Archive for February, 2010

30 Seconds on Leadership- "Optimism" by Dan Davies

Optimism - Emotions are contagious. They spread through the workplace like a brushfire. Each workplace, each day is an emotional stew and the head chef is the leader. It is incumbent upon the leader to look for the silver lining in every cloud, to realized that everyone keys off of you. If you are down, you cannot expect your followers to be up.

Just as a baby is distressed if his mother is stressed, so to your followers feel your emotions. We are bound together much more by our emotions than by our intellect. Our values and those things we care most deeply about are bound up in our emotions. People want to follow positive, confident, competent, inspiring leaders. It is your job to lead and you lead through your emotions.

Promise yourself to look at the sunny side of everything and make my optimism come true.

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26

02 2010

Uncle Sam Continues Health Insurance Life Ring from Hughes, Pitman & Gumpton CPA's

Although some indicators point the economy recovering, other signs are not as encouraging.

For example, the U.S. economy lost 85,000 jobs in December of 2009, and the unemployment rate continues at 10 percent, according to statistics just released by the Labor Department.

What Is Involuntary Termination?

An employee is “involuntarily terminated” under the COBRA assistance provisions if he or she:

  • Is laid off.
  • Is suspended in some other fashion that results in the loss of group health insurance.
  • Resigns as the result of a material change in the geographic location of employment.
  • Resigns when his or her hours are cut sufficiently to constitute a “material negative change” in the employment relationship.
  • Retires because the only alternative to retirement is termination.
  • Is not permitted to work because the employer is engaged in a lockout.
  • Is discharged due to extended illness, disability, or for cause. However, if the discharge is based on “gross misconduct,” the employee isn’t eligible for the COBRA subsidy.
Downsizing? Be Careful with Waivers

The current economic downturn has resulted in widespread layoffs. In some cases, older employees are let go because they are paid the highest salaries.
Employers that lay off some employees, while retaining others, must be careful not to discriminate based on age, race, sex, national origin, religion, or disability.
Many employers offer departing employees money or benefits in exchange for a waiver (or release) of liability for all claims connected with employment, including discrimination claims under civil rights laws.
The EEOC has published information for employees to help them understand the legal issues involved in waivers. Click here to read it. Consult with your attorney about any documents you ask departing employees to sign.

Fortunately, the federal government has provided a last-minute reprieve for some unemployed taxpayers. In new legislation, Uncle Sam extended the COBRA assistance program for some unemployed people who want to continue health insurance with their former employers. Specifically, the law made these changes:

1. The COBRA assistance program is now available to workers laid off between January 1, 2010 and February 28, 2010. (Previously, it was supposed to end on December 31, 2009.)

2. The law extends the subsidy for currently eligible people an additional six months for a total of 15 months, up from the current nine months.

The provisions extending reduced COBRA payments were tacked onto a defense funding bill – the Department of Defense Appropriations Act of 2010 — signed on December 19, 2009. Under the new law, the benefits are available to qualified workers through February 28, 2010.

Background: COBRA (short for the Consolidated Omnibus Budget Reconciliation Act) allows workers who are fired or laid off to continue employer-sponsored health insurance coverage for up to 18 months. (It may be longer under certain circumstances). The ex-employees are generally required to pay 100 percent of the premiums, plus a 2 percent administrative fee. Technically, COBRA applies to companies with 20 or more employees, although smaller companies may voluntarily offer this option.

The COBRA assistance program was initially authorized by the American Recovery and Reinvestment Act of 2009 passed early in 2009. Under that law, certain employees who were “involuntarily terminated” from employment between September 1, 2008 and December 31, 2009 could pay only 35 percent of the required premiums for extending COBRA coverage. The employer was responsible the remaining 65 percent of the cost. (See right-hand box for examples of when an employee is involuntarily terminated.)

Now, under the latest law, the COBRA assistance is extended to newly laid off workers through the end of February and made available to currently unemployed people for another six months.

Upper Income Taxpayers Lose Out

But the COBRA discount isn’t available to all workers. The benefit is phased out for upper-income taxpayers. Single filers with an adjusted gross income (AGI) exceeding $125,000 and joint filers with an AGI exceeding $250,000 must repay part of the amount as an additional tax. The phase-out is complete at $145,000 of AGI for single filers and $290,000 for joint filers.

