Energized Accounting

My Banker, My Friend

noreply@blogger.com (Bill Kennedy, CA) — Fri, 16 Dec 2011 13:15:00 +0000

When I first read an article warning that banks are changing standard mortgage wording to allow them to apply mortgage payments to other forms of debt, I was skeptical. After all, a mortgage payment is a mortgage payment and a credit card payment is a credit card payment. There is no ambiguity.

Then I received a letter from my credit card provider (see below) that says:

"In any of the above categories (a) to (d), those amounts with the lowest rate(s) of interest will be paid first before those amounts with the higher rate(s) of interest."

Now that's just mean. Basic financial advice is that you pay down the debt with the highest rate of interest first. It only makes sense. And in troubled financial times, we all have to pay attention to basic financial advice. Is it really in the bank's best long term interest to treat customers this way? Here's what MNBA says: http://www.mbna.ca/about_company_conductcommitment.html I'll let you be the judge of whether this practice is "top quality customer service."

Codes of Conduct and Public Commitment

MBNA, a division of The Toronto-Dominion Bank and Canada's largest MasterCard issuer, is committed to providing top quality customer service. What sets us apart is our commitment to finding the right customers and keeping them.

Voluntary Codes of Conduct and Public Commitments are non-legislated commitments, voluntarily made by companies, that ensure a high level of service while helping them remain competitive. At MBNA we adhere to the following voluntary codes and public commitment designed to protect our customers.

Code of Conduct for the Credit and Debit Card Industry in Canada
Promotes fair business practices and ensures that merchants and consumers understand the costs and benefits associated with credit and debit cards.

Call to Action

I'm not going to rant about unfairness or counsel you to complain to the authorities, the ombudsman or the courts. Yes, class action lawsuits and government intervention have happened over this kind of issue, but it's a long road. My simple advice is to keep all of your eggs in different baskets. The old advice was to have a relationship with your banker. Keep all your services under one roof so they could get to know you and offer you the best deal. Those days are gone. Now you can have your mortgage with one company, your credit cards with two other companies and your retirement savings with yet another firm. Divide and survive!

Sound, Practical Financial Advice From a Bank??

noreply@blogger.com (Bill Kennedy, CA) — Thu, 15 Dec 2011 12:09:00 +0000

A round of applause to the bank president who wants the Federal Government to reduce the maximum mortgage limit from 30 years back to 25. (I guess he doesn't realize that he could order his own people to do just that.)

Without getting into a bunch of financial mumbo jumbo, I look at it this way: you get the big mortgage when you need the space for a growing family. With the cost of university education being as high as it is, you need the mortgage paid off by the time the kids go there. A 30 year mortgage leaves you caught in a financial squeeze.

Unfortunately, bank employees don't talk in those terms when you sit down to negotiate your finances. They tell you that you can afford a bigger house with a 30 year mortgage. While not technically a lie, it is hardly a responsible practice either.

So, Mr. Clark, put your bank where your mouth is and give your young customers solid, practical financial advice. You don't need Federal Government approval for that.

http://www.theglobeandmail.com/globe-investor/mortgage-rules-should-be-stricter-td-chief-says/article2271588/

Dear Donut

noreply@blogger.com (Bill Kennedy, CA) — Thu, 05 May 2011 17:55:00 +0000

Dear Donut,

Our relationship goes back a long way. I feel like you’ve become a big part of me. You used to be such a treat, but now, I fear you’ve become a bad habit. Three-thirty in the afternoon rolls around and suddenly you’re there, demanding my attention. It wasn’t supposed to be this way.

I don’t know how to say this without hurting your feelings, but let’s face it. You lied to me. You were supposed to be a snack, a burst of energy, a friend to carry me through until dinner. But that’s not what happened. Sure, the anticipation of meeting you was exquisite. Your softness against my lips. Your sweet taste . . .

But I digress. The sad thing was that after all that foreplay, you didn’t hold up your end of the bargain. After you were gone, I felt tired, not energized. In fact, worse than if I hadn’t had you at all. I put up with it for a while, but it has gone too far. This relationship has to end.

I’m sorry if I’ve never mentioned this before. I know you mean well. I appreciate the kind thought, but no, I really don’t think there’s anything you can do. No, another layer of frosting isn’t going to make a difference. Really. Yes, a fruit filling might make you more romantic, but that just doesn’t deal with the issue. We just weren’t made for each other.

Well, I wasn’t going to mention this to you, but yes, there is someone else. She’s from a different country. No, not Danish! She goes down smooth and gives me lasting energy. No, this isn’t about liking salty more than sweet. Besides, she’s a lot less salty now, more earthy, I’d say. She’s a vegetable juice.

