands. You should want your company to be seen as creative and dynamic. An organization doesn’t necessarily have to live on the bleeding edge, but at least be in tune with the latest best practices.

Whatever you do, you don’t want your company to be regarded as being obsolete or out of the mainstream of what the consuming/retail customer expects. That is not a formula for growth and prosperity. At a minimum, be open-minded to a different way of accomplishing a goal and encourage your team members to make similar recommendations.

When your organization is viewed as being proactive in adopting new ways of doing business, it’s easier to attract more customers and explore untapped opportunities.

If we can assist you with any process improvement, please contact Lisa Blankman at (317) 613-7856 or email [email protected].

Employee Spotlight – Tom Sponsel

After 40 years in public accounting, Tom Sponsel is a fixture in the Central Indiana business community. He has helped countless people achieve their personal and entrepreneurial dreams.

Nearly eight years ago, he had the idea to launch a new kind of CPA firm, gathering a team of trusted professionals with a diverse set of skills and unified in the mission of providing clients not just financial acumen, but executive-level counsel to bring more value to their endeavors. Tom is proud of the fact that in most cases, our clients become friends, the ultimate endorsement of a trusted relationship.

Under his leadership as Managing Partner, Sponsel CPA Group has been recognized as one of the fastest-growing firms in the Midwest. Tom provides comprehensive strategic advice to corporations, family-owned and closely-held businesses and nonprofits at every stage in their growth cycle. He is also recognized for his experience in succession/estate planning and mergers & acquisitions.

In addition to being a CPA, Tom is Accredited in Business Valuation (ABV) and Certified in Financial Forensics (CFF), and provides expert testimony in legal proceedings. He often makes public/media appearances, has been profiled in The Indianapolis Star, and has received awards and professional acclamations, for which he is humbled.

Tom’s lifelong passion for community service has become a core staple of the firm’s culture. Tom and his six siblings are very proud of their heritage of growing up on the near-eastside of Indianapolis. He has held many volunteer positions or donated his time to numerous community endeavors, including the Catholic Community Foundation, Arsenal Tech High School, St Philip Neri Parish & School, St. Vincent Health, Perry Township Schools, the Indiana CPA Society and the Archdiocese of Indianapolis.

He takes great delight and comfort in his wife of 42 years, Barbara, their two grown children and five grandchildren. When he’s not working or volunteering, Tom likes to read – especially business profiles and self-improvement books – watch the Colts and Pacers, and play with his grandkids, who “make the world a lot more joyful.”

“Clearly the last eight years have been the most exciting times in my professional life. We’ve worked hard to get here and enjoy the success that we have,” Tom said. “I think a lot about the promising future that lies ahead of us, and cultivating the people who will take us there. I get a great deal of personal satisfaction in seeing young people recruited out of college, join the firm, progress and grow into leaders.

“We truly do it all as a team. We all work together in a very unselfish way, and that’s been the key to what we’ve achieved — TOGETHER!!! … and WE HAVE FUN EVERYDAY!!!

Speed is Key to Success in 2017

By Eric Woodruff, CPA
Manager, Audit & Assurance Services

Technological advances always bring new opportunities, but also fresh challenges. Just a decade ago, a phone call or an email from a customer could be reasonably expected to be returned in a day or two. Now, with social media, texting, Snapchat, etc., any communication response that isn’t near-instant risks alienating a client and sending them running to a competitor.

Our society is undeniably a speedier one – so an organization’s chances for success rests more on being highly responsive in the manner the consumer prefers.

The speed factor also makes it harder to make your company set itself apart in its products and services. If everyone’s customer service is expected to be lightning fast, the marketplace becomes like the cavemen running from the sabre tooth tiger – the slowest one is the loser.

Think about Amazon. People have gotten used to ordering something at noon, and having it waiting for them on their doorstep when they get home. And with Amazon’s pilot program in drone deliveries, the wait can be cut to literally minutes!

That mentality is now spreading to every customer interaction and every industry. Business owners and managers need to ask themselves:

Are we set up to be nimble and flexible in responding to our customers and stakeholders?
How quickly do we respond to communication contacts?
How quickly can we adapt to new changes so we can beat our competition to the market?
Is our website set up so it can be properly viewed on a mobile device? Is it easy to find information on our products and services?
How can we make it easier to do business with our company?
Are we set up to meet the 24/7 demands of the e-commerce world?
How can we stay abreast of upcoming developments?

As a rule of thumb, any contacts from potential new customers should be responded to the same business day. The person or persons monitoring the phone extension or email address linked to your website’s “Contact Us” page should be your proactive point person. Even if a principle team member is not available, at least have a responder let them know when they can expect communication from them.

Just a quick acknowledgement can give the person reaching out that “touch” they need to feel their concerns are being addressed in a timely way. It is important to acknowledge the request and set the expectation of a timely response.

If you’ve ever participated in any customer feedback services, you probably know how important a quick response can be. A horrible client experience can often be rectified with a timely attempt to make good on any failure to meet expectations. On the flip side, a response that is late is usually going to be seen as lacking from the customer’s dissatisfaction perception, and any apology as disingenuous.

Even worse than a slow response is none at all. If you’ve been asked to fill out a survey from, say, a car rental company and gave negative ratings, you may have checked a box that asked if you would like to speak to a manager. Did that manager ever get back to you? If not, chances are you’re not using that car rental agency anymore. Today’s world of commerce demands immediate responsiveness.

It’s also wise to manage expectations for response, especially with existing customers. Have your voicemail message or out-of-office email function let people know you will try to get back to them within 24 hours. If that’s not sufficient for their needs, provide an alternate contact within your business who can jump on the requested task ASAP.

It may sound self-evident, but even an automated response that says “I’ll get back to you soon” is better than none at all.

Analyze your company’s response to communications and judge if your organization is meeting the speed factor necessary for success in 2017. Call your clients and vendors and ask them if they feel your staff is sufficiently responsive.

If the answers you receive are negative ones, take a look at your controls and processes to see how you can get things up to the speed you need.

If we can assist you with any process improvement, please contact Eric Woodruff at (317) 613-7850 or email [email protected].

Guard Against IRS Tax Scams

By Josie Dillon, CPA
Manager, Tax Services

For the average person, getting a threatening phone call from the IRS would stoke a great deal of fear and anger. But many of these and similar ploys are tax scams perpetrated by criminals out to rob you of your tax refund, or simply steal your identity and drain your bank account.

The IRS has reported a huge increase in phone scams in recent years. Taxpayers will receive a phone call from someone claiming to be an IRS agent threatening people with arrest, deportation, revocation of professional licenses and other terrible results if they do not comply with demands to pay a bogus tax bill.

Some of the most sophisticated scammers will even use “ID spoofing” technology, so your phone’s caller ID function will make it look like the local IRS office is calling.

Or, instead of threats, the caller may tempt you with offers of a huge refund far larger than you’re entitled to. Sometimes these calls will be a live person, or recorded “robo-calls.” There is also an uptick in “phishing” emails that lure people into clinking on a link and having their personal data stolen.

The reason the problem is so prevalent is that these shady tactics work. Since 2013 tax scams have hurt more than 5,000 victims to the tune of $26.6 million, according to the IRS.

There are other types of scams that include unscrupulous return preparers, fake charities and inflated refund claims. For a complete rundown of the IRS’ “Dirty Dozen” of common scams, click here.

Here are things the IRS will never do:

Call to demand immediate payment, nor will the agency call about taxes owed without first having mailed you a bill.

Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.

Require you to use a specific payment method for your taxes, such as a prepaid debit card.

Ask for credit or debit card numbers over the phone.

Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.

If you suspect foul play, the IRS advises you to immediately hang up the phone and not reply to a suspicious email. Call their scam reporting hotline at (800) 366-4484. Or file a report with the Federal Trade Commission by clicking here.

Stay alert for scams that use the IRS as a lure. Tax scams can happen any time of the year, though they are more common at tax time.

If we can assist you with any tax-related issue, please contact Josie Dillon at (317) 613-7841 or email [email protected].

Employee Benefit Plans: Pitfalls and Benefits

By Bill Barks, CPA
Director of Employee Benefit Plan Services

Why do we offer Employee Benefit Plans (EBP) to our workers? It’s a seemingly simple question with a multifaceted answer.

As an employer, your biggest challenge is in how to design and implement an employee benefits plan that balances your desire to provide for your employees with the resources and missions of the organization. Here are some of the key pitfalls and benefits of EBPs.

Pitfalls

One of the biggest problems is an improper plan design that doesn’t fit the demographics, geographic location and other specifics of your workforce. For instance, if yours is an industry where people tend to retire at an earlier age, such as police and firefighters, then that should be reflected in terms of retirement matching, health coverage, etc.

Another common pitfall is not having an Investment Advisor on the plan. As the sponsor of the plan, the employer assumes a Fiduciary role. Consider engaging an Investment Advisor to assist with your fiduciary obligations and who can offer an independent perspective.

It’s also easy to misunderstand timing requirements of EBPs. For instance, many smaller companies may start out with a SIMPLE Plan, and then want to change to a traditional 401k as the operation grows. But federal rules prohibit having both in place in the same year.

Don’t have amateurs involved with your plan. Hire experienced consultants with expertise in investment options, plan design and compliance. It’s best not to comingle all functions.

As silly as it sounds, don’t set up a plan and then forget about it. Many companies fail to reevaluate their benefits package every three or four years to see if it’s still meeting objectives as the size and mission of the organization evolve.

A final pitfall is committing plan errors, such as making late deposits of employee withholdings, which can result in a heavy censure and fine from the IRS. Errors also can happen when companies fail to follow their plan documents, such as failing to understand who is eligible to participate and how compensation is defined.

Benefits

At its most basic, the reason companies give employees benefits is to provide for workers, so their lives will be happier and more stable, and thus they are more likely to be loyal and productive members of the team. There are also considerable tax savings, both for the employer and employee, to having benefit plans in place.

In terms of employee recruitment and retention, EBPs are a prime way to attract and keep the best workers – especially in a tightening labor market where there is more competition for prime employees. No one wants to lose a top candidate because the firm across the street has a more attractive benefits package.

There is also an advantage in having your team members be “retirement ready.” This means that they have properly saved and planned so they are ready and able to head out the door to a well-earned retirement when they desire to. Far too many people reach the age they want to retire and find they don’t have the funds to do so.

There are myriad tax benefits for having an EBP in place, including deductions for the cost of the plan and employer contributions. Employees receive tax deferrals by saving money on a pretax basis. Tax credits even exist to help employers set up a new plan, as well as for low-income workers.

Finally, benefit plans are a useful tool for succession planning. This is especially true in family-owned or closely-held companies, where the first generation of owners may have the majority of their wealth tied up in the firm, and find they don’t have enough liquid resources to step out of the business.

Employees are more savvy than ever, and know that their total compensation goes beyond wages to include health insurance, a retirement savings vehicle and other factors. Your benefits package is more important than ever in making your organization an “employer of choice.”

Sponsel CPA Group provides plan design and compliance services. If you have questions about your company’s employee benefit plan, please contact Bill Barks at (317) 613-7867 or email [email protected].

Leaders: Do You Have a Vision?

By Mike Bedel, CPA, MBA, CGMA
Partner, Director of Audit & Assurance Services

If you’re the leader of any organization, one of your most critical responsibilities is to have a vision for the future. It may sound obvious, but many leaders are so focused on dealing with the current situation or rectifying past mistakes that they fail to sufficiently look ahead.

Assuming you do have a vision for the future, you need to be planning the steps necessary to make that vision a reality. Once that vision and process are in place, you must communicate them to your entire organization in order to have the best possible chance of achieving that vision successfully.

Your vision process must become a daily stepping stone to the future you seek.

Many agree that the best way to learn is from mistakes. If we don’t take the time to examine missteps, we are more likely to repeat them. So looking back at your organization’s history can be very bountiful.

Be mindful, however, that looking at the past doesn’t blind you from looking to the future. Don’t dwell on past mistakes at the expense of establishing a vision.

As we start a new year, this is a great time to focus on critical aspects of your operation –financial performance, expected capital expenditures, maintaining or increasing your workforce, market trends, changes to your culture, etc.

To establish or refine your vision, start by asking yourself: where is the organization today? Where do you want it to be in 12 months? What are the milestones necessary to get from here to there? The answers you come up with will lay the foundation for your vision and process.

External factors can and should influence your vision. You probably have trade organizations or industry publications that can help educate you on the expected trends for this year and beyond.

There is new leadership coming to the White House in Washington D.C. and the statehouse here in Indiana. However you feel about the election results, it’s incumbent upon the leader of an organization to think about how that political change could impact their future.

The best leaders are constantly forward-thinking. They clearly articulate and communicate their vision to those they lead. Assuming that your vision requires efforts across the entire organization, it does no good to have a plan for the future if you’re not sharing it, promoting it and making it a critical part of your daily work plan.

Understand that the employees of any enterprise expect their leaders to point the way.

Make sure you have established a vision for 2017 and beyond. Ensure it is clearly communicated to everybody in your organization so that they can all help achieve that vision. Don’t let the daily grind push this essential task away into the future.

This is where a lot of leaders fall down. Either they haven’t formulated a vision, don’t define the path to make it happen or fail to share it with the very people who will carry it out.

The purpose of a vision is to help ensure that the future is an improvement over the past. That’s all anyone can hope for, whether in their personal life or their professional endeavors. That is exactly what Sponsel CPA Group hopes for your organization in 2017.

Good Luck and hopefully your vision for 2017 and beyond will become a successful reality!

If you need help with crafting your vision for your company’s future, please contact Mike Bedel at (317) 613-7852 or email [email protected].

Employee Spotlight: Jason Thompson

As one of the founding Partners of Sponsel CPA Group, Jason Thompson has led the firm’s Valuation and Litigation Services department since inception, helping clients find innovative solutions to challenging financial and legal issues. He provides executive-level counsel to business owners and investors across a broad range of industries, specializing in the valuation of privately held businesses, ownership interests and intangible assets.

A graduate of Indiana University with a bachelor’s degree in accounting, Jason places a strong emphasis on continuing education and expanding his areas of expertise. In addition to being a CPA for over two decades, he holds certifications as an Accredited Senior Appraiser (ASA), Certified Fraud Examiner (CFE), Financial Forensics (CFF) and Accredited in Business Valuation (ABV). Jason routinely provides consultation related to business valuation in mergers and acquisitions, in estate and gift tax compliance and planning and for an array of litigation related reasons. In addition to his skills as a valuation professional, he also performs the firm’s fraud and forensic accounting investigations and serves as an expert witness from time to time in accounting and financial related matters.

The Annual Report Card

By Liz Belcher, CPA
Manager, Tax Services

The start of a new year is a time when students generally receive a report card outlining their progress and shortcomings. As you are perusing your child’s report card, ask yourself: how often you have undertaken similar steps to hold your company accountable for its results in 2016.

January is also when our political leaders deliver a “state of” speech, letting everyone know how we’re doing as a nation or state. You might consider the idea of a report card and giving a “state of the company” speech — Your Accountability Report.

Consider a company-wide meeting, if feasible, in which the leader goes over their 2016 performance along with the vision and goals for 2017. Having this sort of transparent accountability to your employees is a critical component of obtaining their complete buy-in and support.

The Performance Report should include non-financial as well as financial results. Thus, everyone is aware of what segments of your operations are meeting performance standards and which are lagging, and it becomes much easier to focus your team’s resources to improve them.

Many private businesses tend to keep most financial information confidential, for understandable reasons. But there should at least be some key performance indicators that you are able to share with your team. These Success factors should include data that the individual employees can impact on a daily basis. You should also stress the importance of keeping private data confidential, as a trusted stakeholder.

By showing your employees you trust them, you have a much better chance of having that trust reciprocated. When workers have a sense of ownership in a business, a feeling that their actions have a direct impact on the collective success, they tend to be happier and more loyal.

Although it’s not possible everywhere, an “open book” style of management is gaining in popularity.

Possible Key Metrics to review:

How well did the company do against plans, such as a budget?
How well did we do compared to previous years?
What internal or external factors influenced our financial performance?
Do we have a motivated workforce?
Were we Innovative enough?
Have we created a pathway to success?
Can we measure Employee Morale?

Here at Sponsel CPA Group, we do this twice a year. We gather everyone together and deliver an annual “Accountability Report” at the start of the year, followed by a six-month update. We lay out our accomplishments and our challenges with equal candor. We list expectations of the team and request the team’s expectation of the leaders of the firm.

By giving your employees a “report card” to measure the entire organization against, they will have the sort of buy-in that is critical at times when they are expected to go above and beyond, often making personal sacrifices in the process.

We find this is especially beneficial for younger employees. As a group, Millennials have a deep desire to feel like they are part of something greater than themselves. They want to know that the company is moving forward in a way that is consistent with their vision of their professional life.

As CPAs, we help a lot of people with their tax returns and end-of-year financial reporting. We know there are business owners who think they’re only accountable to third-party entities — banks, clients, investors, etc. We think these leaders are leaving out the most critical stakeholder to their success!

Business owners shouldn’t leave out their employees. Whether your results for 2016 were good or bad, share as much of that information as you can with your team. Knowing where you’ve been will help you build on your successes for a better 2017. Also, clearly define your vision for 2017 and make sure as the leader you also clearly develop the path to that success!

If you need help generating a report card for your organization, please call Liz Belcher at (317) 613-7846 or email [email protected].

Full-time staff grows again

Sponsel CPA Group is pleased to welcome two new Staff accountants, Lila Casper and Jack Hiatt. Casper, a CPA who is returning to Indiana and has two years of public accounting experience, will work in the Audit and Assurance Services department. Hiatt, a recent graduate of Marian University, joins the Tax Services department. Welcome to the team!

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].

When Great Customer Service Is Not Enough

By Eric Woodruff, CPA
Manager, Audit & Assurance Services

In today’s fast-moving world of instant and universal communications, the old standards for customer service no longer apply. It used to be if you delivered a great product or service on time and at a good price, the client would be happy and pass that information on to others.

Now, with online reviews, social media and the like, people will find something to complain about if the customer experience isn’t positive from top to bottom. And the “long tail” of digital communications means that negative feedback can follow your company around for years.

Take the example of going to a restaurant. They may serve the best food in town. But if they lose your reservation, or make you wait for a long time to get a table or take your order, or the waiter fails to top off your drink, you will probably come out with a negative impression of your visit.

The chef may think she’s doing an outstanding job, because the meals make it to the table with perfection – ignoring the other aspects that make up the totality of the experience. People may have come for the food, but they didn’t just come to eat! The “complete experience” is what matters and will be measured in the consumer assessment.

This applies to every other kind of business, too. We should look at all the different aspects of customer service upon a continuum. Just because you’re exceling at the primary mission doesn’t mean the “little stuff” can be let slide. Businesses need to make sure they are focusing on delivering a superior overall experience, from the first point of meeting to the wrap-up.

For instance, as a CPA firm we may do terrific work on a tax return, saving the client thousands of dollars. But if the return is delivered late, or our staff isn’t responsive to questions (via email or phone) and concerns or the attitude expressed by staff is less than enthusiastic and helpful, the good part of the engagement will be diluted by the negative.

A business owner or manager keeps a big picture on customer service to make sure their team is always striving for total satisfaction. Some even hire “secret shoppers” to perform a transaction with their company and then report back in detail.

This mindset should filter down to every level of your operation, from how a receptionist answers the phone to how attentive employees are to the client’s needs and desires. Is your team consistently hitting deadlines? Do they deliver exactly what was promised – or more? Is the quality of every single deliverable or meeting exceeding expectations? Does your team return phone calls or emails in a timely manner? Is your staff positive and enthusiastic when interacting with your customers? Is your staff helpful?

You may think you’re already delivering great customer service, but the truth is there might be pieces missing to the puzzle that keep you from reaching full satisfaction for your clients.

Do you encourage your customers to give you the owner/manager “honest” feedback – good or bad?

Do you give your customer a demonstrative “freebie” if you deliver less than a desirable experience? Let your customer know you care. Do you thank them for their feedback? A quick email or phone call can be significant!

Everything you need can be summed up with this question: Do you make it easy for your customers to do business with you?

Ask them this question yourself, and you may be surprised to find that there are ways to improve their total customer experience that you didn’t even know were lacking.

