Sikich Leading Edge Magazine: Information Overload
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This document provides information about Sikich LLP, an accounting firm, announcing their move to a new corporate headquarters location. Some key details: - Sikich LLP has relocated their corporate office from Aurora, IL to a new location near the border of Aurora and Naperville at I-88 and Route 59. - The new facility is said to enhance operations and provide an optimal work environment for employees. - All other contact information such as phone numbers and website remain the same. - The document provides information about Sikich LLP's service offerings and invites readers to update their subscription information for the company's newsletter.
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Sikich Leading Edge Magazine: Information Overload
- 1. WINTER 2012 PUBLISHED BY Sikich LLP ADVICE & INFORMATION TO HELP YOU MANAGE YOUR BUSINESS INFORMATION overload How to get the most from your business data Plus SBA loans in 2012 Doing business in Brazil
- 2. ADVICE & INFORMATION TO HELP YOU MANAGE YOUR BUSINESS Definitely Different.® We may not look like your typical accounting firm. We’ve moved That’s because Sikich is to our NEW anything but typical. corporate We understand that each business, each headquarters! organization, and each industry is unique and needs to approach situations differently. Sikich LLP is pleased to announce its NEW corporate headquarters effective For more than 30 years, Sikich has been November 21, 2011. leveraging its business consulting expertise to transform and adapt to changing times. To further our dedication to providing you with the highest level of service, we By setting new standards for improved have relocated our corporate office from 998 Corporate Blvd., Aurora, to the performance, we have redefined the way our Tellabs building located near the border of Aurora and Naperville at I-88 and clients do business. Our clients like the convenience of working with one partner Route 59. We now have a centrally located, top-quality facility that enhances who is able to provide a full range of the operations of our growing business and provides an optimum working services and appreciate the different voices, environment for our team. views and perspectives of a team that is focused on the execution of long-term Please update your records and stay in touch! strategic goals. We are ready to make a NEW Corporate Office All other contact information remains the same: 1415 W. Diehl Road Phone: 630.566.8400 difference for you. Suite 400 Fax: 630.566.8401 • Accounting & Consulting Services Naperville, IL 60563 Website: www.sikich.com • Assurance Services • Business Valuation • Dispute Advisory Services • Graphic Design & Marketing Services SUBSCRIPTION UPDATE • Human Resource Consulting Complete this form and fax to Samantha Staniszewski at (630) 499-7474 or e-mail • Investment Banking & Corporate Finance to sstaniszewski@sikich.com. Please update your subscription list as follows: • Performance Measurement • Retirement Plan Services ■ Change address ■ Subscribe • Tax Services ■ Unsubscribe from Leading Edge • Technology Services & Products Name _________________________________________________________________ • Wealth Management Title __________________________________________________________________ Company ______________________________________________________________ Address _______________________________________________________________ City ____________________________State __________________Zip ____________ Chicago | Decatur Indianapolis | Naperville | Rockford Phone _________________________________ Email _________________________ Springfield | St. Louis Copy this form as necessary for multiple requests. 877.279.1900 | www.sikich.com Securities are offered through Sikich Corporate Finance LLC, a registered broker dealer with the Securities Exchange Commission and a member of FINRA/SIPC. Advisory services offered through Sikich Financial, a Registered Investment Advisor. General securities offered through Triad Advisors, Member FINRA/SIPC. 2 WINTER 2012
- 3. VOLUME 12 • ISSUE 2 • WINTER 2012 Leading Edge www.LeadingEdgeAlliance.com contents The Leading Edge Alliance is an interna- tional professional association of inde- pendently owned accounting and con- sulting firms. The Leading Edge Alliance enables member firms to access the resources of a multibillion-dollar global professional services organization, providing business development, pro- fessional training and education, and peer-to-peer networking opportunities nationally and globally, around the cor- ner and around the world. features Members are quality firms who are suc- cessful, have deep client relationships, and strong ties to the community. The 4 Information Overload Alliance provides members with an impressive combination: the compre- How to get the most hensive size and scope of a large mul- tinational company while offering their from your business data clients the continuity, consistency and quality service of a local firm. Member firms have access to extensive teams of business advisors—a peer-to- 14 SBA loans set record in 2011: What’s next? peer connection that provides the right business solutions for clients. Plus tips on how to secure one in 2012 To find out more about the Alliance, contact Karen Kehl-Rose, president, at +1 630.513.9814 or kkr@The-LEA.com. 16 Top 6 things to know Leading Edge Advisory about doing business in Brazil Committee Tricia Egry / Alpern Rosenthal Mary Franklin / Lurie Besikof Lapidus & Co., LLP Jen Lemanski / PKF Texas departments Gary Voth / PKF Texas Karen Kehl-Rose / The Leading Edge Alliance 9 News and information In affiliation with from our firm Smart Business Content Marketing www.sbnonline.com Ann M. Gynn / Editor Danielle Toth / Associate Editor 13 Bits & Pieces Stacy Vickroy / Art Director Andrea Jager / Graphic Designer 18 On the Bookshelf Leading Edge is published four times per year by Smart Business Content Marketing, 835 Sharon Drive, Suite 200, Cleveland, OH 44145. (440) 250-7000, (800) 988-4726, FAX (440) 250-7001, www.sbnonline.com. Periodicals postage paid at Cleveland, Ohio. IRS Treasury Regulations require us to inform you that any tax advice contained in the body of this communication was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding pen- alties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions. LEADING EDGE 3
- 4. 4 WINTER 2012
- 5. cover feature INFORMATION overload How to get the most from your business data BY DANIELLE TOTH D ata keeps piling up at your business—client names, emails, purchase information, industry research, etc. They fill up seldom-used spreadsheets, stuff filing cabinets and sit on servers in cold, dark rooms with nary a query. “There is a big accumulation of data that’s taken place over the last decade that has accelerated over the last few years because of the development and implementation of inexpensive data storage,” says Larry Miller, CEO of Activate Networks, a Massachusetts-based social network analytics company. “Ten terabytes of data was a big deal 10 years ago, whereas now it’s not a big deal at all. The sheer pervasiveness of data is astounding.” While amassing data is cheaper, tapping into that data is where the true value for your organization comes. Chances are your data isn’t living up to its full potential and wasting time and resources. Turn data collection into a data strategy for innumerable benefits. Step 1: Evaluate existing data. To use data effectively, it first needs to be organized and managed correctly, says Daniel Teachey, senior director of marketing at DataFlux, a North Carolina-based data management company. “Companies collect data on just about everything,” Teachey says. “They’ve generated literally gigabytes and terabytes of information, but that information needs to be categorized and managed in a uniform way so companies can then use it properly.” LEADING EDGE 5