No need to get personal! Vegetables may not be sexy, but they’re smart, and I have come to appreciate how much I like that. You know, I thought you would be a difficult habit to give up, but it turned out that you were easy to replace with something smart.

Look, let’s not part as enemies. You’re sweet. You’re fun, particularly when you’re fresh. And we have known each other a long time. Can't we just be friends?

Bill

Are the Banks Responding?

noreply@blogger.com (Bill Kennedy, CA) — Fri, 25 Feb 2011 13:49:00 +0000

Rob Carrick of the Globe and Mail reports that the banks may be taking more responsibility for people getting themselves in too deep: http://www.theglobeandmail.com/globe-investor/personal-finance/rob-carrick/banks-can-do-more-to-restrain-runaway-household-debt/article1918234/

I'm all for consumer choice and I don't want a paternalistic approach. At the same time, there needs to be a balance to the marketing messages of spend, spend, spend.

Accounting Crisis Response

noreply@blogger.com (Bill Kennedy, CA) — Tue, 22 Feb 2011 22:40:00 +0000

Major David Ebel, of the Escondido Salvation Army, is one of the moderators of the Emergency and Disaster Responders Support web site. I spoke to him about training as a volunteer to help people in crisis.

"You may think of fires and earthquakes when you talk about disaster relief, but if you were in Escondido, I could use your accounting skills right now," he said. Ebel went on to describe the financial challenges some of the people he serves face. "If you could help people figure out how to live on $22,000 per year, you would be making a big contribution to their quality of life."

Ebel continued, "Some of the people I work with have never seen a raw potato. They don't realize that they can buy five pounds of potatoes for the cost of two boxes of processed potato flakes. They have never made mashed potatoes from scratch in their life."

In the financial area, I see a similar lack of exposure to the basics. In my grandfather's day, if a young couple came to the bank for a mortgage they couldn't afford, the loan officer would quietly explain the situation to them and refuse to advance the money. Fast forward to today, where the bank employee will help you minimize your payment by reducing the down payment and extending the amortization period from 20 years to 35 years. The problem is, they don't tell you the consequences of those decisions.

Let's say you have a $100,000 20 year mortgage at 5%. Over the course of the mortgage, you will pay $57,710 in interest, at $657 per month. If you extend that mortgage to 35 years, then you will pay $110,600 in interest (more than the original mortgage!), at $501 per month. That extra $150 per month makes a huge difference spread over 20 years. Here's the part they don't tell you: if you get the 20 year mortgage when you're 20, then it's almost paid off at the time when your children may need college tuition or are considering getting married, etc. If you go for the 35 year option, then you haven't paid off the house until you're 55 years old! Who needs that kind of stone around their neck?!

The point of all this is simply that when budgeting for mortgage payments, the right question to ask is "What's the MAXIMUM I can pay?" As odd as it sounds, reducing mortgage payments makes mortgages LESS affordable, not more.

The sub-prime mess is still with us. People have been badly wounded and those wounds are no less real for being financial. Grab your spreadsheets and get out there! If anyone reading this blog knows of ways to help counsel people or places to volunteer, please note them in the comments.

Making Financial Reports Fundraising Friendly

noreply@blogger.com (Bill Kennedy, CA) — Mon, 21 Feb 2011 19:42:00 +0000

Charity Accountants: Have you ever watched potential donors read the financial statements of a charity? Even sophisticated readers can be puzzled by things like fund accounting ("What do all these different columns mean?"), how endowments are treated ("What are all these transfers?"), or finding the answers to basic questions ("How much of the money raised goes to administration?")

It's a difficult task to stay up to date with the changing accounting rules for charities, disclosing financial results in a way that ties the revenues and expenses directly into the charity's mission and getting everything done in time for the audit.

But it's worth the struggle. As I look back at all my accounting training, I can't remember devoting a single hour to making financial information easier to read, yet in these days of funding cuts in the charitable sector and increasing direct donor involvement, making the financial story understandable has never been more important. Imagine that each donation has a flag attached to it and the donor of that money needs to know exactly how the donation helps the charity achieve the donor's mission, as well as where the money actually went.

So, as you struggle to get the year end completed and start to think about how the audited statements should look, take a look at what Queen's University is doing about Voluntary Sector Financial Reporting Excellence. Maybe you should consider entering it this year!

Why Aren't They Screaming?

noreply@blogger.com (Bill Kennedy, CA) — Thu, 10 Feb 2011 14:32:00 +0000

Why aren't the pension plans screaming blue murder? Why aren't they foaming at the mouth and demanding justice? Why are there no dire predictions about the millions of retired people who rely on fixed rate investments in an era where interest rates are being kept artificially low to stimulate the economy?

