Why Consultants Make a Difference

Consultants Make a Difference

By: Rene Velez

It seems that on any given occasion that I have the opportunity to discuss the business of consulting, few people know exactly what it all entails. Without question the title consultant is used freely to mean anything. Truth be told you can consult on anything. The real question is not what title you hold, or have given yourself, but what you do. Seems to me that could be said of any profession. I've known a few professionals that have left me entirely in doubt if they knew what they were doing.

I confess that often I evade trying to define what I do as a consultant because, its not easy to describe. Firstly, depending on what you are consulting in it could be your practice envolves more of an art than a science. For example if you are an engineering consultant your consulting engagements are often more of a science. Either the bridge you are designing will hold a given weight and load of traffic or it will not. Either it meets the DOT specifications or it does not. However, if you are a business consultant and you are working on how to increase worker satisfaction and productivity, it becomes an art. Why? Because thats they way it works.

All kidding aside, I have come up with this simple laymans way of trying to draw a line between the two. No science here just a little art!

Consulting as a Science:

If given a predetermined goal or outcome you can apply formulas, calculations, laws, procedures and other contrived gyrations, that do not change, and arrive at the solution consistantly, then it's pretty much been studied and done many times over and it is therefore known and it is a science. Another way I say it is that the solution has been bottled. In Management 101 language it is a mechanistic structure.

Consulting as an Art:

If given a predetermined goal or outcome and you can not apply formulas, calculations, laws or procedures without changing them on each attempt, or you can not repeat what someone else has already proven to work, and the outcomes can vary and are anything but consistant then it becomes an Art form. In management 101 language it is dynamic or Organic.

Today's Consulting Environment

Consulting is on the rise today. However, the business has changed from how it was sold in the 1990's. Whereas in the 1990's everyone was looking for the new fangled widget today everyone wants to make sure the widget works. During the 1990's the search was on for those new minted MBA's who had all that knowledge of making the new widget. America was entrenched on computers, high technology. Out with the old and in with the new. Ideas no matter how underanalyzed and researched were sold to the highest bidders. Today, conservatism has set in the corporate board room and MBA's have the added burden to not just come up with the new widget but be ready to almost guarantee that the widget will actually work.

I have always liked that commercial were some crusty old but distinguished Wall Street fellow says, "We make our money the old fashion way, we eeaarned it". It would seem the phrase has caught on in american business. Business no matter how dynamic and cutting edge needs to be tempered by wisdom not raw knowledge. What businesses want today from consultants is not the concept but rather the "results". Personally, I think its justified. Particularly with Sarbanes Oxley management should be held accountable for the decisions that they makes and consultants are feeling that new expectation.

No one should automatically regard business consultants as the experts of business. Companies should understand that good consultants develop a relationship with their clients. Sometimes the best consultant is the one that can not only teach a client how to accomplish a goal but also be humble enough to acknowledge they have learned something from their clients. Without question I have always learned something from my clients, their practices, style, procedures, business. In fact on many engagements without learning first your almost destined to a poor outcome. This is what an evaluation is all about. Depending on the client however, or how good your relationship is there is an "art form" in learning without loosing your position of promenance with the client. Sometimes this is a chicken or egg type situation. Is the consultant too arrogant to admit he has to learn from the client or is the client too arrogant to recognize that even though a consultant is learning their business that does not make them less qualified? I suppose this is argueable to a degrees. They key thing is that both sides recognize the opportunity to learn from one another.

Today's consultants have to be ready make a difference. They have to stand for results. You earn your pay on each task or assignment you able to bring into fruition. If you are new to consulting pick some winners first. Diversify the risks you take as a consultant so you have a good track history. No matter how good you are you will loose some to failure or at best modest performance.

Besides results consultants offer many things they can not often find from within the organization.

