Advice and information to help
PublishEd bY KaWg&F you manage your business
Stay for the
reach for success
voLUme 9 n iSSUe 2
The Leading Edge
Construction & real estate Services
• Tax planning services to minimize income
taxes using various tax methods specific
to the industry
dear Clients and Friends, • Assistance in obtaining bonding and
maximizing bonding capacity
welcome to the winter issue of The Leading Edge magazine. As the • Cost segregation studies
new year offers a new beginning for individuals and businesses, we • Lease and financing assistance
encourage you to re-examine financial goals, take the necessary • Job cost evaluation and design
• Selection and implementation of
steps to achieve those goals and plan for the future.
construction software solutions
• Business valuations
In this issue, we talk with experts about cultivating top performers • Forecasted and projected statements
within your business. Experts provide insight into how management of income and cash flow
can encourage top performers while not alienating other • Business succession planning
employees within the firm. And, what about the underperformer? • Preparation of compiled,
Experts provide several steps management can take to encourage reviewed or audited financial statements
underperformers to improve performance and take ownership. • Preparation of partnership and
corporate tax returns
For all businesses, the request for proposal is an important step
in cultivating new business prospects for your organization, and medical Practices
• Mergers and acquisitions of medical practices
therefore, it is imperative that the proposals your firm is writing are
• Sales of medical practices and valuations
making an impact. Experts offer tips on writing a proposal that will
• Structuring and negotiating associate
stand out from the rest, explain when to compete on price, how to agreements
know what the prospect wants, and more. • Admission of new owners into practice
• Buy-sell agreements
Also, experts give their forecast for various predictors, industries • Consultation for the selection and
and regions for 2009 and explain how business leaders can properly implementation of medical and accounting
plan for the health and success of their organization during difficult information systems
economic times. • Cost management and budgeting
• Human resources consultation
Finally, while KAWG&F accountants burn the midnight oil this tax • Tax planning services
• Preparation of compiled,
season compiling tax reports and preparing tax forms to meet the
reviewed and audited financial statements
April 15 deadline, we encourage our clients to contact us with any
• Management advisory services
questions at (410) 828.2727. • Practice operational reviews
• Internal control surveys and consultation
• Strategic planning and practice retreats
Health & Life Sciences (biotechnology)
• All federal, state and local business tax returns
Best regards, • Tax planning and compliance services
Alvin D. Katz, CPA, President & CEO • New business planning and set-up
• Projected/forecasted statements of income or
cash flow (for financing options)
• Research and development (R&D) credit planning
• Outsourced accounting services
• Consultation for selection and implementation
of accounting information systems
• Preparation of compiled, reviewed and
audited financial statements
Technology • Construction & Real Estate Services • Personal Financial Planning
Cost Segregation Studies • Estate Administration • Estate and Gift Planning • Audits
Reviews • Compilations • Litigation Support • Medical Practice Services Group
Personnel Interviewing • Business Acquisitions • Business Valuation
Tax Return Preparation • Individual and Business Tax Planning
Outsourcing • Business Consulting • Business Succession Planning
Non-Profit Entities • HR Solutions
2 VOluME 9 n issuE 2 n wintEr 2009
VOLUME 9 n ISSUE 2 n WInTER 2 0 09 contents
The Leading Edge
The Leading Edge alliance is an international
professional association of independently
owned accounting and consulting firms. The
Leading Edge alliance enables member firms
to access the resources of a multibillion-dollar
4 Stay for the climb
global professional services organization, Enable star performers to reach for
providing business development, professional
training and education, and peer-to-peer success and longevity
networking opportunities nationally and
globally, around the corner and around the
world. 13 new business often hinges
Members are top quality firms who are very on an exceptional proposal
successful, have deep client relationships, and
strong ties to the community. The alliance Experts offer insight and tips to
provides members with an unbeatable combi-
nation: the comprehensive size and scope of winning that next project
a large multinational company while offering
their clients the continuity, consistency and
quality service of a local firm. 14 2009: What’s ahead and
Member firms have access to the best and what’s behind for businesses,
brightest teams of business advisors – a peer-
to-peer connection that provides the right consumers and more
business solutions for clients.
To find out more about the alliance contact
Karen Kehl-Rose, president, at (630) 513-9814
Leading Edge advisory Committee
Brady Ware 9 news and information
Marshall Lehman from our firm
Lurie Besikof Lapidus & Co., LLP
Pannell Kerr forster of Texas, P.C. 16 top 10 misconceptions of
Pannell Kerr forster of Texas, P.C.
doing business in Canada
The Leading Edge alliance
18 in a nutshell: Q&a
in affiliation with Wise group
Chris DeSantis responds to your
ann M. gynn
Editor workplace dilemmas
natasha fletcher, amanda horvath,
Crystal Madrilejos, Stacy Vickroy
art directors 19 the Leading edge alliance
The Leading Edge is published four times per year by
Wise group, 812 huron Road, Suite 201, Cleveland, Ohio,
44115, (216) 523-1212, faX (216) 241-5458. Periodicals
postage paid at Cleveland, Ohio.
IRS Treasury Regulations require us to inform you that
any tax advice contained in the body of this com-
munication was not intended or written to be used,
and cannot be used, by the recipient for the purpose
of avoiding penalties that may be imposed under the Winner 2006 AGD award for publication design
Internal Revenue Code or applicable state or local tax
ThE LEadIng EdgE 3
Stay for the
Enable star f the Pareto Theory applies to the
workplace, then 80 percent of the
office but was the top producer. Management
wanted help because it was concerned he was
performers organization’s results come from 20
percent of the employees.
always in the office.
Yet, Stevens says, if management had
to reach for
Since many experts note that star focused on the best practice approach, it would
contributors are more likely to depart than not have been concerned, especially given
average or poor-performing employees, that other sales representatives were out of the
success the impact on companies can be big.
“High-impact workers are often
office 88 percent of the time but only achieved
60 percent of their quota.
and longevity more susceptible to being poached by
a competitor in a downturn,” warns Ed
Boswell, CEO of The Forum Corp., whose
clients include Fortune 1000 businesses. Price offers three reasons why top performers
By ann M. gynn Ron Price, an expert in workplace stay with a company:
behavior, says most top performers leave • Competitive, performance-based compensa-
because they see their company as being an tion (and that’s not just money)
obstacle to their continued growth instead of a • Meaningful work that stretches them profes-
catalyst. sionally (they love to achieve)
Just given the bottom line impact of • Supportive relationships (they need to feel
departing employees—$3,500 for a minimum valued as human beings in addition to
wage hourly worker to 400 percent of a top being recognized for performance)
executive’s salary—having a star-performer- “There’s no reason why everyone in a
retention strategy makes sense all around. company can’t be rewarded this way in
“Companies that want to hold on to their top proportion to their roles, responsibilities and
performers should start asking questions 12 to results,” Price says. “When this is systemized
18 months ahead of job tenure thresholds— in a company, the underperformers decide to
two, five, 10 and 15 years—to make sure leave on their own and the average performers
they understand why a top performer would find a level of contribution that, while not
consider making a change,” says Price, founder making them a superstar, provides good
and CEO of Price Associates. employment and stability for the company. And
Drew Stevens, an organizational the top performers see the sky as the limit.”
development specialist, says organizations need Price explains that keeping the stars without
to make sure they focus on the best practices alienating the rest of the employees is doable.
of top performers. In his doctoral research, When alienation does happen, it’s because a
92 percent of firms seeking assistance for company emphasizes one area over another,
employee performance issues failed to do that. such as excessive compensation, or follows
He tells of one organization that sought narrow definitions of what a top performer is
assistance for an employee performance so all contribution areas and corporate values
issue—a sales representative who never left the are not recognized.