And they are hurting. Really. Here is a recent communication from a pension plan to its members (altered only to remove anything to identify the actual plan):

The Pension Board has been carefully monitoring the funded status of the pension plan. As previously announced, the Pension Board’s decision not to increase the pension benefits, although difficult, was necessary to maintain the plan’s “fully funded” status.

The combination of a challenging investment environment, historically low interest rates, and the maturing demographics for the plan means the Pension Board will be examining options and strategies to best ensure the sustainability of the pension plan for the longer term. The Pension Board has also commissioned an ad-hoc committee to coordinate investment strategies to support the plan’s pension commitments. This committee’s efforts will ensure optimal support for the plan’s long-term sustainability. This systematic approach—in-depth researching of all available options—underscores how seriously the situation is being taken. The Pension Board is keenly aware of the importance of keeping the benefit meaningful for retirees and of maintaining the affordability of the pension plan.

Keeping plan members informed of all decisions that impact the pension plan is a priority of the Pension Board, and any changes will be fully communicated to members as soon as details are available.

In pension circles, there is talk about how to ease the rules so that employers can take longer to fund the deficits in their plans. Pension liabilities are increasingly seen as a heavy burden on large employers. I am seeing an increased emphasis on defined contribution plans as opposed to the traditional defined benefit plans, as employers seek ways of sharing the risk with their staff.

Pension plans are traditionally long term, conservative investors, with as much as 40% of their investments in bonds and other fixed rate interest bearing investments. The current low interest rates are unfairly punishing their performance, particularly when their pension liabilities, which stretch decades into the future, are being discounted at a different rate than they are earning.

Someone should be screaming!

Bleeding Edge Marketing

noreply@blogger.com (Bill Kennedy, CA) — Fri, 24 Dec 2010 14:45:00 +0000

The case you are about to read is true. The names have been changed to protect the not-so-innocent.

Dear Bill,

XXX Insurance Company is pleased to provide you with this desk calendar for your home or office. You'll notice it resembles three people linked together, like our logo.

[skip the paragraph that explains what the three people in the logo represent and the one telling me how wonderful their insurance is, ending with this sentence:]

And should the unexpected happen, rest assured that XXX will handle your claim quickly and efficiently.

To our valued customers, we hope you enjoy this small token of our appreciation . . .

I'm sorry, I just can't go on. I got this dizzy, disoriented feeling like I had been whizzed back to the 1950's, before the days when absolutely every machine that has a computer chip in it boasts a calendar, back when a desk calendar might actually have been useful. Small token, indeed!

It amazes me that people still produce ugly little desk calendars and that others take the time to build marketing campaigns around them. These are not exactly salad days for the insurance industry. They can't afford to waste a single mass mailing.

Face it, the days of the desk calendar have long since disappeared. Deal with it and move on.

A Death in the Family

noreply@blogger.com (Bill Kennedy, CA) — Sat, 11 Dec 2010 19:45:00 +0000

Scowling at the now empty stage, the man sat two thirds of the way back, as the audience, laughing and chatting, left for the lobby. It was the end of Act I of the preview of the comedy "Jitters" at the SouPepper Theatre in Toronto. I watched the man, concentrating on the stage as though the actors were still there. In his mind they were. This was the man who had woven together his own experience as actor and playwright and had run this play through his mind a thousand times as he revised and revised, boiling it down to its essence. This was David French.

I walked over to the row he was seated in and sat down a respectful distance away, not wanting to disturb his train of thought. I had met David through an introduction to dramatic writing course given by his partner, Glenda MacFarlane and I had emailed them a couple of times. After a while he acknowledged my presence. "There's a lot of work to do yet," was all he said. This despite all of the laughter that had just come from the full house.

David was like that: intense, passionate, uncompromising, as much a rock as the place where he had been born. When he visited our class, we all talked about our current projects. When I described mine, he said, "A novel maybe, not a play." He was right. That comment made me start over from scratch, because after listening to him, all I wanted to do was write a play. David's approach was classical theatre: a single protagonist with an all-consuming desire, facing overwhelming conflict and equipped with only their intelligence and feelings. "Salt-water Moon" (http://www.davidfrench.net/salt.html) features two actors on one set in one evening. "The challenge," he explained, "was that this story took place before my previous play, so the audience already knew the ending." Yet, even knowing not just the ending, but also the whole play, I was still riveted to my seat. I took my family to see it at SoulPepper. With two teenagers, it can be difficult to find something that engages all of us. This play was an exception. The conversation all the way home centered around the play and the two characters.

You can picture yourself in a French play. Whether you see yourself as the parent or the child, the young lover or the frustrated patriarch, he spoke to all of us. Each character is presented with understanding and compassion, true to all of the frailties and strengths of the human condition. You can't leave one of David's plays untouched by the experience.

We will miss him.

