A Little Pre-Tax Season Tax Planning Can Go a Long Way

A Little Pre-Tax Season Tax Planning Can Go a Long Way

Some may tell you that it’s too late to do some Tax Planning; that you’ve done all you can do. That it’s time to just hunker down and wait for tax season to start, hoping it will be over before you know it. In truth, it may be too late to drastically change the course of your tax season. However, some relatively easy workflow strategies can help you realize timesaving efficiencies and help you better weather the storm.

By polling firms formally and informally, Tax Preparation Miami uncovered five tried-and-true strategies for a smoother busy season, Tax Planning. Not surprisingly, most agree that a little pre-season Tax Planning and preparation can go a long way.

Tax Return Preparation easier with Tax Planning

1. Communication

This is critical. It won’t eliminate unexpected kinks in your busy season plan, but it will help to minimize them. Your Tax Preparation Miami firm should have a clear communication strategy for clients, staff and any third-party resources you plan to utilize during busy season. Don’t assume that everyone is already on the same page.

Depending on the size of your Income Tax practice and your relationship with individual clients, communication may be in person or in an engagement letter. Key elements should include the following:

Clearly state when, how and where to submit tax information.

  • Give the deadline for tax data, making it clear that failure to meet that deadline results in an automatic extension
  • Provide disclosure and consent forms.
  • Use this as an opportunity to manage expectations, emphasizing constraints on your time.
  • If you have people going into the field, arm them with the list of information needed for tax season so they can address it in person with the client. Make it part of your year-end planning to tell your client when their work is scheduled and get their buy-in. This gives them an opportunity to alert you to scheduling conflicts such as vacations, board meetings, etc.

It’s important to clearly articulate your expectations for your staff – hours, weekend work, opportunity to work remotely, contingency plans in the event of an unexpected absence due to illness, weather, or personal matters (if this varies from your normal HR policy).

Additionally, if you’re using temporary or seasonal workers, or outsourcing, now is the time to inform that resource of what to expect in terms of a time commitment in order to avoid misunderstandings or over-commitments later.

Finally, set a staff schedule for when you will meet during busy season. Allow some flexibility, but lock in key dates for things like determining when to extend clients to avoid wasting time trying to schedule management discussions on the fly. If you’re planning to meet once a week to review workloads and schedules, do it the same day and time every week and set a standing, manageable agenda that will allow participants to get what they need quickly to balance work and address potential resource issues.

2. Capacity Tax Planning

Two important themes to Tax Planning pre-season preparation: Use what you learned last year as a guide, and do as much as possible before the season really gets going. For example, you might want to run last year’s extension report and prepare these same extensions in early January.

Look at how you handled the larger, more complex client returns last year to see exactly when the return was prepared and reviewed, and build it into your scheduling for this year. Research major tax law changes in advance, and add that intelligence into the appropriate client tasks within your workflow software. For example, you might do a data scan to identify all the clients that will be impacted by the new tax legislation this year, then flag them and add instructions to those tasks universally so the preparer and reviewer have the information at their fingertips.

Tax Planning should coordinate scheduling and client responsibility early. This tip goes back to communicating expectations and creating a plan of accountability. Utilize software tools like workflow and scheduling to enforce your plan. Mail your completed organizers in early January, and utilize available technology resources for your client data (i.e., Goldman Sachs provides online access to clients’ 1099s, etc.).

3. Prepare for Problems

Let’s face it – there will be glitches, so it’s best to expect them and prepare for how you will handle them when they arise. Create a schedule that carves out time to plan for and address potential workload and bottleneck issues. Use real-time scheduling and workload management tools to get an up-to-the-minute view of all work in progress by person and status to see who’s buried in preparation or review, who’s overbooked and who’s under-booked so you can make those on-the-fly capacity planning decisions.

For example, one firm has a weekly meeting between the scheduler, the audit team leader and the tax team leader during which they review issues, identify chunks of time and conflicts, discuss new unexpected business, and locate additional resources. This allows them to gain a seven-week outlook and move work dynamically within the workflow system. Part of the purpose of this meeting is pre-emptive problem solving. It’s possible that you can schedule tax season well in advance, but there will always be issues that come up.

Tax Planning relies on its workflow software to see clients with 3/15 and 4/15 filing deadlines to quickly view and proactively address any missing information or other issues holding up the client return. Armed with that view, this firm can proactively work with clients and staff to address the bottlenecks.

Of course, having a real-time view of the work also empowers accounts receivable to stay on top of billing for all the returns that went out that week.

4. Digital Work Environment

The specific software application’s your firm employs varies according to the size of your firm, the Tax Planning services you offer and perhaps even your culture. I think we can all agree that, in addition to some software basics (MS Office, Adobe), the following tools enable you to work digitally: dual monitors, scanners, workflow system, electronic file storage (DMS or shared network filing tree) and a portal.

Some of these you can still put in place before the upcoming busy season. You don’t have to make a career out of picking a scanner; just get started. Use the resources available to help you make a good selection quickly: consultants, technology-focused publications, networks and associations, peers, AICPA and state society resources, and websites like

Now is the time to make sure that your staff knows how to properly use the tools at their disposal. An Adobe refresher and a plug-in toolbar can empower partners and managers to review online.

5. Process Improvement

Adopting paperless technologies and understanding workflow is at the heart of process improvement to attain greater efficiency throughout your practice. In an ideal scenario, you would have time to create a committee, document current processes, identify best practices, optimize for technologies used, map your new workflow, standardize and train across the firm, and automate workflow for a digital environment.

This late in the game, you may have to settle for focusing on your 1040 process or whatever your firm does most and, if time allows, move onto smaller processes. The key here is to question every step so you’re not just doing what you did last year. Your processes should evolve over time. I know one firm that created teams of employees tasked with flow-charting existing processes and recommending improvements. Involving staff members gives you greater insight and gives them ownership of new processes.