ThE LEadIng EdgE 5
ThEy don’T juST
identify the right CULtUre month that he would receive a nickel-an-hour
wanT To Enjoy ThEir
raise (he was earning about $1.25 an hour). work, ThEy wanT
To bE paSSionaTE
Terri Herren of The Herren Dimension says “Immediately, I was hooked,” he says today,
if companies want to embrace the idea of 30-plus years later and having spent most of
cultivating top performers, they first must
decide if a performance-based culture is in
his career at McDonald’s, rising to the level of
regional vice president. Most recently, Facella
their best interest strategically. authored Everything I Know About Business I
“While knowledge-based industries tend Learned at McDonald’s.
to place more emphasis on performance and He points to a Gallup study that showed 65 Osborne explains that in the accounting
continuous improvement, it can be achieved percent of American workers reported that they industry, one of the biggest HR challenges is
in any industry and in all sizes of companies,” did not receive recognition within the previous finding the person with two to five years of
says Herren, who has worked more than 25 year—and other reports show that frequently experience. Thus, keeping staff with similar
years in organizational and human resource the No. 1 reason employees cite for departure experience is a must.
development. “It starts with company leaders is that they don’t feel appreciated. Ryan D. Istre, audit senior manager at PKF
committing to a performance-based culture as McDonald’s understands that data—and of Texas, a Leading Edge Alliance firm, says
a strategic business objective.” right from the start, Facella saw the company everyone always considers other opportunities.
With such a commitment, companies also encourage employees early and often after But doing so just made him realize how lucky
must devote their resources to developing iterating what was expected of the individual, he was. “They never gave me reason to look
processes and education, she says. “Retaining what goals were set for the store, etc. elsewhere,” he says.
top performers is a critical competitive When employees set a record for an Upon college graduation in 2000, Istre
advantage.” hour or a day at a store, the manager might began as an associate. Within two years he was
Sure, she says, a company can treat all compensate the crew with time-and-a-half for promoted to senior associate, then manager,
employees the same, but that’s like a teacher that hour or day. McDonald’s corporate office and last year became a senior manager.
giving all students the same grade because also recognizes staff, licensees and vendors— Opportunities for advancement and a pleasant
they show up for class. Performance is not presenting almost two dozen distinct awards atmosphere that feels like a family—where
rewarded. annually. All employee ranks are eligible for the everyone knows everyone’s name and
“Top performers want to work for companies President’s Award, which is given to the top executives have open-door policies—are
that provide greater recognition and rewards 1 percent in the company. The winners are attributes that have helped him decide on his
to them versus other employees who just show given stock options and flown to Chicago future. “I don’t plan on going anywhere else,”
up for work,” Herren says. along with their significant others for a Istre says.
special dinner. Facella says it’s important to SS&G has next generation leadership
aPPreCiate recognize and include the person behind the classes, which brings together both senior and
and reCognize winner too for his or her support. relatively new directors as well as some of the
“We do it with fanfare,” Facella notes. up-and-coming managers and senior associates.
Shortly after he started working at a
But fanfare doesn’t have to mean big, expen- SS&G encourages its experienced directors
McDonald’s front counter, Paul Facella was
sive gestures. “It can be as simple as shaking to take less-experienced staff when visiting
asked by the general manager to come to a
hands and saying congratulations,” he says. clients and prospects, so they, too, have the
corner of the store. There, all his co-workers
opportunity to get exposure and see how
had gathered and the manager announced
Facella had done such a good job in his first offer earLy exeCUtive things operate in the field.
oPPortUnitieS Osborne says it’s important to realize that
the same plan won’t work for everyone—some
Involve younger staff members in leadership might want more opportunities to work
and development activities, says Rebecca directly with clients, others might prefer to
Osborne, director of human resources at focus on business operations or training fellow
SS&G Financial Services, a Leading Edge employees. “Help get them involved in those
Alliance firm. things that they like doing,” she says.
By leading and helping the firm develop, the
employees know their voices are valued and
they can learn more about all the opportunities fULfiLL a PaSSion
and potential within the organization at an “Great employees are not mercenaries,”
early stage in their careers. says Richard Chang, who operates his own
6 VOLUME 9 n ISSUE 2 n WInTER 2009
performance-improvement consulting, training
and publishing firm. His clients include
It’s about the money AND…
Fidelity Investment, Universal Studios and Sure, money matters. Every employee wants a paycheck. Top performers, however, want
Black & Decker. more than financial compensation—they want their work to connect to something more
“What great employees crave most is to meaningful and bigger than themselves.
be part of something exciting, something “They need to see that their performance isn’t just recognized by a series of weekly
that moves them,” he says. “They want to be checks, which could be replaced by a competitor,” says john baker, speaker and founder
involved in work that challenges their abilities of rEady Thinking, a leadership and development firm.
and pushes them to reach their potential.”
Great employees are passionate about their he offers these two examples as case studies:
work—they perform at a higher level because
they are committed to their organizations
and derive greater satisfaction from their job,
Chang says. ProbLem: a top underwriter, jenny was one of her firm’s most trusted
“They don’t just want to enjoy their work, performers. her loyalty to her job, though, was suspect. whispers of her
they want to be passionate about it,” he says. interviewing with rival firms echoed in the halls. Comments she made in passing
Chang says passion-driven organizations win led others to suspect her tenure was tenuous.
the loyalty of their top employees by giving SoLUtion: jenny’s boss sat down with her to put forth a new vision of what
them freedom. “You can have systems in place jenny was to accomplish at work. instead of just recommending a certain piece
to control the implementation of ideas, but of business be accepted or denied, she was given final decision authority over
you must be certain not to compromise the new business acceptance.
enthusiasm, creativity and hard work that
make them possible in the first place.” in studying the situation, the manager learned that the management committee
He explains that this perspective provides already accepted jenny’s recommendations 99 percent of the time. So he
an edge over the competition. “Encourage thought why not make her a business owner, not just an underwriter.
employees to explore their passions and build reSULt: jenny saw herself not as a cog in the machine and someone with
upon them both inside and outside of work,” transferrable skills, but rather an instrumental part of an executive team trying
Chang says. to grow business. jenny’s attitude turned around. her asides became less
In his own company, he found individual caustic and more positive. recruiters would call, only to be disregarded.
passions suffering—and it led Chang to move
employees to better align their positions with
their passions. A desktop publisher with a
passion for competition was happier and more
ProbLem: pete was the no. 1 sales producer in his region, but his effort was
productive in a sales position that allowed him
pretty much mailed in. he would come into the office at 10 a.m., arrive late to
to exercise that aspect of his nature.
meetings, cut out early for 18 holes of golf. Still, his territory was almost always
“Such changes are invaluable in ensuring
the top of the chart in terms of meeting and exceeding quarterly targets. other
that talented employees remain enthusiastic
sales people thought he was toxic to the team, and his remarks about easily
and productive—even if this means you have
finding a job across the street got on everyone’s nerves.
another job to fill,” Chang says.
