accounting certifications

Which Accounting Certification is Right for You?

Obtaining an accounting certification is a testament to a person’s commitment to succeed professionally, and as such, it is often used as a tie-breaker between candidates for a job. Gaining a universally recognized accounting certification can help you to get and keep the job during economic downturns. It can also increase your skillset’s marketability and provide professional credibility for both yourself as well as your firm.

A professional accounting certification not only looks good on your résumé, but can also lead to increased salary and advancement opportunities. 

Certified Public Accountant (CPA)

A CPA certification can help to advance your accounting career. CPAs work in several different specializations including:

  • Audit
  • Compliance
  • Tax
  • Forensic Accounting
  • Fraud Examination
  • IT Systems
  • Risk Management
  • Appraisals
  • And more

CPAs help companies to comply with the bylaws and regulations set in place as well as reduce risks. Different states have different educational and experience related requirements that extend beyond the 150 hours earned in a BA. 

You will have to pass a CPA exam which includes 4 parts.

  1. Financial Accounting and Reporting (FAR)
  2. Auditing and Attestation (AUD)
  3. Regulation (REG)
  4. Business Environment and Concepts (BEC)

Each part of the exam is graded on a scale of 1-100, and you must receive a passing score of 75 or higher. While that may not appear strenuous, according to the AICPA, the overall passing rate is less than 50%.

Certified Management Accountant (CMA)

Another great certification that often has a few overlapping qualities as a CPA. While CPAs are better for compliance and controls, Certified Management Accountants are more about the financial analysis, budgeting, and ongoing stewardship of the company.

CMAs have 4 major components, including:

  • Business Analysis which includes global economics and business.
  • Management Accounting and Reporting, includes budget preparation, cost management, and external financial reporting.
  • Strategic Management which involves strategic planning, marketing, corporate finance, and investment decisions.
  • Business Application has the organization management, communication, behavioral issues and ethical considerations.

To receive a CMA you have to:

  • Become a registered member of IMA
  • Have a bachelors degree
  • Pass both parts of the CMA exam
  • Have 2 continuous years of professional experience in management accounting or financial management
  • You must also follow the IMA’s Statement of Ethical Professional Practice

The Right Accounting Certification For You

With many different accounting jobs out there, not all of them are created or treated equally. While a CPA will hold more value, there are still other certifications suited for jobs and industry-specific roles.

These include:

If you want to upgrade your position within the accounting and business community, investing time and effort in certification should be your first goal. Then, depending on what kind of accounting job you are looking for, you can add additional certifications like the ones above.

Other Accounting Certifications:

  • Fundamental Payroll Certificate (FPC)
  • Business Accountant
  • Financial Examiner (AFE)
  • Tax Preparer (ATP)
  • Certified Forensic Accountant (Cr.FA)
  • Certified Professional Environmental Auditor (CPEA)
  • Forensic Certified Public Accountant (FCPA)

To Summarize

Accounting and finance is a very competitive field, and most accountants will hit a career plateau if they do not seek further certification. Adding accounting certifications can help to improve your station within the industry.

If you are a CPA or CMA looking for a new position, click here to view DLC’s available accounting and finance opportunities.

CECL December deadline

Non-Financial Institutions Are Being Impacted by The CECL Deadline

With the credit loss accounting standard update deadline coming up this December, non-financial institutions are now trying to catch up and understand the impact of how the Current Expected Credit Losses or CECL change will affect their profits.

The CECL is mainly focused on how the details of contracts and transactions are assembled.

For example, in trade receivables, there doesn’t appear to be a significant change to the allowance for noncollectable trade receivables. While usually, the Financial Accounting Standards Board (FASB) suggests using the aging schedules to determine an allowance, the CECL is broadening that method as well as others.

All receivables now need to be considered

This means that as soon as a receivable has been recorded, an allowance calculated and designated to it.

This change also reflects the notable transformation by the CECL in the financial services industry where a new loan must receive an allowance from the initiation point. A comparable requirement is set for the trade receivables as well.

Considering the future economic conditions

Another noticeable change that comes with the CECL’s new standard is the requirement that you must consider the future economic conditions when determining an allowance. Not only that, but other future implications could be impactful if not properly considered.

Contracts set up with customers may be initially set up as short term and low risk for CECL but if not structured to consider the contract’s off-balance sheet exposure a company could unintentionally offer credit terms to customers that require attention beyond the short-term receivable.