Besides the Outcome:

Unbiased Ideas and Conversation:

Perhaps one of the most valuable outcomes of having a relationship with a consultant is the ability to discuss matters in a candid forum. Let's face it, often companies have their own internal politics that prevent new ideas from coming to life. Managers often do not want to undertake risky propositions for feer that they may loose a promotion or risk being dismissed because of a poor outcome. Sometimes management is lacking in creativity to address emerging trends and the company culture is such that there is little or no upward interaction. Consultants can and often facilitate fertile ground for ideas, and bridge communication between management levels. They create a buffer between personalities in a company and can introduce radical ideas and concepts that are untainted by internal politics. Consultants have been known for setting management straight on priorities, identifying critical problems. In essence consultants often are change agents to a company. They do this with a fresh view and without the same level of fear as employees of the company.

An Outsiders View:

The paragraph above brings to mind how important it is to have a consultant come in and look at things as an outsider. Mnay companies and their management suffer from tunnel vision. They see their company and their business as they see it but fail to realize missed opportunity and critcal flaws from the eyes of an outsider or as a customer. Mystery shopper surveys and analysis is an easy tool to use for any company. In fact many companies that are very successful employ this technique almost on a continuous basis in a variety of ways. These companies know that they rely on what their consumers think so they become very consumer centric. Not a bad thing at all as long as the company does not loose focus. Sometimes it is an art form simply to find ways to be consumer centric and yet be cost efficient. It depends on many variables, such as the type of product or service you sell, number of competitors, industry trends etc.

Project Management:

An often overlooked possibility to establish a relationships with consultants of varying degrees and capabilities is project management. It doesn't matter if you are a fortune 500 company or a local distributor of specialty hardware at some point in time you will need a project manager. Someone who in its simplist form can oversee a task thet requires scheduling, coordination, planning and control and see it from concept through completion. An accounting system conversion, marketing campaign, mail order distribution system, website ordering system etc. etc. Having a professional on board with either knowledge, management ability or simply enthusiaam to get the project done can be uplifting to staff, improve efficiency among current workers, relieve management of a tedious burden and simply create acceptance of a project among company employees. The key for management is to be clear on hiring the right project manager for the job.

Management is Responsible:

Yes. Consultants can be a big asset to any company no matter their size. However, management should never allow any consultant to run free. Management should always take the approach they they are responsible for the company. They shoud develop relationships with a variety of consultants in the various disciplines in their company. They should monitor the results and hold the consultants responsible for results. Determination of time budgets and cost caps are becoming more an more common in cunsultant engagements. Corporate management needs to be cognizant that often there are tradeoffs to accomplsihing goals and that the identification of these tradeoff points should be key to coming up with solutions that are practical. Consultants and management alike need to understand that there will always exist grey areas in which neither the consultant or the company management has the right answer and that both should commit together to learn and take on "calculated risk" in order to arrive at success.

Internal Consultants:

Many of the current events that have given rise to Sarbanes Oxley also have management thinking about how best to develop internal consultants. Without a doubt there exists the possibility of identifying and perhaps grooming internal employees to be on demand consultants. This is a good thing. Often this is a very cost effective measure to many business issues. However, it should not be taken to mean that outside consultants will not be needed. Often an internal consultant is a candiate for higher manement positions within the company. In regards to dealing with external consultants these individuals possess a great deal of knowledge about the company in specific areas and become an asset to external consultants as well as to management. It is not uncommon for these individuals to become the hub for large projects were the internal and external consultants work together.

No Expert is an Island:

From the wave of consultants that entered the work force in the 1990's to what the profession is doing today comes one important aspect of managing business. No matter how developed you may have become in your business or how respected you have become as a consultant neither is an island onto themselves. The relationship and interaction between disciplines can be pricesless. In a world that is constantly changing and evolving each learns from one another. The consulting engagements of today that become sucesses or failures become the case material for the MBA's, CPA's , Engineers of tomorrow. And perhaps managemnt who is often encapsulated in company politics, run a ground on fresh ideas or feeling the influenza of the constant battle of business, or simply needs an occasional check up, consultants are still there to help.

