Providing CFO services in Kirkland, WA and surrounding areas

The food stamp program, part of the Department of Agriculture, is pleased to be distributing the greatest amount of food stamps ever.

Meanwhile, the Forest Service, also part of the Department of Agriculture, asks us “please do not feed the animals” because the animals may grow dependent and not learn to take care of themselves

Recently there has been a good deal of press about the state of the Social Security reserves to fund the upcoming wave of baby boomers.  The forecast I saw earlier last year indicated that without some significant changes the funds would run out by 2017. I commented on this in a prior blog article and since then it seems our political leaders have ignored this information from the General Accounting Office in an effort to get voters to see them as wise and generous by reducing these taxes to stimulate the economy.

In late 2010 Congress voted to reduce the FICA (social security) tax on employees from 6.5% to 4.5% for 2011 and similar cuts in the Self Employment taxes.  This was touted as giving the average taxpayer more cash from their paycheck of about $1,000 for the year.  The FICA tax is what funds the social security and the reduction of what the employees contribute means we are increasing the pace by which the Social Security Administration will run out of money.

The irony here is that this was bad enough in 2011 but on February 17, 2012, Congress approved the Middle Class Tax Relief and Job Creation Act of 2012, which extends through December 31, 2012, the 2% reduction in payroll taxes currently in effect.   Mark Miller of Reuters Money wrote on September 9, 2011, “The current and proposed FICA tax cuts don’t directly affect the long-term health of Social Security, because the revenue that normally flows directly to the Social Security Trust Fund is being reimbursed out of general revenue.”

Since we have enormous deficits it seems that we are planning to fund the shortfall with tax revenues we are not currently collecting specifically for the Social Security fund but by from general revenue which is not covering budgeted deficit spending….am I missing something here?

I understand we all enjoy paying less in taxes and I benefit by this reduction in taxes as well.  What I also know is that every dollar I have paid into the SSA funds since my first job delivering papers till now has been something that was to fund my supplemental retirement benefits as mandated by our government. Now I am beginning to sense that full benefits will not be something I will receive unless a huge burden is put on my children and grandchildren.

Now we have a clear perspective that the funds on hand and those forecasted for the Social Security Administration will not support the pending wave of baby boomers who will be drawing on these over the next 30-40 years.  The governmental accounting office has raised the warning and our politicians from both parties continue to make political decisions to stimulate the economy by reducing the savings and solvency of the Social Security program.

Nancy Altman, co-director of the Strengthen Social Security coalition and author of The Battle for Social Security says, “Look at the controversy over ending the Bush tax cuts, which would only affect a small portion of taxpayers. In this case, if you propose restoring the payroll tax down the road, you’d have to double the rates on workers making minimum wage. This is being sold as temporary, but it’s not likely to work out that way.”

It seems we should look at the irony of the Department of Agriculture issues outlined above and consider if our government is again making policy that flies in the face of logic and wisdom. . The time is now to take control of your finances and not depend on the leaders in government to make sure you receive the benefits you have been promised and paying for.

In my last article I addressed the topic of the CEO of the company having a dual role as the Chief Executive Officer as well as the Chief Encouragement Officer.  The basis for this dual role is that the CEO must be a source of encouragement to the management team as well as all levels of employment.  Although in a large multinational or multi-locational company the CEO may never see the entire base of employees face to face, the need still exists.  If you are a closely held company or regional enterprise, as the CEO you will interact with your levels of management and staff on a regular basis this becomes all the more important.

As the CEO of two companies I have come to realize the significance of my role in providing an atmosphere and attitude that encouraged my staff and managers.  Unfortunately, I did not always understand how my leadership required me to also be a source of encouragement.  The old adage that “If mama ain’t happy, then nobody gonna be happy!” rings true for the CEO as well.  If you either bring your bad day with you or allow the stress of your position and responsibility to permeate the office environment you are likely to infect the office with a less than encouraging outlook.

During my tax seasons as the CEO of my CPA firm I knew that the stress of serving 500 to 600 business and individuals in a 3 ½ month window of time many times got the better of me.  There were times my night’s sleep was only 2-3 hours long.  On rare occasions I stayed up all night to get through the workload.  I also rushed home to eat or out to a restaurant to grab a bite with my wife and four young kids.  At the conclusion of the meal they went home and I went back to work.  They would even bring fast food to the office for a meal with me during times when I felt it was impossible to leave my staff behind and take a meal break.

