Tom Hood, CPA, CITP, CGMA CEO

MACPA & the Business Learning Institute

MACPA Town Hall & Professional Issues Update for MEMBERS Business & Industry Edition

2

Our  Sponsors  

MACPA  Innova1on  Summit  

Message  from  our  Chair  

www.SlideShare.net/thoodcpa  

#PIU13  #MACPA  @tomhood  @MACPA  

Download  today’s  slides  at  …  

Name  this  tune  

50% or more?

• Change • Complexity • Compliance • Convergence • Competition

Remember this? MANAGING THE SEA CHANGE

“You  can’t  stop  the  waves,  but  you  can  learn  how  to  surf.”  –  Jon  Kabbat-­‐Zinn  

http://www.burrus.com

Inattentional blindness

Be  like  Mike(y)  

Insights  to  AcJon    

“One  without  the  other  is  either  useless  or  destrucJve”  

Time  to  Change?  

We  now  accept  the  fact  that  learning  is  a  lifelong  process  of  keeping  abreast  of  change.  And  the  most  pressing  task  is  to  teach  people  how  to  learn.  

OrganizaJons  are  complex  

Requiring  complex  inputs  from  business  levers  that  need  to  be  monitored  effecJvely  enabling  constant  correcJons  to  achieve  desired  outcomes  –  Ash  Noah  -­‐  CGMA  

The  new  “Big  Four”  

• Standards  &  Leg/Reg  

• Technology  • InnovaJon  • GeneraJons  in  workplace  

The  US  Economy  Schumpeter's  Curve  of  CreaJve  DestrucJon  

LegislaJon  &  RegulaJon  

h_p://cpa.tc/1ut  

• Federal  –  Fiscal  Cliff  

• State  •  Budget  Deficit  •  Sales  Tax  on  Services  •  Tort  Reform  

First  the  facts  about  Fiscal  Cliff,  Sequester  and  Fed  Budget  

What’s  at  Stake?  

Revenue = $2.4 trillion Expenses =

exceeded revenue by $1.3 trillion

2011 US Financial Statements

13

Accumulated deficit - US

1   2   3   4  

$11.5  

$13.5  $14.8  

$16.0  

In tr

illion

s

2009 2010 2011 2012 14

www.macpa.org The Maryland Association of CPAs

What’s at Stake – Maryland Edition

An analysis of the State of Maryland’s Financial Statements

and Fiscal Health

www.macpa.org

Establishes the fiscal goals

envisioned by Governor &

General Assembly

Measured on a cash

basis

Tool to help guide spending decisions

Budget

1

State of Maryland Budget vs Financials

Budget surplus $363 Million vs Financial deficit

$1.2 Billion

2

www.macpa.org

The Budget includes Federal, Special & Higher Ed Funds

Source: Maryland Department of Budget and Management 3

www.macpa.org

Record of what has actually

happened

Prepared on an accrual basis

Provide information about longer-term

implications

Financial statement

4

www.macpa.org

Revenue: how much money the company is bringing in

Expenses: how much money the company

is spending

Earnings Expenses < Revenue = Financially Healthy Company

How a CPA looks at a publicly traded company’s financials

5

2011 Financial Statements

-5,000

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2009 2010 2011

Revenue

Expenses

Deficit

Revenue = $33.5 billion Expenses

exceeded revenue by $1.2 billion

Note: The Financial Statement Deficit is

down from the 2009 highpoint of

$2.9 billion 6

7

www.macpa.org

Assets: Property, contracts, and investments owned by a company,

regarded as having value and available to meet debts,

commitments, or legacies.

Liabilities: Debts and obligations arising

from past transactions and

events Net Assets: The residual net

worth of assets minus liabilities. If net assets are

negative you are considered insolvent as your obligations

are more than you own.

Assets > Liabilities = Financially Healthy Company

How a CPA looks at a publicly traded company’s financials

8

www.macpa.org

Net Assets decreased by $7.2 Billion in past 5 years

9

www.macpa.org

Maryland’s unfunded Pension obligations of

$28.5 Billion

Source: 2011 CAFR Footnotes 15 & 16 10

www.macpa.org 11

www.macpa.org

State of Maryland Federal Dependency

Opportunity or Threat?

