A Millennial’s View

Guest blog by: Isaac Bumgarden, audit intern, Eide Bailly LLP

Accountant: the career that seems like it’s filled with numbers nerds, gloomy days reading over spreadsheets and days spent typing away on a calculator. If we’re talking about a public accountant, everyone thinks you’re an evil number cruncher who’s up to no good (and maybe even works for the IRS).

So how does someone, let alone a millennial, decide accounting is the right career path?

As you know, everyone is different (yes, even us millennials have different tastes and interests). While I don’t speak for everyone, it seems a majority of millennials have a similar experience when it comes to choosing a career, especially if they landed on accounting. When looking at the accounting profession (at least before having much exposure to it), we tend to think of someone sitting behind a desk, quickly punching numbers into a calculator all day, or even someone working for the IRS – and often times, these views don’t seem to sit well with us millennials. After all, we are said to be a social generation which thrives off of each other.

However, college and schooling comes around, and a whole new world presents itself. Rather than hearing about the IRS auditors, you start learning about different options in the accounting world.

“A CFO? What’s that?”

            “There are other auditors besides the IRS? Well what’s the difference?”

           “I can open up my own tax accounting firm in my small home town if I                           understand this stuff?”

You begin to realize that maybe accounting isn’t a one-size-fits-all career path, and there might even be something about it that catches your eye. In fact, I see accounting as a door that leads to a lot of potential in the business world, which is something I never would have even thought of on my own.

Many of the potential scenarios in accounting appeal to us millennials if we are exposed to these options. If you enjoy being alone, maybe the traditional accounting job is for you. If you like interacting with people, take a look at the business side of accounting, such as being a CFO, where you get to go in and work alongside different companies. If travel is your idea of an ideal career, maybe an auditor is the right choice for you. There are many different opportunities and possibilities for each personality and skill set.

For myself (and other millennials, too) and even the general public, accounting is often seen as a boring profession, as explained before. However, accounting is so much more than just the numbers. Public accounting is not only a way to help individuals, but businesses as well.

Being an auditor allows you to help businesses be sure they are on the right track both legally and financially. If you’re the tax man (or woman), you can make sure individuals, families and businesses are being taxed properly, which can lead to saved money and greater revenue and income. Many people don’t realize accounting truly allows you to help people do what they love.

It seems the reason millennials aren’t choosing accounting as readily as other generations simply stems from the lack of information about what accounting really entails. When it comes to accounting, you’re never really stuck in one area. We millennials enjoy variety and a change in scenery, and accounting allows us to have just that.

Meet the Team: Angie Ziegler

6147What is my role?

My role is to make sure that all business owners feel understood and educated with what the team provides them, whether it be accounting or payroll. I want to make sure business owners understand the information they are being provided so they can make smart, informed decisions about their business. I strive for the team and me to connect with the business owners in order to build a trustworthy relationship.

Why are numbers important for business?

Numbers are a road map! This map is a journey for the business owner to visually see how their risk and rewards play out, and where these decisions might lead them. The numbers allow us to show a business owner the past, present and future of their business, which can help them make better decision for the future.

Why do I want you to succeed?

I enjoy that feeling you get when you walk out of a business and realize they really value the service you provided them.  If they feel success, then so do I!  A lot of business owners don’t understand and/or really struggle with accounting and payroll, so when I can come in and explain it in a different way that makes sense, we all win and feel a sense of accomplishment.  When the payroll makes sense, everything else rolls along smoothly!

#ILoveSmallBiz

I love to see someone take a leap of faith and start a new business (seriously, how cool is it seeing someone chase their dreams?). I find it so rewarding to be a part of that leap of faith and to help them get where they want to be.  I love hearing the stories from our clients that start out in a basement or garage and then move into a large facility. The business owners have such pride in what they do and I enjoy when they share that with me.

When it Comes to Accounting, Communication is Key

By: Kristie Rants, Eide Bailly LLP

We get it: the thought of sitting down and talking with your accountant might be a little scary. After all, all they do all day is sit and stare at numbers and do math, and their jargon and lingo is hard, if not impossible, to understand, right?

Not exactly.

While the thought of having conversations with your accountant might be intimidating, it really shouldn’t be. More often than not, your friendly number cruncher wants to talk to you, too (and we promise to use words that make sense)!

To help the conversation go smoothly, we came up with some tips to help you have successful conversations with your accountant.

Communication is key

  • First and foremost: figure out the best method for communicating with your accountant. Whether it’s in person, email or even Skype, agree on what works best for both of you.
  • Decide on frequency for communicating. Some businesses may need to have meetings weekly, while others may be on a monthly schedule. This is usually driven by business needs.
  • Make sure you’re both on the same page. It’s important that your accountant understands your business, just as you should be able to understand what they’re talking about. If you are unsure about the topic being discussed, don’t nod your head – ask more questions!
  • Establish a relationship. Create an environment where both you and your accountant are comfortable with each other. When you have a solid relationship with your accountant, it’s often easier to ask whatever is on your mind, no matter how basic it may seem.