Those are seasonable examples of how I mismanaged my role as father, husband and CEO of the company.  My thought was I needed to get the work done, show my staff my personal sacrifice of time with family and be there to help review their work and assign more if need be.  What did I end up with for all this after 15 years of running my firm?  Well my wife and kids knew when tax season came around that I was not much fun to live with or even my attempts to be a loving husband and dad were not as effective as I intended. 

One year my oldest son Jason asked if I was going to make it to his basketball game.  That seemed like an odd question, but one that I still remember to this day. I was the coach of his team and had never missed a game.  He was wondering if my busy schedule would allow for me to attend his game that week.  That was the point where after 20 years of public accounting and the stress I allowed in my life and my family that I knew it was time to find another occupation.

Did I need to leave the CPA world or did I really need to learn how to manage my type “A” personality, the stress of the job and enjoy life more.  I remember a friend of mine who was also a CPA with a similar sized practice.  His goal every tax season was to take a week-long vacation out of the country with his wife to pace himself for the grueling schedule that we worked. I marveled and assumed he just didn’t see how important it was to keep the work flowing.  I was proud to be the CEO….but not aware that Encouragement was lacking.

If that is the impact to my wife and kids, I can only imagine the lack of encouragement my staff felt when I was operating on little sleep and not pacing myself to get the work done without the insane compromises that I made.  How did I reflect and offer encouragement to staff or my family when I was allowing the career choice and the workload to rule my schedule.  Rather poorly is the answer.  My kids grew up aware of my stress level, my wife and I grew apart due to the lack of intentionally dating her and although I was able to earn a nice income, it pales in comparison to what I exchanged for allowing myself to get caught up in the position of running the firm.

Why share this in a newsletter, because at 54 years old I can say, “I am not the man I used to be.”  That is actually the lyrics to a song by Brandon Heath I have come to identify with.  I now see my role to encourage others as my privilege and my responsibility.  I still own a company with a partner and I make sure to express gratitude to the employees and my partner each time I am in the office.  I know that for years I just expected my staff to know that I appreciated them; I paid them their salary, provided an annual review and on occasion would utter some type of thanks.

Being the Chief Encouragement Officer has more to do than just managing busy schedules or lack of sleep and thanking your employees for their service.  The purpose is leading with a vision, empowering the management team and staff to make important decisions and driving the process in a way that reflects the TEAM nature of the organization. The Trust Employees And Managers approach is just another way to use the letters in TEAM to mean something greater as their CEO.

When you entrust your team with responsibility it reflects that you are comfortable with their leadership.  When you let your son or daughter take the car out by themselves after they get their driver’s license, they realize that you are trusting them to return safely, with the car in the same condition you saw it last.

It does not mean that all trust must be given at one time but age and competency based trust being transferred to your children is the same concept of empowering your employees.   When they are ready, let them have the car keys.  You will be amazed how much that provides encouragement to those who serve alongside you.

Part 1 – What does it take to Encourage?

I noticed the title of a person who emailed me recently and although he was the CEO of the organization, he used the term Chief Encouragement Officer as his title.  It struck me that many times the Chief Executive Officer of the company does not do the things that they should do to ensure that they encourage those serving in roles that support the organization.

Roget’s Thesauruses lists the following definition to the word encouragement:

noun

1. Something that encourages: inspiration, motivation, stimulation.
2. Something that causes and encourages a given response: fillip, impetus, impulse, incentive, inducement, motivation, prod, push, spur, stimulant, stimulation, stimulator, stimulus.

That definition tells us that to encourage means to inspire, motivate and stimulate, to prod, push or spur on.  How many times as CEO’s do we in reality invoke these characteristics in those we lead in the organization?  Not only do they need to be inspired, motivated or stimulated, but they need to be inspired to do what is right, best and most valuable to the company.

 We can also inspire or motivate someone to leave the company if we are not careful how we communicate and what we communicate to them.  Many times we actually discourage, de-motivate or stimulate the wrong behavior.  It is important that we understand the role of encouragement in being the CEO.  We are visible to others, expected to lead and communicate effectively and to be an example that inspires.

With respect to leading a company it is essential that we have a plan for the growth, stability, finances and infrastructure of the entity. We should encourage our staff by being prepared, focused and profitable.

Encouragement in terms of the finances comes from things that the CFO (not Chief Fun Officer) has prepared for you.  Here is a list of things that provide a basis for encouragement to the employees of your company:

• Forecast of sales/income for the coming year
• Budget of expenses for the coming year
• Profitability plan for the coming year
• Set of Goals for the company as well as each department
   
• Set of Goals for the employee in each department
   
• Compensation Plan for each employee that is line with the preceding items.