SoLUtion: pete’s boss put him on a 90-day performance plan. at the end of that
time, pete would either turn around his work habits and attitude or be fired. The
embraCe mULti-faCetS conversation hit pete like a thunderbolt and he stormed out of the office. pete’s
Employees are not one-dimensional, says Susan boss explained that his job was to make his sales staff better and that he owed
Wilson Solovic, CEO and co-founder of SBTV. pete direct feedback that pete could do more in sales and as a leader.
com, a video news information destination for
small businesses. reSULt: pete stewed. but after awhile, he stayed with the firm and acted
“We hire people to do a ‘job’ and that job differently. he surpassed his old sales records and began teaching others his
requires certain skills and abilities. It’s easy methods. pete moved from the person to be avoided to something of a mentor.
to forget that often employees have multiple Looking back, pete said that leaders committed to making him better, not just
talents,” she says. “When you can tap into accommodating his laziness, were the type of leaders who deserved loyalty.
continued on page 8
ThE LEadIng EdgE 7
Derailed? Get BACk oN trACk
continued from page 7
those talents, not only do you create a more
engaged and energized employee, but you also
bonnie hagemann, CEo of Executive development associates, has researched the enhance opportunities for your business.”
issues involved with top performers. She offers the top five areas of concern. At SBTV.com, Solovic hired a production
manager for the technical side of the business.
Later, she learned the new manager had started
his career on-air and soon he was contributing
derailment back-on-track as an anchor/reporter in addition to his
issues solutions primary responsibilities.
“Identifying employees’ hidden talents
Lack of communication. when increase feedback and communication requires creating an environment where
responses to requests aren’t given, to surface the problem and take employees feel comfortable allowing them to
engagement decreases. Employees no action. you don’t want to learn about be discovered,” Solovic says. She offers these
longer go above and beyond. the employee’s problem the day she suggestions:
or he resigns. Get close to them early • Host a company social outing that offers
on. if you are proactive in employees’ employees the opportunity to demonstrate
development, you won’t be surprised. or share more about their interests, back-
ground and experience.
personal issues and outside stressors. put together a plan of action and • Bring in creativity consultants who use exer-
nine out of 10 times, derailment is management controls. cises and conversations that unveil employ-
related to personal issues. ees’ hidden abilities.
no follow-through on provide coaching. rotate aSSignmentS
Boswell says providing development
experiences and encouraging rotational
Maturity issues, including poor Find a suitable spot for individual if
assignments have been shown to increase
self-control, lack of self-awareness, she or he has a strong history or track
retention of key players by 15 percent.
low or under-developed emotional record. Cut losses for individuals new
“Rotational assignments move leaders from
intelligence. to the organization.
one area of the company to another to stretch
themselves, develop new talents, develop
Character issues such as ego, Cut losses and move on.
cross-functional skills, groom them for higher
self-serving attitude and lack of
positions, expose them to other functional
areas and help them acquire a holistic sense of
the company,” Boswell explains.
The Forum worked with a global consumer
products company that sought to develop its
leaders, including implementing rotational
assignments. So, Boswell says, a marketing
executive might have worked in finance,
learning about the budgeting process. As a
result the marketing executive developed
cross-functional skills and applied them,
such as building better customer awareness
(marketing) into the budget planning process
“When designed well, these experiences
can also develop awareness of innovation,
storytelling, communicating, scenario planning
and networking. All of those skills benefit
both the company and the individual,”
Boswell says. e
8 VOLUME 9 n ISSUE 2 n WInTER 2009
VOluME 9 n issuE 2
is your firm getting the most
from its financial software?
By Mark E. Rapson, CPA
t he proper tracking of any
businesses finances is critical.
Without a good system in place,
vendor invoices and payments in
accounts payable. A firm should
be able to keep track of purchases
a firm can miss billable hours, and payments by vendor for the
misdirect fees or unnecessarily day, week, month or year.
perpetuate a frustrating and time- Using the expense ticket/job
consuming daily experience. cost function of the software
Fortunately, quality account- enables a firm to allocate expenses
ing software programs exist to directly to clients for subsequent
specifically assist small to mid- billing. A firm should also have
sized businesses in day-to-day the ability to track the profitability
accounting matters. Many of the of projects by using job-tracking
programs are sophisticated enough functions.
to handle multiple financial func-
tions, transforming an accounting Comprehensive financial
headache into a few quick clicks reporting
of the mouse.
A businesses software program
If you suspect your firm is
should provide the reporting func-
spending wasted hours on track-
tionality needed to manage the
ing numbers, perhaps it is time to
organization. If the software has
reexamine your software program.
a report-writer function, then the
You can begin by determining
firm can customize reports to fit
whether your program offers the
any unique needs.
In addition to the above, a firm
will need the following additional
time and billing features: If you’re beginning to think
Many firms should require a • Ease of use your organization’s accounting
full-feature time and billing solu- • Cost-effective solution program is lacking in functional-
tion. This allows for tracking the • Fully integrated accounts pay- ity, then you may want to consider
IF yOu SuSPECT yOuR
amount of time spent on multiple able, accounts receivable, gener- investing in new software. Several FIRM IS SPENDING
activities and services associated al ledger and reporting modules easy-to-use and affordable soft- WASTED HOuRS ON
with your clients. The time can • Preparation of quotes and esti- ware packages are available to help
subsequently be billed to your mates your business. Among the most
clients based on established bill- • Integrated project tracking popular and trusted programs are PERHAPS IT IS TIME
ing rates. The accounts receivable • Customizable reports QuickBooks and Peachtree. TO REExAMINE yOuR
module should be flexible to allow • Integration with other software Choosing the right software can
for billing client retainer fees, flat solutions (time slips) be complicated but keep in mind
project fees, etc. • Other advanced services (credit that many accounting firms deal
card processing and access to with this technology everyday
accounts payable and financial data over the Internet, and can often help you make a
expense tracking etc.) qualified decision about which
software package is right for your
The software package should
provide for detailed tracking of
THE LEADING EDGE 9
What does international Financial
reporting Standards mean for your business?
By Clemens W. Mueller, CPA
i FRS is the latest “hot” acronym
in the accounting and financial
widely reported, IFRS is much
more principles-based than it is
Under U.S. GAAP, they are gen-
erally treated as either current or
world. The purpose of this article
is to briefly explain what IFRS
rules-based. In addition, IFRS has
few industry-specific guidelines
noncurrent depending upon the
balance sheet item to which they
is, why it’s the wave of the future whereas U.S. GAAP has significant relate. DIFFERENCE
for U.S. companies and when
it will be implemented for U.S.
industry-specific guidelines. For
example, IFRS does not have spe-
• IFRS has much less extensive
guidance regarding revenue
companies. cific guidance relating to nonprofit recognition, whereas U.S. GAAP GAAP AND
While there are many specific
has detailed, specific industry
IFRS IS THAT
IFRS is the acronym for
differences between U.S GAAP IFRS HAS
International Financial Reporting
and IFRS, many differences are
not ordinarily significant or relate
Standards. It is a set of account-
ing standards developed by
to transactions or situations not
The push for convergence of U.S
GAAP with IFRS relates primarily
frequently encountered. However,
the International Accounting to the perceived efficiencies to be
there are important differences,
Standards Board. The IASB is an achieved from such convergence
independent accounting-standard- in an increasingly global economy. to or are described in U.S.GAAP.