On the other side there is the need for seasoned company executives to become consultants. The grass can be greener on the other side. Work less hours than before, put up with less politics, an opportunity to be creative with all that stored knowledge, explore new areas of interest, make new industry contacts, be self employed or be part of a group. With the aging of the baby boomers and many expected to continue working throughout there retirement age, consultants will be more common. This is a good thing for company's with disparity of ages in management positions. Were will they turn if all the seasoned brass retires? All those years of knowledge today are welcomed wisdom. Like fine wines these professionals do improve with age. It's no wonder the founding fathers of the U.S. constitution provided that 1/3rd of the senate come for elections every three years or so. It's the recipe for bringing in new blood but maintaining prudence and stability.

Miami's Political Scenery and Business

Miami is a fascinating city all it's own. From the time I first arrived in 1976 til now Miami has matured and grown to what is truely an international point of interest and destination. However, we are a city still maturing. One noteable deficiency in a metropolis coming of age is the lack of major corporations. Why is that? How is it possible that a major city with so much promise, resting on the shores to the Caribbean, Central and South America and a gateway to venues of international trade such as the Panama Canal , lacking in fortune 500 companies?

I think there could be numerous debates that could attempt to answer that question. Be it enough, I think, that we ask the question, and then ask again. The answer lies in many facets of our history and in simply the timing of historical events. Few cities have seen the major influx of refugees and immigrants as Miami. Few cities have seen unprecedented growth as Miami. Again few cities have such a multitude of diverse cultures as Miami. In particular even within the hispanic community, we not only have very diversified cultures but, they are republicans. This is unlike other cities with large hispanic populations which tend to be democratic. In this environment politics slow to a crawl, resources get stretched and governess falls way behind.

Just how much does our diversity affect public services? By way of example Miami has one of the only school boards that monitors country and political risk in the Carribean, Central and South America in order to project census counts and needs in developing its annual budget. We are a model for other cities in this regard. We have contingency plans for the fall of communism in Cuba that affect maritime services, air traffic control, military defense and a host of public services. Miami's politics, its resources and effectiveness are all interconnected with all of its surrounding countries. Not only are we learning and coping but the landscape has changed over time. Therein lies a big reason as to why government and politics has lagged behind in finding solutions. Strange how the very thing that makes this city great also tends to reveal itself as a problem.

The turn around for this city will rest on our ability to govern our city and how we play the game of politics. All the other components for the post coming of age for this city are already present.

Some of the issues we need to be focused on are as follows:

(1) Creating world class international research centers in our universities. Although in my opinion we have a long way to go, the fact is we are already doing this. In fact I am happy to see this happening at our local Florida International University. A public university. Being able to provide human talent and the environment that feeds business and technology will be a very big draw to fortune 500 companies. Besides that universities pump a great deal of money into our economy. Three critical components for any major metropolis, human talent, facility resources and money to drive both.

(2) The expansion of public transportation systems for metropolitan citizens. Having been born and raised in New York City, public transportation is a must. Just a few years ago Miami had one of the highest per capita users of cell phones anywhere in the world. A statistic that has hardly changed. And no wonder considering how much time we all spend in traffic. Truely, Miami has planned poorly for this public need. Then again who would have guessed at our growth rate. Who invisioned that parts of the turnpike in south Florida were built on what was considered to be the fringes of the Everglades, was to become the center of urban sprawl. Truth be told, in hindsight, our government was assleep at the wheel. If you look at statistical trends from 25 years back we could have made some better calculations. We didn't. Worse yet is we have known this for some time and we still have been late in reacting. Yes many emergencies have drained both govermental talent and economic resources. But, ven so gvernment has reacted too slowly, and been undecisive.

