Download Spring 2008 - RubinBrown

SPRING 2008
horizons
A
Publication
by
RubinBrown
LLP
Talent: Driving Innovation and Growth
INSIDE
GETTING READY FOR THE NEXT GENERATION
BUILDING TALENT FROM THE INSIDE OUT Page 5
POSITION YOUR COMPANY TO ATTRACT TOP TALENT Page 7
GOT TALENT? Page 9
GENERATION Y – ARE YOU READY? Page 13
AND MORE
horizons
knowledge. commitment. value.
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
CONTENTS
iiWelcome
1-2
RubinBrown New Hire & Awards
4
For Your Money
5-6
International News: Baker Tilly
7-8
Feature Article: Position Your Company
to Attract Top Talent
9-11
General Topics: Got Talent?
John F. Herber, Jr. CPA
Managing Partner
Welcome
13-16 Guest Article: Ginny Barnes,
G.B. Communications, Inc.
Talent. It is what we as business leaders seek for our organizations.
It determines if we have the ability to get things done and take
our organizations to the next level. At RubinBrown, settling for
second best has never been an option, which is one reason
we are able to support the growing needs of our clients and our
firm with confidence.
Industry News
17-18 ARCHITECTS & ENGINEERS
Managing talent is an ongoing process at RubinBrown. We
invest time and resources to find the best and the brightest
individuals in the profession. In this competitive marketplace,
however, finding them is not enough. We provide opportunities
for development within our organization through a dynamic
professional environment.
19-22 CONTRACTORS
23-24 HOME BUILDERS
25-26 LAW FIRMS
27-28 MANUFACTURING & DISTRIBUTION
29-30 MORTGAGE BANKING
In this issue, we attempt to define how recruiting and retaining
talented individuals will impact our organizations, our customers
and our relationships into the next decade. In addition, Dr. Ginny
Barnes, from the University of Missouri, defines generation Y and
what we, as future employers and mentors, can expect from this
emerging talent pool.
31-32 NOT-FOR-PROFIT
33-35 PUBLIC SECTOR
INFORMATION
Editor: Tim Shannon
Graphic Design: Hughes
Communications Specialist: Michelle Ward
Horizons, a publication of RubinBrown LLP, is designed to provide general information regarding the subject matters
covered. Although prepared by professionals, its contents should not be construed as the rendering of advice regarding
specific situations. If accounting, legal or other expert assistance is needed, consult with your professional business advisor.
Please call RubinBrown with any questions.
Located in St. Louis and Kansas City, RubinBrown has become one of the largest accounting and business consulting firms in
the Midwest. www.rubinbrown.com
St. Louis office
RubinBrown
One North Brentwood
St. Louis, MO 63105
Kansas City office
RubinBrown
9300 West 110 th St.
Ste. 600
Overland Park, KS 66210
I invite you to read this publication and offer us your feedback. Our
goal, as always, is to totally satisfy you, our clients and friends.
We hope to hear from you – [email protected].
Pleasant reading.
horizons
knowledge. commitment. value.
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
CONTENTS
iiWelcome
1-2
RubinBrown New Hire & Awards
4
For Your Money
5-6
International News: Baker Tilly
7-8
Feature Article: Position Your Company
to Attract Top Talent
9-11
General Topics: Got Talent?
John F. Herber, Jr. CPA
Managing Partner
Welcome
13-16 Guest Article: Ginny Barnes,
G.B. Communications, Inc.
Talent. It is what we as business leaders seek for our organizations.
It determines if we have the ability to get things done and take
our organizations to the next level. At RubinBrown, settling for
second best has never been an option, which is one reason
we are able to support the growing needs of our clients and our
firm with confidence.
Industry News
17-18 ARCHITECTS & ENGINEERS
Managing talent is an ongoing process at RubinBrown. We
invest time and resources to find the best and the brightest
individuals in the profession. In this competitive marketplace,
however, finding them is not enough. We provide opportunities
for development within our organization through a dynamic
professional environment.
19-22 CONTRACTORS
23-24 HOME BUILDERS
25-26 LAW FIRMS
27-28 MANUFACTURING & DISTRIBUTION
29-30 MORTGAGE BANKING
In this issue, we attempt to define how recruiting and retaining
talented individuals will impact our organizations, our customers
and our relationships into the next decade. In addition, Dr. Ginny
Barnes, from the University of Missouri, defines generation Y and
what we, as future employers and mentors, can expect from this
emerging talent pool.
31-32 NOT-FOR-PROFIT
33-35 PUBLIC SECTOR
INFORMATION
Editor: Tim Shannon
Graphic Design: Hughes
Communications Specialist: Michelle Ward
Horizons, a publication of RubinBrown LLP, is designed to provide general information regarding the subject matters
covered. Although prepared by professionals, its contents should not be construed as the rendering of advice regarding
specific situations. If accounting, legal or other expert assistance is needed, consult with your professional business advisor.
Please call RubinBrown with any questions.
Located in St. Louis and Kansas City, RubinBrown has become one of the largest accounting and business consulting firms in
the Midwest. www.rubinbrown.com
St. Louis office
RubinBrown
One North Brentwood
St. Louis, MO 63105
Kansas City office
RubinBrown
9300 West 110 th St.
Ste. 600
Overland Park, KS 66210
I invite you to read this publication and offer us your feedback. Our
goal, as always, is to totally satisfy you, our clients and friends.
We hope to hear from you – [email protected].
Pleasant reading.
RubinBrown
New Partners
RubinBrown
New Managers
Theresa Lynch Ruzicka, CPA, joined
RubinBrown as partner-in-charge of its
Small Business Group. She has more than
20 years of experience in business. Before
coming to RubinBrown, Theresa worked
at Ernst & Young, Washington University,
ProjectProfessionals LLC, and Medical
Billing Review LLC. She is a member of the American
Institute of Certified Public Accountants and the Missouri
Society of Certified Public Accountants. Theresa is
involved in the Creve Coeur Economic Development
Commission, St. Louis Forum, the Washington University
Olin School of Business Alumni Executive Committee,
FOCUS St. Louis and the Junior League of St. Louis.
She holds a master’s degree in business administration
from Washington University and a bachelor’s degree in
business administration from Southeast Missouri State
University.
Elsa Coronado Fortune, CPA, joined
RubinBrown as a manager in its Assurance
Services Group. She specializes in the
preparation and review of small audit
engagements, compilations and reviews, as
well as all aspects of financial statements,
tax planning and consulting services for
small business clients. Elsa concentrates on a diverse
client base, including those in the firm’s Health Care
and Law Firm Services Groups. She provides expertise
in financial and management consulting, forecasts
and projections, business performance analysis,
general ledger implementation and financial statement
presentation. Prior to joining RubinBrown, Elsa served
as a manager with two other St. Louis accounting firms.
She is a member of the American Institute of Certified
Public Accountants and the Missouri Society of Certified
Public Accountants and volunteers at St. Clement Parish,
Cardinal Glennon and St. Martha’s Hall. She also coaches
a girls’ club basketball team. Elsa holds a bachelor’s
degree in accounting with a minor in Spanish from St.
Louis University.
Timothy Sims, CPA, joined RubinBrown
as a partner in its Tax Consulting and
Manufacturing and Distribution Groups.
Tim provides several services to
RubinBrown clients, including tax planning
for mergers, acquisitions and divestitures,
tax examination defense, tax litigation
support and overall tax consulting and related tax
compliance. He has more than 16 years of experience,
working most recently for Charter Communications as the
vice president of tax. Prior to that, he worked for 12 years
at Arthur Andersen LLP. Tim holds a bachelor’s degree in
accounting from Southern Illinois University-Carbondale
and serves on the university’s School of Accountancy
Board of Advisors. He also serves on the governance
board for the Make-A-Wish Foundation and is the current
secretary. Tim is a member of the American Institute of
Certified Public Accountants and the Missouri Society of
Certified Public Accountants.
1 u spring 2008 issue
Brenda
Hebenstreit,
CPA,
joined
RubinBrown as a manager in its Assurance
Services Group. Specializing in SEC
reporting, Brenda works on audit and
internal audit engagements. She brings
more than 10 years of experience to
RubinBrown. Previously, she served as
an audit manager with Arthur Andersen. Brenda is a
member of the American Institute of Certified Public
Accountants. She holds a bachelor’s degree in business
administration, with an emphasis in accounting, from the
University of Missouri-St. Louis.
Sharon Latimer, CPA, joined RubinBrown
as a manager in its Assurance Services
Group. Based in RubinBrown’s Kansas
City office, she serves clients in the
product distribution, service, restaurant
and hospitality industries. Sharon brings
more than 20 years of public accounting
experience in Kansas City to RubinBrown. She is a
member of the Kansas Society of Certified Public
Accountants and holds a bachelor’s degree in accounting
from Kansas State University. Sharon also serves on
several committees at Church of the Ascension and for
the Olathe School District.
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
Nancy MacDonell joined RubinBrown as
a manager in its Tax Consulting Group.
Nancy brings nearly 10 years of experience
to RubinBrown, having previously worked
as a federal tax manager at Charter
Communications and senior tax staff at
Arthur Andersen. Nancy is a member of
the Broadband Tax Institute. She holds a master’s degree
in accounting from the University of Missouri-St. Louis
and a bachelor’s degree in accounting from Western
Michigan University.
David Richert Jr., CPA, CIA, CISA,
CQA, joined RubinBrown as a manager
in its Internal Audit Services Group. He
specializes in working with clients in the
information technology and business
process assurance industries. David
has more than 25 years of accounting
experience, previously working for the Federal Reserve
Bank of St. Louis and PricewaterhouseCoopers LLP.
He is a member of the American Institute of Certified
Public Accountants, the Missouri Society of Certified
Public Accountants and the Institute of Internal Auditors.
David holds master’s and bachelor’s degrees in business
administration from the University of Missouri-St. Louis.
Shawn Schaefer, CPA, joined RubinBrown
as a manager in its Assurance Services
Group. He primarily serves clients in
the company’s Real Estate, Contractors
and Home Builders Services Groups.
In his new role, he manages the audit
engagement process, identifies new
business opportunities, and assists in team member
development and new talent recruitment. Shawn is
a member of the Missouri Society of Certified Public
Accountants, American Institute of Certified Public
Accountants and University of Illinois Alumni Association.
He holds a master’s degree in accounting and a
bachelor’s degree in accounting from the University of
Illinois at Urbana-Champaign.
Jeffrey Schuetz joined RubinBrown as
a manager in its State and Local Tax
Group. In his new position, he manages
and provides assistance on all phases of
state and local tax compliance. Jeff also
offers tax consulting and planning services
to clients. He brings nearly 10 years of
federal, state and local tax experience to RubinBrown.
Jeff previously worked as a tax manager at Insituform
Technologies Inc. and as a field auditor with the Missouri
Department of Revenue. He holds a bachelor’s degree in
accounting from Truman State University.
Matthew
Sprenger,
CPA,
joined
RubinBrown as a manager in its
Tax Consulting Group. He provides
accounting and tax consulting to closely
held companies in the manufacturing,
construction, health care and professional
services industries. Matt brings 15 years
of accounting experience to RubinBrown, most recently
working as a tax manager for another St. Louis accounting
firm. He is a member of the American Institute of Certified
Public Accountants, the Missouri Society of Certified
Public Accountants and the Medical Group Management
Association. Matt holds a bachelor’s degree in accounting
from the University of Missouri-St. Louis.
Awards
Felicia Malter, CPA, a partner in the
Assurance Services Group at RubinBrown,
has been named to the St. Louis Business
Journal’s 40 Under 40 Class of 2008.
Featured in the Jan.11, 2008, issue of the
St. Louis Business Journal, Felicia was
selected as one of 40 honorees out of
nearly 350 nominations. The recipients, recognized for
their achievements before the age of 40, were selected
by previous 40 Under 40 winners and St. Louis Business
Journal editors. They were honored at a recognition
dinner and ceremony on Feb. 7.
2 u spring 2008 issue
RubinBrown
New Partners
RubinBrown
New Managers
Theresa Lynch Ruzicka, CPA, joined
RubinBrown as partner-in-charge of its
Small Business Group. She has more than
20 years of experience in business. Before
coming to RubinBrown, Theresa worked
at Ernst & Young, Washington University,
ProjectProfessionals LLC, and Medical
Billing Review LLC. She is a member of the American
Institute of Certified Public Accountants and the Missouri
Society of Certified Public Accountants. Theresa is
involved in the Creve Coeur Economic Development
Commission, St. Louis Forum, the Washington University
Olin School of Business Alumni Executive Committee,
FOCUS St. Louis and the Junior League of St. Louis.
She holds a master’s degree in business administration
from Washington University and a bachelor’s degree in
business administration from Southeast Missouri State
University.
Elsa Coronado Fortune, CPA, joined
RubinBrown as a manager in its Assurance
Services Group. She specializes in the
preparation and review of small audit
engagements, compilations and reviews, as
well as all aspects of financial statements,
tax planning and consulting services for
small business clients. Elsa concentrates on a diverse
client base, including those in the firm’s Health Care
and Law Firm Services Groups. She provides expertise
in financial and management consulting, forecasts
and projections, business performance analysis,
general ledger implementation and financial statement
presentation. Prior to joining RubinBrown, Elsa served
as a manager with two other St. Louis accounting firms.
She is a member of the American Institute of Certified
Public Accountants and the Missouri Society of Certified
Public Accountants and volunteers at St. Clement Parish,
Cardinal Glennon and St. Martha’s Hall. She also coaches
a girls’ club basketball team. Elsa holds a bachelor’s
degree in accounting with a minor in Spanish from St.
Louis University.
Timothy Sims, CPA, joined RubinBrown
as a partner in its Tax Consulting and
Manufacturing and Distribution Groups.
Tim provides several services to
RubinBrown clients, including tax planning
for mergers, acquisitions and divestitures,
tax examination defense, tax litigation
support and overall tax consulting and related tax
compliance. He has more than 16 years of experience,
working most recently for Charter Communications as the
vice president of tax. Prior to that, he worked for 12 years
at Arthur Andersen LLP. Tim holds a bachelor’s degree in
accounting from Southern Illinois University-Carbondale
and serves on the university’s School of Accountancy
Board of Advisors. He also serves on the governance
board for the Make-A-Wish Foundation and is the current
secretary. Tim is a member of the American Institute of
Certified Public Accountants and the Missouri Society of
Certified Public Accountants.
1 u spring 2008 issue
Brenda
Hebenstreit,
CPA,
joined
RubinBrown as a manager in its Assurance
Services Group. Specializing in SEC
reporting, Brenda works on audit and
internal audit engagements. She brings
more than 10 years of experience to
RubinBrown. Previously, she served as
an audit manager with Arthur Andersen. Brenda is a
member of the American Institute of Certified Public
Accountants. She holds a bachelor’s degree in business
administration, with an emphasis in accounting, from the
University of Missouri-St. Louis.
Sharon Latimer, CPA, joined RubinBrown
as a manager in its Assurance Services
Group. Based in RubinBrown’s Kansas
City office, she serves clients in the
product distribution, service, restaurant
and hospitality industries. Sharon brings
more than 20 years of public accounting
experience in Kansas City to RubinBrown. She is a
member of the Kansas Society of Certified Public
Accountants and holds a bachelor’s degree in accounting
from Kansas State University. Sharon also serves on
several committees at Church of the Ascension and for
the Olathe School District.
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
Nancy MacDonell joined RubinBrown as
a manager in its Tax Consulting Group.
Nancy brings nearly 10 years of experience
to RubinBrown, having previously worked
as a federal tax manager at Charter
Communications and senior tax staff at
Arthur Andersen. Nancy is a member of
the Broadband Tax Institute. She holds a master’s degree
in accounting from the University of Missouri-St. Louis
and a bachelor’s degree in accounting from Western
Michigan University.
David Richert Jr., CPA, CIA, CISA,
CQA, joined RubinBrown as a manager
in its Internal Audit Services Group. He
specializes in working with clients in the
information technology and business
process assurance industries. David
has more than 25 years of accounting
experience, previously working for the Federal Reserve
Bank of St. Louis and PricewaterhouseCoopers LLP.
He is a member of the American Institute of Certified
Public Accountants, the Missouri Society of Certified
Public Accountants and the Institute of Internal Auditors.
David holds master’s and bachelor’s degrees in business
administration from the University of Missouri-St. Louis.
Shawn Schaefer, CPA, joined RubinBrown
as a manager in its Assurance Services
Group. He primarily serves clients in
the company’s Real Estate, Contractors
and Home Builders Services Groups.
In his new role, he manages the audit
engagement process, identifies new
business opportunities, and assists in team member
development and new talent recruitment. Shawn is
a member of the Missouri Society of Certified Public
Accountants, American Institute of Certified Public
Accountants and University of Illinois Alumni Association.
He holds a master’s degree in accounting and a
bachelor’s degree in accounting from the University of
Illinois at Urbana-Champaign.
Jeffrey Schuetz joined RubinBrown as
a manager in its State and Local Tax
Group. In his new position, he manages
and provides assistance on all phases of
state and local tax compliance. Jeff also
offers tax consulting and planning services
to clients. He brings nearly 10 years of
federal, state and local tax experience to RubinBrown.
Jeff previously worked as a tax manager at Insituform
Technologies Inc. and as a field auditor with the Missouri
Department of Revenue. He holds a bachelor’s degree in
accounting from Truman State University.
Matthew
Sprenger,
CPA,
joined
RubinBrown as a manager in its
Tax Consulting Group. He provides
accounting and tax consulting to closely
held companies in the manufacturing,
construction, health care and professional
services industries. Matt brings 15 years
of accounting experience to RubinBrown, most recently
working as a tax manager for another St. Louis accounting
firm. He is a member of the American Institute of Certified
Public Accountants, the Missouri Society of Certified
Public Accountants and the Medical Group Management
Association. Matt holds a bachelor’s degree in accounting
from the University of Missouri-St. Louis.
Awards
Felicia Malter, CPA, a partner in the
Assurance Services Group at RubinBrown,
has been named to the St. Louis Business
Journal’s 40 Under 40 Class of 2008.
Featured in the Jan.11, 2008, issue of the
St. Louis Business Journal, Felicia was
selected as one of 40 honorees out of
nearly 350 nominations. The recipients, recognized for
their achievements before the age of 40, were selected
by previous 40 Under 40 winners and St. Louis Business
Journal editors. They were honored at a recognition
dinner and ceremony on Feb. 7.
2 u spring 2008 issue
Value.
With the right financial partner, it all fits together.