Hmmm . . . Which Software Should I Learn?

noreply@blogger.com (Bill Kennedy, CA) — Fri, 12 Nov 2010 21:50:00 +0000

Remember that famous career advice from "The Graduate"?

Mr. McGuire: I want to say one word to you. Just one word.
Benjamin: Yes, sir.
Mr. McGuire: Are you listening?
Benjamin: Yes, I am.
Mr. McGuire: Plastics.
Benjamin: Just how do you mean that, sir?

Plastics was the gee whiz industry back then. A decade or so ago, Great Plains was the advice I received when I asked what product an accountant should specialize in. So, where should a graduating accountant go now?

Hunter Richards, in his Which Tech Skills Help Accountants Land Jobs, has answered the question. I won't steal his thunder. You'll just have to click on the link yourself!

Farewell CFO

noreply@blogger.com (Bill Kennedy, CA) — Sat, 06 Nov 2010 18:58:00 +0000

"There are no mistakes in the universe, no accidents. Everything has a reason,"

says my friend Alice, an astrologer.

Another way to look at it is that every moment, every experience, has a seed of learning and growth in it. The challenge for us is to find it.

I have just come from a funeral where I didn't know anybody. I was there in support of a friend, but we didn't end up connecting.

I just sat in the back and watched. The largest room in the funeral home was two thirds full. There were so many tears, so much grief: men and women, young and old. This man had clearly touched a lot of people. As the service unfolded, I got a sense of his story.

Steven (not his real name) was cut down by cancer at the age of fifty-five. He was an accountant, the Chief Financial Officer of his company. His boss, the Chief Executive Officer and company founder, was the first to speak. He described Steven as the mature one, the one who could make the numbers fit, the company's conscience. He also spoke of Steven as one of the ones driving the company forward, having a solid grasp of where they could go and what they could achieve.

The second speaker represented Steven's hobby, ballroom dancing. She spoke of Steven and Grace, his partner and wife, their spirit, and Steven's ambition to be the best. Steven and Grace represented his adopted country at an international amateur competition and he was particularly proud to carry the flag in the opening ceremonies.

The third speaker was an old friend of Steven's from Hong Kong. He spoke of Steven's other hobby, music, and the bands they had put together so long ago. He also told a touching story about Steven's first date with Grace, when he spent a week's salary on a candle-lit dinner for two at a fancy restaurant, a large initial "investment" that had paid dividends for the rest of his life.

Steven was never awarded the Nobel Prize for Peace. I doubt that the Wall Street Journal will note his passing. He will not even be a footnote in this nation's history, yet he touched a lot of people deeply with his spirit, his willingness to help and his drive to be a better person. The lesson for me, accountant, CFO, former amateur ballroom dancing enthusiast and amateur musician, was clear.

Maybe I should listen to a few more of the things my friend Alice says.

Crazy Quilt Career Advice

noreply@blogger.com (Bill Kennedy, CA) — Mon, 31 May 2010 13:41:00 +0000

If you are in mid-career right now, does your past look like a crazy quilt? A crazy quilt is a patchwork quilt with no design. When you look back at the twists and turns your life has taken, do you find yourself asking, what happened to those wonderful plans I had when I was 20?

I know I did.

I looked back at the decisions I made and wonder, "What was I thinking?" In my more charitable moments, I excused myself with the thought of how young I was at the time, how little of life I knew and, frankly, how little of myself I knew.

Middle age is the time when those thoughts come home to roost. It gets harder to brush them away with the thought that you can do better next time. As a friend said, "Middle age is when you realize that if you're going to accomplish anything in this life, you'd better start soon."

Look at the crazy quilts in this blog post. They are haphazard and random, each piece bearing no relationship to the others. And yet, the eye finds patterns. The mind realizes that there is careful design behind the apparent randomness.

This past weekend, I attended a regional conference as a representative of the national office. I took my trumpet along. One of the wonderful things about working for a church is the amount of music we have at meetings. In the middle of the afternoon, when eyes tend to glaze over, there's nothing better than someone saying, OK everyone, time to rise and sing. Anyway, the musicians were more than happy to let me play along and the delegates were happy to hear the old favourites I tend to play. It softened my image as the accountant from the national office, particularly in these days of budget cuts and staff reductions. The music helped people see me as a person, not just an accountant. It made me more approachable.

We have only so many hours in a life time. When I look at how I have spent mine: accounting, computer systems, family, charities, writing, church and yes, trumpet, it looks like quite a crazy quilt to me. And yet, all of those things have come together in my current position. Looking back, it's as though all those odd career detours I took were leading to this place.

When you look at your past, I hope you too can make some sense of your crazy quilt.

