Blog: AICPA Economic Crisis and Recovery Center

Possible Extension of the Home Buying Credit

Yesterday, USA Today reported that Congress is considering an extension of the first-time home-buyer credit due to expire this fall. Some in Congress are even proposing to raise the credit from $8,000 to $15,000 and apply it to anyone who buys a home.

It seems likely the credit will be extended beyond the fall as there are a few proposed House bills to do so. Each bill carries a different twist beyond merely extending the credit past the fall.

According to the article,  four separate proposals and ideas to continue to spur the housing market have emerged:

1. A Senate bill submitted by Sen. Johnny Isakson, R-Ga., and co-sponsored by Senate Banking Committee Chairman Chris Dodd, D-Conn., proposes raising the credit to $15,000 for any homebuyer with no income limitation. This bill was entered last month.
2. Rep. Kenny Marchant, R-Texas, last month submitted a House bill that would extend the current $8,000 credit for first-time homebuyers through June 2010 and would also provide a $3,000 tax credit to current homeowners who refinance.
3. Rep. Eddie Bernice Johnson, D-Texas, introduced a bill that would extend the $8,000 credit to 2010 and now include ALL homebuyers.
4. The Business Roundtable, a separate group composed of CEOs from large companies, earlier this month asked Congress to raise the credit to $15,000 and make it available to all homebuyers.

Of the four options, tell us which one you think is best and why. Post a comment.

– Mark Koziel

Is your business post recession ready?

I’ve just finished a week full of travel being in four cities in eight days. I’ve listened to many of our members and firms discuss their current state and their prospective future.

I hear pessimism from some, worried what the future will bring, but overwhelmingly, the look on our firms and profession is optimistic. Even firms who have reduced head count did so because there wasn’t a good fit between the firm and employee and it’s something that maybe should’ve happened a year or two prior.

Firms are now focused on planning for the future, controlling growth and focusing on the remaining team members to ensure they stay.

Growth has been so fast and furious for many businesses in the last four years that this “break” helps businesses get back to the basics, reconsider their strategic plan (for those who didn’t have one, they now have time to create one!) and focus on what the future can bring.

What are you doing in your business to get ready for post recession? Post a comment.

– Mark Koziel

Billing & collections, business development at the top of Emerging Partners’ minds

I am just returning from the AICPA/PCPS Emerging Partner Training Forum where new and emerging firm leaders learn how to succeed as a partner in today’s firm.  This is the event’s fourth year and it was nearly sold out. It’s good to see in today’s economy that some firms have not cut back on a learning opportunity for their younger leaders and their firm.

In past years, the emerging partners aimed to achieve success for the firm and for themselves by focusing on attracting, retaining and developing people in their firms. This year, the economy has certainly changed the emerging partner concentration to billing, collections and business development. At the end of each day, Jim Metzler, Vice President of Small Firms at the AICPA, and I split the group up by firm size and facilitated roundtable discussions on the emerging partners’ implementation action plans from the Forum. There were plenty of great ideas for helping their firms improve on billing, collections, business development and even retaining the best and brightest talent.

I’m always excited about these future leaders when I leave the program. There’s plenty of brain power in these emerging leaders. I hope when they return to their office that their firms will allow them the opportunity to implement some of these great ideas for the benefit of the firms.

If you are a new leader, or about to become a new leader in your organization, what about you?  What’s at the top of your mind?  Post a comment.

– Mark Koziel

SBA staying active during the economic crisis

As I travel the country speaking to practitioners, I typically ask how easy or difficult they find getting a  Small Business Administration (SBA) backed loan for their company or clients.  I get mixed answers on this question, but primarily, many firms and companies have found in the last few years that it has been easier.  As Jim Metzler, the AICPA’s Vice President of Small Firm Interests, and I try to tell firms, “this isn’t your mom and dad’s SBA!”  Jim was a driving force behind getting the alliance between the AICPA and the SBA to completion a few years ago, and we’ve found the relationship to be beneficial to our members and to the small business community.

In order for the alliance to work, CPAs need to take advantage of what is there. Gaining a better understanding of what the SBA does is a good start.  The PCPS section of the AICPA Web site can help do just that.  Next,  find out what is available in your specific region.  I’ve found that the primary need of the SBA is lending and this couldn’t be a better time to try to help small businesses access critical funds.  Many practitioners have said that while the funds are available and the SBA backed loans are slightly easier to get than in past years,  you need to know where to find them and how to get started.  Small businesses go to a bank to get a loan and think they are seeing all loan options, but they may be dealing with a bank that doesn’t even offer an SBA backed loan and, therefore, may be missing out on great opportunities.

One practitioner gave me some great advice to pass along.  He said to go to the local SBA and find out which local banks have SBA backed loans available, then start with those banks and find all of your lending opportunities.

On March 19, 2009, my blog post was on the changes to the SBA loan program under the 2009 American Recovery and Reinvestment Act.  Hopefully you or your clients have started to take advantage of this program.  This was the first step toward trying to help small businesses survive the current crisis.  Practitioners around the country have told me that they’ve had some clients take advantage of this program with good success.

A few weeks ago the SBA announced a new loan program scheduled to go into effect on June 15, 2009.  The SBA ARC Loan Program is designed to help small business meet current expense needs in this down economy. Small businesses can borrow up to $35,000 that can be used to make payments for up to six months on certain qualifying small business loans they currently have.

This program is only for established small businesses, not for startup businesses.  Also, the business must show a profit in one of the last three years of financial statements.  The SBA site has additional information on eligibility and who the program is intended for.

What about you, have you dealt with an SBA backed loan recently?  If so, how did it go? Post a comment.

– Mark Koziel

What are Young CPAs doing to adjust to this economy?

The Young CPA Network conducted a survey to see what young CPAs thought about this current economy.  Results were published in the most recent Edge Newsletter, the newsletter for the Young CPA Community.

The survey asked many open ended questions of the young CPAs which provided some interesting insight.  The first question asked “How, if at all, do you feel the broader economic situation has impacted your personal and professional life?”  From this I found two underlying themes to the responses.

First theme I could see is based on the personal side of responses.  For those young CPAs who responded about the economy affecting them personally, there were many responses about tightening the financial belt, watching spending, telling others to watch spending, etc.  The AICPA has been working hard over the last few years to raise awareness on financial literacy.  Now the younger generation really is focused on this topic and that’s a good thing!

On the professional side, I couldn’t help but think of the opportunities for firms to retain their top talent. Responses like being “stuck” in public accounting longer, uncertainty about career options and delays in finding the “dream job” make me think of the opportunities firms now have to be different.  We now have our people’s undivided attention and if firms were to sit down with their people and ask them what their “dream job” may be, firms may find its not that far off from what they can offer.

It seems that the young CPAs are still concerned about job security in their current positions and firms have opportunity to make young CPAs feel more secure and appreciative of where they are.

Stay tuned to the Young CPA Network on aicpa.org for more interesting information in the next few weeks.

What is your organization doing to talk to young CPAs? Post a comment.

– Mark Koziel