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Understanding SSARS 21 can pave the way to more advisory services

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Firms of all sizes are making advisory services an important revenue stream, based on the latest National Management of an Accounting Practice (MAP) Survey from the AICPA Private Companies Practice Section (PCPS) and CPA.com. To better position themselves as providers of higher-level advisory services to their clients, accountants should develop expertise…...

Career paths after becoming an ABV

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By Rachel Flaskey, CPA, ABV, CFF, CGMA, Vice President, Chartwell So you recently achieved the ABV (Accredited in Business Valuation) designation through the AICPA…now what?  An efficient way to start in the valuation profession is to find a mentor who is willing to review your reports and provide introductions to…...

When CPAs need to justify pricing for advisory services

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By Bryce Sanders, President, Perceptive Business Solutions Inc. Ideal clients have complicated tax situations, but not enough time.  You help them, and they recognize your value.  Knowing that your client’s biggest asset is often their business, wealth management as a service offers the ability to cross sell to your clients. Yet,…...

How long does it take to close a commercial loan?

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Banks have a wealth of information available to them, and if they use the right tools to dissect that information, they can make major process changes that improve what matters most to customers – both customers of today and tomorrow. For example, according to a recent poll during the Sageworks…...

ProfitCents is accountants’ “User Favorite” for business intelligence

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ProfitCents, the Sageworks solution that helps accountants easily translate financial statements into actionable insights for client businesses, has been recognized by Accountex USA as the “User Favorite” for business intelligence. Accountex USA, the only independent accounting technology expo and conference in the U.S., announced the award this week in Boston…...

Cash management 101: 5 Ways to improve collections

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By Richard Greene, Clarus Advisors Cash flow is the life’s blood of a business. This is true for the small business and the Fortune 50. Understanding, tracking and controlling your company’s cash inflows and outflows is paramount to running a healthy company. To illustrate the impact collections has on your…...

The first step in a practical 2017-2018 credit union action plan – Build a CECL committee

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In the recent Sageworks webinar Actionable Steps to Prepare for CECL Today, Neekis Hammond and Jared Mills of Sageworks discuss five actionable steps credit unions can take to prepare for the upcoming CECL regulation. Coordinate departments The first step describes the importance of coordinating with other departments to form a…...

What borrowers want – Bringing value to the member relationship

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In a world filled with digital loan applications, growing fintechs and booming small businesses, credit unions need to continually evaluate their borrower experience. In a recent Sageworks webinar, “Best Practices for Automating Simple Member Business Relationships,” Vice President of Strategy at Sageworks Peter Brown discusses ways to improve borrower satisfaction.…...

Cash flow and quality of earnings

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By John F. Dini, CMBA, CExP Financial buyers, Private Equity Groups and Family Offices, acquire companies based on their Return on Investment (ROI). When the owner of a mid-market company receives an offer from a financial buyer, he or she logically expects detailed due diligence on the business’ assets and…...

Business valuations: When speculation becomes fact

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By John F. Dini, CMBA, CExP As an exit planner, I hear lots of owners opine about the value of their company. Some are well informed, but more often than not, they don’t have the full picture. When asked about their reasons for the value they think their business has,…...

How do credit unions ensure CECL data adequacy?

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“When considering member business lending and the consumer portfolio where many credit unions focus, change management to prepare for CECL can be even more difficult with a credit union,” says Danny Sharman, risk management consultant at Sageworks during a recent CECL webinar – Data Quality for Credit Unions. “The first…...

Data quality for credit unions – 3 Methods for data collection

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In order to prepare for FASB’s Current Expected Credit Loss (CECL) model, credit unions are currently relying on different methods to collect and store data. In the recent CECL Webinar: Data Quality for Credit Unions, Sageworks Risk Management Consultant Danny Sharman discusses the three different types of methodologies for data…...

7 Key considerations to establish policy and grow the MBL portfolio

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The NCUA’s new member business lending (MBL) rule has opened the doors for credit unions to grow their loan portfolios. Endeavoring  into member business lending requires a sound strategy that balances inherent risk with perceived opportunity. The first step to outlining a successful MBL strategy requires establishing policies that provide…...

Why business owners don’t buy coaching from their accountant

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In a recent Sageworks webinar, “Why Business Owners Don’t Buy Coaching From Their Accountant (And What To Do About It),” John Warrillow, author of “Built to Sell: Turn Your Business into One You Can Sell,” discussed a major hurdle for accounting firms that are making the transition from compliance work…...

Credit union FAQs: Implementing the new MBL rule

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It’s been more than six months since the National Credit Union Administration (NCUA) issued its revised member business lending (MBL) rule in January 2017. Among other things, the new MBL rule further defines the difference between commercial and member business loans and states that non-member loans do not count toward…...

5 Cash flow management best practices for business owners

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By Alison Nailor, Sageworks As a business owner, you understand it’s important to be aware of your company’s cash flow and manage it well. In the rush of day to day business management, however, this can be difficult. According to a recent Crowe Horwath survey of manufacturing companies and distributors,…...

Business Cash Flow Statement

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What it is and why it’s important to small business owners. Definition A Cash Flow Statement is a financial report that details the amount of cash and cash equivalents that enter and exit a company over a specified time period. The Cash Flow Statement is broken up into operating, investing…...

Have you fed the alligator? Assessing your credit union’s risk appetite

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Would you swim across a pool with an alligator for $1 million?  Some people may say yes, some no. Some may ask – has the alligator been fed? How big is the alligator? How big is the pool? Successful strategic plans require goals that are determined through risk identification and…...

4 Ways to earn CPE credits in North Carolina

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All CPAs are required to complete Continuing Professional Education (CPE) credits in order to maintain their professional competence and provide quality accounting services. Considering that tax laws and regulations are constantly changing, earning CPE credits and continuing to gain expertise is a must. This article addresses current CPE rules and…...

Managing member business lending risk

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It’s been five months since the new member business lending (MBL) rule from the NCUA went into effect in January, providing greater flexibility to credit unions offering member business loans. “Credit unions that focus on business lending are generally healthier than the average credit union,” says Tom Glatt, Principal of…...

Helping credit unions grow organically: Proper software implementation & integration

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In a recent article from Credit Union Insights, Frank Koechlein discusses the need for credit unions to grow into their analytical solutions. “When you were in college you didn’t start with advanced trigonometry, you started with the basics of math and each year you built on what you learned the…...

5 Benefits of expanding in-house member business lending

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With the National Credit Union Administration issuing its final member business lending (MBL) ruling as of January 2017, credit unions are seeing increased flexibility in their lending limits. While this newly found flexibility provides opportunities for competitive growth, the NCUA states “[MBL] has unique characteristics and more complex variables than…...

Adding advisory services? Start with your clients

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Developing predictable revenue streams can help your firm grow in ways you may not have initially thought possible. Many CPAs spend the bulk of their careers bearing up under the weight of their tax and compliance workload while bringing in revenues that fall short, given the time and effort invested…...

In a sea of tech companies, Sageworks rises to top award

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Over the past few years, the Research Triangle area of North Carolina, where Sageworks is headquartered, has been named among the fastest-growing cities in the U.S., the best places to live, the top boomtowns and the best places to start a business (among many other accolades). It’s also home to…...

The most useful (and rarely used) types of data analytics

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By Jackie McLaughlin, CPA Data analytics are gaining momentum as they are increasingly being used during the audit process. As auditors know, data analytics are required during both the beginning and the end of an audit. However, analytics can also be employed efficiently and effectively as substantive procedures. Data analytics…...

How to develop proactive advisory services

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Attend any conference, webinar or professional development course and you will most likely hear the buzz on the importance of becoming more relevant to your clients, adding advisory services and delivering more value. While it sounds great in theory and everyone agrees, just how is this to be accomplished when…...

Business Financial Metrics

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What they are and why they are important to small business owners. Definition Financial Metrics are the key performance indicators for a business. These include Accounts Payable Days, Accounts Receivable Days, Net Profit Margin, Overhead Growth, Sales Growth and Inventory Days among others. Try our free cash flow solution, CashSage…...

SBA Chief: Writing YOUR Success Story

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Guest post by Linda McMahon, SBA Administrator Once upon a time…. It’s the classic opening to our favorite fairy tales. As children we dream of magic potions and knights in shining armor that will provide our happily ever after. How were we to know that our own hard work, skill…...

Business Cash Flow Analysis

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What it is and why it’s important to small business owners. Definition Cash Flow Analysis is an examination of a company’s incoming and outgoing cash during a specific period and is often used for financial reporting purposes. The analysis begins with a starting balance and generates an ending balance after…...

What are analytical procedures and their benefits?

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By Jackie McLaughlin, CPA Analytical procedures are beginning to become more prevalent in the audit world. They provide auditors with many benefits. But are those benefits known? According to the AICPA, analytical procedures consist of reviewing financial information by studying plausible relationships between data and evaluating it for consistency. Analytics…...

One of commercial banking’s biggest challenges solved by Sageworks’ “Most Innovative” product

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Experts agree that while commercial lending is a critical banking service, it has been one of the least automated and technology-reliant aspects of banking today. One of the reasons for the current inefficiency in commercial banking is the number of tax returns that need to be entered and analyzed by…...

Benchmarking

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What it is and why it’s important to small business owners. Definition Benchmarking is the process of using various financial metrics to evaluate the performance of a business against its competitors in an industry. Try our free cash flow solution, CashSage How it is Used Companies from different industries use…...

How to increase efficiency and minimize risk in the audit process using analytics

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Jackie McLaughlin, CPA, started her career in a Big 4 public accounting firm. Since leaving public accounting, she has been an internal auditor, a tax preparer and a controller. She's also done forensic accounting and has written extensively on the accounting field. Currently, in addition to serving as the controller…...

Technology-enabled data analytics: Friend or Foe?

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By Jackie McLaughlin, CPA With the increased availability of useful data, analytical review procedures are becoming more important during the audit process. The processes provide a number of benefits to help CPAs reduce risk and increase audit efficiency. Additionally they provide opportunities for CPAs to become even better at what…...

Business Sales Growth

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What it is, how it’s calculated and why it’s important to small business owners. Calculation Sales Growth = ((Current Annual Total Sales - Previous Annual Total Sales) ÷ Previous Annual Total Sales) × 100 Definition Sales Growth, also known as Revenue Growth, is the percentage by which the average sales…...

Banks and CDFIs: Partnering for community impact

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Guest Post By Paige Chapel, President & CEO, Aeris Most banks recognize that their enterprises can only thrive if their customers also do. And to thrive, those customers need economically diverse and healthy communities in which to live and work. Partnering with local organizations to promote the health of those…...

Business Accounts Receivable Days

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What it is, how it’s calculated, and why it’s important to small business owners. Calculation Accounts Receivable Days = (Accounts Receivable ÷ Annual Revenue) × 365 Days Definition Accounts Receivable Days is the number of days until a company gets paid for its products or services. It is calculated by…...

Becoming an inspiring and profitable advisory accountant

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Best-selling author Steve Pipe is a Chartered Accountant, researcher, speaker and founder of Accountants Changing the World. He authored books including The World's Most Inspiring Accountants, The UK's Best Accountancy Practices and Your Blueprint for a Better Accountancy Practice, and is currently researching his 2017 book, The World's Best Accountancy Practices.…...

Business Income Statement

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What it is and why it’s important to small business owners. Definition An Income Statement is a statement that reflects a company’s financial performance over the course of an accounting period. It lists the revenues and expenses and then calculates the net profit or loss. The Income Statement is split…...

The two biggest challenges public accountants face

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By Jackie McLaughlin, CPA Two of the biggest challenges that partners face when undertaking an audit engagement is risk mitigation and efficiency. Without proper risk mitigation a firm may issue an incorrect audit opinion and without audit efficiency, a firm may not be able to achieve healthy profit margins.  …...

Business Net Profit Margin

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What it is, how it’s calculated and why it’s important to small business owners. Calculation Net Profit Margin = (Net Profit ÷ Total Revenue) x 100 Net Profit = Total Revenue - Total Expenses Definition Net Profit Margin is the percentage of Total Revenue that translates into a profit for…...

Member and customer service is now defined digitally

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By Mark Arnold, president, On the Mark Strategies In the “good old days” of financial services (about 10-15 years ago, given the speed of technological advancement) the way banks and credit unions served consumers was defined more or less in terms of personal interaction. The majority of people still visited…...

How to excite your client with numbers

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By Rich Greene, CEO - Director, Clarus Advisors Finance and accounting are languages, languages of numbers, they speak to you, and you can see financial challenges looming for your clients through those numbers. But when you start a conversation with someone who doesn’t understand the language, they tune out. Quick…...

6 realities for banks about lending to small businesses

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By Eric Baxley, Chief Marketing Officer, Sageworks Since my last post, I’ve continued to meet with our banks and credit union clients across the country, and some common themes surfaced in the conversations. Most notably, the institutions recognized that change was overdue for their business lending programs. 1. Bank management…...