Microsoft Dynamics NAV vs GP

noreply@blogger.com (Bill Kennedy, CA) — Wed, 18 Nov 2009 04:46:00 +0000

Houston Neal, at Software Advice, asked me to blog about the differences between Navision and Great Plains accounting software, or, as they are currently known, Microsoft Dynamics NAV and GP. Houston has done a great job of describing the different Microsoft ERP (Enterprise Resource Planning - an accounting system on steroids - i.e. including purchasing, manufacturing and distribution etc.) packages, so I will just give you my rule of thumb.

When I was with a company selling Great Plains, we talked about it being cheaper because the functionality came out of the box. You didn't have to pay for a lot of customization, either during the initial implementation or later, during upgrades. When I was with a company selling Navision, we talked about flexibility, how easy and cheaply the software could be customized to the individual needs of the customer

My take on this issue is that if Great Plains fits you out of the box, it's a better package. If customization is needed, then Navision is the better pick.

Having said that, I think that both packages would work well for a wide variety of companies. If that is the situation with you, then I recommend taking a close look at the consulting firms selling you the package. A skilled, experienced consultant can make even a limited software package look good, while a bad one can ruin good software.

If you have looked at both packages are still unsure, try what we used to call a Boardroom Pilot. Get a sample batch of different transactions and invite the vendors in to enter those transactions into their systems. That will give you a side by side comparison of the software.

Happy hunting!

Landing That First Job

noreply@blogger.com (Bill Kennedy, CA) — Wed, 11 Nov 2009 04:23:00 +0000

Question from the editors of Forbes:

Recently, the U.S. Bureau of Labor Statistics reported a jump in the unemployment rate to 10.2%.Some economists think we could be looking at 10.5% by early next year.

Given these grim forecasts, how do you counsel recent college graduates and others entering the job market for the first time in this employment climate? Is there any advice or strategies you find particularly useful?

Answer:

My advice is to be enthusiastic. You have youth on your side, so use it. An interviewer early in my career said to me that I lacked experience, but if he decided that he wanted an accountant full of piss and vinegar, he'd call me. I wrote off the interview and actually took another job. I was kicking myself two weeks later when he called back.

My second piece of advice is to figure out what you're good at and keep improving. Take courses, read books and magazines, follow bogs and webcasts, meet others in your field, go to conferences -- whatever it takes to stay current and build your skill. If you are enthusiastic and skilled, people will want you on their team even if you have little experience.

Thirdly, give it away. Volunteer your expertise, share your ideas. Don't hoard your human capital. Show them what you've got and they'll want to work with you. Ideas are cheap. The more you give away, the more you will get.

Finally, surround yourself with intelligent, focused people. Some of it will rub off on you. You can only get better. But these days, watch out for naked ambition. Watch out for people with get rich quick schemes. Look for success in the long run and you'll be better able to balance your life.

You're probably thinking that this advice would be the same even if unemployment were going down. You're right. Use that kind of statistic as intelligence, not an excuse for inactivity.

What Accountants Know

noreply@blogger.com (Bill Kennedy, CA) — Wed, 04 Nov 2009 02:32:00 +0000

What do accountants bring to the table for charitable donations? I would like to make the case for a special kind of support, something that will help EVERY charity and something that comes naturally with accounting training and experience.

The difficult fact that each charity faces is that nobody wants to support administrative costs. Governments don't fund this area, nor do foundations or private individuals as a rule. Yet every charity spends a significant amount of time and money on administration: paying the rent, keying in the payroll, buying insurance, etc.

As accountants, we are arguably experts on administration. We track it. We analyze it. We minimize it. We research it. And we appreciate it when it's done well.

So many not-for-profit organizations I've worked with actually underspend on administration. They use obsolete computers and inadequate software, forcing them to spend too much staff and volunteer time on admin. Often staff are not sufficiently trained in standard packages like word processors and spreadsheets, so too much time gets spent on the otherwise normal processing of transactions and reports. Others are lucky enough to have an endowment cover at least part of the administrative costs, but they are a small minority.

Sometimes this skimping on administration leads to self-defeating results. It takes resources to write grant proposals, report to donors, mount events or create fundraising campaigns. As any salesperson will tell you, you have to spend money to make money.

Administration is not exciting. Most people would rather see their money go towards a scholarship, a key piece of equipment or research into curing a disease, but with our specialized training and experience, accountants are different. We know how important effective administration is, how the very success of the charity may depend on it.

So, please consider marking your next donation to your favorite charity, "For ongoing administration". Your donation will get the attention it deserves!

Don't Manage Me!

noreply@blogger.com (Bill Kennedy, CA) — Sun, 01 Nov 2009 20:47:00 +0000

The nice young man across the table was trying to help my wife and I renew our mortgage. He had access to all of the transactions we had done at the bank, whether online, through the call center or through the branch. It was clear that he was using a well designed Customer Relationship Management (CRM) package. He had everything at his fingertips. The problem is that CRM is no substitute for an actual relationship.