If you need on advice on how to deliver next-level satisfaction to your customers, please call Eric Woodruff at (317) 613-7850 or email [email protected].

CEO, Where Is Your Time Best Spent?

By Tom Sponsel, CPA/ABV, CFF
Managing Partner

(Part 1 of 2)

When you’re the leader of an organization, one of the most important daily struggles is to determine where to spend your time. As a CEO (or whatever title you hold), it’s your duty to take a broad view of the company, recognize untapped opportunities and create the strategy that leads to greater success and prosperity.

Too often we fall into the trap of working “in” the business instead of “on” the business.

This is especially true of small- and medium-sized organizations, where the operations may require more direct oversight by the top leader. Sometimes this sort of personal intervention is necessary to make sure the “trains run on time” — keeping customers happy, making sure employees are motivated and on-task, products and services are being delivered on time, etc.

But if you’re the sort of CEO who wants the business to grow and evolve beyond where it is today, you should set aside time on a regular basis to take a step back and look at the bigger picture. Preferably at least once a week, reserve a portion of your schedule to assessing your processes and systems. Are they working the best they can?

It’s a matter of being a proactive leader instead of a reactive one. A reactive leader soon finds themselves constantly responding to crises large and small. Their days are so filled with responding to critical situations that there’s never any time to plan and strategize so these sorts of emergencies can be avoided in the first place. You become a CEO that focuses more on fixing the past errors, rather planning for your future successes.

A proactive leader devotes time to looking ahead, finding ways to make the company better and more efficient. They recognize weaknesses in their operation that could lead to strife, and endeavors to improve them so the worst scenario doesn’t come to pass.

When you have superior systems in place, most crises can be resolved before they happen, or any damages mitigated after the fact.

When a leader acts in this way, their team members will recognize them as a forward-thinking individual who strives to create a culture of continuous improvement and learning. You’ll find yourself with a stronger, more loyal workforce. Your whole company will be energized to focus on the FUTURE and your success!!

It can be very hard to set aside this time to planning. Most leaders of an organization already put in a lot of hours at the office, so it can seem like a zero-sum game. But if you make that effort to spend even a few hours a week toward analysis and planning, the rewards will come back to you multiplied many times over.

From a time management perspective, think of this not as a cost but as an investment toward a better future.

As a CEO or manager, your primary duty is to focus on creating the most value you can bring to your organization. By coming up with a vision for change and improvement, and working to implement it within your business, you will find this the best time you can spend.

In next month’s article, we’ll talk more about turning your vision into reality.

If you have any questions or comments, please contact Tom Sponsel at (317) 608-6691 or email [email protected].

What makes you different from your best competitor?

By Jason S. Thompson, CPA/ABV, ASA, CFE, CFF
Partner, Director of Valuation and Litigation Services

I have often heard that it’s difficult to see your own weaknesses – especially in an organization of like-minded people. When everyone is committed to a common set of goals, there’s a tendency to overestimate strengths and downplay – or even ignore – weaknesses.

If you want your company to improve in what it’s doing, take a look at the blind spots. One mechanism to do this is to ask yourself what makes your organization different from your closest competitor.

As a business owner, you may constantly compare your business to other organizations in the marketplace, though usually from the perspective of: who’s landing the top clients, who attracts the top talent or who’s got the most revenue, etc.

Drilling down on this comparison a little deeper may shed some light on what makes your company different. As a business owner, it shouldn’t be difficult to identify your biggest rival (closest competitor). Next, make a list of the differences between your company and theirs. Ask questions like:

What do they do better than us?
What do we do better than them?
Why/how are they adding customers?
Why/how do their costs compare to ours?
Do they have a market niche we don’t?

This exercise can be humbling if your competitor is a larger entity with access to a broader range of resources. If this is the case, you are the small fish and they are the big fish, asking these sorts of comparative questions can help you identify opportunities you might not have previously explored. Keep in mind, a smaller enterprise is often more nimble, entrepreneurial and closer to customer relationships than large companies.

As you identify your differences, don’t be afraid to emulate the things your competitor does well. In areas they are weak, consider ways to develop your team’s expertise and offerings and fill that gap or be the “better” option!

Ego can sometimes get in the way of an exercise like this. It’s healthy to take pride in your business’s capabilities and accomplishments. Just don’t let ego get in the way of improvement.

Challenge everyone in your office, especially younger team members. Make sure their 30 -second elevator speech emphasizes how your company stands out in the crowd. Simple things like a consistent message go a long way toward building perception.

Weaknesses within your business may be difficult to see, but if you ask the right kinds of questions and make the difficult comparisons, you’ll soon recognize weaknesses as opportunities to improve. Then maybe one day in the future, your company is the standard others compare themselves to.

It is OK to be a “secret admirer” of your competition. Use that admiration to make your company BETTER!!!

If you have questions or comments, contact Jason Thompson at (317) 608-6694 or [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.

Year End Planning for Section 179 and Bonus Depreciation Deductions

By Josie Dillon, CPA
Manager, Tax Services

The Protecting Americans from Tax Hikes Act (PATH) of last year retroactively extended tax year 2015 provisions that had expired. Today we’d like to talk about how that relates to Section 179 tax deductions and bonus depreciation, including ways the state of Indiana does not conform with PATH.

The Section 179 deduction largely affects small- to medium-sized businesses by allowing them to take immediate deductions on the purchase of equipment and software. After PATH the deduction is permanently set at $500,000. Companies that exceed a total of $2 million in qualifying purchases will have the Section 179 deduction phased out dollar-for-dollar until their purchases hit $2.5 million, at which point the deduction will be totally eliminated. Starting in 2016, the phase-out limitation is indexed for inflation.

Section 179 deductions can be taken within the same tax year as purchase, otherwise known as an immediate deduction, as opposed to other types of business deductions that are capitalized through depreciation over a number of years.

Qualifying property must be “tangible personal” property, so real estate does not qualify, nor does intangible property such as copyrights or patents. Qualified real property will see the $250,000 cap eliminated in 2016.

To take advantage of the Section 179 deduction for the 2016 tax year, equipment and software must be purchased and placed in service before the end of the year. So if your organization is considering any needs for equipment or software, it may be wise to act soon.

Another notable change for 2016 is that air conditioning and heating units placed in service this year are now eligible for Section 179 expensing.

Bonus depreciation has been extended until 2019 through PATH, including 50 percent bonus depreciation for certain “New” property placed in service in 2016 and 2017. This phases down to 40% in 2018 and 30% in 2019.

To qualify for bonus depreciation, the property must be (1) tangible depreciable property with a recovery period of 20 years or less; (2) water utility property; (3) computer software; (4) qualified leasehold improvement property.

In March 2016 Indiana Gov. Mike Pence signed Public Law 204-2016, which updates the state’s conformity date of the Internal Revenue Code to January 1, 2016. As a result, Indiana differs in some ways with federal deductions extended by PATH.

On Section 179, Indiana has an expensing limitation of $25,000 and a phase-out limitation of $2 million. Federal 179 deductions taken in excess of $25,000 must be added back to the Indiana return.

Indiana does not recognize bonus depreciation; therefore, the federal deduction taken for bonus depreciation must be added back to the Indiana return.

Other states besides Indiana may or may not conform to the federal PATH provisions. We would be happy to consult with you on details for other state filings.

If we can assist you with any tax-related issue, please contact Josie Dillon at (317) 613-7841 or email [email protected].

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].

Choosing the Right IRA for You

By Lindsey Anderson, CPA
Manager, Tax Services Group

If your employer does not offer a 401k program – or even if they do — IRAs are a common recourse for retirement savings. Once upon a time there was only one type available, but with the proliferation of IRA plans there are now several to choose from, each with their own set of advantages and drawbacks.

These include “traditional” IRAs, Roth IRAs, SEP-IRAs and SIMPLE IRAs. Some of these plans have similar features, but others have unique qualities. All of them can help your family put aside significant savings for retirement on a tax-favored basis.

Here’s what you need to know in choosing the IRA plan that’s right for you.

Traditional IRA

Traditional IRA’s can be funded with deductible and nondeductible contributions.

Deductible IRA Contributions — You can make an annual tax-deductible contribution to an IRA if you (and your spouse) are not an active participant in an employer-sponsored retirement plan, or if you are in an employer-sponsored plan under a certain level of income (which varies from year to year). You can contribute up to $5,500 a year in 2016 (plus an additional $1,000 if over age 50). You can also contribute to an IRA for a non-working spouse.

Traditional IRA contributions reduce your current tax bill, and investment earnings within the IRA are tax-deferred.

However, withdrawals prior to retirement are subject to full taxation, plus a 10% penalty before age 59½ (unless one of the several exceptions apply). Additionally, you must start making mandatory minimal withdrawals by age 70½, or the amount not withdrawn is taxed at 50%.

Nondeductible IRA Contributions – You can make annual nondeductible IRA contributions without regard to your coverage by an employer plan and without regard to your AGI. The earnings in a nondeductible IRA are tax-deferred within the IRA, but are taxed on distribution (and subject to a 10% penalty if you withdraw money before age 59 ½, unless one of the several exceptions apply).

Roth IRA

Roth IRAs differ in that contributions are taxed up front. Annual contributions to a Roth can be made up to the same amount that would be allowed to a traditional IRA, less the amount you contribute that year to non-Roth IRAs. You can only contribute to a Roth if your adjusted gross income doesn’t exceed certainly levels that vary by filing status.

Earnings within the IRA are tax-deferred just like a traditional IRA, but are tax-free if paid out after five years from when you first made a contribution, and upon reaching age 59½. (If both of the conditions are not met, taxes and penalties may result unless an exception applies.)

One notable benefit of a Roth IRA is that you can continue to make contributions after age 70½, and do not have to take minimum distributions as with a traditional IRA. This makes a Roth IRA an excellent wealth-building vehicle for your family.

It is possible to convert or “roll over” a traditional IRA into a Roth IRA. In doing so you are choosing to pay taxes on the amount of the investment (excluding any non-deductible IRA contributions) now as opposed to in the future. If you are expecting to have a low income year, it might be the perfect time to do so as you can take advantage of a lower tax rate.

SEP and SIMPLE IRA

Small businesses that want to keep the administrative costs of a retirement plan low may able to set up a simplified employee pension (SEP) or savings incentive match plan for employees (SIMPLE) IRA. Contributions are made to an IRA-type account in the employee’s name.

Annual contributions to these plans are controlled by special rules and aren’t tied to the normal IRA contribution limits. Distributions from a SEP IRA or SIMPLE IRA are subject to tax rules similar to those that apply to deductible IRAs.

If you are self-employed, individuals can contribute as much as 25% of his or her net earnings into an SEP up to $53,000, which is deducted from total income. You have until the due date of your individual income tax return (including extensions) to deposit your SEP contribution

If you need any assistance with choosing the right IRA, please call Lindsey Anderson in our Tax Services department at (317) 608-6699 or email [email protected].

Growth: Do You Walk the Talk?

By Nick Hopkins, CPA, CFP®
Partner, Director of Tax Services

Why is it important to grow your business? As a CEO or other leader in an organization, it’s vital to always focus on growing the operation not only to generate more revenue, but because of the image of success it projects to the marketplace.

“If you’re not growing, you’re dying,” the old saying goes, and there is definitely some truth to that.

Growth indicates vibrancy. It means a business is functioning well — and that’s the sort of business pro-active executives will seek out and want to engage with. The most talented employees want to work where they will have the most opportunities for professional growth and advancement.

As an executive, ask yourself how committed you really are to fostering growth. Many give lip service to growth but aren’t willing to take the steps to make it happen.

In other words, do you walk the talk?

Your best chance for growing the size and reach of your company is by growing the talents, resources and capabilities of your team. This could be opening up another line of service. Maybe you need to put infrastructure in place, such as an upgraded facility or regimented procedures. Or continuing education so your employees stay on the leading edge of your industry.

Ask your customers what services or products they could use that you’re not currently providing. Then assess what steps you will need to take to bring that to fruition.

Growth can be intimidating because it necessarily involves risk. Most entrepreneurs are by nature risk-takers. But sometimes they worry about new ventures because they don’t want to endanger the status quo of the business they’ve already built.

Often when a company is in its early stages, the business owner is handling operations, sales, marketing, etc. all by themselves. In order for significant growth to happen, at some point it will become necessary to bring in department managers with different skillsets and delegate those roles.

It’s about being willing to react, to change and build upon what you’ve done in the past to reach that next level.

While you’re bringing in new talent, don’t neglect to expand your own skills. A superior executive should always be trying new things, and encouraging others to do so. Innovation is critical to your long term success.

If yours is a family-owned business, growth will often lie in the hands of the next generation. That’s why it’s important to get them engaged as early as possible, and to give them as diverse a set of experiences in the workplace as possible. They may start off as a teenager sweeping floors and cleaning bathrooms. Then steadily expand their responsibilities as they become more capable and confident.

There is such a thing as good growth and bad growth. Turning a medium-sized, highly profitable enterprise into a larger one that loses money hand over fist is certainly not a step up! So when you think about growth, don’t focus on the size or scope you want to attain, but on generating new revenue through improved or expanded services and products.

Sometimes your short-term profitability will have to take a hit while you emphasize long-term growth. Think of it not as an operating expense but an investment in a future filled with growth and opportunity.

If you commit yourself to being a forward-thinking executive who is always on the lookout for ways to make your business bigger and better, you will be perceived as a thought leader within your industry and then the reality of success will follow.

Need advice on how to grow your business? Please call Nick Hopkins at (317) 608-6695 or email [email protected].

Questions to Ask When Beginning College Planning

By Ryan Hodell
Staff, Tax Services

It’s no secret that the cost of a college education continues to skyrocket, with no ceiling in sight. According to the College Board, the average cost of tuition and fees for the 2015-2016 school year was $32,405 at private colleges and $9,410 at public colleges.

As a result, millions of young people are starting their professional lives with tens of thousands of dollars in student debt, which hampers their ability to pursue independence and fulfillment.

If your family is starting the process of saving for college, it can seem very daunting. Here are three questions you need to ask that will help you start down the road of planning for college.

Where are you today?

You can’t know where you’re going, or how to get there, until you know where you are now. Take a comprehensive view of your family’s financial situation and create a balance sheet to help you better understand it.

Begin by calculating your net worth, which is Assets (cash, property, investment accounts, retirement accounts, etc.) minus Debt (mortgage, loans, credit cards, taxes owned, contract obligations, etc.). This is your starting point.

Where do you want to go?

The next step is to envision a goal, and forecast how much it will cost. This can obviously be a challenging task. If you’re starting as early as possible, your kids probably won’t know what school they want to attend, or if they will be accepted. You also must factor in inflation and the expanding cost of college. But you can at least start setting rough goals.

You may want to have a high-end institution goal and a low-end institution goal. Your child may opt for an in-state public university where costs are lower, or earn an athletic or academic scholarship to a private university. But it’s better to aim too high than too low.

Where do I save the money?

529 Plans are a very popular avenue for college saving today and have several attractive benefits. For starters, earnings in a 529 plan grow tax-free and will not be taxed if the money is taken out to pay for qualified college expenses. In addition, the Indiana College Choice Savings Plan provides a 20% state tax credit (up to annual contributions of $5,000) against the taxpayer’s Indiana adjusted gross income tax liability for the year.

You can use 529 plans for part of the cost of education and use other tools for additional savings to maximize your tax and interest benefits. And 529 plans don’t have much impact on your child’s ability to qualify for financial aid under the Free Application for Federal Student Aid (FAFSA).

Remember, if you have younger kids, 529 Plans can roll over to them without tax implications if you don’t use all the funds saved in an older child’s account.

Another option is a Coverdell Education Savings Account, or ESA. These are treated more as a contribution to the child as opposed to 529s, which are considered as assets of the parents. So ESAs have more of a negative effect on the student’s ability to qualify for student aid.

ESA accounts can only be opened if your adjusted gross income is less than $220,000 if filing jointly, or $110,000 if single. Total contributions cannot exceed $2,000 a year, and contributions grow tax-free until distributed. Distributions from an ESA are tax-free if used for qualified education expenses.

There are different tax implications for college savings plans at the state and federal level, so it pays to do your research and obtain good advice.

Saving for a child’s college education is a major financial commitment. It’s never too early to start, and how you invest your money can have a huge impact on the amount of student loan debt they will carry as they begin their professional and personal journey.

If you’re starting your plan to save for college and need counsel, call Ryan Hodell at (317) 613-4868 or email [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.”

Why Vacations Are Important: Rest, Renewal and Reward

By Nick Hopkins, CPA, CFP®
Partner, Director of Tax Services

Now that the kids are back in school and summer is winding down, hopefully you and your family have already found some time for a vacation. Unfortunately, many people haven’t. In fact, surveys show that many workers feel afraid to take all of their allotted time off, fearing they’ll be seen as giving less than a full effort.

Even when they do take vacations, people take their laptops and smartphones with them to work remotely or check in. In this age of connectivity, people are often unwilling to “unplug.”

This is a mistake. Not only do workers deserve vacations, their supervisors should encourage them to take them – for the good of the employees, and the health of the company.

Vacations are more than just time away for the office. The rest, renewal and rewards offered by them are key to keeping people working at their highest potential. When we’re checking our iPhones every 20 seconds or emailing with colleagues, it creates an information overload that doesn’t allow us to recharge our batteries and reflect on important goals and plans.

This is especially true with business executives, many of whom work 55 to 65 hours a week or more. Over a long period of time, physical and mental health wear down. People return from vacations with a refreshed mind and body.

Vacations also allow us to step back from the daily grind of the workplace and think about the broader picture. Take the time to reflect on the things that are really important in life. Ask the big questions: Am I living the life I want? Am I treating my family and friends well? Is my attitude in the office a positive one? Do I encourage others? What do I need to change to become a better spouse, parent, partner and manager?

I like to bring a book or two with me on vacation, generally something inspirational or enjoyable, to help me see things in a new light.

Not working doesn’t mean you can’t think about work. Indeed, some of your best ideas for the business may come when you’re out of the thick of things. Perhaps you realize you haven’t had as much face time with key customers as they deserve. Or an idea for a new product or service line will materialize.

If you’re a leader in your organization, getting away also serves another purpose: allowing you to see how well the company functions in your absence. If you can’t get away for a week or two without the place falling apart, that’s an indication that you haven’t done a very good job of developing the management team. You want the “next person up” to able to take over in the short term with minimal disruption in the operation.

A lot of times, an executive returns from vacation and will be pleasantly surprised by how well things were managed while they were gone. In a family-owned business, this can help you measure how well prepared the next generation is to come on deck and eventually take over.

Even the downside can have an upside. If a glaring problem occurred while you were away, it allows you to see who stepped up and who didn’t in a crisis. This will help you make long-term decisions about your personnel – who needs training, who is ready for a higher level of responsibility, and who needs to be shifted to another role.

My advice to you is to minimize your technology use when you go on vacation. Resist the urge to constantly check email, or return non-urgent phone calls or texts. Spend time with your family, refresh yourself and step back for a well-deserved breather.

If you do this regularly, and insist that your employees do so as well, you will find that your team has the high energy and morale necessary to take your organization to the next level of success.

Call Nick Hopkins at (317) 608-6695 or email [email protected].

Do You Really Aspire to Be Just Average?

By Mike Bedel, CPA, MBA, CGMA
Partner, Director of Audit & Assurance Services

Almost every profession in which people operate today is very competitive. Organizations compete against one another on customers, talent, pricing, service, product quality, innovation and more.

None of these companies aspire to be average. They like to believe they excel, even when the data might prove otherwise!

There are many ways to measure your organization against others. Statistics can look at peer to peer, against the industry, with companies of similar size or that share the same geography. There are metrics for revenue, number of employees and so on.

But the stark truth is, many businesses are on track for mediocrity – because they haven’t taken the steps to be truly excellent.

To be above average, leaders need to create an environment where people crave success – for themselves, for the entire team and especially for the customers you serve. You want to have a company where talented employees want to work.

Take a look at your organization and how it is run, top to bottom. Make a hard assessment of your leadership team and the quality of the product or service you are providing. How much are you investing in continuing professional education? Does your team have a “deep bench”? Are there other people ready to step up in each department if the current manager leaves or falls ill?