- 6. An interdepartmental database of customers can help management keep track of which customers have made purchases or contact with the company and which haven’t, giving the company a better idea of whom it should target in its marketing campaigns, she says. With better access to better data, the company is spending its money in a smarter, more efficient way, Von Achen says. She says companies can decide whether to start anew or import old data (from a specific date, not all the data ever collected) into the new information system. “Information systems should be used Data Flux’s Teachey says the system itself isn’t as important as the need to standardize more to develop business strategy rather a business’ practices so data is entered in the same way throughout the company for easy than just housing data.” organization and retrieval. Customer data, which is typically the most – Kendra Von Achen, frequently collected and used information, president, DB Pros should be entered following a standard format for items such as addresses (write the full word or abbreviate street names?) and names (last name or first name first?) Standardizing information about products To organize its data, a company should company will measure itself from a and materials is a little more complex, Teachey first remove invalid data. Take phone beginning baseline and monitor their data admits. “If you go to the store and buy a numbers as an example. If your database has improvement program to see how it has package of 20 hex nuts, that purchase can be numbers in the “phone” field with fewer than improved the company, both in time and represented many ways in a database,” he 10 digits, remove or update the invalid revenue. The company can then continue to explains. “For example, you can use 20 count, ct number, Teachey advises. make adjustments and improvements to or cnt. Or you can identify the item by an item He says validation is also based on increase its efficiency.” code. Generally we recommend identifying common sense. For example, a health care items by an item code because they are provider most likely keeps patient records Step 2: Make data easily accessible. normally standard throughout the industry.” that include both the patient’s gender and No matter how good the information is, Information system evaluation also should health conditions. A female patient cannot access to the information is a must for take into account security access measures have a prostate condition, and a male patient success. A standard information-retrieval because not everyone in the company may be cannot be pregnant. If the data review system can vary based on a company’s and privy to the data, although DB Pros’ Von indicates incongruent information, it should possibly departments’ needs, says Kendra Von Achen recommends against privatizing too be removed or reviewed, he says. Achen, president of DB Pros, a New Jersey- much. “Information systems should be used Cleaning up and organizing data translates based data consulting firm for entrepreneurs more to develop business strategy rather than to a more immediate ROI. As an example, and small businesses. just housing data,” she says. “Having an open Teachey says, clean data reduces the spoilage While a new information system can be database is an important value for the rate in a direct mail marketing campaign. A costly, the ROI is substantial, she explains. company.” company that sends a catalog to 15,000 Implementing a more effective system can customers could reduce its spoil rate to less save the company money in terms of number Step 3: Use data to the maximum. than 1 percent, thus saving on needless of personnel and improved time Don’t overlook non-traditional uses for your postage, printing and related costs for management, including reducing the amount data. Customer data, for example, can be used catalogs that no one receives. That translates of hours needed to manually enter, re-enter in more ways than checking to see if an order to a better return on investment. or retrieve information. was delivered or finding addresses for a key “When you reduce costs, you increase One of the biggest benefits is improved mailing. The information can identify customer your profit,” Teachey explains. “A smart marketing capabilities, Von Achen explains. continued on page 8 6 WINTER 2012
- 7. cover feature MANAGE THE OVERLOAD We are constantly bombarded with an alarming amount of information every minute of every day—some we request, some we don’t. Whether it’s beeping email notification messages, constant TV advertisements or millions of Google search results, you cannot escape data. “Information overload is a very big topic, and the impact is universal,” says Jonathan Spira, chief analyst at research firm Basex and author of the new book Overload! How Too Much Information is Hazardous to Your Organization. “In fact, our research demonstrates knowledge workers lose 20 to 25 percent of the day due to information overload. It’s staggering.” Spira says information was limited a few hundred years ago in part because many more people couldn’t read and few books were published. However, as information democratized, everyone regardless of social class could understand and access a wealth of information. “Whether you’re a university professor, a member of Congress or a day laborer, if you go to Google and type in the same search information, you’re going to get the same results,” Spira says. To dial down information overload and gain valuable lost time, he offers a few strategies: Manage your email. For every interruption, it takes the mind 10 to 20 times the length of the interruption to get back to the task, Spira says. So a 30-second interruption requires at least five minutes to recover. To save on interruption time, Spira recommends copying recipients on emails only when they absolutely need to see the information. He also advises to quickly reread your words before hitting “send” to make sure all the necessary information and attachments are incorporated to minimize or eliminate replies with additional questions. Don’t mix topics in one email because it can become confusing and harder to remember. Also, most people won’t read the entire email if it has too much information. If you do need to send a long email, summarize what the email is about in the first sentence so your readers know what it covers. Optimize search engines. Most people don’t know how to construct search arguments using Boolean logic, Spira says. Even simple terms such as AND, OR and NEAR can tremendously narrow down a search (ex: Java NOT coffee for information on the island). Don’t forget to use quote marks around phrases to narrow down the results. Many search engines also offer an advanced search option that allows you to search by file format, website, date, etc. Delete old or obsolete information. Saving all data forever is not the best course of action. Identify a record-keeping policy so employees know when they can delete—and then remind them to delete information they no longer need from their inbox and their file drawers. “Information overload can be controlled with some basic tweaks that have a dramatic impact,” Spira says. “But the worst thing a company can do is bury its head in the sand and say it has bigger fish to fry. The problem will only come back to haunt them later.” LEADING EDGE 7