Examples include: 

  • Deals with terms to extend the receivable in combination with other purchases.
  • Guaranteed delivery of future purchases despite the customer not meeting a threshold with their other receivables.
  • Establishing a future purchase well in advance and extending the credit terms for those purchases before recognizing the receivable.

These situations don’t typically fall under the scope of the CECL but with the details of the contracts, they could. As such, the risks of these possible impacts should be considered on a contract-level review.

Other impacts

Stemming from the subsidiary transactions of third parties is the off-balance-sheet exposures that could be causing an impact on the non-financial institutions. The CECL doesn’t directly pertain to intercompany transactions, but it could apply to exposures that exist for those subsidiaries.

The structural and contractual obligations

With non-financial companies, there is much more uncertainty in the corporate line items.

Corporations utilize their time before the implementation date to review the deal structures that they have in place and consider how they will be held accountable. Being prepared before the date arrives is a great way to understand how calculations will be performed.

august jobs report

The August 2019 Jobs Report: Steady Rates

The U.S. Department of Labor, Bureau of Labor Statistics released its State Unemployment and Unemployment Summary for August 2019 toward the end of September. The jobs report states that there has been a steady 3.7% unemployment rate, and less than predicted job growth for this period.

Unemployment Continues to Hover Near 50-Year Low

The 3.7% unemployment rate has remained steady throughout this quarter. The U.S. hit the 50-year low of 3.6% in April 2019.

According to the jobs report, unemployment generally remained stable in 42 states. Five states had decreased rates, and just two had increased rates.

Job creation has been the highest in:

  • Professional and business services
  • Government
  • Education and health services
  • Financial Activities
  • Construction

Government jobs increased significantly as they have hired 25,000 new temporary workers to prepare for the 2020 census.

Medium and High-Wage Industries See the Most Growth

Twenty-six states have seen job opportunity increases, with the largest in California, Texas, and Florida. Five states increased employment in August 2019 alone.

Many of the job growth opportunities are in sectors that provide medium to high wage opportunities. Jobs like accountants, auditors, marketing and sales, and software developers are in high demand, and the unemployment rate is much lower than the national level in those industries. Unemployment for those with college degrees has also dropped to 2.1% as well.

What Employers Need to Know About the Jobs Report

As employers engage in planning for Q4 and beyond, keeping the jobs report in mind will be critical. Because companies are creating new jobs at steady rates, there is an increased likelihood that your top-performers will look elsewhere for work if they are unhappy.

Hiring may also need to change slightly. You may not be hiring someone who is unemployed—your next employee may be employed already and looking for a change. Hiring tactics may need to adjust to account for this reality.

Taking steps to ensure that your current talent is happy can be a good way to keep them long-term. Read more about being an Inspirational C-Suite Executive or Employee Health and Wellness for ideas on what you can do to keep your team happy and healthy.

For more finance and accounting employment trends and insights, click here to download your copy of the DLC Group 2020 Salary Guide.

If you are an accounting and finance professional seeking a new position, click here to view DLC’s available job openings.

budget

Treat Your Budget Like a Strategic Asset

For some companies, budgets are soley completed for the sake of keeping the Board happy and for departments to justify or gain funding. After compiling a budget, it is often set aside and not referred to until the following year.

However, budgets are much more than spreadsheets, static numbers, and hopeful projections. For companies seeking to grow, budgets are a strategic tool used to set short and long-term goals. To fulfill its potential, a budget must be easy to create, change, revise, approve, and update. It should also promote collaboration with all of the company’s stakeholders.

A Reliable Root of Insight

Using the general ledger, you can combine the budget with the financial classifications needed, including the ongoing budget vs. the actuals and the transactional level.

Budgets are Valuable Tools

A properly utilized budget will:

  • Look through historical data
  • Gather input from the stakeholders
  • Theorize what will happen over the next 12 months
  • Calculate how those theories will affect the company’s finances

Budgets are Strategic

By regularly updating the budget and adjusting the numbers as they come in, it becomes a strategic tool for measuring the success of the company. Not only that, but it can help to avoid issues by indicating warning signs early enough that the company can pivot to a new direction and create a better strategic plan.

Another Form of Budgeting

Driver-based budgeting is when resources and activities are tied together with the financials in the budgeting process. What this means is that if a company is looking for a 20% increase in profits, the driver-based budget will identify the actual resources needed to deliver that boost in sales.

