I'd like to slightly modify my answer to What you know vs. Who you know. See my posting to an answer on LinkedIn.
Comments appreciated.
Monday, April 28, 2008
Thursday, April 17, 2008
Spring Cleaning!
I apologize to my fans (Hi Mom!) for not sharing my thoughts over the past few weeks. I was too busy Spring Cleaning.
I didn't think you'd believe me.
However, Spring Cleaning is a great concept. For some, this is just theoretical.
With spring in the air, I recommend you clean these two important things.
1) Clean up your Personal Work Space.
Whether you have a cubicle, desk, or a corner office (which I hope to have one day soon), organizing those papers by either filing or recycling will do you a world of good, and reduce that feeling of "I'm Overwhelmed".
Try it. You'll like it.
But if your boss sees all that space around you and thinks you have room for more projects, please don't shoot the messenger.
2) Clean up your Work Team.
If you are working in any supervisory capacity, it's time to look at the team that reports to you and say "Are these the best people to work with me and help me deliver for what I am responsible for?". If you cannot say "Yes" without delay, it's a good time to think about what your team should look like, and go out and find them.
Spring is a time that many employees are considering change, and you could be their next new long-term employer.
Follow my advice, and not only will your work area be less cluttered, you'll have time to enjoy the weather outside.
I didn't think you'd believe me.
However, Spring Cleaning is a great concept. For some, this is just theoretical.
With spring in the air, I recommend you clean these two important things.
1) Clean up your Personal Work Space.
Whether you have a cubicle, desk, or a corner office (which I hope to have one day soon), organizing those papers by either filing or recycling will do you a world of good, and reduce that feeling of "I'm Overwhelmed".
Try it. You'll like it.
But if your boss sees all that space around you and thinks you have room for more projects, please don't shoot the messenger.
2) Clean up your Work Team.
If you are working in any supervisory capacity, it's time to look at the team that reports to you and say "Are these the best people to work with me and help me deliver for what I am responsible for?". If you cannot say "Yes" without delay, it's a good time to think about what your team should look like, and go out and find them.
Spring is a time that many employees are considering change, and you could be their next new long-term employer.
Follow my advice, and not only will your work area be less cluttered, you'll have time to enjoy the weather outside.
Thursday, April 3, 2008
Building an Accounting Firm... to last
This week I saw an ad for a merger between mid-sized accounting firms. And it got me thinking...
Great professional service firms are able to grow into great businesses. This may require merging practices from time to time. The Big 4 accounting firms are a great example, having merged their way into an oligopoly for their market (serving public companies).
For many accounting (and legal) firms, survival of their business beyond the second (or first) generation of partners hardly ever happens. In my opinion, while the founding partners may be great rainmakers and are able to build their empire by themselves, they are not able to transfer responsibility and clients to the next generation.
Which is really a shame. We speak to a number of practising professionals that after a significant period of time with their firm, are looking to change their employer. They tell us that even though they enjoy their current firm, they are looking to leave because they do not see room to grow. They are afraid their senior rainmaker partners will eventually retire or pass on, without giving them the opportunity to become a senior rainmaker themselves. So these solid professionals leave to greener pastures, usually leaving the weaker ones to stay behind and close the lights.
Retention of professionals in a firm starts with giving them real opportunities for growth, and not being afraid to transfer knowledge, know-how and clients. Successful senior partners should be hitting the golf course often when they hit 55, giving their team members opportunities to shine.
The senior partners I know that are enjoying their years as they move to (or beyond) retirement, have a team of smart, dedicated and competent people running the firms that they built. Their firms are built to last. Is yours?
Great professional service firms are able to grow into great businesses. This may require merging practices from time to time. The Big 4 accounting firms are a great example, having merged their way into an oligopoly for their market (serving public companies).
For many accounting (and legal) firms, survival of their business beyond the second (or first) generation of partners hardly ever happens. In my opinion, while the founding partners may be great rainmakers and are able to build their empire by themselves, they are not able to transfer responsibility and clients to the next generation.
Which is really a shame. We speak to a number of practising professionals that after a significant period of time with their firm, are looking to change their employer. They tell us that even though they enjoy their current firm, they are looking to leave because they do not see room to grow. They are afraid their senior rainmaker partners will eventually retire or pass on, without giving them the opportunity to become a senior rainmaker themselves. So these solid professionals leave to greener pastures, usually leaving the weaker ones to stay behind and close the lights.
Retention of professionals in a firm starts with giving them real opportunities for growth, and not being afraid to transfer knowledge, know-how and clients. Successful senior partners should be hitting the golf course often when they hit 55, giving their team members opportunities to shine.
The senior partners I know that are enjoying their years as they move to (or beyond) retirement, have a team of smart, dedicated and competent people running the firms that they built. Their firms are built to last. Is yours?
Wednesday, March 26, 2008
Having difficulty hiring? Try this.
People I speak with in business continue to complain to me about the difficulty of hiring appropriate people for their business. If they are looking for accounting & finance help, I am more than happy to help them, considering that this is the business CFO2Grow is in.