One common mistake that can hold a company back is having departments that act like independent silos, with little interaction between each other or with clients. Encourage your customers to interact with different departments, to build relationships and uncover new lines of service you could be providing. Make sure clients are talking to more than just the department heads, so if there is a break in the chain of leadership, the next person is ready to link up and continue the mission seamlessly.

Take a look at your processes and procedures. If you find that they are exactly the same as five years ago, things probably need to be updated. “Change for the sake of change” can cause problems, but failing to keep step with changes in the way you operate poses even more of a threat.

Analyze your technology, your computer infrastructure and IT function. To keep ahead of the curve, consider upgrading your hardware and software frequently, such as every three years. Don’t look at these sort of expenditures as a drain on your bottom line, but investments in the future of the business.

How much to you spend on research and development? Are you investing in new product lines or expanding the set of services you provide? Whatever business you’re in, from an assembly line at a manufacturing plant to professional services, you should always be looking to grow the breadth and depth of what you can offer your customers.

Do you solicit feedback from clients? How much and how often? Many companies do this, but only ask customers if they’re satisfied. Instead, ask them what you aren’t doing right, or areas where they could use assistance that you don’t currently provide. This is the type of feedback that spurs innovation.

If you just want to be an average company, keep doing what you’re doing. Accept “OK” as normal.

But if you truly want to stand out from the crowd, that requires taking risks and trying new things that may or may not work out. In this way you can distinguish yourself from your competitors, for both customers and the talent pool.

If you need strategic advice on how to make your organization truly exceptional, please contact Mike Bedel at (317) 613-7852 or email [email protected].

Client Profile: Outreach, Inc.

Outreach, Inc. is a key civic safety net for Central Indiana teens who are homeless or at risk. Founder and CEO Eric Howard started the non-profit group nearly two decades ago, literally operating out of the trunk of his car. Now Outreach serves nearly 400 homeless young people between the ages of 14-24, has a permanent staff of 15 people plus 96 volunteers.

“We call our volunteers unpaid staff because they are so vital to our success. They are mentors and tutors to our young adults, and also perform administrative duties and data entry,” Howard said.

After operating out of a home on Indianapolis’ Eastside for many years, Outreach recently broke ground on a new facility four blocks away that is almost four times as large as their present space. That has brought expanded ambitions, but also new challenges.

A Christian-centered group, Outreach offers a broad range of services, from meals and a place to shower to counseling and referral to other community resources. They also run a telephone resource line for teens who find themselves in need of their services..

For a number of years now Outreach has turned to Sponsel CPA Group for help. Not only does the firm assist them in meeting all their important filing deadlines and state and federal disclosure requirements, they serve as proactive advisors who bring new ideas and opportunities to the table. This includes streamlining their new service model, launched in June, which promotes health and capacity amongst youth, staff and partners.

“We couldn’t do what we do without Sponsel CPA Group. They not only celebrate our success but want us to thrive. They are partners, and I’m surprised how excited they get about our successes,” Howard said, adding that members of the Sponsel staff attended their groundbreaking and other events.

“This is hard to believe, but our staff loves it when they come to audit. The audit is more than catching mistakes. It’s about helping us become a better steward with the resources entrusted to us.”

Unlike previous accounting firms that seemed more interested in racking up billable hours than lending assistance, the Sponsel team is always ready to help, Howard said. “We are never embarrassed to ask Sponsel CPA Group a question. They know filing deadlines and state and federal requirements are their focus, which frees us up to focus on our business.”

Ransomware: Take Action to Protect Against It

By Chris Edwards
Manager, IT Services

Ransomware has been around for a number of years, but has increasingly become a larger problem, both at home and in the business world. It is a type of malware that installs covertly on a victim’s computer, and then literally takes it hostage: blocking access or functionality until a ransom payment is made to restore it.

McAfee Labs researchers identified 4 million samples of ransomware in the second quarter of 2015 alone, and expects those instances to grow in 2016, according to Security Magazine. One “Trojan” piece of ransomware, CryptoWall, accrued more than $18 million before being taken down by authorities.

The Atlantic even reported on a string of ransomware attacks against police departments in Massachusetts, Tennessee and New Hampshire! They had to pay ransoms between $500 to $750 to have their systems restored. Clearly, ransomware hackers are not lacking in boldness.

Here are the things you need to know, as well as preventative steps you can take, to head off the ransomware threat.

Ransomware comes in two forms. The first is a screen which seems to lock you out of your computer. Most IT and security staff can help you clear this up with some time and effort.

The second form encrypts your files, both on your local computer and your network, and demands a fee for the key to decrypt them. While at times the virus has had errors allowing security professionals to defeat it, that is no longer the case.

In the past, it was advisable to not cooperate; as much as 75% of paying parties never received any further communication or their decryption key. Unfortunately, the FBI now advises that victims pay the ransom.

Most ransomware is transmitted via links or files in email, usually made to look legitimate. It can also be transmitted via pop-ups in a web browser. The key is to get the victim to click on the link, causing the virus to be downloaded where it will install itself.

Once installed, it will immediately begin to encrypt every data file it can access, and does so extremely quickly. It will leave behind numerous files with instructions on how to pay the ransom. While the FBI now advises most victims to pay, there is never any guarantee that payment will result in decryption, and there is no recovering the time lost while systems are restored.

The best defense is to never become infected. Teach your staff and remind them regularly to avoid clicking on links that appear suspicious. If the email isn’t expected or looks like something that person wouldn’t send them, chances are it is illegitimate.

Use a virus scanner to scan email attachments. Most cloud-based spam filtering services will now also scan your email for these links and virus attachments, but their success rate isn’t 100 percent. And just one failure can lock every document and data file you have.

Have your staff use pop-up and ad-blocker software in their web browsers as these viruses have been transmitted this way from popular sites like Yahoo and Forbes. Limit the access your staff has to key files; their computers do the encrypting at the behest of the ransomware, and if people can’t edit the files they can’t inadvertently encrypt them.

Finally, make sure you have a regular backup of all the documents necessary to run your business, and have it tested frequently as well. Keep a copy of these backups off-site, either through a cloud service via the internet or by taking the files physically off-site, such as on a tape backup.

Doing so keeps the backups from being potentially damaged or infected, and also protects you in case of damage from fire or other natural disaster affecting your data’s physical storage devices.

With a regular backup, you can restore the files that were encrypted, avoid paying the ransom, and at worst lose the amount of work between when the backup occurred and the encryption was discovered.

If you need to consult with an expert about protecting your company’s data, please call Chris Edwards at (317) 613-7855 or email [email protected].

The Baby Boomer Challenge: Avoiding the Post-Retirement Blues

By Tom Sponsel, CPA/ABV, CFF
Managing Partner

(Part 4 of 4)

After discussing the financial, planning and psychological impacts of retirement, the Baby Boomer Challenge wraps up today with a talk about the blues – the post-retirement blues.

Ask anyone who has retired recently, and you’ll discover it’s a real phenomenon. This can be especially true for go-go Type A people from the business world, who have invested so much of themselves in their career it has come to define them.

I know of one gentleman retiree whose wife of 40 years sat him down shortly after his transition. I respect that you’re changing, she told him, but that doesn’t mean I am. Don’t try to treat me like an employee you can boss around. Just because we’ll be spending more time together during the weekdays doesn’t mean I want our relationship to change!

Other spouses may feel similarly, or completely the opposite. They key is to “do the dialogue.”

As discussed in the previous article, finding another activity about which you are passionate is a must, whether it’s looking after grandkids, volunteering for a charitable group or something else. Your other activity could be a “second career” that you pursue at your own pace and intensity. Be aware, though, that just as during your working life it’s easy to become overloaded. People realize you have a lot more time on your hands, and soon look to fill it with their own needs and wants.

I know of retired individuals in their 70s who say they’re busier now than they ever were during their “working” careers! Learn the power of gently and politely telling people, “No.”

Whatever you do, avoid the situation where you find yourself sitting at home with nothing to do. A sense of purpose is key to your feelings of self-worth. Before that was probably largely tied up with your business or the company you worked for.

Now it’s time to transition to something new. Seek out activity and engage with other people, and you will discover a fulfilling retirement where the blues stay at bay.

I recently read a book “The NEW Retirementality” by Mitch Anthony which is a comprehensive analysis of what to look for in “Retirement” and how planning requires much more than just a retirement savings account. In fact, in most cases (realizing it is all relevant) the size of your retirement savings account may be the least of your concerns. Retirement is about happiness, and you are the only one who can define that for you and your loved ones.

If you would like advice on your retirement planning, please contact Tom Sponsel at (317) 608-6691 or email [email protected].

Are You a Thought Leader in Your Organization?

By Jason S. Thompson, CPA/ABV, ASA, CFE, CFF
Partner, Director of Valuation and Litigation Services

Do you know what it means to be a “thought leader” within your business or organization? It’s not just someone who acts smart and offers lots of pushy ideas!

A thought leader is a person who shares their knowledge with other members of the team in order to enhance the capabilities of the entire organization. It’s someone who sees learning as an ongoing endeavor rather than something you do when you’re young to land your first job.

When someone behaves in this manner on a consistent basis over a long time, eventually others will seek them out for their knowledge and advice. So if you’re a manger or executive in your organization – or seek to become one – you should strive to be in a position where people recognize you as a thought leader.

Everyone who’s been around awhile gains knowledge, even if it’s just a basic sense of do’s and don’ts. But a thought leader seeks out information. They read about current events and devour industry-related publications and websites – such as Financial News, Wall Street Journal, Fortune magazine, etc. They read business related literature on a regular basis as they can provide informed discussions on new trends in business and government policies.

Thought leaders grasp that learning is not just about going to training: it’s also the things you do on your own to expand your base of knowledge and improve your power of positive thinking. Doing this also allows you to be a better performer in whatever path you choose in life.

For example, as a CPA I am often asked about the current state of the financial markets or who would be the best political candidate for local, state or federal office, and why. Instead of just giving a reflexive opinion, this is an opportunity to educate the questioner using the perspective you’ve gained over the years related to critical economic success factors – local, state, and national.

Thought leaders can be both young and old – certainly when it comes to emerging technology and digital communication, the novice can educate the old-timer these days!

But as a general rule of thumb, thought leaders tend to be people who’ve plied their trade for 10, 20 years or more. Experience breeds valuable insights as to what long-term success looks like. Sometimes the wise person will forego short-term success for the benefit of a long term permanent solution. In this age of instant gratification, this may appear to be a novel strategy.

Because they’ve been around the block a few times, their knowledge goes beyond theory to real-life successes and failures. Veterans know what works and what doesn’t. When it comes to becoming a thought leader, there really is no replacement for experience.

Sometimes people gain a great deal of information and experience during their tenure within an organization, but keep it to themselves. Often they think they are guarding their own position, or improving their chances at promotion by keeping a few “aces up their sleeves.”

While it’s possible hoarding knowledge can help an individual’s prospects in the short run, over the long term this type of practice is harmful to the health of the entire organization. Executives would be wise to instead promote a culture that rewards sharing and support between colleagues.

Thought leaders thrive in an environment where nurturing other people is standard practice. Servant leadership is the overriding principle. If you create dialogues with other people and freely offer them the benefit of your counsel and experience, soon people will seek out your knowledge.

You should seek to be an inspirational leader who drives others to thirst for the knowledge of experience and desire to learn more. This will lead to a stronger, more informed organization that operates in a productive manner to achieve success.

Seek out knowledge, and share it, and you will have enhanced your own professional status as well as your company’s future prospects.

If you have questions or comments, contact Jason Thompson at (317) 608-6694 or [email protected].

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: Psychological Reality

By Tom Sponsel, CPA/ABV, CFF
Managing Partner

(Part 3 of 4)

In the first two articles in The Baby Boomer Challenge, we discussed planning for retirement and the financial aspects of preparing for a post-work life. Now it’s time to talk about the psychological impact of stepping away from your career.

This can be a touchy subject, especially for business owners and managers. They are by nature can-do people, the type who focus on achieving their goals rather self-analysis of their own motivations. Having attained so much professional success, they are therefore less prepared to transition to a life that is not defined by their career.

After assisting countless people through succession planning and retirement, I can speak from authority in saying that many of them experience a loss of self-worth. They are so used to being in the thick of things that having the daily pressures of the workplace suddenly removed can feel abrupt and even traumatic.

At its most basic level, there is an adjustment to not physically going into the office every day. Recently retired people will say they don’t know what to do with themselves. There’s only so many times you can walk the dog around the block or play golf. That simple day-to-day routine of getting up and going to work gives people structure that makes them feel valued.

Another loss occurs when there is no longer a continuous stream of people seeking you out for advice and counsel. A person in a senior position can take great satisfaction from having their expertise utilized by others for the benefit of the organization. When that stops, they feel their skills and experience are no longer relevant and accordingly they believe they personally are no longer relevant!

This can translate to a sense of “losing” their professional status, which also means a hit to their self-worth. People want to know they still have something to contribute.

One can fill these gaps through exercise, hobbies, travel, watching over the grandkids and other activities. And there’s volunteerism, which is a terrific way for retirees to feel connected and appreciated.

I have seen many business executives go into the not-for-profit area, either as a part-time volunteer or a full-time position, and find a whole new identity waiting for them. They gain the socialization of the workplace as well as the utilization of their skillset.

Another option is to keep working but in a limited role. An emeritus position, perhaps a day or two per week, can allow a manager to feel like they are still contributing. A role that focuses on mentoring up-and-coming leaders can be especially satisfying.

This can bring its own set of challenges, of course. I spoke with one former executive who said that, even though he enjoyed coming into the office, it was difficult seeing someone else occupying his old office and leadership role.

He eventually sought professional counseling to get through this phase – something that is not at all unusual. There is no stigma in asking for help, and is something that should be actively encouraged.

By all means, if you’re approaching retirement age and don’t feel like stepping away – don’t! I know of some executives who refuse to even utter the word “retirement” because they fear the unknown. There’s no rule that says you have to retire when you’re 65, or 75, or even 85!

But sooner or later, nearly all of us will be faced with transitioning to a post-working phase of life. Don’t underestimate the emotional aspects of this change. The key is to explore this new terrain with the same gusto that they brought to conquering their professional endeavors.

The key “take-away” of this article is that if you or other loved ones are approaching the “retirement phase,” approach it with honesty and realism. Retirement is different for everyone. I know individuals who are still working into their 80s and are loving it! And others who retired at age 55 and would not change a thing.

In each case their success was determined by a deliberate analysis (along with their spouse) and an intentional plan for a Happy Retirement!

Look for the final installment in this series next month as we discuss transitioning into your post-retirement life.

If you would like assistance with your retirement planning, please contact Tom Sponsel at (317) 608-6691 or email [email protected].

The Baby Boomer Challenge: Financial Aspects

By Nick Hopkins, CPA, CFP®
Partner, Director of Tax Services

(Part 2 of 4)

In the first part of The Baby Boomer Challenge, we talked about the planning and preparation that should come before retirement. We discussed the questions Boomers should be asking themselves, such as when, where and how they want their post-working life to take shape.

Now it’s time to take a closer look at the financial aspects of retirement planning.

For Boomers’ mom and dad, the old rule of thumb for retirement was that they should plan to live on an income equal to 50% to 60% of their working income. This was usually made up by a combination of Social Security benefits, a company pension plan and perhaps some modest investments.

Times have changed, and those metrics have transformed with them. Fixed pension plans have mostly gone away. The long-term liquidity of Social Security is questionable. Half of your previous income may not fund the lifestyle you desire. So your road map for saving and investing for retirement needs to keep up with reality.

First, analyze what your Social Security benefit would be depending on the age you retire. Look at your 401k or other retirement accounts, and any other investments you have. Sit down with a trusted financial advisor to determine what sort of income these assets will generate during retirement.

Now that you have an estimate of what’s going to be coming in, it’s time to look at the “going out.” As discussed in the last article, you should firm up your idea of how you want to live in retirement. It may include travel, a second home near family or things on your “bucket list.” Some of these things may represent a significant cost, while others are financially nominal.

Finished visualizing? OK, now it’s time to put a dollar amount on all that. Develop a household budget, based on what you’re currently spending and an estimate of what it will be post-retirement.

Make sure to include things like insurance and medical costs in this phase. Healthcare is often one of the biggest expenses as we grow older. Consider getting Medicare supplement insurance or fund a health savings account prior to retirement. Life insurance past a certain age becomes an issue of rising cost versus return. Again, talk to the experts you know and trust.

Now comes the daunting part: seeing how your estimate of income and expenses square up with each other.

Many people who do this exercise immediately recognize a significant shortfall. That’s why it’s important to do planning early on, so you can take action ahead of time.

If you’re still paying off a large mortgage or have a heavy load of credit card debt, that can siphon off a lot of discretionary income during retirement. Initiate a plan — be it for 5, 10 years or more — to eliminate or significantly lower your debt obligations.

Doing this will help crystalize your thinking, and see where your plan may need altering. Perhaps you’ll have to work a year or two longer than expected, or consider part-time work to make up the difference. You might even have to face the prospect that your retirement dreams were a little too “pie in the sky,” and require scaling back.

The point is to start this process as early as possible so you can give yourself choices ahead of time. You don’t want to wait until you’ve filed your retirement paperwork to realize you don’t have the financial security to walk out the door.

The good news is people are living longer and longer. If you’re 65 years old and in good health, it’s not unreasonable to expect to live another 15 or 20 years enjoying life after years of hard work. But the bounty of longevity also means you need to be proactive in putting your financial house in order before retirement.

In next month’s article, we’ll talk about coping with the psychological reality of stepping away from the workplace.

If you to talk to an expert about your financial portfolio in preparation for retirement, please call Nick Hopkins at (317) 608-6695 or email [email protected].

Are You a Super Boss? Do You Want to Be?

By Mike Bedel, CPA, MBA, CGMA
Partner, Director of Audit & Assurance Services

Whole books and college courses have centered on the subject of what makes a GOOD LEADER. But in a business setting, you can usually identify the best bosses by looking at the people surrounding them.

A “Super Boss” aspires not just to lead the people they manage, but serve them—make them better. They seek out, hire and promote those who have an aspiration to learn more, to contribute more and to add more value to the organization. In this way, the entire triangle – manager, employee and company – obtain mutual benefit that also makes them each stronger. The whole becomes better than the sum of its parts!!!

Some people who are perceived as strong leaders do so by surrounding themselves with “yes people” or those less gifted than themselves. A Super Boss seeks out people who are smarter than they are. Then, they foster employee development so they get even better.

This falls very much in line with the model of the “servant leader” who tries to help everyone they come in contact within the organization to get what they want by helping others obtain what they want! This notion is altruistic, but there is also personal benefit in that people will naturally want to return the favor and help you get what you want.

Obviously, we won’t all get everything we want, all the time!

But the idea is that by propelling people to do better and act smarter, it will go a long way to developing a company culture that values continuous learning, experimentation and research into making the business better. This can take virtually any form, from developing a process or procedure to make or deliver something more efficiently or that helps client succeed in their own endeavors, or exceeding customer’s expectations.in an unbelievable manner.

This starts with hiring the best and brightest, something every good boss tries to do. Then take the next step and give them the maximum amount of autonomy possible within the work environment. Set limits, but encourage them to take risks — and be prepared to accept failures.

The best thing a Super Boss can do when an employee fails is to show them where they went wrong, then tell them to pick themselves up and go at it again. Simply punishing failure only teaches employees not to try new things, which means they’re not trying their best.

A poor leader often resembles a dictator, in which every decision must go through them, large or small. They take credit for everything that’s going right, and offer only blame to subordinates when things go wrong. They may wield power, but no one who works for them will feel inspired.

Creativity and dynamic thinking can only flourish in an environment where people feel nourished and empowered. And that is how they will continue to grow, professionally and personally.

Do you want to be a Super Boss? If so, strive to be humble and embolden your employees to try things — and to sometimes fail at them. Share the accolades when they come.

Most of all, understand that creating a very powerful talent pool within the organization is the most fundamental ingredient to taking your enterprise to unimaginable new levels.

Please contact Mike Bedel at (317) 613-7852 or email [email protected].

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].

Estate Planning: Is It Really Necessary?