The big difference between driver-based budgeting and the traditional budget methods is that this budget method links to the actual physical resources needed to make the goals a reality.

Spreadsheets vs Intelligent Planning

Spreadsheets are an outdated form of budgeting. With the constant change of numbers and updates, any small change could through off the entire mathematical equation and result in a lot of wasted valuable time troubleshooting the issues.

Intelligent Planning platforms are much more efficient because they can handle these changes and make the necessary updates without disrupting everything. Saving you a lot of time, resources, and money. With it being activity-based, the flow of input through the financials are based on the logic and rules already established.

You may also enjoy, Driving EBITDA Quickly, Post Acquisition

boosting cybersecurity

How CFO’s Are Boosting Cybersecurity on a Budget

Today, cybersecurity is no longer considered solely a technology risk. In recent years, CFOs have become more involved in the discussions because boosting cybersecurity has become an important finance department battle, too.

A CFO’s job is to ensure that their company can protect the data-centric drivers of business value. This includes intellectual property as well as financial statements and reporting.

CFOs must find the proper resources to support cybersecurity and ensure that the security investments made by the company deliver measurable risk reduction and safety value. 

To do this, a CFO should treat their cybersecurity research the same as they do their company’s financial performance reporting. Using their expertise in making risk-based decisions regarding cybersecurity spending.

Risk management and security control

When a cybersecurity incident happens, the company, their employees, vendors and customers are all at risk.

Technology advances mean that there will need to be further advances in cybersecurity. This means that the budget for proper security and remediation will need to be increased. A CFO should identify the restrictions and procedures necessary to control the new financial spending.

Hiring cybersecurity talent on a budget

Currently, there is a deficit in cybersecurity talent. With a workplace gap of almost 1.5 million job openings, and growing, it’s hard to find and afford good talent. Meanwhile, CFOs are well aware that they need to hire talent with their limited financial constraints on the security budget.  

Many CFOs are employing managed security services as a way of easing through the talent squeeze. It also allows them to have access to highly trained cybersecurity talent at a reduced cost. 

Why you should purchase cybersecurity insurance

The costs associated with a data breach can be astronomical. Having cybersecurity insurance will help to lessen the financial costs to the data, physical property, individuals, as well as the company’s branding.

For more tips about boosting cybersecurity, check out Combating Data Breaches.

ASC 842

Learning From Companies That Implemented ASC 842

The ASC 842 is a new standard that is impacting both lessees and lessors and creating a significant compliance challenge for both public and private companies. The implementation deadline for private companies is approaching, and by now, most public companies have already implemented the FASB’s new lease accounting change. 

How ASC 842 is making an impact

Previously, lessees didn’t have to report operating leases on their GAAP balance sheets. With the new lease accounting change, leases have been reclassified. It now requires lessees to recognize operating leases as an asset on their balance sheets with a comparable lease liability.

Companies are seeing a significant increase in their assets and liabilities as a result of this update.

Some targeted changes are intended to help align lessor accounting with the lessee accounting changes and update revenue recognition rules.

What compliant companies are learning about this new standard:

Adopting the changes is difficult

According to a survey from PwC, 87% of the respondents report that adopting the changes has been difficult. Do not underestimate the amount of effort required to implement these changes. It’s recommended that you start taking an inventory of all of your vital data and documents needed for analyzing and accounting leases. 

This includes:

  • Initial agreements
  • Amendments
  • Exhibits
  • Non-lease arrangements

Choose the proper software

According to the same survey, more than half of the companies have chosen to accept and implement the new lease management software. Meanwhile, another 17% adapted their current software to meet the changes, and another 22% are continuing to use spreadsheets. Spreadsheets might work for smaller companies, but larger companies might find that the new software can streamline the workflow and provide better accuracy for financial records.

Testing is important

Before the deadline arrives, it is a good idea to run through a mock case using the lease accounting system in place. By manually calculating or using Excel, you can check to make sure that the results of the system are accurate. 

Continue to look for opportunities to improve the process

Many public companies found ways to gain better controls, be more efficient, and reduce costs around their lease accounting processes by taking the time to streamline and enhance their accounting processes.

Going forward lease negotiations may be impacted

With the new rules in place, lessees may want to negotiate the terms in their lease payment structures. Lessees may also prefer to have a shorter lease term because they can choose to not include leases with a term of 12 months or less on their balance sheets.