Now is not the time for fundamental changes (you’ll have to make that a priority after busy season), but you can address simple modifications that allow you to eliminate redundant loops, valueless steps, and the ever-wasteful search for information. Tightening your process so that you save even 10 to 20 minutes per return (a very conservative goal) can have a real impact on your season if you’re preparing hundreds or even thousands of 1040s.

Although preparing for the coming season in January is not ideal, a little preparation and planning can help your season run a lot smoother. These steps can serve as the foundation from which you build for next season. Do a post-season review to see what worked well, what didn’t, and what can be improved so that you can build some of those bigger changes into your strategy.

Reviewing and refining your Tax Planning strategy in May allows you to take lessons from the just finished season while they’re still fresh. Then, you can implement process improvements and new technologies during the more relaxed summer months and use the fall filing deadlines to test them in a live situation that’s not quite as stressful as the real deal.

Business Trends

Business CPA & Limited Liability Company (LLC) Advice

Limited Liability Company (LLC) Advice

Clients often ask about limited liability company (LLC) which is a hybrid-type of legal structure that provides the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership.

As a Business CPA, I don’t recommend them for the average small business. The “owners” of an LLC are referred to as “members.” Depending on the state, the members can consist of a single individual (one owner), two or more individuals, corporations, other LLC, and even other entities. As a CPA I have seen clients devastated with their tax bill as a result of having picked an LLC structure

Unlike shareholders in a corporation, LLC are not taxed as a separate business entity. Instead, all profits and losses are “passed through” the business to each member of the LLC, according to VieraCPA a CPA Firm. LLC members report profits and losses on their personal federal tax returns, just like the owners of a partnership would.

CPA Firm & Forming an LLC

CPA’s note that while each state has slight variations to forming an LLC, they all adhere to some general principles:

Choose a Business Name. There are 3 rules that your LLC name needs to follow: (1) it must be different from an existing LLC in your state, (2) it must indicate that it’s an LLC (such as “LLC” or Limited Company”) and (3) it must not include words restricted by your state (such as “bank” and insurance”). Your Small Business CPA can register your name with your state when you register your business, so you do not have to go through a separate process. Read more here about choosing a business name.

A small CPA Firm or Attorney usually files the Articles of Organization. The “articles of organization” is a simple document that legitimizes your LLC and includes information like your business name, address, and the names of its members. The form is provided by and filed with your state’s LLC office. For most states, you file with the Secretary of State. However, other states may require that file with a different office such as the State Corporation Commission, Department of Commerce and Consumer Affairs, Department of Consumer and Regulatory Affairs, or the Division of Corporations & Commercial Code.

Create an Operating Agreement. Business CPA will most often defer to an attorney for the creation of operating agreements which are required by most states and are not filed at your state office. However, an operating agreement is highly recommended for multi-member LLCs because it structures your LLC’s finances and organization, and provides rules and regulations for smooth operation. Percentage of interests, allocation of profits and losses, member’s rights and responsibilities, and other provisions are usually included here and required by your small Business CPA for tax preparation.

Obtain Licenses and Permits. Once your business is registered, you must obtain business licenses and permits. Regulations vary by industry, state and locality. Use the Licensing & Permits tool to find a listing of federal, state and local permits, licenses, and registrations you’ll need to run a business.

In the eyes of the federal government, an LLC is not a separate tax entity, and therefore the business itself is not taxed. Instead, all federal income taxes are passed on to the members of the LLC and are paid through their personal income tax. While the federal government does not tax income on an LLC, some states do, so check with your Business CPA.

Small Business CPA note that since the federal government does not recognize LLC as a business entity for taxation purposes, all LLCs must file as a corporation, partnership, or sole proprietorship. Certain LLCs are automatically classified and taxed as a corporation by federal tax law.

Small CPA Firm note that LLCs that are not automatically classified as a corporation can choose their business entity classification. To elect a classification, an LLC must file Form 8832. This form is also used if an LLC wishes to change their classification status. Read more about filing as a corporation or partnership and filing as a single member LLC at

The following tax forms should be filed depending on your classification:

  • Single Member LLC. A single-member LLC files Form 1040 Schedule C like a sole proprietor.
  • Partners in an LLC. Partners in an LLC file a Form 1065 partnership tax return like owners in a traditional partnership.
  • LLC filing as a Corporation. An LLC designated as a corporation files Form 1120, the corporation income tax return

Business CPA can guide you through Limited Liability Companies relevant tax forms and additional information regarding their purpose and use.

Small Business CPA & Combining the Benefits of an LLC with an S-Corp

There is always the possibility of requesting S-Corp status for your LLC. A small business attorney can advise you on the pros and cons. You’ll have to make a special election with the IRS to have the LLC taxed as an S-Corp using Form 2553. This must be filed prior to the first two months and fifteen days of the beginning of the tax year in which the election is to take effect. For more information about S-Corp status, visit or read Should My Company be an LLC, an S-Corp or Both?.

The LLC remains a limited liability company from a legal standpoint but for tax purposes can be treated as an S-Corp. Be sure to contact the state’s income tax agency where the election form will be filed. Ask them whether or not they recognize elections of other entities such as the S-Corp and what the tax requirements are.

 Advantages of an LLC

Limited Liability. Members are protected from personally liability for business decisions or actions of the LLC. This means that if the LLC incurs debt or is sued, members are not required to satisfy the claims with their personal assets. This is similar to the liability protections afforded to shareholders of a corporation. Keep in mind that limited liability means “limited” liability – members are not necessarily shielded from their or their employees’ tort actions, such as accidents.

Less Recordkeeping. An LLC’s operational ease is one of its greatest advantages. Compared to an S-Corporation, there is less registration paperwork and there are smaller start-up costs.

Sharing of Profits. There are also fewer restrictions on profit-sharing within an LLC, as members distribute profits as they see fit. Members might contribute different proportions of capital and sweat-equity. Consequently, it’s up to the members themselves to decide who has earned what percentage of the profits or losses.