- 8. cover feature demographic makeup, so you better understand perhaps the company would realize the need For example, Activate Networks turns who your customers are and how to better to identify a back-up vendor because it relies health insurance claims into a network map. meet their needs, Von Achen says. on a single provider for a critical service. Pharmaceutical companies and health care “By looking at your customer data, you can Businesses can access significant plan administrators can see how patients learn who your top 10 clients are,” she information from publicly available databases, move through the system, how they are explains. “This is invaluable because of the but many don’t because they aren’t aware of treated and what they are prescribed. The 80/20 rule: 80 percent of a company’s the potential. A nonprofit, with which information can be segregated based on business comes from 20 percent of its clients. Teachey worked, used U.S. Census region, therapeutic area or specialty. If you know who these top clients are, you information to determine areas of the “Understanding who is connected to can better understand what they want and community that were underserved by whom opens up a whole variety of business how to give it to them.” commercial services. The nonprofit used that possibilities,” Miller explains. Information from Twitter and Facebook free, professionally collected information to In the corporate world, Activate pages may not be considered business data reach out to sought-after retailers to locate in Networks has evaluated email traffic to map but it should be. “If companies can match a the underserved neighborhood. employee relationships. Employees who Twitter handle to a customer’s account, they Similar data could be used to determine a email each other every day and respond could capture a whole new understanding of company’s new office locations and areas in quickly to each other’s messages most likely their customer base,” Von Achen says. which the company’s key demographics live or have a strong relationship, Miller explains. Consider what other data your company work, enabling concentrated marketing On the other hand, employees who only collects. Finance files can be a great wealth of campaigns and deeper customer understanding. email each other once a quarter have a weak information that may not be linked together Companies also can turn information connection. This data can help companies to gain the biggest advantages. For example, created for one-time use or purpose into view the flow of information in their what if your company did more than pay its multiple outlets. Social network analytics workplace and improve their corporate account payables and update corresponding company Activate Networks uses data to communication structure. budgets to reflect year-to-date actual? By map social networks—but not just the “We hope to help people realize they reviewing the compensation to all vendors in a online kind. It goes deeper to map out all should take more inventory in the data they particular category, the business could identify sorts of relationships based on virtual and have for whatever reason and understand the potential for savings through aggregation. Or real-world data. value that might be in it,” Miller says. LE “Understanding who is connected to whom opens up a whole variety of business possibilities.” – Larry Miller, CEO, Activate Networks 8 WINTER 2012
- 9. INSIDE: • Non-profits face difficulties, but opportunities exist • Changing landscape of accounting and reporting for state and local government pension plans • Cutting through the clutter of HR compliance There’s gold in your data By Jeff Rudolph Once a customer sets this A ll businesses have data on their customers. In the worst case scenario it is on feature up, it is hard for them to unwind and go to another bank. Therefore, your relationship paper, in the best case it is in a with your bank Customer Relationship is “sticky.” Management (CRM) system. In What does all of this have to reality, it is somewhere in do with your customer data? between. Regardless of where Let’s answer that with another the information is kept, many question. If you don’t know who organizations do not use this your customers are, how are you data to its full potential. This is going to sell them more stuff? unfortunate, as the data is The key to reaching your literally handed to them for free, customers for additional sales is and has the ability to create a • knowing what they bought loyal customer base and attract from you, new customers. • who their decisionmaker(s) New customer acquisition is is, critical to growing your business, • where they are located, who but if you lose customers faster the business line leaders are, than you can add them, you will • what their revenue is, There are several things you want collect. You can find a not be able to achieve this • when the last time they need to do to tap into your lot of information can on the growth. Successful companies bought from you was, customer data: Internet. You might also find not only secure new customers, • what industry they are in, 1. Locate your data. If it is in it useful to subscribe to an but they keep their existing and so on. multiple systems, work to online database such as ones. There are many facets to This information allows you consolidate to a single Hoover’s or Dun & keeping your customer base: to continually market to them, system. Not only is it time Bradstreet to obtain outstanding service, fantastic and if you roll out a new consuming to maintain information not readily products, stellar support and product or service, you can multiple systems, but it is available on a company’s selling them more “stuff.” While easily identify the best prospects error prone. website. all these factors are important, in your customer base. Plus, 2. Start with the data you are 5. Finally, dig for gold. Put a data can help you with the there is a 60 percent chance currently collecting and plan in place to market to latter. However, to be clear, it is they will buy from you! determine what additional your existing customer base very hard to sell to existing Along with selling to your customer data you want to and adapt your new sales customers if you do not perform current customers, you can use collect. (Hint: one of those marketing plan to take in the quality department. your data as “free” information pieces better be email advantage of where your It is much easier to sell to an to hone your new customer addresses.) success has come from in the existing customer. The acquisition marketing. If, along 3. Create processes for entering past. If you think of your probability of a sale to a new with your customer data, you new customer data and customer data as a gold customer is 5 to 20 percent, tracked how customers came to changing and deleting data, mine—you simply need to while the probability of a sale to do business with you, you might so you are confident your dig in to see the full an existing customer is 60 to 70 learn, for example, that 20 information is accurate and potential. LE percent. Plus, selling to existing percent of your advertising is up to date. customers creates “stickiness,” spent on yellow page 4. Cleanse and backfill your If you have questions or would like which means the more things advertising, but it is only data. This can be a very more information, please contact Jeff customers buy from you the attracting 2 percent of your new daunting task. Remove Rudolph, Partner-in-Charge, harder it is for them to leave. A customers. What would your duplicate information, make Technology Services & Products, case in point is the free online marketing plan look like for the certain the data is correct Sikich LLP, at (630) 566-8421 or bill pay that most banks offer. following year? and add additional data you jrudolph@sikich.com. LEADING EDGE 9