What private companies should do now

With private companies having more time before needing to implement the ASC 842, they should use the identified challenges made by the public companies to help themselves to achieve the process with less of a hardship. By gathering the necessary resources now and understanding how it can affect their businesses, they can develop a plan and put it into a team to put it into motion.

Click here for a closer look at ASC 842

pace of change emerging risk

The Pace of Change is Now a Top Emerging Risk

With the rapidly changing business landscape, companies are growing concerned over their abilities to keep up, due in part to their own weak digitalization strategies.  In a Q2 survey taken of 133 senior executives across different industries, we can see that the pace of change is a top emerging risk. 

Accelerating privacy regulation was the previous quarter’s top emerging risk and has now become an established risk after ranking in the 4 previous reports, as well.

Two operational risks are closely linked with the concerns around the pace of change:

  1. Weak digitalization. Executives communicated their concerns regarding poor digital budgets and a high failure rate for digitalization projects as well as the ability to scale projects and potential project delays.
  2. Digitalization misconceptions. Two out of 3 digital transformation projects fail to achieve their objectives. Increasing the focus on digital projects can help to reveal the companies weaknesses, and by learning with an incremental approach, the organization can learn at scale, with limited risk.

These two risks may be driving the concern about the pace of change and other related threats from business model disruption. 

Organizations are worried about the pace of change and the state of being exposed to disruption. Another driving concern around the pace of change is the fear of being disrupted by more agile competitors and having a lack of clear paths to follow to encourage growth. 

Leaders should insert themselves as early as they can into the strategic planning process and collaboratively work together with their finance teams to encourage a change in steps and other positive risk-taking.

Risks can materialize through:

  • An increase in the numbers of new innovative competitors 
  • A failure of the brand proposition not meeting the client’s needs or demands
  • Executives not responding to the macro trends
  • The needs of consumers constantly changing

Overview

Make sure you are in control of your company’s pace of change rather than letting it control you. By automating processes and hiring the right employees, your company can fuel it’s own growth at a manageable speed for everyone.

For more industry insights and news, check out our DLC Blog.

ipo preparation

IPO Preparation Tips

Many companies have decided to go public due to the healthy stock market. However, going public is a major decision and there is a lot that goes into IPO preparation. How can you be sure it is the right path for your company? Companies need to thoroughly evaluate their ability to handle the ins-and-outs of being a public company before jumping in. It requires that management is able to immediately meet shareholder and market expectations from the first day. Including addressing compliance and regulatory requirements, operational effectiveness, risk management, periodic reporting, and investor relations.

Companies must create an extensive IPO plan that balances the short-term objectives with long-term goals and allows for the coming rush of real-time reporting required of a public company.

Time-specific issues in IPO Preparation

Investor Relations

The C-suite executives should launch a promotional campaign providing investors and financial analysts the opportunity to ask them questions about the company. This campaign should include revenue, outlook, net income and operating cash flows. This process should be done as early as, while the SEC is reviewing the company’s Form S-1.

Upgrade Financial Reporting Platforms

It’s imperative to upgrade to an automated financial-reporting solution that is scalable and easily integrated with other systems, including budgeting and forecasting, enterprise resource planning and customer management. As manual accounting, budgeting and general ledger upkeep are prone to errors and are time-consuming.

Processes and Controls

Prior to going public, it is important to perform a risk assessment to discover high-risk gaps. Along with the CFO, the CEO, accountants and legal team should all review the risk assessment.

Is 2019 Your Year to Go Public?

Finding the perfect time for a company to go public is very difficult. As of right now, many experts feel that 2019 is a great year. But just because this year is good, it doesn’t mean that the next one will be. With the markets continually changing, your best bet is to get all of your company’s accounts and documents in order in case you decide to take the leap.

DLC’s Accounting and Finance Consultants are uniquely positioned with a comprehensive set of skills to guide you through the planning and execution of your IPO.

bad accounting structures

Bad Accounting Structures Can Doom Startups

Bad accounting structures exist in companies for a wide range of reasons, and in the article, “The Five Most Common Ways Startups Waste Money” by Henry Kressel and Norman Winarsky in Fast Company magazine, bad accounting structures, made it onto the list. Kressel and Winarsky provide real-life examples of how bad accounting structures can hurt a company. They also share how proper accounting can be beneficial and provide reliable financial tips.