Disadvantages of an LLC

Limited Life. In many states, when a member leaves an LLC, the business is dissolved and the members must fulfill all remaining legal and business obligations to close the business out. The remaining members can decide if they want to start a new LLC, or part ways. However, you can include provisions in your operating agreement to prolong the life of the LLC, should a member decide to leave the business.

Self-Employment Taxes. Members of an LLC are considered self-employed and must pay the self-employment tax contributions towards Medicare and social security. The entire net income of the LLC is subject to this tax.


Miami CPAs What is Cost Accounting 101?

Miami CPAs What is Cost Accounting?

Cost Accounting is the branch of accounting which directly pertains to the overall cost of running and managing a business. The concepts and formula involved in this branch of accounting are based on standard accounting practices.

Cost Accounting takes into consideration the expenses and the cash flow of an organization to analyze the cost of running it. Many CPA Firms mistakenly believe that cost accounting itself is an all-inclusive branch of accounts whereas that really isn’t the case. It is just the branch which deals with the cost of the business functions.

Basic objectives for which cost accounting is utilized:

Measuring Company Resources:

Miami Accounting and CPA Firm find it helps provide data for the resources of the company being utilized. Identification of production costs related to a particular event and the creation of its data is the primary purpose of cost accounting. Also, it helps in identifying the cost of production through the three business cycles.

Marketing Strategies and Product Development:

Miami accounting CPA Firm marketing strategies and product development plans are also addressed by using cost accounting. When it comes to product development, cost accounting can measure the cost of the product and determine whether it is right for the business or not. Similarly, cost accounting can also determine whether the marketing budget for the product is appropriate or not. Through cost accounting techniques, CPA Firm can measure the effectiveness of the marketing plan can also be reckoned.

Cost accounting plays an important role in making the right decisions for the company. The techniques involved to reach this stage usually compare the total cost of the product to the anticipated benefits.

Those handling cost accounting should keep in mind that the sole purpose of this branch of accounting is to manage costs and provide data for further consideration. Cost accounting itself is not responsible for making marketing plans or the creating action strategies.


Business Trends

Miami CPA Firm Spotlights Inequality of Tax Code

Miami CPA Firm Spotlights Inequality of Tax Code

Miami CPA Firm Gustavo A Viera CPA reflect on the Tax Code and how it has contributed to rising income inequality in recent decades as middle- and lower-income Americans have seen their incomes stagnate while the wealthiest have experienced staggering income growth, according to Miami CPA Firm VieraCPA.

Miami CPA Firm VieraCPA reports from the his headquarters in Palmetto Bay Florida, argues that deficit-financed tax cuts do not spur economic growth. Those who have received the largest income gains in the past three decades have also seen the largest tax cuts.

Since the last major tax reform in 1986, the number of loopholes, special preferences and the volume of the Tax Code have ballooned, resulting in a system widely considered to be inefficient, complex, and unfair, as well as an impediment to growth, Miami CPA Firm VieraCPA noted.

“Drawing a page from successful prior reform efforts, Miami CPA Firm advocates of comprehensive tax reform generally urge that we broaden the base and lower rates,” said the report. “However, the current economic context for tax reform is far more challenging than it was in 1986. Most immediately, the economy is still in the midst of a slow recovery with an unemployment rate that remains too high. Even with robust rates of job growth, it will take years to close the jobs gap. An important role of fiscal policy in the near term is to support recovery in the labor market.”

Miami CPA Firm VieraCPA acknowledge that while a larger number of families do not pay federal income taxes nowadays, it took issue with the idea that these households do not pay any form of taxes, as many suggest. “In fact, most Americans pay more in payroll taxes than in income taxes,” said Miami CPA Firm VieraCPA.

“Those who pay no federal taxes—on payroll or income—are disproportionately young (such as students who will pay taxes after they join the workforce) or old (such as retirees who paid taxes over their lifetimes), or temporarily out of work.”

Miami CPA Firm VieraCPA argues that cutting individual income tax rates would modestly increase the earnings of the typical American family, but substantially increase the federal budget deficit.


The challenge of managing a CPA Firm

CPA Firm of all sizes are grappling with volatile economic conditions

CPA Firm changing expectations by clients and staff, and rapid evolutions in technology. Is there some magic solution that will bring all this into harmony and allow the Miami CPA Firms to cruise calmly forward into the future? Hardly! But, firms positioning themselves for success will usually look for a careful alignment of people, processes, and technology.

The first essential for this alignment is a shared vision of the future, articulated clearly in a written strategic plan. One thing that a strategic plan will reveal is that to be successful, a CPA Firm needs a commitment to growth. A commitment to growth doesn’t necessarily mean more people, but it does demand that the staff on hand be as efficient as possible. Part of this focus on efficiency will likely mean developing staff members and empowering them to work effectively from wherever they might be. Most CPA Firm have some experience with staff working non-traditional hours, or working from home, or simply keeping up with their workload while traveling. This requires the technology to make flexible work opportunities possible.

Good firms view technology as a strategic multiplier, not an overhead expense. But all the technology in the world won’t make much difference if the CPA Firm doesn’t commit to refining processes and procedures to take advantage of the opportunities technology presents. Technology and process go hand-in-hand: new technologies make new processes possible while new processes are necessary to get the most out of the technologies purchased.

Fortunately, the tools required to achieve this alignment of people, process, and technology are available across a wide spectrum of CPA Firm sizes. Firms as small as 20 or so staff and a few partners have one set of needs and opportunities; multi-office firms of several hundred staff and a diverse partner group have yet another. In both cases, however, partners must be free to focus on client service while using automated processes for maximum efficiency. We will look at how well-integrated practice management software will allow both large and small firms to meet their own special needs.