- 10. Non-profits face difficulties, but opportunities exist Gary G. Flori, CPA, partner-in- profits. The number of with less effort. For example, if charge of not-for-profit services for Americans aged over 65 will you have written articles about Sikich LLP, took time out recently increase by nearly 80 percent your organization in the past to talk about the issues and between 2010 and 2030. Older and gained exposure by running opportunities non-profits face in Americans have both the the piece in local publications, the current economic climate. inclination and the means to you can now leverage that one make larger charitable article by quickly posting it Q. What is the economic contributions. online and gaining a broad outlook for non-profits? Internet donations—Many audience. A single article can be A. According to First Research, a non-profits have made it easy posted on an organization’s division of Hoover’s (a D&B for donors to contribute over website, a Facebook page, a accounting software. Then company), U.S. corporate profits, secure websites. Consequently, LinkedIn page, and a Twitter brainstorm with your accounting an indicator of corporate online giving has joined more account, and used in public software business partner on sponsorships, memberships, and traditional channels as a relations. So, one article to tell ways to make your system do donations, jumped 26.4 percent mission-critical part of the your story and many easy ways more for you. If your accounting in the third quarter of 2010 fundraising mix. Donating to access channels to get the system can’t handle those compared to the same period in online is often more efficient word out. processes, then consider finding 2009. U.S. personal income, than offline and can help an accounting package that will which drives consumer ability to charities reduce administrative Q. How can non-profits do better meet your needs. donate to non-profits, rose 4.6 costs. Try creating a “donate more with less? Shared-service percent in January 2011 now” link on every page of your A. Automation—One way to arrangements—For areas compared to the same month in website so donors can pay by decrease costs is through requiring specialized skills, 2010. Total U.S. revenue for credit card right then and there. automation. This allows shared-service arrangements religious, grantmaking, civic, This can be facilitated by use of management more time to focus should be considered. One such professional, and similar a well-established service on the “management” of the area is employment-related organizations fell 1.6 percent in provider such as PayPal. Other operations and finances. A great regulations. Today non-profit the fourth quarter of 2010 donors will want to pay by check example of automation in a organizations of all sizes must compared to the same period in so give them a self-addressed non-profit organization is comply with more than 40,000 2009. Although this is positive, envelope in direct mail pieces accounting software. Chances pages of employment the impact of the recessionary and brochures. Non-profits seem are most non-profits are not regulations. Government period has been severe and will to have the most success when fully utilizing the full spending on enforcement of likely continue to negatively they combine traditional appeals, functionality of their accounting these regulations has increased impact non-profits for at least the such as direct mail, with the software. Your accounting in many areas including wage next year. Many non-profits have option to give electronically. software should be handling and hour, equal employment had to adjust their services, even Social media—Some non- budgets, allocations, reporting opportunity, and immigration, though the demand for those profits have begun creating and and payroll (specifically, which puts many organizations services remains very strong. This maintaining profiles on online allocating payroll and related at risk. Non-profits are reaching is especially true for certain social networking sites to recruit expenses by program). Does out in many directions for help agencies that are heavily reliant new staff members and your organization have Excel including outsourcing and upon state funding which have volunteers, engage audiences spreadsheets for any of these shared service arrangements to been hit hard with budget cuts. interested in their cause, build processes? If so, transfer those tap into the level of expertise supporter lists, and raise money. processes to your accounting needed without committing to Q. What are some Other non-profits are reluctant system. Not only will you save additional staff. LE opportunities on the horizon to explore online social time and eliminate duplicate for non-profits? networking, primarily due to the data entry but also you will If you have questions or would like A. Demographics favor significant time investment. eliminate the risk of data entry more information, please contact charitable contributions— While the thought of social errors with a spreadsheet. Where Gary G. Flori, CPA, Partner-in-Charge, Older people and their estates media may sound like a lot of do you start? Begin by making a Not-for-Profit Services, Sikich LLP, represent a significant portion of additional effort and work, it list of all the financial data you at (630) 566-8517 or gflori@sikich. the donor base for many non- can actually increase visibility maintain outside of your com. 10 WINTER 2012
- 11. Sikich LLP Changing landscape of accounting and reporting for state and local government pension plans By Frederick G. Lantz, CPA I n late June 2011, the Governmental Accounting Standards Key components of the proposed pronouncements would require a Board (GASB) issued two exposure drafts (EDs) that government to: propose significant structural changes in how state and local • Report a net pension liability in accrual basis financial statements governments account for and report the cost of pensions (i.e., entity-wide and proprietary fund financial statements). The provided to employees. The first ED, Accounting and Financial net pension liability is the difference between the total pension Reporting for Pensions, an Amendment of GASB Statement No. liability and the actuarial value of assets. 27, proposes to alter how an employer determines and accounts • Calculate the total pension liability as the projection of benefit for the cost of providing retirement benefits to employees and payments in future periods, considering the number of how the composition of a pension liability may be calculated beneficiaries expected to receive benefits, the benefit levels and reported. The second ED, Financial Reporting for Pension including cost of living adjustments (COLAs) and other actuarial Plans, an Amendment of GASB Statement No. 25, will impact the assumptions, all of which must be consistent with the American reporting of the pension plan itself, either in a separate pension Academy of Actuaries’ Actuarial Standards of Practice. plan financial report or as a pension trust fund in the • Use the expected future long-term rate of return on the employer’s financial statements. It is important to note that investments of the pension plan as the discount rate for these proposed pronouncements do not require or suggest any determining the present value of the total pension liability. changes to how a government determines its funding policies However, if the employer has a history of not funding the ARC, for contributing to a pension plan, as that is a management the discount rate used would correlate more to a cost of decision. Instead, these proposed pronouncements relate solely borrowing rate (e.g., tax exempt municipal bond rate) as the to accounting and reporting for the cost of pension