When a startup company is within 3 to 6 months of running out of cash, they’re in trouble, and it’s most likely due to not being able to raise the necessary capital. They had convinced investors that they’d be a success, and now they’re spending more money than they’re making. At this point, it will be incredibly difficult to find a new financial investor.

Below are 4 big-money wasters

Prematurely hiring staff

While in the early stages of a young company, it’s important to evaluate the needs of the company. Being in a rush to hire personnel can result in employees with little to do and cost you a fortune in the process. Instead, focus on hiring trained individuals with marketing and business development skills that can target your need to work with potential customers. This can help you to start bringing in that revenue, and after the money and connections have been established, you can branch out and increase your sales staff.

Remaining too informal

While most early-stage ventures are relaxed in the workplace and don’t resort to monitoring employees, if it remains this way for too long, it could be damaging to the company. Figure out how your company is going to track and monitor the performance and productivity of employees. Also, make sure that those at the management level are given the proper training. 

Poorly managing or marketing the product

There are a lot of reasons why poor product management can cause a startup to waste money, including:

  • Selecting the wrong first product and targeting the wrong customers
  • Misjudging the product features
  • Technology issues
  • Falsely believing that the product is not good enough

These issues often stem from a small consumer feedback group and not the needs of the broader market.

Selecting the wrong partnerships

When a company is fresh, it makes sense that it would try to partner with a larger and more established company. Unfortunately pursuing the connections and partnerships can take a lot of the management’s attention and distract from the company.

Click here to find out how DLC can help you head in the right financial direction with your startup.

Sean Hastings

Workplace Wellness Plans. How and Why? – By Sean

A little over 4 years ago I wrote a workplace wellness article called, Staying Healthy While Working: You and Your Employer Win! However, it seems that in 4 years we have actually gotten unhealthier as a society. Without question, our country’s lack of health and fitness has reached epidemic proportions as our life expectancy in the US continues to decline

Luckily, most of us have healthy food and lifestyle options available, making it easier to make immediate improvements. But, it comes down to our own motivation to make the required changes.   Below are some steps we can do as employers and professionals to help ourselves and our colleagues lead healthier lifestyles.

Workplace Wellness and Employers

There is no question that healthy employees are less expensive, happier, and more productive employees!  Here are some tips you can use to promote workplace wellness:

  • Give your employees time to be active each day.
  • Implement wellness programs, as many companies have, that incentivizes employees to perform and track healthy habits. Reimburse employees for health club membership fees or an organized walk/run.  My employer, DLC, has a wellness program that incentivizes employees for certain healthy activities.
  • Ask your employees how their exercise and healthy eating plans are going.  
  • When you order food for your company lunches and snacks order healthy food, such as salads and fruits, rather than pizza and donuts.
  • Lead by example! You can’t expect your employees to get fit and healthy if you stroll into the office every morning with a box of munchkins – we still can’t run on Dunkin, despite the commercials!
  • Sign your team up for a fitness event such as a Spartan Race or local 5k.  Participating in these events together not only promotes health in your employees, but it also promotes camaraderie and team bonding. Coincidentally, team bonding goes a long way towards improving employee retention.

Workplace Wellness and Employees

You will spend less on healthcare, feel happier, and feel more energized throughout the day the better you eat and if you exercise daily!  Here are some tips:

  • Make time for exercise every workday. Walking, running, lifting, whatever.  Before, during, or right after work.  The trick is to build exercise into your schedule and do your best to make it one of your priorities. 
  • If you succumb to peer pressure or enjoy being around others, join an exercise and/or healthy food group. CrossFit, Yoga, Boot Camps, Cycling, Weight Watchers, a running or walking group. There is a group out there for whatever you are interested in doing.
  • Eat more whole and minimally processed foods. Cut down on sugars. 
  • If you have kids, encourage them to exercise and eat healthy with you. Stop buying them breakfast cereal with marshmallows or any cereal named candy.  Eat healthily and make exercise a priority as a family. 

So don’t sacrifice your health for your career.  You have to be around to enjoy the fruits of your labor – make healthy living a priority and reap the rewards!  Your employer will, too…win-win!

About the Author – Sean Hastings, MBA – Client Services Director

Sean serves as Client Services Director for DLC’s Chicago market. He has over 18 years of experience providing accounting and finance consulting, interim, and permanent placement solutions to public and private clients in the Chicago area.