For YOUR money
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
responsible to invest the money. Although the parents
can guide them and oversee the investment, the children
must work together. If the investment does well, maybe
the family takes a better vacation. If the investment tanks,
maybe the family only goes camping.
Other families have had their children run garage sales
to teach them how to work together and handle money. It
could be interesting to see how children divide up tasks
to get the work done. Who will set the prices? Who will
get the word out that the garage sale will take place?
Who will deal with the customers? How will the profits
from the garage sale be split?
People with family businesses may want their
children to work in the business part-time to gain real
world experiences.
For more than half a century, RubinBrown has been making a lasting mark on business. Our
one-firm approach means you gain access to a comprehensive chain of services, all managed
and delivered by an integrated team of experts. It’s how we’re able to provide the kind of
insights and solutions you need to succeed.
Firm-wide, specialized knowledge. An unmatched commitment to service. That’s the value
RubinBrown delivers. Contact us today and discover for yourself the RubinBrown difference.
www.RubinBrown.com
Certified Public Accountants and Business Consultants
Knowledge. Commitment. Value.
Teaching
Teamwork
and Financial
Management
to Children
It is not uncommon to see families bicker over finances.
One cause of this problem is that some families are
completely unprepared to handle money. For children,
it is quite possible that the first time they have to make
significant wealth decisions together occurs when one or
both of their parents die and they are settling their estate.
This event is not a good time for siblings to learn about
making group financial decisions.
Some parents have started to teach their children about
teamwork and money management at an early age. For
example, a parent can entrust his/her children with a set
sum of money (let’s say $5,000) each year. The children
(let’s assume they are ages 13 and 15) will be primarily
The point of these exercises is to teach children to work
together and make intelligent decisions about money.
Simply talking about teamwork and money management
may not be enough for children. Tying educational
moments to an actual event provides a better chance to
have the lesson really sink in.
When children reach an appropriate age, it also is
important to teach them how the capital markets and
investments work and how financial decisions can be
made. Providing children with this financial foundation
can help them learn to manage money and ensure
financial stability when they get older. Your financial
advisor can be helpful in this area.
The teamwork concept helps strengthen families and
prevents hurt feelings. Such lessons are useful for
families regardless of their financial status. Any teaching
that goes on for several years gives a message to
children that it takes time to build a financial base. It also
can be useful to teach children your values. Otherwise,
the children may adopt the culture of their peers, which
might be about undue consumption and spending
beyond a person’s means.
Questions? Contact:
Mike Ferman, CPA
Partner
RubinBrown Advisors
314.290.3211
[email protected]
Assurance | Internal Audit | Litigation Support | Qualified Plan Audit | SEC Advisory | Small Business
State and Local Tax | Tax and Compliance | Valuations | Wealth Management
4 u winter 2008 issue
4 u spring 2008 issue
Value.
With the right financial partner, it all fits together.
For YOUR money
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
responsible to invest the money. Although the parents
can guide them and oversee the investment, the children
must work together. If the investment does well, maybe
the family takes a better vacation. If the investment tanks,
maybe the family only goes camping.
Other families have had their children run garage sales
to teach them how to work together and handle money. It
could be interesting to see how children divide up tasks
to get the work done. Who will set the prices? Who will
get the word out that the garage sale will take place?
Who will deal with the customers? How will the profits
from the garage sale be split?
People with family businesses may want their
children to work in the business part-time to gain real
world experiences.
For more than half a century, RubinBrown has been making a lasting mark on business. Our
one-firm approach means you gain access to a comprehensive chain of services, all managed
and delivered by an integrated team of experts. It’s how we’re able to provide the kind of
insights and solutions you need to succeed.
Firm-wide, specialized knowledge. An unmatched commitment to service. That’s the value
RubinBrown delivers. Contact us today and discover for yourself the RubinBrown difference.
www.RubinBrown.com
Certified Public Accountants and Business Consultants
Knowledge. Commitment. Value.
Teaching
Teamwork
and Financial
Management
to Children
It is not uncommon to see families bicker over finances.
One cause of this problem is that some families are
completely unprepared to handle money. For children,
it is quite possible that the first time they have to make
significant wealth decisions together occurs when one or
both of their parents die and they are settling their estate.
This event is not a good time for siblings to learn about
making group financial decisions.
Some parents have started to teach their children about
teamwork and money management at an early age. For
example, a parent can entrust his/her children with a set
sum of money (let’s say $5,000) each year. The children
(let’s assume they are ages 13 and 15) will be primarily
The point of these exercises is to teach children to work
together and make intelligent decisions about money.
Simply talking about teamwork and money management
may not be enough for children. Tying educational
moments to an actual event provides a better chance to
have the lesson really sink in.
When children reach an appropriate age, it also is
important to teach them how the capital markets and
investments work and how financial decisions can be
made. Providing children with this financial foundation
can help them learn to manage money and ensure
financial stability when they get older. Your financial
advisor can be helpful in this area.
The teamwork concept helps strengthen families and
prevents hurt feelings. Such lessons are useful for
families regardless of their financial status. Any teaching
that goes on for several years gives a message to
children that it takes time to build a financial base. It also
can be useful to teach children your values. Otherwise,
the children may adopt the culture of their peers, which
might be about undue consumption and spending
beyond a person’s means.
Questions? Contact:
Mike Ferman, CPA
Partner
RubinBrown Advisors
314.290.3211
[email protected]
Assurance | Internal Audit | Litigation Support | Qualified Plan Audit | SEC Advisory | Small Business
State and Local Tax | Tax and Compliance | Valuations | Wealth Management
4 u winter 2008 issue
4 u spring 2008 issue
INTERNATIONAL NEWS
Baker Tilly International
Joe Pimmel, RubinBrown St. Louis Office
RubinBrown:
Building Talent
from the
Inside Out
What? From the inside out? What do you mean? I mean
internationally. RubinBrown is building our team members
into stronger professionals every year through the Baker
Tilly International Secondment Program. Through this
innovative approach, RubinBrown sends two to four of
its promising team members overseas to network firms
across the globe.
This past year we sent team members to Glasgow,
Scotland, and Melbourne, Australia, to learn about local
accounting practices, firm structure and processes,
and the local culture. If you ask team members who
have traveled abroad in this program, you will hear their
excitement in “meeting new people, observing how
other people do things, and reflecting on how things are
going back home.”
What does the secondment program through Baker
Tilly International offer its member firms? For the staff of
RubinBrown, the secondment program:
• Provides international work experience
• Provides personal and professional development
• Facilitates partnership through working with others
and strengthens personal relationships within
the network
For RubinBrown, the secondment program:
• Assists with staff retention and motivation
• Aids in recruitment
• Provides international work experience for staff
development
• Facilitates partnerships between firms and
strengthens firm relationships in the network
As our recent secondment program participants will
tell those who ask, “Work was the important part of the
experience.” A secondee (as secondment program
participants are dubbed) works with firms that vary greatly
in areas of expertise and local size. “We learn about
other firms, their office size and the work environment
(open work tables versus cubicles).” A secondee also
learns about how other firms are managed and how they
service their clients on a day-to-day basis. “Managers
sit with the staff, which differs from RubinBrown.” For
smaller firms, “They need paper more than we do. Our
approach is moving to a paperless environment.”
For secondees visiting larger network offices, they learn
“how they (the firm) attempt to meet their objectives – how
they handle a paperless audit and how they handle their
work papers, audit sampling, scheduling and time off,
internships and recruiting, and how they use technology
to provide services to their clients.”
5 u spring
winter 2007
2008 issue
issue
Chester Moyer, RubinBrown Kansas City Office
Not only does the secondee learn international accounting
practices, new ideas and best practices from other firms,
they also grow personally. According to one participant,
“Many of the individuals I met during the secondment
had a much different view on life than the ‘average
American’ – they all seemed to make every available
opportunity to travel or experience something new. Many
Americans discuss 'back-packing' through Europe,
taking long holidays, moving to foreign cultures, etc., but
rarely make good on these thoughts. Most of the people
I met during this experience had the same thoughts but
followed through on them and had incredible stories and
experiences to share.”
Not only does the experience grow and enrich the team
members of RubinBrown and the firm, but RubinBrown
secondees also are ambassadors to the world. One of our
recent secondees remarked, “I gained an appreciation
for the reach of RubinBrown. Those we visited know
about St. Louis and our culture through RubinBrown by
knowing team members from RubinBrown even if they
never travel to St. Louis. Those things that we define
as St. Louis or KC, like the Rams or the Chiefs, are little
known in foreign lands. It is RubinBrown that is St. Louis
and KC to them.”
RubinBrown is an active participant within the secondment
program of Baker Tilly International because we focus on
building talented professionals to provide services to our
clients doing business in a growing global economy.
Questions? Contact:
Jim Castellano, CPA
Chairman
314-290-3300
[email protected]
International
World
Conference
The Baker Tilly International World Conference recently
was held in “The City of Lights” – Paris, France. Staying
consistent with the theme of collaboration and embracing
change, member firms from around the world met to
discuss issues related to international communications
and the global economy. Conference attendees included
340 delegates from more than 70 countries and more
than 190 guests.
RubinBrown’s Jim Castellano, chairman of Baker Tilly
International, provided the session’s opening remarks.
The conference formally commenced with a reception
in the Pyramide de Louvre, where Castellano thanked
everyone for their commitment to the network and
congratulated Baker Tilly International on 20 successful
years. Castellano commented on the scale of change in
the profession over the past two decades. He added that
Baker Tilly International has matched the progress of the
profession but continues to challenge each region for
further growth and to operate as a business.
Robin Oakley, European political editor for CNN, provided
an overview of the EU as it celebrates its 50th birthday.
Oakley discussed whether the EU has been a success
story and presented the need to strike a balance between
economic reform and social protection. He felt the key
test will be how the EU handles Turkey’s Union admission;
immigration; the United States, China and Russia; and
energy security.
To date, Baker Tilly International is the 8th largest
accounting and consulting network in the world, with
138 independent firms representing 104 nations and
annual aggregate billings of more than $2.5 billion.
New members to Baker Tilly International represent
Armenia, Azerbaijan, Indonesia, Moldova, Mongolia,
Spain and Zambia.
66 u
u spring
winter 2008
2007 issue
INTERNATIONAL NEWS
Baker Tilly International
Joe Pimmel, RubinBrown St. Louis Office
RubinBrown:
Building Talent
from the
Inside Out
What? From the inside out? What do you mean? I mean
internationally. RubinBrown is building our team members
into stronger professionals every year through the Baker
Tilly International Secondment Program. Through this
innovative approach, RubinBrown sends two to four of
its promising team members overseas to network firms
across the globe.
This past year we sent team members to Glasgow,
Scotland, and Melbourne, Australia, to learn about local
accounting practices, firm structure and processes,
and the local culture. If you ask team members who
have traveled abroad in this program, you will hear their
excitement in “meeting new people, observing how
other people do things, and reflecting on how things are
going back home.”
What does the secondment program through Baker
Tilly International offer its member firms? For the staff of
RubinBrown, the secondment program:
• Provides international work experience
• Provides personal and professional development
• Facilitates partnership through working with others
and strengthens personal relationships within
the network
For RubinBrown, the secondment program:
• Assists with staff retention and motivation
• Aids in recruitment
• Provides international work experience for staff
development
• Facilitates partnerships between firms and
strengthens firm relationships in the network
As our recent secondment program participants will
tell those who ask, “Work was the important part of the
experience.” A secondee (as secondment program
participants are dubbed) works with firms that vary greatly
in areas of expertise and local size. “We learn about
other firms, their office size and the work environment
(open work tables versus cubicles).” A secondee also
learns about how other firms are managed and how they
service their clients on a day-to-day basis. “Managers
sit with the staff, which differs from RubinBrown.” For
smaller firms, “They need paper more than we do. Our
approach is moving to a paperless environment.”
For secondees visiting larger network offices, they learn
“how they (the firm) attempt to meet their objectives – how
they handle a paperless audit and how they handle their
work papers, audit sampling, scheduling and time off,
internships and recruiting, and how they use technology
to provide services to their clients.”
5 u spring
winter 2007
2008 issue
issue
Chester Moyer, RubinBrown Kansas City Office
Not only does the secondee learn international accounting
practices, new ideas and best practices from other firms,
they also grow personally. According to one participant,
“Many of the individuals I met during the secondment
had a much different view on life than the ‘average
American’ – they all seemed to make every available
opportunity to travel or experience something new. Many
Americans discuss 'back-packing' through Europe,
taking long holidays, moving to foreign cultures, etc., but
rarely make good on these thoughts. Most of the people
I met during this experience had the same thoughts but
followed through on them and had incredible stories and
experiences to share.”
Not only does the experience grow and enrich the team
members of RubinBrown and the firm, but RubinBrown
secondees also are ambassadors to the world. One of our
recent secondees remarked, “I gained an appreciation
for the reach of RubinBrown. Those we visited know
about St. Louis and our culture through RubinBrown by
knowing team members from RubinBrown even if they
never travel to St. Louis. Those things that we define
as St. Louis or KC, like the Rams or the Chiefs, are little
known in foreign lands. It is RubinBrown that is St. Louis
and KC to them.”
RubinBrown is an active participant within the secondment
program of Baker Tilly International because we focus on
building talented professionals to provide services to our
clients doing business in a growing global economy.
Questions? Contact:
Jim Castellano, CPA
Chairman
314-290-3300
[email protected]
International
World
Conference
The Baker Tilly International World Conference recently
was held in “The City of Lights” – Paris, France. Staying
consistent with the theme of collaboration and embracing
change, member firms from around the world met to
discuss issues related to international communications
and the global economy. Conference attendees included
340 delegates from more than 70 countries and more
than 190 guests.
RubinBrown’s Jim Castellano, chairman of Baker Tilly
International, provided the session’s opening remarks.
The conference formally commenced with a reception
in the Pyramide de Louvre, where Castellano thanked
everyone for their commitment to the network and
congratulated Baker Tilly International on 20 successful
years. Castellano commented on the scale of change in
the profession over the past two decades. He added that
Baker Tilly International has matched the progress of the
profession but continues to challenge each region for
further growth and to operate as a business.
Robin Oakley, European political editor for CNN, provided
an overview of the EU as it celebrates its 50th birthday.
Oakley discussed whether the EU has been a success
story and presented the need to strike a balance between
economic reform and social protection. He felt the key
test will be how the EU handles Turkey’s Union admission;
immigration; the United States, China and Russia; and
energy security.
To date, Baker Tilly International is the 8th largest
accounting and consulting network in the world, with
138 independent firms representing 104 nations and
annual aggregate billings of more than $2.5 billion.
New members to Baker Tilly International represent
Armenia, Azerbaijan, Indonesia, Moldova, Mongolia,
Spain and Zambia.
66 u
u spring
winter 2008
2007 issue
FEATURE ARTICLE
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
Position Your
Company to
Attract Top
Talent
Remember the days when you ran an ad and received
hundreds of qualified candidates? Demographics,
increased accounting college credit hours (to sit
for CPA) and, until recently, a strong economy have
created a shortage of top talent. That doesn’t mean you
should give up. There are many talented candidates
– you just need to know how to position your company
to attract them.
Based on our research and work with employers across
the country, we have identified the distinguishing
traits of organizations that attract, retain and motivate
the best employees.
The bottom line is:
• Money is a necessary – but not sufficient – condition to
attract, retain and motivate good employees. You and
I will go to work for a paycheck and benefits plan. But
we won’t really do work (at least our best work), unless
something else is present.
• It is the quality of work itself and our relationships with
others at work that draw us to the best organizations
and keep us there, performing at peak effectiveness.
Expanding further, here are the detailed steps to make
sure your company is ready to draw in the top talent.
1. Get excited about your company. Make a commitment to create a workplace with purpose,
excitement and mutual alignment. Refocus your energy
on your employees from a whole-life prospectus. Poll your
employees on what they appreciate about their jobs and
co-workers. Knowing what makes your company unique
and communicating that message is the foundation for
7 u spring 2008 issue
building a workforce that is committed and energized to
achieving the organization’s goals.
2. Make lifestyle part of your offer. Many employees are just as concerned about quality of
life as they are about the amount of money a position
offers. Make your company more attractive to potential
employees by offering things such as flexible hours and
work at home options. Among the more unusual benefits,
some of our clients offer their employees an option to
bring their pet to work. You may not be able to do this,
but add your signature by offering some type of perk that
your employees will appreciate.
3. Offer an employee benefit program. In times when employees get to pick and choose
companies, an employee benefit program moves from
their wish list to their necessities list. For successful
employee recruitment, your company needs to offer
employees at least life, medical and dental coverage. If
your business is small, check with business organizations
like the Chamber of Commerce about more inexpensive
insurance.
4. Start a profit sharing program and/or a 401(k) plan.
There is no better way to give employees a stake in
your company’s success. For businesses that are going
somewhere, profit sharing and/or a 401(k) plan can
be a powerful inducement to work for you instead of
someone else.
5. Offer employees upward mobility. Most employees are looking for positions that offer
opportunities for advancement. What will your position
offer? The chance to develop new skills? A stepping stone
to a position with more responsibilities? More money after
a certain amount of time on the job? Whatever it is, in
terms of attracting employees, be sure to communicate
future advancement possibilities.
6. It’s the M word again (money). One common mistake businesses make when creating
a position is to base the salary on their budget rather
than the market realities. If the going rate for a two-year
accounting professional is $55,000 a year, why would
someone accept $40,000 a year? Save yourself time,
money and training in the long run by paying market
rates to get top talent.
7. Create an employee incentive program. Employee incentive programs not only reward good
employee performance, but also give prospective
employees something to look forward to if they come to
work for you. Whether it’s an annual company-paid retreat
or a program in which employees collect points that they
can trade in for cash, employee incentive programs can
increase your chances of attracting top talent.
8. Sweeten the pot. When competition is fierce, a plain old-fashioned signing
bonus may be what is needed to attract the employee
you want. If you choose to do a signing bonus, it should
be large enough to matter, and the bonus should be
contingent on a certain amount of time of employment.
(Otherwise you will be running a revolving door as people
sign up, take the money and run.)
9. Develop a relationship with a recruiter. Invite the recruiter into your company to learn as much
about your company, its culture and a wish list of your
needs. When a recruiter gets excited about your
company, he/she can be in a constant search mode for
quality talent for you. There also should be an agreement
that the recruiter will not solicit your own employees.
10. Be transparent. Employees love to be a part of the big picture.
Communicate goals and objectives of the company.
Develop a mission statement and strategic objectives,
then communicate it at all levels of your organization.
Attracting and retaining employees is as much a
marketing issue as it is a management issue. Developing
and promoting a positive organization and reminding
employees of the value of being part of it are critical to
recruiting and retaining top talent.
