Remembering a Sad Day

God grant me the serenity
to accept the things I cannot change;
courage to change the things I can;
and wisdom to know the difference.
Living one day at a time;
enjoying one moment at a time;
accepting hardships as the pathway to peace;
taking, as He did, this sinful world
as it is, not as I would have it;
trusting that He will make all things right
if I surrender to His Will;
that I may be reasonably happy in this life
and supremely happy with Him
forever in the next.
Amen.

--- Reinhold Niebuhr (1892-1971)

Opportunities beyond Workation

I’m writing this looking out on Long Island sound on my Fourth of July get away.  According to the commercial real estate company, Regus most of us this year will have what they call a “Workation”.  Among their findings is that during this year's vacation time:

• 50 percent of Americans will do some work
• 75 percent plan to stay connected to the office
• 66 percent will be checking and responding to email  
• 29 percent may have to attend meetings virtually

While it’s possible people are inherently more productive lately, my guess is this behavior is a reflection of economic concerns.  A new CBS News poll  shows only 20% of Americans think the economy is improving, and 39% think it has permanently declined. 

While admitting that I will do some work this weekend, I would also say that particularly around the 4^th of July my belief in the resilience of the American economy is very strong.  As an encouragement to economic development  I’m passing on the IBIS World  suggestions for  5 best growth industries for start up businesses. 

1.  The Testing and Educational Support industry has gown an average of more than 6% a year over the past five years, and that growth is expected to continue.  The rapid pace of change in the work place has yielded dislocation for lots of folks.  Training and testing the relocation of these workers into hot job areas is already a $15 billion dollar industry.

2.  IBIS World acknowledged the obvious opportunities available in cloud computing and mobile, but also brought up the need to provide services to help businesses with their technology needs. As examples of this they suggest looking into IT consulting, logistics, online lead generation, and data mining consulting. 

3.  This next slot was one that surprised me.  The strength of the “Green business” is withstanding the economic downturn. IBIS World projects environmental consulting growth should be upwards of 9% a year through 2016.  Growing just as robustly is the inverse industry – environmental remediation.   

4.  The next one was hard to agree with -- Residential and Commercial Construction.  IBIS World’s hypothesis is essentially, people need a place to live and / or work, so declines in this area have to end at some point.  Still there is so much slack in the system, I have to question the idea that now is the time to get involved in the construction business.

5.  Interestingly their pick for health care growth opportunities is alternative health care.  They project that industry’s revenue to grow 4.3 percent annually for the next five years, reaching $14.4 billion by 2016.

Looking at all this I’m inspired to work on a mobile app that makes it easier to meditate on your tax planning options without using so much paper….

How to Depreciate a Time Machine

At a recent continuing education session, one of the partners talked about how historical cost accounting was fading in value, and that the focus of our services will increasingly be about what  something is worth right now. I thought that was a keen observation and it reminded me how important it is to be building competency with a focus on where your work is going. 

This type of thinking caused me to read about the Technology Time Machine Symposium. Clearly I’m already behind the curve on this one, as I have no idea what the depreciation schedule is for a time machine.  Actually, they didn’t really have a time machine, the conference was populated by people who can make an educated guess about what the world will be like in 2020. 

The ideas are pretty cool.  Computers will be more powerful, and the whole concept of mobile computing will be different when you can roll up the computer and the screen made of flexible component materials.  Walls will display things, and everything will be touch screen, but you won’t actually have to touch – just gesture.  Some things won’t even need that as we’ll have brain computer interfaces that we’ll either wear or have implanted. 

Interestingly, the one solution not provided, was the issue of how all this information is going to be transmitted between us and our devices.  The Giga-OM piece on the conference talked about how network capabilities appear to have more potential than the foreseeable traffic management technologies.  “It’s nice to own a Lamborghini, but it won’t get you there any faster at rush hour”.

While they didn’t talk about the accountant of the future, it got me thinking about this. I remember Y2K, so I’m thinking it’ll be 2020 before I know it.  In 2020 I picture going on audits with virtual reality capabilities that let me “see” the inventory values overlaid on the actual inventory.  I’m picturing a virtual shoebox at tax time that lets me sort the various items electronically and zoom in to see details on transactions that are potentially mislabeled by the client. Best of all, I see more real time collaboration with clients as the efficiency of organizing and analyzing data increases.  This means we can discuss the possibilities as the information comes in. Not quite as good as a time machine – but pretty terrific.