Business Overhead Costs

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What it is and why it’s important to small business owners. Definition Overhead Costs are the indirect costs or fixed expenses of operating a business that range from rent to administrative costs to marketing costs. Overhead refers to the sum of all non-labor expenses required to operate a business. Try…...

Business Accounts Payable Days

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What it is, how it’s calculated and why it’s important to small business owners. Calculation Accounts Payable Days = (Accounts Payable ÷ Cost of Goods Sold) × 365 Days Definition Accounts Payable Days is the amount of days until a business pays its suppliers and employees. It is calculated by…...

Business Inventory Days

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What it is, how it’s calculated and why it’s important to small business owners. Calculation Inventory Days = Inventory ÷ Cost of Goods Sold * 365 Cost of Goods Sold = Beginning Inventory + Purchases - Ending Inventory Definition Inventory Days represents how many days inventory is on hold. To…...

Help clients boost enterprise value by building collaborative decision-making

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By Rich Greene, CEO - Director, Clarus Advisors How a company interacts internally to overcome obstacles is a key to building and expanding the enterprise value of the organization. Is there an inclusive process to review, anticipate and plan for changes and disruptions in the business and marketplace? Or a…...

The rise of the accounting entrepreneur

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In a recent Sageworks webinar, The Rise of the Accounting Entrepreneur, Jason Blumer compared the accounting industry today to that of the past, and explained how accountants today can lead their firms to greater financial success while finding greater personal fulfillment by becoming entrepreneurs.  Blumer, founder of CPA network Thriveal, began…...

Business Balance Sheet

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What it is, how it’s calculated and why it’s important to small business owners. Definition A Balance Sheet reflects an organization's assets, liabilities and capital at a particular point in time. The total number of assets must equal the sum of liabilities and shareholders’ equity. Asset: a resource that an…...

Customer road trip: 6 Lessons learned about small business lending

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By Eric Baxley, Chief Marketing Officer, Sageworks I visited 20 customers (banks and credit unions) across the U.S. in the past few months and have learned six things that are common to almost all of them.  They want to: 1. Grow their loans, focusing on small business lending with a…...

8 fundamentals for increasing the value of your client’s business

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As a business owner it is easy to get stuck in the weeds. The day-to-day commitments that a business deals with can prevent owners from thinking about the big picture. This reality is what hinders many companies from developing long-term plans for how to grow the value of their business.…...

Marc Rosenberg’s advice on partner retirement and buyout plans

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In a recent Sageworks webinar, 29 Must Haves for a CPA Firm Buyout Plan, Marc Rosenberg, CPA and President of The Rosenberg Associates, covered what it takes to develop a comprehensive, well-written, competitive partner buyout agreement. Rosenberg began by explaining that succession planning and partner retirement are arguably the most…...

Business Bottom Line

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What it is, how it’s calculated, and why it’s important to small business owners Calculation Total Revenue - Total Expenses = Bottom Line Definition Bottom Line refers to a company’s net income. The term stems from its location on the Income Statement, where it falls on the last line. Bottom…...

3 Excel tips to help accountants avoid common errors

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In a recent Sageworks webinar, 3 Excel Tips for Accountants to Avoid Common Errors, Jeff Lenning, CPA and Author of Excel University, described key tips that can help accountants avoid common Excel errors and get their work done more efficiently. Lenning’s webinar is one of many resources Sageworks provides to…...

Tips to Prepare Your Client’s Business for Sale

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The following is written by Mary Beth Koester, Manager of Business Valuations at Rea & Associates. As you prepare clients for an exit, there are a few key areas and metrics to consider. Keeping in mind that exit planning can, and should, begin years in advance, you will be able to…...

Loan decisioning technology’s role in small business lending

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Many community banks and credit unions are turning to small business loans as a source of loan growth. In their Spring 2016 Semiannual Risk Perspective, regulators have publicly acknowledged increasing risk in commercial real estate lending, so small business lending seems like it may be an alternative path. Since small…...

Leveraging relationships: How community banks can win

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Some of the most pressing challenges facing community banks and credit unions in the current banking environment include narrow interest rate margins, increasing pressure from regulators, and competition.  One area where small community banks and credit unions have maintained an edge is in relationship lending. The bankers at community institutions…...

Position your accounting firm as a place to grow businesses

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Whether you are performing managerial accounting, financial accounting or tax accounting, your firm can grow by exploring other services that you may be able to provide for each client. If your accounting firm primarily does tax work, for example, begin to think about pushing that boundary and expanding your firm’s…...

Password protection best practices for lending and risk management solutions

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Across personal and professional platforms, bankers have experience with managing passwords to online services. Yet given the confidential nature of data often stored in web-based lending, credit risk and portfolio risk solutions, bankers have to pay special attention to potential weaknesses in password management. This post aims to share general…...

5 common lending challenges and how software can help

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Institutions are equipped to solve five common challenges when they provide staff with the necessary data through an integrated software solution:  1. Improving transparency into business development.  At most institutions, lenders track outstanding opportunities and their sales activities in spreadsheets, calendars and notebooks, and without a centralized system, it’s challenging…...

Whitepaper: How to improve financial presentations to clients

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The following is an excerpt from the Sageworks whitepaper "How to Improve Financial Presentations to Clients". Numbers are the starting point for most business decisions, whether it be seeking a bank loan to start or expand a business, obtaining board approval for a new project or clearing a new hire…...

Building your growth plan: Key metrics to consider – Credit analysis

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As discussed in a previous post, many banks and credit unions are turning to loan portfolio growth as the way forward. These growth plans typically focus on finding new ways to attract more qualified applications. While increasing the volume of qualified loan applications is an important component of any growth…...

Building your growth plan: Key metrics to consider – Marketing

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As the leadership teams at many banks and credit unions perfect plans to grow their loan portfolios, management can depend on several key metrics to measure the effectiveness of their plans and execution. As discussed in a previous blog post, Part 1, one such metric is the loan application conversion…...

Building your growth plan: Key metrics to consider – The lending funnel

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For many banks and credit unions, it is hard to feel anything but stuck between a rock and a hard place right now. In the current market, banks and credit unions are facing pressure on all fronts. Interest rate margins remain slim, and FinTech companies that compete directly with traditional…...

How accountants can build revenue and relationships through consulting meetings

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Have you ever wondered whether your clients question the value of your meetings and engagements?  If so, it might be time to learn how you can elevate your role as a CPA from a finance or tax advisor to one of a business consultant. Having business consulting meetings with your…...

The questioning mind: Best practices for ensuring professional skepticism in the audit process

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By Lana Richards, Contributing Writer, Sageworks Auditors tend to get a lot of eye rolls from client personnel. After all, no one likes to have their work questioned or their errors pointed out to their bosses. Yet that questioning is foundational to the audit practice. If auditors are not appropriately…...

What is keeping your financial institution from growing?

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A common problem impacting productivity and the ability to serve customers is inefficient processes. Many of these are inherited and accepted as “just the way we do things.” But in order to work smarter, not harder, and provide a good experience for customers, inefficiencies should be challenged in favor of…...

The importance of peer benchmarking

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Whether peer analysis is a new practice or a tested strategy at your bank, it is always important to begin any analysis with an overview of key performance metrics. As Tim McPeak, an executive risk management consultant at Sageworks, pointed out in a recent webinar, it may seem obvious, but…...

The past and future of the valuation industry

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The value of a business was once defined in simple terms. Prior to 1920, if someone had to value a business, there was no “valuation industry,” so it’s likely that the only reasonable or logical way to do it would have been to look at the business's assets, its liabilities…...

Know your competition: Best Practices for using peer bank data

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This post is based on a webinar led by Tim O’Rourke, Chairman and CEO of Matthews, Young – Management Consulting. Why analyze peer institutions? A peer analysis – where a bank compares its performance to that of similar institutions - equips bankers to think strategically about a bank’s current position…...

How the 2016 election impacts community banks and credit unions

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According to Sageworks’ Bank Information resource there are nearly 12,000 community banks and credit unions across the United States. Those main-street institutions employ and service millions of voters in towns both large and small, but are often overlooked and underestimated in the role they play in the political process. With…...

Branch transformation: A data focus

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One of the biggest shifts in banking in the past few years has been the decline of the branch. As Anthony Burnett of LEVEL5, a branch consultancy, mentioned in a recent webinar, many banks are struggling to make the old branch model work in the modern banking environment. In a…...

Why financial institutions are updating loan pricing strategies

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Progressive banks are increasingly turning to stronger pricing models that incorporate loan risk, borrower profitability and bank strategy to ensure that the customer always sees the bank’s best rate. This rate may not be the lowest rate, but it will be its best rate that aligns with the strategic goals…...

Does your firm suffer from these 3 false claims?

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Let's face the facts. Public accounting firms tend to have the same challenges when they try to create value for clients. Creating value often means launching or enhancing an Advisory practice. In fact, in 2015, 32 percent of small-to-mid-sized North American accounting firms saw growth in Advisory and consulting services…...

Best practices for documenting analytical procedures

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By Lana Richards, Contributing Writer, Sageworks Documenting audit and review procedures often feels more like administrative than value-adding work. And some procedures—like analytics, for example—require more extensive documentation due to the amount of judgment applied in their selection, design and evaluation. While it can be quite tempting to skimp on…...

6 Ways to Increase Dental Practice Sales

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When running a dental practice, there are plenty of opportunities to increase sales. These opportunities can come in the form of simple changes to how the practice is operated. Read ahead for some tips on how to increase sales for a dental practice. Implement a text appointment reminder system If…...

Three ways bank-marketing executives should use data

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The quote, “You can't manage what you can't measure,” attributed to both American statistician W. Edwards Deming and Austrian management consultant Peter Drucker, has seen significant play as data management has increasingly become more important to professionals in all industries. Data may serve as a buzzword for marketers, but it…...

Interviewing staff candidates for your firm: Some best practices

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When looking to interview candidates to grow your accounting or valuation firm, what is your greatest concern? Is it recruiting and managing the process? Facilitating a flow throughout the actual interview? Follow-up or determining the right questions for the interview? If asking questions is your challenge, you are not alone.…...

Measuring loan-portfolio credit quality

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All financial institution personnel play a role in the maintenance of positive asset quality through loan portfolio management, especially during periods of growth. The credit process inherently has risks. But as the OCC instructs examiners in its Comptroller’s Handbook, loan portfolio management is the process by which these inherent risks…...

Which are America’s healthiest credit unions?

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For many people, trusting another party with their hard-earned money can be an anxiety-inducing experience. Whether it is securing funds in a checking or savings account, or investing in a retirement fund, many Americans need a sense of security that comes with an outstanding experience from their financial institution. Credit…...

How to implement consistent credit risk pricing

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Many banks and credit unions have adopted sophisticated risk-management practices, and their board of directors has to play an active role in ensuring that risks are well understood in overseeing risk exposure. Credit risk refers to the potential for a loss if a borrower or a counterparty to the transaction…...

Why you don’t want to miss the 2016 Risk Management Summit

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With the recent release of the Financial Accounting Standards Board’s (FASB) guidance on the Current Expected Credit Loss (CECL) model, Sageworks' Summit is uniquely positioned to provide the latest information on how institutions can prepare for the changes and what the impact may be once effective.  The 2016 Risk Management…...

What’s wrong with your appraisal process? Common deficiencies

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By Carl Streck, Co-founder and CEO, Mountainseed In a perfect world, an appraisal would land on your desk free of error. However, as we know, the world isn’t perfect, and as such, neither are appraisals. With the average appraiser completing between 220 and 240 appraisals per year, it’s only natural…...

Why your institution needs a standardized loan pricing model

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How Loan Pricing Models Add Value to the Institution Implementing a loan pricing model often requires a process change for lenders and business development staff at the institution, and may necessitate a few extra steps. But if the institution evaluates the change bank-wide and the impact that a standardized pricing…...

3 Ways the 2016 Risk Management Summit will ease CECL transitions

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Sageworks will host the 5th Annual Risk Management Summit September 14-16 at the AT&T Executive Education and Conference Center in Austin, Texas. The Summit will feature presentations from industry leaders, interactive roundtable discussions, panels and networking opportunities. Central to the discussion this year will be strategies for transitioning to the…...

New practice aids help avoid valuation hazards

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The number of small businesses listed for sale is at a seven-year high, and the median sale price is also the highest in several years, according to BizBuySell, an online business-for-sale marketplace. At the same time, BizBuySell data from the first quarter indicate that only about 6 percent of businesses…...

Infographic: How do landscaping businesses increase cash?

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any business owners have trouble managing the line between business and personal expenses. To increase cash for your business without hurting your personal finances, it is important to understand your cash flow situation.  These situations make it hard for business owners to gauge the cash flow of the business. The…...