Questions? Contact:
Tamara Vasquez
President
ABACUS Recruiting
314-878-5522
[email protected]
8 u spring 2008 issue
FEATURE ARTICLE
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
Position Your
Company to
Attract Top
Talent
Remember the days when you ran an ad and received
hundreds of qualified candidates? Demographics,
increased accounting college credit hours (to sit
for CPA) and, until recently, a strong economy have
created a shortage of top talent. That doesn’t mean you
should give up. There are many talented candidates
– you just need to know how to position your company
to attract them.
Based on our research and work with employers across
the country, we have identified the distinguishing
traits of organizations that attract, retain and motivate
the best employees.
The bottom line is:
• Money is a necessary – but not sufficient – condition to
attract, retain and motivate good employees. You and
I will go to work for a paycheck and benefits plan. But
we won’t really do work (at least our best work), unless
something else is present.
• It is the quality of work itself and our relationships with
others at work that draw us to the best organizations
and keep us there, performing at peak effectiveness.
Expanding further, here are the detailed steps to make
sure your company is ready to draw in the top talent.
1. Get excited about your company. Make a commitment to create a workplace with purpose,
excitement and mutual alignment. Refocus your energy
on your employees from a whole-life prospectus. Poll your
employees on what they appreciate about their jobs and
co-workers. Knowing what makes your company unique
and communicating that message is the foundation for
7 u spring 2008 issue
building a workforce that is committed and energized to
achieving the organization’s goals.
2. Make lifestyle part of your offer. Many employees are just as concerned about quality of
life as they are about the amount of money a position
offers. Make your company more attractive to potential
employees by offering things such as flexible hours and
work at home options. Among the more unusual benefits,
some of our clients offer their employees an option to
bring their pet to work. You may not be able to do this,
but add your signature by offering some type of perk that
your employees will appreciate.
3. Offer an employee benefit program. In times when employees get to pick and choose
companies, an employee benefit program moves from
their wish list to their necessities list. For successful
employee recruitment, your company needs to offer
employees at least life, medical and dental coverage. If
your business is small, check with business organizations
like the Chamber of Commerce about more inexpensive
insurance.
4. Start a profit sharing program and/or a 401(k) plan.
There is no better way to give employees a stake in
your company’s success. For businesses that are going
somewhere, profit sharing and/or a 401(k) plan can
be a powerful inducement to work for you instead of
someone else.
5. Offer employees upward mobility. Most employees are looking for positions that offer
opportunities for advancement. What will your position
offer? The chance to develop new skills? A stepping stone
to a position with more responsibilities? More money after
a certain amount of time on the job? Whatever it is, in
terms of attracting employees, be sure to communicate
future advancement possibilities.
6. It’s the M word again (money). One common mistake businesses make when creating
a position is to base the salary on their budget rather
than the market realities. If the going rate for a two-year
accounting professional is $55,000 a year, why would
someone accept $40,000 a year? Save yourself time,
money and training in the long run by paying market
rates to get top talent.
7. Create an employee incentive program. Employee incentive programs not only reward good
employee performance, but also give prospective
employees something to look forward to if they come to
work for you. Whether it’s an annual company-paid retreat
or a program in which employees collect points that they
can trade in for cash, employee incentive programs can
increase your chances of attracting top talent.
8. Sweeten the pot. When competition is fierce, a plain old-fashioned signing
bonus may be what is needed to attract the employee
you want. If you choose to do a signing bonus, it should
be large enough to matter, and the bonus should be
contingent on a certain amount of time of employment.
(Otherwise you will be running a revolving door as people
sign up, take the money and run.)
9. Develop a relationship with a recruiter. Invite the recruiter into your company to learn as much
about your company, its culture and a wish list of your
needs. When a recruiter gets excited about your
company, he/she can be in a constant search mode for
quality talent for you. There also should be an agreement
that the recruiter will not solicit your own employees.
10. Be transparent. Employees love to be a part of the big picture.
Communicate goals and objectives of the company.
Develop a mission statement and strategic objectives,
then communicate it at all levels of your organization.
Attracting and retaining employees is as much a
marketing issue as it is a management issue. Developing
and promoting a positive organization and reminding
employees of the value of being part of it are critical to
recruiting and retaining top talent.
Questions? Contact:
Tamara Vasquez
President
ABACUS Recruiting
314-878-5522
[email protected]
8 u spring 2008 issue
GENERAL TOPICS
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
Got Talent?
If you are struggling to find top finance and accounting
talent, you are in good company. Attracting and retaining
talent continues to be a leading management issue facing
all forms of entities – from banks to accounting firms,
from small private to large public enterprises, from notfor-profits to government organizations. The competition
for talent is fiercer than ever before, and there is no
end in sight. The question is: How do you position your
organization to win this battle?
Uncovering strategies to forge this war on talent must
begin by understanding the underlying issues, and there
are a number of them. Demand is at an all-time high due
to a perfect storm of economic conditions, demographics
and increased regulation.
Although the subprime mortgage crisis is calling into
question the current economic stability, the unemployment
rates are still relatively low and have been for a number
of years. In other words, there is an overall shortage of
talent in the marketplace, and the shortage of finance
and accounting professionals is much more extreme
given some additional complicating factors.
The supply of available talent is scarce at all levels
of experience. It is the most experienced talent that
is most troublesome. More finance and accounting
professionals will retire in the next 10 years than in
the last three decades combined. We will lose a
generation of the workforce that not only has a wealth
of knowledge, but also represents a generation of
career-minded, loyal employees. This shift occurs at
the same time a new generation, generation Y, is
entering the workforce. This new generation’s free
agent mentality will indubitably complicate the talent
issue, as they are much more prone to change employers
multiple times over the course of their careers.
It was with this backdrop that the now infamous
corporate scandals of Enron and WorldCom shook the
financial markets. The regulators answered with the
Sarbanes-Oxley Act of 2002, an unprecedented law
virtually doubling the need for finance and accounting
talent overnight. In addition, the resulting lack of overall
investor confidence has created a cascading effect of
similar requirements for both private and public sector
organizations. As such, the demand for talent is at an alltime high and likely will continue to increase, straining an
already depleted supply.
Organizations will need to be creative to win the talent
game. Here are a few of the strategies being employed
to combat the talent crisis. As with most solutions, the
answer doesn’t lie with one big action but a series of
small actions.
1. Embrace superior corporate governance
practices.
Think about it. More than any other employees, finance
and accounting professionals appreciate the value of
good corporate governance practices. Given the wealth
of employment opportunities awaiting these individuals,
why would they settle for an organization that doesn’t
embrace these principles? Given the all-too-recent
corporate scandals, setting a strong tone at the top
for your organization will have the derivative effect of
attracting top talent.
2. Revisit your campus recruiting strategy.
To get the best graduates, the best organizations are hiring
interns from the junior ranks. To get the best interns, these
same organizations are now seeking out sophomores for
top intern slots. There is a certain stickiness with interns.
They are much more likely to accept full-time offers of
employment than non-interns. Moreover, you have a lowrisk opportunity to evaluate their on the job performance
before committing to them for the long-term.
Send the heavy hitters to campuses. Don’t just rely on
your recruiters to visit campuses and interview. If you
want to differentiate your organization, bring members of
top management to meet the recruits, and give them firsthand knowledge of your corporate culture and the real
opportunities that await them.
9 u spring 2008 issue
3. Accelerate the hiring process.
Recruits are entertaining multiple employment offers,
including offers from your competition. Don’t delay in
making hiring decisions. According to a recent Hackett
Group (a Boston consulting firm) survey, the average
Fortune 2000 company spends 52 days selecting a
candidate, whereas the best companies make their
hiring decisions 31 percent faster. Accelerate interviews,
personality tests and background checks. Try to have all
interviews take place in one visit.
4. Consider outsourcing opportunities.
The scarcity of talent is so severe that outsourcing may
make good sense for some employers. Focus on your
business and let professional firms recruit and train
top talent so that you can gain access to it when you
need it.
5. Employ online recruiting tactics.
Organizations need to look beyond their local markets for
top talent. Take advantage of the Internet to broaden your
search. Look for opportunities to hire talent relocating into
your market.
6. Connect with your existing employees.
As challenging as it is to recruit new employees,
organizations should invest an equal amount of time and
energy in retaining existing employees. People don’t quit
an entity; they quit people. Leaving is easier for them if
there is not an emotional connection between them and
your people. Create a mentoring program that focuses
on building relationships with staff. The stronger the
emotional bond with your staff, the more difficult it will be
for them to leave.
Create a flexible work environment to attract and retain
non-traditional employees, including working mothers.
Utilize technology to allow for work outside the office or
from home.
Embrace diversity and expand your traditional hiring
profile. Not only will you open up a new talent pool; your
organization will be stronger in the long run.
10 u spring 2008 issue
GENERAL TOPICS
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
Got Talent?
If you are struggling to find top finance and accounting
talent, you are in good company. Attracting and retaining
talent continues to be a leading management issue facing
all forms of entities – from banks to accounting firms,
from small private to large public enterprises, from notfor-profits to government organizations. The competition
for talent is fiercer than ever before, and there is no
end in sight. The question is: How do you position your
organization to win this battle?
Uncovering strategies to forge this war on talent must
begin by understanding the underlying issues, and there
are a number of them. Demand is at an all-time high due
to a perfect storm of economic conditions, demographics
and increased regulation.
Although the subprime mortgage crisis is calling into
question the current economic stability, the unemployment
rates are still relatively low and have been for a number
of years. In other words, there is an overall shortage of
talent in the marketplace, and the shortage of finance
and accounting professionals is much more extreme
given some additional complicating factors.
The supply of available talent is scarce at all levels
of experience. It is the most experienced talent that
is most troublesome. More finance and accounting
professionals will retire in the next 10 years than in
the last three decades combined. We will lose a
generation of the workforce that not only has a wealth
of knowledge, but also represents a generation of
career-minded, loyal employees. This shift occurs at
the same time a new generation, generation Y, is
entering the workforce. This new generation’s free
agent mentality will indubitably complicate the talent
issue, as they are much more prone to change employers
multiple times over the course of their careers.
It was with this backdrop that the now infamous
corporate scandals of Enron and WorldCom shook the
financial markets. The regulators answered with the
Sarbanes-Oxley Act of 2002, an unprecedented law
virtually doubling the need for finance and accounting
talent overnight. In addition, the resulting lack of overall
investor confidence has created a cascading effect of
similar requirements for both private and public sector
organizations. As such, the demand for talent is at an alltime high and likely will continue to increase, straining an
already depleted supply.
Organizations will need to be creative to win the talent
game. Here are a few of the strategies being employed
to combat the talent crisis. As with most solutions, the
answer doesn’t lie with one big action but a series of
small actions.
1. Embrace superior corporate governance
practices.
Think about it. More than any other employees, finance
and accounting professionals appreciate the value of
good corporate governance practices. Given the wealth
of employment opportunities awaiting these individuals,
why would they settle for an organization that doesn’t
embrace these principles? Given the all-too-recent
corporate scandals, setting a strong tone at the top
for your organization will have the derivative effect of
attracting top talent.
2. Revisit your campus recruiting strategy.
To get the best graduates, the best organizations are hiring
interns from the junior ranks. To get the best interns, these
same organizations are now seeking out sophomores for
top intern slots. There is a certain stickiness with interns.
They are much more likely to accept full-time offers of
employment than non-interns. Moreover, you have a lowrisk opportunity to evaluate their on the job performance
before committing to them for the long-term.
Send the heavy hitters to campuses. Don’t just rely on
your recruiters to visit campuses and interview. If you
want to differentiate your organization, bring members of
top management to meet the recruits, and give them firsthand knowledge of your corporate culture and the real
opportunities that await them.
9 u spring 2008 issue
3. Accelerate the hiring process.
Recruits are entertaining multiple employment offers,
including offers from your competition. Don’t delay in
making hiring decisions. According to a recent Hackett
Group (a Boston consulting firm) survey, the average
Fortune 2000 company spends 52 days selecting a
candidate, whereas the best companies make their
hiring decisions 31 percent faster. Accelerate interviews,
personality tests and background checks. Try to have all
interviews take place in one visit.
4. Consider outsourcing opportunities.
The scarcity of talent is so severe that outsourcing may
make good sense for some employers. Focus on your
business and let professional firms recruit and train
top talent so that you can gain access to it when you
need it.
5. Employ online recruiting tactics.
Organizations need to look beyond their local markets for
top talent. Take advantage of the Internet to broaden your
search. Look for opportunities to hire talent relocating into
your market.
6. Connect with your existing employees.
As challenging as it is to recruit new employees,
organizations should invest an equal amount of time and
energy in retaining existing employees. People don’t quit
an entity; they quit people. Leaving is easier for them if
there is not an emotional connection between them and
your people. Create a mentoring program that focuses
on building relationships with staff. The stronger the
emotional bond with your staff, the more difficult it will be
for them to leave.
Create a flexible work environment to attract and retain
non-traditional employees, including working mothers.
Utilize technology to allow for work outside the office or
from home.
Embrace diversity and expand your traditional hiring
profile. Not only will you open up a new talent pool; your
organization will be stronger in the long run.
10 u spring 2008 issue
You’ve gained the knowledge.
Do you have the commitment?
GENERAL TOPICS
Got Talent? (cont.)
7. Create a leadership development program.
Identify your top performers and develop their talent and
leadership skills. This investment will not only serve to
invest in the future, but also retain this group for longer
periods of time. Top management must be actively
involved in such a program. Get participants involved
in all aspects of the business through special projects
and job shadowing opportunities. Involve them in real
business problems, not just case studies.
8. Don’t settle for second best.
Although it may be tempting to settle for “B” players in
a tight labor market, it will damage your organization
in the long run. Don’t be too stringent on the specific
qualifications and experience you desire; rather, look
for candidates with overall intelligence, a desire to
learn and energy. You can teach these candidates
what they need to learn.
We are in the midst of a war for finance and accounting
talent that will only become more competitive. Given
the current economic conditions, demographics and
regulatory environment, organizations will need to
consider alternative strategies to remain successful.
We hope the above ideas give you a fresh perspective
on this challenge as well as new insights on how to
overcome it.
Commitment. It’s a special value here at RubinBrown. It describes the professional pride in the work we do.
It also defines the personal care we take in the relationships we build – with our clients, with our partners
and, of course, with one another.
Questions? Contact:
Fred Kostecki, CPA
Partner-in-Charge
Assurance Services Group
314-290-3398
[email protected]
For the career minded individual looking to grow and advance in the accounting profession, it means an
or
We invite you to explore the RubinBrown difference.
Steve Newstead, CPA, FLMI
Partner-in-Charge
Internal Audit Services Group
314-290-3325
[email protected]
www.RubinBrown.com
unparalleled opportunity to work alongside a team of leading experts. To grow your knowledge by drawing
upon the global resources of Baker Tilly International. And ultimately to realize the rewards that come from
a firm-wide commitment to being the very best.
Certified Public Accountants and Business Consultants
Knowledge. Commitment. Value.
Assurance | Internal Audit | Litigation Support | Qualified Plan Audit | SEC Advisory | Small Business
11 u spring 2008 issue
State and Local Tax | Tax and Compliance | Valuations | Wealth Management
You’ve gained the knowledge.
Do you have the commitment?
GENERAL TOPICS
Got Talent? (cont.)
7. Create a leadership development program.
Identify your top performers and develop their talent and
leadership skills. This investment will not only serve to
invest in the future, but also retain this group for longer
periods of time. Top management must be actively
involved in such a program. Get participants involved
in all aspects of the business through special projects
and job shadowing opportunities. Involve them in real
business problems, not just case studies.
8. Don’t settle for second best.
Although it may be tempting to settle for “B” players in
a tight labor market, it will damage your organization
in the long run. Don’t be too stringent on the specific
qualifications and experience you desire; rather, look
for candidates with overall intelligence, a desire to
learn and energy. You can teach these candidates
what they need to learn.
We are in the midst of a war for finance and accounting
talent that will only become more competitive. Given
the current economic conditions, demographics and
regulatory environment, organizations will need to
consider alternative strategies to remain successful.
We hope the above ideas give you a fresh perspective
on this challenge as well as new insights on how to
overcome it.
Commitment. It’s a special value here at RubinBrown. It describes the professional pride in the work we do.
It also defines the personal care we take in the relationships we build – with our clients, with our partners
and, of course, with one another.
Questions? Contact:
Fred Kostecki, CPA
Partner-in-Charge
Assurance Services Group
314-290-3398
[email protected]
For the career minded individual looking to grow and advance in the accounting profession, it means an
or
We invite you to explore the RubinBrown difference.
Steve Newstead, CPA, FLMI
Partner-in-Charge
Internal Audit Services Group
314-290-3325
[email protected]
www.RubinBrown.com
unparalleled opportunity to work alongside a team of leading experts. To grow your knowledge by drawing
upon the global resources of Baker Tilly International. And ultimately to realize the rewards that come from
a firm-wide commitment to being the very best.
Certified Public Accountants and Business Consultants
Knowledge. Commitment. Value.
Assurance | Internal Audit | Litigation Support | Qualified Plan Audit | SEC Advisory | Small Business
11 u spring 2008 issue
State and Local Tax | Tax and Compliance | Valuations | Wealth Management
Guest Article
Dr. Ginny Barnes, G.B. Communications, Inc.
Here are four core traits that, in general, the workplace will
focus on as it prepares for recruiting, hiring and retaining
this generation Y workforce:
1. Achievement Goals: Fame, Fortune,
Leadership and Trust
Generation Y
Are You Ready for Them?
Generation Y –
Who Are They?
Members of generation Y, born between 1980 and 1994,
are the children of 78 million baby boomers. Reaching
numbers of more than 60 million, they are an enormously
powerful, savvy and diverse market. They have grown
up in a time in which the world was no longer safe and
reliable, recalling events such as school shootings, the
Oklahoma City bombing, Sept. 11, terrorists’ activities
and the Iraq War. They have been exposed to AIDS,
drugs, rapidly improving technology, reality TV, talk
shows and MTV. They also benefited from growing up in a
13 u spring 2008 issue
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
Four Core Traits of
Generation Y @ Work
Guess Who
Is Coming to
Work?
Yes, they are here! Generation Y, otherwise known as
the millennial generation, has grown up and is now job
hunting. Companies are responding to this potential
employee market with mixed reactions. On the one
hand, the generation Y market exhibits competitive and
attractive applicants. On the other hand, this generation
comes with a set of expectations and behaviors
unlike those of generation X, boomers or the matures.