 

Be prepared

  • Come prepared to each meeting. Make sure you have organized and complete information to share. If you’re not sure what exactly to bring, ask your accountant. He or she can give you a list of documents and information that might be needed.
  • Be prepared to share any changes occurring in your business. This keeps your accountant in the know and decreases the likelihood of any unwanted surprises in the future.
  • Ask questions throughout the year and as they arise rather than holding them all in. It’s easier to remember and examine information right away, rather than waiting six months down the road.
  • If your accountant sends out newsletters, articles, etc., read them! These often contain current and important information that can impact your business. If your accountant thinks it’s important, you should give it a read as well.

Accountants wear many hats

  • Your accountant likely has access to many resources to help you with any phase of your business. Your accountant can do all sorts of tax planning, whether you’re interested in putting away additional money in a retirement plan or wondering what your options are for depreciating equipment. Maybe a cost segregation study to accelerate depreciation or a 179d study makes sense for you!
  • Accountants can even help train you or your staff. Ask them if they offer an on-site service. Sometimes a few hours of training makes all of the difference. (Shameless plug: our accounting coach services do just that)!
  • Consider what stage your business is in. If you’re thinking about selling (or buying) or even retiring, your accountant can likely help you or introduce you to someone who can get you on the right track for a successful transition. They have the expertise to help you succeed.

The moral of the story…

Communicating with accountants can seem intimidating and confusing. Using these tips can help you have successful conversations. If you’re still intimidated, reach out. We promise to help you understand the accounting side of your business so you can get back to doing what you love.

You Say Accountant, I Say Controller

You say tomato, I say tomāto. You say accountant, I say controller. Unlike tomato and tomāto, the terms accountant, controller, and chief financial officer (CFO) do have significant differences.

We could go into great detail on what makes them different (oh wait, we did). Instead, here’s a basic breakdown of the difference between the three:

  • An accountant is responsible for entering day-to-day transactions and performing basic accounting functions. These could include entering bills and invoices, running payroll, paying sales tax, etc.
  • A controller is responsible for the accuracy of the financial statements, preparing budgets, calculating financial ratios, etc.
  • A CFO is responsible for a forward looking perspective. They are involved in strategic planning and providing improvement recommendations based on the financial ratios provided by the controller.

Each of these positions relies on the other to get the information they need and to make your accounting and financial processes run more smoothly. Each has a distinct purpose and each is important for the financial health of your business.

Now we know what you’re thinking … there are THREE positions. Yep. But that doesn’t mean they’re three people. Technically, one person could perform all three positions. Often times in small businesses, this is exactly what happens.

The first position you will need is an accountant. Do not take this position lightly. One of the greatest needs of business is the need for good financials. Hire someone who has the knowledge and experience to do a good job, like someone who has experience working with your type of business, or has a strong financial background. If you hire the right person with the right experience, they can also serve as your controller. A CFO is needed when you begin to use your financials as a management tool.

Yet at a certain point, you need to begin to think about expanding your financial department and separating the roles. Knowing when to separate depends on your business. Consider who will be looking at your financials and the purpose for those financials.

So what if you’re just not ready for all three positions? Or, what if you are, but financially you’re not ready to hire all three. After all, recent research shows that a CFO can cost over $125,000.

Look into outsourcing it! A trusted business advisor or accounting firm can help you outsource any number of functions, from the day-to-day functions all the way to the CFO level. Not sure how to find the right advisor to help? Here are six questions you can start with.

By outsourcing these positions, you can free your time to work on your business. Plus, you’ll have a trained professional who can help you understand the importance of your finances and why they matter.

Tax Accountants, CFOs & Bookeepers … Oh My!

When people hear I’m an accountant and used to be an auditor, I can put money on the next two statements that come out of their mouth. “Oh, so you do taxes?” and “I didn’t know you worked for the IRS!”

I mean, yes, I have done taxes, but that’s a very small portion of my work. In fact, many of my colleagues don’t do any taxes and probably never will. And we’ve said it before, but we will remind you again: just because someone is an auditor does not mean they work for the IRS.