How can credit underwriting help maintain credit quality?

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As the OCC noted in its 2015 Survey of Credit Underwriting Practices, credit risk is increasing as underwriting standards have eased more than tightened for commercial and retail loan products for the third consecutive year amid increased competition for business. “Similar to pre-crisis surveys, the 2015 survey reflects that many…...

Price services more effectively with value pricing

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By Melinda Crump, Sageworks Have you been evaluating firm profitability and how to more effectively price the services you offer? If so, consider changing your pricing method from the standard billable hour to value pricing. Why? Price chases value, and by creating more value, you will be able to “capture…...

Three ways the lending department can help maintain credit quality

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Loan officers and the chief lending officer can play a role in protecting asset quality during the sales and application process, particularly during times of rapid loan growth. Here are three ways that the lending department can proactively help manage credit quality. 1.  Request a consistent set of product-specific documents.Consistent…...

What every business owner needs

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Would you like to provide more services to each client or to improve the quality of each client conversation? Conferring with a client for the first time, or perhaps a friend we've known for years who is now in need of a business valuation for exit planning or other reasons,…...

Poll: Vast majority of bankers still manually create credit memo

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A credit memorandum is meant to summarize the information collected during the loan application and credit analysis processes. This large document bridges the gap between underwriting and funding, and it is a pivotal point in the life of the loan. A credit memorandum is used by the loan committee to…...

Everyday technology for everyday challenges at accounting and valuation firms

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By Melinda Crump, Sageworks Did you know that many of the daily maintenance and management activities in your firm can be handled more effectively with technology? And while the word “technology” itself sometimes sounds like a daunting challenge, good technologies are actually designed with the end user in mind --…...

How “Veiled Value” hurts your accounting firm

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By Jason Blumer, CPA Founder, The Thriveal CPA Network Listen to Blumer's presentation on different pricing structures for firms, the economic reality of value, and how to influence your clients during pricing. Access the replay of the recent Sageworks webinar featuring him: “Considering Value Pricing to Effectively Price Your Services.”…...

The business of accounting: Building an engagement funnel

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Traditional marketing operations such as print advertising and organic referrals provide an unreliable number of engagements for partners and can stunt firm growth. Accountants should begin to think about their clients and prospects as it relates to where they fit within a sales funnel. Though most partners are comfortable with…...

Notes on normalizing adjustments to the income statement

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Valuation experts know that normalizing is an important and sometimes challenging step in the business valuation process. Business owners themselves may not realize how their own efforts can incorrectly inflate or deflate their sense of the valuation. Other owners may provide limited information on which to base the valuation, which…...

Why would anyone want to listen to a podcast from an accounting firm?

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Guest post by  Becca Davis Director of Practice Growth, Rea & Associates I know what you’re thinking – listening to a podcast from an accounting firm is probably about as entertaining and insightful as watching paint dry. But “unsuitable on Rea Radio” isn’t your typical accounting podcast, which is why…...

Using better data for loan origination

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Sageworks focus grouped more than 100 bankers in 2015 to understand their goals and challenges. A recurring theme within origination was time-wasted with data entry – reading tax returns and typing the data into spreads. That wasted time meant lenders were spending less time trying to grow the portfolio and…...

Business owners: Are you financially literate?

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April was National Financial Literacy Month (also known as National Financial Capability Month), but for business owners, the need for a financial understanding of what’s going on within the establishment is a year-round affair.  Unfortunately, many business owners never received formal training in finance or accounting. Others are more focused on…...

National Small Business Week celebrates the American entrepreneurial spirit

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Guest Post By Maria Contreras-Sweet, Administrator of the U.S. Small Business Administration What creates two out of three net new American jobs; produces close to half of our nation’s goods and services (nonfarm private GDP); and can be found, coast to coast, in every small town, big city and rural…...

Business valuation: In defense of simplicity

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By Erik Kobayashi-Solomon, Principal and Founder, IOI Investor Services Linda is 31 years old, single, outspoken and very bright. She majored in philosophy. As a student, she was deeply concerned with issues of discrimination and social justice, and also participated in anti-nuclear demonstrations. Which is more likely true about Linda?…...

How to make better lending decisions with a probability of default model

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As technology and data collection improve, banks and credit unions are finding ways to use this information to improve their loan decision making and thus improve their asset quality in the long term.  The best way to maintain asset quality is to make good loans…and that involves validating that borrowers…...

The importance of effective data governance for banks

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With the pressures of changing regulations and data security continuing to increase, banks and credit unions must remain vigilant when it comes to their data. Ensuring that data is of high quality, accessible and secure is key to keeping up with this changing environment. In addition, institutions should determine how…...

Are you a trusted advisor?

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At Sageworks, we have conversations with thousands of accountants each month. One characteristic we have noted that successful accountants have in common is their ability to leverage technical skills with a sales mentality and their “soft skills.” You could refer to this as the skill set necessary to create dynamic…...

Avoiding the crushing sound of tax season

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“The hardest thing in the world to understand is the income tax.” –Albert Einstein We could list many other amusing quotes about taxes and tax season. You can probably think of a famous quote right now. Tax season, as accounting firms know, is not just busy. It's the busiest time…...

Poll: Bankers feel they aren’t pricing loans correctly

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Given the current state of interest rates, loan pricing has become extremely competitive and net interest margin has taken a hit at most banks. This intense competition has forced bankers to simply match prices with competitors, not knowing if the loan is priced correctly or profitable for the institution.  …...

Two keys to building a strong credit culture

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In today’s banking environment, there is strong pressure for banks and credit unions to grow the portfolio profitably. With more competition, institutions are lending in new areas, adjusting underwriting standards and seeking to grow via mergers and acquisitions. Despite the pressure, banks and credit unions must remain diligent across departments…...

How does your accounting firm stack up against others?

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Like most marketplaces, accounting firms look to the most successful firms to identify ways that they can grow. Another reason accountants look to more developed firms is to discover, “Are we heading in the right direction? Are we putting resources where they need to be put?” Observing the practices and…...

The Real Price of Risk: How to use risk ratings to increase the profitability of your loans

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Risk ratings are the basis for understanding credit risk in the portfolio, yet many institutions struggle to maintain and apply an objective risk rating system. Accurate risk ratings allow institutions to better price loans and account for risk in the overall portfolio. This webinar will cover the basics of identifying…...

7 Upkeep Tips for Landlords

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When renting out a home or apartment building, there are plenty of ways to avoid future costs by properly maintaining the property. These often come in the form of simple things a landlord or tenant can do on a regular basis. Read ahead to learn some easy tips and tricks…...

ALLL at many banks, CUs reliant on 1-2 people – poll

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Two-thirds of bankers in a recent poll said their allowance for loan and lease losses (ALLL) is primarily calculated by only one or two people in the institution, according to Sageworks, a financial information company that provides loan portfolio and risk management solutions to banks and credit unions. Sageworks conducted…...

7 marketing tips to engage your clients about starting a succession plan

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By Warren Sheydwasser With no shortage of tasks to complete during tax season, many financial professionals don’t need help expanding their to-do list. Given that it’s one of the few times during the year you will likely connect with all of your clients, some additional communication strategies can go a…...

3 external challenges banks and credit unions are facing today

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Financial institutions face a range of challenges arising from issues that are external to the bank or credit union, including: -  Interest rate environment-  Changing regulatory and accounting landscape-  Competitive pressures, especially for commercial and industrial (C&I or MBL) loans.After several years of trying to mitigate the impact of low…...

Upload data quickly from QuickBooks Online for financial analysis, valuations

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Accountants and valuation professionals can spend less time at the computer screen and more time identifying revenue-based consulting opportunities, thanks to the integration of ProfitCents, Sageworks’ flagship financial analysis platform, and the Sageworks Valuation Solution with Intuit’s QuickBooks Online. The integration now allows financial professionals to upload client data directly…...

Join Sageworks and Linda Keith Wednesday February 24th for “The Cs of Credit Guidelines for Tax Return Analysis” Webinar

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In this webinar, Sageworks is teaming up with Linda Keith CPA again to bring you more great information about tax return analysis.  Linda has been a guest speaker on several Sageworks webinars that covered topics like Global Cash Flow, Red Flags for Tax Return Analysis and Making Judgement Calls for…...

4 challenges banks and credit unions are facing today

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The following is an excerpt from the Sageworks whitepaper "Optimizing Capital: Challenges and Opportunities for Financial Institutions". Given the many differences between a community institution and a bank with $100 billion in assets, the challenges facing bank executives and their financial institutions may differ dramatically at various times. Yet all…...

A strong year (financially) for U.S. accounting professionals

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Posted by Sageworks

As professionals who specialize in finance, preparing financial statements, and assisting business owners with their financial performance, one would suspect that accounting, tax preparation, bookkeeping, and payroll service companies would tend to have a firm grip on their own financial performance. And looking at statements filed over the past year,…...

Positioning your firm in a dynamic marketplace

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By Nancy A. Damato  President, Senior Consultant at Accounting Advisory Group, LLC The CPA firm marketplace is changing rapidly, as consolidation of the profession is creating larger firms with greater resources and expanded geographic marketplaces, while the competition for quality clients and staff has reached an all-time high. All of…...

Early-bird registration now open for 2016 Risk Management Summit

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Posted by Sageworks

Sageworks recently announced the dates and location for the 2016 Risk Management Summit. Set for September 14-16 at the AT&T Executive Education and Conference Center in Austin, TX, the Summit is the premier banking conference covering the ALLL and stress testing, and it will feature presentations from industry leaders, panels,…...

8 Restaurant Technologies to Boost Business

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Keeping up with the latest technology is often a critical factor in remaining competitive in the restaurant industry. Considering all of the technological advances that have been made in the last decade, there are now plenty of opportunities to improve efficiency and increase restaurant sales. Read ahead to learn about…...

[Handout] Show your clients how valuations can impact their businesses

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Posted by Sageworks

Selling valuations can be complex and business owners don't always know why they need one. Good news...sometimes the valuation professional doesn't need to sell the service at all. Educating business owners on why valuations matter and how they improve businesses in both the short and long term can help business…...

Optimizing capital: Challenges and opportunities for banks and credit unions

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The following is an excerpt from the Sageworks whitepaper "Optimizing Capital: Challenges and Opportunities for Financial Institutions". Serving customers and helping them achieve their financial goals are often identified by bank and credit union executives as their organizations’ top objectives. Whether it is Wells Fargo (with $1.6 trillion in assets and thousands of employees)…...

Mitigating risk (and legal action) with business intelligence and client relationships

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Posted by Sageworks

By Jeff Borschowa  Author, Freelance Writer, Speaker, Growth Specialist at Dream Practice Possible Errors Accounting is a risky business. Many accountants I know, myself included, worry about what could happen if we were to be sued. The sad reality is that accounting professionals are a target and are at risk…...

Whitepaper: How routine client meetings could fuel a business valuation practice

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The following is an excerpt from the Sageworks whitepaper "How Routine Client Meetings Could Fuel a Business Valuation Practice". Routine meetings with business clients, such as those ahead of or after tax season, tend to cover housekeeping items related to preparing financial statements, tax payments or tax returns. These routine…...

Obstacles to an effective loan review

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Posted by Sageworks

Click here to read the entire whitepaper written by Tim McPeak "A ship is always safe at the shore, but that is not what it is built for.” – Albert Einstein Banks generate most of their revenue by lending money, and lending money, by definition, involves a certain amount of…...

Stuck in compliance: The Grim Reaper of accounting firms

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Posted by Sageworks

Progressive accounting firms seek consulting opportunities so their firms can take advantage of more lucrative advisory service offerings. Recent discussions with industry thought leaders and CPAs that are providing advisory services have highlighted a key benefit to this move. Often the amount of time taken to complete certain advisory services…...

10 Twitter accounts every accountant should follow

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Posted by Sageworks

Information overload seems to be an occupational hazard for anyone spending time on the internet these days, particularly on social media channels.  Coupled with the fact that new social media platforms pop up on what seems like a daily basis, it can be tough for financial professionals to sift through…...

Why you should attend the “CECL Workshop Series”

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Posted by Sageworks

**The FASB issued the final CECL standard on June 16, 2016. For up-to-date information and resources, access the updated CECL Prep Kit. Are you ready for CECL? The Financial Accounting Standards Board (FASB) is expected to release final guidance in Q1 for the current expected credit loss (CECL) model. Implementation…...

The ABCs of becoming your client’s most trusted advisor

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Posted by Sageworks

By Adam Blitz, Principal and Consultant at GetBlitzed Solutions When I was in college, working on obtaining my degree in business economics at UC Santa Barbara, I can recall that I was required to take ONE communications course. Only one 4-hour communication course of a single semester during my entire…...

