Waypoints: Ideas and Insights to Navigate Enterprise Complexity

Are you ready to implement the Department of Labor’s new overtime rules when they go into effect on Dec. 1, 2016?

I don’t know if you’ve ever attended a Meet the Firms event—it’s similar to a career fair but specific for the accounting field. Colleges and universities hold them to help graduating students make connections with hiring firms. When I was at The University of Southern Mississippi, the process consisted of waiting in boring long lines, crowds of people, and praying that I got to talk to the firms I was interested in.

All industries are experiencing disruption in today’s environment, but few are experiencing it to the degree the energy industry is, especially those in the electricity sector. The industry faces government regulations, security threats, demographic shifts, storage limitations, consumer demands, technological changes, shifts in public perception and supply chain transformations, just to name a few. At first glance, one might feel overwhelmed at the task at hand, adapting to the changes currently bombarding the industry, while simultaneously anticipating future opportunities so not to be disrupted by change but rather help drive it!

Recently, House Speaker Paul Ryan and Ways and Means Committee Chairman Kevin Brady released a blueprint for comprehensive tax reform. While these proposed changes are not authored by either presidential nominee, they will likely be an integral part of any tax reform taking place in 2017, assuming the Republicans maintain House control. The blueprint is a step towards tax law simplicity and is pro-growth, leading some to believe the Senate might take action on similar legislation as well. 

In the news lately, company after company has been announcing significant layoffs in their workforce. The reasons are varied, including centralizing operations at a corporate office, cutting budgets, experiencing an industry downturn or automating manual tasks.

When the HORNE Public & Middle Market team started writing about the new lease standard and the new revenue recognition standard, the implementation deadlines seemed to be in the distant future. The guidance for the lease standard was just released in February of this year and doesn’t take effect for public companies until 2019 and for private companies until 2020. The revenue recognition standard deadlines are scheduled a year earlier—2018 and 2019 for public and private companies, respectively.

Forbes just reported that “the average cost of a data breach has reached $4 million, up 30% from 2013.” The article shows that time is of the essence when measuring the costs a breach may inflict. For example, if the breach is identified in less than 100 days, the cost is averages a mere $3.23 million while those that were undiscovered until after 100 days could cost an average of $4.38 million for repairs and reparations. What a difference a few days can make when it comes to controlling the costs associated with repairing the damage of a data breach.

For those in the trucking industry, it is no secret that one of the biggest challenges is the increasing shortage of drivers. The America Trucking Associations recently estimated the shortage is currently between 35,000 and 40,000 drivers – a number that is expected to rise due to economic growth and increasing retirement in the workforce. In addition to the driver shortage, the turnover rate has been as high as 95 percent during the last three years.

Tax policy is a critical element of any presidential campaign, and this year is no different. Presumptive nominees Donald Trump and Hillary Clinton have proposed very different tax law changes, and it is not too early to take a look at the highlights of these proposed plans. Keep in mind that regardless of the outcome, neither candidate will have all of his or her proposals enacted into legislation.

The two plans have some distinct differences that are worth a closer look. Highlights are as follows:

I’m a CPA. So every time I make a large purchase, I do the research first. I didn’t buy my last car on a whim – I looked at various makes and models in order to decide which one was best for me. Fortunately, I could use any of a number of websites that allow consumers to compare vehicles, and I did. I compared horsepower, fuel economy and safety ratings, among other things. The ability to compare vehicles helped to make a difficult decision much easier. I bought a Ford F-150, if you’re interested.

New Orleans provided a great venue for this year’s AICPA CFO Conference. CFOs from around the country arrived to expand their knowledge on topics from risk management to being an effective leader.  As someone in the accounting profession and not in that CFO, here are a few of my takeaways from the conference. 

One of the benefits of working with a variety of clients is that the PMM team is able to observe excellence in governance first hand. Many of our clients are putting best practices to work in their organizations, and they have high expectations for the performance of their boards of directors and their audit committees. I’d like to share some of the traits I see as hallmarks of high-performing audit committees. You can use my observations to assess the performance of your own audit committee. After all, you might be one of the companies we think are the best.

Recently, my team and I were discussing an audit recommendation with a client. We thought it was a no-brainer – our suggested change would make the audit process more efficient and put less of a burden on our client. We were certain the client would love our idea because it would mean fewer headaches for the company in the future.