benefits employer is in fact “borrowing” from the pension fund to pay provided to employees. other costs. Historically, accounting for pension costs by state and local • Use the entry age normal actuarial cost method, using a level governments has been very budget friendly and has focused on percentage of payroll, as the actuarial cost method used to allocate the funding of a pension plan. We only report an asset or the present value of benefits earned. liability for pensions on a statement of position today if a government does not fund the annual required contribution The amount of pension expense to be recorded in accrual basis (ARC) as determined by an actuary and the asset or liability is financial statements would include: only reported in financial statements prepared using the • Normal cost (benefits earned by employees that year), economic resources measurement focus and the accrual basis of • Interest on the pension liability, accounting. This is akin to preparing a personal statement of • Changes in the total pension liability due to differences between position for yourself or your family, listing your house as an assumed and actual economic and demographic assumptions; due asset, but not reporting your mortgage as a liability. Instead, to changing the economic and demographic assumptions; or due you would only report a liability if you are behind in making to changing the terms of the pension benefits (e.g., pension spikes your mortgage payments. and/or retroactive benefit increased) and The GASB does not believe that this is appropriate • Changes in the amount of plan assets due to interest earnings, accounting or reporting for accrual basis financial statements. receiving contributions and paying benefits and differences Instead, the GASB believes that pensions are a form of between assumed rates and actual rates. compensation, like salaries, which governments provide to their employees in return for services provided by the employee. These proposed changes, if passed as drafted, will result in Therefore, the GASB believes that like salaries, the costs and significant changes to accrual basis financial statements of state and obligations associated with pensions should be recorded when local governments. The GASB hopes to issue final pronouncements earned by the employee in accrual basis financial statements, in the second quarter of 2012, with an effective date of fiscal years rather than when contributions are made by the government to a ending June 30, 2013, and thereafter for large plans and June 30, pension plan or when benefit payments are made to retirees. The 2014, and thereafter for smaller plans. LE GASB’s proposal for the two new standards are built on this basic philosophic understanding of the pension transaction and If you have questions or would like more information, please contact Frederick shifts the model from one being driven by funding to a model G. Lantz, CPA, Partner-in-Charge, Government Services, Sikich LLP, at (630) driven by costing. 566-8557 or flantz@sikich.com. LEADING EDGE 11
- 12. Sikich LLP News & Info from Sikich • Sikich LLP announced the acquisition of the Elite HP Networking Team of Integrity Technology Group LLC. • Sikich Financial has expanded its wealth management practice into the Decatur office of Sikich LLP. • Sikich LLP and Indianapolis accounting firm Ent: Imler CPA, PC, have merged. RECENT ACCOLADES: • Sikich was named Cutting through the clutter of HR compliance to INSIDE Public Accounting’s Top 50 Accounting Firms. • Sikich was honored By Joyce Grenis to win the 2011 SonicWALL US Gold Partner of the Year Award. A nyone handling human resources today is faced with an ever-changing landscape of federal, state and even local employment laws. Cutting through this clutter is a daunting task for even the most diligent HR professionals who dedicate their precious • Sikich received our eighth consecutive time to reading professional journals and attending informative seminars. In addition unmodified (“pass”) peer review report. to doing their own necessary reading and professional development, I would This is the highest level of recognition encourage anyone who has HR responsibilities to identify a trusted advisor as a conferred upon a public accounting resource and guide; someone who makes it his/her business to stay current. Who are firm for its quality control systems. some of these people? • Sikich ranked No. 13 in the Accounting • Law firms specializing in employment law. An attorney can be a valuable Today VAR 100 list. resource in articulating the legal ramifications of the laws on the books today and what’s coming on the horizon. Fees for this type of periodic support may not be in • Thanks to our employees, an organization’s budget. Sikich received our first • HR consulting practices. Consultants, while not attorneys, typically help their Chicago Tribune Top clients understand the basics of the law as commonly accepted. These individuals Workplaces Award! also bring experience related to the practical side of human resources and can advise on the pros and cons of a particular course of action in the context of the WELCOME TO SIKICH! organization and what it is trying to accomplish. • Michael Sheehan has joined the firm • Professional colleagues. You can obtain a strong informational network through as a Partner with Sikich Financial and other professionals in HR. However, realize that they’re probably facing the same is doing business out of the Decatur challenges in keeping up-to-date as you might be. office. • Local or national HR groups. These groups can be helpful in gaining a general • Richard Lynch, CPA, has joined the understanding of what is current in compliance. Some of these groups may also firm as a Partner on Sikich’s Non-Profit have useful resources available for members and most have regular meetings Services team in the Springfield office. focusing on topics on interest. Is one type of trusted advisor better than another? Not necessarily, and in some • Carla Paschal, CPA, has joined the situations a combination of resources is advisable. LE firm as Senior Manager in the Rockford office. If you have any questions or would like more information, please contact Joyce Grenis, Senior Vice • Leah Davis, MBA has joined Sikich President, Human Resource Consulting Services, Sikich LLP, at (630) 566-8454 or jgrenis@sikich.com. Financial as Compliance and Operations Supervisor in the Springfield office. 12 WINTER 2012
- 13. bits REVISIT MARKETING 101 & Whether your company is just rolling out a marketing plan or reviving an old one, simpler is better, according to The Maids. The residential cleaning company offers several low-cost, low-maintenance ideas for getting the word out about your company: Network—Not only should you join local business groups and expand your contacts, but remember you are a face of your company. Talking passionately about what you do is one of the best ways to market your BUSINESS pieces TRAVELERS TALK More than 3,000 business travelers talked the best and worst in a recent survey by Vitesse Worldwide, a land and air executive travel company. Worst experiences included: business. Accept and pursue offers to speak at community meetings to get • Herd-like, impersonal your face and name out there. treatment by travel and Word of mouth—An extension of networking and speaking passionately lodging staff about the organization is leveraging others to do the legwork for you. Offer • Overly intrusive security systems discounts or other incentives to customers and/or employees for referrals to • Frequent flight cancellations and delays individuals as well as groups to which they belong. Experiment—Every campaign does not work for every business. But if Best experiences included: you want to try something, go for it. Test your idea with an inexpensive • A concierge service with knowledge of their personal campaign then take the feedback and analyze to preferences determine if it will work on a large scale and • Well-coordinated scheduling for all facets of their trip what adjustments may be necessary. • A security detail when traveling in dangerous parts of Communicate—Send periodic print or email the world newsletters to customers. Post on LinkedIn groups, “What comes through loud and clear is that an executive Facebook and Twitter. They are a great way to traveler isn’t asking for high-priced services as much as introduce new products, special pricing or other high-touch,” says Shawn Abaspour, CEO of Vitesse offers and news. Worldwide. POOR SKILLS SPELL FAILURE FOR NEW HIRES Thirty-six percent of chief financial officers say the top reason new hires don’t work out, aside from performance issues, is a poor skills match, according to a survey by Robert Half International. The survey is based on interviews with more than 1,400 CFOs of U.S. companies. Other factors that contribute to a failed hire include unclear performance expectations (30 percent), personality conflicts (17 percent), failure to fit into corporate culture (14 percent) and don’t know (3 percent). “Companies can’t afford hiring mistakes, which are costly and can erode staff morale,” says Max Messmer, chairman and CEO of Robert Half International. “Finding the right match requires time and attention, and it’s something even busy managers need to make time for.” Robert Half offers these tips for better hires: Know what you want. Don’t recycle the job description you used last time because it has most likely changed. Take a fresh look at your needs and desired skills. Look for the intangibles. Inquire about and evaluate a potential employee’s soft skills, such as leadership and communication to determine if he or she will fit into your corporate culture. Sell your company. People in high-demand specialties commonly have multiple job offers. Show them why they should choose your organization by communicating its benefits and offering a compensation package comparable to or above market rates. LEADING EDGE 13
- 14. SBA loans set record in 2011: What’s next? T he U.S. Small Business Administration loaned more than $30 billion in fiscal year 2011—$7.8 billion more than the previous year and $1.9 billion better than the previous record set in 2007. A major reason for the growth is that the loan maximum rose from $2 million to $5 million in 2011, says Dawn DeRidder, national SBA/government lending sales manager at M&I Bank, now part of BMO Financial Group. “This opened the door for bigger projects many companies were looking to do, whether it was purchasing equipment, capital improvements or anything, really,” DeRidder explains. She adds, “In bad economic times, like the recession we’re coming out of, companies’ Want an SBA loan in 2012? What small businesses need to know SBA loans are bank-financed but expert. There are SBA district offices all across development specialists who can help.) government-backed. The backing depends the country designed to help these businesses, Applying businesses also should understand on the specific government loan program. and they should take advantage of it.” its credit report as well as identify any On the standard 7(a) loans, for example, Researching basic information through hiccups and resolution plans, Hauk advises. the SBA provides an 85-percent guarantee www.sba.gov is a first step, Hauk says. The All the documentation is important, but on loans $150,000 and less, and a site is filled with the latest information and the critical component to any application is 75-percent guarantee for loans more than updates, including forms and guidelines a that the applicant truly understands the $150,000, explains Dawn DeRidder of business might need. nature of the business, DeRidder says. BMO Financial Group. In addition, the The next step is to find an expert to help “I can’t tell you how many times I’ve talked SBA-backed loans can have lower interest guide the business through the process. to a client who wants to start a business, and rates and longer terms. Through the SBA website, businesses can when I ask them about their business plan, SBA loans also come with eligibility search for a local SBA office by ZIP code— potential projects or competition, they have requirements that differ from traditional the offices serve as resources to answer no idea and the process stops,” she says. loans. Loan applicants must meet the questions and provide additional information. “Businesses need to be prepared when going definition of a for-profit, small business to a lender because from a lender’s based on either number of employees or Prep before meeting perspective, if the person sitting in front of revenue levels depending on the industry, Existing businesses should prepare and/or their desk doesn’t have a plan of action, the DeRidder says. update business plans, and bring previous tax lender is naturally going to gravitate to and As consultant Helena Hauk explains, returns when meeting with the banker. New approve a business that is more prepared.” “Businesses shouldn’t underestimate the businesses should prepare a business SBA; there are different loan programs to feasibility study. (Unsure about preparing Know it takes time meet different needs. They should take the these documents? Local SBA offices have Rosemary McLaughlin, who obtained an SBA time to pick up the phone and talk to an counseling, training and business loan in 2011 to open an Elements 14 WINTER 2012
- 15. financial balance sheets are stressed and liquidity is not sought SBA loans to help cash flow, won’t be seen until potentially 2014,” where it needs to be. Businesses rely more on particularly through refinancing. She expects she says. loans to meet their needs.” a similar pattern in 2012. Rosemary McLaughlin left her job as a “I think the overall tone is cautious $2 billion for early stage health care executive in August and used an optimism,” says Hauk, founder of 5th Gear In 2012, the SBA is moving forward with the SBA loan to open an Elements Therapeutic Consulting, a consulting firm that specializes recently launched billion-dollar Early Stage Massage franchise with plans to open two in commercial real estate lending through Innovation Fund, which will provide matching more in the next two years. She says she SBA loan programs. capital to small business investment companies sought an SBA loan because of the favorable DeRidder says don’t expect 2012 to set a that target early-stage small businesses seeking loan terms—6.25 percent for seven years— new SBA loan record. “This is attributed to private institutional capital. that will help cash flow in the initial a general lack of ‘consumer confidence’ in In conjunction, the Startup America operating phase. the economy,” she explains. “As such, Partnership, a new nonprofit alliance of “I tell every small business owner or companies are not looking to borrow now. entrepreneurs, major corporations and service potential small business owner I meet about While banks want to lend money, the providers, announced another $1 billion-plus my success obtaining this loan,” demand just isn’t there. in commitments from more than 50 private- McLaughlin says. “As much as we would like to see the sector entities, which will provide everything Many of the companies with whom economy turning around quickly, the majority from free software to free consulting and consultant Helena Hauk worked in 2011 of predictions indicate that a solid recovery legal services, to 100,000 startups over the next three years. LE Therapeutic Massage franchise, says the SBA