4 Lessons to be covered in Sageworks Credit Analysis User Groups

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Posted by Sageworks

Sageworks recently announced its lineup for regional User Groups in 2016, including events in Atlanta, Philadelphia, Chicago, Los Angeles and Dallas. Each event will feature 2 tracks: one for users of Sageworks Credit Analysis and one for users of Sageworks ALLL. If a bank or credit union is considering these…...

4 Reasons to review your bank’s risk rating system

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Posted by Sageworks

Risk rating practices for the loan portfolio can draw scrutiny from regulators, to be sure. One of every six financial institutions responding to the 2015 Sageworks Bank & Credit Union Examination Survey said that examiners criticized or required action related to their risk ratings practices.  But avoiding regulators’ inquisition isn’t…...

Credit unions strengthen, but is there cause for concern?

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Posted by Sageworks

Glatt Consulting, a leading credit union consulting firm, publishes a proprietary Credit Union Industry HealthScore each quarter. The HealthScore, based on a 5-point scale (0 reflects poor health, 5 reflects exceptional health), calculates overall credit union health by grading them on 11 ratios, including net worth, ROAA, operating expense, efficiency,…...

Top 10 business valuation blog articles from 2015

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Did you miss them? Read the most popular business valuation articles published by Sageworks in 2015. Visit the Valuation Blog to read the latest. Most common challenges facing business valuation professionals  The process of valuing a business combines both art and science and can be arduous. Generally speaking, a detailed,…...

3 simple ways to differentiate a valuation practice in 2016

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Posted by Sageworks

Let's assume, for the purpose of this article, that you are operating a successful valuation or accounting firm. Or, perhaps you're an M&A professional or business broker, but no matter the nature of your work, you have a cash flow positive, successful organization. Yet your work valuing businesses and advising…...

Be a profit center: Add value to your consulting engagements

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Posted by Sageworks

By Adam Blitz, Principal and Consultant at GetBlitzed Solutions CPA’s can be invaluable. However, CPA’s often dive into accounting work that only meets the compliance requirements. It’s common knowledge that clients need tax returns or financial statements completed and submitted in a timely manner. It’s also well known that the…...

12 Questions to ask in consultative client meetings

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Posted by Sageworks

When accountants go to client meetings they run the risk of either going in without a plan or failing to innovate their usual tactics for understanding their client. Since most business owners view accountants as a commodity, prioritizing the ways you communicate with your client during your annual or quarterly…...

6 Questions to help accountants sell advisory services

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Posted by Sageworks

If you are following the large accounting industry news outlets, it’s no surprise that the role of an accountant has been, is currently and will continue to shift from compliance work to consulting engagements.  The resistance to this change has been threefold: First, there is not enough time in the…...

Most popular valuation webinars of 2015

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Posted by Sageworks

Looking back at 2015, the Sageworks valuation team hosted and attended webinars across a variety of topics from marketing a practice to finding the bias in a valuation. Each of the webinars listed below is available on demand to watch at no cost. In this article, we highlight some of…...

6 Ways a Plumbing Business Can Boost Sales

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Posted by Sageworks

Boosting sales is one of the first steps towards becoming a more successful and profitable business. Many of the tips below can be simple changes that a plumbing business can make to help improve their sales. Read on to learn about some tips and tricks to help improve sales in…...

Top 10 banking webinars of 2015

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Posted by Sageworks

Are you staying current with the hot topics in banking? While the FASB’s CECL model has garnered much of the industry’s attention as of late, several other topics within credit, stress testing and the ALLL were of interest to banks and credit unions in 2015. Sageworks, a provider of credit…...

7 Ways to Cut Costs in a Medical Practice

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Posted by Sageworks

When running a medical practice, there are multiple ways one can cut down on their total expenses. Cutting out unnecessary expenses is a critical component of becoming more profitable. Read ahead to learn more about the different ways that a medical practice can reduce costs. Invest in Pre-Registration Software Consider…...

Whitepaper: How technology is changing the way firms operate

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The following is an excerpt from the Sageworks whitepaper "The Automation Revolution: How Technology is Changing the Way Firms Operate". As consumers adopt the latest technology, businesses must do the same in order to provide services and customer experiences that align with today’s technology. The feeling of visiting a financial…...

Is your website generating new business for your accounting firm?

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By Ryan Himmel, CPA, Founder & CEO, TaxResearchPro By now, many accounting firms have a website. Firms are motivated to have a site because other firms in the area have one and most clients expect it. Still, saying you have a website is not enough. You should be able to…...

Professional skepticism and other 2015 audit focus areas

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Posted by Sageworks

The auditing process is mechanical in its function but requires a curious mind to prevent and detect misstatements that can hurt a business. Each year, leaders in the industry gather together to discuss ways to make the craft of an audit more deliberate and structured. As a result of these…...

Is 2016 the year for bank M&A?

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Posted by Sageworks

For years, the banking industry has been talking about mergers and acquisitions (M&A). While some consolidation has occurred, it still hasn’t reached levels that many expected. Bank Director’s 2016 Bank M&A Survey, sponsored by Crowe Horwath, was recently released and offers insight on current M&A trends in the banking industry.…...

Tips for telling business owners why valuations matter

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Posted by Sageworks

Finding prospective valuation clients isn't always easy, and even once a firm has identified a prospect, communicating the value of valuations is critical to a successful relationship. Sageworks hosted a webinar on the topic, "How to Find New Business Valuation Clients" in order to explore tactics for identifying clients as well as the…...

What borrower data to collect for agricultural lending

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Posted by Sageworks

Banks involved in ag lending understand that the volatility of the industry – unpredictable weather patterns, variable commodity prices and more – can often lead to higher amounts of risk compared to other concentrations. Given recent news about decreasing ag incomes, combined with increasing demand for ag loans, banks need…...

Before and after tax season checklist: How to increase revenue and add value

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Posted by Sageworks

Hectic schedules and an immense workload often prevent accountants from fulfilling their role as a trusted advisor during tax season. Time crunches mean that some strategic planning that accountants wish they could implement for their clients goes out the window during these months. Though strategic planning for clients must be…...

Managing your credit union’s loan data

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Posted by Sageworks

Whether it’s part of a CECL preparedness conversation or part of a more proactive approach to risk management under existing regulatory expectations, the topic of “loan-level data” has repeatedly come up since the 2012 proposal from the FASB. As a result, at Sageworks, we have received many questions from our…...

What is the impact of the NCUA’s risk-based capital rule?

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Posted by Sageworks

Last month, the National Credit Union Administration (NCUA) approved the long-awaited final rule on risk-based capital requirements for credit unions. The rule aims to reduce the possibility of high-risk credit unions exhausting their capital and causing systemic losses, which all federally insured credit unions would have to cover for through…...

Why business owners can fail, even during growth

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Posted by Sageworks

By Bakley Smith, CFA Most business owners - especially those in the startup space - have an eye fixed on valuation. At what level does the market value the company? The media, of course, feeds the frenzy with television shows, articles, podcasts and a steady stream of click bait, aimed…...

OCC warns about increasing credit risk

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Posted by Sageworks

With the recession fading into the more distant past, banks – in particular, community banks – have seen several years of loan growth. Banks, according to Comptroller of the Currency Thomas Curry, are starting to reach for additional growth by lending to less creditworthy borrowers, a move that increases risk…...

Preparing to execute well this tax season

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Posted by Sageworks

A significant amount of planning is typically involved before most major events. For example, D-day, the most comprehensive invasion to ever take place, was planned and scheduled with extreme detail months before its execution on June 6, 1944. Likewise, accountants each year experience a tax season that requires detailed planning…...

The business case for portfolio stress testing

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Posted by Sageworks

Some financial institutions consider stress testing the loan portfolio as one more regulatory issue to address, but that view is short-sighted, according to John P. Behringer, RSM’s national leader for credit risk services. Portfolio stress tests can provide a number of benefits beyond compliance with regulatory expectations, Behringer said at…...

Data, where art thou?

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Posted by Sageworks

Banks and credit unions rely on their borrowers for updated information, which they in turn use to make accurate credit decisions. Financial statements, tax returns, collateral appraisals, rent rolls, loan agreements, economic data, credit reports, images, etc. all factor into credit decisions, making document and data management a big deal…...

3 Ways to capitalize on your tax season engagements

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Posted by Sageworks

Every year, accountants brace themselves for the inevitable tax season. For many accountants, unfortunately, tax season means that lucrative consulting work that can diversify revenue and bolster firm growth throughout the year gets put on hold in order to handle the mountains of personal and business tax returns. However, tax…...

Why your business should have a buy-sell agreement in place

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Posted by Sageworks

By Rachel Flaskey, CPA/ABV/CFF/CGMA Building a strong business foundation begins with you, the owner. Having a formal written document to detail ownership transition plans is a best practice that should be utilized by business owners, regardless of when the business transition will be happening. The article below outlines four key benefits…...

5 Common errors in global cash flow analysis

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Posted by Sageworks

For banks and credit unions, the term “borrower” can often take on many meanings – especially in complex situations where the “borrower” can have multiple owners, businesses, real estate entities and/or farms. When combining personal financial information, the analysis can get even more complex. To more objectively calculate a global…...

Process key to new hires at your firm

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Posted by Sageworks

As the fall ramps up, many accounting firms will see a steady stream of new faces in their halls. Recent college graduates have already or soon will find their new homes in cubicles, wide-eyed and eager to learn the ins and outs from their firm’s senior staff. While a company…...

7 Ways to Cut Energy Costs When Running a Convenience Store

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Posted by Sageworks

When running a convenience store, energy costs can eat up a lot of revenue. Although some energy costs are inevitable, others can be significantly reduced by following some of these easy-to-implement tips. Gas Station Bay Rather than having the gas station bay constantly lit at night, use one general overhead…...

How business brokers can add value and create growth opportunities for clients

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Posted by Sageworks

Remember the days of yellow mustard, when there was only plain, yellow mustard? Malcolm Gladwell published a story about how the mustard market changed forever in the 1980's. All of a sudden mustard came in glass jars, had French-sounding names, and was featured in commercials with a Rolls-Royce driving down a country…...

Attracting and retaining female staff

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It will come as no surprise that one of the largest concerns facing accounting firms today is staffing. For some firms, the way to solve this is by ensuring there is a greater gender balance among the staff. Although women are entering the profession in higher numbers than ever before,…...

Goodwill is a function of jurisdiction, appraiser says

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Posted by Sageworks

Republished with permission from Business Valuation Resources (www.bvresources.com). No two cases are alike, and different jurisdictions approach goodwill and noncompete agreements differently, cautions Jim Alerding (Alerding Consulting LLC), in response to the BVWire item on the Mauceri Texas divorce case, in which Bob Dohmeyer (Dohmeyer Valuation Corp.) was the prevailing expert. Therefore, it would be a mistake to…...

8 steps to an accurate business valuation

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Posted by Sageworks

Valuation is as much an art as it is a science, and it is commonly considered to be a statement of opinion rather than a mathematically proven fact.  The numbers, models and metrics are not the only factors of a business valuation. In his video of an introduction to valuation, Professor…...

Is your credit union ready to grow member business lending (MBL)?

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Posted by Sageworks

Member business lending (MBL) has been a hot topic in the financial services community this summer, particularly as the industry awaits finalization of the NCUA’s rule changes. While credit union lending to businesses has been on the rise over the last several years, both in terms of dollars and the…...

Credit union membership, lending up in Q2

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Posted by Sageworks

Credit unions are on the rise, as indicated by the NCUA in the second quarter of 2015. Last week the NCUA reported that the total number of credit union members had surpassed the 101 million mark, and overall lending was up as of the close of Q2. According to the…...

The power of Twitter for recruitment

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Sageworks ProfitCents SolutionSimplify your audit and advisory services with a globally accessible, easy-to-use solution. Sageworks ProfitCents Solution is a web-based, audit and advisory solution that helps firms streamline workflow, scale existing processes and increase realization rates. Learn more by requesting a demo....

Avoid pitfalls of a growing business valuation practice

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Posted by Sageworks

The baby boom generation is often marked by the free-spirited popularized during the 1960’s and 1970’s. The same generation that preached “peace, love and understanding” also funneled that spirit into some of the most successful entrepreneurial ideas ever, like the iPod and the Roomba. Now, as the generation ages, many…...

Attracting and retaining millennial talent

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With the inevitable retirement of baby boomers, it is critical to have plans in place for developing the future leaders of your firm. This process begins by hiring potential partners who have the potential to grow into your firm’s cash cow. How does your firm begin to identify and draw…...

4 Reasons to attend the 2015 Risk Management Summit

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Posted by Sageworks

The 2015 Risk Management Summit is less than a month away. Executives from more than 100 banks and credit unions representing 39 states have already registered to join their peers, industry experts and Sageworks in Chicago for the premier ALLL and stress testing conference. Registration is still open, but very…...