• IFRS does not permit the use
setting organization based in Such efficiencies include: Other than the costs, some
of LIFO as an inventory costing
London. It consists of members • The use of common accounting commentators also see other
from nine countries, including the standards will make it easier to problems with convergence. For
• IFRS allows companies to
United States. In effect, IFRS rep- compare performance between example, there is concern that
revalue property, plant and
resents country-neutral account- competitors from different coun- certain countries may reserve the
equipment to fair value, while
ing standards, which are quickly tries. right to not fully adopt IFRS; that
U.S GAAP requires historical
becoming “global GAAP.” • Capital markets will be more is, they would partially adopt
cost accounting unless there is
More than 12,000 companies efficient because international IFRS but selectively modify IFRS
in approximately 100 countries investors will be able to more guidance with which they do not
• IFRS uses a single-step method
have adopted IFRS. In fact, the readily understand the finan- agree. This would result in lack of
for impairment testing rather
European Union requires publicly cial statements of a potential comparability between countries,
than the two-step method
traded companies in its member acquiree. which is the very “disease” that
required by U.S. GAAP. The
states to prepare their financial • Companies with subsidiaries convergence to IFRS wishes to
result is that, under IFRS,
statements in accordance with in multiple countries would cure. Also, because IFRS is more
impairment write-downs are
IFRS. Canada plans to require have only one set of accounting principles-based than rules-based,
IFRS for public companies in standards throughout the entire concern has been expressed that
• IFRS allows capitalization of
2011. It had previously planned company. companies could make significant
development costs if certain cri-
convergence with U.S. GAAP. changes to accounting policies
teria are met. U.S GAAP requires
Japan and India also plan conver- Of course, there will be costs to (for example, revenue recognition,
all research and development
gence with IFRS by 2011. convergence with IFRS, especially which is much less specifically
costs to be expensed.
While U.S. GAAP and IFRS education and training. The edu- addressed in IFRS) that could
• Even if debt covenant violations
have many similarities, there are cation and training will apply not potentially still be in compli-
are cured after the end of the
many differences. In general, the only to accountants but to other ance with IFRS, and that users of
year, IFRS still requires clas-
main difference between U.S. specialists (such as actuaries and the financial statements may not
sification as a current liability.
GAAP and IFRS is that IFRS has valuation analysts) who perform clearly understand the nature of
Under U.S. GAAP, such debt can
significantly less detail. To illus- services that have financial state- such changes.
still be classified as long-term
trate this, it has been reported ment impact. In addition, there Despite what one may think
debt assuming a written waiver
that a U.S GAAP analysis that may be additional costs due to the regarding the cost versus benefit
fills about 20,000 pages would potential need to rewrite contracts decision, convergence is in fact on
• IFRS treats all deferred tax assets
consume only an estimated 2,500 whose terms and conditions refer its way, as explained in the follow-
and liabilities as noncurrent.
pages for IFRS. As has been ing section.
10 VOluME 9 n issuE 2 n wintEr 2009
When above, the effects of increasing of developments related to con- is already here. It is very common
globalization, and confusion that vergence. An excellent source for the foreign parent to require
The U.S. Securities and Exchange
could be caused by certain private of information is the web site, at least annual reporting by the
Commission has taken an active
companies implementing IFRS www.ifrs.com sponsored by the U.S. subsidiary in accordance with
role in the convergence effort. In
while others staying with U.S. American Institute of Certified IFRS.
2007, it unanimously voted to
GAAP, there is the very real issue Public Accountants. In fact, for The bottom line is that change
allow non-U.S. based companies
in the not too distant future of many private companies in the is almost certainly coming, and
to file IFRS financial statements
what accounting standards private United States that are subsidiaries planning and preparation is best
without an accompanying recon-
companies should be using. The of foreign parent companies, IFRS done sooner, rather than later. e
ciliation to U.S. GAAP. Even more
most likely possibilities include:
significantly, in August 2008 the
• IFRS specifically geared for
SEC released its proposed con-
private companies. In fact,
vergence roadmap, which can be
the IASB is conducting a proj-
summarized as follows:
ect entitled “IFRS for Private
• The SEC will decide in 2011
Entities.” This project is sched-
whether to require U.S domestic
uled to be completed this year.
public companies to adopt IFRS.
• Continued use of U.S. GAAP,
• If SEC decides in 2011 that con-
but in a scaled down version for
version to IFRS will be required,
the use of IFRS will be required
• Adoption of IFRS in full
beginning in 2014 for the large
public companies, 2015 for
It should be noted, though,
those considered medium, and
that if the FASB and the IASB
2016 for those considered small.
complete the convergence projects
• In addition, a select group of
mentioned, this will bring U.S
U.S. multinational public com-
GAAP and IFRS much closer to
panies will be permitted to elect
each other, making any eventual
to adopt IFRS for their 2010
transition less problematic.
So, what should we do now?
For public companies and
The SEC is currently seeking
CPAs providing services to public
public comments regarding its
companies, there is a not a
moment to lose. They should, as
The FASB and the IASB have
soon as possible, start considering
also been working together with
and planning the variety of
the goal of convergence between
changes that could occur, which
U.S. GAAP and IFRS. They are
include not just purely changes
presently working on convergence
in the “debits and credits,” but
projects with estimated comple-
also the impact on, among other
tion dates generally between 2009
things, investor communications,
information technology, employee
The above information then
compensation issues such as
begs the question—what about
performance targets and stock
private companies and IFRS?
Of course, the dictates of the
For private companies and
SEC do not affect private com-
CPAs providing services to private
panies directly. Yet, with the very
companies, there is of course not
likely implementation of IFRS by
the same urgency. Nonetheless,
public companies as described
it would be wise to keep abreast
THE LEADING EDGE 11
medical practices can benefit with internal controls
to protect business, revenue
By Mark R. Cissell, CPA
i n today’s medical practice,
physicians are being forced
to accept less for services they
and post payments to the comput-
er. Dividing the two duties helps
prevent an employee from stealing
physician. This avoids the situ-
ation in which money could be
diverted from the practice with-
Controlling the charge tickets/
perform. This in turn reduces money from the practice and then out any kind of trail. The office
patients’ encounter forms can
profit and ultimately physician manipulating patients’ accounts manager should review patients’
be done by pre-numbering and
income. One way to help counter in the computer, usually by writ- accounts weekly and document
controlling the flow of the forms.
this “squeeze” is to control costs. ing off the balances as contractual activity. The managing physi-
A gap in the numerical sequence
Internal controls can protect a adjustments or bad debts, to cover cian should review all patients’
may indicate an oversight in post-
practice from revenue loss and the theft. accounts monthly. There should
ing client services or some other
potential employee embezzlement. In an ideal situation, one person be an explanation for all balances
This article discusses different opens the mail, another prepares more than 90 days describing
forms of internal controls and why the deposit slip and a third posts what has transpired and future
they should be implemented in the payment to patients’ individual plans. monitor contractual
your practice. Although there is accounts in the computer. For adjustments
no guarantee employee embezzle- example, if any given employee for reasonableness
ment, fraud or similar defalca- has the authority to sign for deliv- and deposits Contractual adjustments should be
tions will be found, a practice can eries, this situation could lead to segregated by category from other
The sign-in sheet (beware of
minimize these activities by imple- falsified inventory. Make sure that bad debt expense. This makes
HIPPA issues here) and the
menting and monitoring sound an authorized staff member signs monitoring the amount of adjust-
appointment schedule are good
internal controls. for all deliveries. ments within each contract easier
internal control tools. They should
thus highlighting large variances.