Source: Governor’s Grants Office

Source: Maryland Board of Revenue Estimates

12

www.macpa.org

MACPA State Budget Task Force

15

www.macpa.org

MACPA State Budget Task Force

Speakers Cynthia  S.  Lund,  Vice  President  of  State  Society  Affairs  AICPA  –  American  Ins1tute  of  CPAs    Eric  Brenner,  Director  Merril  Oliver,  Deputy  Director  Governor’s  Grants  Office    The  Honorable  Nancy  K.  Kopp  Treasurer  of  Maryland    Warren  Deschenaux,  Director  of  Policy  Department  of  Legisla1ve  Services    John  M.  Wasilisin  Execu1ve  Vice  President/Chief  Opera1ng  Officer  Maryland  Technology  Development  Corpora1on  (TEDCO)  Former  Deputy  Secretary  of  the  Maryland  Department  of  Budget  and  Management  Former  Deputy  Secretary  of  the  Department  of  Labor,  Licensing  and  Regula1on    John  D.  Kenney,  Former  Director,  General  Accoun1ng  Division  Comptroller  of  Maryland  

16

www.macpa.org

MACPA State Budget Task Force

Resources MD CAFR 2011 http://www.marylandtaxes.com/finances/revenue/reports/cafr/cafr2011.pdf MD CAFR 2012  http://www.marylandtaxes.com/finances/revenue/reports/cafr/cafr2012.pdf FY 2013 Proposed Operating Budget Detail - http://dbm.maryland.gov/agencies/operbudget/Pages/2013ProposedOperBudget.aspx FY 2012 Proposed Operating Budget Detail - http://dbm.maryland.gov/agencies/operbudget/Pages/2012ProposedOperBudget.aspx 2012 Fiscal Digest (Approved Operating Budget) http://dbm.maryland.gov/agencies/operbudget/Pages/2012FiscalDigest.aspx  MD Governor’s Grants Office Annual Report RY 2011-2013 - http://grants.maryland.gov/Pages/AnnualReport.aspx

17

Democracies  will  not  confront  the  major  issues  of  their  day  unJl  the  absolute  last  moment  

Accoun&ng  bodies  hail  G20  emphasis  on  public  sector  repor&ng  

 

DATA  Act  &  Financial  Industry  Transparency  Act  using  XBRL  

Where  were  you  on  January  16th?  

It’s  really  a  numbers  game  

2,500  188  90  

Sales  Taxes  on  Services?  

Annapolis  Update  

The  Future  is  Bright  Students  from  U  of  B  

New  Deputy  Comptroller  David  Roose  at  MACPA  Board  MeeJng  

Advocacy  –  If  not  you,  who?  

Standards  •  InternaJonal  –  

IASB  &  IFRS  •  FASB  &  PCC  •  AICPA  &  FRF  –  

SME  •  ASB  –  Clarity  

(12/15)  •  GASB  Pension  •  PEEC  h_p://cpa.tc/1us  

FAF,  XBRL  and  You  

Changes  in  the  Profession  

55  Firms  in  T100  Mega-­‐mergers  Counter  trends?  

www.bizlearning.net  

InnovaJon  for  CPAs  

•  Big  Four  Trends  –  Social  – Mobile  –  Cloud  –  Big  Data  (XBRL)  

•  InnovaJve  Services  –  Value-­‐added  CFO  –  CFO  Advisory  Services  –  FRF-­‐SME  –  Assurance  on  XBRL  Tagging  –  XBRL  for  research  

 

Sunny  or  Cloudy?  

Moore’s  Advice  on  how  to  Escape  Velocity  

3  Areas  of  Investment  •  Migrate  Systems  of  Record  

to  the  cloud  •  Adopt  Systems  of  

Engagement  to  conduct  business  interacJons  on-­‐line  

•  Adapt  enterprise  Business  Intelligence  approaches  to  address  high-­‐value  business  consulJng  needs  

3  Strategic  Decisions  •  Determine  current  &  

desired  future  state  of  your  pracJce  

•  IdenJfy  technology  investments  appropriate  to  stages  of  transiJon  

•  Organize  change  management  around  business  pracJce  transformaJons  and  technology  deployments  

Me  and  Geoffrey  Moore  

Social  AccounJng?  

Dealing  with  DisrupJon  

Dealing  with  DisrupJon  

•  Visionary  •  Adopt  ahead  of  the  industry  to  gain  compeJJve  advantage  •  Focus  on  technology  that  accentuates  your  differenJaJon  •  Pay  up  to  get  the  extra  support  necessary  for  early  adopters  •  Showcase  your  systems  with  your  clients  for  leadership  posiJoning    

•  PragmaJst  •  Adopt  in  conjuncJon  with  the  rest  of  the  industry  to  reduce  risk    •  Focus  on  technology  that  keeps  pace  with  market  expectaJons    •  Pay  up  to  go  with  the  market  leader  to  further  reduce  risk    •  Integrate  your  systems  with  your  established  business  processes  for  producJvity  gains    

•  ConservaJve  •  Adopt  later  in  the  life  cycle  to  defer  capital  investment  and  reduce  cost  •  Focus  on  technology  that  catches  you  up  to  market  expectaJons  •  Go  with  a  low-­‐price  soluJon  from  an  established  commodity  vendor  •  Displace  prior  systems  to  reduce  overall  operaJng  expenses.    