CRM started life as a Rolodex, a listing of the names and addresses of a salesperson's contacts. Good salespeople knew they needed more than "tombstone" information about their customers, so they started taking notes on their customers. When computers systems to replace Rolodex cards were created, they were called Contact Management systems. Later on, it became clear that the sales team could benefit from knowing all of the ways customers interact with the company and Contact Management software morphed into CRM. The problem is, CRM was built to support existing relationships, not replace them.

The nice young man we were talking about our mortgage a few years ago to was not actually a banker. He was actually a high school teacher by day, working at the bank in the evenings. His advice to us was to lock in the mortgage because, after all, how could rates go any lower? (If you're smiling right now, you know where I'm headed.) Well, rates did go lower.

Now, as my wife and I are planning our financial future, one source of information we will no longer use is our bank. I have no relationship with anyone at the bank that I can trust. I have nobody that I can go to who knows me well enough to advise me. Each bank looks pretty much the same to me right now. I feel no loyalty to the one I'm using. This means it would be pretty easy for another bank to take my business by offering me a better rate.

But hey, my bank still has a good CRM system.

Experienced, Responsible, Reliable, BORING

noreply@blogger.com (Bill Kennedy, CA) — Sat, 31 Oct 2009 10:05:00 +0000

In a blog post about hiring leaders, Wayne Floyd asks, "How would you describe the most important skills or qualifications that you bring to the position of leadership?" He then gives the standard list: "experienced, responsible, reliable, organized, competent, skilled, likeable, supportive, flexible, collaborative, knowledgeable, proficient person to …."

He goes on to challenge the standard list, saying that we should think carefully about what we need and use the right words to attract the right kind of leader. He is looking for church leaders at a time when most mainline churches are in decline, so here's his want ad:

Wanted: A compulsive networker and incorrigibly hopeful futurist and wooer of the straying, a lifehacker full of tips and tricks for getting things done among people who often seem to have given up already, a visual storyteller and verbal artist — strategy orchestrator, textologist, and Experience Engineer, to serve as ….

Now, I know that when you hire an accountant, reliability and responsibility figure high on the list, but I wonder whether we need to crib some of the qualities from the list above and add them to our tool box. We accountants need to be good communicators if we are going to get our message across. We have to be nimble and able to package what we say into 10 second sound bytes. We are often the bearers of bad news, so maybe a hopeful attitude and a capacity for getting things done would also be useful.

What life skills would you add to the list of requirements for the modern accountant?

Putting the Customer First - Really!

noreply@blogger.com (Bill Kennedy, CA) — Sun, 25 Oct 2009 21:43:00 +0000

You, the software vendor, are making your pitch. It breaks down into three sections:

Microsoft has amazing software,
You are an amazing Microsoft representative, and
Here's how you would address my needs.

It's very logical, isn't it? The problem is that every vendor I see has the same pitch. It's like Microsoft has pre-packaged the sales presentation (actually, Microsoft does do that, but that's a story for another day). Another problem is that my eyes have glazed over by the time you get to the good stuff.

Really. I'm stifling yawns by the end of the first section. You see, I can predict what you're going to present, so I lose interest. There's no way you're going to say that Microsoft is anything other than perfect or that anybody might have a better team than yours.

What if we turned the whole presentation around? What if the presentation started with my problems? What if instead of filling the screen with the logos of the other companies that use the software, it was filled with diagrams showing what I need? You'd have my attention.

Really. I'd be on the edge of my seat.

Then, once you've got my attention by showing me that you understand me, what if the salesperson stands back and lets the team speak? That would show me that you have confidence in the people who are going to do the work. YES, let the techie speak! Coach him/her before hand. Tell them it's OK to be nervous, but let them say something like, "I spoke to your technical staff about your current hardware. We think you can continue to use your existing workstations and network. All that will be required is a separate server for the Microsoft system." Then, your implementation manager could give me a run down of a sample implementation for a company my size. I would get a chance to assess the chemistry between my staff and yours.

After that, I'd be all questions. Have you done this kind of implementation before? Who are your other clients? Can the Microsoft system handle my requirements? You could then do the rest of your presentation, and get through all of your material without a single yawn from me.

Really!

Energized Accounting Graduate

noreply@blogger.com (Bill Kennedy, CA) — Sun, 25 Oct 2009 10:45:00 +0000

This posting appeared in craigslist: http://toronto.en.craigslist.ca/tor/res/1424093814.html

Hard Working Energized Accounting Graduate seeking employment (all of GTA)

I just want to say that while I am actively encouraging energized accounting, I haven't actually graduated anyone in this field. It is, however, wonderful to see others using the term Energized when describing accounting!