By Nick Hopkins, CPA, CFP®
Partner, Director of Tax Services

Changes in Estate Tax law at the Federal level and the elimination of inheritance taxes in Indiana have significantly increased the threshold at which “death” taxes are incurred. A few years ago Congress amended the IRS code so no estate tax is due on estates with a value under $5.45 million (2016 amount) for individuals, or $10.9 million (2016 amount) for married couples. And the Indiana Legislature completely eliminated state inheritance tax.

This was good news for critics of estate taxes, which they have dubbed “the death tax,” since it incurs when there is a death in the family. Now, more accumulated wealth can be passed down from generation to generation without the state or federal government claiming a large slice of the pie.

One downside, however, is that it has led people to believe it’s no longer as necessary to plan their financial future as it once was. But experts agree that estate planning is still critical if you want to ensure the accumulated assets you worked so hard to acquire are distributed according to your wishes after you’re gone.

We recommend that you have a professional review of your estate plan every two to three years, by both your trusted financial advisors and an attorney who specializes in estate, elder care and family planning matters. Circumstances do change over time, and your plan must reflect those changes.

Factors to be considered include the role of a trust, the appointment of a trustee and any designated successor trustees, the guardianship of any minor children and philanthropic wishes. If you don’t already have an estate plan in place, it’s never too early to start thinking about the choices you want to make.

If you have a plan in place, but haven’t revisited it in a while, you may find that some of your previous decisions have been superseded by developments since you originally established your plan. A designated trustee may no longer be your preferred choice. Or a favorite charity has been beset by internal turmoil. Meanwhile, another nonprofit organization may have a higher priority of need.

Change is the natural progression in any family: minor children grow up to be adults, adults get married, divorced, remarried or remain single, have children of their own or choose to remain childless. This may spur a reordering of your beneficiaries, such as including grandchildren who hadn’t been born when the estate plan was first created or grandchildren that come along with the second marriage of a son or daughter.

Every family dynamic is different, so your estate plan should evolve as the people you love change and adapt.

As CPAs we know that the road is littered with individuals who didn’t properly plan their estate. It can be heartbreaking to watch a family’s harmony damaged due to the administration of a poorly planned estate. This sort of discord can often be avoided through proper planning and communication.

When you’ve worked so hard all your life and succeeded in accumulating even a modest amount of wealth, it’s difficult to think about upsetting people you love after you’re gone due to estate planning that doesn’t reflect your wishes at the time of your passing. The legacy of most parents is that family harmony persists and survives their lifetime.

In addition to beneficiaries, estate planning should also include preparation for healthcare challenges that an individual may encounter during their life. When talking to your advisors, make sure to discuss tools like a living will, a designated healthcare representative, and a power of attorney. Know who you want to speak on your behalf in case you are injured or ill and are not able to do so yourself.

While you’re thinking about these issues, you may want to consider including your loved ones in the discussion. We know these may be painful conversations to have, but it’s much preferable than having your family face internal strife after you’re gone or incapacitated.

A lot of people will not have a taxable estate due to the higher limits, but it’s still important to have an estate plan in place, and update it as needed. It’s comforting to know your wealth will be preserved and distributed in the manner you want (rather than by government edict) so that your legacy carries on based on your preferred wishes.

If you need advice on estate planning or any other personal financial issue, please call Nick Hopkins, Director of our Tax Services at (317) 608-6695 or email [email protected].

Do I Want My Business to Become a Family Business?

By Tom Sponsel, CPA/ABV, CFF
Managing Partner

First generation business owners are by their nature “can-do” people who focus like a laser on establishing and growing their company. Often they came up with a new idea for a product or service that beats the marketplace. They bootstrapped through the lean early years, and after much hard work and perseverance reach a level of success they are comfortable with.

By the time they’re in their middle-age years, business owners may have children of their own, perhaps already in high school or even college. But because they’re so involved in the day-to-day management of the company, they have never really asked the question: Do I want my business to become a family business?

It is possible they have just assumed their children will want to carry on the leadership of the company after they retire. Or the kids have expressed interest in other fields and endeavors, so they believe they don’t want to take over someday. Either assumption can be wrong, so the solution is: ask the question!

Have a purposeful and deliberate talk with your children at an early age – while they’re in college, or even still in their teens. You may be surprised how much thought your child has already given to an issue that has largely gone unspoken.

Talk about how they see their future, what they want to study, the things they want to accomplish. Ask the forthright question: Do you see yourself having a role with the company? Is it something they’d like to at least explore before they decide on another path?

If there is an interest, set up a specific strategy to give them a role in the business, prepare for the possibility of passing on the mantle of leadership someday. Give them a well-defined role with set duties and responsibilities, and see how they respond in the workplace. Set a defined timeline to get together and review their progress.

Ask them how they like the work. Tell them to give you an honest answer. One of the hardest questions a parent can ask a son or daughter is if they genuinely enjoy working in the same enterprise as Mom or Dad. Kids are naturally reluctant to tell their parents if their life’s work may appear as “boring” to the younger generation. Inquire as to their personal vision for their chosen vocation – what attributes are most important to them.

Taking over an enterprise should be the child’s personal choice, not an obligation they come to resent. So think about bringing in a trusted advisor to facilitate the discussion in analyzing the possibilities.

If after some time, the children do express a desire to eventually run the company, come up with a plan to guide them into a leadership role. Set a desired timeline for them moving up the chain and transitioning the levers of power. As problems or conflicts arrive, deal with them head-on through communication.

Look at this as a sequence of phases of additional responsibilities, well defined and understood up front.

One piece of advice: During the workday, try to treat each other as respected co-workers rather than parent and child. This will help them grow in their professional capacities by requiring them to meet the obligations you would expect of any other employee. It’s highly advisable for their direct supervisor to be someone other than yourself.

And their regard among other employees will swell as they realize the child is not being coddled as the “boss’ kid.” It will already be self-evident to your workforce since you probably share the same last name!

The opposite goes for nights and weekends: When you’re off the clock, be a family and enjoy your leisure time together. Leave the shop talk at work.

But first, start the conversation with your kids. I have personally seen the anguish that can occur when parent and child make erroneous assumptions about what the other wants. Such as a successful businessman with a daughter whom he thought wanted nothing to do with the company he built.

When he sold the business, he learned the hard way she had been waiting for him to approach her about joining him — while he made other plans because she hadn’t directly expressed an interest. As she so succinctly, sweetly stated, “But Dad, you never asked me!”

Whether your kids choose to follow in your footsteps or find their own path in life, talk to them early so you can each set the right direction for a successful and happy journey — not only for your business, but also for your family relationships.

If you would like assistance in considering passing on a family business, please contact Tom Sponsel at (317) 608-6691 or email [email protected].

Is Your Company Strategically Organized?

By Eric Woodruff, CPA
Manager, Audit & Assurance Services

Your company is constantly changing and evolving, whether you are aware of it or not. The question is, are you adapting how your team is organized from a strategic standpoint?

Most businesses run on a day-to-day basis with roles and responsibilities that are changing over time – or just happen by accident. Often the owner or owners take on particular spheres of responsibility simply because it’s what they’re good at or enjoy doing. But is that really the best use of their skills and talents to further the company’s progress?

You need to ask questions like what are the primary revenue drivers for the business, who is responsible for regular operations, who oversees strategic planning and vision, and who are the employees with the most significant roles to play. This means taking the time to analyze your company to see if it’s organized in a strategic fashion that aligns with your ability to deliver on your overall goals.

The first step is obvious: do you even have an org chart? If not, now is the time to lay one out and see if it makes sense. In some cases, a specific role or title does not even represent what that person is actually responsible for on a day-to-day basis.

Look at all of your key managers and see if their areas of responsibility are a good match with their specific background and discipline – sales, engineering, manufacturing, marketing, etc. Quite often as the workplace duties evolve and people leave, you’ll find that you have someone overseeing a department for which they have little experience or passion.

Those “temporary” fixes have a way of enduring, and eventually you’ll discover parts of your operation are sagging. For example, sales and marketing are two areas that often are believed to be synonymous, but the disciplines are quite different in practice and require different skills to be successful.

Next, look further down the hierarchy and ask if every employee understands their own role in the organization, no matter how minor. It’s critical to any company’s success that everyone grasps how their role and duties contribute to the overall mission. Every team member is a link in the chain to delivering a quality product or service to customers.

At Sponsel CPA Group, we advise our clients to take a fresh look at their organization every two years or so and ask, “Is this how I want my company to run?” Just that simple question can open up all sorts of areas for analysis.

It’s more than just a matter of having ‘the right people on the bus,’ but making sure the right people are performing the appropriate role for their skills within the company.

You may well find that you have the right people serving in the wrong role. Or that the staff is “skill bankrupt” – no one has the proper skills in a particular area, so new blood is needed. This can often manifest in a business that is rapidly growing.

Our experience has shown that sometimes you may take a poor performing employee and find that they have been placed in a job they are poorly suited for; but by analyzing their personal skillset, you may find a position that the “non- performer” thrives at and they become a solid contributor in a position better suited for their skillset and talents.

Often people will outgrow a role, but sometimes a role outgrows the person you have in place. This doesn’t necessarily reflect badly on them, but most employees are loathe going to the boss and saying they feel like they’re in over their head.

We all like to think every employee will grow their skillset as the company expands, but often people reach a plateau in a particular area. Change becomes necessary to reach that next level.

Another thing to consider in organizing your team is the employees’ own comfort level and ambitions. By asking the right questions, you may find that one of your best workers is eager to take on new responsibilities – or that the person you’ve been eyeing for a new position likes where they are and the thought of additional duties would be a “de-motivator” to them personally.

Hopefully you have the right vision for your company and a strategic plan on how to get there. Now it’s time to see if you’re organized in the right way to help it come to fruition.

If you need advice on how to organize your operation to maximize efficiency, please call Eric Woodruff at (317) 613-7850 or email [email protected].

Changes Coming for Indiana Property Taxes

By Denise Gates, CPA
Manager, Tax Services

Last year the Indiana Legislature and Gov. Mike Pence made changes to the Indiana laws for personal property taxes. This resulted in some new requirements and opportunities for Hoosier taxpayers. Here’s what you need to know to prepare for the 2016 filing season.

New Assessment Date

Indiana has historically had a March 1^st assessment date for Tangible Personal Property. However, beginning in 2016, the assessment date will change to January 1^st. So for this tax cycle assets will be reported from March 2, 2015 to January 1, 2016. The filing due date remains the same, May 15^th.

Exemption for Businesses with Less than $20,000 in Assets

Beginning in 2016, companies will be exempt from paying personal property tax in an Indiana county in which the company has less than $20,000 of total asset costs. An annual certificate of exemption must be filed with the appropriate Indiana county by May 15, 2016 and will replace the filing requirement of Form 103 and 104. This certificate of exemption is required to be filed annually and also must be notarized. Each county may adopt a local service fee of up to $50 for each taxpayer that files an annual certification with the County Assessor.

Duplicate Filing Requirement Removed for Property Values more than $150,000

Beginning January 1, 2016, taxpayers will no longer be required to file personal property tax forms in duplicate if the assessed value is greater than $150,000. Prior to 2016, if a business had an assessed value greater than $150,000, then the business was required to file Forms 103 and 104 in duplicate with the County Assessor’s office.

Filing Single Returns for Multiple Locations

Taxpayers with personal property in more than one township in the same county must now file a single tax return with the County Assessor and attach a schedule listing (by township) of all the taxpayer’s personal property and its assessed value.

Exemption Applications for Non-Profit Organizations Due April 1^st

Certain nonprofit organizations file Form 136, Application for Property Tax Exemption, to exempt property from taxation. In prior years, this form was due on or before May 15^th, and starting in 2016 must be filed by April 1^st.

Enhanced Abatement on Qualifying Property

Enhanced abatements, sometimes called a super abatement, can now be granted for up to 20 years, up from the previous maximum of 10 years.

If you have any questions about the changes in Indiana personal property taxes, please call Denise Gates at (317) 613-7867 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.

Start 2016 Right with Proper Budgeting

By Mike Bedel, CPA, MBA, CGMA
Partner, Director of Audit & Assurance Services

Hopefully you all have enjoyed a healthy and happy holiday season, and are ready to attack the challenges of the New Year with gusto. If you’re a business owner or manager, you’re busy looking over your numbers for how well the company did in 2015. Now is also the time to set your goals for 2016.

Just as many individuals form New Year’s resolutions to improve something about their personal lives, businesses need a plan in order to improve and reach their goals. For a business this plan usually takes the form of a budget.

Large companies are usually required to do detailed advance planning, but it often doesn’t happen for smaller businesses. Don’t make the mistake of becoming so engrossed in the daily operation of the enterprise that you fail to think further ahead.

The budgeting process is a key way to jump-start your strategic thinking.

At its most basic level, a budget is a simple comparison of the upcoming year to the prior year. If everything goes as planned, then the results should be similar. If you begin with the prior year as the starting point, you can then modify its actual results for things you know will change in the coming year.

One important benefit of budgeting is the potential to predict cash flow patterns for the coming year. By building a balance sheet with a budgeted income statement, a business owner can estimate how cash may be generated and used over the course of the year. This exercise can be very helpful in planning for capital expenditure needs and debt service obligations that should be part of the budget but do not manifest themselves in an income statement. It will also assist in maintaining compliance with bank debt loan covenants or identifying metrics that may require modification.

As you’re taking a hard look at the numbers, this can help open other areas of the operation to examination, such as human resources. If you don’t already have a system in place for performance evaluations, implement one as soon as possible. This can help you ascertain if you have the right people in the right positions.

This should be a collaborative process of constructive criticism, highlighting each employee’s strengths and needed areas of improvement. Set goals for them for 2016 and, wherever possible, tie that to critical metrics in your budget. Help them understand how their role fits into the overall team’s success.

Talk to your most important vendors and clients and ask them to give you feedback on how well you’re doing, where the business relationship needs development and any untouched opportunities. This could help you improve aspects of the operation that you didn’t know were lagging, or open up new possibilities for revenue and growth.

While going through the internal issues, don’t neglect to take a macro view as well. Compare your business’ performance to that of competitors, and against industry averages in the state, region and even nationally. This can help you spot weak areas that aren’t immediately apparent before they become major headaches.

Start 2016 with renewed vigor and dedication to the planning and budgeting process, and you’ll reap the benefits all year long.

If you need help getting your budgeting process into the next gear, please contact Mike Bedel at (317) 613-7852 or email [email protected].

Sharpen Your Saw

By Nick Hopkins
Partner and Director of Tax Services

In Steve Covey’s seminal business book “7 Habits of Highly Effective People,” there is a chapter about “sharpening your saw.” It tells of a lumberjack who is trying to cut down a large tree, and not making much progress because the dull saw is ineffective. Someone suggests to him that 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 business leaders reflect the beliefs of that 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 work-day problems and challenges without ever stopping to evaluate the situation and investigate a possible improved process or procedure.

Remember the definition of insanity: doing the same failed task over and over, but expecting a different result!

As a leader of your enterprise or organization, how much personal improvement time 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, which will only grow more uncertain in the future. We must commit our organization to a strategy of continuous 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 pledge 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 to look back over the past year and see if you can list five or more actions where you attempted a new approach, attended a class or broadened your insights into your company. If you can’t … ask yourself: 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. Invest in YOUR Human Capital! If you do that effectively, the growth in revenue dollars and net income will come naturally.

So, as a leader, whether that be your company, your department or your personal efforts – commit yourself to learning by budgeting for it and planning to make it happen. Don’t procrastinate! Your FUTURE depends on it!!

If you need advice on how to sharpen your company’s saw, please call Nick Hopkins at (317) 608-6695 or email [email protected].

Tangible Property Expensing Threshold Rising

The Internal Revenue Service (IRS) has increased the de minimis safe harbor threshold for deducting certain capital expenditures from $500 to $2,500. This move, which takes effect for tax year 2016, should greatly simplify the paperwork and recordkeeping requirements for small businesses.

This change applies to funds spent to acquire, produce or improve a tangible unit of property (UOP) that would normally qualify as a capital item. It affects businesses that do not maintain an applicable financial statement (AFS). The new, higher threshold applies to any such item substantiated by an invoice.

Before, small businesses would have to spread deductions of these expenditures over a period of years through annual depreciation. Now they can be deducted immediately.

IRS Commissioner John Koskinen stated the change came about as a result of comments from taxpayers and the professional tax community – evidence that your feedback can produce results. “This important step simplifies taxes for small businesses, easing the recordkeeping and paperwork burden on small business owners and their tax preparers,” he said.

The de minimis safe harbor applies to an amount paid during the tax year to acquire or produce a UOP, or acquire a material or supply, only if:

The taxpayer has, at the beginning of the tax year, written accounting procedures treating as an expense for non-tax purposes amounts paid for property (1) costing less than a specified dollar amount; or (2) with an economic useful life of 12 months or less;

The taxpayer treats the amount paid for the property as an expense on its AFS (such as a financial statement required to be filed with the Securities and Exchange Commission, or a certified audited financial statement accompanied by an independent CPA’s report and used for credit or reporting purposes) if it has one – or on its books and records if it does not – in accordance with its accounting procedures; and

If the taxpayer has an AFS, the amount paid for the property does not exceed $5,000 per invoice (or per item as substantiated by the invoice), or if the taxpayer does not have an AFS, does not exceed $500 per invoice (or per item as substantiated by the invoice), or other amount as identified in published IRS guidance.

The change does not affect deductible repair and maintenance costs, which businesses can still claim even if they exceed the $2,500 threshold. For taxpayers with an applicable financial statement, the de minimis or small-dollar threshold remains $5,000.

Follow this link to the IRS website for more details on the change.

If you want an analysis of how these new tangible property expensing thresholds could affect your company, please call Liz Belcher in our Tax Services department at (317) 613-7846 or email [email protected].

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].

7 Actions That Can Trigger Economic Incentives

Our nation’s “economic turnaround” continues to take shape. As many different asset classes continue to grow with talent and capital expenditures, some companies may think that their business is too small, is not growing quickly enough, or is not making a big enough investment to qualify for economic incentives.

Governments are interested in attracting new businesses, retaining existing businesses and discovering new investment opportunities to create jobs, promote economic growth and help maintain an area’s economic vitality and quality of life. Additionally, the resulting economic activity helps maintain governmental tax revenues used to support schools, infrastructure and community resources.

State and local governments will offer incentives to assist business growth in their state or community instead of another. Since state and local incentives are offered separately, many states will offer incentives to businesses that create as few as 10 new jobs over a five-year period. Local authorities can offer incentives with capital expenditures of as little as $1 million.

Incentives are customized according to the needs of each business. They can include tax abatements, payroll tax credits, infrastructure grants, lower interest loans, relocation or training grants, special lease or construction terms and tax refund credits.

Navigating through the maze of potential economic incentives available can be tricky and timing is important.

When should your business explore incentives? Prior to hiring new employees, making capital investment or signing lease/purchase agreements.

Here are KEY ACTIONS that can trigger economic incentives:

Adding Jobs
Buying, Leasing or Building a Facility
Acquisition or Merger
Relocating Operations
Expanding or Downsizing Operations
Purchasing Equipment
Training Initiatives

Our firms can work in conjunction on your behalf with state and local officials to identify, negotiate and procure incentives for your company. We use a proven process to highlight project fact patterns and propose financial-incentive solutions that benefit both corporate goals and public economic development.

The incentive landscape is complex and constantly changing, which is why it is shrewd to have knowledgeable advisors – including attorneys, CPAs, bankers and brokers – on your consulting team.

For more information about how Sponsel CPA Group and McGuire Sponsel can assist you with incentives, please call Nick Hopkins at (317) 608-6695 or email [email protected]; or call Doug Dalton at (317) 296-6446 or email [email protected].

New Healthcare Reform Penalties Set

The IRS has set new penalties associated with the Affordable Care Act (ACA), commonly referred to as Obamacare. They have been increased for failure to file information returns, which includes Forms W-2, 1094-C and 1095-C. The penalties are reduced if the forms are filed late.

The changes apply to 2015 forms filed in 2016. Here is a rundown of the new penalties and other pertinent information.