Don’t  be  a  C.A.V.E  man  

Colleagues  Against  Virtually  Everything  

S-­‐Curves  &  Business  Model  InnovaJon  

•  ROA!  •  L>C  •  CC  >  EC  

Rear  view  analyJcs  

Dashboards  are  backward  looking  requiring    the  driver  to  keep  his  head  down    –  Ash  Noah  -­‐  CGMA  

EBR  

Source:  Deloi_e  CFO  Signals™  survey,  fourth  quarter  2012  

Source:  Deloi_e  CFO  Signals™  survey,  fourth  quarter  2012  

CPA,CGMA  

2/3 1/3

CGMA – CIMA The global value-added financial professional

Our  Vision  Statement  for  the  future  is:  (  mandates  to  ourselves  for  a  successful  future)  

•  CommunicaJng  the  total  picture  with  clarity  and  objecJvity,  

•  TranslaJng  complex  informaJon  into  criJcal  knowledge,  

•  AnJcipaJng  and  creaJng  opportuniJes,  and  

•  Designing  pathways  that  transform  vision  into  reality.  

CPAs are the trusted professionals who enable people and organizations to shape their future.

Combining insight with integrity, CPAs deliver value by:

Business Events Capture Report Insight Communicate &

Engage Action

•  Historical •  Compliance •  Technical

•  Forward looking

•  Reliance •  Leadership

Vision

The Foundation Compliance

Leadership and Business Model Development

The Information Value Chain •  CommunicaJng  the  total  picture  with  clarity  and  objecJvity,  

•  TranslaJng  complex  informaJon  into  criJcal  knowledge,  

•  AnJcipaJng  and  creaJng  opportuniJes,  and  

•  Designing  pathways  that  transform  vision  into  reality.  

InnovaJon  thru  CollaboraJon  

CGMA  Survey  Balancing  Risk  &  InnovaJon  

•  Understand  your  business  model.  What  creates,  and  could  potenJally  destroy,  value  in  your  business?    

•  Harness  the  power  of  transparency.  Create  a  line  of  sight  between  capital  sources  and  how  it  will  be  invested  in  the  sustained  success  of  the  business,  beyond  the  short-­‐term.  

•  Ensure  robust  informa1on  flows.  Build  confidence  in  the  right  informaJon  that  drives  investment  and  risk  miJgaJon  decisions.  

•  Go  beyond  defining  a  risk  appe1te.  Have  a  risk  astude  that  empowers  all  in  the  business  to  take  appropriate  risks  that  drive  growth  and  opportunity.    

•  Be  clear  on  the  skills  and  talents  you  need  now  for  tomorrow.  IdenJfy  and  close  potenJal  skills  gaps  you  may  have  when  considering  your  future  business  model,  markets  and  innovaJon  agenda.  

Leading  InnovaJon  

1.  "OK,  let's  give  it  a  whirl!”    2.  "It's  harder  than  it  looks.”    3.  "It  seems  to  be  working!”    4.  "We're  reaching  the  point  of  no  return.  Do  we  really  want  to  do  this  forever?”    5.  "Hey,  we're  starJng  to  get  really  good  at  this."     Source:  IDEO  Project  Mood  Chart  

Three  Rules  for  Success  

1.  Be_er  before  cheaper  (it's  best  to  compete  on  differenJators  other  than  price);  

2.  Revenue  before  cost  (prioriJze  increasing  revenue  over  reducing  costs);  

3.  There  are  no  other  rules.  

The  Start-­‐up  of  You    

The 5 C’s • Career Path (Ladder)

• Competency-based Learning

• Curriculum

• Compliance Tracking for CPAs

• Content – world-class Technical & Leadership Courses in multiple formats

Corporate Learning Matrix

The Corporate Learning Matrix Leadership & Communication

Strategic & Critical Thinking

Collaboration & Synthesis

Technologically Savvy

*Technical Skills for Functional Areas

Staff / Analyst

Senior Staff

Manager

Senior Manager / Controller

CFO / SVP / Director

•  Corporate Accounting & Reporting

•  FP&A •  Business Services •  Shared Services

*Separate columns for organization’s functional financial areas – examples:

Staff Levels

Competencies

Are  you  a    Mr.  T-­‐  shaped  Professional?  

Why  should  you  care  about  Social  Media?  

“In-­‐forming  is  the  individual  person's  analog  to  open-­‐sourcing,  outsourcing,  insourcing,  supply-­‐chaining,  and  offshoring.  Informing  is  the  ability  to  build  and  supply  your  own  personal  supply  chain—a  supply  chain  of  informa1on,  knowledge,  and  entertainment.  In-­‐forming  is  about  self-­‐collabora1on—becoming  your  own  self-­‐directed  and  self-­‐empowered  researcher,  editor,  and  selector  of  entertainment.  