(3) The expansion and enhancement of major terminals of transportation. What I mean by this is Miami International Airport, Tamiami and Opalocka Airports, The Port Of Miami. Clearly Our local government has fallen short. Miami International is frought with corruption, mismanagement and a serious lack of leadership. It is my opinion that in time more horrors will surface. I only hope that frustration will lead to alternatives such as Opalocka Airport. Already I see signs of interest from the community in wanting to expand the runway length at Tamiami Airport. Not that it can handle large commercial traffic but it would be a major invitation to corporate business jets and other corporate aircraft. In addition I think it can be a reliever airport for short flights to the Carribean if not the Americas. The fastest growing segment of air travel in the world is fractional corporate jets. A recent statistic I saw said commercial jet travel has grown by an average of 18% per year, where as corporate and fractional business jet travel has grown by 140%. If that doesn't catch your eye nothing will. We must be aware of how this stimulates economic growth, and make our city corporate freindly, if we are to attract fortune 500 businesses to the area. I would recommend that anyone look at the flight line at Homestead General Airport, Tamiami and even Homestead Airforce Base on holidays of Race Car activity. What you will find is hundreds of millions of dollars in aircraft and millions more spent here in our local economy. Just as to emphasize the point we are the gateway to the Americas! Already we do very brisk business in aircraft repairs, and parts distribution to Central and South America. In addition we do a great deal of flight training. Seems to me we are again politically behind the curve. We need to build a better infrastructure in every mode of transportation. Why we fuss over having water taxies, creating private transportation systems and other mass transit alternatives is beyond me. We should welcome any improvement over what we have. To this regard we need to tell goverment to start acting like a business.

(4) Controlling Urban Sprawl. Again our local government has done a poor job at controlling Urban Sprawl. Urban Sprawl creates huge inefficiencies in operating a city government. Just think of how many more hospitals, ambulances, police cars, fire engines, road maintenance crews, buses, libraries you need as you spread out over miles and miles of city streets. Do you get the picture? We as citizens pay for this! Building up is more efficient use of limited land, government funds and resources. If done properly controlling urban sprawl can improve quality of life through less travel times to and from work and more and better resources for our community. I should mention this takes public transportation to make it all work well. Take an aireal view of SOFLO and you quickly realize we are nothing more than a strip of land that borders on our famous river of grass, the Everglades, on the west and the Atlantic Ocean on the east. Not only is this land limited it is a very fragile ecosystem. Protecting the environment and the conservation of limited resoures such as potable water and electric power are issues that go hand in hand with urban sprawl issues. In addition we need a comprehensive plan for code enforcement. Not popular with voters but Miami is becoming less and less homogenius. It seems like shoping for a good neighborhood is not a matter of finding an incorporated city or area but finding remote pockets of neighborhoods. Urban sprawl has created what I have called pocket neighborhood syndrome. An aggregation of similar homes with neighbors of similar demographic qualities amongst dissimilar surrounding neighborhoods. It's a double edge sword towards home values and how goverment resources are allocated to wide areas.

So why is all this important towards attracting big business?
Well the easy answer is it brings high paying jobs! The reality is it doesn't stop there. Big businesses also spend heavily in investment items, demand many services, donate towards hospitals, schools, universities, chambers of commerce and all kinds of non profit organizations. They become a source for fresh leadership in city and local governments and in many organizations. They become a magnet for other investments from the outside to our area. They contribute towards the arts and culture of our community and attend the major sport franchises in the area. Big business brings Miami closer to the rest of the world.

At the beggining of all this I mentioned that our government is key to turning this all around. One look at the above points and you can find plenty of critisism about how poorly government has been carried out. However, I should also say we as citizens are also to blame. We simply are too disinterested, disconnected and perhaps too passive. We too need to take some of the blame and be more critical of our leadership and demand more. That fact is that although we have many temporary residents, those of us who make Miami our perminant home need to say more, and do more.

I think the tied is turning and there is a new generation at hand. Despite our troubles Miami is still a great place.

Non Profits and Quality of Life - Responsibility

Presentation on Non Profits - Responsibility

C-One Center for Non Profit Effectiveness (United Way , Miami)
Seminar Feb 26th, 2004
and Florida Department of Revenue
(Introduction by: Rene Velez)

RENE VELEZ Accounting, Tax & Consulting

Non Profits and Quality of Life

For many years Non Profit organizations have contributed to the quality of human life both here in the United States and throughout the world. Their causes range from the arts, healthcare, homelessness and world hunger to offering comfort and support to AIDS victims, single mothers, the elderly and caring for our young through education and early childhood development, just to name a few causes. It would truly be difficult to think of a major metropolitan city like Miami not having the services available through non profits. It’s something to think about as it affects all of our lives.