Will credit unions return to an 18-month exam cycle?

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Posted by Sageworks

“… it’s not 2008.” This is the sentiment of several high-profile executives regarding the National Credit Union Administration’s (NCUA) stance on examination cycles for credit unions. There’s been much back and forth over the last week on this subject and the NCUA’s desire to stick to a 12-month examination cycle…...

The benefits of audit technology

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Current technology has enabled auditors to analyze extensive amounts of financial data, allowing accounting professionals to more easily identify areas of risk. These technologies have also helped streamline time per audit and produced higher quality assurance. Is your firm taking advantage of these current technologies? What might the future of…...

Ag lending risk increasing as result of declining incomes

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Posted by Sageworks

According to recent data from the Agricultural Finance Databook, non-real estate farm loan volumes continued to rise in the second quarter of 2015, increasing by five percent over the second quarter of 2014. This growth continues the trend from the first quarter of 2015, which saw an increase of eight…...

Expanding your member business loan (MBL) portfolio through credit union service organizations (CUSOs)

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Posted by Sageworks

Earlier this summer, the NCUA unanimously approved a series of proposed changes to their regulations on member business lending (MBL). These amendments, if adopted, would lessen current restrictions to make it easier for credit unions to lend to businesses. The proposal just concluded its 60-day comment period and a final…...

Video: How to prepare for valuation industry growth

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Posted by Sageworks

Industry research suggests that much of the growth in the business valuation industry is due to baby boomers retiring, with the intent to sell their businesses. While growth is superficially appealing, many firms need to consider if they are prepared to meet the increased demand for those valuations. Like most things in…...

The Bermuda Triangle of Valuation: Bias, Uncertainty and Complexity

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By Aswath DamodaranProfessor of Finance, NYU Stern School of Business Introduction from Sageworks: Studies have shown that sizable numbers of business owners look to transfer their ownership interests in the next decade, and a major concern for many is whether they’ll get out of the business what they expect. Gaps…...

Is your bank or credit union struggling with inefficiencies?

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Posted by Sageworks

A common problem countering workplace productivity and the ability to serve customers is inefficient processes. Many of these are inherited and accepted as “just the way we do things.” But in order to work smarter, not harder, and provide a good experience for customers, inefficiencies should be challenged in favor…...

Guiding your succession planning

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Posted by Sageworks

For many years leaders in the accounting profession have preached the need for firm succession planning. And there is no time like the present. The retirement of baby boomers combined with high turnover and the slow growth of new entrants to the profession all point to the inevitable passing of…...

Why fair value isn’t always the right value

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By Bakley Smith, CFA The debate between fair value and historical cost accounting is a hot topic for academics, regulators and investors. As noted by a University of Chicago Booth School research paper and Harvard Business Review, the debate centers on the use of fair value accounting and its impact…...

Succession planning: Defining and finding an ideal candidate

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Succession planning, whether you are a sole proprietor or a top 200 firm, is a delicate topic. With such a transition there are not only financial components to consider but also the relational changes that could occur. These changes will not only affect dynamics within the company but also the…...

Could a bank’s best asset to perform stress testing be in HR?

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It is no doubt that stress tests for the nation’s largest banks can be an anxiety-inducing experience for those institutions being reviewed. Since the passing of Dodd-Frank, more than 30 megabanks are in the hot seat annually while their ability to withstand the financial stress of dynamic shifts in the…...

Infographic: 5 Bar Promotion Ideas

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It is becoming increasingly important for bar establishments to find ways to differentiate themselves from others in the industry in order to remain competitive in the marketplace. Finding quick ways to increase profitability can be tough, but the infographic below details 5 simple ideas for how bars can better promote…...

Loan underwriting and administration remain a top concern of bank examiners

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In its semiannual report last month, the Office of the Comptroller of the Currency (OCC) noted that the banking industry has loosened its standards for underwriting loans, bolstering the credit risk for financial institutions. While an increase in risk might be a red flag to the regulatory agencies, the reason…...

The deception of capital expenditure and working capital in business valuation

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The demand for business valuations continues to grow with the improvement of the economy and the rise of baby boomer retirement. Performing high quality valuations has become more important than ever before to meet client expectations and compete in the industry. To reach the true value of a company, one must…...

Avoiding the pitfalls of analytical procedures

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By definition, analytical procedures is a process of analytically detecting ways to decrease time and increase efficiency. This process can appear daunting at times because of the numerous comparisons of financial information that must be made when working on a client’s statements. The overall goal for an auditor is to…...

Community bank stress testing: Where to begin

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While banks under $10 billion in assets aren’t technically required to stress test, recent data suggests the practice is becoming the norm. According to the Sageworks 2015 Bank and Credit Union Exam Survey, more than 40 percent of the 180 responding institutions had already begun stress testing, and it was…...

How to build your valuation practice

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Business valuations are one of the fastest-growing services offered by accountants. With a projected growth of nearly three percent each year through 2019, the industry is truly thriving. Much of the demand comes from the shift in business owner demographics as our nation’s baby boomers reach retirement age and step…...

Growing your firm’s advisory services: Financial management

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One of the growing interests for accountants is expanding their firm’s services to include financial advisory. The transition from compliance to consulting makes sense: tax season is just that, a “season,” and nearly 60 percent of respondents to a Sageworks survey indicated they saw an increase in total revenue by…...

Survey: Trends in technology decision-making

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Companies across the globe ask themselves the same question: Is adopting new technology worth it? As you can imagine, this question is not new. Businesses of the past have debated whether or not they should install telephones to connect to customers more easily, use refrigeration to extend shelf life of…...

Technology overload: Which option is the best for me?

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Industry, especially the financial industry, has become packed with insightful and time saving technologies. In a recent Sageworks webinar, 60 percent of attendees said that one of their main road blocks to adopting new technology at their firm was their unfamiliarity with potential solutions. In today’s blog I will map…...

Is your bank prepared to comply? The evolving role of the Chief Risk Officer

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Compliance is often a loaded word for bankers. While regulations within the banking industry are, of course, a necessity, the ongoing conversation about striking a balance between mitigating risk and overregulation continues in government, media and financial institutions themselves. By nature, a bank is set up to withstand some risk.…...

OCC cites loosening of underwriting standards as a top supervisory concern

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On June 30th, the OCC released its Semiannual Risk Perspective for Spring 2015. The report, based on data through the end of 2014, discusses risks facing national banks and federal savings associations, and focuses on issues that pose threats to the safety and soundness of those OCC-regulated institutions. According to…...

Effective LinkedIn strategies for marketing and thought leadership

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Remember the days of the rolodex on your desk? Well, even if you don’t, you probably realize that with today’s digital technology, the rolodex is pretty much extinct. Today, Outlook or Gmail contacts, your phone’s address book and LinkedIn have replaced the reams of paper we once used. You might…...

Engage your market by leveraging technology

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The message of accounting firms has remained relatively the same over the past decade. Offers of insight and ways to generate business growth and increase effectiveness have flooded the market. Though the message has stayed constant, technological improvements have opened the door for firms to reach beyond the borders of…...

How segmentation can benefit a bank’s ALLL and risk management practices

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With increased scrutiny surrounding a financial institution’s ALLL calculation, many are asking how they improve their process and make it more comprehensive. Of course there isn’t any one answer to this question, and the direction can vary based on an institution’s starting point. A segmentation strategy, though, is a great…...

More banks predict larger impact from CECL model

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**The FASB issued the final CECL standard on June 16, 2016. For up-to-date information and resources, access the updated CECL Prep Kit. The attention on the FASB’s current expected credit loss (CECL) model has only increased in recent months, as the industry braces for the release of final guidance before the…...

Happiness and firm efficiency

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Over the past ten years, technological advances have made communications and on-demand services almost necessary for profitably relating to the world. Ultimately, goods and services have become highly customizable, and value propositions are tailored to the individual. These trends are not simply occurring within the consumer marketplace, but also in…...

Can banks have an impact on alleviating the egg shortage?

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If you’re craving an omelet the next time you sit down at your favorite restaurant, you may need to reconsider your order. If eggs are even on the menu at your local haunt, your dish may carry a higher price tag than the last time you dined out. The egg…...

June and July: The months of accounting conferences

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June and July have notoriously been the months that most firms use to attend accounting industry conferences. Though June is coming to a close, it is not too late to think through how your firm may be able to benefit from this time out of the office and away from…...

Video: Introduction to business valuation by Aswath Damodaran

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Aswath Damodaran is a business valuation expert and Professor of Finance at New York University Stern School of Business. In this video, he reviews the importance of valuation and offers three main reasons why valuations fail—bias, uncertainty and complexity. According to Damodaran, human nature and the emotional connection to a…...

NCUA proposed rule: MBL flexibility for credit unions?

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On June 18th, the board of the National Credit Union Administration (NCUA) unanimously approved five items, including a proposed rule aimed at modernizing member business lending (MBL). The rule would provide greater flexibility and autonomy for credit unions to better meet the needs of their members. Small business lending at…...

The benefit of a business philosophy

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In a recent Sageworks webinar, we explored the importance of sole proprietors and small business valuation teams maintaining a strong work and life balance. This balance is, in many ways, the core of their ability to be successful in their work. Like training for a high impact sport such as…...

How to stress test your ag portfolio

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According to recent data, lenders are seeing elevated agricultural loan demand largely as a result of tighter profit margins among producers. The report, from the Federal Reserve Bank of Kansas City, stated that demand could remain high since futures markets for fall crops show prices are likely to remain low…...

Understanding commingled entities through global analysis

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The main philosophy behind a global cash flow (GCF) is to spread all parts of a relationship (people, businesses and related real estate) to measure their financial health and cash flow individually, then collectively on a “global” level. The important take-away here is to try and view individuals, businesses and…...

Survey: 88 percent of people still favor an in-person banking experience

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In late December, CNBC took a peek inside the bank branch of the future. The piece looks at one possibility – a faceless branch, where avatars take the place of tellers. CNBC said in the article, “Community-level banking, particularly from large institutions, will become more cost efficient and less personal.”…...

Summer goals: Improve your audit planning

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Memorial Day unofficially kicked off summer, a time of year that often prompts auditors to begin reflection on what type of accounting firm they want to be. Whether you went on vacation with friends or family for the long holiday or continued to work away in the office, your mind…...

The benefits of building a relationship with your bank examiner

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In a recent Forbes article, Frank Sorrentino, Chairman and CEO of ConnectOne Bank, offered his take on how financial institutions should flip their mindset on regulators and examinations. The piece, titled “Why Banks Should Stop Fighting and Learn To Love Regulators,” suggests that while institutions of all sizes are grappling…...

Credit unions continue to see growth in auto lending

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For more than 30 years, the number one vehicle in America by sales is the Ford F-series line of trucks. More than three-quarters of a million were sold in 2014, continuing its reign as the top vehicle since 1981. The Toyota Camry, the first car on the 2014 list, ranked…...

Approach clients to offer valuation services using these discussion-starters

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By Brad Spence, Director of Sageworks Valuation Solution Most business owners aren’t as lucky as 91-year-old media tycoon Sumner Redstone, who famously declared he won’t discuss succession planning for his Viacom and CBS empires because he isn’t going to die. The fact is, millions of business owners are over age…...

4 Tips for creating an effective credit policy

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Some view banks’ credit policies as somewhat of a necessary evil; many comprise hundreds of difficult-to-decipher pages intended to establish numerous policies for evaluating and undertaking risk. These credit policies outline banks’ appetite for risk, establish banks’ credit culture, determine the extent of decision-making delegation and describe how loan portfolio…...

How will the Apple Watch and other tech evolutions impact banking?

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That five-inch screen is ready to move to your wrist, and, perhaps surprisingly, that affects a lot more than just your wallet.  It’s not just the technology industry that is constantly evolving – many other industries must also remain adaptable to the changing landscape of the American consumer. One such…...

What to consider when pricing business valuations

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A recent survey by Pepperdine University found that 64 percent of business owners intend to transfer their ownership interests within the next 10 years. For those considering selling their business, a valuation professional could be seen as friend or foe – either delivering the good news that their business is…...

Yelp for accountants: What your online reputation can mean for new business

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With more than 142 million users per month and 77 million local reviews, you’ve likely used Yelp’s website or mobile app to source a great Italian restaurant or locate the nearest bakery when you’re craving something sweet. But the review-based community extends far beyond ravioli and cannoli. Just about any…...

3 scenarios that demand a valuation professional

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While business owners are the captains of the ship, in many cases they operate leanly -- with a small crew or perhaps no crew at all. With more than 70 percent of all businesses in the U.S. owned by sole proprietors, a significant number of people control their professional destiny,…...