When companies find it difficult to hire, they need to look at sources that are a little different, while still giving them the solution they need. This solution can apply to many industries needing employees in Canada.
For companies that need to hire, I recommend that they consider an additional source of qualified candidates: Hire from the United States.
While this sounds a little off the wall, listen to the reasons why you should consider hiring from the United States.
- The Canadian Dollar is at par, so you will be paying dollar for dollar.
- Americans are generally used to picking up and moving thousands of miles for the right career move.
- The American job market is getting soft, while Canada looks like it will ride out the downturn well.
- You can hire a professional from the United States with little problem, using the TN-1 Visa. Canadians have been going to the USA for years for opportunities under the NAFTA Visa. It's time we use labour mobility to our advantage.
While American labour (or is that labor) will not be able to fill all of your positions, if you have some serious hiring ahead of you, try it. You might like it.
When companies find it difficult to hire, they need to look at sources that are a little different, while still giving them the solution they need. This solution can apply to many industries needing employees in Canada.
For companies that need to hire, I recommend that they consider an additional source of qualified candidates: Hire from the United States.
While this sounds a little off the wall, listen to the reasons why you should consider hiring from the United States.
- The Canadian Dollar is at par, so you will be paying dollar for dollar.
- Americans are generally used to picking up and moving thousands of miles for the right career move.
- The American job market is getting soft, while Canada looks like it will ride out the downturn well.
- You can hire a professional from the United States with little problem, using the TN-1 Visa. Canadians have been going to the USA for years for opportunities under the NAFTA Visa. It's time we use labour mobility to our advantage.
While American labour (or is that labor) will not be able to fill all of your positions, if you have some serious hiring ahead of you, try it. You might like it.
Tuesday, March 18, 2008
The Sky is Falling! The Sky is Falling!
Let’s get a grip. The sky is not falling. It’s just an acorn.
Okay. Maybe a BIG acorn, but we will recover from this bump on the head.
Yes, the financial markets are in a tizzy about mistakes made by company managers, hoping to cash in on the latest trend of the time (sub-prime mortgages). This is opposed to the other times that company managers made mistakes (Enron et al, the tech bubble of 2001, the real estate debacle of the early 1990’s, and all the others that preceded them). So, as we know, this too shall pass.
What can we learn from this current situation? A few things for sure, but here is something that I have learned.
Sarbanes-Oxley is a failure
SOx was created with the intention to stop control failures at US companies. The sub-prime mortgage mess is a prime example of control failure. I’m sure all the forms were filled out, the systems descriptions completed, and the CEO/CFO certifications were filed on time. However, the basics of risk management went out the window when financial companies in the United States did not seriously consider the impact of what a downturn in the economy and an increase in interest rates would have on their sub-prime mortgages.
Hopefully, we won’t see a “new and improved” SOx (although 5 bucks says we will). Shareholders need to be active in the companies they invest in to ensure that the managers and directors properly manage risk. And if the companies don’t manage their risk properly, then shareholders should not be surprised if the value of their shares takes a downturn.
Okay. Maybe a BIG acorn, but we will recover from this bump on the head.
Yes, the financial markets are in a tizzy about mistakes made by company managers, hoping to cash in on the latest trend of the time (sub-prime mortgages). This is opposed to the other times that company managers made mistakes (Enron et al, the tech bubble of 2001, the real estate debacle of the early 1990’s, and all the others that preceded them). So, as we know, this too shall pass.
What can we learn from this current situation? A few things for sure, but here is something that I have learned.
Sarbanes-Oxley is a failure
SOx was created with the intention to stop control failures at US companies. The sub-prime mortgage mess is a prime example of control failure. I’m sure all the forms were filled out, the systems descriptions completed, and the CEO/CFO certifications were filed on time. However, the basics of risk management went out the window when financial companies in the United States did not seriously consider the impact of what a downturn in the economy and an increase in interest rates would have on their sub-prime mortgages.
Hopefully, we won’t see a “new and improved” SOx (although 5 bucks says we will). Shareholders need to be active in the companies they invest in to ensure that the managers and directors properly manage risk. And if the companies don’t manage their risk properly, then shareholders should not be surprised if the value of their shares takes a downturn.
Thursday, March 6, 2008
Collateral Damage? US GAAP’s use in Canada may no longer be accepted
In November 2007, the United States Securities and Exchange Commission (SEC) accepted foreign issuers to prepare their financial statements using IFRS. This will allow Canadian companies, once IFRS compliant, to file their financial statements for SEC purposes without any additional changes or reconciliations.
(Read our previous article on IFRS here).
In February, The Canadian Securities Administration (CSA) released a Concept Paper on the possible changes to Securities Rules relating to IFRS. In this Concept Paper, they are considering no longer allowing Canadian companies to report in US GAAP for Canadian Securities purposes. Having heard about this, we thought we would let our comments known to the CSA. Attached is the Question from the Concept Paper, as well as our response.
If this subject is of interest to you, we highly recommend that you read the Concept Paper. Should this concern you, we recommend that you let your thoughts known to the CSA – the deadline for comments is April 13, 2008.