Different lender types You have an loan process is easy, although borrowers should be aware the loan’s timing depends on DeRidder says SBA loans come with the misperception that the paperwork is SBA loan— the actual closing date. “Schedules, information requests and overwhelming compared to a conventional loan. While the amount of paperwork depends now what? some detailed requirements can add time to on the type of loan, preferred lenders can fill the process,” she says. “The loan did require out 99 percent of the paperwork. Managing an SBA is no different than time, but starting a new business requires “There are three different types of SBA managing a conventional loan, says time. And the SBA website is helpful during lenders—infrequent participant, certified and Helena Hauk, founder of 5th Gear the application process. preferred,” she explains. “Infrequent Consulting, a consulting firm that “Only four forms are required to start an participant lenders need to send the SBA all specializes in commercial real estate SBA loan application, so fill those out and their paperwork for independent analysis, lending through SBA loan programs. bring to the bank. It shows you take initiative which can take some time. Certified lenders The borrower makes monthly and are serious,” McLaughlin says. review the loans and send them to the SBA, payments and is required to provide She also recommends finding a bank and which then has three days to review the the lender with at least an annual, but or bank officer that specializes or understands documents. Preferred lenders have the final sometimes a quarterly or monthly, the applicant’s business type. She worked with say on loans. So the process will be quicker a bank officer who understood franchises and and simpler if a business chooses a financial statement. The borrower also startups. “Once I found a bank that was preferred lender.” must notify the lender of any changes familiar with the business model, I was able to Check out the SBA’s website, www.SBA. to the company, as is the case with a have conversations about Elements gov, to search for your local office, which can conventional loan, she says. Therapeutic Massage that were easily provide the certified and preferred lender list understood,” McLaughlin says. for your area. LEADING EDGE 15
- 16. Top6things to know about doing business in Brazil BY GERD FOERSTER, CPA, CONFIDOR 1 What should a businessperson know about Brazil? First of all, Brazil is a country that has an area of more than 3 million square miles situated in South America and represents approximately 50 percent of the continent’s land. It borders almost all countries in South America, except Ecuador and Chile. The national language is Portuguese, and the population is about 194 million people, about 2 3 40 percent of whom are children. About 83 percent of the population lives in the cities. Since 1994, the national currency has been What are the biggest differences compared What should business know about setting up the Real (BRL). Brazil has lacked the capital to operating in the United States? a company in Brazil? to supply the needs of the country and its The biggest differences are the many In 1994, the federal government population. Consequently, foreign bureaucratic requirements demanded by the tax implemented the “Plano Real,” an economic investments (if not for short-term and legal authorities in Brazil. In the Brazilian reform plan that reduced inflation rates based applications) typically receive tax incentives tax system, products are taxed throughout the on the strength of the federal government’s from the government. In general, foreign chain of production. In the United States, the foreign currency reserves coupled with credit investments do not require prior approval of end consumer pays sales taxes once the sale is restrictions that raised interest rates. Initially, the government unless the company is finalized. In Brazil, however, each person income was redistributed to the lower class, interested in obtaining an incentive. However, involved in the process, including the producer, generating a consumption boom. To control there are some exceptions, so it is a good idea wholesale dealer, retailer, etc., pays sales taxes, the resulting inflation in the following year, to consult advisors familiar with Brazilian resulting in a higher level of tax burden. Also interest rates increased and credit was law and customs before conducting business black markets operate in Brazil, so U.S. restricted. As a consequence, the economy in the country. businesses should be aware of their effects. has grown slowly since then. 16 WINTER 2012
- 17. During the last nine years of socialist limited manner to provide the desired Temporary visas are granted to foreign 4 government, social policies were adopted and products and services. workers for two years. A foreign company minimum governmental aid boosted (bolsa- that wishes to hire a foreign executive with a família) to help the poorest class, stimulating permanent employment visa must have a What about employment in Brazil? internal consumption. However, the minimum investment in Brazil equivalent With more than 190 million citizens, the government has not reduced the public to $200,000. country has a significant labor force, 6 deficit, which compromises the effectiveness composed of many semi-skilled or unskilled of the economical targets and increases the workers. There is a shortage of management, What else should someone know about risk of inflation. supervisory and technical staff at disposal for doing business in Brazil? Internationally, trade with other countries Brazilian or foreign companies. One of the Despite all the internal problems in some key in South America has increased significantly biggest challenges, for example, is to find public areas, such as health, education and in the past few years with the creation of a qualified labor in the high-technology area. transport, Brazil represents a secure shore in common market among Argentina, Paraguay which to invest compared with other 5 and Uruguay (Mercosul) in 1991. However, countries because of the strong political all the countries involved still make What type of work permit is necessary for situation and the fact that the country does protectionist decisions, making the non-Brazilians? not have any important enemies or market effectiveness of the market a nightmare. Considering the force and influence that the barriers with other countries. There are a lot As a consequence of the improvement in labor unions represent and generate in the of opportunities in the chemical, real estate, the distribution of income to the poorest companies and in the Brazilian government, transportation and food areas. Also several classes, the Brazilian public debt has increased there are many limitations for the contract major international events will happen in during the last year. As a result, the Brazilian of foreign labor. Brazilian companies are not 2014 (Soccer World Cup) and in 2016 government has adopted the policy to increase allowed to hire foreign citizens who do not (Olympics). For this reason, Brazil has a the tax burden, which varies between 40 to 45 hold the proper visas and work permits. The large, positive and prospective market to percent of the Brazilian GDP. Furthermore, type of visa depends upon how long the present. LE there is a lack of high-level investments in employee will work in Brazil. To receive the public areas such as health, education, authorization for non-Brazilian workers, at Author and CPA Gerd Foerster is a member of Brazil- transport, social welfare, etc., which represent least two-thirds of the company’s employees based Confidor, a Leading Edge Alliance firm. If you great business opportunities because Brazilian must be from Brazil and at least two-thirds would like more information, contact Foerster at public services do not act or act in a very of total payroll must be paid to Brazilians. gfoerster@confidor.pro or (+55) 51 3222 8933. LEADING EDGE 17