Top questions on global cash flow and pass-through entities

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One of the more challenging components of tax return analysis is analyzing global cash flow with multiple pass-through entities – especially without double-counting or leaving cash flow out. Linda Keith, president of Linda Keith CPA, recently partnered with Sageworks to lead a webinar aimed at clarifying the confusion on pass-through…...

As baby boomers age, valuation professionals adapt to help close “value gap”

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Written by Zeb Zilar, Project Lead, Sageworks Valuation Solution Baby boomers are hitting age 65 at a rate of 10,000 a day until 2030, according to the Pew Research Center. Another study showed that 65 percent of new business sellers in Q1 of 2014 were baby boomers.  The transfer of wealth that…...

Standardizing analytical procedures to bolster audit compliance, efficiency

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By Michael Sferratore, Vice President of ProfitCents One of the unintended consequences of auditing changes in the wake of accounting scandals since Enron and WorldCom is that some investors and regulators have come to believe that accounting can be an exact discipline – where objective practitioners uncover “the truth” by…...

Creating repeat valuation and consulting work: Optimize value of clients’ businesses

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Business appraisers have an excellent vantage point to see deep into the workings of a business in the process of doing their appraisal. They can then offer their insights to owners who would like to increase the value of their business.  A home is a useful metaphor for valuation professionals…...

Shoot and score: Tips for winning a new business valuation client

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If you’re a sports basketball fan, you know that the NBA playoff matchups are underway. As it stands, the average field goal percentage for the current season is .449. Of all 30 NBA teams – from first place standing in the Eastern Conference to last place in the West –…...

3 Common loan review weaknesses

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Loan review is a periodic review of bank and credit union loan portfolios in order to gauge their overall risk profiles. The assessment of loan portfolio quality is then provided to senior management and the board of directors. This assessment often provides an early warning of deterioration(s) in credit quality…...

Leverage social media to market business valuation services

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Much like peanut butter and jelly, social media and content marketing are two things that go together in the world of forward-thinking marketers and business owners. So how does a firm get started using social media to build their valuation practice? Given the competing pressures on business valuation professionals or…...

Beyond efficiency: Using technology to ramp up a valuation business

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By Brad Spence, Director of Sageworks Valuation Solution What drives new business for your valuation practice? Referrals? Marketing? Cross-selling current accounting clients? How about technology? Is your firm using technology to drive new valuation engagements?  Many accounting firms view technology expenses as overhead – costs that chew up precious revenue dollars…...

Lessons to apply to business valuations

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By Bakley Smith, CFA Most business owners - especially those in the startup space - have an eye on valuation. At what level does the market value the company? The media, of course, feeds the frenzy with television shows, articles, podcasts and a steady stream of click bait, aimed at…...

What can your firm learn from busy season?

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Get ready to breathe a sigh of relief… you’ve almost made it to the end of busy season. If your Twitter feed has consistently seen nothing but #busyseasonproblems for the last few months, it’s nearly time to make them a distant memory (but admit that you’ll miss the comic relief).…...

3 Easy steps to get the most out of ProfitCents

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By Natasha L. Closs, Director of ProfitCents Consulting & Advisory Services In working day in and day out with accountants, we often hear that a main reason people subscribe to ProfitCents is to provide additional value to their clients. Accountants want to be able to help clients understand what their…...

How to simplify valuation report writing

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When confronted with multiple clients, each requiring days of your time or your employees’ time to produce a customized valuation report, it is common to ask: How can I make this process easier? How can I make this process more productive for my bottom line?  In speaking with financial professionals…...

What data is needed for top down stress testing?

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The OCC defines “top down” stress testing as “applying estimated stress loss rates under one or more scenarios to pools of loans with common risk characteristics.” This method of stress testing provides deeper insight into a financial institution’s portfolio or portfolio segment during stressed scenarios. For top down stress testing…...

Top cash flow forecasting mistakes

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By Bakley Smith, CFA Strong businesses have a solid handle on their financial reality, and the cash flow statement is an excellent, if not the best, measure of a company’s ability to generate cash in excess of cash invested. Over a sufficiently long period of time, all businesses have to…...

Find out what other institutions hear during exams

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Few bankers enjoy having a federal examiner onsite, conducting a safety and soundness examination. It can lead to bottlenecks, additional reports that must be prepared, lost focus for bank or credit union executives, stress for board members and, in some situations, a bad report from examiners. How can you cheat…...

What Basel says about expected credit loss

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The phrase “expected credit loss” (ECL) is one that bankers will be hearing a lot more of in the coming months. Currently, financial institutions adhere to the incurred loss model for their allowance for loan and lease losses (ALLL). However, final guidance on the FASB's Current Expected Credit Loss (CECL)…...

How can bank boards respond to increased regulatory scrutiny?

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Bank directors have always played a critical role in ensuring the success of their institution. Unfortunately, the recent economic crisis highlighted shortcomings in boards’ understanding of risks and the proper oversight of those risks. This may have been due to some directors lacking experience and/or being too closely tied to…...

The madness of March: Busy season edition

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Someecard created by Whitney2327585 If you’re an accountant, a CPA or an auditor, March may very well be the most grueling month of the year. You’re probably up to your ears in #busyseasonproblems like being overloaded on caffeine, working on little sleep, and jealousy for missing out on the college…...

Business, marital disputes fuel valuation demand

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By Brad Spence, Director of Valuation Solutions, Sageworks Accountants considering adding or expanding valuation services in their practice may wonder about the demand for valuation services and what kind of clients can benefit from a valuation or calculation engagement. According to valuation and forensic specialists queried in the 2014 AICPA…...

Are you diversifying your portfolio appropriately?

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It is only natural for community banks to have loan concentrations that result from the market(s) they serve and the markets they pursue. In today’s times, a high commercial real estate (CRE) concentration is often the result of community banks pursuing opportunity in the market. Consequently, interagency guidance on CRE…...

Which are America’s healthiest banks?

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In the last several years following the Great Recession, the health of banks in the U.S. has been analyzed and debated.  For the largest of American financial institutions – those that much of the public banks with for checking, mortgages and auto loans – stress testing regulations have been passed…...

Valuation vs. calculation engagements: What’s the difference?

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By Brad Spence, Director of Valuation Solutions, Sageworks Accountants, other professionals and their clients encounter many circumstances that may generate the need for an appraisal of a business or part of a business: • Divorce • Tax planning • Buy-side due diligence on a merger or acquisition or sell-side advice…...

How to improve your relationship-based banking

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Posted by Sageworks

According to the latest FDIC Quarterly Banking Profile, community banks continue to thrive and lead the industry. As more banks turn profitable – 90.3 percent achieved that threshold in the fourth quarter of 2014 – they aren’t just competing with large, national banks; their community bank counterparts also account for…...

4 Traits of quality industry data for valuing a business

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By Erik Lively, Regional Valuation Consultant, Sageworks Accountants and other financial professionals know that the quality of industry data can make a substantial difference in business valuation services, whether it’s for a valuation engagement or for a calculated value to help develop a business improvement plan. Good industry data can…...

Do you have 99 #busyseasonproblems?

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Tax and audit season got you down? For all in the accounting industry, it’s the time of year that means longer days, pots of coffee, and staring at spreadsheets and W-2 forms ad nauseam. You may be teetering dangerously close to the point of sleeping under your desk at night.…...

Community banks’ net income, loan balances increase in 2014

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The latest FDIC Quarterly Banking Profile was just released and the industry continues to be led by the nation’s community banks. The positive trends from the third quarter of 2014 continued for the industry sub-set. Net income was up almost 28% over the fourth quarter of 2013 led by higher…...

Stressing the importance of stress tests

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March comes in like a lion for the nation’s largest banks. Yesterday the Federal Reserve announced how “the big banks” fared on their annual stress tests (The Wall Street Journal’s Briefly blog offers what to know and what is relevant about the exams). The reports were positive: all 31 stressed…...

Making your lending process efficient

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For most banks and credit unions, a current strategic focus is loan growth – increasing the portfolio by both acquiring new borrowers and expanding services offered to existing borrowers. In this competitive environment, to win prospective loans, regardless of whether it is a new or existing borrower, the institution has…...

Business valuations as performance dashboards for accounting clients

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By Brad Spence, Director of Enterprise & Valuation Teams, Sageworks Many accountants are exploring opportunities to add business valuations to their menu of client services, especially as valuation demand increases and as these professionals understand valuations can generate higher profits than traditional accounting services. Offering advisory services like valuation engagements…...

6 Ways to Improve Profitability of Plumbing Businesses

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When a plumbing business becomes more profitable, it is able to expand its offerings and attract more customers. Taking some of the following simple steps into consideration to improve profitability may give a business an edge against competitors and help make it more successful. GPS Tracking Try utilizing GPS tracking if…...

OCC warns against lax auto loan standards

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The U.S. auto industry is booming. According to Federal Reserve Economic Data (FRED), total light weight vehicle sales rose to 16.6 million in January 2015, from 15.2 million the year prior. Unsurprisingly, the sales growth also increased demand for auto loans at domestic banks. FRED reports that 25.4 percent of…...

What is your accounting firm’s plan post-tax season?

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With spring comes the promise of warmer temperatures, irises and snapdragons, along with March Madness college basketball rivalries and the start of baseball season. While tax accountants may not be able to see the light at the end of the busy season tunnel yet, the spring is sure to come.…...

Business valuation methods matter

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By Brad Spence, Director of Enterprise & Valuation Teams, Sageworks Think performing quality business valuations is important? Consider this statistic: Roughly one in every three business-sale engagements for brokers over the last 12 months ended without a transaction, and unrealistic asking prices were a major factor in the failed deals,…...

Auto lending up more than 30 percent at credit unions since 2012

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It may still be early in the New Year, but the U.S. economy is looking promising for 2015. A resurgent job market (with 257,000 U.S. jobs added in January, following two very strong months in November and December) is most telling, and leaving many Americans with smiles on their faces.…...

Professional standards and business valuations

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By Brad Spence, Director of Enterprise & Valuation Teams, Sageworks Standards – whether they relate to academics, safety or business practices – help people identify acceptable levels of quality, and standards are used in nearly all aspects of our lives. Without standards, for example, it’d be harder to tell whether…...

Which loan types are fueling bank growth?

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Following the recent recession, U.S. commercial bank loan portfolios have continued to expand. As of the third quarter of 2014, the total value of portfolios was $7.4 trillion, up from $6.5 trillion at the end of the third quarter of 2011. Which areas of lending and what banks are driving…...

Trend analysis within your Watch List

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A standard component of monthly board meetings is an update on the performance and volume of the institution’s Watch List, the group of adversely classified loans under close supervision due to past nonperformance. Oftentimes, the Watch List includes loans rated as a (low) Pass, Special Mention, or Substandard, though in…...

Stop creating “Frankenstein” business valuation reports

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By Mike McCaffery, Regional Consultant – Valuation Solutions, Sageworks Business valuation professionals know that writing the report is a major component of performing valuations.  For one thing, valuation analysts spend a lot of time on each report. In fact, writing the report is the most time-consuming part of the process…...

How to reduce professional liability risk when performing valuations

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By Brad Spence, Director of Valuation Solutions, Sageworks Remember the old saying, “Make hay while the sun shines”? It’s a good reminder that one should take advantage of opportunities while they’re available. Valuation services represent one good opportunity for growth that many accountants recognize and are taking steps to address.…...

Infographic: 4 Ways to Improve Landscaping Sales

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It is important for a landscaping business to find the best way to differentiate themselves from others in the industry in order to remain competitive in the marketplace. Finding quick ways to increase profitability can be tough, but the infographic below details 4 easy ways to increase revenue by improving…...

What 2015 holds for banking

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The IBM Institute for Business Value released its 2015 report, “The paradox of Banking”, which analyzes the existing market and makes predictions about how the landscape will evolve, what will make banks succeed or fail and how institutions can use the market trends to their advantage. While the report recognizes…...

Three ways to keep your best employees from leaving your firm

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A few decades ago, it was fairly common for a person to secure a job immediately following graduation from school and remain with the company until retirement. Those days are gone, and now, hanging on to top talent is a significant concern for most employers. In October, PayScale, the online…...

Top benefits of ALLL scenario building

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Though it may be often overlooked, scenario planning allows bankers to assess the outcome of the ALLL calculation under various assumptions or “scenarios.” Bankers can then estimate the impact that ALLL-calculation variables may have on the final reserve without having to perform a completely new calculation. The process can be…...

Will the cost of regulation impact community bank customers?

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The banking industry has seen a steady stream of media attention since 2008, much of it in the form of stories about data breaches linked to major retailers or mega banks’ profits. For most consumers who have a checking account, savings account and maybe a mortgage, the regulations placed on…...

How to get referrals and grow your firm

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By Natasha Closs, Director of ProfitCents Consulting & Advisory Services An ongoing challenge for accountants and other financial services professionals is attracting new clients. In fact, bringing in new clients is at or near the top of the list of challenges facing accounting firms of all sizes, and it’s a…...