2 > 2 X 1 (Accounting Can Be Lonely)

noreply@blogger.com (Bill Kennedy, CA) — Sat, 24 Oct 2009 20:12:00 +0000

Accounting can be lonely. So much of what we do is by ourselves. I was at a the finance committee meeting of a charity last week. We were discussing how much money the charity needs to have on hand as a contingency fund. We decided that three month's worth of expenses was a realistic, practical amount. After the discussion, the Treasurer thanked us. He said he and the other management staff had wrestled with the question, but he felt better having the chance to work with other accountants.

I have to agree. Having another professional accountant to challenge your thinking and check your work is invaluable. The work of two together is worth more than the two individuals. Sometimes you get that kind of discussion with your auditor, but I find a peer's advice so much more practical and useful. It also helps that I'm usually not paying my peer by the hour!

Earlier this week I attended a meeting of an industry group. They bring together representatives from the various organizations in our industry. This, too, gives me a chance to check in with my peers. I can stay up to date with them, check our performance against theirs, find out what issues they face and what opportunities there are to work together.

So, this is just a little reminder: if you're feeling alone in your work, consider volunteering on the finance committee of a charity or getting involved in your industry association. You'll be glad you did.

Cover Letter Blues

noreply@blogger.com (Bill Kennedy, CA) — Sat, 17 Oct 2009 12:57:00 +0000

Reading all the resumes was depressing. We're hiring a new manager and I was going through a stack of them with the human resources consultant. The resumes looked remarkably similar and there wasn't a decent cover letter in the pile. "We should have required applicants to have good communication skills," I joked to the consultant. "We did," he replied.

Here's the way I see it. My resume is all about me. Me me me. My cover letter needs to be about the employer. You you you. Here's my advice to anyone applying for a job:

Go through the ad in detail. Take all the requirements seriously. Think about how your background fits with the job.
If this job is important to you, do some more digging. Look for the challenges faced by the employer. Look for things that aren't in the job ad. Is the industry cyclical or in decline? Are they threatened by foreign competitors? Are they having to deal with explosive growth? Check out the company's web site as well as any news articles that mentioned them.
Pick the top three challenges and do a SHORT paragraph for each. The opening sentence should start like this: "You are looking for someone with solid industry experience who can lead the team." You can then tie their requirement to the skills and experience outlined in your resume. By the way, if the evidence you want to use is not in your resume, then update it. There is no rule that says you have to use the same resume at each company.
That is the meat of your letter. Next you need an opening. The opening is important because it needs to grab the attention of the reader. Show them that's it's worth their time to read the rest of the letter. Since so few people seem to do this, I would use the opening to show that I understand the challenges this company faces.
Finally, your closing should be a call to action and a polite ending of the letter.

Remember, if you are applying for a management position, communications is part of the job, even if it isn't in the job ad. You need to show that you can analyze a situation, convey your thoughts briefly and clearly, make a persuasive case and be sensitive to the needs of others.

Oh, and please spell the name of the company correctly!

Accountants Care

noreply@blogger.com (Bill Kennedy, CA) — Tue, 13 Oct 2009 02:26:00 +0000

Karen was the accountant for a client of mine. She had twenty years of experience, starting as the receptionist and working her way up to become an indispensable part of the team. She was quiet and dependable, keeping the invoicing and payroll systems going through changes in legislation, system problems and people’s comings and goings. That is, unless you were trying to get away with anything. If a salesperson tried to get some of next month’s sales recorded in this month for bonus purposes, she had a way of making a grown man feel like a little boy caught with his fingers in the cookie jar. I don’t think she ever put the company before her children and husband, but it came a close second.

Accountants care about where they work. In my experience, they take their jobs personally. If anything goes wrong with the company, they feel it, even if it is something completely out of their control. At the same time, they are the company’s conscience, asking the difficult questions about why the budget was not met or why so much money was spent. In good times, accountants are invisible. In bad times, nobody wants to talk to us.

Last week, I attended a meeting with 15 volunteer treasurers from local churches. It was a three-hour meeting about such things as whether people paid by the church (e.g. musicians, choir directors, replacement ministers, etc.) should be treated as employees or contractors for income tax purposes. We also discussed reporting requirements for charities, budgeting, the disposal of church property and other technical matters. The treasurers then had the responsibility of going back to their churches, implementing any necessary changes and explaining the results to their boards.

As I looked around the table, I saw a lot of caring people. I remembered when my mother was elected treasurer of a volunteer group. The requirements were much simpler back then, but I remember her and my father, who actually had a business degree, spending a week of evenings wading through the mess of what had been done previously. We don’t thank volunteers like these nearly enough.