Failure to file required forms:

Per form penalty of $250 (formerly $100)
Calendar year penalty limit of $3 million (formerly $1.5 million)
For businesses with gross receipts up to $5 million, the maximum calendar year limit is $1 million

There are lower penalties if forms are submitted after the deadline:

Submitted within 30 days of deadline — $50 penalty (formerly $30)
- Maximum calendar year limit — $500,000 (formerly $250,000)
- For businesses with gross receipts up to $5 million, the max calendar year limit is $175,000
Submitted on or before August 1^st — $100 penalty (formerly $60)
- Maximum calendar year limit — $1,500,000 (formerly $500,000)
- For businesses with gross receipts up to $5 million, the max calendar year limit is $500,000

If the IRS identifies that failure of filing the required information returns is due to intentional disregard, the per form penalty has increased to $500 (formerly $250).

This information is especially important for our clients who are Applicable Large Employers (greater than 50 full-time equivalent positions). If they do not file the required Form 1094-C and 1095-C’s in 2016 for tax year 2015, they will be subject to the above penalties.

The IRS has stated that if a good faith effort is made to file the returns on time for the tax year 2015 filed in 2016, there will not be penalties for errors made on the forms.

If you have questions about how ACA penalties could impact your organization or would like referrals for experts who assist with filing the required forms, please call Beth McGraw at (317) 613-7862 or email [email protected].

Tax Impact of Playing Daily Fantasy Sports

If you’ve turned on your TV recently, chances are you’ve seen an advertisement for DraftKings or FanDuel, two of the most popular daily fantasy sports gaming sites. Daily fantasy sports (DFS) are similar to regular fantasy sports, with the main exception being that the contests are held over a much shorter time frame.

Most online gambling and sports gambling in the U.S. is illegal. However, fantasy sports sites claim their contests are legal under a federal law exemption whereby fantasy sports are considered a “game of skill” rather than a “game of chance.”

As these sites have grown in popularity, some states are beginning to challenge the legality of daily fantasy sports within their jurisdiction. Here in Indiana, Republican State Representative Alan Morrison says he plans to revisit a bill he introduced earlier this year.

As tax season inches closer, one question that frequently arises is, “What are the tax consequences associated with playing daily fantasy sports”?

If you are a profitable DFS player and win more than $600 during the year, then you and the IRS will both receive a Form 1099-MISC reporting the income. The income listed on this form should be included by the taxpayer as income on their Form 1040.

The income on Form 1099-MISC is calculated by daily fantasy sports sites with the following formula: Income = (Winnings – Total Entry Fees) + any Bonuses/Rewards.

This is a formula players should keep in their records so they can track their income and plan for any possible tax reporting at the end of the year. As shown in the formula, entry fees are deducted in determining taxable income, but you may also be eligible for more deductions depending on the frequency of play and your individual tax situation.

If you are a casual DFS player, the most common scenario would be claiming any other applicable expenses and losses as a miscellaneous itemized deduction on Schedule A. The caveat is that in order to obtain a deduction for miscellaneous expenses, they must exceed 2% of your adjusted gross income.

Another potential option would be to report the income as business income on Schedule C. This option would allow a DFS player to directly deduct all relevant expenses such as site subscriptions, TV sport packages, internet and phone data. However, the only way a DFS player could report the DFS activity as a for-profit business (Schedule C) is if that player is in the trade of business of being a DFS player (i.e. business vs. hobby loss rules).

If you have any questions regarding the tax consequences associated with daily fantasy sports, please contact Jared Duncan at (317) 613-7848 or [email protected].

What’s Your Fourth Quarter Game Plan?

As the leaves change color and we dust off our heavy coats, we await the year end with anticipation, and perhaps some anxiety. If you’re a business owner or manager, by now you’ve gotten a very good sense of how the company is doing and whether you will meet your goals for 2015.

It’s also a perfect time to start your year-end planning, making sure everything can be done to make it a really strong year – and springboard into a solid 2016. It’s much like the final quarter of a big game, when strong momentum can not only win the day, but carry over into the next field of play.

Large public companies do more advance planning, usually by necessity or the requirements of being publicly traded. But many small- and medium-sized businesses don’t, and should be strongly encouraged to think further ahead. If you do not plan for where you want to go, any road will take you there!

A great start is to call up your key customers and vendors and invite their sincere feedback on how you’re doing, where the business relationship needs improvement and any untapped opportunities. This could help you improve aspects of the operation that you didn’t know were lagging, or open up new possibilities for revenue and growth.

It’s also a good time to step back and take a macro view of things – the national and regional economy, trends within your industry, geopolitical events that could impact your operations.

After taking a look at the broad picture, next examine the internal infrastructure of your business – especially your human resources. Do you have the right people in the right positions? Have you done performance evaluations, highlighted their strengths and weaknesses, and helped them think about the individual goals to set for themselves in the new year?

This is a great tactic for weaning your team onto a planning mindset, so they can think about how their role fits into the overall team’s success.

You should also take the opportunity to make the hard comparisons – between your company and competitors, and with industry averages in the nation and state. Focus on things like financial reporting, sales, profitability and other key performance indicators. This will help spot weakening areas so you can make the appropriate modifications before it becomes a critical problem.

Fall is your fourth quarter, the time when the game is decided. Work on your game plan and strategy, so your team can find its way to the end zone, now and in the future.

If you need help formulating or implementing your fourth quarter game plan, please call Eric Woodruff at (317) 613-7850 or email [email protected].

Get Out of the Weeds: THINK Strategically!

“In the Weeds” is a saying commonly used to describe being immersed or entangled in details. For many business owners, managing the day-to-day details (the weeds) of the business is a constant task. Thus being stuck in the weeds leaves a business owner with little, if any, time and energy to think strategically.

In managing time and energy, it’s important to distinguish between tactical and strategic matters. Tactics cover the day-to-day details necessary to keep a business running smoothly, such as maintaining customer relationships or making sure deadlines are met. Strategy is long-term. It is the planning that incorporates broader goals for continued and future success.

Are you driven by tactics or strategy? Knowing which one drives you is vital if you are going to successfully allot time for strategic thinking.

Some business owners are driven by tactics, so dealing with day-to-day details is rewarding to them. If you like spending time in the weeds, then you will probably need a push from someone outside your company to get you to do strategic thinking.

For other owners, the weeds are the last place they want to be. Unfortunately, many of these owners get pulled into the weeds regularly because they are the owner. Having the right people doing the right things is a must for these individuals if they are going to get out of the weeds and think strategically.

Regardless of which camp you are in, strategy is important. Formulating your strategy can be as simple as having a vision and a direction for the future. Where do you want to go? What benchmarks would you like to achieve? Once you’ve identified these goals, then you’ll need a map for how to achieve them.

The map tends to surface as “action steps” or initiatives that move the company toward the vision. Monitoring of the action steps with the existing daily tactical activities is a good way to assess whether or not the company is moving in the direction you want to go. If there isn’t much movement, then it may be time to revise the action steps.

A key to making a strategic initiative successful is making sure everyone in the business, from the old timers to the latest hire, understands the initiative and steps for getting there. Encourage your workforce by illustrating to them how their role fits within the overall strategic blueprint.

Communication of the plan to your key personnel is especially important. Not only should they be taking time — whether it’s daily, weekly or monthly — to think strategically, they should also be a messenger to the entire workforce about the plan and how employees can help.

Strategic goals can be addictive, meaning once you begin the process of setting goals you want to tackle everything at once. Keep in mind, strategic movement is a continuous process. Thus, two or three goals a year are usually all most businesses and employees can accomplish. Prioritizing and focusing on the most critical initiatives increases the chance of effectively addressing them — and thereby creating opportunity to move on to other issues.

Making time for strategic planning isn’t easy; if it were, everyone would do it regularly. The weeds are going to get in the way, but keep in mind the benefits of regular strategic planning tend to be exponentially more valuable to the vitality of your enterprise than any short-term hiccup in day-to-day operations.

The age old adage is true: owners that work on their business see more success than those who choose to work in their business.

If you would like to talk about assessing your enterprise from a strategic standpoint, or have questions or comments, contact Jason Thompson at (317) 608-6694 or [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.

How to Make Electronic Tax Payments

Filing your federal and state income taxes can be burdensome for business owners and individuals. It is possible to arrange to pay your taxes electronically, but many people who have never done it before can find it challenging.

Sponsel CPA Group is here to help with a handy set of step-by-step instructions for paying your federal and Indiana taxes online!

Electronic Federal Tax Payment System (EFTPS)

Some businesses were pre-enrolled in EFTPS, but individuals were not. Individuals can still register with the service and use it to pay any balance due from their federal tax return, as well as make quarterly estimated tax payments. The website also allows you to track payment history.

If you’re not already enrolled, go to https://www.eftps.gov/eftps/ and follow these instructions:

Click on the “Enroll” button.
Accept the terms and choose “Enroll me as an individual.”
You will then be prompted to enter personal information such as social security number, name, address, bank information, etc.
Within five to seven days after enrolling, you will receive a PIN and enrollment number via U.S. mail. This letter will also have instructions as to how to complete the registration process including creating a username and password.

Once you’re registered, it’s easy to make payments online by logging in and following the prompts. Tax payments must be submitted one calendar day before the tax due date in order for the payment to be processed in a timely manner. You can make payments up to 365 days in advance if desired. You will receive an Acknowledgement Number as proof of payment. Make sure to retain it for your records.

If you still prefer to enroll by phone and “snail mail,” call (888) 725-7879 to request an enrollment form by mail. You will complete the form and receive a PIN within seven business days after EFTPS receives your enrollment form. Then call (800) 555-3453 anytime to make a telephone payment. You will need your social security number and EFTPS PIN.

Indiana Department of Revenue ePay

Indiana’s ePay system allows individuals and businesses to make bill payments, estimated tax payments, extension payments and balance due income tax payments. You do not need to register an online account with the ePay system.

Go to http://www.in.gov/dor/4340.htm and click on “Get Started” near the bottom of the page.

Select the type of payment you would like to make (i.e., Tax Return Payment, Estimated Payment, etc.).
Enter your personal information as prompted. The website will ask for information such as filing status, social security number, payment amount and tax year to verify your identity.
Continue through the prompts until the payment is submitted.

Indiana ePay payments can be scheduled up to 90 days in advance using the electronic check feature. Electronic checks require a $1 fee. If using a credit card, a sliding fee will be charged based on the amount paid.

You will receive a Payment Confirmation Number and/or Electronic Transaction Number as proof of payment. Make sure to retain for your records.

If you need any assistance with setting up electronic tax payments, please call Lindsey Anderson in our Tax Services department at (317) 608-6699 or email [email protected].

New Tax Deadlines for Corporations and Partnerships

The new Transportation Act signed into law by President Obama on July 31 was the object of much political wrangling. And more partisan bickering is likely on the horizon: the bill is essentially a three-month stopgap extension of the Highway Trust Fund.

What you may not be aware of is that the act includes a number of permanent key tax provisions, including revised due dates for tax returns of partnerships and C corporations. Here’s what you need to know.

Currently domestic corporations, including S corporations, file their returns by the 15^th day of the third month after the end of their tax year. So corporations using a calendar year file by March 15 of the following year. Partnership returns are due the 15^th day of the fourth month of the following year, or April 15 for those with a calendar year.

Because due dates for partnership and individual tax returns have been the same, individuals with partnership holdings often have to file for an extension because Schedule K-1 forms are not available in time.

Under new rules established by the Transportation Act, tax deadlines for both partnerships and S corporations will be the 15^th day of the third month after the tax year, or March 15 for those with a calendar year. By having partnership returns due a month earlier, that should save some partnership holders from scrambling to file their individual returns.

Meanwhile, returns for C corporations are pushed back one month, to the 15^th day of the fourth month after the tax year, or April 15 for those using the calendar year.

These changes are generally effective for returns for tax years beginning after 12/31/2015. For C corporations whose fiscal year ends June 30, a special rule will allow the change to be deferred for 10 years, i.e. the 2026 tax year.

Also beginning for 2016, the IRS is allowing for longer extensions to file certain forms under the new law. These include:

U.S. Return of Partnership Income (Form 1065): Extension maximum is increased from 5 months to 6.
Annual Return/Report of Employee Benefit Plan (Form 5500 series): Maximum extension is increased from 2½ months to 3½ months.
U.S. Income Tax Return for Estates and Trusts (Form 1041): Extension maximum increased from 5 to 5½ months.

Additionally, FinCEN Form 114 is used to report a financial interest in or signatory over a foreign financial account. The Form 114 currently must be received by the Department of Treasury on or before June 30^th of the year immediately following the calendar year being reported. Under the new law, for returns for tax years beginning after 12/31/2015, the due date of the FinCEN Form 114 will be April 15 with a maximum six-month extension ending on October 15.

If you want an analysis of how these revised tax deadlines will affect you, please call Liz Belcher in our Tax Services department at (317) 613-7846 or email [email protected].

Great Business Owners Often Neglect Personal Finances

You’re an all-star business owner/manager. The company is growing, revenue forecasts are all pointing up, and new opportunities seem to be lining up before you. Everything’s looking great… except for your personal finances.

It’s a conundrum we’ve encountered all too often as CPAs: a world-class business owner whose company ledger is all tidy, while their own family finances are in disarray with minimal planning in place.

It’s not necessarily surprising, if you think about it. Top-notch business people obsess so much about their company, thinking strategically about its growth, that they lack the time and energy to place a similar emphasis on their own future. It’s like a person who keeps their professional work space shiny as a penny, while their house is cluttered.

In looking at the personal financial issues of business owners, they’re often deficient in one or more of the following areas:

Lack of diversification in investment portfolio
Lack of estate planning
No will or outdated will
Underinsured or not insured
Not planning for retirement

As a business owner, it’s natural to have confidence in your own enterprise and see it as your best investment. But it’s important to diversify your holdings so you can reap the highest return and protect yourself against calamity. The Great Recession wiped out many owners who hadn’t planned for such a possible event. Think of diversification as your armor and shield.

In terms of estate planning and wills, it’s surprising how many people in their 40s, 50s or even older have not done any at all! More commonly, people make out a will and a plan for passing on their accumulated wealth but leave it untouched for years – even decades.

If you don’t have a will, implement one immediately. Ideally, wills should be updated every two to three years. Circumstances can change greatly during that time, whether it’s the need for new trustee or a redesignation of your favorite charities you want as beneficiaries.

Some business owners fail to properly insure themselves personally – life, disability, home, personal property, etc. – because they are optimistic people, or would rather spend the premiums on something else. Like diversification, it’s a matter of protecting yourself against the unforeseen. Consult with a trusted insurance broker to actively manage your risk exposure.

When retirement age approaches, business owners often don’t have an exit strategy. Much of their wealth may be tied up in the company, so it’s a matter of monetizing that so you can enjoy the retirement they desire. Succession planning can seem daunting if you haven’t thought about it before. I suggest reading our series of articles as a good starting place.

It’s also important to talk to your spouse or other family members about retirement: where you want to go, what you want to do, etc. A solid foundation of communication is the basis for an enjoyable retirement. Ask yourself and your loved ones the hard questions.

Given increased life expectancies, it’s more important than ever to plan properly for a secure and happy retirement. Don’t get so wrapped up in the day-to-day challenge of running your business that you lose sight of your own needs and responsibilities. Your family and loved ones deserve as much!

If you need advice on bringing your personal financial picture into sharper focus, contact Tom Sponsel at (317) 608-6691 or email [email protected].

What Does Your 2015 Halftime Report Look Like?

As the sights and sounds of the fireworks fade, we find ourselves already at the halfway point through the calendar year. In many sports this is a time to pause, reflect on how well the team has performed so far, and make adjustments in the game plan to better prepare them for success in the second half.

Why shouldn’t we do the same thing in our business endeavors?

Hopefully your company or organization has already started off 2015 on the right note by establishing some metrics at the beginning of the year – especially a budget. (If you haven’t, it’s never too late to start!)

Take a look at the benchmarks you made for financial results, such as revenue growth, capital expenditures, personnel costs and so forth. Are your projections living up to expectations? Are you achieving your targeted milestones?

If not, start asking why – and what can be done to get the team back on track.

Did external events affect your sales, such as a worsening economic outlook? Did you pick up new customers beyond expectations, or lose more than you should? Is it possible that you just made bad assumptions at the beginning of the year, which now must be revised in line with actual performance?

It can be a struggle to perform this sort of honest assessment. As anyone who’s ever been the owner or manager of a business knows, you strive so hard working in the company every day that you don’t take time to work on the business. But undertaking these sorts of regular, periodic evaluations of your organization’s actual results is critical to growing stronger and more competitive in the marketplace.

When you’re looking at the numbers, also go beyond the dollars and cents to look at the off-line factors that can crucially affect a business: employee satisfaction, turnover, etc.

Mid-year is a good time to determine if you need more bodies to shore up the segments of your operation that hold the most potential for revenue generation – or if you need to remove poor performing team members who are not adding value to your team.

A good practice when doing these kinds of assessments is to look at not only your internal projections, but compare to broader industry standards. If, for example, you’ve suffered a sharp seasonal dip in revenue that your competitors have not, then something needs to be addressed.

If you’ve done well and don’t see any black marks on your team’s performance up till now – don’t just coast on your success!

If you’ve managed to exceed your forecast and do better than planned, now it’s time to ratchet up your expectations. Point your vision even higher and raise your results. Don’t use accomplishment as an excuse to slack off.

If you need help in assessing your organization’s performance at the halfway point, contact Mike Bedel at (317) 613-7852 or email [email protected].

Diversity of Thought Is Good for Business

Smart business people strive to promote diversity in their organizations. And it’s not just the usual factors of race, gender, etc. that matter. You should also endeavor to have diversity of thought among your staff, especially the management team.

When everyone approaches the business from the same mindset, it ends up being an operational liability. Because when you’re tackling a problem or planning for the future, you need a range of methods and ideas to have the best chance of finding the path to the greatest success.

It’s easy to fall into the trap of homogenous groupthink. People tend to want to associate with others like themselves, with similar experiences and world views. Those who are alike naturally then join into endeavors together. As the company grows, they invite others like themselves into the team.

Before long, you’ve got an organization in which everyone more or less thinks the same way.

Another reason diversity of thought can be a challenge is that a range of opinions means more conflict will occur, and in a business setting many managers assume conflict is always a bad thing. It isn’t. A better way of looking at an issue is to value those with different opinions than our own. And this should extend to the management team and employee pool. Respectful debate bonds your team and will produce a better solution.

An owner/manager should never surround themselves with yes-women and yes-men. Good managers want people on their team who don’t reflexively agree with them. They seek out differing opinions and novel ideas. They allow the team to hash out its different approaches and from them select the one that’s right for the entire organization. One concept may prevail or another will – or a fusion of many.

When you have diversity of thought, it also provides you with the ability to see how someone else perceives an issue. By having that understanding, you can accelerate the path to identifying a solution.

This is a valuable tool for understanding a customer’s situation. Having people who see things from different sides can help head off client dissatisfaction, and pre-emptively avoid a problem in a quick and satisfying manner.

Prudent business owners want to know when clients have a complaint with their product or service. That way they can address emerging issues before they harm the reputation of the entire company. It’s like the old business adage: if a customer is happy, they’ll tell one person. If they’re unhappy, they’ll tell 10 people.

At Sponsel CPA Group, one of our best methods for encountering diversity of thought is by serving on the boards of civic or nonprofit organizations. The best of these boards have people from a broad spectrum of backgrounds who can come to a solution that’s satisfactory to everyone. Listen to these people, especially when you’re looking for recommendations on who to add to your own team.

By being respectful of others’ opinions and encouraging people to openly disagree and share other points of view and ideas, you will emerge with a diverse team that’s stronger than its dissimilar pieces and your success will follow.

If you need advice on how to promote though diversity in your organization, please call Nick Hopkins in our Tax Services department at (317) 608-6695 or email [email protected].

Guard Tax Returns Against Identity Theft

At least 9 million Americans are the victim of identity theft every year, according to the Federal Trade Commission. You have no doubt read about cases in the media where large retailers such as Target have had their customer databases hacked. It’s become an all too common characteristic of modern society, where purchases and other financial exchanges are often handled digitally.

What you may not know is that the most common type of identity theft happens not when a person makes a transaction, but through the filing of taxes.

The FTC reported more than 100,000 complaints of tax-related identity theft in 2014, higher than any other source — the fifth straight year it topped this infamous list.

One of the most common tactics by criminals is to file a fraudulent tax return on your behalf and claim a refund. Tax filings are a good source for cyber-thieves because they typically contain all the pertinent information they need: name, address, date of birth, social security number, financial accounts, etc.