Business valuation solutions: To build or to buy?

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By Brad Spence, Director of Sageworks Valuation Solution It’s a classic conundrum – to build versus to buy. Make dinner at home versus take-out. While there are certainly people constructing their own coffee table – measuring, cutting, sanding and staining – most will drop a bill or two on a…...

Sageworks to host 2015 Risk Management Summit in Chicago

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Following three successful years in Nashville, Tennessee, the 2015 Risk Management Summit heads to a new city this September. Bank and credit union executives and leading industry experts will convene September 23-25 in Chicago, Illinois, for the premier banking conference covering the ALLL and stress testing. Given pending changes to…...

Community banks most likely to approve small business loans

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According to a recent survey from four Federal Reserve Banks, small regional and community banks have the highest approval rate for small business loans. Over the first half of 2014, these banks, with an approval rate of just under 60 percent, beat out large national banks (31 percent), large regional…...

The war for wallets: CU Wallet to debut this year

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The world is increasingly digital. Favorite songs, memorable moments and solitaire are all housed on a small, thin rectangle likely tucked away in a pocket. The techies and bankers alike knew that a mobile wallet was next. And why shouldn’t it be? Peek inside nearly any brick-and-mortar retailer and you’ll…...

How to increase revenue this busy season without adding clients

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By Natasha L. Closs, Director of ProfitCents Consulting & Advisory Services To increase revenue, your accounting firm either needs to add clients or boost prices, right?  Those are certainly two options for accountants looking to have a better busy season than last year. Taking either of these approaches, however, could…...

Defending the bank’s capital levels

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The Recession and its subsequent rate of bank failures underscore the need for banks of all sizes to invest in developing a capital plan. The Recession taught many institutions that whatever processes had been in place for managing capital were not sufficient. Often, they either failed to include forward-looking analyses,…...

Growing a mortgage portfolio: Encourage borrowers to bank local

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Finding one’s dream home can be a tedious, lengthy process. Financing it can feel even more cumbersome for many homebuyers. There are a lot of options on the table for mortgage applicants, and sometimes comparing interest rates and conditions can feel overwhelming, particularly for first-time homebuyers. Interestingly, the Consumer Financial…...

New rules on cybersecurity, MBLs considered by NCUA for 2015

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During an October 2014 NCUA examination of Palm Springs Federal Credit Union (FCU), a confidential flash drive went missing. According to Palm Springs FCU President & CEO Debbi Pitigliano, the drive was provided to the NCUA and contained members’ personal information, including names, addresses and social security numbers. Since last…...

How much should you segment FAS 5 (ASC 450-20) pools?

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The benefits of segmentation within the Allowance for Loan and Lease Loss calculation are many. Institutions can gain more insight into sub-segmented performance, conduct more sophisticated loss methodologies such as migration analysis and can make better-informed lending decisions over time. However, as the old adage goes, there certainly can be…...

3 Percent down payments and risk to lenders

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Many would point to imprudent lending standards as a leading cause of the financial crisis of 2008, and in turn, financial institution regulators have since bolstered lending standards and capital thresholds as a preventive measure against a similar crisis. But recent news from Fannie Mae and Freddie Mac might suggest…...

Expanding credit portfolios: 3 Growing pains

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Posted by Sageworks

Community banks are expanding their loan portfolios to include more small business loans, according to the most recent Community Bank Performance report by the FDIC. Loans across categories increased, with commercial and industrial loans growing at the fastest rate, roughly 5.3 percent over the 3rd quarter of 2013. These expansions…...

How to cross-sell additional accounting services with ProfitCents

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Clients of accounting services hold their accountants as one of their most trusted business advisors. This high level of confidence positions you, as a CPA, in a role where you can offer services beyond commodities such as bookkeeping and tax preparation. In a recent case study, Sageworks’ customer Mueller Prost…...

4 Reasons to leverage technology in your accounting firm

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3 out of 4 clients of financial services think their CPA is behind or just keeping up with technology. Learn how being an early adopter of technology can help your firm win more clients and add value by cross-selling additional services. Download this infographic According to The Sleeter Group, “Small…...

Best banks to work for in the U.S.

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Do you work at one of the best banks in the country? American Banker just released its second annual ranking of the best banks to work for in the U.S. The rankings are based on employee opinions of the work environment, benefits, career-advancement opportunities and perks such as subsidized gym…...

3 Global cash flow analysis tips

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With an improving economic environment, many banks are seeing strong loan growth. In fact, a recent report from the OCC highlighted the fact that loan growth doubled over the past year in the Northeastern district. However, it is important for institutions to remain disciplined during this growth, all the way…...

How to embrace technology and grow your accounting firm

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Forty-five percent of accounting clients prefer an accountant who is adaptive to changes in technology. While technology has its fair share of shortcomings, from added costs to potential learning curves, it also has its upsides. Embracing and leveraging technology can help accountants discover new avenues for improving lead generation, increasing…...

How accountants can identify opportunities to offer valuation services

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With an estimated 75 million baby boomers in the U.S. and 7 million of them owning privately held businesses, the number of companies to hit the market in the next 10 years is likely to provide a large amount of opportunities for the valuation industry. This checklist provides 10 scenarios…...

The role of self-assessment in board meetings

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Every bank has a board of directors, with each member providing his or her experience and expertise to develop strategic plans and enhance the institution as a whole. According to the FDIC, the Board’s role includes: • Selection, monitoring and evaluation of management• Establishment of business strategies and policies• Monitoring…...

Guest blog post: Protecting yourself online

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The majority of professionals love technology. It makes not only your personal life easier, but running your small business or CPA firm, too. But when is too much technology just too much? Sageworks asked Don West, a member of the AICPA's Information Management and Technology Assurance Section's CITP Credential Committee…...

Caution! 3 Blood-curdling ways to stop your accounting firm’s growth dead in its tracks

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1. Be eerily similar to your competitors Many accountants will come to the spooky realization that firms who compete in the same market will likely have the same basic offerings, mostly because accounting services are pretty standard across the board. And while your firm’s qualifications and experience may be fantastic, the…...

Poll: 36% of finance professionals send clients to a third party for business valuation services

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During a recent webinar on how to prepare for booming growth in the valuation industry, Sageworks polled over 135 finance professionals and found that more than 35 percent are sending their clients to a third party to complete a business valuation.     During the webinar, Paul Wapner, CPA/ABV, CGMA,…...

How one accounting firm used ProfitCents to show clients the importance of value-added services

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Nearly every firm has business clients who are interested in more services from their accountant. Almost two-thirds of clients are unaware of all services their accounting firm has to offer. Cross-selling value-added services will not only help you retain your current clients but also grow your business’s revenue. In a…...

The 8 questions to picking an accounting niche

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Consumers understand that certain retailers specialize in particular items. If you're looking to plant tomatoes in your garden, your first step is unlikely to visit the local Best Buy store. Sometimes a specialty retailer is necessary to meet your needs. Such can also be the case with accountants. A one-size-fits…...

3rd annual Risk Management Summit proves “valuable” and “insightful”

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More than 140 bankers and industry experts from over 30 states gathered in Nashville, Tennessee last month for the 3rd annual Risk Management Summit hosted by Sageworks. Building on the success of the 2nd annual Summit, this year’s event featured new topics, new speakers and additional networking opportunities. Maintaining a…...

Poll: Are your staff members aware of what makes your accounting firm different from the competition?

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During last month’s webinar, How to Create and Implement a Marketing Plan in Your firm, speaker Bonnie Buol Ruszczyk, president of bbr marketing, discussed a number of tactics accountants can use to establish a marketing strategy for their firm. Bonnie shared how having a plan in place allows accountants to…...

How to prepare for Basel III

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Following the recent financial crisis, the Basel Committee of Banking Supervision (BCBS) set out to “strengthen global capital and liquidity rules with the goal of promoting a more resilient banking sector.” With the release of Basel III, the Committee is building on Basel II’s three pillars and strengthening them. The…...

3 ways for community banks to capitalize on the “buy local” movement

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Wal-Mart, McDonalds, Home Depot. These large corporations are found in almost every town in America. While many consumers choose to take advantage of their less expensive product offerings, a culture shift is starting to take place. Today’s youth and others across all age groups are placing a significant importance on…...

Why your accounting firm should have a retention strategy

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It is estimated that 40 percent of accounting clients are interested in new services from their accountant. Learn how you can increase your client’s awareness about your firm’s service offerings, potentially resulting in more revenue and happier clients. Download this infographic     Winning new clients is a top priority…...

3 Steps to becoming the Steve Jobs of accounting

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Steve Jobs. Sergey Brin. Mark Zuckerberg. Each of these individuals, and their companies, are celebrated as changing the face of the technology. They all followed a similar path to success: excelling at one thing and developing that specialty. Jobs knew gadgets, which led to the Mac, the iPod, and the…...

Poll: Does your firm have a formal marketing plan in place?

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ProfitCents by Sageworks recently hosted a webinar on How to Create and Implement a Marketing Plan in Your Firm.  Bonnie Buol Ruszczyk, president of bbr marketing, discussed strategies for developing a marketing road map to to attract the clients that will be most valuable for your firm. During the presentation,…...

How to manage the risk of commercial real estate lending

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As banks are increasingly playing a bigger role in commercial real estate lending, it is more important than ever to ensure proper risk management practices. This is especially true for banks exceeding one or both of the commercial real estate (CRE) supervisory criteria. According to recent data generated by Sageworks…...

How one accounting firm used ProfitCents reports to retain a client

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Identifying improvements a client can make to their business should be part of an accountant’s regular routine, but getting the client to actually take the necessary steps to implement these opportunities can be a challenge. Accountants can use resources such as ProfitCents reports to help bridge the gap with clients…...

Is your ALLL prepared for the future?

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Given all the attention the allowance for loan and lease losses (ALLL) is receiving from regulators and FASB, it is important to understand how banks and credit unions will be impacted in the short, mid and long-term by regulatory changes. It is also critical for bankers to understand what they…...

An accounting firm’s checklist for attracting and keeping talented team members

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Finding and retaining qualified staff is a top concern among accounting firms, according to the AICPA. Establishing a plan to recruit and develop staff in your firm will help you attract and keep top-notch employees. This checklist provides 4 steps you can take to win and retain talented team members.…...

How to present stress test results to the bank Board: Part II

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Yesterday’s article examined the importance of presenting actionable stress test results to the Board, as well as how to structure the Executive Summary of a stress test analysis. This article focuses on the remainder of the presentation, beginning with a section on local and national conditions. After the Executive Summary,…...

How to present stress test results to the bank Board: Part I

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As part of a series, this article focuses on communicating actionable stress test results to a bank or credit union board of directors, as well as how to structure the executive summary. Part II will focus on the remainder of the presentation including local and national conditions, methodology, and results.…...

6 Steps accounting firms can take to win new clients through specialization

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Lack of industry knowledge is the #1 concern for buyers of accounting services according to a Hinge Marketing survey. Developing an industry niche and establishing yourself as an industry expert allows you to differentiate your services and can help you win new clients. This checklist outlines 6 steps on how…...

Poll: How much is thought leadership and content marketing used at your firm?

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ProfitCents by Sageworks recently hosted a webinar, Content Marketing Strategies, which discussed how to effectively implement and use thought leadership in your accounting firm. Rob Nance, director of content marketing & consulting services at Inovautus Consulting, explained ways to overcome the most common challenges in creating thought leadership. During the…...

3 Common ALLL model validation questions

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Posted by Sageworks

Scrutiny around the allowance for loan and lease losses (ALLL) by regulators has grown in recent years since many banks and credit unions did not properly increase their reserve to reflect increases in charge-offs and deterioration in loan portfolios leading up to the economic crisis. Since then, banks and credit…...

Take your relationship with your accountant to the next level

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By Diana Mackie, Chief Content Officer at Funding Gates How well do you and your company’s accountant know one another? Do you hand him or her a pile of papers come tax time and go about your day, or do you appreciate and make use of the wide range of…...

Establish a strategy for cross-selling your accounting firm’s services

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The AICPA estimates that winning a new client costs 11 times more than retaining a current client. One way for accountants to increase firm revenue and deepen client relationships is to offer value-added services to existing clients. Don’t know where to start? Download this checklist to learn how to develop…...

6 Reasons why your accounting firm should establish an industry niche

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Thirty-five percent of buyers for accounting services use expertise and specialization as a deciding factor when selecting a firm. Benefits to developing a firm focus include establishing a competitive edge in the marketplace, building your accounting practice’s credibility and winning and retaining more clients. Download this infographic to learn the…...

How one firm used ProfitCents to win a new accounting client

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Many accountants find it challenging and are not sure how to start developing an industry focus for their firm. In a recent case study, Sageworks’ client MiddletonRaines + Zapata, a growing Houston-based accounting firm, shared how they attracted and won numerous engagements by establishing an industry niche with the help…...