             –  Thomas  Friedman  

ProducJvity  &  You  

Glassblowing  and  CPAs?  

MACPA  Summit  –  May  16th,  2013  MarJn’s  West  

If  you  need  help  

BLI  program:  Social  Media  Strategy  &  Quick  Start:  Developing  and  ImplemenJng  a  Social  Media  Strategy  for  CPA  Firms  &  OrganizaJons    

h_p://cpa.tc/8s    

Let  Bill  Sheridan,  NaJonal  Thought  Leader  and  architect  of  MACPA’s  award-­‐winning  social  media  strategy,  be  your  trusted  guide  to  help  you  jump  start  your  social  media  experJse.    In  seven  tele-­‐coaching  sessions,  Bill  will  guide  you  through  creaJng  a  social  strategy  and  hands-­‐on  coaching  to  get  you  up  and  running  fast!  

Some  starJng  points  •  Michelle  Golden  (Golden  PracJces;  h_p://goldenmarkeJng.typepad.com)  •  Paul  Caron  (TaxProf;  h_p://taxprof.typepad.com)  •  Caleb  Newquist  &  Adrienne  Gonzalez  (Going  Concern;  h_p://goingconcern.com)  •  Rick  Telberg  (CPA  Trendlines;  h_p://cpatrendlines.com)  •  Francine  McKenna  (re:  The  Auditors;  h_p://retheauditors.com)  •  David  Albrecht  (The  Summa;  h_p://profalbrecht.wordpress.com)  •  Tax  Policy  Center  (Tax  Vox;  h_p://taxvox.taxpolicycenter.org)  •  Tax  FoundaJon  (Tax  Policy;  www.taxfoundaJon.org  /blog)  •  Tom  Hood  and  Bill  Sheridan  (CPA  Success;  www.cpasuccess.com)  •  Blumer  CPAs/THRIVEal  h_p://blumercpas.com/blog  •  Kelly  Phillips  Erb  Tax  Girl  h_p://blogs.forbes.com/kellyphillipserb  •  Tom  Selling  The  AccounJng  Onion  h_p://accounJngonion.typepad.com  •  Jody  Padar  -­‐  AccounJng  Tomorrow  h_p://www.accounJngtoday.com/acto_blog/  •  Jeff  Drew  –  Another71  (CPA  Exam  blog)  h_p://www.another71.com/  

   

More  Resources  CPA  Success  posts  about  social  media  h_p://www.cpasuccess.com/social-­‐media/  Self-­‐directed  learning  guide  –  15  min  a  day  h_p://www.cpalearning2.com/  Can  Social  Media  Help  You  Learn?  h_p://cpa.tc/sociallearn  Making  Social  Media  Work  for  You  h_p://www.journalofaccountancy.com/MulJmedia/TomHood.htm  Social  Media  for  Learning  h_p://cpa.tc/sociallearn  Social  Media  for  CPAs  and  CEOs  –  interviews  &  stories  h_p://cpa.tc/social  How  to  Leverage  Social  Media  –  Journal  of  Accountancy  h_p://cpa.tc/8u    

Recommended  Reading  •  The  Corporate  Blogging  Book  by  Debbie  Weil  

•  Crush-­‐It  by  Gary  Vaynerchuk  •  The  Whuffie  Factor  by  Tara  Hunt  •  Here  Comes  Everybody  by  Clay  Shirky  •  Social  Media  Strategies  for  Professionals  and  Their  Firms  by  Michelle  Golden  

•  Switch:  How  to  Change  When  Change  is  Hard  –  Chip  &  Dan  Heath  

•  Escaping  Velocity  by  Geoffrey  Moore  

Tom  Hood,  CPA.CITP  CEO  Maryland  Associa1on  of  CPAs  Business  Learning  Ins1tute  (443)  632-­‐2301  E-­‐mail  tom@macpa.org  Web  hip://www.macpa.org  Blog  hip://www.cpasuccess.com  Blog  hip://www.bizlearningblog.com      

Follow  me  on:  

ü   Twi_er:  h_p://www.Twi_er.com/tomhood  

ü   LinkedIn:  h_p://www.linkedin.com/in/tomhood  

ü   Facebook:  h_p://www.facebook.com/thoodcpa  

ü Plaxo:  h_p://tomhood.myplaxo.com  

ü Slideshare:  h_p://www.slideshare.net/thoodcpa  ü Youtube:  h_p://www.youtube.com/thoodcpa  

ü Second  Life  avatar  name:  Rocky  Maddaloni