Some ID thieves work singularly or in conjunction with others, such as an employee in the mortgage industry who sells lendee information to computer hackers. Sometimes criminals will even use the identity of a minor who is still in school or a deceased person.

In one famous case, a records clerk at a corrections facility stole the IDs of more than 1,000 prison inmates and filed false federal and state tax returns for them!

In many cases, victims do not even know they are the victim of tax-related ID theft until they receive a notice from the IRS indicating that multiple returns have been filed, or that wages were reported to them from an unknown (and likely bogus) employer.

Correcting the fraud and collecting your actual tax refund can be a lengthy and frustrating process. The Treasury Inspector General for Tax Administration (TIGTA) found it took the IRS an average of 278 days to resolve identity theft cases.

Often the fraudulent filings happen at the very start of the tax filing season. IRS officials have said that $17 million worth of ID theft happens on the very first day taxpayers are eligible to file a return. To combat this, the IRS and FTC recommend filing as early as possible to get ahead of the thieves.

Federal officials are working to crack down on tax-related ID theft. The IRS claims that during the period of 2011-14 it stopped 19 million suspicious returns and protected more than $63 billion in fraudulent refunds. They are also now issuing special identity protection PIN numbers (IP PIN) to victims of identity theft to use when filing subsequent returns.

If you think you have been the victim of identity theft, there are a number of steps you should take. After confirming that ID theft has occurred, you should file theft complaints with the FTC, credit agencies, local law enforcement and the IRS. You will then receive a notice from the IRS with instructions on how to proceed.

You would also do well to obtain the services of a professional who can help you navigate the financial and legal jungle of reclaiming your identity, and obtaining peace of mind.

If you have been the victim of tax-related identity theft or want to know more about how to prevent it, please call Nick Hopkins in our Tax Services department at (317) 608-6695 or email [email protected].

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].

Changes Loom for Not-for-Profit Reporting

The Financial Accounting Standards Board (FASB), which establishes financial accounting and reporting standards in the U.S., has proposed significant changes to not-for-profit (NFP) reporting guidelines. While not yet approved, these new rules would represent the biggest impact on the way non-profit groups perform their financial reporting responsibilities since FASB statements in 1993.

FASB’s Not-For-Profit Advisory Committee has sought ways to make NFPs more comparable to each other through financial reporting. The changes are also intended to give donors and lenders a clearer picture of liquidity so as to better assess the financial health of the not-for-profit.

The proposed changes include:

NFPs would have to report all expenses by nature and function, something that currently only applies to health and welfare organizations.
Requiring a net presentation of investment expenses against investment return on the statement of activities, including internal salary and benefit expenses. External investment expenses netted against returns would no longer have to be disclosed.
NFPs must present two intermediate operating measures as defined by the dimensions of mission and availability. Mission refers to the group’s reason for existence, while availability on resources available for current-period activities.
The requirement to use the placed-in-service approach for the treatment of expiring restrictions on long-lived assets, thereby eliminating the possibility of releasing the donor-imposed restriction over an asset’s estimated useful life.
The current net asset classes of permanently restricted, temporarily restricted and unrestricted would be simplified into two classes: assets with donor restrictions and assets without restrictions.
Endowment funds that are currently underwater would be placed in the “with donor restrictions” class of net assets. The NFP would additionally be required to provide disclosures about the original gift amount, current fair market value and organizational spending policies.
Reporting cash flows for operating activities would now require the direct method, replacing the existing indirect method.
NFPs must provide quantitative and qualitative information for assessing liquidity, including a description of the time horizon used to manage its liquidity.

The FASB is accepting comments on the proposal through Aug. 20. If you have any concerns about these new rules, we would be happy to consult with you and assist in directing your concerns to the FASB.

If you have any questions about financial reporting for not-for-profit organizations, contact Lisa Blankman at (317) 613-7856 or email [email protected].

Bedel honored by Indiana CPAs

The Indiana CPA Society (INCPAS) recently held CPA Celebration, its annual award dinner. Mike Bedel, Partner and Director of Audit & Assurance Services, received the CPA Advocacy Award, which honors the recipient for advocating for the profession through government relations. Bedel serves as a trustee and the chairman of the Indiana CPA Political Action Committee. Congrats, Mike!

Promote Excellence in Your Employees

In last month’s newsletter, we mentioned a practice the partners have here at Sponsel CPA Group, “Catching employees doing something right.” I’d like to further expound on that topic, and discuss how you can promote excellence in the workers at your business.

The harsh truth is that at many companies, personnel view their supervisors as somebody whose job is to catch them making a mistake. Certainly, detecting and addressing problems is part of a manager’s duties.

But a good boss should strive to be a “strength finder” who actively searches for what an employee does well, rather than dwelling on what they don’t.

It starts by recognizing that we’re all different people with different talents and skills. Some things we’re good at, and some things we aren’t. Though we might improve at a skill with training and repetition, we should be aware that a weakness will sometimes remain a weakness.

Rather than obsessing over the things an employee doesn’t do well, a manager should try to zero in on the things they do do well – and then work with them to improve those skills even more. That way, a worker creates a sense of confidence and can be more valuable to the overall team effort.

Draw the big picture

When you find an employee doing something right, commend them on it. Let them know how their work impacts the greater mission of the entire company. Often, younger workers don’t understand how their duties fit into the big picture.

Take opportunities to show employees how they matter, and you’ll be rewarded with greater productivity and loyalty. And they’ll be encouraged to take that next step, so they can shoulder bigger responsibilities.

When you’re a leader at an enterprise, sometimes there is an instinct to keep information bottled up. For instance, many supervisors feel reluctant to share their experiences or anxieties with those lower in the hierarchy.

But by opening up a little about your own personal failures and mistakes, you can minimize their own anxiety or apprehension by demonstrating a shared experience. And by giving them the long-term benefit of your own experiences, they’ll have a better grasp of how to anticipate challenges and be better prepared to confront them.

If they can see their boss has been through the grinder, survived and thrived, they’ll be less afraid of responsibility and risks. Don’t let the fear of failure become the barrier to your personal success!

Use your employee evaluation process to tell employees what they’re doing really well, instead of merely what they’re not. View evaluations as a training tool to build strengths, not just a mechanism for spotlighting times they’ve screwed up.

Construction vs. confrontation

It comes down to criticism versus constructive criticism. To most people, criticism is synonymous with conflict. They become defensive and unreceptive.

Constructive criticism shows that you care about them as a professional and as a person. Rather than being afraid of the boss, employees should view him or her as a coach actively trying to make them better.

If you need advice on how to promote excellence among your staff, contact Mike Bedel at (317) 613-7852 or email [email protected].

Client Profile – Milano Inn

The LaGrottes serve as a snapshot of how a striving family can take a single idea and turn it into an enterprise in just a few generations. In their case, quite literally – as a humble Downtown Indianapolis grocer eventually became LaGrotte Enterprises with multiple properties and businesses.

The iconic Milano Inn, a staple in the Holy Rosary-Danish Church Historic District since 1934, serves as their crown jewel and flagship. The LaGrottes didn’t establish the Italian restaurant on South College Avenue – that was another family, the Madaffaris. But they’ve owned and operated it for the past 35 years, carrying on the same welcoming traditions and authentic cuisine that first attracted working-class immigrant families during the Great Depression and post-war boom.

Sisters Gina and Tina LaGrotte, the third generation and current leadership, began their apprenticeship at Angelo’s, the grocery store right next to the Milano Inn owned by their grandfather. After school they would stock shelves, work the register, etc.

“That’s primarily where we began, working as kids while learning how to run a business,” Gina said.

Their father Leo Michael assembled other operations to support the existing ones, such as a meat processing plant to supply the Milano Inn and Angelo’s with fresh product. Other non-related businesses were added over the years as opportunities presented themselves, such as a hair salon.

Eventually, LaGrotte Enterprises owned most of the block surrounding the Milano Inn. As nearby neighborhoods like Fountain Square to the south and Lockerbie Square to the north became hot properties, their company’s reputation flourished.

But change requires adapting to the times. When their father grew ill and could no longer manage their growing empire – which by then included the Village Plaza retail strip center on south Meridian – Gina and her sister made the decision to pull back. Some businesses were sold off, including the hair salon to a family friend and the meat plant. Leo Michael passed away in 2007.

Now LaGrotte Enterprises is looking beyond building businesses to helping build up an entire neighborhood. They recently acquired a nearby paint store, and sold nearly three acres of land across the street from the Milano Inn to a developer who is planning to construct chic apartments.

Why just settle for bringing customers to your business, they figure, when you can turn them into neighbors?

“It will do nothing but help the Milano Inn and other businesses. We’re looking forward to creating more of a neighborhood feel,” Gina said. “This quadrant, Fountain Square and our area, is growing like crazy. It’s close to Downtown and has easy access to the interstate. We’re thinking more people will move into the neighborhood and it will just get better and better.”

As part of their ambitious plans, LaGrotte Enterprises hired Sponsel CPA Group about a year ago to help provide the vision and financial strategy. Gina she has felt very comfortable working with the Sponsel team, including Tom Sponsel and Nick Hopkins. Beyond standard CPA functions, she said they have helped with strategic planning, coaching and educating some of their key leaders.

“They’ve done a lot of work for us, and gone above and beyond what we would have expected them to do on a professional scale, and also on a personal scale,” she said. “They’ve been crucial in helping us with streamlining our businesses and making sure Tina and I are making sound decisions as to financing in the family business.”

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]

Spring Fever: A Good Time to Hit the Refresh Button

As we finally – and thankfully! – emerge from the winter doldrums, now is a good time to hit the “refresh button” on your operational planning for the year.

Believe it or not, with the arrival of spring the first fiscal quarter of 2015 is almost in the books. So you can use the track record experienced so far to evaluate how your business is doing against various benchmarks.

The best place to start is with the company’s own annual budget. Hopefully a detailed, comprehensive budget has already been prepared for the year. (If not, it’s not too late to start.) Look at it honestly, and see how the business is performing against forecasted revenue, expenditures and operations.

The benefit of assessing the budget more than once a year is that it allows you to make comparisons, identify problems and take corrective actions before things get too far off track. Quarterly is a good basis to start, since you can compare to the previous trailing quarter, the same quarter from the previous year, and so on.

It’s also smart to compare your business to similar ones in the same industry, both in your region and nationally. Our clients are often surprised with the amount of data we can capture through various resources. With the economy gradually improving, these comparisons provide a picture of the marketplace. So not only can we measure how well a company is doing according to their own budgetary plans, but also compare their results to the overall competitive environment.

Spring is also a good time to address operational challenges that perhaps have been pushed back in favor of more pressing concerns. This includes contemplating personnel changes, altering the functional responsibilities of various team members, and a renewed focus on coaching more junior employees. If you haven’t made a set of New Year’s resolutions for your business, here is a second chance to do so while 2015 is still young.

If you find that things aren’t going according to plan, use this opportunity to institute better budgeting and monitoring, see what cost controls can be implemented or think about gaining better control of management of the sales function. If you feel like some of your own business skills are lacking in certain areas, consider seeking training opportunities to enhance your capabilities.

With the weather warming up and people’s spirits feeling refreshed, use the more positive attitude that comes with “spring fever” to regroup your company’s goals. If you’re taking a spring break trip, come back with a rejuvenated outlook about ways to make 2015 the awesome year you hoped it would be.

If we can assist you with any business planning issues, please contact Tom Sponsel at (317) 608-6691 or email [email protected].

What’s in the President’s Tax Plan?

During his recent State of the Union address, President Obama discussed a number of proposed changes to the federal tax code that he is in favor of making. Later the President released his federal budget which shed additional light on several of these proposals. Though many of the items outlined face a high hurdle in passing a Congress in which both chambers are now held by the Republicans, the president’s proposals do provide some insight on the thinking in Washington D.C. at this particular moment.

Let’s unpack some of President Obama’s wish list and see how it might affect taxpayers, and also their prospects for becoming law.

Capital gains/dividends – Under the president’s plan, the top capital gains rate would rise to 28% (24.2% plus 3.8% net investment income tax), applicable to couples with total income above $500,000 a year. The top capital gains rate was already increased during previous financial standoffs with the GOP, and they’re not in a mood to give more in this area.
Stepped-up basis “loophole” – Under current law, capital gains on bequests to heirs go untaxed, and the basis of inherited assets is immediately increased (“stepped up”) to the value at the date of death. The president proposes to require payment of capital gains tax on the increase in value of securities at the time of inheritance. The budget does provide some exceptions for the sale of small closely held businesses, personal residences and tangible personal property. Again, Republicans will oppose this.
Cut corporate tax rate and broaden tax base – This has long been a bipartisan goal as part of a comprehensive tax reform deal, so there’s actually a chance the GOP and Obama could find middle ground. The president’s plan would lower the top corporate rate from 35% to 28% (25% for domestic manufacturing). However, he wants to have a one-time 14% tax on profits held abroad by multinationals, plus 19% on future foreign earnings. Republicans will most likely oppose that part.
SE Tax on Professional Service Firms – The President’s proposal would treat owners of pass-through entities providing professional services (such as S-Corp’s and partnerships) consistently for self-employment tax purposes, regardless of how they are legally formed. This would close certain loopholes that allow professional service businesses the ability to avoid self-employment taxes on a portion of their income.
Research and experimentation tax credit – Obama proposes to simplify the research and experimentation credit by making the alternative simplified research credit (ASC) permanent, and increase the rate from 14% to 18%, plus other changes. The research and experimentation credit has received bi-partisan support in the past.
Section 179 deduction – Obama proposes to permanently extend the Section 179 expensing provision and allow small businesses the ability to write off up to $1 million of fixed asset investments on an annual basis.
Limits on deductions – The president would limit itemized deductions and other tax preferences to 28% for individuals with incomes over $200,000, or $250,000 for couples. The limit would apply to all itemized deductions as well as other tax benefits, including tax exclusions for retirement plan contributions, employer sponsored health insurance, and tax-exempt interest. His plan, sure to be nixed by the GOP Congress, would also establish a 30% minimum effective tax rate for the wealthy, aka “The Buffet Rule.”
Retirement plan contributions – Obama’s proposal would prohibit additional contributions to tax-preferred retirement plans and IRA’s once an individual’s balance reaches approximately $3.4 million (or enough to provide an annual income of $210,000 in retirement).
Cash accounting – This proposal would let businesses with gross receipts under $25 million – the vast majority of companies in the U.S. – dispense with more complex tax rules and pay their taxes on the simpler “cash” method of accounting.
Basis fees for financial firms – Obama wants to impose a seven basis point fee on the liabilities of large domestic financial firms in an effort to discourage excess borrowing. This one’s dead in the water for the GOP.
Child care tax credit – The president’s plan would increase the tax credit for child and dependent care to as much as $3,000 per child under the age of five, capped at a household income of $120,000. This could benefit millions of families, and Republicans have expressed support for increasing this credit in the past.

There are many other aspects of President Obama’s tax proposals, but these are some of the highlights.

If you’d like to hear a more detailed rundown of how this proposed budget could affect you, or if you need any tax planning advice, please call Nick Hopkins in our Tax Services department at (317) 608-6695 or email [email protected].

Succession Planning: Keys to Post-Career Happiness

(Part 6 of 6)

In our previous article on succession planning, we talked about how to invest the proceeds from the sale of a business. In this final installment in the series, let’s discuss the keys to a happy post-career life.

It’s probably not surprising that people who own or run a company tend to be hard-charging, goal-oriented folks who thrive on staying in the thick of things. They’re usually type-A personalities who enjoyed the feeling of running a business and having people report to them on a daily basis.

As such, they often experience the biggest challenges in transitioning to retirement or other post-sale undertakings. They’ve spent so much of their lives striving for success that they’ve never really given serious thought to what they will do when they retire. They lose their sense of relevance.

Much of the time it comes down to sheer boredom. Former business owners may find themselves getting their newspaper in the morning, drinking their coffee, walking the dog – and by 10 a.m. they have no idea what to do with the rest of their day. They miss that sense of people coming to them for their opinion and leadership, and it affects their psyche. They wonder, “Am I still a valuable person?”

At Sponsel CPA Group, we have known clients who eventually sought professional counseling for their post-sale blues.

In my experience, those who find the most post-career happiness are those who find a replacement for that sense of purpose they had when they owned a company. They find something that brings them fulfillment and pursue that with the same zeal they had for business.

It can be a hobby, working with charitable organizations, or anything else they’re passionate about. The key is to recognize this stage of life as being the start of a new chapter rather than the end of an old one.

This could take the form of actually creating a new business. For example, the man who loved tinkering with old cars and ended up opening a car restoration shop. Or it could be volunteering with a local non-profit whose civic philosophy aligns with your own. Many business owners have gone on to be fine executives of not-for-profit groups.

As you’re starting the succession planning process, start thinking about the activities you do outside of work that make you feel really good about what you’re doing. These bring you joy, a sense of purpose and satisfaction. Once you’ve figured out what they are, talk to people who spend most of their time at those endeavors to see if there’s a way you can get involved.

During this stage, don’t neglect to speak with your family. Any major life changes you make will also impact them and your relationships with them.

Some post-sale “retirees” find themselves busier than they ever were when running their company. Others are soaking up a life of well-earned leisure. Most fall somewhere in between.

In general, those who have made the succession transition most easily went about it in a very deliberate way. They had a concept of their specialized interests and talents, and leveraged them for happiness in the next stage of life.

If we can assist you with any succession planning issues, please contact Tom Sponsel at (317) 608-6691 or email [email protected].

Celebrating Five Years of Success – Thank You!

At this special time of year, I — along with the other partners and staff of Sponsel CPA Group — am reflecting on the fact it’s been five years since the firm was founded. It’s an unofficial anniversary, and as we look back on the tremendous successes and challenges, we also look forward to a future of continued growth.

And we have certainly grown. Back in 2009 there was me, three other partners and a team of just 18 employees. By the time January 2015 is here, we will have grown to a staff of 35 people, including the addition earlier this year of new partner Mike Bedel. We’ve even been recognized as one of the fastest-growing accounting firms in the state of Indiana.

We know we couldn’t have achieved this without the support of people like you: clients, bankers, colleagues and friends who have contributed to our growth and referred new business our way. For that, we are eternally grateful.

Sponsel CPA Group was founded with the idea for a new kind of accounting firm — one based on relationships and giving outstanding service to both customers and community. In fact, many relationships that began as short client-vendor engagements have since turned into enduring friendships. And that has been truly special.

We’ve been very humbled by our success, and we look forward to opportunities to continue carrying forward this vision on a day-to-day basis.

At this time of year, we give thanks and praise for the many good things in our lives, both personally and professionally. So thank you to our employees, our clients and everybody who has been integral to our development.

We should also give thanks to our challenges, too. It hasn’t always been easy during the past five years, starting a new accounting firm at a time of severe economic downturn. But we have grown through many challenges, learned from them and celebrated many more tremendous successes.

To us, encountering problems is not a cause for discouragement but a source of motivation. We’re thrilled to help others overcome their own challenges and, in doing so, become better financial counselors. We are committed to continuous learning and improvement, from the most junior employee to the senior partner.

(And I have the gray hairs to prove it!)

These five years have come and gone so quickly, as it does with any endeavor in which you feel driven and fulfilled. There really is nothing quite like starting up your own entrepreneurial business and seeing it thrive.

And we still have a ways to go. We have many even grander goals for the future. Thank you for sharing this journey with us!

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].

Delivering on Excellence

Every good business owner or manager wants to run a business known for excellence, and for delivering the very best service to their customers. But how do you find and sustain that commitment to excellence in your organization?

The secret is to break it down for every single individual employee in the company, from the CEO to the most junior worker. The most successful businesses are ones that strive for excellence up and down the line. Everyone must understand their specific role in the grand scheme of things, embrace their expectations, and hold themselves and their co-workers accountable for meeting those lofty standards.

For example, if you’re in charge of shipping product, your job is to expedite everything being moved that day, to make sure it’s ready and accurate so everything gets on the truck and delivered correctly. If your role is receptionist, you want to make sure every single office visitor is greeted with a smile and professional courtesy, and the phone is answered with an attitude that is positive and helpful.