be compared to the report of
Fidelity bond insurance daily charges. These tools assist
LIMIT SIGNING Every medical practice regard-
less of the size should consider
in finding errors as well as poten-
tial embezzlement. Also from Mistakes and improprieties are not
AuTHORITy bonding all personnel who touch an internal control standpoint, limited to cash receipts and bill-
ing. Payables offer similar oppor-
ON CHECKS TO or may come into contact with
money. Bonding, most commonly
the practice needs to make daily
deposits so the corresponding tunities. The best way to control
OnE Or twO known as fidelity bond insur- reconciliations can be performed. the outflow of cash is to limit
signing authority on checks to
PHySICIANS ance, is relatively inexpensive and
will reimburse the practice for
Daily deposits also reduce the pos-
sibility of lost checks and prob- one or two physicians and attach
AND ATTACH A embezzlement by office person- lems related to having cash and/or a vendor invoice to each check
when it is signed. For checks over
VENDOR INVOICE nel. This type of insurance also
covers theft of practice funds by
checks in the office.
a pre-set amount, two signatures
TO EACH CHECK someone other than an employee.
For example, a staff member is
Lockbox deposits should be required.
for medical practices
taking the daily deposit to the Strong internal controls
Lockboxes are a service provided
bank. Along the way he or she strengthen a practice’s record-
Segregate job duties stops for personal errands. While
by most financial institutions
keeping. Poor records aid embez-
today. They set up a mailing loca-
One primary internal control step away from his or her car, the car is zlement, fraud and mistakes.
tion for all cash receipts. Since the
is to divide selected job duties. stolen along with the deposit. The While implementing internal
receipts are received directly by
In most small medical practices practice is covered by the fidelity controls does not guarantee no
the institution the money becomes
this is a difficult task. However, bond insurance. mistakes or improprieties, it does
available more quickly. The finan-
there are certain duties that must strengthen the practice’s ability to
cial institution provides a daily
be segregated to create an envi- Consent of managing physician protect itself against those types of
report to the practice of who paid
ronment with effective internal for write-offs losses. e
what and in some cases it will pro-
controls. An individual should not
A patient’s account balance should vide a copy of the checks received
be allowed to both open the mail
never be written off as a bad debt for the day to assist with proper
(i.e., initially handle the money)
without the written consent of a recording against patients’ records.
12 VOluME 9 n issuE 2 n wintEr 2009
new business often hinges on
an exceptional proposal
Experts offer insight and tips to winning that next project
By ann M. gynn
W hether responding to a request for
proposal or submitting a pitch for new
business, the challenges are many but they all
is profit justification, says Frank Rumbauskas,
author of The New York Times bestseller, Never
Cold Call Again, and the follow-up Selling Sucks:
relate to the ultimate question: How do we win How to Stop Selling and Start Getting Prospects to
this new project? Buy. don’t forget
“New business is the lifeblood of any
company. Companies just need to be smart
“You MUST show the prospect how your
solution will put money into his or her pocket. the writing
about business development and submitting It is not enough to sell on features, benefits or “proofread. proofread. proofread,”
proposals,” says Michele Harris, founder and price,” he says. advises author and speaker Sue
CEO of SmartiSolutions, a marketing agency Winning proposals and clients is all about Thompson. “use spell check.
search firm. telling, says Nancy Trent, founder and CEO
She advises that an initial meeting with the of Trent & Company. “Tell them what you’re “There is hardly anything that turns a
prospect, even a conference call, is a must going to tell them, tell them, and tell them client off more than an incorrect street
before a proposal is submitted. “Clients want what you told them,” she says. address, poor syntax, or atrocious
thoughtful ideas about where and how you Many salespeople fail to tell prospects what spelling,” she says.
would take their business,” Harris says. “In they are going to tell them. “The way you
“poor writing and spelling can lead the
submitting a proposal, impress with strategy present your proposal will test the waters
reader to assess you as uneducated,
and ideas over information overload. You don’t for success. It’s all about first impressions,”
unprofessional, or just plain stupid,
need a ton of detail but you do need to dazzle.” Trent says.
especially if your proposal is being
Rose Fass of Fass Forward says showing how She says being prepared for changes with
compared with others,” she says.
you can add value quickly and succinctly is the prospect is a must. Perhaps a new business
critical. “This is more important than price—if pressure has caused the prospect to change al borowski of proposal writing
your potential client can’t see the bottom line course, a new requirement has arisen or Services says knowing the rules of
benefit, they won’t use you no matter how budgets are lower than expected. Or nothing writing and knowing how long it takes
cheap you are,” she says. really has changed but as the decision draws to write a truly effective proposal
Distinguish yourself from your competition. near, cold feet cause the prospect to rethink a are critical to success. among his
Identify what the prospect could get from you position on the campaign. advice, which is found in detail at
that others can’t give—what separates you from Trent says be ready for these challenges www.proposalwritingservices.com:
the pack of other contenders, Fass notes. by delivering a compelling story to get your • Avoid “boilerplate” usage.
Demonstrate knowledge of the prospect’s message across by: • Demonstrate understanding of clients’
industry and the company in particular— • understanding the prospect’s needs better wants, needs and expectations.
mention big accomplishments and big than anyone else. • Be conversational. Don’t write a
challenges that they face, she says. • having products and services that fit like a college term paper.
Raj Khera, CEO of MailerMailer, offers glove for those needs.
proposal writing advice through his blog, • exceeding the prospect’s expectations in “Make it easy for your buyers to skim and
http://blog.mailermailer.com. One recent tip he your specialty field by showing results, still understand your story through your
shared is to make sure the bottom line bid is credibility and reputation with past projects. use of design elements such as graphics,
less than what it would be if you totaled each Lisa Nirell of EnergizeGrowth LLC advises slogans and informative headings,”
line item. “Include a line item called ‘discount,’ that you ensure you are working directly with says dianna booher, author of Rules of
which is the difference between your bottom the economic buyer. “This is the person who Business Grammar: 101 Fast and Easy Ways
line bid price and each line item price total,” can authorize payment or lead the project,” to Correct the Most Common Errors.
he says. “This way, if the customer tries to says the author of EnergizeGrowth NOW: The “a cut-and-paste job won’t do in today’s
reduce price by picking a particular line item, Marketing Guide to a Wealthy Company. “Do environment—particularly when cutting
you can accommodate them but then reduce not waste time writing a proposal for someone and pasting from poor models that have
your discount.” who can say ‘no,’ but can never say ‘yes.’ Your been ‘in the files’ for a decade or so.”