Companies are competing for the best applicant, yet
often are unprepared for the recruitment, interview,
hiring and coaching process that creates a successful
hire. What are the characteristics of this generation, and
how can you position your company processes to be
successful?
knowledge. commitment. value.
2. Strong Parent Connection Impacts
Problem Solving
3. Desire for Psychological Comfort: Fear
of Failure
4. Hyperlink Communication and Impacted
Attention Span
time of economic growth and personal wealth for parents
and the country, creating a menu-driven society and
options for busy schedules, activities and lots of things
given to them. They were the first generation to grow
up having the global world view at their fingertips.
Achievement Goals:
Fame, Fortune, Leadership
and Trust
Sociologists and psychologists disagree about the future
of generation Y. They have been described as being
the next great “hero generation,” indicating their traits
as being extraordinarily well rounded, having high selfesteem, being civic-minded, and raised to believe they
could do anything. Others describe them as the next “me
generation,” indicating their self-focus, expectation of
entitlement, and desire for fame and fortune.
Members of generation Y are optimistic about their
futures and fairly cynical about current leadership.
Because of the current situation of the world (unsafe,
war, terrorism, etc.), they do not see that current
leadership is producing the type of world they want.
So, the status of being a leader is not based on
old patterns of hierarchy, title or age. Rather, for
generation Y, good leadership is based on trust,
which is built one day at a time by the actions of the
leader. This criteria for leadership means that the
person who leads can be anyone worthy of that trust,
and that produces a free agent mindset of “I can do
it my way.”
While the jury is still out on the future of generation Y,
what is most important are the core traits they exhibit as
a generation and what can be done in the workplace to
support, challenge and prepare this generation for the
years to come.
Often, other generations like baby boomers misinterpret
the questioning behavior of generation Y as a lack of
respect for authority or seniority, instead of understanding
that the primary quality search for leadership is trust.
Generation Y not only seeks a trustworthy leader, but
also wants seniority to trust them and give them the
opportunity to produce good ideas and quality results.
Then, generation Y’s goal is to gain recognition (fame)
and ultimately fortune. The difficulty for both seniority
and this generation is in the timing factor. Generation
Y expects this rise to leadership to come faster, while
boomers believe one should “pay ones’ dues.” Thus,
the conflict for leadership and achievement are strong
issues in the workplace with generation Y. It is important
for seniority and managers to communicate frequently
the pattern for leadership development within the
organization, documenting the benchmarks necessary
for leadership success. This communication is done
most effectively during recruitment, interviewing and at
hiring with mentors and coaches, where both parties
can share dreams, ideas and conflicts.
Strong Parent Connection:
Impacts Ability to
Problem Solve
The term “helicopter parent” has been overused and
appeared as front-line news in studying and analyzing
generation Y. Parents were described as swooping in to
rescue the young adult from problems and situations.
Stories proliferated in every college setting as generation
Y became a freshman. College admissions counselors
and academicians began describing the unwarranted
parent interference as “Blackhawk helicopter” because
of parental intrusion into grades, faculty decisions and
social issues.
The relationship of generation Y to its parent is both a
positive and negative influence on the young adult and
the workplace. Basically, the strong parent connection
has been largely responsible for producing young adults
who have been sheltered from consequences, have weak
problem-solving skills, have a high sense of entitlement
and have a high expectation of being cared for and being
served. Stories (which may by now have reached fable
proportion) abound on both the college campus and the
workplace environment about how parents rescue little
Johnny or Mary. When Johnny’s mother asks his teacher
to give him a wake-up call so he won’t miss class, or
mom and dad sit in on the job interview or do the salary
14 u spring 2008 issue
Guest Article
Dr. Ginny Barnes, G.B. Communications, Inc.
Here are four core traits that, in general, the workplace will
focus on as it prepares for recruiting, hiring and retaining
this generation Y workforce:
1. Achievement Goals: Fame, Fortune,
Leadership and Trust
Generation Y
Are You Ready for Them?
Generation Y –
Who Are They?
Members of generation Y, born between 1980 and 1994,
are the children of 78 million baby boomers. Reaching
numbers of more than 60 million, they are an enormously
powerful, savvy and diverse market. They have grown
up in a time in which the world was no longer safe and
reliable, recalling events such as school shootings, the
Oklahoma City bombing, Sept. 11, terrorists’ activities
and the Iraq War. They have been exposed to AIDS,
drugs, rapidly improving technology, reality TV, talk
shows and MTV. They also benefited from growing up in a
13 u spring 2008 issue
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
Four Core Traits of
Generation Y @ Work
Guess Who
Is Coming to
Work?
Yes, they are here! Generation Y, otherwise known as
the millennial generation, has grown up and is now job
hunting. Companies are responding to this potential
employee market with mixed reactions. On the one
hand, the generation Y market exhibits competitive and
attractive applicants. On the other hand, this generation
comes with a set of expectations and behaviors
unlike those of generation X, boomers or the matures.
Companies are competing for the best applicant, yet
often are unprepared for the recruitment, interview,
hiring and coaching process that creates a successful
hire. What are the characteristics of this generation, and
how can you position your company processes to be
successful?
knowledge. commitment. value.
2. Strong Parent Connection Impacts
Problem Solving
3. Desire for Psychological Comfort: Fear
of Failure
4. Hyperlink Communication and Impacted
Attention Span
time of economic growth and personal wealth for parents
and the country, creating a menu-driven society and
options for busy schedules, activities and lots of things
given to them. They were the first generation to grow
up having the global world view at their fingertips.
Achievement Goals:
Fame, Fortune, Leadership
and Trust
Sociologists and psychologists disagree about the future
of generation Y. They have been described as being
the next great “hero generation,” indicating their traits
as being extraordinarily well rounded, having high selfesteem, being civic-minded, and raised to believe they
could do anything. Others describe them as the next “me
generation,” indicating their self-focus, expectation of
entitlement, and desire for fame and fortune.
Members of generation Y are optimistic about their
futures and fairly cynical about current leadership.
Because of the current situation of the world (unsafe,
war, terrorism, etc.), they do not see that current
leadership is producing the type of world they want.
So, the status of being a leader is not based on
old patterns of hierarchy, title or age. Rather, for
generation Y, good leadership is based on trust,
which is built one day at a time by the actions of the
leader. This criteria for leadership means that the
person who leads can be anyone worthy of that trust,
and that produces a free agent mindset of “I can do
it my way.”
While the jury is still out on the future of generation Y,
what is most important are the core traits they exhibit as
a generation and what can be done in the workplace to
support, challenge and prepare this generation for the
years to come.
Often, other generations like baby boomers misinterpret
the questioning behavior of generation Y as a lack of
respect for authority or seniority, instead of understanding
that the primary quality search for leadership is trust.
Generation Y not only seeks a trustworthy leader, but
also wants seniority to trust them and give them the
opportunity to produce good ideas and quality results.
Then, generation Y’s goal is to gain recognition (fame)
and ultimately fortune. The difficulty for both seniority
and this generation is in the timing factor. Generation
Y expects this rise to leadership to come faster, while
boomers believe one should “pay ones’ dues.” Thus,
the conflict for leadership and achievement are strong
issues in the workplace with generation Y. It is important
for seniority and managers to communicate frequently
the pattern for leadership development within the
organization, documenting the benchmarks necessary
for leadership success. This communication is done
most effectively during recruitment, interviewing and at
hiring with mentors and coaches, where both parties
can share dreams, ideas and conflicts.
Strong Parent Connection:
Impacts Ability to
Problem Solve
The term “helicopter parent” has been overused and
appeared as front-line news in studying and analyzing
generation Y. Parents were described as swooping in to
rescue the young adult from problems and situations.
Stories proliferated in every college setting as generation
Y became a freshman. College admissions counselors
and academicians began describing the unwarranted
parent interference as “Blackhawk helicopter” because
of parental intrusion into grades, faculty decisions and
social issues.
The relationship of generation Y to its parent is both a
positive and negative influence on the young adult and
the workplace. Basically, the strong parent connection
has been largely responsible for producing young adults
who have been sheltered from consequences, have weak
problem-solving skills, have a high sense of entitlement
and have a high expectation of being cared for and being
served. Stories (which may by now have reached fable
proportion) abound on both the college campus and the
workplace environment about how parents rescue little
Johnny or Mary. When Johnny’s mother asks his teacher
to give him a wake-up call so he won’t miss class, or
mom and dad sit in on the job interview or do the salary
14 u spring 2008 issue
Guest Article
Dr. Ginny Barnes, G.B. Communications, Inc. (cont.)
negotiations for little Mary’s new job, we tend to laugh and
shake our heads in disbelief. Yet, this strong connection
between parents and generation Y continues in the
workplace environment and has resulted in companies
opening “parent interface offices” to deal with specific
questions related to recruiting, interviewing, hiring and
negotiating salary.
What implication does this interference have for the
workplace and for managers? Often, generation Y
anticipates and can benefit from a “surrogate” parent in
the form of a company coach or role model from whom
to learn the ropes and assist with problem solving. A
trusting role model or coach can teach and mentor a
generation Y employee to success.
As generation Y matures, it will be necessary for them
to create appropriate boundaries with their own parents
while maintaining good relationships. Having a mentor
or coach in the workplace can help the young employee
become more independent while being encouraged
and supported.
Desire for Psychological
Comfort: Fear of Failure
Increasing numbers of generation Y are seeking mental
health services, with an increase in reported panic
attacks and stress. In focus groups, individuals report
fear of failing parents, pressure in school and panic when
unable to locate parents to help solve problems or have
someone to talk to. While generation Y appears to have
high self-esteem, it often hides the shallow or fragile lack
of confidence that is impacted by dealing with failure.
Because of the support of parents who often step in to
solve problems for generation Y, there appears to be a
disturbing lack of critical thinking and problem-solving
skills. Thinking long-term, planning and evaluating risk
are weak life skills of this generation, and those inabilities
lead to psychological discomfort when problems surface
that they do not know how to solve. This generation often
received awards, trophies and stars for competing in team
activities in which they may or may not have excelled.
Just showing up often resulted in an award. As a result
of being a recipient of much praise, photography and
awards, generation Y often expects immediate feedback
15 u spring 2008 issue
and praise when working on a project or simply fulfilling
the job description. Silence is often seen as a negative
response and has the potential to impact performance.
This perception has implications for seniors or managers
in a company who believe that simply doing a job is the
award in and of itself – not so for this generation, who
wants and gives immediate feedback on relationships,
work, activities, etc. They are not afraid to challenge
authority or speak out. However, they respond negatively
to threats of discipline or consequences and are
apt to network or negotiate to solve a problem in order
to secure comfort for themselves. Both educators and
company managers cite examples of parents, officials
and friends stepping in to assist with solutions when
negativity or stress results.
Generation Y’s need for support may go unnoticed
in the workplace due to the appearance of high
self-esteem initially and only begin to surface when
problems or conflict occur or award is not timely
enough. Seniority and managers should be observant
about potential problems, negativity and depression or
decreased work performance due to lack of a company
network, feedback or successful progress. Keeping
open communications with generation Y employees and
helping them understand the operations of a company
and where they can go for help within the company
will provide needed help.
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
multi-focused, managing many ideas at one time and
hyperlinking or hopscotching from one idea to another.
They indicate a decline in undivided attention span and,
as a result, the old linear patterns of meetings, project
organization or communication don’t work as effectively
with these generational workers. They want to work
quickly, create ideas and projects as they come, in any
order, and put many things together to create one.
The best way for generation Y to work is in teams,
where ideas can be expressed, feedback is quick and
members can work on different parts of the whole.
When generation Y’s are asked to work on a project
solo, they will often network and create their own web
of support and communication to hyperlink the project
to completion. Maximize the talents of generation Y
by creating virtual and real teams for work-related
issues and projects. Provide a variety of ways for them
to network and communicate on and off the company
property. Create a variety of patterns for workdays that
are different from the standard 8-5, five days a week
model. This variety will maximize their efforts and
motivate them to creativity and performance.
To prepare for generation Y, companies need to be
flexible and analyze why and how they currently conduct
business internally. Admit it to yourself! Generation Y
brings new ways of thinking, behaving and expecting.
This innovation doesn’t have to be a negative thing.
Ginny Barnes,
President/Owner
G.B. Communications Inc.
Dr. Ginny Barnes is
president and owner of
G. B. Communications Inc.,
a consulting and training
firm in Columbia, Mo.
Barnes specializes in areas
of diversity, communication,
conflict management and
organization development.
She is the author of “Eight Steps of Highly
Effective Negotiations: Letting the Other
Person Have Your Way” and is the 2006
recipient of the Telly Award for her production
of a diversity video titled “Can You See
Me Now?”
Hyperlinking Communication
and Impacted Attention Span
This generation is fast-paced and has been exposed to
many activities in life, with access to fine-tuned, portable
technologies. They are accustomed to being chronically
stimulated since childhood and as a result get bored
easily and don’t know how to deal with dead time.
While their fast-paced, get-it-done attitude is a plus for
employers in terms of fast performance, they also exhibit
the need for instant gratification, getting it done and
moving on to something else. So, commitment to a long
project, dealing with slow bureaucratic wheels, longterm decision-making tools and staying the course to
pay attention to accuracy and details are not necessarily
their best features! As experiential learners, they are
The relationship
between your company
and your new
generation employee
can be a success by:
1. Developing trust in leadership
relationships.
2. Improving problem solving and
critical thinking skills.
3. Communicating steps for
performance success.
4. Developing new ways to work
and communicate.
16 u spring 2008 issue
Guest Article
Dr. Ginny Barnes, G.B. Communications, Inc. (cont.)
negotiations for little Mary’s new job, we tend to laugh and
shake our heads in disbelief. Yet, this strong connection
between parents and generation Y continues in the
workplace environment and has resulted in companies
opening “parent interface offices” to deal with specific
questions related to recruiting, interviewing, hiring and
negotiating salary.
What implication does this interference have for the
workplace and for managers? Often, generation Y
anticipates and can benefit from a “surrogate” parent in
the form of a company coach or role model from whom
to learn the ropes and assist with problem solving. A
trusting role model or coach can teach and mentor a
generation Y employee to success.
As generation Y matures, it will be necessary for them
to create appropriate boundaries with their own parents
while maintaining good relationships. Having a mentor
or coach in the workplace can help the young employee
become more independent while being encouraged
and supported.
Desire for Psychological
Comfort: Fear of Failure
Increasing numbers of generation Y are seeking mental
health services, with an increase in reported panic
attacks and stress. In focus groups, individuals report
fear of failing parents, pressure in school and panic when
unable to locate parents to help solve problems or have
someone to talk to. While generation Y appears to have
high self-esteem, it often hides the shallow or fragile lack
of confidence that is impacted by dealing with failure.
Because of the support of parents who often step in to
solve problems for generation Y, there appears to be a
disturbing lack of critical thinking and problem-solving
skills. Thinking long-term, planning and evaluating risk
are weak life skills of this generation, and those inabilities
lead to psychological discomfort when problems surface
that they do not know how to solve. This generation often
received awards, trophies and stars for competing in team
activities in which they may or may not have excelled.
Just showing up often resulted in an award. As a result
of being a recipient of much praise, photography and
awards, generation Y often expects immediate feedback
15 u spring 2008 issue
and praise when working on a project or simply fulfilling
the job description. Silence is often seen as a negative
response and has the potential to impact performance.
This perception has implications for seniors or managers
in a company who believe that simply doing a job is the
award in and of itself – not so for this generation, who
wants and gives immediate feedback on relationships,
work, activities, etc. They are not afraid to challenge
authority or speak out. However, they respond negatively
to threats of discipline or consequences and are
apt to network or negotiate to solve a problem in order
to secure comfort for themselves. Both educators and
company managers cite examples of parents, officials
and friends stepping in to assist with solutions when
negativity or stress results.
Generation Y’s need for support may go unnoticed
in the workplace due to the appearance of high
self-esteem initially and only begin to surface when
problems or conflict occur or award is not timely
enough. Seniority and managers should be observant
about potential problems, negativity and depression or
decreased work performance due to lack of a company
network, feedback or successful progress. Keeping
open communications with generation Y employees and
helping them understand the operations of a company
and where they can go for help within the company
will provide needed help.
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
multi-focused, managing many ideas at one time and
hyperlinking or hopscotching from one idea to another.
They indicate a decline in undivided attention span and,
as a result, the old linear patterns of meetings, project
organization or communication don’t work as effectively
with these generational workers. They want to work
quickly, create ideas and projects as they come, in any
order, and put many things together to create one.
The best way for generation Y to work is in teams,
where ideas can be expressed, feedback is quick and
members can work on different parts of the whole.
When generation Y’s are asked to work on a project
solo, they will often network and create their own web
of support and communication to hyperlink the project
to completion. Maximize the talents of generation Y
by creating virtual and real teams for work-related
issues and projects. Provide a variety of ways for them
to network and communicate on and off the company
property. Create a variety of patterns for workdays that
are different from the standard 8-5, five days a week
model. This variety will maximize their efforts and
motivate them to creativity and performance.
To prepare for generation Y, companies need to be
flexible and analyze why and how they currently conduct
business internally. Admit it to yourself! Generation Y
brings new ways of thinking, behaving and expecting.
This innovation doesn’t have to be a negative thing.
Ginny Barnes,
President/Owner
G.B. Communications Inc.
Dr. Ginny Barnes is
president and owner of
G. B. Communications Inc.,
a consulting and training
firm in Columbia, Mo.
Barnes specializes in areas
of diversity, communication,
conflict management and
organization development.
She is the author of “Eight Steps of Highly
Effective Negotiations: Letting the Other
Person Have Your Way” and is the 2006
recipient of the Telly Award for her production
of a diversity video titled “Can You See
Me Now?”
Hyperlinking Communication
and Impacted Attention Span
This generation is fast-paced and has been exposed to
many activities in life, with access to fine-tuned, portable
technologies. They are accustomed to being chronically
stimulated since childhood and as a result get bored
easily and don’t know how to deal with dead time.
While their fast-paced, get-it-done attitude is a plus for
employers in terms of fast performance, they also exhibit
the need for instant gratification, getting it done and
moving on to something else. So, commitment to a long
project, dealing with slow bureaucratic wheels, longterm decision-making tools and staying the course to
pay attention to accuracy and details are not necessarily
their best features! As experiential learners, they are
The relationship
between your company
and your new
generation employee
can be a success by:
1. Developing trust in leadership
relationships.
2. Improving problem solving and
critical thinking skills.
3. Communicating steps for
performance success.
4. Developing new ways to work
and communicate.