- 18. on the bookshelf BUSINESS RESOLUTION TIME I t’s time again—to set new goals or at least Successful Strategy The Zigzag Principle: revisit previously set goals and long-term Execution: How to The Goal Setting plans to see what’s been happening and Keep Your Business Strategy That Will where your company needs to go. This edition Goals on Target Revolutionize Your of “On the Bookshelf ” offers some reading Michel Syrett Business and suggestions to help identify what you need to The Economist; Your Life do, where you need to go and how to get there. Bloomberg Press Rich Christiansen 164 pages McGraw Hill The B2B Executive Tracking performance is one thing. Tying it 256 pages Playbook: The to long-term plans is another. Too many Following a straight line is never the best Ultimate Weapon companies are lost in translation, failing to route—thus the zigzag principle created for Achieving compare actuals to projections and adjust by Christiansen. As a leader of well- Sustainable, their plans accordingly. Syrett explores how established and start-up businesses, he Predictable and to implement practical strategy execution brings a unique mantra—don’t bulldoze to Profitable Growth and shares real-life stories of companies reach your objectives; zigzag to achieve Sean Geehan implementing strategies to keep their goals them. Well-known author Stephen Covey Clerisy Press on target. writes of The Zigzag Principle, “Rock-solid 192 pages principles so simple that you will read this The B2B marketplace operates significantly Hundred Percenters: book wondering how you could have different than the B2C marketplace. Yet, Challenge Your missed seeing truths that are so obvious.” Geehan found the more publicly discussed Employees to Give it As Christiansen explains, readers can case studies and anecdotes shared with Their All & They’ll Give assess their resources, use them to the businesses were primarily B2C (Coke, Apple, You Even More fullest and keep the team motivated. etc.) He writes about the unique challenges of Mark Murphy B2B—in particular how a business in this McGraw Hill The Now Revolution: marketplace tends to rely on few individuals, 240 pages 7 Shifts to Make thus key relationships are essential to Most leaders don’t believe employees are Your Business Faster, sustaining growth. Geehan explores the need giving 100 percent and they’re right, according Smarter and More for B2B companies to make engaging with to what employees report. Doing fine, getting Social customers their top goal and how that goal by and meeting expectations are sufficient. But Jay Baer & Amber should drive the company’s internal alignment what if a growing segment of your employees Naslund and operations. As one reviewer on Amazon. thought “let’s push the envelope, let’s be great, Wiley com states, “The lessons learned here can serve let’s do what nobody thought could be done?” 224 pages as a competitive weapon for those who take Murphy, chairman and CEO of Leadership Customers expect a level of attention and the time to thoughtfully apply them to their IQ, says a key to reaching that goal is for responsiveness that most companies can’t own circumstances.” leaders to care enough to push “Hundred live up to. Can you? That’s the question Percenters” to new heights. Murphy offers posed by the authors who then offer insight practical insight into setting clear expectations, to help your business live up to what your dealing swiftly with toxic employees, customers expect in today’s instantaneous eliminating “de-motivators” and focusing world. They offer a seven-part plan to Do you have a suggestion for a book employees on value-added work. harness the power of the social web for your we should feature? Email Editor Ann business including, stripping away silos, Gynn at agynn@sbnonline.com with the empowering a new type of employee, and title and author, and include why the redesigning success metrics for the book would be helpful or interesting to instantaneous business world. LE your peers. 18 WINTER 2012
- 19. This firm and other members of the Leading Edge Alliance are leaders in many key markets, including: The Leading Edge Alliance is an international professional Alabama India Palestine association of independently-owned accounting and consulting firms. Albania Indiana Panama Afghanistan Indonesia Paraguay The Alliance enables member firms to access the resources of a Argentina Iowa Paris multibillion dollar global professional services organization, providing Atlanta Ireland Peru Australia Israel Philadelphia business development, professional training and education, and peer-to- Austria Italy Phoenix peer networking opportunities nationally and globally, around the corner Azerbaijan Jordan Philippines and around the world. Bahrain Kansas Pittsburgh Baltimore Kazakhstan Poland Bangladesh Kenya Providence Members are quality firms who are very successful, have deep client Belgium Knoxville Puerto Rico Bolivia Korea Richmond relationships, and strong ties to the community. The Alliance provides Boston Kuwait Reno members with an impressive combination: the comprehensive size and Brazil Las Vegas Romania scope of a large multinational company while offering their clients the British Virgin Islands Latvia Russian Federation Buffalo Lebanon San Francisco continuity, consistency and quality service of a local firm. Member firms Bulgaria Lexington Saudi Arabia have access to extensive teams of business advisors – a peer-to-peer Cayman Islands London Scotland Chattanooga Los Angeles Seattle connection that provides the right business solutions for clients. Chicago Luxembourg Senegal Chile Macedonia Serbia China Madison, WI Singapore Cincinnati Malaysia Slovakia Cleveland Malta Slovenia The Leading Edge offers: Colombia Mauritius South Carolina Croatia Memphis Spain • Access to extensive teams of accounting professionals and business Cyprus Mexico Sweden advisors—a peer-to-peer connection that provides the right solutions Czech Republic Miami Switzerland for clients. Dallas Michigan Taiwan Dayton Minneapolis/St. Paul Thailand • Innovative, practice-proven strategies for improving performance in Denver Missouri Tokyo management, business processes, finance, operations, information Dominican Republic Moldova Toronto Ecuador Montenegro Tucson technology and marketing. Egypt Montreal Tunisia • A leading knowledge resource for multi-disciplinary information and El Salvador Morocco Turkey industry-specific expertise responsive to clients’ unique needs. Finland Nashville Ukraine Fort Lauderdale Nebraska United Arab • The Alliance offers accounting, consulting and tax services through a Ghana Netherlands Emirates global alliance of firms with over 18,323 professional staff, more than Germany New Orleans Uganda Greece New Jersey Uruguay 1,600 partners and over 23,518 staff in 455 offices. Guatemala New York U.S. Virgin Islands • The Leading Edge Alliance offers global business advisory expertise Harrisburg, PA New Zealand Venezuela and experience with innovation, progressiveness and quality. Hartford North Carolina Washington, D.C. Hong Kong Norway Vietnam Honolulu Orange County, CA Virginia/West Virginia Houston Oregon Hungary Pakistan To find out more about The Leading Edge Alliance, visit www.LeadingEdgeAlliance.com or contact Karen Kehl-Rose, Visit LeadingEdgeAlliance.com for a detailed listing of member firms. president, at +1 630.513.9814 or kkr@The-LEA.com. LEADING EDGE 19
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