Comparison of For Profit vs. Non Profits
Financial and Management Responsibility

However, running a non profit is a sizeable undertaking. You have to be business oriented, work within budgets, hire personnel, establish a marketing strategy deal with human resource issues, keep track of your accounting, develop a business plan and secure funding and deliver your product, just to name a few of the major functional areas. In fact there is a great deal of comparison between running a small non profit and starting a small business. In reality the pressure could well be greater for those who decide to undertake this role because often they have a great deal of passion invested in their cause. Managing a non profit requires a great deal of management resourcefulness. Above and beyond that, you should be aware that if you mismanage a non profit it may not be as simple as going out of business. Even though you are tax exempt you could owe taxes, you may have filing penalties and you could be in violation of the special tax exemption you have been given. Your organization could be penalized and those officers and directors could also face fines and penalties personally. In some cases grants may be recalled for lack of proper accounting or for incorrect use of funds. Just as for profits have a responsibility to shareholders and to the investing public at large, non profits have a financial and management responsibility to their donors and to the public. Think your plan through carefully not only because you are liable but also because when a non profit fails, it affects how the public will give and support the next non profit start-up. (EXAMPLES OF PENALTIES)

Non Profit Image, Marketing, Awareness, Professionalism, Balance

In raising donor funds as well as in attracting volunteers and professionals it is important to develop the right image, understand the value of developing marketing tools. A very important function of your organization is to create awareness for your cause. People have to understand what you do. The service you offer. Why it’s important. You have to develop a level of professionalism to gain people’s trust. To get them to donate time and money and to support your cause along with you. You have to set standards for answering the phone, providing the right donor receipts, thanking donors and recognizing them in your literature. Of course you have to create a balance when trying to address image, marketing, awareness and professionalism. You have to strike a critical balance between doing a great job but not looking like you spent all your donations on a fancy business card and brochures.

Your money is better spent creating a statistical sheet of your accomplishments. How many patients did you serve? How many man hours of volunteers did you have? How many meals did you serve? What is your average cost of service per beneficiary?
What percentage of the target market did you reach? Yes. You have to be a statistician also!


Start out on the right foot

The biggest piece of advice I can offer to anyone starting a non profit is, do your homework and prepare for a major commitment. Then “write down” (at minimum) a simple business plan in draft. You have to address these simple questions just to start:

(1) Who or what will you serve?
(2) What service or product will you provide? Is there anyone else doing this?
(3) How much will it cost to provide that product or service per month for 1 year? (budget)
(4) What am I good at and what will I need help to do?
(5) What/who do I need to start out?

Be very realistic! Don’t lie to yourself! If anything can go wrong it will! There are many resources out on the internet you can look into. You have to be willing to do a lot of homework. Also there is C-One (United Way , Miami) which has an extensive library and also UM (University of Miami) Center for Non Profit Management. Seek out guidance from other non profit founders and managers. Don’t overlook for profit owners and managers that can guide you in your business plan.


Non Profits are a Regulated Industry

I have not heard this phrase often since becoming involved in non profits however, I am starting to use it more and more. “Non Profits are a Regulated Business”. My hopes is to keep non profits from committing errors that can get them into serious trouble. In addition there seems to be a trend that has been going on for some time now both by taxing authorities and homeland security to take a closer look at Tax Exempt organizations. My suspicion is this scrutiny will continue over time.

In the past year we have all heard of the scandals in the business sector. Fraud, mismanagement, corruption. These scandals have created a new era in accounting, financial reporting and business administration. As such there is an emphasis on holding managements feet to the fire when they are entrusted by the public with money. It is already being felt in the non profit sector and it’s only a matter of time before we see more rules and legislation to make sure charitable organizations are measured with more accuracy than ever before.