16 u spring 2008 issue
INDUSTRy
u
ARCHITECTS & ENGINEERS
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
The Key to a
Firm’s Success
Architecture and
engineering firm leaders
know that talented,
motivated employees are
the key to a firm’s success.
The challenge lies not only in attracting the best
personnel, but also in developing and retaining them.
So, what are some ways a firm can attract, develop and
retain desired employees? Listed below are suggestions
in each of these three main categories.
Attracting Talent
A tried and true method to attract top talent is to recruit.
Interviewing may only occur a few times each year;
however, recruiting for top talent should be a continuous
process. Firms should be cognizant of where to search
for talent. Search opportunities should include academic
universities and search firms, as well as inquiries among
current personnel for acquaintances. If universities are
deemed the top talent pool, architecture and engineering
firms should establish solid relationships with both
professors and students. Firms may offer academic
scholarships, give presentations to undergraduate
classes, and provide internships to undergraduates as a
means of establishing relationships with top recruits.
Firms also must value the power of alumni. While no
firm wants to lose talented employees, it unfortunately
happens. A firm whose alumni are viewed as outstanding
talent can take pride in being a developer of such talent.
If it becomes widely known that a company actively
develops its personnel, recruiting and attracting talent
becomes a much easier process.
17 u spring 2008 issue
Firms also may offer incentives such as flexible work
schedules. Part-time and alternative work weeks are
some examples of flexible arrangements.
Developing Talent
Developing employees is crucial to the longevity of a
firm and its ultimate success. Top executives must make
the development of top talent a priority. They also should
be involved in the formulation of core competencies
that employees must master to excel within the firm.
Having a foundation of core competencies enhances
the performance review process. Competencies can be
referenced in an evaluation session. They also can be
used as benchmarks when evaluating top performers.
This process allows for open communication in
determining where an employee is, where he/she wants
to be, and what areas can be improved upon to help him/
her accomplish his/her career goals within the firm.
Training, training and more training! There are a
variety of avenues to take when increasing training for
employees. On-the-job training, in-house courses taught
by more experienced company personnel, and tuition
reimbursement for academic courses and degrees are
just a few examples. Some firms also offer a flexible work
schedule to those employees interested in obtaining
a more advanced degree with the hope that once the
degree is completed, the employee will return to full-time
status with increased performance ability.
Retaining Talent
A “growth from within” strategy allows top talent to see
career advancement as a possible reward for their efforts.
At times, it is necessary to hire from outside the firm in
order to fill key gaps. However, if the standard practice
is to promote from within, top employees will see career
advancement as an attainable goal within the firm without
feeling the need to leave to achieve it.
Training, as previously mentioned, is key to developing
employees, but it also may be used to enhance cultural
integration as a method of retaining employees. Training
sessions may be held off-site, and employees may
spend as little as a few hours to a few weeks together.
These training sessions enable employees to develop
bonding relationships while still achieving necessary
technical competencies.
Top executives need to act as both advisers and mentors
to top talent. As advisers, they can provide answers to
daily task-oriented questions or inquiries relating to the
firm’s practices or policies and procedures. An adviser
also assists with personal assessments of strengths and
areas for improvement. As a mentor, the relationship
is deeper to enhance long-term personal growth and
career development. Mentors may need to work
personally with their protégés to address both personal
and professional issues.
It requires tremendous planning and strategy to reach
or maintain the status of a top-tier architecture and
engineering firm. The best firms, however, realize the
importance of not only attracting top talent, but also
developing and retaining that talent.
Questions? Contact:
Mark Jansen, CPA
Partner-in-Charge
Architects & Engineers Services Group
314-290-3208
[email protected]
If it becomes widely
known that a company
actively develops its
personnel, recruiting
and attracting talent
becomes a much
easier process.
18 u spring 2008 issue
INDUSTRy
u
ARCHITECTS & ENGINEERS
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
The Key to a
Firm’s Success
Architecture and
engineering firm leaders
know that talented,
motivated employees are
the key to a firm’s success.
The challenge lies not only in attracting the best
personnel, but also in developing and retaining them.
So, what are some ways a firm can attract, develop and
retain desired employees? Listed below are suggestions
in each of these three main categories.
Attracting Talent
A tried and true method to attract top talent is to recruit.
Interviewing may only occur a few times each year;
however, recruiting for top talent should be a continuous
process. Firms should be cognizant of where to search
for talent. Search opportunities should include academic
universities and search firms, as well as inquiries among
current personnel for acquaintances. If universities are
deemed the top talent pool, architecture and engineering
firms should establish solid relationships with both
professors and students. Firms may offer academic
scholarships, give presentations to undergraduate
classes, and provide internships to undergraduates as a
means of establishing relationships with top recruits.
Firms also must value the power of alumni. While no
firm wants to lose talented employees, it unfortunately
happens. A firm whose alumni are viewed as outstanding
talent can take pride in being a developer of such talent.
If it becomes widely known that a company actively
develops its personnel, recruiting and attracting talent
becomes a much easier process.
17 u spring 2008 issue
Firms also may offer incentives such as flexible work
schedules. Part-time and alternative work weeks are
some examples of flexible arrangements.
Developing Talent
Developing employees is crucial to the longevity of a
firm and its ultimate success. Top executives must make
the development of top talent a priority. They also should
be involved in the formulation of core competencies
that employees must master to excel within the firm.
Having a foundation of core competencies enhances
the performance review process. Competencies can be
referenced in an evaluation session. They also can be
used as benchmarks when evaluating top performers.
This process allows for open communication in
determining where an employee is, where he/she wants
to be, and what areas can be improved upon to help him/
her accomplish his/her career goals within the firm.
Training, training and more training! There are a
variety of avenues to take when increasing training for
employees. On-the-job training, in-house courses taught
by more experienced company personnel, and tuition
reimbursement for academic courses and degrees are
just a few examples. Some firms also offer a flexible work
schedule to those employees interested in obtaining
a more advanced degree with the hope that once the
degree is completed, the employee will return to full-time
status with increased performance ability.
Retaining Talent
A “growth from within” strategy allows top talent to see
career advancement as a possible reward for their efforts.
At times, it is necessary to hire from outside the firm in
order to fill key gaps. However, if the standard practice
is to promote from within, top employees will see career
advancement as an attainable goal within the firm without
feeling the need to leave to achieve it.
Training, as previously mentioned, is key to developing
employees, but it also may be used to enhance cultural
integration as a method of retaining employees. Training
sessions may be held off-site, and employees may
spend as little as a few hours to a few weeks together.
These training sessions enable employees to develop
bonding relationships while still achieving necessary
technical competencies.
Top executives need to act as both advisers and mentors
to top talent. As advisers, they can provide answers to
daily task-oriented questions or inquiries relating to the
firm’s practices or policies and procedures. An adviser
also assists with personal assessments of strengths and
areas for improvement. As a mentor, the relationship
is deeper to enhance long-term personal growth and
career development. Mentors may need to work
personally with their protégés to address both personal
and professional issues.
It requires tremendous planning and strategy to reach
or maintain the status of a top-tier architecture and
engineering firm. The best firms, however, realize the
importance of not only attracting top talent, but also
developing and retaining that talent.
Questions? Contact:
Mark Jansen, CPA
Partner-in-Charge
Architects & Engineers Services Group
314-290-3208
[email protected]
If it becomes widely
known that a company
actively develops its
personnel, recruiting
and attracting talent
becomes a much
easier process.
18 u spring 2008 issue
INDUSTRy
u
Contractors
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
Reimbursing
Business
Expenses
The end of one calendar year and the beginning of the
next is a good time to revisit topics related to wages,
W-2 reporting and expense reimbursements. Contractors
frequently reimburse employees for travel, lodging, meals
and other incidental expenses, and it is important to be
aware of the requirements in this area.
Reimbursed Business
Expenses of the Employee
An employer may reimburse an employee for travel, meals
and entertainment expenses incurred while performing
services for the employer. This reimbursement can and
is done in many ways. At one end of the spectrum,
employees are required to turn in receipts and other
documentation in order to be reimbursed. At the other
end, the employer may just give the employee an amount
of money the employer believes is adequate to cover any
expenses the employee may incur and not require the
employee to report back on actual expenses incurred. In
between, there are nearly as many separate methods as
there are employers.
As far as the IRS is concerned, all these reimbursement
plans fit into two categories. Either the plan is an
accountable plan or a non-accountable plan. The tax
treatment of the reimbursement, for both the employer
and the employee, depends on whether the employer
has an accountable plan or a non-accountable plan.
In an accountable plan, the employee is required to
provide certain required documentation (see discussion
below) to the employer. All other plans are considered
non-accountable plans.
If expenses are reimbursed under an accountable plan,
the employer deducts the amount allowable as travel,
meals and entertainment expense. The amounts are not
treated as income to the employee; therefore, no amounts
are required to be included on the employee’s W-2, no
employment taxes need to be paid, etc. The 50 percent
limitation on the deduction for meals and entertainment
applies to the employer’s deduction of meals and
entertainment expenses that are reimbursed. The
employee excludes the reimbursement from income.
Under a non-accountable plan, the IRS rules require the
employer to report the reimbursement as taxable wages
to the employee on Form W-2. The employer receives a
deduction for compensation expense but also is required
to withhold income and Social Security taxes. The
employer also is responsible for the employment taxes on
the payment. The employee is allowed to deduct business
expenses that are reimbursed under a non-accountable
plan, as well as expenses that are not reimbursed, as
miscellaneous itemized deductions. The portion of
the expenses representing meals and entertainment
is subject to the 50 percent limit on deductions for
meals and entertainment. As miscellaneous itemized
deductions, these expenses also are subject to the 2
percent of Adjusted Gross Income limitation. These
limitations result in the employee paying tax on a portion
of the payment.
Accountable Plan
To qualify as an accountable plan, employees must:
1) Have paid or incurred deductible expenses while
performing services as an employee;
2) Adequately account to the employer for these
expenses within a reasonable period of time; and
Adequate Accounting
Employees must adequately account to the employer
for their travel, meals and entertainment expenses. They
must give the employer documentary evidence of their
travel, mileage and other employee business expenses.
This evidence should include items such as receipts,
along with a statement of expenses, an account book, a
day planner or similar record in which the employee has
entered each expense at or near the time the expense was
incurred. To minimize the administrative effort required to
meet these rules, the employer may use a per diem plan.
The rules of per diem plans are discussed below.
Excess Reimbursement
Any amount advanced to the employee that exceeds the
amount adequately accounted for by the employee must
be returned to the employer within a reasonable period
of time.
Reasonable Period of Time
Interpretation of a “reasonable period of time” depends
upon the facts and circumstances of the situation. Actions
that take place within the periods listed below will be
treated as occurring within a reasonable period of time.
• The employer reimburses an expense within 30 days of
the time the employee incurred the expense.
• The employee adequately accounts for the expense
within 60 days after the expense was paid or incurred.
• The employee returns any excess reimbursement within
120 days after the expense was paid or incurred.
• The employer gives the employee a periodic statement,
at least quarterly, that asks the employee to either return
or adequately account for outstanding advances, and
the employee complies within 120 days of the date of
the statement.
3) Return any excess reimbursement or allowance within
a reasonable period of time.
An arrangement under which the employer advances
money to the employees is treated as meeting the third
requirement above only if the following requirements also
are met:
a) The advance is reasonably calculated not to exceed
the amount of anticipated expenses.
b) The employer makes the advance within a reasonable
period of time.
19 u spring 2008 issue
20 u spring 2008 issue
INDUSTRy
u
Contractors
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
Reimbursing
Business
Expenses
The end of one calendar year and the beginning of the
next is a good time to revisit topics related to wages,
W-2 reporting and expense reimbursements. Contractors
frequently reimburse employees for travel, lodging, meals
and other incidental expenses, and it is important to be
aware of the requirements in this area.
Reimbursed Business
Expenses of the Employee
An employer may reimburse an employee for travel, meals
and entertainment expenses incurred while performing
services for the employer. This reimbursement can and
is done in many ways. At one end of the spectrum,
employees are required to turn in receipts and other
documentation in order to be reimbursed. At the other
end, the employer may just give the employee an amount
of money the employer believes is adequate to cover any
expenses the employee may incur and not require the
employee to report back on actual expenses incurred. In
between, there are nearly as many separate methods as
there are employers.
As far as the IRS is concerned, all these reimbursement
plans fit into two categories. Either the plan is an
accountable plan or a non-accountable plan. The tax
treatment of the reimbursement, for both the employer
and the employee, depends on whether the employer
has an accountable plan or a non-accountable plan.
In an accountable plan, the employee is required to
provide certain required documentation (see discussion
below) to the employer. All other plans are considered
non-accountable plans.
If expenses are reimbursed under an accountable plan,
the employer deducts the amount allowable as travel,
meals and entertainment expense. The amounts are not
treated as income to the employee; therefore, no amounts
are required to be included on the employee’s W-2, no
employment taxes need to be paid, etc. The 50 percent
limitation on the deduction for meals and entertainment
applies to the employer’s deduction of meals and
entertainment expenses that are reimbursed. The
employee excludes the reimbursement from income.
Under a non-accountable plan, the IRS rules require the
employer to report the reimbursement as taxable wages
to the employee on Form W-2. The employer receives a
deduction for compensation expense but also is required
to withhold income and Social Security taxes. The
employer also is responsible for the employment taxes on
the payment. The employee is allowed to deduct business
expenses that are reimbursed under a non-accountable
plan, as well as expenses that are not reimbursed, as
miscellaneous itemized deductions. The portion of
the expenses representing meals and entertainment
is subject to the 50 percent limit on deductions for
meals and entertainment. As miscellaneous itemized
deductions, these expenses also are subject to the 2
percent of Adjusted Gross Income limitation. These
limitations result in the employee paying tax on a portion
of the payment.
Accountable Plan
To qualify as an accountable plan, employees must:
1) Have paid or incurred deductible expenses while
performing services as an employee;
2) Adequately account to the employer for these
expenses within a reasonable period of time; and
Adequate Accounting
Employees must adequately account to the employer
for their travel, meals and entertainment expenses. They
must give the employer documentary evidence of their
travel, mileage and other employee business expenses.
This evidence should include items such as receipts,
along with a statement of expenses, an account book, a
day planner or similar record in which the employee has
entered each expense at or near the time the expense was
incurred. To minimize the administrative effort required to
meet these rules, the employer may use a per diem plan.
The rules of per diem plans are discussed below.
Excess Reimbursement
Any amount advanced to the employee that exceeds the
amount adequately accounted for by the employee must
be returned to the employer within a reasonable period
of time.
Reasonable Period of Time
Interpretation of a “reasonable period of time” depends
upon the facts and circumstances of the situation. Actions
that take place within the periods listed below will be
treated as occurring within a reasonable period of time.
• The employer reimburses an expense within 30 days of
the time the employee incurred the expense.
• The employee adequately accounts for the expense
within 60 days after the expense was paid or incurred.
• The employee returns any excess reimbursement within
120 days after the expense was paid or incurred.
• The employer gives the employee a periodic statement,
at least quarterly, that asks the employee to either return
or adequately account for outstanding advances, and
the employee complies within 120 days of the date of
the statement.
3) Return any excess reimbursement or allowance within
a reasonable period of time.
An arrangement under which the employer advances
money to the employees is treated as meeting the third
requirement above only if the following requirements also
are met:
a) The advance is reasonably calculated not to exceed
the amount of anticipated expenses.
b) The employer makes the advance within a reasonable
period of time.
19 u spring 2008 issue
20 u spring 2008 issue
INDUSTRy
u
Contractors
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
Use of Per Diems
A per diem is an allowance for travel, lodging, meals
and incidental expenses that is calculated based on the
number of days of an employee’s travel. An employer can
reimburse employees under an accountable plan based
on travel days, miles or some other fixed allowance.
The employee is considered to have accounted to the
employer the amount of the expense that does not
exceed the rates established by the federal government.
By using a per diem allowance, the employee is not
required to submit receipts to the employer to meet the
accountable plan rules. However, employees are still
required to substantiate the time, place and business
purpose of the trip.
Federal Per Diem Rates:
The federal rate can be figured using one of the
following:
• The regular federal per diem rate is defined as the
highest amount the federal government will pay to
its employees while away from home on travel. Rates
differ depending upon the travel location. The federal
government publishes the rates for each location
annually. The published rates are effective for the
period from Oct. 1 of one year to Sept. 30 of the next.
The rules allow employers to use the same rates for the
entire calendar year. The rates for 2008 can be found
in IRS Revenue Procedure 2007-63.
• The standard meal allowance is the meals and incidental
expenses portion of the regular federal per diem rate.
The standard meal allowance is the only per diem
allowed if the employer pays for or reimburses actual
lodging expenses or the employee is not reasonably
believed to have incurred any lodging expenses.
Whether the employer uses the regular federal per
diem rate to cover all expenses (including lodging)
or the standard meal allowance, the amount of the
reimbursement that represents the meals and incidental
expenses is subject to the 50 percent disallowance
of meal and entertainment expenses.
• The high-low method is a simplified method of
computing the federal per diem rate for lodging and
meal expenses. It eliminates the need to keep a current
21 u spring 2008 issue
list of the per diem rate in effect for each city. Instead,
each travel location is considered either a high-cost
or low-cost destination, and there are two levels of per
diems depending on the travel destination. The 2008
high and low per diems are:
Lodging Expense
M&IE
Rate
Rate
Maximum
Per Diem
Rate
High-cost
locality
$179
$58
$237
Low-cost
locality
$107
$45
$152
The high and low-cost destinations for 2008 can be found in IRS Rev.
Proc. 2007-63.
Allowance Not Equal to Federal Rate
If the allowance for an employee is less than or equal to
the appropriate federal rate, the allowance is treated as
reimbursed under an accountable plan and is not included
in the employee’s taxable wages. If the allowance is
greater than the federal rate, the amount up to the federal
rate is excluded from the employee’s taxable wage under
an accountable plan but reported to the employee in box
12 (code L), Form W-2.
Incidental Expenses
Expenses included in the rate for meals and incidental
expenses are:
• Fees and tips given to porters, baggage carriers,
bellhops, hotel maids and others.
• Transportation between places of lodging or business
and places where meals are taken, if suitable meals
cannot be obtained at the temporary duty site.
• Mailing costs associated with filing travel vouchers and
payment of government charge card billings.
No Standard Deduction for Lodging
Employee Related to Employer
The per diem rates for meals can be used as a standard
meal allowance by both employees and self-employed
taxpayers for determining a deduction for unreimbursed
meal expenses. However, the per diem rates for
lodging are only used for purposes of determining the
amount of an employer reimbursement that meets
the accountable plan rules. Employees who are not
reimbursed by their employer and self-employed
taxpayers cannot use the per diem rates for lodging as a
means to determine a deduction for lodging. They must
use the actual expense method for this purpose.