CPAs Margin Call

So its turns out that besides reorganizing how we interact socially and start worldwide democratic revolutions, social media is also getting more students to study computer science.  The theory is that Facebook, or rather the movie about it’s founder, has made being a geek cool again.  Also, one has to believe in a world where college is expensive and jobs are scarce, studying in this area also makes economic sense.  Still, it’s worth noting that unless you are Mark Zuckerberg or Andrew Mason (GroupOn), according to this blog post from Forbes.com, you might actually be better off majoring in accounting.

 In a February post called “The Most Profitable Small Businesses “ , Forbes assembled a list of the 20 most profitable industries, and CPA’s topped the list!  Who knew?!  (Obviously not me.)  Chiropractors were number 2 followed by “Freestanding Ambulatory Surgical and Emergency Centers”.  Non-CPA accounting services held the number 4 spot and Dentists came in at number 5.  Lawyers were number 8, Portfolio Managers were number 10. Physicians’ offices (except mental health specialists) came in at 20.

I’m sorry, there’s no way I’m going to tell my son that he shouldn’t apply to medical school because he can make more money as an accountant.  I’ve done too many tax returns to have those words leave my mouth.  However, as an accountant, I do have an explanation.  The issue is margin.  Profitability is how many cents out of a dollar your business gets to keep.  People who make lots more gross dollars than any accountant I’ve had the pleasure to meet can work in low margin businesses.  For example current “activist investor” Ron Burkle was in the supermarket business before he had billions left over to invest.  Supermarket margins are known for being razor thin.   

Still, it’s nice to know when it comes to being thrifty accountants rank number one.  Who knows, one day it may even be cool to be “froogle”.

Tips on Tipping

I’m not a US News & World Report subscriber, though I admit they’re often a first choice when I’m at the airport news stand.  I stumbled on their piece about appropriate amounts to tip at year end, and thought I would pass along the key points.  This is always a “nail-biter” for me.  I want to show my appreciation.  I value courtesy and think it’s important to extend it whenever possible.  However, it’s not obvious to me how one determines where the number is between doing a Scrooge imitation or acting like Daddy Warbucks. 

 So here’s the scoop according the US News:

• The postman can get up to $20, but it’s OK to leave cookies or a little gift instead.  Newspaper delivery came in a little understand the postman with a $10 to $20 recommendation.  For the garbage truck they recommended $20 for each person on the truck.  (Oops, I’ve definitely under done that one for years.) 
• They suggest collaborating with other parents to come up with between $100 to $300 for daycare.  (I always did cookies for that!) 
• For your cleaning lady or any other personal service provider you see at least once a month (massage, personal trainer, etc.) they recommend the value of one visit.

 

Of course, the minute someone puts a number on something I have this uncontrollable impulse to benchmark.  Kiplinger recommendations run along the same lines as US News, though they did suggest just $25 to $75 for the day care provider.  (I still think a personal gift is a better bet for that one.)  Another area of difference from US News was a flat rate of $50 for a personal trainer and the cost of one visit for your hairstylist.  Interestingly the Kiplinger folks opine that if the provider of personal services acts as a confidant as well as their official job title, you should throw in a little extra. 

 Martha Stewart had a few ideas surprised me.  She frowns on giving home-made gifts in lieu of a holiday tip, which she suggests should be only for friends and family.  OK, so not everyone can be Martha Stewart, but if you take the time to make something, I think it sends a nice message.  Oh well, one of us is famous for our social suggestions, and it’s not me.  So I guess I’ll hang up my glue gun.   I will agree with Martha on another topic.  She said no need to send some cash back to your accountant if you appreciate the job done on the tax return.  Just a thank you card and repeat business will do. 

The final note in the US News article is one I have argued for years – the standard tip now is 20%.  15% is archaic.  I joined the 20% club after finding the right answer to the New York Times crossword puzzle clue on standard tip amount was – 20%.