__________________________________________________________________
Question: Do you agree we should not allow a SEC issuer to use US GAAP for financial years beginning on or after January 1, 2009, with the exception that a SEC issuer filing US GAAP financial statements in Canada for its most recent financial year ending on or before December 31, 2008, could continue doing so until 2013? If not, why do you disagree, and how, if at all, would you modify existing rules?
Answer:
No, we do not agree.
Reason 1. We disagree for sound business reasons. While Canada is choosing an honourable position to converge accounting standards internationally, Canadian companies continue to access significant capital in the Unites States. Companies currently choose to report in US GAAP for business reasons – mostly because investors in the United States prefer to invest in companies that report in US GAAP. Taking away the opportunity for Canadian companies to report only in US GAAP would only be increasing their costs by having to report in IFRS for Canadian purposes and US GAAP (chosen for appropriate access to capital markets).
Reason 2. We have found the SEC decision to accept IFRS for foreign issuers a great step towards the admirable goal of one GAAP acceptable worldwide. It is important to note that winds of change continue to blow through the United States, from internationalist to protectionist and back again. Considering the speed in which the SEC has moved towards acceptance of IFRS for foreign issuers, we are concerned that political events could cause the SEC to change its mind just as quickly on the acceptance of IFRS for foreign issuers. Because of this risk, Canadian companies must be able to choose to continue to report in US GAAP.
We would not propose to modify existing rules for reporting in US GAAP.
(Read our previous article on IFRS here).
In February, The Canadian Securities Administration (CSA) released a Concept Paper on the possible changes to Securities Rules relating to IFRS. In this Concept Paper, they are considering no longer allowing Canadian companies to report in US GAAP for Canadian Securities purposes. Having heard about this, we thought we would let our comments known to the CSA. Attached is the Question from the Concept Paper, as well as our response.
If this subject is of interest to you, we highly recommend that you read the Concept Paper. Should this concern you, we recommend that you let your thoughts known to the CSA – the deadline for comments is April 13, 2008.
__________________________________________________________________
Question: Do you agree we should not allow a SEC issuer to use US GAAP for financial years beginning on or after January 1, 2009, with the exception that a SEC issuer filing US GAAP financial statements in Canada for its most recent financial year ending on or before December 31, 2008, could continue doing so until 2013? If not, why do you disagree, and how, if at all, would you modify existing rules?
Answer:
No, we do not agree.
Reason 1. We disagree for sound business reasons. While Canada is choosing an honourable position to converge accounting standards internationally, Canadian companies continue to access significant capital in the Unites States. Companies currently choose to report in US GAAP for business reasons – mostly because investors in the United States prefer to invest in companies that report in US GAAP. Taking away the opportunity for Canadian companies to report only in US GAAP would only be increasing their costs by having to report in IFRS for Canadian purposes and US GAAP (chosen for appropriate access to capital markets).
Reason 2. We have found the SEC decision to accept IFRS for foreign issuers a great step towards the admirable goal of one GAAP acceptable worldwide. It is important to note that winds of change continue to blow through the United States, from internationalist to protectionist and back again. Considering the speed in which the SEC has moved towards acceptance of IFRS for foreign issuers, we are concerned that political events could cause the SEC to change its mind just as quickly on the acceptance of IFRS for foreign issuers. Because of this risk, Canadian companies must be able to choose to continue to report in US GAAP.
We would not propose to modify existing rules for reporting in US GAAP.
Monday, March 3, 2008
The costs of being public: Is it worth it for smaller companies?
Growing a business towards success requires capital for growth. 3 ways to get cash for growth include:
- increasing revenues
- funding via equity
- funding via debt
Of these 3 options, funding via equity (going public and staying public) can be very expensive. These costs can include:
- meeting tight reporting deadlines
- cost of staff
- cost of professional fees
- complicated and changing securities rules
- complicated and changing accounting rules
Considering these costs, why do smaller companies go public (and stay public)?
- Allows (the potential) for liquidity
- Public relations purposes
- Companies that are not able to fund growth from revenue, and have no assets to support debt (development companies such as biotech and high-tech)
Is it worth the cost?
The standard accounting answer applies (it depends). If you plan to become public, be aware of what your costs are really going to be. Ensure that you spend for value and pay the price properly. If you decide to become public, and are not committed to spending the right amounts to be compliant, you are only going to get the kind of publicity you don't want.
- increasing revenues
- funding via equity
- funding via debt
Of these 3 options, funding via equity (going public and staying public) can be very expensive. These costs can include:
- meeting tight reporting deadlines
- cost of staff
- cost of professional fees
- complicated and changing securities rules
- complicated and changing accounting rules
Considering these costs, why do smaller companies go public (and stay public)?
- Allows (the potential) for liquidity
- Public relations purposes
- Companies that are not able to fund growth from revenue, and have no assets to support debt (development companies such as biotech and high-tech)
Is it worth the cost?
The standard accounting answer applies (it depends). If you plan to become public, be aware of what your costs are really going to be. Ensure that you spend for value and pay the price properly. If you decide to become public, and are not committed to spending the right amounts to be compliant, you are only going to get the kind of publicity you don't want.
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