You can never start too early with indoctrinating employees into a culture of excellence. Ideally, it should begin with the orientation process for new employees, and continue as part of their ongoing evaluation process. Each worker needs to be familiar with how their job functions in the delivery of your service or product, and how a single weak link can undermine the performance of the whole group.

Every employee should be made to feel that their work is vital to the company’s chain of service or manufacturing, and that excellence in their position will be recognized – as will a failure to meet expectations.

While maintaining high standards, don’t create an environment where employees are reluctant to bring a problem forward. That avoidance of reality can lead to disaster. Consider the recent recall related to the failure of ignition switches by General Motors. Years ago one or more engineers realized there was a defect that could be fixed with a part that cost $1.25. But they were either too afraid or unwilling to make waves.

Because nobody put their hand up to zero in on this issue, now it has mushroomed into a wide vehicle recall that will cost GM hundreds of millions of dollars and loss of esteem in the marketplace. This goes to show that “little things” in the company’s process can compound to become huge problems.

In some organizations, the top managers are notorious for greeting bad news with fire and brimstone, and only wanting yes-men and yes-women around them. That’s not conducive to maintaining a corporate culture of excellence.

The commitment to excellence cannot just flow downhill from manager to employee. It should be a universal desire to hold each other accountable – whether peer to peer, supervisor to subordinate, even rank-and-file employee to boss. It’s about developing a culture that says if something is outside the company’s boundaries of expectations, you’re going to be called on it. Disruptions will not be swept under the carpet.

Everyone makes mistakes – we’re all human, that’s how we learn. The true test of character is how we react to our mistakes.

If we acknowledge and correct our errors, and take proactive steps to ensure they don’t happen again, our co-workers and customers will judge us positively in our ability to handle adversity. If you work hard to correct any mistakes and strive to inconvenience the client as little as possible, they will want to keep doing business with you.

We should never stop trying to fine-tune our organization’s system of delivering our product or service in a way that will result in excellence. The ultimate test is the marketplace, and what your clients say about you.

If we can help you find ways to better deliver excellence within your organization, please contact Mike Bedel at (317) 613-7852 or email [email protected].

There’s just something special about family-owned businesses

By Meredith Reinker
Roberts Camera

Editor’s note: this recent blog post by one of our clients demonstrates just how special family-owned businesses are, not just to the families who run them but the customers they serve. Reprinted with permission.

If you haven’t heard the news by now, we hope this will find its way to you one way or another:

ROBERTS IS MOVING! ROBERTS IS MOVING! ROBERTS IS MOVING!

By the time you read this, we should be reopened at our new location, 220 E. St. Clair Street in Indianapolis. Here are a few things you ought to know:

Are you going to make a ridiculously big deal out of the new store?

Ummm…Yes! Save the date for our Grand Opening weekend, Nov. 6-8! It is going to be big! We are going to have amazing speakers, tons of seminars, tons of deals and tons of giveaways. Trust me … you don’t want to miss it. We will release all the details soon!

Why are we moving?

There are MANY answers to this question, but the most concise one is that we need room to grow and adapt and change with this new online retail marketplace. My dad has always been a huge proponent of change. It is the reason that Roberts has stayed relevant for as long as it has.

We want room to bring in more product lines and more variety. We want to offer our retail customers an experience vs. just a showroom — try out the camera, try out that lens, test out some studio equipment. Photography should be an experience and we hope to bring that to our new store.

We need a better warehouse and shipping area to help grow our online offerings and processes. We are making a big splash in the used camera business, and what better way to bring people this great gear (at really great prices) than to have a big used camera showroom and tons of inventory to choose from! The Midwest has a large and vibrant photography community and you deserve a place with an extensive selection of used gear. And we want to be the ones to deliver it to you.

We also know that not everyone can buy the latest and greatest — you might just need to rent something for a few days? Well, we can help you there, too! We are going to be expanding our rental offerings (this will happen over time) with some of the hottest new lenses, video gear, audio gear and more.

And, we will finally have a lovely on-site classroom to help bring more amazing seminars and workshops to Indy! Oh yeah … the parking is better, too! We can’t promise a parking lot like you would see at Target — I mean we are still downtown, but we can promise it’s better than what we had! Here is just a small teaser…

While change is great and necessary (more emphasis on necessary), let me tell you what is not going to change:

Our commitment to the customer and to providing a great experience. We will continue to do whatever we can to make sure that you get what you need, we will listen to you and your needs and give you our best opinions. We will continue to give you the best pricing, and we will continue to educate you so that you can get the most out of your equipment. AND, we will continue to have a staff that is as passionate and knowledgeable about photography as you are.

In short — we never have and never want to be a transactional business where we see you once every five years when your camera breaks and you come in to get a new one. We like relationships, we like friends. We want to focus on the lifecycle of your camera and you as a photographer.

We hope you get your first camera here; take some great classes to learn how to use it; buy some cheap used gear as you make your way through life; trade in your old camera for cash when you get your first job; buy the hot new camera; take some classes to master lighting, Lightroom and light painting; let us help you with the repair process when you drop it; buy some new lenses when you get ready to go on your honeymoon; get your trip pictures printed here; trade up your camera when that perfect job comes along; get a new camera with a great lens to capture every moment of your child’s first years; probably get some pictures printed on canvas; take some classes on portrait photography and sports photography; buy some BIG lenses to capture every second of every sports game; trade in your camera to help pay for college; and college is over — get the hottest new camera with the best lens because your are finally taking that trip of your dreams!

That was not short at all, was it? You get the point. We want to be there for everything. Let us help you achieve your vision and capture every memory … because it goes fast right!

Why else is this move a BIG deal?

Well, for starters we have been in this building (yep, the one below) at 255 S. Meridian Street since 1970. That is 44 years of history, inventory, paperwork, pictures, cameras, clocks, jewelry, weird figurines and more that we have to sort through. We want to make sure that we are bringing only the best to our new store location.

This move is a pretty big deal to me personally as well. My grandparents started Roberts in 1957 and truly put everything they had on the line to buy this building and make this business work. I learned a lot from them about character, loyalty and hard work.

But for me, it is more about my relationship with my dad, Bruce Pallman. I am currently 33 years old, and my dad has been the managing partner of Roberts for the past 40 years. That means it is the only job he has ever had and the only thing I have ever known. It means I have been coming here for 33 years.

I started answering phones at the front desk when I was 12 years old. I would get so excited to come to work with my dad on Saturdays. We would go to breakfast at Shapiro’s, open the store and I would help turn on all the lights and clean the cases. My grandmother would not let me use more than two paper towels and two squirts of Windex to clean the show cases — she was a child of the Great Depression and you did not waste ANYTHING. During the day, I would answer phones, wrap Christmas gifts for the holidays and bother the staff. My dad would take me to lunch at Union Station when they had the big food court in the upstairs area. We would always get Enzo’s pizza — those really big New York style slices, and I would get a huge soda (which I was NOT normally allowed to have).

And I would watch my dad stand at the front counter and go through his invoices and talk to every person who came in the door. I would see how much fun he was having (and still is having) all the time with everyone that came in the door. He truly loves seeing people, providing great service and getting people what they really need — and not talking them into something they don’t.

It’s funny how you remember the small things so vividly. There were these containers of mixed nuts that my grandmother insisted we sell at the holidays. They were in red boxes and always sat right by the front door. There is a sign that has hung in my dad’s office for years that reads, “It Is What It Is,” because that was my grandmother’s famous saying. I remember her hanging another sign in the store that read, “Any Unattended Child will be given an Espresso and a Free Puppy,” and she thought that was the funniest thing she had ever seen. She made everyone who came in the store read it.

She also RULED the parking lot. If you were not in the store, you did not come within a 10-foot radius of the parking lot without feeling her wrath. I remember my grandfather sitting in his big leather chair at the front of the store, and he would talk with the longtime customers and watch. He’d watch it change, he’d watch it grow and I know he was proud of my dad. I remember when the wholesale district actually had wholesale businesses.

Many things have changed, and many things have not. But the most interesting thing to me is still watching my dad work. His business mind and intuition is one that can’t be taught, you can only hope to absorb like a sponge as much as you can in the time that you have. The best part is that I still get to come to work each day with my dad and see him having so much fun, day in and day out. That’s an experience not a lot of people have (and maybe not a lot of people want), but for me it makes this move that much more important.

I know how much work has gone into making this store what it is today, and I know how hard it will be to continue to move this into the future. But the fun is in the challenge of it, and in the day-to-day, and that is what makes coming to work an adventure where no day is ever the same.

So, all in all, I think the word of the hour is “bittersweet.” I am excited for the opportunities that this growth will bring to Roberts, to the photography community and to Indy. I am sad to be leaving behind such a key piece of this company’s history. I am sad to walk out of that building for the last time. And I am sad to not be able to look at the front counter and picture my grandmother standing there, or my dad sitting in his office laughing with someone on the phone.

But, as my dad will be the first to tell you — you can’t move forward when you are standing still, right?

Succession Planning: Investing the Proceeds

(Part 5 of 6)

In the previous article in our series on succession planning, we looked at how to avoid the post-sale blues. Now it’s time to talk about how to best manage the assets you have obtained as a result of selling your business or ownership stake.

If everything has gone as planned, you now have a sizeable amount of liquidity with which to invest, and possibly more cash coming your way per the provisions of the sales agreement. The next step is for you and your family to take a hard look at what to do with these funds, both in terms of investing the proceeds and passing it on one day.

The first thing you should do is comprehensive estate planning. This includes important matters such as a will, a living trust, a power of attorney for healthcare situations and a living will. Decisions must be made on how the estate will be bequeathed to your beneficiaries, whether family members or charitable organizations.

We recommend that you revisit estate planning every three to five years, since circumstances can change greatly over that span of time. New charities may have cropped up that you want to give to. Someone who had agreed to serve as trustee could be having second thoughts. You may have had a falling out with Uncle Joe.

It’s not just about emotional relationships, but who can best serve in the role of trustee. A friend or family member may have been a solid choice when your estate was small, but now that it is flush with the proceeds of a sale, it might make more sense to turn to a co-trustee, bank or trust company to oversee the risk of a larger cash pool.

Estate planning requires some hard thought on what sort of lifestyle you want to have in retirement, how much income that will require, and what sort of philanthropic choices you want to make. Many families set up a private family foundation as a vehicle for charitable contributions.

The next stage is to determine how to invest the money. Many successful business owners have kept the large bulk of their personal wealth tied up in their company, and can be unsure how to leverage the proceeds into a reliable income after they retire. You will need to assess your tolerance for risk, as well as your spouse’s, to help determine where your money should be invested in the various market channels — such as public stocks, bonds, private equities or alternative investments.

It’s prudent to hire an investment advisor to give you professional counsel. In selecting them, you should pick someone who meshes well with your personality, has an investment approach similar to your goals, and who you feel you can work with in the long run. It may make sense to interview at least three candidates before making your final choice.

In the accounting profession, we call the sale of a business a “liquidity event,” since it usually results in the quick acquisition of a large amount of liquid funds. For most people this is an once-in-a-lifetime occurrence, so you want to be in a position where everything from an investment and estate planning perspective is well managed.

Your investment choices should be appropriate for your age, stage of life and risk tolerance. If you retire at age 65, your life expectancy is around 87. With 22 years of life left, that’s a long period of time to plan and prepare for to make sure your money lasts. A lot of people will see that they’ve got a couple of million dollars banked and think they’re set for life. But that is not always the case, especially with unforeseen circumstances like a medical crisis or a downturn in the market.

Some people are not comfortable with equity markets, and can’t handle swings in volatility. Just this past week we’ve seen the Dow Jones fluctuate by several hundred points. The real test of your investment approach is if you can sleep well at night and not worry constantly about your nest egg. You worked hard to build your business and find the right buyer, so you deserve peace of mind.

If you have any questions about how to manage the post-succession process, please call Nick Hopkins at (317) 608-6695 or email [email protected].

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?

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].

Succession Planning: Avoiding the Post-Exit Blues

(Part 4 of 6)

In our previous segments of this series, we have discussed the sequence of events leading up to the exciting big event that the business owner has worked toward: when you “cash out” and head towards your “second career” in retirement.

We find that many owners who go through this process do not always prepare themselves for the post-exit transition period. This can be a very challenging existence for a number of reasons.

Many sale agreements require that you remain with the company for a transitional period — usually 6 months to two years. During this time you may find that no longer being “in charge” is not only foreign to you, but a situation that you find incredibly frustrating. You may find that the new owner is making changes to your “beloved operations” that are very different from your philosophy and inconsistent with the way you ran the business for 20, 30, or 40 years!

You may also find that your former employees are not being treated in the manner that was at the core values of the company when you owned it. You may also find that after the initial transition period, you are still being paid and have an employee agreement, but there is very little for you to do but answer questions. You may even come to question in your own mind what your value is to this endeavor.

Our experience is that in about 40%-50% of these cases, the former owner terminates the transitional employment agreement before its term is complete. The former owner will be challenged by his or her own relevancy to the company they used to preside over, as the “troops” are now seeking direction from the management team installed by the new owner.

So as an owner contemplating a sale of your company, how do you avoid these pitfalls? To a certain degree, you can’t, as they come about as a result of a natural human reaction to life’s events. But you can help yourself as follows:

Psychologically prepare yourself for this change. Many owners have sought counseling, or at least conferred with other business owners who have experienced a similar transition.

Talk very candidly with the buyer and clearly define your terms, conditions and responsibilities during the transition period.

We would recommend agreeing to a short transition period as practical, with options to extend upon mutual agreement, rather than a longer period.

In the sale or exit event, if there are people or conditions you want to see maintained, negotiate for those in the sale agreement. Because after this transaction, you are no longer the owner, president or CEO – you gave up that authority upon the sale, and hopefully have a much larger bank account to show for it!

The key to a personally successful exit from your company and avoiding any second-guessing after the transaction includes:

Honest self-reflection on your personal motivation for exiting, and acceptance that your professional life will change!

Proper planning in all phases and negotiations of the transaction.

If you have any “sacred cows” of any sort, cover these in the legal agreements related to the sale.

Discuss any apprehensions with your spouse or significant other, as you will need their listening ear and support.

Make it a fun event!

We as a firm have done a multitude of exit transitions on a number of different scales and structures. If we can help, please give us a call Jason Thompson at (317) 608-6694 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.

Collaborative Law: An Alternative Approach to Divorce

Divorce can obviously be a very painful transition in anyone’s life — not only from an emotional and family perspective but also logistically, legally and fiscally. It is not unusual for some contentious divorces to take three to five years to complete, mentally and financially draining the estranged spouses, and dragging out the process when what they most desire is to get on with their lives.

Fortunately, a new area of practice has emerged that aims to make divorce more amicable, quicker and less costly. Collaborative Law combines the skills of trained attorneys, financial and mental health professionals who come together with the stated goal of rendering the legal separation — including property settlement, child custody and support needs — as painless as possible.

In some cases, divorces governed by collaborative law are completed with just a handful of meetings after only a few months.

In collaborative law, both parties enter an agreement stating that they do not want to go to court. The spouses declare their desire to maintain mutual respect for one another. Obviously, there must be a high level of trust between the separating spouses — including truth about the marital assets — in order for this process to work.

Each spouse retains their own attorney trained in collaborative law, and financial and mental health professionals are selected from an agreed-upon list of qualified individuals. If the collaborative law engagement fails, it is stipulated in the contract that the couple has to start the legal process over with a completely new set of professionals, in order to avoid conflicts of interest.

From an accounting perspective, our role in a collaborative law divorce includes tasks like valuing business interests, preparing the marital balance sheet, determining the potential incomes of the parents and calculating child support payments. (The attorneys are there to advocate on behalf of their respective clients’ needs and desires, and mental health professionals help them traverse the mental and emotionally minefield involved with children, mothers and fathers.)

The benefits for the separating couple are obvious — a less contentious divorce that generally costs far less and happens much quicker than a judicial proceeding. And they get to be directly involved in every step of the process, splitting the marital assets and any support payments by mutual agreement rather than having a judge make that determination for them.

Aside from the reduced costs and time involved, getting to make your own decisions is perhaps the most attractive feature for couples going through this very difficult task. A court divorce can leave both people feeling stripped and laid bare, while a collaborative law process allows them to feel safe, dignified and respected by their former spouses. It is important for the children to observe their divorced parents demonstrating mutual respect and civility for the long-term emotional welfare of those children.

If you are interested in consulting about a collaborative law engagement, please contact Tom Sponsel at (317) 608-6691 or [email protected].

Succession Planning: The Exit Transaction

(Part 3 of 6)

In last month’s article on succession planning, we talked about selecting the right leadership team for a business ownership transition. Now it’s time to discuss the actual sale transaction: determining the liquidity the owner can expect to receive and what form it might take.

The first thing to determine is what type of sale it will be: a total outright transaction for the entire enterprise or a portion of the equity. Typically an outright sale occurs when the owner(s) is looking to retire or start an entirely new venture. If they want to stay involved, but move out of the hot seat of leadership, they might choose to sell only a part of their equity.

In my experience with many business exits, I find that the objectives of the selling shareholder — i.e., what they would like to see happen to the business after their departure — will define what type of transaction the “sale” evolves into. Many business owners who worked hard to build their enterprises feel a responsibility to the company’s legacy and to their employees, and that weighs heavily into their exiting objectives.

Part of any successful exit plan it to gather a team of advisors who will help the seller facilitate the transaction in a way that meshes with their objectives. This team can include legal counsel, accountants, a business broker who finds a buyer, insurance professionals and others necessary to properly effect the transition in an efficient manner and manage the risk involved.

Part of the advisors’ job is to manage the expectations of the seller, to help develop terms and conditions for the transaction and then be flexible in negotiating a transaction favorable to the seller. The most important things are getting a fair price for the value of the company and formulating a plan for the sale proceeds that meets the seller’s requirements.

As a rule, 100 percent cash sales are very rare. So that means the seller is probably going to carry some paper on the transaction. It’s important to establish terms of payment, time frame — it’s better to keep it short — and the interest rate. The seller also needs to consult with a tax advisor to understand the tax consequences of a sale to one’s personal financial situation.

Also, a seller should be aware that it is common for a buyer to insist upon a non-compete clause, so the seller can’t operate in the same market and/or industry for a specified term. After all, from the buyer’s position it makes little sense to pay a fair price for a company if the seller takes their expertise and business relationships to set up a new competing shop across the street!

Gathering the correct documents and executing them can be a time-consuming process that can even put the transaction at risk. Once the Letter Of Intent is signed, the seller should establish a tight timeline for consummation of the sale so distractions and delays don’t endanger the deal.

Finally, in my experience the most successful transactions are those in which the seller and buyer personally like each other. When they can communicate well and have a shared base of trust and mutual respect, differences and misunderstandings can often be worked out without sinking the sale. In one case that I was a party to, the lawyers reached a stalemate over terms, and the CEOs of the buying and selling companies resolved the matter with a simple phone call.

In next month’s succession article, we’ll talk about avoiding the Post-Sale Blues.

If we can assist you with any succession planning and business exit planning issues, please call Jason Thompson at (317) 608-6694 or email [email protected].

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].

Succession Planning: Selecting the Right Leadership

(Part 2 of 6)

In our last article on succession planning, we gave an overview of how to begin the discussion of an exit strategy for the business owner or owners. Now it’s time to look at selecting the right leadership team to ensure a smooth transition, as well as maximize the value of the company in preparation of a sale – whether to a third party or a family member.

One of the keys to making a business more valuable is to have the right human assets, talent and skillset already in the company at the management level. Depending on the role of the business, one of the best ways to provide for the perpetuation of the company’s success is to ensure you have outstanding management in place in all vital areas of the operation.

Think about it from a seller’s perspective. If you knew most of the key managers who helped build and run the business would leave after the transaction, or if the current leadership seems inept without daily guidance from the current owner, it will seem like much more of a challenge to take on. As a result, they won’t want to pay as much.

On the other hand, the more the managers already in place can operate in an autonomous way without requiring direction from the current owner/leader, the more valuable the company can be.

The first priority should be in the “C-suites,” the highest-level executives: the CEO, COO, CFO, CIO and so on. It’s obviously critical to have the “right people on the bus” — those who have the proper expertise for their role and share a common vision for the company’s goals.

But don’t ignore the lower levels of management. It’s smart to take a really hard look at the organization chart in a strategic manner, and think about who might be ready to retire or move on – and who their replacement might be.