Taxation:
Internal Revenue Service (http://www.irs.gov/)
Florida Department of Revenue ( http://www.state.fl.us/dor/)
Florida Department of Agriculture and Consumer Affairs ( http://www.800helpfla.com/ )

Finance and Accounting:
Financial Accounting Standards Board ( www.fasb.org/ )
American Institute of Certified Public Accountants (http://www.aicpa.org/index.htm )
Office of Management and Budget ( http://www.whitehouse.gov/omb/ )

The Tax Preparer and Regulation

Considering it is tax season I thought it appropiate to make mention of a virus that threatens our society. The "Unregulated Tax Preparer" or UTP. Every now and again but mainly during tax season I come accross a new client who has had their return prepared by Mr. or Ms. UTP. Yes you all know who they are. They hang out that yellow or red flag in notable establishments like check cashing stores, corner grocery stores or Bodega's and proclaim the words "Income Tax". Its hard to tell what they do but some how that sign has come to be understood as a place to get your return done.

They are in every city across america. Before I speak freely there are some who actually know what they are doing. Some are Enrolled Agents of the IRS and do a fare job for the simple individual income tax returns. Others are degreed accountants who have a good understanding of accounting and tax law. Some may actually be Certified Public Accountants. However, beware! Many are nothing short of Charleton's. I have coined the phrase UTP as "Used Toilet Paper" people. It would seem that the majority of these establishments prepare nothing but "Used Toilet Paper!" The give the profession a bad name and need to be outlawed.

Firstly, here is a bit of advice. Get a professional to do your return. Well known franchises like Jackson Hewitt or H&R Block are a good start. These people get good training however, many are seasonal employees who really do not have experience or who are not well versed in complicated matters. Worse yet many times you might be hard pressed to establish a relationship with these preparers. They sometimes come and go with the season. There is a lot to be said about establishing a relationship with your tax preparer, tax advisor and accountant. It's like feeling comfortable with your doctor or lawyer. You could find an "Ennrolled Agent". This is a designation given to individuals that have taken courses to learn about tax laws have passed and exam and passed a level of standard with the IRS. Again same issues as above but still better than just anyone. Wether you choose a franchise or and enrolled agent they should be professional enough to tell you what they can or can't do. You could go to a "Tax Attorney". These are obviously skilled professionals with lots of knowledge. They are lawyers who understand tax law. Being lawyers they can represent you before the IRS. In fact CPA's often use tax attorney's to create Trusts, Wills, Pension and 401K plans, for tax research and tax opinions, legal representation in criminal cases, to name a few services, because you need to be licensed to practice law, (for the most part) in order to prepare or perform many of these services. Tax Attorney's are licensed and know the law. However, many are not accountants. They don't know or only have a vague idea how to maintain a set of books. They do not understand systems and controls for businesses. Many are true lawyers and are tax guru's but they don't and will not prepare a tax return. Thay are are financial analysts and some are plain horrible at numbers. In fact a good tax attorney has a good relationship with a good CPA or accountant. One does the law the other does the numbers, audits, return preparation etc. The other alternative is to hire a "Certified Public Accountant" (CPA). CPA's take a uniform CPA exam. The exam is composed of various parts but generally cover, accounting, auditing, business law, taxation and economics. Once that exam is passed they request licensing under state law. Once they are certified the IRS recognizes them as competent in the laws of taxation and capable of representing taxpayers before the IRS. CPA's often prepare income taxes and do so very competently. Contrary to the belief of many taxation may have nothing to do with accounting. The operative word is "may". This is because tax law is made by well "law" and although much of tax law has its basis in some accounting or financial model those individuals who govern have a job to enact laws that frankly, may have no economic purposes other than to raise a buck for uncle sam. (entirely a different issue). CPA's are good with numbers, understand finance, many hold other designations such as Certified Financial Planner(CFP), Certified Insurance Underwriter (CLU), Certified Management Accountants (CMA) and so forth. They know tax law and the interrelationships that exist. Better yet is that they know business and thats very good because even if you do not own one, you probably work for one, and besides your household is a business. It has income, expenses assets and liabilities. In fact you may need to see a CPA if your not thinking about your household as a business.