The subsidy doesn’t mean that employers are forced to subsidize the reduced cost for eligible ex-employees. An employer can recoup the cost through a payroll credit, which is generally claimed on Form 941 for the quarter in which payments are made (or annual Form 944 if employment tax liability for the year is $1,000 or less). Otherwise, an employer can elect to claim the credit in a subsequent quarter in the same calendar year.

Impact for Plan Administrators

The new extension means more paperwork for employers. Under the extension, plan administrators have additional notice requirements. In some cases, they may also have to reimburse employees who paid 100 percent of the insurance premium in December.

Note: An employer can’t claim the credit until it has received the 35 percent payment from an employee. Employers should keep documentation of employee payments. If the credit exceeds the amount of employment tax due, the IRS will reimburse an employer for the difference.

Alternatively, instead of claiming the new payroll credit, an employer can reduce its regular employment tax deposits. For this purpose, the COBRA premiums are treated as having been made on the first day of the quarter and will be applied against regular deposit requirements.

Business owners should consult with their employee benefits professionals if additional information is needed about the subsidy and the relevant notice requirements.

More to Come?

Undoubtedly, we haven’t heard the final word on this subject. Congress is expected to revisit the COBRA assistance program prior to its current expiration on March 1, 2010. Another extension may be forthcoming. We’ll keep you up to date on any future developments.

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25

02 2010

Characteristics and Competencies of a Financial Champion by Jimmy Mullens– Part VIII

Conclusion

In today’s economy, given global competition, shrinking staff sizes, increasing demands, etc., hiring decision are more important than ever.  The cost of making a bad hire is high.  As you consider your candidates, you still must find that person that meets your technical requirements and whose personality fits in your organization.  However, don’t stop there.  Explore each of your candidates’ background thoroughly to identify whether or not he/ she is a champion.  Weigh the trade offs of the nice to have skills you would like in a candidate (i.e. industry, software, etc.)  with their champion characteristics and competencies.  Is it wise to pass on a candidate who exhibits champion attributes just because they don’t have certain skills that will likely be obtained within a short period of time?

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24

02 2010

Characteristics and Competencies of a Financial Champion by Jimmy Mullens– Part VII

Ability to Execute

The most important characteristic of a champion is their ability to execute.  It’s all about the ability of a leader to get things done that positively impacts the business.  Leaders who have a long history of achievement will likely employ each of the characteristics and competencies discussed in this series.  Without these attributes, a leader will probably struggle to execute change, strategy, or initiatives.

The ability to execute is obviously important.  However, knowing how to execute is equally important.  Larry Bossidy, former CEO of Honeywell International and Ram Charah wrote in their book The Discipline of Getting Things Done that “strategies most often fail because they are not executed well.  The resulting gap between expectations and results is often clear.  However, the gap often overlooked at the start of an initiative is the gap between what a company’s leadership wants to achieve and the ability of the organization to achieve it”.

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23

02 2010

Characteristics and Competencies of a Financial Champion by Jimmy Mullens– Part VI

Team Player

The finance team is made up of individuals.  A champion will recognize the value of every member on their team.  They also recognize that success is the product of the entire team, working together for a common goal.   No one succeeds for very long on their own.

A financial champion also recognizes they are team members with more than just their fellow finance/ accounting buddies.  The team concept has integrated itself into business today.  There are cross functional teams, process improvement teams, senior leadership teams, management teams, etc.  A key aspect of being a good team player is having an excellent working relationship with each of your team members.  Recognize the teams you are a part of and develop strong relationships with the members of each one.  Having strong relationships helps the team communicate more openly, operate more effectively, and break down any “hidden agendas” that may exist.  Ultimately, the business will benefit when its teams are effective.

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22

02 2010

Characteristics and Competencies of a Financial Champion by Jimmy Mullens– Part V

Love of People

The ability to show that you care for people is one of the key characteristics of a champion.  James Turley, Chairman and CEO of Ernst & Young wrote “Respect of others is essential.  You will never earn the respect of others unless they feel you respect them first”.  John Maxwell  wrote in his book The 21 Irrefutable Laws of Leadership “Successful leaders take the first step with others and then make the effort to continue building relationships”.