This leads me to my point. Although some accountants do taxes and some go on to work for the IRS, there are many more areas that accountants find themselves working in. In fact, there are so many unique areas that we thought we would break them down for you. Here are some of the different types of accountants:

  • Tax Auditor – These accountants work for the government and help make sure tax returns are filed correctly.
  • Public Accounting Auditor – These accountants are employed by public accounting firms (like us!) and are hired by companies to make sure all accounting records and financial statements are accurate. They work closely with these companies to correct any issues, and make sure the company has good safeguards and controls around their accounting department.
  • Internal Auditor – I promise, this is the last auditor! This type of auditor is generally employed by a specific company and focuses on uncovering and correcting inefficiencies and preventing fraud within the organization. They also check the work of the accounting department to ensure everything looks correct. They do all of this to help your business run better.
  • Tax Accountant – This type of accountant helps companies or individuals with all things related to, you guessed it, tax. This could be personal or business returns, tax planning, estate planning and even succession planning for their business. Tax accountants often focus on a specialized area of tax, such as international tax or state and local tax, to name a few.
  • Forensic Accountant – This type of accountant practices in a very specialized area of accounting focused around detecting and uncovering issues. This could be fraud, embezzlement or even bankruptcies. These accountants may also act as expert witnesses in court.
  • Bookkeeper – Working as a bookkeeper focuses on originating and organizing business transactions and entering this information into the accounting system. Common duties of a bookkeeper include sending customer invoices, processing cash receipts and paying bills, to name a few.
  • Controller – The Controller acts as a manager of the accounting department, and is responsible for all transactions and controls within the department. Often times, this includes the preparation of financial statements and checking to ensure there is accuracy throughout the department.
  • Chief Financial Officer –– This is a high-level accounting position in a business, which can sometimes be overseen by the president or vice president of finance in the organization. Being at such a high level, this position holds a substantial amount of responsibility. Some of the duties of a CFO include overseeing the accounting function, managing taxation of the business and assisting with strategic planning. It is safe to say that a CFO is not just a one trick pony. (To learn more about the cast of financial characters, check out this blog).
  • Consultant – This type of accountant brings a high subject matter expertise to their clients. They often times have many years of experience in many different areas of accounting, and can help a business with many of their needs, rather than focusing on one specific area. This could include strategic planning, implementing accounting systems, making sure the company is running efficiently or even helping a business grow.

Accountants are able to specialize in a certain area within their practice and are therefore able to meet clients’ specific needs. Specialization can also be fun for accountants (yes, we said fun!) because they are able to focus on what they enjoy.

So there you have it. We’re not all tax accountants and most of us have never, and will never, work for the IRS. However, we do come from different backgrounds that have given us vastly different experiences that have helped us decide where we belong in the world of accounting.

(Shameless plug: if any of these people sound like someone your business could use, contact us!)

The Hidden Monsters of Accounting

halloween-graphic-finalHappy Halloween! With it being the scariest time of the year, you are probably thinking about black cats, jack o’ lanterns and how to sneak away with a little bit of your child’s Halloween candy. However, you’re probably not thinking about another topic that can be frightening to some: accounting!

We promise, it’s not that scary… we numbers nerds actually find it pretty fun! But, there are some monsters hiding in the accounting world that you should always be on the lookout for.

The Zombie — Assuming Profits Mean Cash Flow

It’s easy to make a sale (we’re talking either a sale of goods or services) and subtract your costs and then record the remaining amount as a profit. But if you’re allowing your customer to purchase on credit (meaning you are letting them pay you later), don’t be too fast to count it as cash in your pocket and spend it on your Halloween costume. What if it takes longer than expected to collect? What if you don’t collect? Now you have cash flow issues you weren’t anticipating.

It may be tempting to think profits and cash flow are the same, but by doing this, you’re giving yourself a twisted image of your company’s real condition and this can lead to even bigger problems down the road. Like a zombie, your financial statements (if you don’t understand them) can rise from the dead and scare you. If you need more help with this concept, check out this blog.

The Vampire – Not taking Bookkeeping Seriously

It’s easy to pretend bookkeeping doesn’t exist (just like vampires). However, if you’re not keeping accurate books, you might be in for major struggles that can be very painful in the future.

No matter the size of your business, investing in accurately tracking your business financials can be compared to garlic. That’s right, maintaining a good bookkeeping system can protect your business from the vampires who can suck your financials dry. Having accurate, timely financial statements also gives you confidence when making your business decisions. 

Frankenstein – Not Having a Clear Budget on Each Project

Does your company operate without a budget? And we’re not talking about the kind of budget you fill out at the beginning of the year and forget about the rest of the time. We’re talking about a rolling budget; the kind you reference and update throughout the year (ebbs and flows with the changes in your business). Operating without any financial guidance could result in a freaky experiment with the end product not being what you hoped for.

Operating without a clear budget can make it difficult for your company to keep in check, and can lead to spending a lot of your hard earned money unnecessarily (nobody wants to flush money down the toilet). Don’t throw everything into one pot and hope it turns out. It is best to have a rolling budget to start with the end in mind and to help provide a roadmap for getting there.

