WORKING WITH NONPROFITS P. 21
CPAs can help NFP clients with untangling regulatory
burdens, and smaller budgets
CASE STUDIES: PORTALS P. 24
Firms in the trenches share best practices
about these client communication tools

accountingtoday.com

SOFTWARE REVIEW P. 26
We test-drive the best accounting packages
for mid-range businesses

Partners: Time to update your pact

It’s often referred to as the Holy Grail of an accounting firm — a crucial, almost revered document that legally de;nes the organization and serves as the cornerstone for many critical areas of its operation — yet, inexplicably, many ;rms rarely refer to it, or neglect it when it’s badly overdue for an update.

It’s the partnership agreement, the roadmap that determines ;rm governance, compensation, retirement, restrictive covenants, partner election and termination, capital contributions, and equity vs. income partners, among many other things.

“If you don’t have one, you’re basically screwed,” quipped consultant August Aquila, who heads Aquila Global Advisors in Minneapolis, and has both lectured and written on partnership agreements. “I’ve seen too many cases

See PACT on 35

BY BILL CARLINO

Firm partnership agreements are too often out of date — or worse, ignored

BEST FEET FORWARD MICHIGAN’S REHMANN MAKES GREAT STRIDES ee page 8

Off to a slow start

Late legislation means delays, but more certainty for pracs

While the late December tax cut extension slowed down the beginning of tax season for some, it brought a welcome degree of certainty to the tax landscape.

“Now, for two years, we at least know what our
tax system looks like in a general sense,” said Leon
LaBrecque, managing partner of investment man-
agement ;rm LJPR LLC. “We can continue to look
at dividends and capital gains with special rates;
we can plan for our tax bill and make decisions
based on at least some certainty.”
Bob Scharin, senior tax analyst for the Tax &
Accounting business of ;omson Reuters, agreed.
“Taxpayers who made Roth IRA conversions are
faced with an option when they file their 2010
returns. They can have their income from the
conversion taxed in 2011 and 2012, or they can
elect out of that deferral and have it taxed in 2010
instead,” he said. “;e extension legislation gives
people more certainty regarding the 2011 and
2012 rates, so they should be more comfortable
taking advantage of the tax deferral and not worry

See SLOW START on 37

BY ROGER RUSSELL

Tax Season Update

Beware reckless engagement

How to tell if a client means trouble — and what to do about it

If your gut tells you a client is
risky, you’re probably right.
BY ROGER RUSSELL

SPECIAL REPORT

“We frequently hear accoun-
tants say, ‘I knew this client was
going to be trouble,’” said Tom
Henell, chief marketing o;cer at
the North American Professional
Liability Insurance Agency, which
specializes in providing profes-
sional liability insurance. “You
wonder why they took them
on in the first place. With some
prospects, it’s better to lose them
even before they become a client,
rather than taking on someone
that you have doubts about from
the beginning.”
Ron Parisi, executive vice
president of risk management at
California-based Camico, agreed.
“Client acceptance and re-ac-
ceptance are the most important
aspects of risk management,” he
said. “It’s really who the clients are
that get you in trouble more than
your work product.”
To that end, Parisi recommend-