If the employee is related to the employer, the employee
must still be able to prove expenses to the IRS even if
the expenses have been adequately accounted to the
employer under a per diem or car allowance plan and
any excess reimbursement is returned. For this rule,
an employee who directly or indirectly owns more than
10 percent of the stock in a corporation is considered
related to the employer.
Travel on First and Last Days of Trip
The per diem rate for meals must be prorated (a reduced
rate) on the first and last days of a trip. A taxpayer can
either claim three-fourths of the standard meal allowance
for each day or prorate the amount using any method that
is consistent and within reasonable business practice.
Non-Accountable Plan
Any form of reimbursement that does not meet the
accountable plan rules discussed above is a nonaccountable plan. All amounts paid, or treated as paid,
under a non-accountable plan are reported as wages
on Form W-2. The payments are subject to income
tax withholding, Social Security, Medicare and federal
unemployment taxes.
Questions? Contact:
Frank Hogg, CPA
Partner-in-Charge
Contractors Services Group
314-290-3413
[email protected]
22 u spring 2008 issue
INDUSTRy
u
Contractors
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
Use of Per Diems
A per diem is an allowance for travel, lodging, meals
and incidental expenses that is calculated based on the
number of days of an employee’s travel. An employer can
reimburse employees under an accountable plan based
on travel days, miles or some other fixed allowance.
The employee is considered to have accounted to the
employer the amount of the expense that does not
exceed the rates established by the federal government.
By using a per diem allowance, the employee is not
required to submit receipts to the employer to meet the
accountable plan rules. However, employees are still
required to substantiate the time, place and business
purpose of the trip.
Federal Per Diem Rates:
The federal rate can be figured using one of the
following:
• The regular federal per diem rate is defined as the
highest amount the federal government will pay to
its employees while away from home on travel. Rates
differ depending upon the travel location. The federal
government publishes the rates for each location
annually. The published rates are effective for the
period from Oct. 1 of one year to Sept. 30 of the next.
The rules allow employers to use the same rates for the
entire calendar year. The rates for 2008 can be found
in IRS Revenue Procedure 2007-63.
• The standard meal allowance is the meals and incidental
expenses portion of the regular federal per diem rate.
The standard meal allowance is the only per diem
allowed if the employer pays for or reimburses actual
lodging expenses or the employee is not reasonably
believed to have incurred any lodging expenses.
Whether the employer uses the regular federal per
diem rate to cover all expenses (including lodging)
or the standard meal allowance, the amount of the
reimbursement that represents the meals and incidental
expenses is subject to the 50 percent disallowance
of meal and entertainment expenses.
• The high-low method is a simplified method of
computing the federal per diem rate for lodging and
meal expenses. It eliminates the need to keep a current
21 u spring 2008 issue
list of the per diem rate in effect for each city. Instead,
each travel location is considered either a high-cost
or low-cost destination, and there are two levels of per
diems depending on the travel destination. The 2008
high and low per diems are:
Lodging Expense
M&IE
Rate
Rate
Maximum
Per Diem
Rate
High-cost
locality
$179
$58
$237
Low-cost
locality
$107
$45
$152
The high and low-cost destinations for 2008 can be found in IRS Rev.
Proc. 2007-63.
Allowance Not Equal to Federal Rate
If the allowance for an employee is less than or equal to
the appropriate federal rate, the allowance is treated as
reimbursed under an accountable plan and is not included
in the employee’s taxable wages. If the allowance is
greater than the federal rate, the amount up to the federal
rate is excluded from the employee’s taxable wage under
an accountable plan but reported to the employee in box
12 (code L), Form W-2.
Incidental Expenses
Expenses included in the rate for meals and incidental
expenses are:
• Fees and tips given to porters, baggage carriers,
bellhops, hotel maids and others.
• Transportation between places of lodging or business
and places where meals are taken, if suitable meals
cannot be obtained at the temporary duty site.
• Mailing costs associated with filing travel vouchers and
payment of government charge card billings.
No Standard Deduction for Lodging
Employee Related to Employer
The per diem rates for meals can be used as a standard
meal allowance by both employees and self-employed
taxpayers for determining a deduction for unreimbursed
meal expenses. However, the per diem rates for
lodging are only used for purposes of determining the
amount of an employer reimbursement that meets
the accountable plan rules. Employees who are not
reimbursed by their employer and self-employed
taxpayers cannot use the per diem rates for lodging as a
means to determine a deduction for lodging. They must
use the actual expense method for this purpose.
If the employee is related to the employer, the employee
must still be able to prove expenses to the IRS even if
the expenses have been adequately accounted to the
employer under a per diem or car allowance plan and
any excess reimbursement is returned. For this rule,
an employee who directly or indirectly owns more than
10 percent of the stock in a corporation is considered
related to the employer.
Travel on First and Last Days of Trip
The per diem rate for meals must be prorated (a reduced
rate) on the first and last days of a trip. A taxpayer can
either claim three-fourths of the standard meal allowance
for each day or prorate the amount using any method that
is consistent and within reasonable business practice.
Non-Accountable Plan
Any form of reimbursement that does not meet the
accountable plan rules discussed above is a nonaccountable plan. All amounts paid, or treated as paid,
under a non-accountable plan are reported as wages
on Form W-2. The payments are subject to income
tax withholding, Social Security, Medicare and federal
unemployment taxes.
Questions? Contact:
Frank Hogg, CPA
Partner-in-Charge
Contractors Services Group
314-290-3413
[email protected]
22 u spring 2008 issue
INDUSTRy
u
HOME BUILDERS
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
with another 5 percent decrease expected. There is
apparent capacity in many of the production facilities,
especially in the Southwest and Southeast, barring any
future hurricanes.
The NAHB is working very hard to lobby the Fed for
some additional short and long term interest rate
relief. If nothing else, these rate cuts should help the
psyche of the market and provide some much needed
good news.;
THE LOCAL MARKET
Surviving the
Market
NEWS FROM NAHB
“Survival” and “crisis” were the words most uttered by
those in attendance at the NAHB fall board meeting in
Seattle. There was certainly a serious tone as all in the
home building industry attempt to maneuver through
these challenging times. Only a few markets in the
country have not been affected by the downturn.
NAHB is now predicting the market may hit bottom
sometime in 2008, although all recent forecasts have
been off target. “Mortgage disruption,” as it is now
called, is a huge concern for an otherwise weakened
industry. The sub-prime market is virtually gone, and
the availability of credit has been limited, especially for
jumbo loans. While not as much of a problem locally, the
number of foreclosures that will impact the market and
compete with new home inventory is substantial.
Some good news – it appears raw material prices
nationally have fallen an average of 10 percent this year,
23 u spring 2008 issue
The market continues to sputter along. Despite time
periods of inconsistent sales, decent to good traffic,
and very attractive incentives, the home-buying public
continues to lack a sense of urgency to buy. It is
truly unfortunate given all the excellent opportunities
available to purchase. Also, for the first time, there
is a fear from potential buyers of swapping their
existing mortgage rate for one that is likely to be
substantially higher.
The local market showed signs of a slowdown
beginning in August 2005. Despite a few spurts in
the last two years, overall sales have decreased since
2005. Eventually there will be some pent-up demand
that should occur, especially given the reduction of
finished spec inventory. The slowdown in new projects
being developed also will help reduce the perceived
oversupply of lots.
withholding. The industry has worked well for a
variety of reasons with those treated as independent
contractors. Let’s hope there are no major changes.
• There seems to be some clarification forthcoming
on the definition of a “green builder” or a national
green building standard. NAHB has accelerated its
work on a National Green Building Program. It appears
there will be four to five levels of “green,” starting
with emerald and ending with bronze.
• NAHB has developed a help piece titled “Back to
Basics, NAHB’s Toolkit for a Challenging Market,”
which can be obtained by viewing NAHB.org –
good stuff!
• A slightly revised NAHB Chart-of-Accounts will be
published later this year.
What Can Be Done Now to
Survive the Crisis?
Create a Business Plan and Upgrade Systems and
Processes
• Strive to be the best you can be at your current level
of activity.
• Cross-train individuals to keep them productive and
better utilize resources.
• Walk your job sites to identify needless waste and
opportunities for savings.
• Remember, cash is king – treat it carefully!
Work with Professionals
• Ensure that your relationships with your bankers
are solid.
• Be sure to get ahead of your banker with your
forecast.
• Remove the element of surprise in your year-end
financial statements.
• Always work with a lawyer before signing contracts.
• Adjust insurance
production levels.
rates
based
on
your
new
Questions? Contact:
Steve Hays, CPA
Partner-in-Charge
Home Builders Services Group
314-290-3336
[email protected]
• Use this time to upgrade and improve your systems
and processes.
• Create a short-term (one-year) and a long-term
(five-year) plan.
Hays’ Bits
It remains even more imperative that all home builders,
lenders, suppliers and subcontractors work together to
navigate these challenging times.
• Include both your income statement results and a
period end balance sheet to monitor ratios like debt
to equity.
Stay tuned!
• Budget at a detailed level to remain accountable and
manage costs.
Builder Magazine America’s Best Builder Award.
Other News
• Update your short-term plan quarterly and your longterm plan annually.
that are consistent with these outstanding
• NAHB is concerned about Congress’s renewed efforts
to close what is perceived as the “Tax Gap,” i.e., what
is actually collected versus what is owed. Legislators
have increased resources to examine those in the
industry classified as “independent contractors.”
In particular, it is alleged or assumed that many of
these workers are treated as independent contractors
instead of employees to avoid the required
Manage Your Overhead
• Review your staffing levels versus your current,
short-term plan and long-term plan sales.
• Keep control of your developed lots and spec
inventory levels.
I was fortunate to serve as a judge again for
It is very interesting to see the characteristics
companies – mainly exceptional people,
processes and systems.
Heard a new term for a punchout
carpenter – “detail technician.”
• Review each detail income statement expense
account for cost savings.
24 u spring 2008 issue
INDUSTRy
u
HOME BUILDERS
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
with another 5 percent decrease expected. There is
apparent capacity in many of the production facilities,
especially in the Southwest and Southeast, barring any
future hurricanes.
The NAHB is working very hard to lobby the Fed for
some additional short and long term interest rate
relief. If nothing else, these rate cuts should help the
psyche of the market and provide some much needed
good news.;
THE LOCAL MARKET
Surviving the
Market
NEWS FROM NAHB
“Survival” and “crisis” were the words most uttered by
those in attendance at the NAHB fall board meeting in
Seattle. There was certainly a serious tone as all in the
home building industry attempt to maneuver through
these challenging times. Only a few markets in the
country have not been affected by the downturn.
NAHB is now predicting the market may hit bottom
sometime in 2008, although all recent forecasts have
been off target. “Mortgage disruption,” as it is now
called, is a huge concern for an otherwise weakened
industry. The sub-prime market is virtually gone, and
the availability of credit has been limited, especially for
jumbo loans. While not as much of a problem locally, the
number of foreclosures that will impact the market and
compete with new home inventory is substantial.
Some good news – it appears raw material prices
nationally have fallen an average of 10 percent this year,
23 u spring 2008 issue
The market continues to sputter along. Despite time
periods of inconsistent sales, decent to good traffic,
and very attractive incentives, the home-buying public
continues to lack a sense of urgency to buy. It is
truly unfortunate given all the excellent opportunities
available to purchase. Also, for the first time, there
is a fear from potential buyers of swapping their
existing mortgage rate for one that is likely to be
substantially higher.
The local market showed signs of a slowdown
beginning in August 2005. Despite a few spurts in
the last two years, overall sales have decreased since
2005. Eventually there will be some pent-up demand
that should occur, especially given the reduction of
finished spec inventory. The slowdown in new projects
being developed also will help reduce the perceived
oversupply of lots.
withholding. The industry has worked well for a
variety of reasons with those treated as independent
contractors. Let’s hope there are no major changes.
• There seems to be some clarification forthcoming
on the definition of a “green builder” or a national
green building standard. NAHB has accelerated its
work on a National Green Building Program. It appears
there will be four to five levels of “green,” starting
with emerald and ending with bronze.
• NAHB has developed a help piece titled “Back to
Basics, NAHB’s Toolkit for a Challenging Market,”
which can be obtained by viewing NAHB.org –
good stuff!
• A slightly revised NAHB Chart-of-Accounts will be
published later this year.
What Can Be Done Now to
Survive the Crisis?
Create a Business Plan and Upgrade Systems and
Processes
• Strive to be the best you can be at your current level
of activity.
• Cross-train individuals to keep them productive and
better utilize resources.
• Walk your job sites to identify needless waste and
opportunities for savings.
• Remember, cash is king – treat it carefully!
Work with Professionals
• Ensure that your relationships with your bankers
are solid.
• Be sure to get ahead of your banker with your
forecast.
• Remove the element of surprise in your year-end
financial statements.
• Always work with a lawyer before signing contracts.
• Adjust insurance
production levels.
rates
based
on
your
new
Questions? Contact:
Steve Hays, CPA
Partner-in-Charge
Home Builders Services Group
314-290-3336
[email protected]
• Use this time to upgrade and improve your systems
and processes.
• Create a short-term (one-year) and a long-term
(five-year) plan.
Hays’ Bits
It remains even more imperative that all home builders,
lenders, suppliers and subcontractors work together to
navigate these challenging times.
• Include both your income statement results and a
period end balance sheet to monitor ratios like debt
to equity.
Stay tuned!
• Budget at a detailed level to remain accountable and
manage costs.
Builder Magazine America’s Best Builder Award.
Other News
• Update your short-term plan quarterly and your longterm plan annually.
that are consistent with these outstanding
• NAHB is concerned about Congress’s renewed efforts
to close what is perceived as the “Tax Gap,” i.e., what
is actually collected versus what is owed. Legislators
have increased resources to examine those in the
industry classified as “independent contractors.”
In particular, it is alleged or assumed that many of
these workers are treated as independent contractors
instead of employees to avoid the required
Manage Your Overhead
• Review your staffing levels versus your current,
short-term plan and long-term plan sales.
• Keep control of your developed lots and spec
inventory levels.
I was fortunate to serve as a judge again for
It is very interesting to see the characteristics
companies – mainly exceptional people,
processes and systems.
Heard a new term for a punchout
carpenter – “detail technician.”
• Review each detail income statement expense
account for cost savings.
24 u spring 2008 issue
INDUSTRy
u
LAW FIRMS
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
Resources. Both human and financial resources are made
available to further the committee’s mission. Management
support is needed so committee members can take
time from engagements and other responsibilities. Meeting
expenses, research data and outside consultants may
be needed.
Staging. To ensure the support of the entire firm,
regular communication about the committee’s mission
and progress should be disseminated through the
firm and presentations made to the partners and other
firm leaders.
Staff
Committees
Can Help Law
Firms Retain
Top Talent
Who knows more about how to improve your firm’s
approach to recruiting, retaining and developing talent
than your current team members?
Your law firm’s partners participate in various committees
devoted to hiring, marketing, technology and
practice development. Does your firm have separate
committees that allow professional staff to help tackle
key firm issues?
If you haven’t yet created staff committees, it is definitely
an approach to consider at firms that want to improve
recruitment and retention. Giving staff the power to
explore these issues gives them a sense of ownership
and helps your firm develop talent.
Major firm committee areas that can benefit from
25 u spring 2008 issue
staff involvement include strategic planning, career
development, budgeting and engagement management,
information technology and corporate culture. Assistance
with orienting incoming employees is an obvious area in
which staff committees can help. Others to consider are
flex time programs, training and compensation.
Benefits are an excellent example of an area in which
staff input can help – and perhaps even surprise your
firm’s leadership. You may find, for instance, that staff
highly value family health care coverage and are willing
to forego or reduce other benefits so that the firm is able
to contribute more to that benefit.
Another area is the 401(k) plan match and duration of
time for entry to the plan. Staff can let you know what
makes the most sense to them. The firm may be able to
deploy valuable resources in other directions as a result.
Like all good ideas, results depend upon execution.
If staff committees are used, they should address the
following:
Mission. Each committee must focus on a welldefined need.
Leadership. The committee chair drives the committee’s
mission. A partner or senior leader, such as the firm
administrator, is responsible for overseeing and directing
the committee’s activities.
Structure. The committee should report to the managing
partner, firm administrator or another partner identified
as being in charge of the particular committee. The topic
of the committee will affect this choice: for instance, the
firm administrator is probably the logical person to oversee
a committee on benefits.
Other steps to take to keep committees on track include:
• Evaluating members’ participation to make sure they
are contributing to the committee’s mission.
• Establishing goals and routinely communicating
progress toward reaching them.
• Making sure committee activities aren’t competing
or redundant.
• Reviewing each committee’s mission to make sure it’s
on course; if it isn’t, it is quickly disbanded.
Establishing staff committees can not only help your firm
develop and retain talent, but also can increase your
firm’s profits.
Questions? Contact:
Don Esstman, CPA
Partner-in-Charge
Law Firms Services Group
314.290.3384
[email protected]
26 u spring 2008 issue
INDUSTRy
u
LAW FIRMS
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
Resources. Both human and financial resources are made
available to further the committee’s mission. Management
support is needed so committee members can take
time from engagements and other responsibilities. Meeting
expenses, research data and outside consultants may
be needed.
Staging. To ensure the support of the entire firm,
regular communication about the committee’s mission
and progress should be disseminated through the
firm and presentations made to the partners and other
firm leaders.
Staff
Committees
Can Help Law
Firms Retain
Top Talent
Who knows more about how to improve your firm’s
approach to recruiting, retaining and developing talent
than your current team members?
Your law firm’s partners participate in various committees
devoted to hiring, marketing, technology and
practice development. Does your firm have separate
committees that allow professional staff to help tackle
key firm issues?
If you haven’t yet created staff committees, it is definitely
an approach to consider at firms that want to improve
recruitment and retention. Giving staff the power to
explore these issues gives them a sense of ownership
and helps your firm develop talent.
Major firm committee areas that can benefit from
25 u spring 2008 issue
staff involvement include strategic planning, career
development, budgeting and engagement management,
information technology and corporate culture. Assistance
with orienting incoming employees is an obvious area in
which staff committees can help. Others to consider are
flex time programs, training and compensation.
Benefits are an excellent example of an area in which
staff input can help – and perhaps even surprise your
firm’s leadership. You may find, for instance, that staff
highly value family health care coverage and are willing
to forego or reduce other benefits so that the firm is able
to contribute more to that benefit.