The Witch – Lack of Accountability

Do your people know what is expected of them? And do they know what they should be doing day-to-day to meet those expectations? Lacking accountability can lead to some serious confusion; it may be a struggle to figure out who’s flying around on which broom.

It is extremely important to define everyone’s roles and performance expectations. Not only that, tell them how they can meet those expectations by relating them to their day-to-day tasks. We’re talking about KPIs (key performance indicators). Need a refresh? Check out this blog.

And now a plug for accounting (let’s be honest, you knew that was coming). Having timely, accurate financial information is important as many KPIs are tied to financial information. Make sure you are holding your people accountable against accurate information.

The moral of dealing with this Halloween monster…having accountability in your business can help your people know which broom they should be flying and be able to fly them in the same direction.

The Ghost – Failing to Reconcile Your Books With the Bank

Failing to reconcile your accounts frequently can come back to haunt you. When you reconcile your books, you are ensuring an account balance is accurate and correct, and that it can be tied back to supporting documentation (such as your bank statement). Without reconciling your accounts, there could be a ghost hiding around the corner. Boo!

All accounts should be reconciled (especially the balance sheet), no matter the size. From cash to accounts payable, these accounts all have an impact on your financial situation. Small to mid-sized businesses should especially be sure to reconcile their books every month to ensure the accuracy of their financial information. And don’t be afraid to reconcile them more frequently. For example, if you are experiencing cash flow deficits or concerns, you may want to consider tracking your accounts receivable, accounts payable and cash more frequently just to keep those ghosts at bay.

The Mummy – Managing All Accounting Tasks In-House

It is a common misconception that handling all of your accounting activities in-house will allow you to save money. That’s not always the case. Depending on your situation, outsourcing might actually save you money. In some cases, outsourcing is less expensive than hiring internally (remember all the cost associated with your people, onboarding, training, wages, benefits, etc.). Not only that, a reputable outsourced accounting provider may save you money due to costly bookkeeping errors.

If your business is too busy getting wrapped up in all of the accounting details, you may struggle to pay attention to other important parts of the business, and this can hurt your company – whether in the loss of revenue, customers or even reputation. Outsourcing your accounting needs (we can help!) allows you to ensure the other parts of your business are running smoothly, and lets you get back to why you got into business in the first place.

 

Although these accounting monsters may be scary, they are avoidable. With the right knowledge and skills, your business can avoid these tricks and instead focus on the treats of timely, accurate financial information.

Meet the Team: Jenni Huotari (@huotarijenni)

JenniWhat’s my role?

I’ve been given the awesome opportunity and responsibility of leading the Possibilities Center. I’ve been with EB for nearly 14 years, and spent almost all of that time as an auditor (don’t be afraid, I’m really nice).

So, why the transition? While verifying numbers is fun (no seriously, it can be), I have a strong desire to spread the love of numbers a little broader. Plus, I have a crazy curiosity about business, which causes me to want to know as much as possible about our clients, and keeps my mind churning with ideas of how we can positively impact your business.

Why are numbers so important?

When numbers nerds get out and about (not too often, as we’re mostly introverts) and tell others what we do all day, the usual response is “I don’t know how you do that for a living.” We find that people are either intimidated by accounting or in no way interested (usually our artistic, creative friends).

Here’s the honest truth: I could look at financial statements all day. To me, they read like a book and tell the story of a company. They clearly show the increase in revenue you’ve worked so hard for, how volatile your cost of goods sold can be, how you’ve managed to keep those operating costs in check (even with revenue growth) and so much more.

Each one plays in to the total and affects the ending of the story. Understanding what they’re are trying to tell you, and how they impact each other is essential for a business to be as healthy as possible.

Why do I want you to succeed?

Let’s face it, there’s plenty of outside factors beyond your control that impact your business. Having quality financial information, and knowing how to understand it, is not one of them. In fact, it’s completely attainable.

The Possibilities Center team and I have a strong desire to make business owners and other decision makers comfortable with your company’s financial statements. You shouldn’t have to rely on your accountant/bookkeeper to prepare all of the financial information and interpret it for you. We want you to know what the numbers mean, where different things are presented and how business decisions can/will impact your financials. We want you to have strong financials and I guarantee we even have a few ideas to help you get there!

#ILoveFargo

We’re very fortunate to work in such a great place. This area is filled with unbelievable talent, including colleges and universities with eager graduates ready to get out and make a difference.

We are blessed by strong business allies. I personally know several people at numerous community organizations (the SBDC, SBA, EDC, Emerging Prairie, etc.) who come to work every day with the goal of helping businesses be successful, including those just starting out.

And if that wasn’t enough, there’s an uprising of peer support. As nice Midwesterners, I think we’ve always rooted for each other, but we’re continually finding ways to be more impactful. Collaboration is the key to success here, and we’re proving there’s more than enough success to go around.