CPA Firm Streamlining Functions|

One way to improve results is to carefully review traditional ways of doing essential functions. These functions include the sales and marketing tools used in client development, the ability to forecast staff availability and assign the right staff to a job, the ability to build accurate job budgets to ensure profitability, and the full integration of Work in Process (WIP) and Accounts Receivable (AR) into the firm’s own General Ledger (GL) accounting system.

Most CPA Firm have a variety of back-office systems in which they track multiple interactions with prospects and clients. Far too often, these related functions are tracked in entirely separate systems, limiting the firm’s ability to share critical information at the right time. These firms miss the competitive benefit of a full relationship view of all interactions with prospects as it nurtures them toward becoming clients and they miss the benefit of leveraging firm contacts and experiences with existing clients in new pursuits. Once a “prospect” becomes a “client”, then the traditional time, expense, and billing processes come into play. Combining those into a cohesive firm-wide relationship data base yields significant dividends but it doesn’t just happen, it requires a marketing plan and executive vision.

Once a client engagement is secured, the key to maximizing the profitability of the engagement may have already been lost. Most sales processes emphasize winning the pursuit first and then consider profitability after the fact. The assignment of the proper staff to the job and the development of an accurate budget for the labor costs to be incurred are deferred until the time the project is initiated. CPA Firm use a variety of tools to do this, ranging from specialty software applications to the ubiquitous spreadsheet. This process typically involves separate data sources limiting their ability to share common information across applications.

One of the most frustrating examples of the lack of integration comes from the firm’s own internal accounting process. Many firms use a traditional “time and billing” application to track time and expenses, accrue WIP, and track AR after invoices are issued. Far too often, however, these asset balances are not integrated with the general ledger accounting system and require one or more journal entries to produce the firm’s own financial statements. The real breakdown in this system is the inability to “drill down” into the financials and analyze source information without resorting to multiple applications, each with its own database. Perhaps even more damaging is that most systems do not integrate a preview of the engagement’s likely profitability into the pursuit. As a result realization and profitability not known until the final invoice has been paid.

A step toward simplifying these back office processes is to move from a mixed array of software technology to a fully integrated Practice Management system which brings all these features together with a common shared database.

The Sales & Marketing function of the system manages contacts, clients and opportunities in a single location, charting the prospect to client process. Ultimately, firm leaders can see an estimated project realization before the opportunity is won. As in standard CRM, interactions are documented by emails, tasks, appointments and notes, and that information is also saved into Outlook. CPA Firm can look up the zip code where a client is located, the business type, the address, and have the ability to verify data as it is entered.

Once a project work plan is created by a team leader, it can be confirmed as the project’s budget and used to benchmark the actual time for completion with a preview of the project’s realization before work had begun. When a particular professional service is chosen as an opportunity within TCPM, a unique template of standard work steps or “tasks” for staff is presented. Those tasks come with an estimated time of completion and a fee based on the staff levels needed to complete the project. Once a prospect becomes a client, managers will be able to view the actual time vs. planned time on a day-to-day basis. Ultimately this function allows forecasting and a better understanding of time management for each staff person. Team leaders can now see which staff person is working on what, if time revisions need to be made, the rates per hour and how work is distributed between staff members.

Executive Decision Support

For the firm to run efficiently, decision makers need timely and accurate information. This means having the right information (not cluttered up with unnecessary distractions!) presented naturally, in a clear and concise form. For many firms, this will mean rounds of customized reporting to get the information the partners need and oftentimes supplemented with individual spreadsheets where the reporting falls short or is suspect.

The high payoff activity in streamlining reporting is the consolidation of databases without the costly effort of developing data warehouses. Instead of going to multiple places to change or enter common information, do it once and let the applications share the data! Instead of drawing information from multiple sources, and compiling it for reporting purposes, let the reporting application draw upon the information it needs! Best of all performance metrics are available in real-time – which offers powerful tools for management and accountability at all levels of the organization.

TCPM promotes a growth strategy supporting the philosophy that the clients belong to the firm, rather than to individuals or practice groups. The program allows managers and staff a bird’s eye view of the business and practice management processes happening at all times. Assessing clients across industry segment and service areas enhances cross selling ability and creates a one-firm concept. Each individual staff person can look at their billable goals and from their own dashboard view see how they are doing while their managers see how they are measuring up to others on the team and within the firm. Open and pending WIP and prior Progress & Final Bills can be viewed in a single location and workflow notifications of pending tax and project deliverables are also easily accessible. Within the program’s time and billing capabilities, the Biller’s Workbench is a powerful one-stop resource for project/billing managers to quickly generate bills and see the impact of billing decisions on realization.

Flexible Implementation

So far, we have examined many benefits of a fully integrated Practice Management application with a shared database and common user interface. These benefits are enhanced even further, and implementation and training become simpler, if the system is built upon industry standard tools. Some of the most common (and most powerful!) back office support tools come from Microsoft. Specifically, these include Microsoft Dynamics CRM and Microsoft SharePoint. These tools have the advantage of being available for an “on-premise” server installation, or in the Software as a Service model “from the cloud”. In either configuration the integration described above is readily available. Smaller firms with less robust internal IT support may find the cloud model appealing, while larger firms with more engineering expertise available may opt for the on-premise model. In actuality, though, either model can fit well with either firm profile allowing clients to choose the deployment option that is right for them. Clients or prospects looking to transition to the cloud can take their time – knowing they can make the move without buying additional software or building out new infrastructure.

Rising to Meet the Management Challenge

At the outset of this article, we recognized that large and small firms alike are facing unprecedented challenges to profitable operation. The key to profit in today’s environment is efficiency, and efficiency comes in large part from simplified and integrated back office operations. Achieving these back office efficiencies becomes much easier when the tools are based upon industry standard applications. TC Practice Management, built upon Microsoft Dynamics CRM and Microsoft SharePoint, provides robust back-office integration, flexible installation configurations, simplified licensing, all built on industry standard platforms.