Another area is the 401(k) plan match and duration of
time for entry to the plan. Staff can let you know what
makes the most sense to them. The firm may be able to
deploy valuable resources in other directions as a result.
Like all good ideas, results depend upon execution.
If staff committees are used, they should address the
following:
Mission. Each committee must focus on a welldefined need.
Leadership. The committee chair drives the committee’s
mission. A partner or senior leader, such as the firm
administrator, is responsible for overseeing and directing
the committee’s activities.
Structure. The committee should report to the managing
partner, firm administrator or another partner identified
as being in charge of the particular committee. The topic
of the committee will affect this choice: for instance, the
firm administrator is probably the logical person to oversee
a committee on benefits.
Other steps to take to keep committees on track include:
• Evaluating members’ participation to make sure they
are contributing to the committee’s mission.
• Establishing goals and routinely communicating
progress toward reaching them.
• Making sure committee activities aren’t competing
or redundant.
• Reviewing each committee’s mission to make sure it’s
on course; if it isn’t, it is quickly disbanded.
Establishing staff committees can not only help your firm
develop and retain talent, but also can increase your
firm’s profits.
Questions? Contact:
Don Esstman, CPA
Partner-in-Charge
Law Firms Services Group
314.290.3384
[email protected]
26 u spring 2008 issue
INDUSTRy
u
MANUFACTURING & DISTRIBUTION
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
Driving
Financial
Performance
with Standard
Cost
Companies already using a standard cost accounting
system have a tool at their disposal to drive business
performance. There is no need to add costly performance
management systems to measure progress toward
achieving your strategic goals. When standards are
set with the strategic initiatives in mind, variance
analysis provides the information to track your progress.
Tying incentive pay programs to the variances also
focuses management’s attention on achieving the
strategic objectives.
Initially, the standard costs need to reflect the strategic
initiatives of your company. For example, the strategic
planning process results in the anticipation that the
direct materials cost can be reduced by 5 percent. This
reduction would be reflected in the standard costs
by reducing the standard cost of purchased parts by
5 percent. Most accounting systems have a global
update procedure that can perform such a function,
or the standards could be exported to a spreadsheet
or database where a global update could be done
and then imported back into the accounting system.
Another example would be establishing a goal of a 10
percent increase in efficiency, in which case the hours on
routing could be reduced by 10 percent across the
manufacturing departments.
Apart from normal budget to actual variance analysis,
the performance of key departments like manufacturing
and purchasing can be monitored using standard cost
variances. To fully benefit from the variances generated
27 u spring 2008 issue
For goals to be
effective, they
must be specific,
measurable,
attainable,
results-oriented
and time-based.
in a standard cost environment, the income statement
must break out the variances – purchase price variance,
inventory adjustments, usage variance, material
burden variance, and labor and overhead efficiency
and rate variances.
Purchase price variance is the difference between the
standard cost and the actual price paid. Usage variance
reflects the difference in the amount of raw materials
consumed versus what is called for on the bill of material.
Any additional usage differences will be caught during
cycle counts or the physical inventory and appear as
inventory adjustments. The material burden variance
would include overhead activities associated with
acquiring and handling purchased materials, such as
the purchasing department and the receiving
department. Efficiency and rate variances often are
lumped together in the under/over absorption line on
the income statement. To break these out, your
accountant will need to use actual hours, standard
hours, actual rates and standard rates to compute.
Management’s incentive plans can be set to achieve
these goals. The purchasing department could
be incentivized to achieve the 5 percent reduction
in material cost. Progress toward the goal can
be monitored by evaluating the purchase price
variance. Likewise, the production management
could
be
incented
to
achieve
efficiency
improvements and progress would be monitored by
the efficiency variance. In both cases, the cost of
attaining these goals could be monitored by looking
at the material burden variance and manufacturing
rate variances (both labor and overhead variances),
which would compare the standard unit cost for these
departments to the actual costs incurred.
For goals to be effective, they must be specific,
measurable, attainable, results-oriented and timebased. A monthly reporting from your standard costing
system provides you with the feedback and
monitoring system to judge performance. When the
strategic objectives are tied to compensation plans
and monitored with a timely reporting system using
standard cost, they create a powerful system for
achieving your company’s goals.
Questions? Contact:
Mike Lewis, CPA
Partner-in-Charge
Manufacturing & Distribution Services Group
314-290-3391
[email protected]
or
Rick Feldt, CPA
Partner
Manufacturing & Distribution Services Group
314-290-3220
[email protected]
28 u spring 2008 issue
INDUSTRy
u
MANUFACTURING & DISTRIBUTION
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
Driving
Financial
Performance
with Standard
Cost
Companies already using a standard cost accounting
system have a tool at their disposal to drive business
performance. There is no need to add costly performance
management systems to measure progress toward
achieving your strategic goals. When standards are
set with the strategic initiatives in mind, variance
analysis provides the information to track your progress.
Tying incentive pay programs to the variances also
focuses management’s attention on achieving the
strategic objectives.
Initially, the standard costs need to reflect the strategic
initiatives of your company. For example, the strategic
planning process results in the anticipation that the
direct materials cost can be reduced by 5 percent. This
reduction would be reflected in the standard costs
by reducing the standard cost of purchased parts by
5 percent. Most accounting systems have a global
update procedure that can perform such a function,
or the standards could be exported to a spreadsheet
or database where a global update could be done
and then imported back into the accounting system.
Another example would be establishing a goal of a 10
percent increase in efficiency, in which case the hours on
routing could be reduced by 10 percent across the
manufacturing departments.
Apart from normal budget to actual variance analysis,
the performance of key departments like manufacturing
and purchasing can be monitored using standard cost
variances. To fully benefit from the variances generated
27 u spring 2008 issue
For goals to be
effective, they
must be specific,
measurable,
attainable,
results-oriented
and time-based.
in a standard cost environment, the income statement
must break out the variances – purchase price variance,
inventory adjustments, usage variance, material
burden variance, and labor and overhead efficiency
and rate variances.
Purchase price variance is the difference between the
standard cost and the actual price paid. Usage variance
reflects the difference in the amount of raw materials
consumed versus what is called for on the bill of material.
Any additional usage differences will be caught during
cycle counts or the physical inventory and appear as
inventory adjustments. The material burden variance
would include overhead activities associated with
acquiring and handling purchased materials, such as
the purchasing department and the receiving
department. Efficiency and rate variances often are
lumped together in the under/over absorption line on
the income statement. To break these out, your
accountant will need to use actual hours, standard
hours, actual rates and standard rates to compute.
Management’s incentive plans can be set to achieve
these goals. The purchasing department could
be incentivized to achieve the 5 percent reduction
in material cost. Progress toward the goal can
be monitored by evaluating the purchase price
variance. Likewise, the production management
could
be
incented
to
achieve
efficiency
improvements and progress would be monitored by
the efficiency variance. In both cases, the cost of
attaining these goals could be monitored by looking
at the material burden variance and manufacturing
rate variances (both labor and overhead variances),
which would compare the standard unit cost for these
departments to the actual costs incurred.
For goals to be effective, they must be specific,
measurable, attainable, results-oriented and timebased. A monthly reporting from your standard costing
system provides you with the feedback and
monitoring system to judge performance. When the
strategic objectives are tied to compensation plans
and monitored with a timely reporting system using
standard cost, they create a powerful system for
achieving your company’s goals.
Questions? Contact:
Mike Lewis, CPA
Partner-in-Charge
Manufacturing & Distribution Services Group
314-290-3391
[email protected]
or
Rick Feldt, CPA
Partner
Manufacturing & Distribution Services Group
314-290-3220
[email protected]
28 u spring 2008 issue
INDUSTRy
u
MORTGAGE BANKERS
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
Several local lenders
have done a good job of
establishing specialized
niches within the
marketplace, and this
differentiation will remain
crucial for capitalizing on
opportunities in 2008.
A Challenging
Year for
Originations
Originators continued to struggle in 2007 under very tough
market conditions. A poor housing market, combined
with turmoil in the credit markets, resulted in double-digit
declines in originations in 2007. Although final numbers
have not yet been published, the consensus among
Mortgage Bankers Association of America and Fannie
Mae economists is that 2007 origination volume will be
down approximately 15 percent from 2006 levels.
Our early indications are that St. Louis lenders’ total
origination activity will be down approximately 12 percent
in 2007. Sales of new and existing homes remained
very sluggish in 2007. The turmoil in the credit markets,
which resulted in tighter lending standards and fewer
mortgage products, certainly hurt the housing market
this past year. Unfortunately, the projected declines in
29 u spring 2008 issue
2007 total origination activity are on top of significant
decreases in 2006. As a result, we anticipate that
St. Louis originations for 2007 will be at their lowest level
since 2000.
Purchase originations will be leading the decline in 2007.
Our early indications are that purchase originations
in St. Louis will be down approximately 15 percent
in 2007. This projected decrease in 2007 follows an
approximate 10 percent decline in 2006 in St. Louis
purchase originations.
The one bright spot in the origination landscape may be
refinance activity. As we neared the end of 2007, the yield
on the benchmark 10-year Treasury note moved toward
4 percent. This change should provide an increase in
normal rate-based refinancings of fixed rate mortgages.
In addition, a significant number of loans will face resets
toward the beginning of 2008. Hopefully, interest rate cuts
by the Federal Reserve will restore more liquidity to the
financial markets and provide meaningful opportunities
for refinance activity.
Although refinance activity appeared promising toward
the end of 2007, refinancings for the entire year were
sluggish. At this point, RubinBrown’s indications are
that refinance originations in St. Louis will decline
approximately 10 percent in 2007. Refinance activity
for most of 2007 consisted of cash-out refinancings
and the conversion of upward-adjusting adjustable
rate mortgages into fixed rate mortgages or other
loan products.
Unfortunately, the decline in origination volume over
the past several years also has been combined with
continued erosion of profit margins (i.e., gain on sale
percentage). With the end of 2007, the industry has
now completed its fourth full year in the post-refinance
landscape. Despite being four years removed from the
peak refinance year of 2003, there is no question that
overcapacity remains an issue within the industry. The
turmoil in the credit markets during 2007 has resulted in
more lenders struggling and going out of business. In
addition, more lenders are requiring significant capital
infusions in order to maintain their operations. Even with
many lenders struggling, competition within the industry
in 2007 remained intense.
In addition to profit margins, the cost side of the equation
needs to be constantly monitored. We continue to
recommend that lenders be very deliberate in adding
overhead costs in the near future. Most lenders have
done a relatively good job of adjusting their cost
structures to the current origination environment. The
key is managing overhead expenditures in the context of
projected origination activity. This short-term perspective
on cost containment, however, must be balanced against
a longer-term investment in certain core employee and
other infrastructure costs. Investments in these costs will
be crucial to prospering when market conditions become
more favorable.
In terms of the outlook for 2008, it is easy to be discouraged
by the forecasts of many of the national economists.
Projections of double-digit declines in origination activity
in 2008 are relatively common. Hopefully, the housing
market will begin to recover in 2008 and credit markets
will stabilize. In addition, as we discussed earlier, the
opportunities for refinance activity appear promising for
early 2008.
In order to capitalize on whatever opportunities are
present, we continue to emphasize one key factor for
success in 2008. It is critical that mortgage lenders
differentiate themselves in some manner from their
competition. Unfortunately, overcapacity remains an issue
within the industry, and there are still too many lenders
chasing too few loans. Several local lenders have done
a good job of establishing specialized niches within the
marketplace, and this differentiation will remain crucial
for capitalizing on opportunities in 2008.
Questions? Contact:
Frank Hogg, CPA
Partner-in-Charge
Mortgage Bankers Services Group
314-290-3413
[email protected]
As a result, we anticipate that profit margins will decline
several basis points in 2007. This projected decrease
is on top of significant decreases for the period of 2004
through 2006. We have noted that this erosion of profit
margins has been gradually slowing and will hopefully
stabilize in the upcoming year.
30 u spring 2008 issue
INDUSTRy
u
MORTGAGE BANKERS
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
Several local lenders
have done a good job of
establishing specialized
niches within the
marketplace, and this
differentiation will remain
crucial for capitalizing on
opportunities in 2008.
A Challenging
Year for
Originations
Originators continued to struggle in 2007 under very tough
market conditions. A poor housing market, combined
with turmoil in the credit markets, resulted in double-digit
declines in originations in 2007. Although final numbers
have not yet been published, the consensus among
Mortgage Bankers Association of America and Fannie
Mae economists is that 2007 origination volume will be
down approximately 15 percent from 2006 levels.
Our early indications are that St. Louis lenders’ total
origination activity will be down approximately 12 percent
in 2007. Sales of new and existing homes remained
very sluggish in 2007. The turmoil in the credit markets,
which resulted in tighter lending standards and fewer
mortgage products, certainly hurt the housing market
this past year. Unfortunately, the projected declines in
29 u spring 2008 issue
2007 total origination activity are on top of significant
decreases in 2006. As a result, we anticipate that
St. Louis originations for 2007 will be at their lowest level
since 2000.
Purchase originations will be leading the decline in 2007.
Our early indications are that purchase originations
in St. Louis will be down approximately 15 percent
in 2007. This projected decrease in 2007 follows an
approximate 10 percent decline in 2006 in St. Louis
purchase originations.
The one bright spot in the origination landscape may be
refinance activity. As we neared the end of 2007, the yield
on the benchmark 10-year Treasury note moved toward
4 percent. This change should provide an increase in
normal rate-based refinancings of fixed rate mortgages.
In addition, a significant number of loans will face resets
toward the beginning of 2008. Hopefully, interest rate cuts
by the Federal Reserve will restore more liquidity to the
financial markets and provide meaningful opportunities
for refinance activity.
Although refinance activity appeared promising toward
the end of 2007, refinancings for the entire year were
sluggish. At this point, RubinBrown’s indications are
that refinance originations in St. Louis will decline
approximately 10 percent in 2007. Refinance activity
for most of 2007 consisted of cash-out refinancings
and the conversion of upward-adjusting adjustable
rate mortgages into fixed rate mortgages or other
loan products.
Unfortunately, the decline in origination volume over
the past several years also has been combined with
continued erosion of profit margins (i.e., gain on sale
percentage). With the end of 2007, the industry has
now completed its fourth full year in the post-refinance
landscape. Despite being four years removed from the
peak refinance year of 2003, there is no question that
overcapacity remains an issue within the industry. The
turmoil in the credit markets during 2007 has resulted in
more lenders struggling and going out of business. In
addition, more lenders are requiring significant capital
infusions in order to maintain their operations. Even with
many lenders struggling, competition within the industry
in 2007 remained intense.
In addition to profit margins, the cost side of the equation
needs to be constantly monitored. We continue to
recommend that lenders be very deliberate in adding
overhead costs in the near future. Most lenders have
done a relatively good job of adjusting their cost
structures to the current origination environment. The
key is managing overhead expenditures in the context of
projected origination activity. This short-term perspective
on cost containment, however, must be balanced against
a longer-term investment in certain core employee and
other infrastructure costs. Investments in these costs will
be crucial to prospering when market conditions become
more favorable.
In terms of the outlook for 2008, it is easy to be discouraged
by the forecasts of many of the national economists.
Projections of double-digit declines in origination activity
in 2008 are relatively common. Hopefully, the housing
market will begin to recover in 2008 and credit markets
will stabilize. In addition, as we discussed earlier, the
opportunities for refinance activity appear promising for
early 2008.
In order to capitalize on whatever opportunities are
present, we continue to emphasize one key factor for
success in 2008. It is critical that mortgage lenders
differentiate themselves in some manner from their
competition. Unfortunately, overcapacity remains an issue
within the industry, and there are still too many lenders
chasing too few loans. Several local lenders have done
a good job of establishing specialized niches within the
marketplace, and this differentiation will remain crucial
for capitalizing on opportunities in 2008.
Questions? Contact:
Frank Hogg, CPA
Partner-in-Charge
Mortgage Bankers Services Group
314-290-3413
[email protected]
As a result, we anticipate that profit margins will decline
several basis points in 2007. This projected decrease
is on top of significant decreases for the period of 2004
through 2006. We have noted that this erosion of profit
margins has been gradually slowing and will hopefully
stabilize in the upcoming year.
30 u spring 2008 issue
INDUSTRy
u
NOT-FOR-PROFIT
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
Tax Assessors
and
Not-for-Profits
While most not-for-profits assume they are exempt from
property taxation, the mere fact that they have been
granted exempt status by the Internal Revenue Service
or by a state-level taxing agency such as Missouri’s
Department of Revenue does not guarantee exemption
from property taxes. The local property tax assessor
applies a higher standard in determining whether to grant
exempt status. In recent years, as a result of pressure
to increase the value of property on the tax rolls, tax
assessors have increased their scrutiny of organizations
seeking or enjoying exemption from taxation.
If an assessor requests operational data regarding the
business that owns or operates exempt property, it is
imperative that the request be promptly reviewed and
the appropriate response submitted. Exemption from
taxation requires the entity requesting the exemption
to prove that it qualifies for the exemption. Failure to
respond in a timely manner may cause the exemption
to be revoked pending proof of qualification for the
exemption. It is far easier to convince the assessor
before there is a revocation than to undo the revocation
before a review panel.
2) be owned and operated on a not-for-profit basis, and
As the legal requirements for
exemption from property taxation
vary by state, it is recommended
that the laws of each state be
reviewed with a tax professional
rather than assuming the
organization automatically qualifies
for the exemption.
3)must be for the benefit of an indefinite number of
individuals or society in general.
Questions? Contact:
In Missouri, like most states, the exemption from property
taxation is granted by the state constitution. In Missouri,
the exemption is limited to property “not held for private
or corporate profit and used exclusively for religious
worship, for schools and colleges, for purposes purely
charitable, for agricultural and horticultural societies, or
for veterans’ organizations.”
The Missouri Supreme Court has established a
three-part test to define the exemption. The test requires
the property:
1) be used exclusively for purposes purely charitable,
Assessors have looked at various aspects of property use
and the organizations that operate those properties. For
example, organizations operating health care facilities
must use judgment in the collection of fees charged for
services received by patients. Aggressive tactics such
as the use of a collection agency to recover unpaid bills
have been viewed as lacking the charitable intent of the
exemption provisions of the law. Although there is no
clear definition of what would cause the revocation of the
31 u spring 2008 issue
exemption, clearly an entity that has profits that greatly
exceed the value of its charitable acts may not represent a
charitable organization. Similarly, a limitation that restricts
the general public from using the property creates the
circumstance under which an assessor could determine
a property is not of benefit to the general public.