Some leaders believe that people will follow them because they are the boss.  This management style does not drive loyalty among staff members.  Generally, employees who are involved in the business feel they help create the success of the organization.  In their book Strengths Based Leadership Tom Rath and Barry Conchie wrote “Employees who feel their manager/ leaders care about them:

  • Are more likely to stay with the organization
  • Are much more engaged
  • Are substantially more productive
  • Produce more profitability for the organization
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19

02 2010

Characteristics and Competencies of a Financial Champion by Jimmy Mullens– Part IV

Excellent Communication Skills

A financial champion must have excellent communication skills.  Larina Kase in her book The Confident Leader wrote “effective communication is the ability to tell something in a way that gains our complete attention”.  The challenge for the financial leader is to make the message compelling.  We have all sat through financial presentations where we thought watching paint dry would be more exciting.

As we know, there are verbal as well as written communication skills.  Think about people you know who have excellent verbal communication skills.  The people I admire because they can give killer presentations are able to draw everyone in the room in, tell great stories, are comfortable being animated, and speak clearly and confidently in terms everyone can understand.  They certainly don’t stand up and recite power point slides full of numbers.

Effective writing skills may be tougher than verbal skills.  I don’t know anyone who can fire off a great letter or memo on the fly.  It takes time and effort to write it, read it, and make changes over and over again till you get it just right.

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18

02 2010

Characteristics and Competencies of a Financial Champion by Jimmy Mullens– Part III

Confidence

If you think about leaders you have respected over the years, one characteristic probably holds true with each one.  They all projected confidence (not arrogance) in themselves and their ability.  But in an interview situation how does one detect confidence?  In her book The Confident Leader, Larina Kase says “confident leaders confront their fears and use them to propel themselves.  People who stay within their comfort zone may not experience much anxiety, but they also don’t experience much growth”.  A part of being a champion is taking the lead when the opportunity arises.  However, there is risk in doing so.  If you are successful, that’s great.  However, if you fail, everyone will know.  A champion accepts this risk and takes the opportunity to make a difference.

A champion is willing to pursue an opportunity outside their normal responsibility.  I call this discretionary effort.  Who is a champion – the accounting manager that improves the process for determining accruals or the financial analyst that identifies an unfavorable variance and takes the lead in working with the functional team to correct it.  Who took the bigger risk?

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17

02 2010

Characteristics and Competencies of a Financial Champion by Jimmy Mullens– Part II

Integrity

James Turley , the Chairman and CEO of Ernst & Young wrote “Integrity is the bedrock upon which all else is built.  Without a solid foundation of integrity, any success will ultimately crumble”.  The strength of one’s integrity is a reflection of their character.  In his book “How to Hire a Champion” David Snyder writes “champions, first and foremost, are defined by their character.  Because character is defined by what people do, our character is demonstrated every day”.  Without integrity you don’t have credibility.  Without credibility you don’t have trust.

A key measure of integrity is accountability.  It’s easy to take credit when your work is right.   However, what if there is a mistake?  Do you try to deflect it?  A champion will own up to a mistake and accept responsibility.  Accepting responsibility for a mistake, albeit uncomfortable, builds trust among the leadership team and your team members.

As a leader you want your team to be engaged in the business.  A Gallup poll revealed that only 1 in 12 employees are engaged in the business when they do not trust management.  The rate jumps to 1 in 2 when they do trust management.

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16

02 2010

Characteristics and Competencies of a Financial Champion by Jimmy Mullens– Part I

During the interviewing and hiring process in finance and accounting, the hiring manager must satisfy himself of the candidate’s ability to meet two criteria.  First, does the candidate’s background and experience meet the requirements of the position?  Second, will his/ her personality fit within our organization?

I believe there should be a third criterion that is the most important of all – Will the candidate be a champion within the finance department?  What is a champion?  A champion is someone your business leaders will seek out when they need help.  A champion will give your company a competitive edge by raising the performance bar in their respective area.  This is a series of blogs exploring the characteristics and competencies of a financial champion.

In today’s job market there is an abundance of highly qualified people to choose from for your open financial leadership role.  All have strong technical skills, analytical skills, are timely and accurate in their work, and have specific accomplishments over many years of experience.  A larger talent pool enables you to further refine the job requirements (i.e. specific industry experience, computer systems, specific activities, etc.) to help identify that perfect candidate.  Nice to have qualifications have become minimum requirements.  There are a number of candidates to choose from, but will they be a champion?

How do you identify a financial champion?  I believe the key characteristics and competencies you should look for are:

  1. Integrity
  2. Confidence
  3. Excellent Communication Skills
  4. Love of People
  5. Team Player
  6. Ability to Execute
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15

02 2010