Templeton Solutions is primed to offer a practice management system because of their association with Templeton & Company. They’ve put their everyday working knowledge of what it’s like to be part of a CPA firm into practice – as the vision and direction of TCPM came directly from the founder and partners of Templeton & Company resulting in a solution for CPAs designed by CPAs. Realizing that many firms don’t want to fix something that’s “ain’t broke,” TCPM integrates with other systems and can be customized to fit your firm’s needs. Templeton’s practical approach to implementation allows you to take advantage of the capabilities you need when you need them.|

Has your CPA Firm committed to the alignment of people, processes and technology? Are you positioned the way you want to be to meet the management challenges of the future? If so,


The Changing Role of the Traditional Local Miami CPA Firm

A Miami CPA Firm Personal Perspective

Over the past 20 years I’ve seen the old, established, and familiar tools of the Miami CPA Firm nearly all become replaced.  In fact, other than the trusted 10-key printing calculator, and the over-sized coffee pot, most Miami CPA Firm are beginning to shift towards contemporary technology.

While most Miami CPA Firm prefer to be contacted by email, and dread the thought of a client requesting a printed copy of their tax return, almost all of our desks are full of brightly lit monitors displaying a myriad of data.  Although most of our familiar tools have been upgraded, we have continued to provide services based on a legacy business model.

For decades, the local Miami CPA Firm was a transactional-based business, only working when our clients brought us something to do. We prepared periodic financial statements, a year-end tax return, and perhaps random ad-hoc projects brought to us by the client throughout the year. We watched gradually as the client began to take billable time away from us as they began to pursue other alternatives.

The user friendliness of such software as QuickBooks and TurboTax made it a viable solution for companies looking to manage their own accounting, tax-preparation, and Accounting and Bookkeeping activities.  Firms were no longer on the forefront of each client’s financial information, but rather sidelined as clients began to assume the role that we once held.

While most Miami CPA Firm would view these revolutionary changes as a threat, my practice views them as an opportunity for business growth. Over the last several years, we have heavily invested in innovative technology and training to become the Miami CPA Firm of the future. The fierce competition has encouraged us to become more dedicated to improving work flows, accelerating change, and speeding up existing processes in order to improve client services and increase satisfaction.

We realize that while our clients might utilize the same accounting tools that we have, they do not have the essential training or expertise to be able to use the tools as effectively as we can. Additionally, they may not be able to translate exactly what the numbers mean, and validate whether the information is accurate. Therefore, they still require the assistance of a Miami CPA Firm, but in a different capacity.

The client’s initial motivation for pursuing accounting software was not to replace our expertise, but rather minimize the cost of busy work. When clients handed over their records, they did not know how many hours Miami CPA’s were performing for them, or understand all the crucial activities associated with preparing consolidated financial statements.  Helping our client’s understand the exact nature of the services Miami CPA Firm provide, became key to establishing a strong, long-term professional relationship.

In order for any Miami CPA Firm to flourish, it’s important that clients are provided with reliable, accurate, and timely information to effectively manage their businesses. If clients are no longer inclined to pay for traditional activities, because they have replaced such services by an implementation of accounting software, they may not have reliable, accurate, and timely information readily available to them. Armed with this knowledge, we decided to transform the working relationship with our business clients into a collaborative workforce with knowledge sharing.

Rather than strictly focusing on billable hours, we conformed to providing fixed value based arrangements unique to each client’s needs.  We designed four unique services that ranged from having a client completely outsource all their financial operations to our Miami CPA Firm, to a monthly on-site financial tune-up visit by one of our Miami CPA’s.

In establishing a fixed fee arrangement, the client knew the exact services that they were purchasing, what work was being performed for them, and at a price they could predictably budget for. Likewise, our office gained two advantages.  First, we gained predictable cash flow. It was no longer a guessing game to predict how many hours we would be able to bill for. Secondly, we were able to treat the relationship like a business.  It became our responsibility to maximize the profitability of the relationship by working effectively with each client.

We found that the more effectively we worked, the higher the return on the client, and the longer the relationship would last. This strategy did not occur overnight and took a significant amount of time to implement.  Through strategic acquisitions, smart leadership, and effective communication we were able to help our Miami Accounting Firm grow in an otherwise stagnate economy.

To continue to help our business grow, we look for clients that have a need for an Miami Accountant, and have a positive cash flow. If they are a good fit for our Miami CPA Firm, we perform a needs based assessment to determine the type of services that will best benefit them, and establish a fixed fee to accommodate for our services. Through specialization, deliberation, and lucrative measures, our firm will customize its services specifically to meet each client’s needs.

The ideal client is a business that is an emerging, small, or medium company with variable workloads. At times the client may require the expertise of a Miami Accountant, controller or CFO, but not on a full-time basis.  Our Miami CPA Firm is able to provide those services on a part-time, or as-needed basis at a lower cost than the client would traditionally pay to hire a full-time accounting staff to do. This benefits the client in that they can lower costs, increase profits, and can focus on the core competencies of their business, while maintaining an established relationship with a financial expert who is also looking to help their business grow.

Over the next three articles, I will outline the various levels of outsourced CFO services and describe how to successfully implement it to become one of the most prosperous aspects of your firm.

The next article will discuss the technology, training and infrastructure that our firm has begun to employ.  Subsequent articles will primarily focus on the various types of fee-based arrangements and how to determine the right type of working relationship to maintain with a client.

My goals are to give you an in-depth analysis of these arrangements, as well as exemplify how these services can be mutually beneficial to the client and the firm alike.


Miami Accounting Firms and IRS Looking Closely at Independent Contractors

Miami Accounting Firms and Internal Revenue Service are casting a skeptical eye on many companies’ attempts to classify employees as independent contractors.

Miami Accounting Firms say the IRS “focus on the withholding, the FICA taxes, Medicare taxes,” said Gustavo Viera CPA, partner-in-charge Miami Accounting Firm VieraCPA, during a Florida Society of CPAs conference Thursday on taxation for individuals. “They’re drilling down on compensation, on withholding. They come prepared and they do their work. These agents can have files with a tremendous amount of documentation.”