The most important value to demonstrate proposal will gather dust.” e
ThE LEadIng EdgE 13
2009 What’s ahead and what’s behind
for businesses, consumers and more
s 2009 begins, forecasters and trend experts share their insight and predictions about what lies ahead. And this time, unlike in many recent
years, their comments all reflect the impact of the economic troubles.
new behaviors adopted time for turnaround government promotes green
“Change is good—even when it means tem- Turnaround consultants and financial advisors E. Bruce Harrison, author of Corporate Greening
porary losses—and ups and downs happen,” will continue to face an abundance of work 2.0, says despite congressional preoccupa-
says Judith Lederman, president of a strategic but a paucity of options to save businesses tion with economic recovery, Congress will
marketing firm and former market analyst with stifled by a credit crunch, according to the enable legislation that mandates stronger green/
a leading consumer publication. Turnaround Management Association. energy initiatives for business. The cooperation
“A plummeting stock market does not mean The organization’s annual Trend Watch poll between Capitol Hill and the White House will
that consumers need less; it just means that released last fall shows about three-quarters of energize the initiatives.
the buying patterns are likely to change and respondents report engagements and revenue Public companies in the United States must
spending will decrease,” she says. “Businesses up at least 10 percent in 2008 over the previ- prepare for election-year political pledges to
that are going to succeed are going to have to ous year. The same number anticipates further convert to a long life. Standards, rules, inspec-
target strategically, lower prices, appeal to bar- revenue growth this year, with most expecting tions, compliance deadlines and lawsuits will
gain-hunting attitudes and stay aware of what increases of up to 25 percent. follow the corporate-greening pattern set in
people are most likely to buy.” Manufacturing (62 percent), construction 1970 when the Environmental Protection
Lederman offers her consumer behavior pre- (46 percent) and distribution (45 percent) Agency opened its doors, Harrison notes.
dictions: were the top industries in which turnaround
• Clothing—Consumers are holding off on professionals were working. More than one in Social media expands business role
making expensive fashion purchases and four respondents said their work also includes
Being relevant in the social media world will
that trend is likely to continue. Consumers retail, real estate, automotive, service busi-
get to the top of more companies’ to-do lists,
will look for durable and classic clothing. nesses and health care.
according to Romji Mahajan, chief marketing
Dry-clean-only tags won’t be as popular, “Not only are more companies in need of
officer of Ascentium Corp.
which may pinch dry cleaners too. turnaround professionals, the new Bankruptcy
Ascentium is finding more of its customers
• Food—Restaurants will suffer in the long Code and the current credit market have
want or need to tie into various social plat-
term as more people analyze their credit card combined such that a significantly higher
forms to give their customers better insight into
bills and come face to face with their restau- percentage of these troubled companies will
consumer demographics and trends. “These
rant expenditures. In grocery stores, cou- have no option other than liquidation,” says
types of platforms enable companies to be
pons will see a resurgence not only among James B. Shein, chair of the TMA Trend Watch
more relevant to younger and more technically
the boomer and older generations who Committee and professor of strategy and man-
savvy consumers who have flocked to sites like
have used them previously, but among the agement at the Kellogg School of Management
MySpace, Facebook and Twitter,” Mahajan says.
younger generations as well. Comfort food, at Northwestern University.
not gourmet cuisine, will be popular again.
• Technology—Online shopping is likely to not just social Web expansion
baby boomers talk exit strategies
experience renewed growth. Mobile market- Paula Lovell, president of Lovell
As the baby boomer generation approaches tra-
ing, such as Twittering, blogging, texting, Communications and past chairman of the
ditional retirement age and rides the economic
will increase to reach the public and let Federal Reserve Bank of Atlanta, agrees that the
roller coaster, more will see uncertainty in their
them know what’s happening. Web is where more businesses will go.
retirement plans. In 2009, more small- and
• Health care—More stress-related illnesses “In 2009, we expect more businesses to
mid-size business owners will recognize the
may come into play but consumers will be turn to social networking, search engines and
need to plan for the future, says Bob O’Hara,
less likely to pay for expensive co-pays on the Web for public relations exposure, driv-
president of O’Hara & Company.
medical tests. Emergency room visits will ing demand for Web sites with effective search
O’Hara, who advises on exit planning, says
increase as the middle class neglects its engine optimization, SEO,” she says.
baby boomer business owners realistically must
health and follows the indigent community As traditional media organizations consoli-
know there will probably be no more peaks in
that uses the ER as a primary care provider. date, the remaining journalists will be required
their business cycle. “Therefore, it is imperative
Lower-cost HMOs are likely to be busier to produce more; thus they will turn to expert
for them to think of the bigger picture now. In
and get more customers than the more sources who are easy to find online.
five or six years when the markets come back,
it will be too late,” he says.
14 VOLUME 9 n ISSUE 2 n WInTER 2009
a pLuMMETinG Steps to watching expenses include:
• planning well in advance to shop for dis-
SToCk MarkET counts and monitor currency fluctuations
for the most favorable exchange rates,
doES noT MEan • using prepaid foreign currency travel cards.
ThaT ConSuMErS More people opt for these electronic forms
of payment over traveler’s checks and cash,
nEEd LESS; iT juST according to a recent industry study,
• using planning tools such as Travelex’s
MEanS ThaT ThE budget calculator (www.cashpassport.com/
buyinG paTTErnS us/budgetcalculator.html) to estimate costs
of trip basics such as food and beverage,
arE LikELy To accommodations, public transportation,
entrance fees, etc.
ChanGE and While travel for business is still required,
SpEndinG wiLL cost containment is a priority for companies,
according to the Association of Corporate
dECrEaSE. Travel Executives.
Christopher Russell, Travelex’s executive vice
president of outsourcing, says business travel
previously was considered a necessary expense
and generally no one scrutinized that belief.
“Businesses that understand and collabo- funding losses for nonprofits “We see that starting to change,” he says.
rate with the Web’s influential social media Nonprofits around the country will see funding “Travel management and travel spending man-
outlets—blogs, Facebook, Twitter and a host cuts for a variety of reasons. The government agement are being discussed in CEO offices
of others—will fare better than those who fail may reduce or eliminate their funding, their and board rooms across the country.”
to grasp the significance of this fundamental endowments took a hit in the stock market
shift,” Lovell says. and their contributors are facing their own eco- fewer dollars spent on off-site meetings
Travel managers, directors and others involved
it cost containment for many Dave Kerr, founder and president of Integrity
in planning meetings for their companies say
IT decision-makers across government and House, a substance abuse rehabilitation center
they will be spending less in 2009.
corporate sectors enter the year citing cost con- in New Jersey, says the need continues to be
A Worktopia survey shows that economic
tainment as their top priority, according to a great but the dollars are shrinking.
conditions are tightening companies’ plans
survey by CDW Corp. “The problem of addiction didn’t hear about
to host off-site meetings, including moving
Forty-one percent of respondents cited cost our bad economy,” he says. “Our waiting list
meetings to lower-priced venues and locations
as their top concern. However, 32 percent said is in the hundreds. We probably will see a
where less travel is incurred. More rigorous
investment, new products and technologies funding cut soon and yet somehow we have to
planning also is anticipated.
was their priority for 2009, a five percentage maintain services to 366 addicts in recovery in
Those companies expecting fewer meetings
point increase over 2008. our residential program,” he says.
in 2009 typically are larger organizations with
“Many times, organizational objectives An added economic impact for organizations
more than 2,500 employees. They also are the
are set well in advance, and after navigating like Kerr’s is that graduates of the program
ones who are planning to strategically leverage
through the volatile market conditions that will be competing for employment with hun-
technology to reduce meeting costs.
have become the defining characteristic of dreds of thousands of qualified workers being
“Not surprisingly, larger companies are
2008, IT decision-makers are planning for laid off.
more inclined to utilize a technology-based
2009 by planning for the one element they solution or service provider to source, track
can control—cost,” says CDW Vice President Planning before plane departs and plan their off-site meetings,” according to
Mark Gambill, who handles market insights International travel will still happen, but Worktopia. e
for the company. Americans are opting to control costs better in
2009, according to Travelex.