  Are you encouraged by things you don’t know, don’t hear about, don’t understand or don’t experience?

  To me I am encouraged by those things I hear, see, feel and experience.  Therefore, you can possess these things but unless they are communicated and reinforced for your employees, you will not be serving as the Chief Encouragement Officer. 

  If you don’t have those financial tools in place you also may become discouraged.  It takes a lot of work to be a CEO and even more help from your CFO to ensure that your role is seen as an encouragement to those you are working with.

  Don’t leave your staff in the dark, don’t be in the dark yourself. Take the steps to encourage those in your company and you will find by being prepared you will also enjoy encouragement as those around you radiate those feelings. Make sure your CFO provides the financial tools to ensure you provide encouragement

B2B CFO NAMED IN PRESTIGIOUS INC. 5000 LIST

184% Growth Earns B2B CFO Spot in the 2010 List of Fastest
Growing Companies in America

Phoenix, Ariz. August 24, 2010 – B2B CFO, nation’s largest
provider of CFO services to small businesses, has been named to the
prestigious Inc. 5000 list of fastest growing companies in America.



Now in its 29th year, Inc. Magazine’s annual ranking judges US-based
and privately held companies by their revenue growth. This year’s
list was ranked on the percentage in revenue increase from
2006-2009. B2B CFO’s growth earned 84th place in its industry.

“There are approximately 27 million small businesses in the U.S.
today,” said Jerry L. Mills, founder and chief executive officer of
B2B CFO, “It is a huge honor to be among the fastest growing and the
most successful businesses in the country. Our firm has experienced
tremendous growth over the past few years and we are on track to
continue expanding. I am especially grateful to all of the firm’s
dedicated Partners who continue to advocate our services around the
nation.”

In a personalized letter congratulating B2B CFO on this
accomplishment, Jane Berenston, editor-in-chief of Inc. Magazine’s
wrote “Congratulations: your company, B2B CFO, has made the 2010
list of the fastest growing private companies in America. This
achievement puts you in rarefied company, especially if you consider
that over 27 million businesses are registered in the USA. The elite
group you’ve now joined has, over the years, included companies such
as Microsoft, Timberland, Visa, Intuit, Jamba Juice, Oracle, and
Zappos.com. I look forward to congratulating you in person in
Washington, D.C.”

B2B CFO’s growth is reflected in numerous awards this year. The
company was also recently named in ACE Corporate Growth Awards,
which recognized the most successful and fastest growing companies
in Arizona.
In August 2010, B2B CFO has grown to 170 Partners across 39 states,
representing 5,000 years of cumulative experience. Each Partner is a
seasoned financial executive who serves as CFO to growing businesses
on as-needed basis. Approximately 80% of the Partners have a
background that includes senior executive positions at the Big Four,
and all of the Partners have held high level executive finance
positions in various industries in corporate America. Together, B2B
CFO Partners work with more than 500 businesses in the nation with
combined annual sales of more than $3 Billion.

Jerry L. Mills and many of the B2B CFO Partners regularly dedicate
time to educate business owners on financial matters. Mills is a
frequent speaker and contributor and has been featured on many
national media networks including FOX Business, Fortune Small
Business, Smart Money and many others. Mills is also the author of
The Danger Zone – Lost in the Growth Transition, and Avoiding The
Danger Zone – Business Illusions, both business non-fiction books
that help entrepreneurs understand and build a strong financial
strategy.

“We look forward to participating in the Inc. 500|5000 conference in
Washington, DC this fall,” added Mills. “Along with my colleagues, I
look forward to the October 2nd awards ceremony and to meeting the
entrepreneurs that created the other 5000 fastest growing companies
in America.”

About Inc. Magazine

Founded in 1979 and acquired in 2005 by Mansueto Ventures LLC, Inc.
is the only major business magazine dedicated exclusively to owners
and managers of growing private companies that delivers real
solutions for todays innovative company builders. Inc. provides
hands-on tools and market-tested strategies for managing people,
finances, sales, marketing, and technology.

Inc. Magazine’s 29th annual Inc. 5000 ranking of the fastest-growing
private companies in the country is available online at
www.inc.com/inc5000/list

About B2B CFO

Headquartered in Phoenix, Ariz., the firm was founded in 1987 by
Jerry L. Mills. B2B CFO is the nation’s largest CFO firm serving
entrepreneurial, growth and mid-market companies with revenue under
$75 million. The firm’s partners have an average of 25 years of
experience and each individual partner is a senior level executive
with a broad range of expertise. Please visit online at
http://www.b2bcfo.com/