It’s not only low-level staff who can be the subject of such audits. High-level executives can also come under scrutiny. Miami Accounting Firms warned about golden parachute issues. “If you take an excess parachute payment, there’s an excise tax on the employer and on the executive,” he cautioned. “They look at non-cash fringes like housing, loans, gross-ups to cover certain tax payments they have to make. There’s a lot going on here that the agents are looking at.”

VieraCPA noted that Miami Accounting Firms can do planning for their clients, helping them update their processes and procedures. He advised checking the payroll system for temps, alternative workers and contingent workers.

“When you have a contract with someone that says they’re going to be treated as an independent contractor, that is not enough,” he said. “You have to drill down. The contracts are getting more specific. You have to look at the written documents and at the actual work.”


Miami CPA Firm to Keep Yourself and Your Clients Out of Jail

A Miami CPA Firm may sometimes be the first people contacted when their clients are faced with an actual or possible criminal tax examination. To safeguard the client, along with defending against personal exposure, a Miami CPA Firm must know in advance what legal and ethical considerations are at issue. Under usual circumstances, Miami CPA Firm offer priceless professional advice. The emergence of a criminal tax issue in a client’s fact pattern, however, alters the nature of the client’s tax matter from a compliance issue to a legal issue.

The best way to serve the client’s interest is to resist the urge to investigate further and immediately refer the client to an experienced criminal tax attorney.

The AICPA Statement on Standards for Tax Services asserts that when the Miami CPA Firm has a reason to believe that a taxpayer may be charged with any type of fraud or criminal violation, the client should be advised to consult with a tax attorney before speaking to the CPA further in regard to the matter at hand.

Common Misunderstanding of Accountant-Client Privilege

Many Miami CPA Firm mistakenly believe that their client communications are protected when representing an audited client. This is partially true in non-criminal tax matters—especially where the CPA did not prepare the return under audit.

However, CPA communications surrounding the preparation of a client’s original return that is under audit are never privileged (even where the original return was prepared by an attorney) given that a tax return is a public disclosure; therefore, no expectation of confidentiality surrounds the communications at issue.

A dilemma for CPA’s instantly develops when a civil examination turns criminal and Miami CPA Firm can find themselves legally compelled to divulge the client’s previously discussed secrets to the IRS under its’ subpoena power. Moreover, a conflict of interest inevitably arises where an actual or potential criminal tax issue arises surrounding a previous tax preparation engagement where Miami CPA Firm has a vested interest in protecting their reputation with the investigating tax authority, which can place them at odds with the needs of the investigated client.

A taxpayer with a potential criminal matter often requires both legal and accounting assistance to defend a case.

Where the attorney deems it advantageous for the client, the attorney may engage the referring CPA. By engaging the CPA’s services under a Kovel letter prepared by an attorney, the CPA can freely communicate with the client under protection of the attorney-client privilege, and the work papers prepared by the CPA can be protected from discovery under the attorney’s work product privilege where they are not involved with return preparation. Essentially, the CPA Firms and accompanying staff become an extension of the attorney’s firm as to the common client and thus the services rendered are protected.

Criminal Tax Violation Basics

Federal and state taxing authorities can bring both felony and misdemeanor tax charges against a CPA’s client—the most common of which include tax evasion, failure to file a return, failure to pay tax and filing a false return. The IRS also prosecutes taxpayers under the Federal Criminal Code on charges such as presenting false claims to the government, conspiracy and making false statements.

For example: A defendant (either a taxpayer or a tax preparer) can be convicted of making and subscribing a false return if it can be proved that the taxpayer willfully made and subscribed a return where he or she did not believe the document was true and correct when subscribed. For the federal government to prevail in a criminal prosecution, they must prove each element of an accused tax crime beyond a reasonable doubt.

Moreover, the government must bring the action within the appropriate statute of limitations for prosecution—ranging from three years to six years under the Internal Revenue Code and within five years for crimes prosecuted under the Federal Criminal Code.

To emphasize the importance of proper reporting, taxpayers and tax preparers can be charged under a number of theories and scenarios. For instance, they can be simultaneously charged with a greater offense and with a lesser-included offense within the legal definition of the greater offense (which often carries a lower burden of proof), and can be convicted of either the individual charge or both charges.

Furthermore, a single action on the part of a taxpayer may constitute a violation of several criminal tax statutes. When both criminal and civil remedies are available to the government, it has the discretion to pursue criminal remedies, civil remedies or both under the law. To complicate matters further, individuals can also be convicted of committing a tax crime with regards to another person’s or entities tax liability.

To illustrate—through the legal concept of vicarious liability—a corporate officer, director or employee could possibly be accused and convicted of attempted evasion of the related corporation’s taxes. This includes the corporation’s in-house attorney or CPA.

Some of the more commonly charged criminal tax crimes associated with a CPA are:

  • Aiding and abetting a criminal tax violation;
  • Filing false, fictitious or fraudulent refund claims;
  • Conspiracy to defraud the United States or an agency thereof; and
  • Filing a false return.

General Defenses

The hardest part of any criminal tax prosecution is proving the element of willfulness. The government has the burden of proving that the defendant intentionally and voluntarily violated a known legal duty. Because the state of mind is the most difficult element to prove, it’s also the easiest element to defeat.

Defenses available to defeat willfulness include inadvertence, negligence, mistake, uncertain legal duty, and reliance on others and diminished capacity. Typically the government is forced to resort to circumstantial evidence to establish willfulness. For this reason the government usually won’t prosecute unless a pattern of complained of behavior can be established, usually over a three-year period. The existence of the pattern itself tends to indicate to a jury that the behavior was intentional and willful rather than mere negligence for example.