ThE LEadIng EdgE 15
top 10 misconceptions about
doing business in…Canada
By gordon Jessup | fuller Landau
Canada iS a
Canadian companies require implemented the federal corporate tax rate will
resident directors. be 15 percent.
Provincial tax rates have also seen reductions
Canadian companies can be
over the last few years and they range from
incorporated under the jurisdiction of a
a low of 10 percent to a high of 16 percent.
province, a territory or the federal government.
Some provinces have announced future tax rate
Each Canadian jurisdiction has enacted its own
cuts, and once fully implemented combined
Business Corporations Act and, while similar,
Than 5 MiLLion each piece of legislation has variations. Most
Canadian jurisdictions require at least one
federal and provincial corporate tax rates will
range between 25 percent and 31 percent.
Please note that tax paid to the province is
resident director and many require a majority
not deductible in arriving at federal corporate
of the directors be Canadian. This can be an
impediment for foreign businesses wishing to
establish a subsidiary in Canada.
Nova Scotia and New Brunswick, however, Canada does not have any
LanGuaGE aS do not require resident directors. By choosing
to incorporate in one of these provinces
incentives for businesses.
Companies undertaking scientific
oThEr Than a foreign business can set up a subsidiary
without the need to find a resident to act as a
research and experimental development
in Canada are eligible to claim federal and
director. These corporations can then register provincial tax credits. The federal government
to do business in other provinces, even though provides a tax credit equal to 20 percent of
they may not have any business activity in their eligible expenditures that is applied against
FrEnCh. province of incorporation. federal income taxes. Several provinces also
provide tax credits for research performed in
Canada is a high tax jurisdiction. their province.
Companies that manufacture in Canada also
Traditionally Canada was seen as a high
enjoy tax incentives. Many provinces provide
tax jurisdiction as corporate tax rates
tax credits for manufacturing and processing
often were greater than 40 percent.
undertaken in their jurisdiction. These credits
However, Canadian governments (federal and
reduce the effective corporate tax rate.
provincial) have been successful in balancing
The Canadian entertainment and software
their budgets, and the resulting surpluses have
industries benefit from lucrative film-related
allowed them to reduce tax rates.
tax credits. These tax credits significantly
In the 2008 budget the federal government
reduce the cost of Canadian productions.
announced reductions in the general corporate
tax rate for the next several years. When fully
16 VOLUME 9 n ISSUE 2 n WInTER 2009
foreign corporations do not need of the population of Canada lives within 93 than English or French. A significant portion of
to file Canadian tax returns miles of the Canada-U.S. border. the population speaks Chinese, Italian, German
Average winter and summer temperatures and Punjabi. More than 50 percent of the
Canada has an extensive treaty
across Canada vary by location. Winters can people living in Toronto, Canada’s largest city,
network. Following the Organization
be harsh in many regions of the country, were born outside of Canada.
of Economic Co-operation and Development
particularly in the north and Prairie provinces,
model treaty, a foreign corporation that is a
where daily average temperatures are near Canada is mostly focused on
resident in a treaty country is exempt from
5°F but can drop below 40°F with severe trade with the United States.
Canadian income taxes on business profits if
wind chills. Southern Ontario experiences
it does not have a permanent establishment While Canada’s primary trading partner
a moderate winter with average daily
in Canada. If the corporation has an is in the United States, in recent
temperatures around 14°F Coastal British
establishment in Canada it is subject to tax on years Canada has increased trade with other
Columbia enjoys a temperate climate with a
income earned through that establishment. countries. China has increasingly become an
mild and rainy winter.
Foreign corporations resident in a non- important trading partner. Aside from the
While winters can be cold, summers in
treaty country are subject to tax on income North American Free Trade Agreement that
many parts of Canada can be quite warm.
earned in Canada even if it has no permanent Canada has entered into with Mexico and
Summer high temperatures range from 75 to
establishment. the United States, Canada has entered into
85°F with occasional extreme heat in some
In 1999 Canada adopted rules in its Income similar free trade agreements with Peru, Costa
interior locations exceeding 104°F .
Tax Act that require non-resident companies Rica, Israel, Chile, the European Free Trade
that are exempt under a tax treaty to file Association (consisting of Iceland, Norway,
a federal corporation income tax return to Canada’s economy is primarily Liechtenstein and Switzerland) and Columbia.
disclose that they are carrying on business based on resources. By reducing trade barriers Canada has not
in Canada and the basis by which they are Canada is one of the world’s most only opened its doors to the world, it has
claiming exemption from Canadian tax. important suppliers of agricultural opened foreign markets to Canadian-based
Failure to file a required tax return can result products (wheat, canola and other grains) companies. Foreign companies looking to
in penalties being assessed against the non- as well as one of the few developed nations reach into these markets may wish to establish
resident corporation. Many non-resident that are net exporters of energy. Canada has manufacturing operations in Canada to gain
corporations are unaware of this requirement vast deposits of natural gas and oil and is the lower cost access to these markets.
and surprised when assessed non-compliance world’s largest producer of zinc and uranium.
penalties of $2,500 for each year of non- It is also a world leader in many other natural Canadians enjoy
compliance. resources such as gold, nickel, aluminum, free health care.
and lead. Yet, with all of these resources the
Canada has a nationalized
foreign businesses can sell to Canadian economy is dominated by the service
health care system. The federal
Canadians without concern for industry, which employs about three quarters
government ensures access to health care
Canadian sales taxes. of working Canadians.
through the Canada Health Act. This act provides
Canada has a highly skilled workforce
Canada has a national sales tax, the criteria provinces must meet to be eligible for
and many universities known for their
Goods and Services Tax. Non-residents who are federal transfer payments. Federal transfers are
business, engineering and computer science
carrying on business in Canada are required to important for the provinces because as they are
programs. Companies such as Research In
register, collect and remit this tax. As a value- constitutionally responsible for providing health
Motion, producer of BlackBerry™ wireless
added tax they may be eligible to claim tax care services. Without federal transfers many of
communication, are the product of these
credits for GST that they pay on their inputs. the provinces would be unable to raise sufficient
Canada collects tax on all importations of funds to operate their health care system.
goods. This applies to non-residents that act For the federal government to be in a
as the importer of the goods. Without proper all Canadians speak french. position to provide the necessary transfer
planning the non-resident may be incurring Canada has two official languages, payments to the provinces it must raise
non-recoverable tax when selling goods to English and French. English is spoken significant tax revenues. Canadian individuals
Canadians. by more than 85 percent of Canadians have not experienced the significant tax
and French is spoken by just 30 percent of reductions that corporations have seen in recent
Canada’s climate is cold. Canadians. Eighty-five percent of French- years. Universal health care is provided to all
speaking people live in the province of Quebec. Canadians at the cost of higher personal taxes. e
Canada is the second largest country in
Other than Quebec, only New Brunswick has a
the world (only Russia is larger). Much
statement of official bilingualism. If you would like to discuss any of the above in detail or
of this land mass is in the north where would like further advice about setting up business in
Canada is a multicultural society. More than 5
population is sparse. Approximately 75 percent Canada, please contact Gordon Jessup at (416) 645-6508
million residents list their first language as other or email@example.com.