Judy Murphy, CPA
Partner-in-Charge
Not-for-Profit Services Group
314-290-3496
[email protected]
Major Changes
to Form 990
In December 2007, the IRS released a
redesigned version of the Form 990. This is
the first major revision of the Form 990 since
1979. For most organizations, this new form
and related schedules must be used for
the 2008 tax year, i.e., returns filed in 2009.
However, the IRS has established a graduated
transition period for organizations with gross
receipts under $1 million as well as new
schedules for tax-exempt bonds and hospitals.
This revision has been expected. As discussed
in the fall 2007 issue of Horizons, the IRS
issued a draft of the proposed revision on
June 14, 2007, with a 90-day comment period.
The IRS received nearly 3,000 pages of
comments related to the draft. Based on these
comments and input from numerous nonprofit
experts and state regulators, the IRS changed
some of the proposed revisions to the form.
The IRS believes this input helped create a
final form that achieves its guiding principles
of transparency, compliance and burden
minimization.
For additional details, our most recent
“Focus on Not-for-Profits” e-newsletter,
and a copy of the revised Form 990, visit
our Web site, www.rubinbrown.com.
32 u spring 2008 issue
INDUSTRy
u
NOT-FOR-PROFIT
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
Tax Assessors
and
Not-for-Profits
While most not-for-profits assume they are exempt from
property taxation, the mere fact that they have been
granted exempt status by the Internal Revenue Service
or by a state-level taxing agency such as Missouri’s
Department of Revenue does not guarantee exemption
from property taxes. The local property tax assessor
applies a higher standard in determining whether to grant
exempt status. In recent years, as a result of pressure
to increase the value of property on the tax rolls, tax
assessors have increased their scrutiny of organizations
seeking or enjoying exemption from taxation.
If an assessor requests operational data regarding the
business that owns or operates exempt property, it is
imperative that the request be promptly reviewed and
the appropriate response submitted. Exemption from
taxation requires the entity requesting the exemption
to prove that it qualifies for the exemption. Failure to
respond in a timely manner may cause the exemption
to be revoked pending proof of qualification for the
exemption. It is far easier to convince the assessor
before there is a revocation than to undo the revocation
before a review panel.
2) be owned and operated on a not-for-profit basis, and
As the legal requirements for
exemption from property taxation
vary by state, it is recommended
that the laws of each state be
reviewed with a tax professional
rather than assuming the
organization automatically qualifies
for the exemption.
3)must be for the benefit of an indefinite number of
individuals or society in general.
Questions? Contact:
In Missouri, like most states, the exemption from property
taxation is granted by the state constitution. In Missouri,
the exemption is limited to property “not held for private
or corporate profit and used exclusively for religious
worship, for schools and colleges, for purposes purely
charitable, for agricultural and horticultural societies, or
for veterans’ organizations.”
The Missouri Supreme Court has established a
three-part test to define the exemption. The test requires
the property:
1) be used exclusively for purposes purely charitable,
Assessors have looked at various aspects of property use
and the organizations that operate those properties. For
example, organizations operating health care facilities
must use judgment in the collection of fees charged for
services received by patients. Aggressive tactics such
as the use of a collection agency to recover unpaid bills
have been viewed as lacking the charitable intent of the
exemption provisions of the law. Although there is no
clear definition of what would cause the revocation of the
31 u spring 2008 issue
exemption, clearly an entity that has profits that greatly
exceed the value of its charitable acts may not represent a
charitable organization. Similarly, a limitation that restricts
the general public from using the property creates the
circumstance under which an assessor could determine
a property is not of benefit to the general public.
Judy Murphy, CPA
Partner-in-Charge
Not-for-Profit Services Group
314-290-3496
[email protected]
Major Changes
to Form 990
In December 2007, the IRS released a
redesigned version of the Form 990. This is
the first major revision of the Form 990 since
1979. For most organizations, this new form
and related schedules must be used for
the 2008 tax year, i.e., returns filed in 2009.
However, the IRS has established a graduated
transition period for organizations with gross
receipts under $1 million as well as new
schedules for tax-exempt bonds and hospitals.
This revision has been expected. As discussed
in the fall 2007 issue of Horizons, the IRS
issued a draft of the proposed revision on
June 14, 2007, with a 90-day comment period.
The IRS received nearly 3,000 pages of
comments related to the draft. Based on these
comments and input from numerous nonprofit
experts and state regulators, the IRS changed
some of the proposed revisions to the form.
The IRS believes this input helped create a
final form that achieves its guiding principles
of transparency, compliance and burden
minimization.
For additional details, our most recent
“Focus on Not-for-Profits” e-newsletter,
and a copy of the revised Form 990, visit
our Web site, www.rubinbrown.com.
32 u spring 2008 issue
INDUSTRy
u
PUBLIC SECTOR
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
Rubin Brown
Public Sector
Group
Issues First
Benchmarking
Survey
In October 2007, RubinBrown’s 2006 Financial Ratio
Study for Municipalities was released. As auditors for
many municipal governments, it was always frustrating
not to have benchmarking information available to
help government officials see how they were doing as
compared to their peers. We often heard from our clients
that they would like to see how they matched up against
similar governments. The study included statistical
financial results for municipalities in both the St. Louis
and Kansas City metropolitan areas, focusing on cities
with populations greater than 5,000. For purposes of
this study, metropolitan St. Louis included municipalities
in both Missouri and Illinois; metropolitan Kansas City
included municipalities in both Kansas and Missouri.
Methodology
RubinBrown team members contacted the finance officers
from the selected municipalities, requesting financial
information for the ratio calculations. Financial information
was then collected from the 2006 Comprehensive Annual
Financial Report or 2006 Audited Financial Statement if
no CAFR was prepared. All municipalities included in the
study prepare financial statements in accordance with
generally accepted accounting principles. Key financial
ratios were calculated in three categories: governmentwide (governmental activities only), governmental funds
and general fund information.
33 u spring 2008 issue
The following shows a breakdown of participating
municipalities by location:
• Debt per capita averaged $1,093, which represents
the debt burden on each citizen.
• Tax revenues per capita averaged $705, while expenses
per capita averaged $842, showing the need for other
types of revenue, like charges for services and grants.
Municipalities
Participating
Metro
St. Louis
Metro
Kansas City
Total
30
13
43
Format of the Report
The ratio results were presented separately for the
St. Louis and Kansas City metropolitan areas. Information
for the St. Louis metropolitan area was further segmented
by population greater than or less than 20,000. The
Kansas City information was not segmented; however,
the average population of the metro Kansas City
municipalities was 57,600.
For each ratio presented, the report gave information
both by quartile and average. The computed values
for each ratio were sorted from most favorable to least
favorable, and quartiles were determined. A description
and interpretation of the ratios also were provided.
Analysis
In the St. Louis area, we noted that, on average,
municipalities experienced the following:
• A 13 percent increase in their government-wide net
assets, representing a very healthy improvement in the
financial condition of those cities.
• 90 percent of the respondents experienced an increase
in net assets and experienced positive interperiod
equity and, on average, revenues exceeded expenses
at a clip of 1.2 times.
• An aging infrastructure exists because, on average,
accumulated depreciation on assets approximated
42 percent of the cost, and cities in the region
may be experiencing significant replacement cost in
the future.
• Debt to assets, which shows how leveraged the cities’
capital assets are, averaged .41 times.
• Total grants and other non-tax revenues represented
an average of 12 percent of total revenues, so cities are
somewhat reliant on revenues from external sources.
• Public safety expenses are always the largest functional
expense and, on average, comprised 35 percent of
total expenditures.
• Debt service expenditures at the fund level use an
average of up to 14 percent of total revenues that
potentially could be used for services.
• Also on a fund basis, capital expenditures as a percent
of total expenditures averaged 16 percent, which
represents the government’s commitment to adequately
provide for its capital asset needs.
• On a fund basis, the unreserved fund balance amounted
to, on average, a healthy 46 percent of revenues,
which shows that most cities can weather a temporary
shortfall in revenues.
For the Kansas City governments participating in the
survey, we noted very similar averages to St Louis,
as follows:
• A 7 percent increase in their government-wide net
assets, also representing a very healthy improvement
in the financial condition of those cities.
• 78 percent of the respondents experienced an increase
in net assets and experienced positive interperiod
equity in 2006 and, on average, revenues exceeded
expenses at a clip of 1.2 times.
• A younger aged infrastructure exists because
accumulated depreciation on assets averaged
approximately 34 percent of the cost, and cities
in the region currently are addressing their
replacement cost.
34 u spring 2008 issue
INDUSTRy
u
PUBLIC SECTOR
knowledge. commitment. value.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
Rubin Brown
Public Sector
Group
Issues First
Benchmarking
Survey
In October 2007, RubinBrown’s 2006 Financial Ratio
Study for Municipalities was released. As auditors for
many municipal governments, it was always frustrating
not to have benchmarking information available to
help government officials see how they were doing as
compared to their peers. We often heard from our clients
that they would like to see how they matched up against
similar governments. The study included statistical
financial results for municipalities in both the St. Louis
and Kansas City metropolitan areas, focusing on cities
with populations greater than 5,000. For purposes of
this study, metropolitan St. Louis included municipalities
in both Missouri and Illinois; metropolitan Kansas City
included municipalities in both Kansas and Missouri.
Methodology
RubinBrown team members contacted the finance officers
from the selected municipalities, requesting financial
information for the ratio calculations. Financial information
was then collected from the 2006 Comprehensive Annual
Financial Report or 2006 Audited Financial Statement if
no CAFR was prepared. All municipalities included in the
study prepare financial statements in accordance with
generally accepted accounting principles. Key financial
ratios were calculated in three categories: governmentwide (governmental activities only), governmental funds
and general fund information.
33 u spring 2008 issue
The following shows a breakdown of participating
municipalities by location:
• Debt per capita averaged $1,093, which represents
the debt burden on each citizen.
• Tax revenues per capita averaged $705, while expenses
per capita averaged $842, showing the need for other
types of revenue, like charges for services and grants.
Municipalities
Participating
Metro
St. Louis
Metro
Kansas City
Total
30
13
43
Format of the Report
The ratio results were presented separately for the
St. Louis and Kansas City metropolitan areas. Information
for the St. Louis metropolitan area was further segmented
by population greater than or less than 20,000. The
Kansas City information was not segmented; however,
the average population of the metro Kansas City
municipalities was 57,600.
For each ratio presented, the report gave information
both by quartile and average. The computed values
for each ratio were sorted from most favorable to least
favorable, and quartiles were determined. A description
and interpretation of the ratios also were provided.
Analysis
In the St. Louis area, we noted that, on average,
municipalities experienced the following:
• A 13 percent increase in their government-wide net
assets, representing a very healthy improvement in the
financial condition of those cities.
• 90 percent of the respondents experienced an increase
in net assets and experienced positive interperiod
equity and, on average, revenues exceeded expenses
at a clip of 1.2 times.
• An aging infrastructure exists because, on average,
accumulated depreciation on assets approximated
42 percent of the cost, and cities in the region
may be experiencing significant replacement cost in
the future.
• Debt to assets, which shows how leveraged the cities’
capital assets are, averaged .41 times.
• Total grants and other non-tax revenues represented
an average of 12 percent of total revenues, so cities are
somewhat reliant on revenues from external sources.
• Public safety expenses are always the largest functional
expense and, on average, comprised 35 percent of
total expenditures.
• Debt service expenditures at the fund level use an
average of up to 14 percent of total revenues that
potentially could be used for services.
• Also on a fund basis, capital expenditures as a percent
of total expenditures averaged 16 percent, which
represents the government’s commitment to adequately
provide for its capital asset needs.
• On a fund basis, the unreserved fund balance amounted
to, on average, a healthy 46 percent of revenues,
which shows that most cities can weather a temporary
shortfall in revenues.
For the Kansas City governments participating in the
survey, we noted very similar averages to St Louis,
as follows:
• A 7 percent increase in their government-wide net
assets, also representing a very healthy improvement
in the financial condition of those cities.
• 78 percent of the respondents experienced an increase
in net assets and experienced positive interperiod
equity in 2006 and, on average, revenues exceeded
expenses at a clip of 1.2 times.
• A younger aged infrastructure exists because
accumulated depreciation on assets averaged
approximately 34 percent of the cost, and cities
in the region currently are addressing their
replacement cost.
34 u spring 2008 issue
INDUSTRy
u
The knowledge you need.
PUBLIC SECTOR
Public Sector Group Issues First Benchmarking Survey (cont.)
• Debt to assets, which shows how leveraged the cities
capital assets are, averaged 0.27 times.
• Debt per capita averaged $887, which represents the
debt burden on each citizen.
• Tax revenues per capita averaged $608, while expenses
per capita averaged $859, showing the need for other
types of revenue like charges for services and grants.
• Total grants and other non-tax revenues represented an
average of 24 percent of total revenues, so these cities
are more reliant on revenues from external sources.
• Public safety expenses are always the largest functional
expense and, on average, comprised 35 percent of
total expenditures.
• Debt service expenditures at the fund level use an
average of up to 15 percent of total revenues that
potentially could be used for services.
The commitment you expect. The value you deserve.
• Also on a fund basis, capital expenditures as a percent
of total expenditures averaged 32 percent, which
represents the government’s commitment to adequately
provide for its capital asset needs.
• On a fund basis, unreserved fund balance amounted
to a healthy average of 39 percent of revenues, which
shows that most cities can weather a temporary shortfall
in revenues.
For more than half a century, RubinBrown has been making a lasting mark on
business. Our unique, one-firm approach means you benefit from the best of both
worlds – specialized expertise and comprehensive services. All designed to deliver
A complete copy of the statistical analysis can be found
on our Web site at www.rubinbrown.com.
the kind of insights and solutions you need to succeed.
Questions? Contact:
A passionate, professional team. A one-firm approach to service excellence.
It’s how we bring real value to our clients. And it’s why they remain clients for
decades, not just years. That’s the RubinBrown difference.
Jeff Winter, CPA, CGFM
Partner-in-Charge
Public Sector Services Group
314-290-3408
[email protected]
www.RubinBrown.com
Certified Public Accountants and Business Consultants
Knowledge. Commitment. Value.
Assurance | Internal Audit | Litigation Support | Qualified Plan Audit | SEC Advisory | Small Business
35 u spring 2008 issue
State and Local Tax | Tax and Compliance | Valuations | Wealth Management
INDUSTRy
u
The knowledge you need.
PUBLIC SECTOR
Public Sector Group Issues First Benchmarking Survey (cont.)
• Debt to assets, which shows how leveraged the cities
capital assets are, averaged 0.27 times.
• Debt per capita averaged $887, which represents the
debt burden on each citizen.
• Tax revenues per capita averaged $608, while expenses
per capita averaged $859, showing the need for other
types of revenue like charges for services and grants.
• Total grants and other non-tax revenues represented an
average of 24 percent of total revenues, so these cities
are more reliant on revenues from external sources.
• Public safety expenses are always the largest functional
expense and, on average, comprised 35 percent of
total expenditures.
• Debt service expenditures at the fund level use an
average of up to 15 percent of total revenues that
potentially could be used for services.
The commitment you expect. The value you deserve.
• Also on a fund basis, capital expenditures as a percent
of total expenditures averaged 32 percent, which
represents the government’s commitment to adequately
provide for its capital asset needs.
• On a fund basis, unreserved fund balance amounted
to a healthy average of 39 percent of revenues, which
shows that most cities can weather a temporary shortfall
in revenues.
For more than half a century, RubinBrown has been making a lasting mark on
business. Our unique, one-firm approach means you benefit from the best of both
worlds – specialized expertise and comprehensive services. All designed to deliver
A complete copy of the statistical analysis can be found
on our Web site at www.rubinbrown.com.
the kind of insights and solutions you need to succeed.
Questions? Contact:
A passionate, professional team. A one-firm approach to service excellence.
It’s how we bring real value to our clients. And it’s why they remain clients for
decades, not just years. That’s the RubinBrown difference.
Jeff Winter, CPA, CGFM
Partner-in-Charge
Public Sector Services Group
314-290-3408
[email protected]
www.RubinBrown.com
Certified Public Accountants and Business Consultants
Knowledge. Commitment. Value.
Assurance | Internal Audit | Litigation Support | Qualified Plan Audit | SEC Advisory | Small Business
35 u spring 2008 issue
State and Local Tax | Tax and Compliance | Valuations | Wealth Management
Knowledge. Commitment. Value.
One North Brentwood
St. Louis, Missouri 63105
Timely Reminders
April 15 Individuals. File a 2007 income tax return and pay any tax due. If you want an automatic six-month extension of
time to file the return, file Form 4868. If you paid cash wages of $1,500 or more in 2007 to a household employee, you must
file Schedule H. Contributions to an IRA must be made by this date. If you are not paying your 2007 income tax through
withholding (or will not pay in enough tax during the year that way), pay the first installment of your 2008 estimated tax.
Use Form 1040-ES.
Partnerships. File a 2007 calendar year return (Form 1065). Provide each partner with a copy of Schedule K-1.
Corporations. Deposit the first installment of estimated income tax for 2008.
April 30 Employers’ Taxes: Employers of non-agricultural and non-household employees must file Form 941 to report
income tax withholding and FICA taxes for the first quarter of 2008.
May 15 Exempt Organizations: Exempt organizations with a calendar year must file the annual return (Form 990, Form
990-EZ or Form 990-PF) for 2007. Organizations are exempt from income tax under Code Section 501. Calendar year
Section 501 organizations with unrelated business income must file income tax returns (Form 990-T).
June 2 IRA or SEP: Annual statements to IRS must be filed regarding 2007 account balances for an IRA or SEP (Form
5498). Participants and the IRS must be provided with IRA plan contribution information.
June 16 Individuals: Payments of second installment of 2008 estimated tax by individuals (other than farmers and
fisherman), trusts and estates and certain trusts.
Corporations: Payment of second installment of 2008 estimated income tax by calendar year corporations.
July 31 Employers’ Taxes: Employers of non-agricultural and non-household employees must file Form 941 to report
income tax withholding and FICA taxes for the second quarter of 2008.
Filings: Form 5500 due for calendar year taxpayers for 2007.
“Under U.S. Treasury Department guidelines, we hereby inform you that any tax advice contained in this communication
is not intended or written to be used, and cannot be used by you for the purpose of avoiding penalties that may be
imposed on you by the Internal Revenue Service, or for the purpose of promoting, marketing or recommending to another
party any transaction or matter addressed within this tax advice. Further, RubinBrown LLP imposes no limitation on any
recipient of this tax advice on the disclosure of the tax treatment or tax strategies or tax structuring described herein.”