and the complexities of the planning process
drive every advisor crazy. A paperless imaging and archiving system will ease much of
this burden. Paperless for financial planning
isn’t quite as advanced as it is for tax practice,
but you can buy systems that offer automated
application filling, straight through-process-ing to custodians or other vendors, and com-pliance-approved archiving.
Technology resources for your clients are
also important. As a small practice, competitive forces dictate that your technology looks
as good as that of the behemoth direct marketers. That would include a Web site for your
practice that does more than offer electronic
brochures of your firm. It should include a
portal that allows them to look at holdings
and even a way for them to get access to important documents, such as wills and insurance policies, that you can archive for them. I
like client-facing systems that have a two-way
PFP Resources
FROM PAGE 18
and entities whose tax liability is subject to a
100 percent credit for dividends paid.
A two-step approach is used for evaluating
tax positions. The first step, recognition, occurs when an enterprise concludes that a tax
position, based solely on its technical merits,
is more likely than not to be sustained upon
examination. Measurement is the second
step, which is addressed if the requirement
for recognition has been satisfied. The benefit
of a tax position is the largest amount of benefit, determined on a cumulative probability
basis, that is more likely than not to be realized upon ultimate settlement.
Another issue at play — that may not have
had full effect yet, but could soon — is convergence with International Financial Reporting
Standards. As the U.S. awaits a final Securities
and Exchange Commission decision, the rest
of the world is busy at convergence. If convergence eventually occurs in the U.S., changes
to policies and procedures, and more education for staff, boards of directors, and investors, are inevitable.
Tax Reporting
FROM PAGE 16
PROBLEMS OVERSEAS
For companies with subsidiaries abroad, IFRS
challenges may already exist. Since most oth-
er countries are somewhere along the path
to convergence with IFRS, many subsidiar-
ies are already facing convergence issues for
in-country reporting. IFRS may necessitate
another “set” of foreign books with which
there must be translation and consolidation
procedures. The ability to extend ASC 740 to
foreign subsidiaries can be challenging for
many reasons, from the complexity of for-
mirror, allowing the advisor, the client, or one
or more of your subject matter experts to also
access the system.
TYING IT ALL TOGETHER
The last category of resources necessary to
build a great wealth management practice
would be systems and processes. Most CPAs
have terrific systems and processes for their
accounting practice. You have engagement
checklists, routing sheets or online workflow,
and levels of review to ensure quality control.
These systems were probably built after years
of testing in the trenches.
But for financial planning engagements,
scalable systems and processes are very rare
in CPA firms. Even though financial planning is a relatively new area of service for
the profession, there is no excuse for having undocumented systems and processes
for everything from client engagements to
quality control. We already mentioned that
all of this can be created and implemented
through your CRM system. Good systems and
eign tax laws to cultural differences. Some
companies rely on a decentralized approach
out of the necessity of relying on in-country
tax and financial accounting expertise. As
a result, incorporating disciplined ASC 740
evaluations of tax positions can be difficult
in a multinational context.
BEST PRACTICES
With all this legal and regulatory cacophony,
tax function best practices are imperative,
albeit difficult. Best practices should be policies, procedures and systems designed to repeatedly accomplish, or exceed, performance
expectations with the minimum cost to establish and operate.
One way to approach best practices for the
tax function is to use proven quality improve-
ment processes. Usually those processes in-
clude planning, analysis, implementation/in-
tegration, monitoring, and feedback of some
type. A good first step is to set goals for the
process. Below are several goals to consider
for the tax accrual process:
an hourly billing rate. It starts with making
the time to develop the planning side of the
business. Without exception, you’ll first need
to carve time out for the financial planning
division every week to make it successful.
CPA planners whose planning division isn’t
growing are probably getting drawn back into
the accounting side of the business to the det-
riment of the financial planning division.