In contemplating a succession, you should perform an exercise where you evaluate every key position you have, whether the current person is performing up to task, and if you have somebody identified who would be the logical choice to step in and take over.

At Sponsel CPA Group, we advise most owner/managers to start thinking about succession five to 10 years out – though it’s never too late to start planning. During this phase it’s important to recruit, train and promote from within the business so your bullpen is always strong.

This can be a challenge for some strong-willed CEOs, who think everything revolves around them and the business would come crashing down without their daily oversight. This may be true, and even gratifying to some extent, but it diminishes the potential value of the company if the people around you aren’t trained to operate in your absence.

We recommend that business owners meet from time to time with managers in vital positions to assess their place within the organization. Talk frankly about what’s expected of them today, and also how you envision their role changing in the next three to five years. If you spot a hole in the skillset they’ll need to advance to the position you both desire, develop a plan to fill it.

It can even be helpful to have a written plan of how to groom someone for their move up the company ladder. For example, in year one they will take on certain new responsibilities; in year two they will gain oversight of this particular department, and so on.

If you feel like your current team of managers isn’t up to snuff, start making moves now so in a few years they’ll be fully trained and ready to go when you’re heading out the door. This will not only help the company you created or grew, but enhance your own financial position when the business gains in value.

If you have any questions about the succession planning process, please call Jason Thompson at (317) 608-6694 or email [email protected].

Succession Planning: Starting the Discussion

(Part 1 of 6)

One of the unfortunate consequences of the Great Recession is that so many business owners were focused on the immediate survival of their company, they put off long-term planning for the future – including an exit plan for when they want to retire or sell their business.

This month we are beginning a new six-part series that will walk you through the succession process, starting with an overview of how to begin the discussion. Subsequent articles will focus on specific topics like positioning the company for a sale, getting a new management team in place, finding the right advisors, and so on.

In our collective years of experience, the team at Sponsel CPA Group has often encountered owners of very successful ventures who haven’t adequately saved for retirement on a personal basis. Most of their personal wealth is tied up in the business, and they thought that was enough to fund their golden years.

One of the first things you must do is define financial freedom for yourself. What sort of lifestyle do you expect to maintain in retirement? How much money will you need? How can you best extract that value from the business and turn it into personal income-producing assets during your retirement years?

It’s vital to keep in mind that succession planning isn’t an overnight process. We advise most clients to start thinking about it five to 10 years in advance. If you want to retire young enough to enjoy the fruits of your labors, that can mean starting the planning process while you’re still in your prime. But it is never too late, if your timeline is shorter.

This can be a challenge in of itself. If you are a 55-year-old Baby Boomer who feels like you’re at the top of your game, it’s natural to resist contemplating the finale. So ask yourself: are you really ready to give up control?

If yours is a family business with multiple generations of ownership, there can be an additional sense of responsibility to those who came before and after. In this case, it’s vital to communicate with the next generation as early as possible to explore if they’re interested in acquiring the business.

Too often, this sort of serious discussion never takes place, which can result in all sorts of undesirable confusion and enmity. The legacy of the business operations may not survive.

For example, we once advised a client with two children: a son deeply involved in the day-to-day running of the business, and a daughter who was completely uninvolved and disinterested. The owner’s initial plan was to transfer ownership of the company to the son, but give the real estate to the daughter. The son objected, arguing that he would be doing all the work (50-70 hours a week) while his sister would sit back and collect rent checks, with no effort!

In another scenario, a father (a second generation owner) sold the company to a third party, only to learn after the letter of intent was signed that his daughter had hoped to one day take over the reins, even though she was not working for the business at the time of the sale. She was never asked by her father if she had an interest in the business.

These examples go to show that it is not always clear-cut in terms of what the family will think is fair. If that next generation is married, this adds another component as their spouse may want to have a say and/or participate in the business.

Finally, as you begin the discussion for succession, consider the potential value of the company and what terms of the transaction will be acceptable to you.

In our experience, a very small percentage of business owners walk away with a single check for a lump sum. In most cases, it’s actually less than 5 percent of the purchase price. So start thinking about the payment terms and financial structure you will need in retirement, or for your next venture.

In next month’s installment, we’ll talk about selecting the right leadership team to ensure a smooth transition.

If you have any questions about the succession planning process, please contact Amber Hoover at (317) 613-7844 or [email protected].

IT Security: Protecting Your Company

Not long ago we talked about how to protect your customers’ important data. Now let’s discuss ways to safeguard your company’s internal systems and databases.

There is a quiet but ongoing war between hackers and IT security over preventing unwanted access to the systems of businesses and organizations. The challenge for those of us on the protection side is that there’s always a new bug or program cropping up to infiltrate computer networks – often without us even knowing at first – such as the Heartbleed virus you’ve probably heard about.

Many business people who are non-technical in nature think simply having a firewall and anti-virus software in place is enough to defend your company’s internal systems and databases. But this may not always be the case with today’s most sophisticated data infiltrators. So you should take proactive steps to protect them before the bad guys think to target you.

Some of this may seem self-evident, but you would be surprised how many organizations fail to physically secure their systems. This includes:

Having a locked room where the company’s servers are located, with only senior management and IT experts allowed access.
Making sure all laptop computers that are owned by the business or contain company data are accounted for at all times.
Ensuring that computers both inside and outside the office are protected with encryption software. This can be done in one of two ways: encrypting individual devices so unauthorized people can’t access it, or storing all your crucial information in one place and having employees access it remotely.

One thing to guard against is what we call social engineering, in which hackers interact directly with a person to try to trick them into giving up their passwords, or fool IT staff into giving them access by resetting a password. Having strict security policies and ensuring everyone adheres to them is how you protect against social engineering.

Doing such things as making people verbally give you their pin code over the phone, and shutting off their access if they can’t get it right in a certain number of tries, may seem harsh. But it greatly reduces the chances of a hacker getting into your company’s databases or taking over your website.

Then there is the familiar issue of passwords. Everyone feels hassled about having to remember so many passwords these days. But a little frustration is well worth the security that comes with having a strong password system that is unlikely to be broken by hackers who use randomization programs to guess your access codes.

Your password criteria should be: no less than eight digits; use a mix of upper- and lower-case letters, numbers and symbols; and change it often – once every 72 days is recommended.

Disgruntled employees can be a major source of IT intrusion. If you know a certain worker is going to be terminated, work in advance of their notification to make sure they can’t do any important damage.

Finally, at least once a year, have your IT manager or consultant do a complete “sanity check” of your system, performing a top-to-bottom review of things like security protocols and data recovery backups.

If you need to consult with an expert about protecting your company’s data, please call Chris Edwards at (317) 613-7855 or email [email protected].

Fraud 301: Why do perpetrators commit occupational fraud?

(Final in a 3-part series)

In the first part of our series, we dealt with popular occupational fraud schemes. In Fraud 201 we discussed who commits occupational fraud. This article delves into why employees may commit fraud and offers some suggestions on what you can do to keep it from happening.

Dr. Donald R. Cressey, a criminologist whose research focused on embezzlers, developed the following hypothesis:

“Trusted persons become trust violators when they conceive of themselves as having a financial problem which is non-sharable, are aware this problem can be secretly resolved by violation of the position of financial trust, and are able to apply their own conduct in that situation, verbalizations which enable them to adjust their conceptions of themselves as trusted persons with their conceptions of themselves as users of the entrusted funds or property.”

This hypothesis is the foundation for Cressey’s “Fraud Triangle,” a model for explaining the factors that cause someone to commit occupational fraud. The factors are Pressure, Opportunity and Rationalization. The existence of these three factors together can lead to fraudulent behavior.

Pressure is an incentive or reason for doing something. Pressure can be internal or external to the company. Internal pressures include perceived lack of appreciation, the perception of being under-compensated, being mistreated by a supervisor/boss/owner, etc. External pressures include addictions, unexpected financial difficulty, health concerns, family financial pressures, etc. In the context of occupational fraud, the pressure ultimately causes a financial problem for the employee. Thus they are forced to look for ways to solve their personal financial issue.

Identifying pressures is often a difficult task and one that may not provide a benefit in excess of the cost when trying to deter fraud. Keep in mind, however, that many convicted perpetrators were living beyond their means. So having knowledge about your employees’ activities outside of you business can prove to be a valuable fraud prevention technique.

Opportunity is any chance for advancement. Opportunities exist for employees when they have both access to an asset and access to the company records regarding that asset. For instance, when an employee has both the ability to authorize and record a cash disbursement.

Opportunities can be minimized with well-designed internal controls. Therefore, a review of your company’s processes, combined with periodic oversight and inquiry, will help in identifying opportunities and ways to eliminate them. Segregation of duties and authorization, along with avoiding conflicts of interest, are also strong preventive tools.

Rationalization is often considered the trigger for fraud to occur. Rationalization is the justification of the fraud as the solution to the pressure. In general, most people are good and want to do good things. Therefore rationalization is necessary in order for the good person to allow the pressure to coerce them into doing a bad thing.

The existence of all three fraud triangle factors in a particular instance causes the chances of fraud to skyrocket. Don’t get caught holding the triangle — know your critical employees, design and implement effective internal controls and watch for changes in employees attitudes, habits and activities.

If you are concerned about occupational fraud in your organization, call Jason Thompson at (317) 608-6694 or email [email protected] we would be happy to discuss how we could be of assistance and ideas for prevention that you can take advantage of.

Client Profile: Zone Solutions

The average consumer isn’t particularly knowledgeable about what Foreign Trade Zones (FTZ) are – mention the topic, and most people think of the duty-free shops where they can pick up international goodies at a discount. But FTZs are actually an essential part of the U.S. economy, accounting for about one-fifth of the value of imports entering the country.

BMW’s plant in Spartanburg, S.C., manufactures more than 1,000 vehicles per day inside a foreign trade zone, employing American workers while exporting approximately 85% of their goods. President Obama’s 2010 National Export Initiative sought to double U.S. exports by 2014; so far, Foreign Trade Zones are the only slice of the import-export pie to achieve that goal.

Zone Solutions, headquartered in Indianapolis but doing business coast to coast, acts as the middle man between clients and governmental regulatory agencies. Under this managed services business model, they ensure compliance with customs laws and report all receipt and removal activity on behalf of the FTZ Operators.

Zone Solutions also assists businesses with cost-benefit analysis, FTZ application review, development, submission to the Foreign Trade Zones Board, and FTZ site activation. Their personnel utilize proprietary software to help manage the flow of information about goods moving through FTZs.

“A large portion of the program is accountability for merchandise, and systems play a very large role in that accountability. We ensure our customers’ inventory systems remain in sync with Foreign Trade Zone systems,” said Eva Tomlinson, Zone Solutions President & CEO.

Essentially, they help clients monitor the information and trade activity being communicated to US Customs and other regulatory agencies.

Founded in 2003, Zone Solutions started with a very select group of clientele, and has experienced tremendous growth – doubling revenues virtually every year. They’ve gone from two employees to 17, with plans to hire three more this year.

Tomlinson envisions continued growth in the coming years, but says their primary emphasis is on maintaining their high level of compliance in on-going operations, which helps Zone Solutions stand out from the crowd.

“We have experienced a great percentage of growth since we started. But given the nature of our business and the clients we work with, we have a philosophy of controlled growth. It is so important that the projects are implemented in a compliant manner, and that we have the checks and balances in place so they stay compliant,” she said.

“Our commitment is to excellence; that’s what we strive for. We build our policies and procedures around them.”

Their record speaks for itself: no Zone Solutions client has ever received a negative audit from regulatory agencies.

Tomlinson said Sponsel CPA Group has been instrumental in developing a long-term valuation strategy for the company. Their counsel has helped determine how to structure the business to realize the most advantage tax position possible. They also give guidance and advice on a variety of subjects to help them keep growing in the way they want.

“Sponsel CPA Group provides consulting as it relates to company structure, strategy from a tax perspective, and they also handle the corporate tax reporting on an annual basis,” she said.

Lease Accounting Convergence Efforts: Is Change in the Future??

Over a decade ago, the improper treatment of leases by Xerox Corporation sent shock waves through the financial and accounting professions. Recently, the International Accounting Standards Board met with the U.S. Financial Accounting Standards Board in an attempt to reach consensus about how to consistently record and report leases on financial statements.

As the accounting profession continues to seek convergence between accounting principles generally accepted in the United States (GAAP) and International Standards, companies and organizations across the U.S. continue to utilize leases to finance the growth of their operations.

For most companies, the decision about whether to purchase or lease an operating asset is not so much about how it will be reported on their financial statements as it is about cash flow and the anticipated timing of business plans. For some, the prospect of entering into an operating lease and keeping that off the balance sheet (as a liability) is very enticing.

However, the prospect of capitalizing operating leases on a company’s balance sheet is looming in this proposed convergence and, if passed, could have a significant impact on your financial reporting.

For example, if ABC Company leases their corporate offices for $12,000 a month, they expense $12,000 a month and disclose the 10-year length of their lease term in the footnotes to their financial statements along with the related future minimum payments. There is no asset or liability recorded on their balance sheet under GAAP.

Under international standards, at the inception of their office lease, ABC Company would record an asset for the right to use that office space and a liability that represents their future payments on that lease – for the term of the expected use of that asset. With a monthly $12,000 payment ($144,000 annually) for 10 years, it is easy to understand why adding an asset and related liability to ABC Company’s balance sheet would cause a significant change to their financial statement presentation.

Beyond financial reporting, any agreements tied to the balance sheet of ABC Company, or related financial metrics, would be impacted – namely covenants on commercial financing agreements.

The FASB and IASB did not reach a consensus when they met last month about convergence of lease standards, but they did not give up on seeking consensus, either. This will continue to be an area of focus for standard-setters. In the meantime, companies don’t need to change their financing plans, but should be vigilant of the impact future changes in accounting policy could have on them.

For more information about accounting for leases, contact Mike Bedel at (317) 613-7852 or email [email protected].

Fraud 201: Who Commits Occupational Fraud?

(Second in a 3-part series)

By Jason S. Thompson, CPA/ABV, ASA, CFE, CFF
Partner, Director of Valuation and Litigation Services

Our Fraud 101 article last month dealt with common occupational fraud schemes that occur in privately held businesses. This knowledge can be helpful in designing internal controls to reduce the opportunity for fraud in your business. It’s also helpful to understand exactly who commits occupational fraud.

The Association of Certified Fraud Examiners (ACFE) 2012 Report to the Nations is their most recent study published on occupational fraud and abuse. This report includes demographic information about fraud perpetrators. Based on this data, occupational fraud is most often committed by perpetrators with the following characteristics:

Gender – Males account for approximately two-thirds of occupational fraud cases.

Age – According to the study, approximately 54 percent of the perpetrators were between the ages of 31 and 45.

Education – Approximately 54 percent of perpetrators have a college degree or above.

Position (level of authority) within the Company – Occupational fraud is committed most frequently by the rank and file employees of a company. While this level of authority constitutes the most frequent level of perpetrator, fraud at the owner/executive level of authority is approximately six times more costly than those of other employees.

Tenure with the Company – The longer an employee works for a company, the more trust they can build with supervisors and co-workers. They also have more experience and a better understanding of the company and its transactions. These factors contribute to employees with tenure of between one and five years being the most frequent perpetrators of occupational fraud.

Department at the Company – Employees in the accounting department generated the highest number of occupational fraud cases, according to the study. It was followed closely in second and third place by operations and sales, respectively.

Prior Criminal Background/Employment History – Approximately 87 percent of cases in which information about prior criminal background was available indicated the perpetrator had not been previously convicted of a fraud-related offense. Of the cases with employment history available, 84 percent showed the perpetrator had no prior termination or punishment for occupational fraud.

Keep in mind that just because an employee falls into one or more of these demographic patterns doesn’t mean they will commit occupational fraud; these are merely the common traits found among occupational fraud perpetrators.

Next month’s article will delve into “Why” a person may commit occupational fraud.

If you are concerned about occupational fraud in your organization, please call Jason Thompson at (317) 608-6694 or email [email protected] to discuss how we could be of assistance in finding or preventing fraud.

Client Profile: Blue Ribbon Transport

Blue Ribbon Transport was founded in 1996 as a sister company to Caito Foods Service, taking over their distribution needs. Over the past decade, though, the Indianapolis-based business has experienced regular double-digit growth as it expanded its horizons into a full-service transportation and logistics operation.

Now they employ approximately 50 people and do roughly $70 million worth of business a year, with a client list that includes familiar brands like Kroger, Dole Vegetables, Driscoll’s strawberries, Harlan Bakeries and more. They also increasingly deliver distribution solutions for non-food companies, and even non-asset based logistics.

“We essentially hear what the customer needs and build a solution around that need,” said President/CEO David Frizzell. “We never want to say to somebody, ‘We don’t do that.’”

Frizzell took over the helm in 2004, and immediately saw the transportation management they were performing for Caito could be extended to other clients. Blue Ribbon Transport does not actually employ the truck drivers or own the fleets, instead subcontracting that out to third parties. What they do is set up the distribution points, organize the schedule of shipments, and constantly search for a way to get goods from Point A to Point B as cheaply as possible.

“Distribution is where the war is won or lost,” Frizzell said, noting that manufacturing costs of many commodities tend to be fairly even. Once customers who had used them for shipping saw their services in related areas, like warehousing refrigerated goods, it opened up a host of opportunities that had previously been missed.

Blue Ribbon is in a controlled growth mode as they explore future possibilities, such as getting their clients to collaborate with each other in cooperative arrangements, searching for more economy in the supply chain. For example, one of the things the company spends a lot of resources on is making sure that trucks that deliver food from agricultural regions to population centers can make the return trip loaded with other goods.

While food products no longer represent all of their pie, it remains their bread-and-butter, business-wise. And Frizzell says that will always be so.

“Food has been very good for us, because even in downturns of the economy people still have to eat. They may eat differently — they may not eat as much fresh strawberries, but they’re still going to buy their staples,” he said. “Strategically, we always want to stay in food and we always want to have a strong food portfolio.”

About three years ago as Blue Ribbon Transport was continuing to stake a separate corporate identity from Caito, Frizzell brought in Sponsel CPA Group to focus on their growing mission. This included bringing in a new controller, as well as additional needs for tax advice, audit services and setting up capital groups to provide the resources to expand their horizons.

“Nick Hopkins and his group came in and gave us exactly what we were looking for, which was a very personal experience. We know we mean something to them,” Frizzell said. “Sometimes with other accounting firms you feel like you’re just number. Nick goes over everything with us in person, and nothing ever waits to the 11th hour.”

Rather than waiting for a call when help is needed, Hopkins is very proactive and is constantly bringing new ideas to the table, according to Frizzell. “They’re trying to give us what we need to grow, and always adding value to the relationship.”

Cash-Hoover earns ABV credential

Amber Cash-Hoover, a CPA and Analyst in the Valuation and Litigation Services department, has officially earned her ABV credential, designating her as Accredited in Business Valuation.

According to the American Institute of Certified Public Accountants (AICPA), which awards the credential, an ABV recognizes “premier business valuation service providers who differentiate themselves by going beyond the core service of reaching a conclusion of value and creating value for clients through the strategic application of this analysis.”

	2016	2015
401(k) deferral limits	$18,000	$18,000
Catch-up Contribution to Qualified Plans	$6,000	$6,000
Highly compensated employee	$120,000	$120,000
Annual compensation limit	$265,000	$265,000
Social Security taxable wage base	$118,500	$118,500
Section 415 limit	$53,000	$53,000
Traditional IRA limits	$5,500	$5,500
Catch-up Contribution to IRAs	$1,000	$1,000
Healthcare flexible spending account	TBA*	$2,550
Mileage reimbursement	TBA**	$0.575/mile

	2015	2014
401(k) deferral limits	$18,000	$17,500
Catch-up Contribution to Qualified Plans	$6,000	$5,500
Highly compensated employee	$120,000	$115,000
Annual compensation limit	$265,000	$260,000
Social Security taxable wage base	$118,500	$117,000
Section 415 limit	$53,000	$52,000
Traditional IRA limits	$5,500	$5,500
Catch-up Contribution to IRAs	$1,000	$1,000
Healthcare flexible spending account	$2,550	$2,500
Mileage reimbursement	$0.575/mile	$0.56/mile