Anything short of these professionals and you are looking for trouble. Unfortunately, this industry is unregulated. There is nothing to keep these unskilled, UTP's from practicing. In the end they hurt all of us. Some operate under the guise that they know how you don't have to pay income tax. They'll go so far as to operate outside the law and snare you in the process. This is criminal activity and should not be taken lightly. Moreover, they raise the income tax burden on those of us who abide by the law. Many times these individuals are elusive but you as a taxpayer who signs that return may unknowingly be signing lies that can get you into a lot of hot water sometime down the road. The latest gimic are advances againts your refund. By itself not a bad thing as many people really need this money right away. But you are paying a very high rate for that money upfront. Many simply do it for you and unfortunetly the consumer is unaware of what it has cost them to receive that money fast.

I have heard and personally experienced tax tragedies by these UTP's that have had clients crying and shaking in my office when they have come to realize what poor service they have received. Some have faced criminal actions by the IRS and other taxing authorities. Some clients have had business credit denied, bonding capacity revoked, lines of credit taken away. Businesses and individuals have faced steep interest, penalties and back taxes in order to correct their standing with tax authorities. Not to mention the cost of expensive professional help to straighten out the mess. Most tax professionals will tell you no matter how much you think you might save in the shortrun tax cheats and those unfortuante individuals who have received poor advice and tax services pay triple if they are caught.

As a CPA I think we need to have better regulation of tax preparation. Too many tax dollars are lost. Too much of the tax burden is carried by those who are honest. The profession of Income Tax Prepration is severely hurt and tarnished by these Charleton's and in the end many honest and hardworking consumers are hurt in the process. Given the sheer number of UTP's it's my guess that lost tax revenue adds up to numbers that create a whole underground economy and collectively add up to the likes of Enron or Worldcom scandals.

It seems to me this is a no brainer.

Rene Velez Accounting Tax and Consulting

Joining the ranks of many entreprenuers within the United States a Miami accountant, Rene Velez, has launched his own firm, RENE VELEZ Accounting, Tax & Consulting, catering to small to medium sized businesses within the local tri-county economy (Miami, Broward and Palm Beach). These businesses typically have less than $5 million in sales anually, have experienced significant growth and require a high touch approach towards their accounting, tax and business needs.

" My best client is one that knows thay have a viable business venture but realize they can no longer afford to manage their business by themselves. If they don't undersatnd the value of forming a realtionship with someone that is going to understand their business, understand their issues and concerns and assist them in acheiving their goals then we simply become another accounting and tax service provider. We hare happy to provide this service alone however, most business owners want more. The want to restructure debt, create a strategic plan, work less, attract new business, bring their business to the next level. Entreprenuers today define success not only by being profitable but by being able to establish a life style. The real challange is that as you grow that business you tend to get sucked into the machinery. What we can do is come in and give you some relief, pull you out of the machinery and develop a plan so that you can run the business without it neccesarily running you.

Most profitable small business owners know that having a business can really take over your life. It's like your success becomes your worst enemy. When the business starts to control you its usually a good sign that you need to change gears and bring that business to the next level. It's unfortunate that many small business owners panic and get out of business or sell out only to find themselves with asset value but no income stream. I should say this is what happens if they are lucky. For us it's a real challenge because helping them with these issues is like doing an overhaul on a race car while its going around the track at 120 mph. Definetly not for the typical CPA who may be a Guru in Accounting & Tax but may not understand the business, has not examined his own clients level of tolerance for risk, knows nothing about the industry or what the competition is doing, is not an operations oriented professional and in the end can not devote that much time to one client. The fact of the matter is we would love to work more with CPA's because we are not out to steal the client. We are more than happy having them be the auditors, accounting and tax experts and keep them on as long as they can be part of the solution. Often depending on the complexity of the business we have to bring in other professionals. It's in the best interest of the client."

Today's small business owners have changed significantly. More and more many are college graduates. Many with advanced degrees. The are knowledgeable and educated. This is a trend that is expected to continue. Many educated professionals are tired of the turmoil in corporate america. To many corporate america has failed to create stability and add quality of life. Too often you get pigeon holed, you could be a good employee for many years then find out you are out of a job because of a merger or acquisition. Few middle and upper management positions have tenure or some kind of golden parachute. This constant insecurity has made many go out and find greener pastures on their own. The Miami tri-county area is a prime example of this. In particular the hispanic community has been very succesful at starting and operting many small businesses. Statistically, around 78% of Miami businesses have 10 or fewer employees. As Rene Velez mentioned, "the hispanic culture is one of the fastest growing segments of our society. Every major corporation is looking at this market segment for future growth. Part of that culture defines success as going into business for yourself. I think it will be very interesting to see what happens in the future. The real trouble is there is no one secrete formula to define that market. In Miami you have so many different hispanic cultures you wind up with segments within a segment."

