Archives for February 2013

A Resurgence of Outsourcing

The word “outsourcing”, in some instances, has a bad connotation, but for many it means being able to compete with other companies worldwide. The most basic method of outsourcing is using an external service provider to perform functions that the company does not want to perform itself. There are many ways that this can be done and not all of them mean sending business overseas.

There are two different types of outsourcing: onshore and offshore. When Company A has Company B, which is in their same country, complete the service, which is onshore outsourcing. Offshore outsourcing has two types, nearshoring and farshoring. For any company that is outsourcing to a company that is geographically close to them, but not in their country, they are nearshoring. Farshoring would be using a company that is not geographically close to them.

A company of any size can outsource. There are two sides to outsourcing—a service provider and a service buyer. To help companies find other companies for outsourcing the International Association of Outsourcing Professionals (IAOP) generates a list of the best services providers.

There is not an ideal way of outsourcing for any company. By looking at all the possibilities, finding the right solution for their company is possible, but first we need to know why a company outsources. The main reason is to reduce operating cost, but other reasons include assess to new skills or technology, and to make global operations more effective.

Companies that choose to outsource services are typically outsourcing IT, human resources, finance and accounting, procurements and facilities management. The biggest of those services outsources is IT. Many times the company providing the IT services has technologies that midsize to smaller companies do not have the money to invest in, and it make more economical sense to outsource it to a company that has the technology already.

Outsourcing in some aspect will continue into the future. There have been predictions that offshoring will continue to increase. With the increase of unemployment, many companies are looking at different cities in the US for outsourcing, but with wages still cheaper in other countries, outsourcing will be here to stay.

Here at Crowley & Halloran CPA’s, our consultants would be happy to help you plan and manage your business budget. Click here to request a proposal.

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Wealth Management Trends for 2013

With 2013 barely underway, trends for wealth management are undergoing a transition characterized by uncertainty and change. The change will affect everything from business models to how technology influences client relationships. Over the next few months, the changes develop how wealth management services are provided to clients.

A lot of the reevaluation will focus around operating and growth strategies, should companies acquire other companies or partners. The largest wealth management firms will continue to grow through acquisitions and internal building. Whereas the smaller to midsize companies may choose to grow through partners that provide resources that will help them remain current and competitive.  Wealth management firms will become smarter about running their business and become open to working with other companies that has the expertise help them deliver their services.

Along with growth, many advisors will begin to find a successor and groom them to take over their practice. It is important to ensure the longevity of their practice. Finding their ideal successor and connecting them with their clients’ children safeguards their practice from declining after they retire. By bringing in a younger successor, they will be able to establish their own client list, and prove to your established clients that they will be taken care of when you retire.

Wealth management services will also progress through the uses of technology. Larger firms will have an advantage of the newest technology and all that it can provide. Smaller firms that outsource to other companies for some technology needs are currently less efficient. However, there will be a move to efficiency. Many firms will be investing in technology to maintain or create effective ways of working for and with clients. Many firms will find themselves working from the cloud and have an “always on” connectivity through online access.

Overall, there are many transitions to come this year. Be proactive in how the year progresses and grow your business accordingly. Take the change as a positive and the uncertainty as a chance to find your way.

Here at Crowley & Halloran CPA’s, our consultants would be happy to help you plan and manage your business budget. Click here to request a proposal.

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Dodd-Frank Act Protecting Whistleblowers

Prior to when the Dodd-Frank Act was enacted, the standards for dealing with a client’s confidentiality made it a challenge for CPA’s who discover fraud to report their findings. The Dodd-Frank Act, which is a federal law, therefore overriding state laws, has increased protection for CPA’s who find or attempt to find fraud.

The Dodd-Frank Act had several requirements, including the SEC to establish a whistleblower program that not only offers protection, but also monetary awards for the individual reporting the fraud. While many CPA’s might choose to keep the issues internal, there are some cases where they will need to make an external report to maintain integrity. In those cases, the CPA would have protection from discrimination and if possible, identification while making the report and through the investigation.

While the Dodd-Frank Act protects any individual, including CPA and other professionals when reporting fraud, it also helps encourage individuals to report findings. In the past, many professionals would quietly resign from the job instead of reporting findings. This give the professional a chance to report the problem instead of letting it continue. It is now their professional obligation to report such findings to either the company or the SEC. Regardless of what happens during the investigation, the person who makes the claim will still have the same protections under the law, as long as the submission was made in good faith.

Even with all the protections in place, there are still some risks to making a report. Understandably, many CPA feel a commitment to their clients and do not want to betray their trust or undermine the relationship. They may also feel that they are breaking confidentiality codes and could lose their licenses, but in reality accountants are required to present the findings to someone. According to her AICPA Code of Professional Conduct, an accountant should present the findings to the audit committee or the full board of directors. If the audit committee or board of directors refuses to do something, then the findings should be submitted. The submission will not break any state or federal laws of confidentiality. Remember that the submission can be turned in anonymously. This could be the final protection if a report is made.

Here at Crowley & Halloran CPA’s, our consultants would be happy to help you plan and manage your business budget. Click here to request a proposal.

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Combating Fraud

In every business, the reality is that fraud can happen. According to the Association of Certified Fraud Examiner’s authoritative annual Report to the Nations, estimates that 5 percent of business revenue worldwide, or approximately $3.5 trillion, is stolen through fraud each year. With the magnitude of fraud, business owners need to be aware of how to help prevent fraud.

It is hard to prevent fraud, because fraud happens when an opportunity presents itself and a person is willing or can justify the actions. Funds can be siphoned off for decades before someone realizes what happened.

When looking for fraud, it is important to know that not all audits or compilation will be looking for fraud. It is not a protection against fraud. The best way to detect fraud is from inside the company through internal controls. By completing an audit of your internal controls, a company can find their weakness and put in place monitoring systems that will discourage fraud. One way some companies have found that have been effective is a hotline for reporting dodgy dealings. Almost 40% of fraud cases are find this way, and training and hotlines do not cost much to establish.

The face of fraud is also changing making it difficult to know where the vulnerabilities come from within the company. The fast pace of the technology can also create issues that could lead to fraud. Here are some technology rules that can help curtail fraud:

• Remind employees that they are at work and should not be using the computer for personal purposes
• Use stronger passwords that are less easily guessed
• Make sure that firewalls are installed for all computers, when using the internet
• Treat phones and tablets like a computer, make sure the virus protection is updated
• Keep track of where your technology goes and who is using it.
• When using the cloud, know what protection and assistance you can except in the event of fraud or legal action.

Overall, the most effective way to combat fraud is to make it clear that it is unacceptable and is not tolerated. Do not blindly trust any employee, set out clearly the expectations and rules of the organization, and remember that the attitude starts from the top down. Set the example for employees and they will rise to the standards.

Here at Crowley & Halloran CPA’s, our consultants would be happy to help you plan and manage your business budget. Click here to request a proposal.

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