Accounting's Patron Saint

noreply@blogger.com (Bill Kennedy, CA) — Thu, 08 Oct 2009 01:33:00 +0000

Here's the official patron saint of accounting, Saint Matthew:

"The patron saint of accountants, bankers, bookkeepers, security guards and tax collectors is Saint Matthew of Apostle fame, and he also was the author of one of the Gospels. Before becoming an Apostle, however, he started out as a Jewish tax collector at Capernaum. Little is known about him, outside the seven references he has in the Gospels. In medieval art, Saint Matthew is represented under the symbol of a winged man, carrying in his hand a lance as a characteristic emblem - his artistic calling card if you will. He is one of the originals in the pantheon of patron saints."

Okay, that's the official line. My nominee for the patron saint of accounting would be Cassandra from ancient Greek mythology (and not just because she's both smart and beautiful). She was the one who was condemned by Apollo to be able to see the future but have nobody believe her. She warned Paris that he was courting disaster when he went after Helen. She later warned the Trojans about the Greeks' horse statue, but do you think anyone listened?

Honestly, do you sometimes feel that way? I thought so.

I was accused of exceeding my mandate the other day because I recommended a strategic course of action. According to this person, my role as accountant is only to give the financial picture. I am supposed to tell people what the cost consequences of their decisions are, but not recommend a course of action. Now, I want to make it clear that this person is not my boss, nor did he represent a majority. Still, do you think he was right?

As accountants, are we just supposed to analyze the situation and nothing more? Do we destroy our objectivity or independence if we make specific recommendations? If you see a solution to a financial problem, should you wait for others to fix it or should you step in boldly and argue for your vision? Or are we condemned, like Cassandra, not to be believed?

The More Things Change . . .

noreply@blogger.com (Bill Kennedy, CA) — Tue, 06 Oct 2009 12:57:00 +0000

My son is in the throws of selecting a university (no, he has no intention of studying accounting!)We are doing the usual rounds of visits to campuses, going to the university fair and my son is attending the events sponsored by the colleges at his school. This morning he was chuckling at the lame marketing slogans employed by the universities.

"'Discover the unexpected,' like, what's that supposed to mean?" he said to me on the subway this morning.

"You're not impressed with their marketing?"

"My generation learned about advertising when the Batman figure we bought at age six didn't work like the TV commercial."

"So you're not impressed by the free pens or mousepads?"

"Nope."

"Okay, so what should the universities use to attract teenagers to their displays?"

"Donuts."

The more things change, the more they stay the same.

This Accounting Life

noreply@blogger.com (Bill Kennedy, CA) — Sun, 04 Oct 2009 11:46:00 +0000

Late last night I was driving home from work, yeah I know it was Saturday - it's budget time, enough said - and I passed by a building where I used to work. There was a light on in one room and I realized it was my old office. Now, I have no way of knowing whether that's still the Controller's office or not, but I felt a stab of pity/empathy for a fellow sufferer. I pictured him / her sweating over the gap between revenues and expenses just as I had been doing.

Did we sign up for this? When you went to accounting school, did anyone stand at the front of the class and ask you why the hell you were choosing a life where you would be working late nights and weekends to meet this or that corporate / government / bureaucratic deadline? And they just keep coming. It isn't just year end. It's also month / quarter / budget / government form / system change / retroactively applying some new accounting pronouncement etc. etc. time. And then someone says they need a quick report / analysis / answer to an important question. Frankly, often that person is me. I stare at the numbers and something doesn't make sense, so I'm off on a hunt to find out what REALLY happened.

I know, I know. I shouldn't complain. Accounting has been a good career for me. It allowed me to move between companies and across industries when times were hard. I have been involved in challenging projects and meet some very caring people. But neither of my children has any interest in becoming an accountant. "You work too hard," my son told me. I just smiled. I'll let him figure that one out for himself.

So, what sparked this little diatribe? In yesterday's paper there was an essay about Kevin Page, "The Man Who Knows Too Much". He is the head of the Parliamentary Budget Office and his projections of the cost of the budget disagree with the government's. Surprise, surprise. He seems to think that the government's projections are too rosy and now he is being accused of violating his legislative mandate.

He sees the Parliamentary Budget Office, which has been in operation for a year and a half, as the Canadian equivalent of Washington's Congressional Budget Office, the powerful independent agency that, among its other duties, costs proposed legislation in the House of Representatives and the Senate.

The key word is "independent". Yesterday I was looking at a proposal that called for "independent legal advice". It occurred to me that that is an oxymoron. There is no such thing as independent legal advice because lawyers are paid to be advocates. Lawyers professionally represent their client's point of view. Accountants are the ones who crave independence and objectivity. The numbers need to stay the same regardless of who is using them. It shouldn't matter whether you are the government or the Parliamentary Budget Office, there is only one projected cost. Sure, you can attack the accountant's assumptions and methods, but you can bet (s)he was there past midnight making sure the numbers were right.