Changes within the accounting profession itself seems to underscore a great deal of potential for accountants. For the past ten years business schools have been turning out fewer accountants than before. In addition you have many senior level accountants who as part of the baby boomers are considering retiring. This will create a shortage of seasoned accounting professionals within the industry. Many within public accounting are looking to private industry as they have come to realize that public accounting leaves very little room for family life. In an industry which has seen a large influx of female professionals with the last two decades, accounting firms need to gear-up for a whole new way of compensating and retaining their most valuable assets. Rene Velez mentioned " the accounting industry as a whole really has done a poor job historically on two fronts. Although, I recognize they have tried they have not succeeded in positioning in the publics mind the value that accountants bring to the greatest economy in the world. The U.S. economy. I am not talking about your senior level CEO, I am talking about the view the average household has about accountants. We are still called bean counters, the guy that does our taxes. The average american doesn't know the difference between a bookkeeper and a true accountant or CPA. Lawyers by far are more successful in positioning their value and likewise command higher rates. Another issue is that the typical career path for accountants is exhaustingly long. In many mid sized public accounting firms 12, 15 years is not uncommon before you become a partner. Even then you are expected to bring in business before you are considered for partnership. For lawyers 7 to 10 year tracks are more the norm. The starting salary for accountants is about $50K for a green accountant CPA, but for a lawyer about $85 to $90K. Let me ask you if you are not paying these professionals well don't you think logically you have more chances for another Enron, WorldCom, Tyco? Most lawyers who are also CPA's will tell you the CPA exam was much more challenging than the Bar exam."

The Sarbanes Oxley Act has proven to be monumental in creating change within the accounting profession. In many ways it is amplifing other changes in the industry. Sarbanes Oxley has not only doubles the cost for many public company audits, it has created significant demands upon the accounting and internal audit functions of these companies. Often times creating a huge need for outside consultants. Creating shortages of qualified personnel both in private and public accounting. Even more so since this is new ground and few have the expertise and knowledge to address the relevant issues. Rene Velez explained. " SOX is a real challange for all companies. Its not like you can create a template of rules, policies and procedures and then braod brush it accross a spectrum of public companies. Each industry is different. What works for Automotive industry may not even apply to a technology or biomedical industry. What's more is that within a given industry there is a multitude of differences. It's not even that you can get to a point and say okay we have complied with SOX. Each year you have to take a new look to make sure you can prove you have systems and controls for what is happening in the company. You have to constantly be asking yourself what has changed?, what did we miss?, where can this go wrong? What's more is my feeling is SOX will find its way across a variety of businesses not yet addressed. Such as Non-Profits and private companies that get paid with public money. It's just a matter of time if not another pending disaster we have not read in the headlines as of today".

The accounting profession seems to be going through some rather distinct changes. Professionals such as Rene Velez have made a niche for themselves that seems to have longevity given a host of statistical and demographic factors. Sarbanes Oxley, demand for consultants and qualified accountants play into the hands of these professionals for hire. Perhaps the tied is changing and accountants will soon be billing as much as lawyers and will gain their rightful degree of presitige as we move closer to a true global economy. One thing is for sure these are complex issues. Accountants do play a significant role in our economy. As a profession they bring order to chaos and thay attest to the viability of financial information. Information which is used to make decisions on the degree of risk of a given venture. They help us draw a picture of what is good or bad of the giant and small businesses that make up our economy. They execute our tax code by providing tax services from research to preparing a tax return. They help small business owners manage their ventures and create wealth they help multinational conglomerates protect assets and disclose information useful to society in everything from environmental issues to determining stock values and protecting the public from crooks.