ThE LEadIng EdgE 17
in a nutshell by Chris de Santis
iMpEndinG rETirEMEnTS poSE nEw ChaLLEnGE For CoMpany
Q: our company employs several hundred The retirement age was set at the age it people who work with individuals inside the
people—35 percent of whom will reach was because most people, at the time, didn’t organization to identify resource needs, then
traditional retirement age in the next five live much beyond it and therefore the cost create the project scope and determine its
years. What should we do now to ensure a of carrying people wasn’t burdensome. worth and costs. A budget is created and the
smooth transition? Life expectancies have changed. What isn’t project is posted for bidding by the network
changing are work habits. or passed directly to members of the “alumni.”
Boomers have worked hard all of their The trick is to make the project interesting
lives. I for one do not see them leaving work enough to attract talent.
where they are fully engaged for 10 or more There are any number of ways to retain and
hours a day and suddenly sitting around and attract talent. First off, you will need a talent
gardening, golfing or pursuing any number of bank that identifies all the skills available
leisure activities. While that might be fun for a and who possesses them. Next, you will
short time, it will not meet the needs of a large need incentives. This is why it is important
group of formerly productive individuals. What to highlight the costs of the scoped project.
you will see is a slew of second careers, which Once you know the costs, you can estimate
brings us back to what to do about those the worth of the project to the organization
people retiring. and price it accordingly.
Here is the challenge for savvy businesses. Back to your original concern regarding
If you have a workforce highly dependent on the transition of knowledge. What I didn’t
the intellectual capital of people who are going mention was the value of both mentoring
to retire. If that workplace is finding it hard and knowledge management. If you have a
a: Your question is one that will impact a large or impossible to replace those individuals in good approach to mentoring, then you are
number of companies in the next few years. the interim, then the workplace has to create developing the next generation to take the
The first of the baby boom generation just incentives and structures that entice these reigns of the organization. But, I would argue,
reached the age of Social Security eligibility potential retirees to remain or continue to since we are all living longer and since we all
and soon will reach the traditional retirement contribute in a limited capacity. The challenge want to contribute continuously, expect to see
age of 65. On their heels are another 30 or for most businesses is structure and reward. Alumni Talent Management as an HR function
40 million Boomers. Most businesses are structured around someday soon. Also, because of the difficulty
According to The Economist, there will be a advancement. If you do well, you will in capturing institutional knowledge, expect to
management talent shortage by 2012 that will move up. If you move up you take on see that same talent manager scoping out work
continue for a few subsequent years as more more responsibility. If you take on more and negotiating with the retirees for “gigs.”
and more managers leave the workplace. While responsibility, you will receive greater reward. The good news is that healthy, talented and
this sounds dire, if you look at it in more It is a virtuous cycle, supposedly. energetic people who still wish to be involved
detail, you might see it more as an opportunity The new world order is closer to a loose in making contributions to the organizations
than a threat. network of contracted experts who only do or fields of work they are passionate about
I would first like to start with this issue specific tasks or assignments based on defined will continue to have an opportunity to do so.
of “retirement.” The concept of the golden needs. This contractual arrangement is much The bad news is that retirement dinners will
years in retirement was and remains largely a like outsourcing on a local scale, with a never be the same and that watch you were
construct. It was first marketed to the public core group of full-time employees acting as expecting at your retirement might end up
by the housing developer Dell Webb as a what I would term, “scopists.” Scopists are being a BlackBerry. e
way to sell homes in “Sun City” community
model. The idea stuck and became rooted
in the American psyche. At the time, the
organizational “man” dreamed of the day when do you have a workplace question you want
he or she would be able to say goodbye to answered? What do you want to know to make
work for good. Thus, the concept of retirement work a better place? Send your questions to
became the ultimate brass ring. The reality is a deSantisCP@aol.com to get Chris deSantis’ two
cents as to what he thinks you might want to do.
18 VOLUME 9 n ISSUE 2 n WInTER 2009
The members of the Leading Edge alliance
are leaders in many key markets, including:
the Leading edge alliance is an international professional
afghanistan Indiana Paris association of independently owned accounting and consulting firms. The
argentina Indonesia Peru alliance enables member firms to access the resources of a multibillion-dollar
atlanta Iowa Philadelphia
global professional services organization, providing business development,
australia Ireland Phoenix
austria Israel Philippines professional training and education, and peer-to-peer networking
Bahrain Italy Pittsburgh opportunities nationally and globally, around the corner and around the world.
Baltimore Jordan Poland
Bangladesh Knoxville Providence
Belgium Kenya Puerto Rico Members are top quality firms who are very successful, have deep client
Bolivia Korea Richmond relationships, and strong ties to the community. The alliance provides
Boston Kuwait Reno
Brazil Las Vegas Romania members with an unbeatable combination: the comprehensive size and scope
British Virgin Islands Latvia Russian federation of a large multinational company while offering their clients the continuity,
Buffalo Lebanon San francisco
consistency and quality of service of a local firm. Member firms have access to
Bulgaria London Saudi arabia
Cayman Islands Los angeles Scotland the best and brightest team of business advisors—a peer-to-peer connection
Chicago Luxembourg Seattle that provides the right business solutions for clients.
Chile Macedonia Senegal
China Madison, WI Serbia
Cincinnati Malaysia Singapore
Cleveland Malta Slovakia the Leading edge offers:
Colombia Mauritius Slovenia
Croatia Mexico South Carolina • Access to the best and brightest CPAs and business advisors—a peer-to-peer
Cyprus Miami Spain connection that provides the right solutions for clients.
Czech Republic Michigan Sweden
dallas Minneapolis Switzerland • Innovative, practice-proven strategies for improving performance in
dayton Missouri Taiwan management, business processes, finance, operations, information technology
denver Moldova Thailand and marketing.
dominican Republic Montenegro Tokyo
Ecuador Montreal Toronto • A leading knowledge resource for multi-disciplinary information and
Egypt Morocco Tucson industry-specific expertise responsive to clients’ unique needs.
El Salvador nashville Tunisia
finland nebraska Turkey • The strength and reputation to attract the highest quality team members.
fort Lauderdale netherlands Ukraine
ghana new Orleans United arab • The Alliance offers accounting and consulting services through a global network of
germany new Jersey Emirates firms with more than 15,000 professional staff in more than 430 offices.
greece new York Uruguay
guatemala new Zealand U.S. Virgin Islands • The Leading Edge Alliance offers world-class business advisory expertise and
harrisburg, Pa north Carolina Venezuela experience with innovation, progressiveness and quality.
hartford norway Washington, d.C.
hong Kong Orange County, Ca Vietnam
honolulu Oregon Virginia/West Virginia
houston Pakistan To find out more about The Leading Edge alliance, visit
www.LeadingEdgealliance.com or contact Karen Kehl-
Visit LeadingEdgeAlliance.com for a detailed listing of member firms. Rose, president, at (630) 513-9814 or kkr@The-LEa.com.
ThE LEadIng EdgE 19
u s postage
permit no. 1702
9690 Deereco Road
Timonium, MD 21093