How to Help Your Clients When They Face Potential Criminal Tax Matters

From the outset, CPAs should take necessary steps to protect any materials or documents related to services rendered connected to an actual or potential criminal tax matter. Such documents will help an attorney identify potential issues and protect the CPA Firm from any further exposure.

To facilitate this to the extent an attorney has not given direction, the CPA should have a document retention policy that extends the retention period to prevent inadvertent disposal or destruction of important documents. The CPA should consider taking such actions as adequately labeling materials, segregating the materials from other client related materials and adopting access restrictions as appropriate.

When a CPA becomes aware that a current or former client could be exposed to allegations of fraud or other criminal misconduct, the CPA should consider whether to withdraw from the performance of further tax (or other) services for the client and whether to continue a professional or employment relationship with the client.

If the relationship continues, the CPA should work with the client’s attorney to best protect the client’s rights. This means the CPA should avoid any unsupervised communication with the IRS or investigating agency personnel.

Additionally, the nature and content of any and all information that is to be shared with the IRS once the investigation has commenced should be approved in its entirety by the client’s legal counsel. This collaborative effort will provide the common client the best chance at success of avoiding harsh penalties and the possibility of jail time—and minimize the CPAs own exposure.

An alternative way in which the CPA and attorney can team up is in making a voluntary disclosure to the IRS on behalf of a common client. This is a process whereby the client’s tax attorney knocks on the door of the IRS Criminal Investigation Division and concedes that a client has cheated in some way on their taxes and wants to remedy the situation.

This is achieved by amending the previously filed fraudulent return and making payment of taxes and penalties owed in exchange for the IRS passing on criminal prosecution. The written policy of the IRS is to take the taxpayer’s voluntary disclosure as a factor that is heavily weighed in a facts-and-circumstances evaluation of whether or not to prosecute, but in practice the IRS will generally refrain from prosecuting under such circumstances where the client fully complies with the terms of the IRS voluntary disclosure policy.

The FTB has in recent years stepped up its criminal investigation section. Its stated mission is to encourage compliance with the California income tax laws by identifying, investigating and effectuating prosecution for tax evasion, fraud and employee misconduct.

The FTB’s Criminal Investigation Division maintains case inventories consisting of failure to file, false income tax returns, refund fraud and joint task force operations. Joint task force operation cases can involve local, state or federal agencies. FTB special agents perform most of the duties associated with a “peace officer”—namely, writing and serving search warrants, gathering and analyzing evidence, interviewing witnesses, interrogating suspects, making recommendations to prosecute and assisting prosecutors through all stages of prosecution.


The IRS criminal investigations usually lead to criminal tax convictions, which can carry penalties ranging from fines to imprisonment—or a combination. The reality in this practice area is that nothing is guaranteed, but by taking the proper steps, CPAs can protect themselves and place the client with criminal tax exposure in the best possible position to achieve a favorable outcome.



Business Trends

The Best Accountants are Problem Solvers

Consider these five words: The best accountants solve problems.

When we think about the best accountants money can hire, compare them to beloved brands out there today. Many managed to get off on the right foot by solving a problem or filling a void. We can look at Google, for example, whose mission to create a faster, user-friendly search experience has led to a full-fledged web empire. We can also look at a more concrete, simple solution in the form of a company such as Square, who managed to provide businesses the ability to accept credit on-the-go with little more than the power of a smartphone.

Whether by getting us from point A to point B or simply saving us tax dollars, the best accountants make their mark by tackling a problem and make big impression on their clients. That impression matters when it comes time to motivate that client, by getting them to act, click or buy, as Google would say. Is your accountant the considered among the best accountants and problem solvers?

Chances are that your accountant solves some of your problems, although the extent of that problem may not be clear to you or your accountant. These details are easy to overlook when you’re considering your business strategy; however, the best accountants problem solving can be paramount in your marketing efforts and can help establish both your company and product. How so?

The Best Accountants Benefits of Solving Problems

Creating a Narrative For Your Business

Solving a problem establishes a narrative for your clients. Its clear accountants are bean counters; however, so often we see businesses fail to capitalize upon their accountant’s advice. In fact, many accountants present themselves as someone trying to get ahead rather than someone trying to solve a client’s problem. Such a “rat race” narrative does nothing to make your firm stand out in a crowd or motivate your clients to interact.

Conversely, the best accountants that solve problems have the potential to craft a truly compelling narrative surrounding the purpose of their clients businesses and how the problems they assisted with help spawn a successful entrepreneur. Such a story offers something unique to your clients and allows you to break away from the other accountants on the block. While there may be others attempting to solve the same problem your competitors is tackling, your story is completely original to you. Take that story into consideration as you grow your CPA Firm presence both online and off.

Making Your Accounting Firm Relatable

As mentioned earlier, there are others that have faced the problems, which your accounting firm is trying to solve. For this reason, problem solving is allows a key opportunity for your CPA Firm to become more relatable as a whole. It’s frustrating when I visit a business client and feel like they’re speaking an entirely different language or completely fail to connect. When it comes to your clients, consider the fact that you have the ability to reach just about anyone that has faced the dilemmas they you have faced. What do you have to offer them? Information? Advice? You’re accounting and tax knowledge? Your business acumen that helps you relate and build trust among your potential clients who are facing the serious problems. No I say listen and learn to speak their language. Things are not always as they appear. Jumping to conclusions can be detrimental to you and your client. A mistake very few clients will forgive, but embrace those who do, and do what you have to solve their problems. Go the extra mile.

The Best Accountants Build Credibility One Client at a Time

In addition to establishing trust, problem solving helps build your CPA Firms credibility. So often we see CPA’s offer solutions with absolutely nothing to back up their claims. Recently, I ran across a CPA firms website which promised a settle tax debts with the IRS per pennies on the dollar. Really? Be realistic in terms of the problem solving capabilities that your accounting firm can tackle and offer legitimate solutions to your client base. If your business has the ability to take on a problem, take the time to prove it to your clients.

The Don’ts of Problem Solving 

When it comes to problem solving or just about any other aspect of your CPA Firm, don’t tell tall tales or make promises you can’t keep. As mentioned above, one of the key elements of solving problems is to build your firms credibility rather than undermine it. In an increasingly transparent digital age, clients are able to see through any false claims even the best accountants attempts to make. Start small and build up when it comes to solving problems and don’t tackle problems that your firm cannot handle.

Never Stop Solving Problems 

While your accounting firm may tackle a particular problem, continue to present challenges to your staff and help your clients understand how you’ve overcome them. As there’s always room for improvement, you need work to understand your shortcomings with your own professional services and how to solve those problems. Problem solving has the ability to snowball, which both create more work for you and your firm yet also creates the opportunity for vast reward. How so?

Consider that the best accountants and clients alike are constantly overcoming obstacles. If you’re doing the same, you have wisdom to offer. Weave your problem solving experiences, skills and stories into your CPA firms overall message, marketing and content strategies. Each problem your firm has overcome has the potential to become a story or blog post, for example. You have the ability to reach out to your clients with surveys, emails and infographics concerning what sort of problems they face and what they need to overcome them. This sort of engagement starts a conversation and keeps your accounting firm in front of a dedicated audience. Furthermore, such engagement also make your CPA Firm out to be an authority. It shows that you care and further shows that you’re willing to go out of your way to solve your client’s problems. While such a marketing strategy may not seem like much, this sort of behavior and dedication is what causes clients to evangelize your CPA Firm.

The Bottom Line

In short, there’s plenty to learn when it comes to the problems that your client faces and there’s much to be gained from taking the time to understand how to solve such problems. Historically, the best accountants are problem solvers, not bean counters or tax preparers. What sort of problems are you solving?

Business Trends

How Miami Accountants are aiming for success?

What are Miami Accountants planning for the future?

Gustavo A Viera CPA, a Miami Accountants talked with over 250 CPAs at a Miami Accountants shows in July to compile a list of the top 10 initiatives that Miami Accountants are planning for the their businesses. Here they are, in no particular order of importance.

1. Strategic Management and Corporatization

Miami Accountants want to move away from a “services-driven” business approach to “strategy-driven” development of service offerings. That way, they can take their business where they wish, instead of the business taking them where they don’t want to go. Miami Accountants also want to make decisions faster. The role of “managing partner” is quickly turning into that of a CEO: empowered, accountable and visionary.

2. Building Capacity

Clients always ask their Miami Accountants to do more, and firms need to be able to handle that. One Miami Accountants provides monthly financial reporting services to a niche industry. Each week, at least one of his clients asks him to do their bookkeeping. This CPA is forced to turn down that business, as he does not have enough processing capacity available. The estimated revenue opportunity lost could well be $100,000 a year.

3. Marketing and More Marketing

Miami Accountants want to free themselves from daily processing so they can devote more time to finding and getting new clients. Word-of-mouth referrals are just not enough anymore. Online marketing, social media engagement with prospects, providing expert advisory in public forums, various consulting services — there are many new marketing tools for CPAs to use. Miami Accountants want to understand more than ever how their clients are making the buying decisions when they source the services of a Miami Accountants. The trend seems to be moving away from a simple matter of “needs” fulfillment to “wants” satisfaction.

4. Creating Opportunities for Clients

Miami Accountants aren’t satisfied with just producing perfect financial accounting. They want to make sense of each client’s unique financial situation and create specific opportunities for them. One Miami Accountant told us that one of his clients with a multi-location, multi-branch business was buying the same inventory items at different costs. If this CPA had the ability to do data mining to find trends and variances across all the different branches, his client would save tons of money every year on purchases.

5. Technology and More Technology

For a long time, Miami Accountants settled for a limited range of products that they used successfully year after year in their firms. But the explosion of online bandwidth, coupled with the emergence of powerful cloud technology for public accounting firms, is radically redefining the way CPAs provide their services. A CPA firm can provide services to clients in several states, using scanned images of their source documents. The result is low-cost, efficient, productive and profitable. Leave it to the cloud providers to deal with the hardware.

6. Empowering and Energizing Staff

Miami Accountants are focusing on making their staff more expert in their work, making the workplace more exciting and providing meaningful assignments to staff. The essence is getting staff to become better able and more available to engage with clients, which increases client satisfaction.

7. Core Competencies and Niche Creation

CPAs want to do what they do best: help their clients’ businesses grow. To do that, they need to focus on their own core competencies and leave the rest to professionals. Why waste time managing computer hardware? Use a managed services provider or cloud computing. Firms are also looking to leverage their core strengths to offer specialized services to niche industries.

8. Beyond Tax Season

Engaging clients beyond tax season is one strategy that many CPAs are implementing. Offering investment management, personal finance management and consulting services is just the beginning. Leveraging an existing network of clients, vendors and bankers to create mutual benefits is on the rise. No wonder the number of CPAs using LinkedIn, Facebook and Twitter is increasing by the day.

9. Value Pricing

Clients are used to paying a certain amount for what they receive from Miami Accountants. They understand time and effort. Many CPAs we met feel that value pricing does not mean charging more for the same deliverable. It has more to do with how effectively a CPA conveys the value of each deliverable to the client. At the same time, within firms, it all boils down to reducing the time, cost and effort of producing each deliverable. Use of new technology, and outsourcing of time-consuming tasks such as payroll processing to specialized providers, allows firms to benefit from economies of scale. The pricing is based on the value perceived by clients, instead of the traditional time and billing methods.

10. Brand Creation

Typically, small and midsized CPA firms are known for the “brand equity” of their partners. Miami Accountants are looking to enhance the brand value by establishing a more pronounced online presence and incentivizing clients to engage more online. A self-service client portal is one major item that many CPA firms want to provide to their clients. Yet CPAs want an integrated solution, technology that will take what they already have and, with minimal effort, make it available to clients.