How to retain “A” clients

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In an economic climate where so many decisions come down to dollars and cents – particularly for small businesses – it is important for accountants to illustrate your worth. Perhaps surprisingly, then, more often than not, a client’s decision to leave their current CPA or accounting firm comes not from…...

Are you focusing more on risk management than your actual job function?

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Posted by Sageworks

According to the ABA Banking Journal, risk assessment is a trending topic and could grow out of hand if it detracts from other bank priorities. Risk assessments can be a lengthy, complex and ongoing process, which makes it difficult to discern when you should focus on managing risk and when…...

How accountants can cross-sell their services to existing clients

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Successful accountants can generate more revenue while keeping costs down by creating new business from their existing clients. The AICPA estimates that it costs 11 times more to acquire a new customer than to keep an existing one. This infographic will give you key steps to keep clients coming back…...

Increasing interest in MBL for credit unions

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Posted by Sageworks

As credit unions continue to experience solid growth in traditional lending areas, many management teams are focusing attention on starting or expanding their member business lending program. Growing the business portfolio can provide a number of benefits for credit unions, including: • Diversifying the balance sheet and revenue streams, •…...

Why U.K. accountancy pros use ProfitCents

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Accountancy professionals aim to have the expertise and tools to address customer needs, but this can be difficult, given the many demands on firms. That is why accountants in the U.K. who are looking to win new clients and increase engagements use ProfitCents, the leading solution for analysing small- and…...

How accountants can win new clients

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Accounting firms oftentimes abandon a marketing plan for fear they don’t have the budget to successfully win new clients. This checklist provides 9 steps to create a plan of action to win new clients at low-cost.     Download this checklist to learn the six key questions accountants can ask that…...

7 Questions successful accountants ask during client meetings

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It's important for accountants to have a list of key questions to use during client meetings to deepen relationships. This checklist can provide a wealth of benefits including better understanding of client challenges and highlighting opportunities to cross-sell accounting services. Download this checklist to learn questions you can ask that will…...

How to use stress testing results to your advantage

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As stress testing has increasingly become a focus of regulatory guidance, it is important to understand its purpose and methodologies, but also how to use the findings to your advantage. This post provides five ways to use stress testing results to benefit your bank or credit union. 1. Ward off…...

Sageworks and Crowe Horwath to host webinar on ALLL model validation

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Posted by Sageworks

In recent years, scrutiny around the ALLL by regulators and auditors has grown, as many banks and credit unions failed to increase their reserve to reflect increases in charge-offs and deterioration in loan portfolios during the economic crisis. Since then, many institutions have revised existing models or implemented new models…...

Defining risk through CRE bottom up stress tests

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Posted by Sageworks

A bottom up stress test is one in which the financial institution uses loan-level data from a sample of the portfolio to gauge potential impact of a stress scenario on the institution’s earnings and capital. Once the sample has been selected—typically a portion of the CRE portfolio—the institution applies a…...

How to create lasting client relationships in your accounting firm

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Relationships with accounting clients require trust, communication and understanding. Creating real relationships is key to maintaining the prosperity of your firm. This infographic will share ways to create, maintain and move these relationships to the next level.     Download this infographic to learn 9 traits that will transform relationships…...

The role of management and the board with the ALLL

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Posted by Sageworks

Guidance states that it is the responsibility of a bank’s management team and Board to ensure an adequate ALLL level as part of the institution’s safety and soundness. That responsibility includes several specific components as outlined in the Federal Reserve’s Commercial Bank Examination Manual.  Bank management is expected to outline…...

Greatest risk to your bank

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Posted by Sageworks

In light of the improved financial and credit conditions in which banks and credit unions find themselves today, the current lending market might seem rosy. But that’s not to say bankers are ignoring variables in the lending equation that might introduce vulnerabilities into the institution. Through a recent survey of…...

Accounting for purchased loans: How to determine the appropriate standard

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Posted by Sageworks

In light of record-high at-risk bank figures, increasing regulatory pressures, a low-interest rate environment and the continued struggle for capital, many banks have, and are continuing to seek increased growth via mergers and acquisitions. The acquisition of loan portfolios, particularly those of failed institutions or those succumbing to the aforementioned…...

Growing CRE: Cause for concern?

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Posted by Sageworks

With the help of Synergy Bank Consulting, Sageworks recently surveyed a host of community banks and credit unions regarding areas of growth in their institutions. Emerging from the financial crisis of recent years, the overwhelming majority of growth was in commercial real estate (CRE), as opposed to other areas like…...

4 Emerging risk management best practices

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Posted by Sageworks

As the first half of 2014 comes to a close, many bankers continue to face challenges to grow their loan portfolios and comply with ongoing regulatory changes. But there are ways bankers can reduce risk and examiner criticism, according to four industry experts participating in the 3rd Annual Risk Management…...

ProfitCents U.K. enhances industry benchmarking

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Posted by Sageworks

Sageworks, the maker of ProfitCents, has enhanced its ProfitCents U.K. platform to add real-time industry averages so that accountancy firms across the U.K. can show clients the most up-to-date and accurate trends in their industries. Providing these types of value-added services can help accountancy firms win and retain more clients. …...

Full agenda for 3rd annual Risk Management Summit released

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Posted by Sageworks

Sageworks recently released the full agenda for the 3rd annual Risk Management Summit, which will be held September 24-26 in downtown Nashville, Tennessee. The Summit will bring bank and credit union executives together with banking’s top consultants for a variety of presentations, panel discussions and networking opportunities. Here are a…...

Implementing migration analysis for the ALLL?

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Posted by Sageworks

By Aaron Lenhart, Risk Management Consultant at Sageworks   It’s recognized that migration analysis is a more comprehensive loss rate calculation for banks and credit unions, as it more accurately reflects loan performance and loss overtime. But it’s not a process that can be started overnight. Successful implementation of migration…...

5 steps to uncover mid-year accounting client opportunities

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By Lauren Prosser, Director of ProfitCents Professional Services Summer is a great time for accounting firms to look for fresh opportunities to grow the business. Here are five ways accounting firms can “fertilize” existing efforts in order to jump-start business and grow deeper, stronger roots with clients. 1. TRAIN YOUR…...

Why banks should use migration analysis

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Posted by Sageworks

While the implementation of migration analysis can be a tough hurdle for many institutions, those that deploy the technique can obtain a more comprehensive and accurate measure of their reserve. By evaluating their pooled loan segments at the risk rating level, for example, and tracking the migration of those loans…...

Why accountants choose ProfitCents

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Accounting professionals go the distance for their clients and arm themselves with the information and tools they need to be successful at their jobs. That’s why accountants looking to win new clients and increase engagements use ProfitCents. ProfitCents was developed by Sageworks, the leader in the financial analysis of privately…...

Stress testing deferred in OCC proposed rule

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Posted by Sageworks

The OCC released a proposed rule impacting financial institutions greater than $10B in assets, which are required to submit stress testing results on an annual basis. If implemented, the proposed rule would delay the timelines upon which results must be submitted to federal agencies, giving the financial institutions more time…...

The truth about valuations in 2014

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Posted by Sageworks

Low interest rates. Ample bank financing. Record capital committed to private equity funds. The highest value of private-equity backed buyout deals since 2007. These factors and others are contributing to intensifying deal competition, which means private equity firms on both sides of transactions must increasingly find an edge to win without…...

Rocky Bleier announced as Summit Guest Speaker

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Posted by Sageworks

Sageworks is pleased to announce war veteran and Super Bowl Champion Rocky Bleier will be a guest speaker for the 3rd Annual Risk Management Summit. The premier conference for banking executives, covering the ALLL, stress testing and risk management best practices, will be held September 24-26 in Nashville, Tennessee. Bleier…...

Free CPE webinar: “Building a firm of the future”

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Posted by Sageworks

By the end of this decade, most accounting firms will face a change of seismic proportion – the transfer of leadership to the next generation. Firms that develop and execute strategies around their people, market insights and agility are the most likely to survive, while those that don’t will probably…...

Top priorities for you to focus on in your accounting firm

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Posted by Sageworks

By Lauren Prosser, Director of ProfitCents Professional Services If your CPA firm is like most, its biggest assets are the staff and clients. Knowing more about these assets and gaining greater and more timely insights into the roles they play in the firm's success will enable you to better manage…...

Tech decisions for your bank’s Board

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Posted by Sageworks

BankDirector recently released a new whitepaper, The Role of the Board in Technology, explaining how technology-investment decisions should include Board of Directors participation. More than just their impact on the bank’s budget, technology decisions often relate to strategy within the institution, including areas of growth, weaknesses identified through the exam…...

Backtesting the ALLL: deeper investigation of specific portfolio segments

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Posted by Sageworks

On the specific portfolio segments, first, it is important to determine answers to several questions from period to period. Which segments had an increase in the FAS 5 reserve? How much of the increase is due to changes in volume of that portfolio? How much is due to change in…...

Most common challenges facing business valuation professionals

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Posted by Sageworks

The process of valuing a business combines both art and science and can be arduous. Generally speaking, a detailed, comprehensive analysis and the ability to develop accurate projections and assumptions are necessities. Business valuation also requires the application of finance theory in the appropriate places and using professional judgment. With…...

Why technology is needed for stress testing

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Posted by Sageworks

Shifting regulatory demands often have direct impact on banks and their use of technology and innovative processes. The next shift is around stress testing, according to a recent article by American Banker’s Penny Crosman.  A general theme coming from bankers and consultants that attended the American Banker Stress Testing 2014…...

Understanding a business valuation

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Posted by Sageworks

It has come to our attention that many accountants are interested in expanding their firm by adding a business valuation practice, however there isn’t much existing easy-to-understand literature on what exactly a business valuation is as well as its components. A business valuation is a set of processes and procedures…...

ALLL backtesting at the portfolio level

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Posted by Sageworks

On the simplest level, backtesting of the ALLL can be completed on global level, comparing the institution’s ALLL to its realized losses over a period of time. An example is shown below: Figure 1   In this example, the institution is looking at its ALLL and comparing that amount with…...

2 Approaches for marketing advisory services in your accounting firm

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Posted by Sageworks

Choosing the right clients is incredibly important when marketing business advisory services. Once you have completed the selection process it’s important to alert your clients to your new services in a way that’s informative without being pushy. When offering advice to prospective clients, we suggest you take one of these…...

Backtesting the ALLL – what is backtesting?

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Posted by Sageworks

Given the increased regulatory scrutiny over the allowance for loan and lease losses (ALLL) in the past several years, regulators, auditors and senior management are all looking for additional ways to measure the effectiveness of the bank or credit union’s ALLL methodology. The OCC’s 2011 Supervisory Guidance on Model Risk…...

How to pick the ‘right’ client and stand out among other accounting firms

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Posted by Sageworks

Remember dating in high school? You know that guy or girl who you liked but were pretty sure didn't feel the same way back? It is likely that you spent countless hours trying to wow him or her, but to no avail. In the end, although you were unlikely to…...

Who will be affected by the NCUA’s RBC proposal?

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Posted by Sageworks

Although the risk-based capital (RBC) proposal being pushed by the National Credit Union Administration (NCUA) is only currently directed towards credit unions above $50 million in assets, CUs regardless of size should read the proposal carefully and determine how it will indefinitely impact them. Recent consolidation trends are projected to…...

Sageworks announces topics for 3rd annual Risk Management Summit

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Posted by Sageworks

Sageworks just released the topics for the upcoming 3rd annual Risk Management Summit, which will be held September 24-26 in Nashville, Tennessee. Maintaining a focus on the ALLL and stress testing, the Summit will bring bank and credit union executives together with banking’s top consultants for a variety of presentations,…...

Best practices for determining the right measure of loss

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Posted by Sageworks

Loss measures, or the methods by which an institution calculates loss rates used in determining the allowance for loan and lease losses (ALLL), are oftentimes passed down period to period at institutions with little consideration. “It has always been done this way” is the refrain consultants frequently hear. Prudent institutions…...

How to build a valuation practice within your accounting firm

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Posted by Sageworks

Many public accounting firms are developing business valuation practices as a way to meet the needs of existing clients while distinguishing the firm with specialized services. A best-in-class business valuation practice will ensure compliance with accounting standards and incorporate quality controls that ensure a superior analysis, superior report product and…...

Determining the right level of loss using the historical loss method

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Posted by Sageworks

The historical loss method uses an annualized average net charge-off rate incurred during a prescribed time period as a proxy for estimating future losses. The loss rate is derived either from losses incurred from the institution’s own portfolio or those incurred by a peer bank or a pool of peer…...

Becoming a trusted advisor to your clients

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Posted by Sageworks

Accountants perform the role of providing financial data very well. However, simply presenting clients with this data is not enough to become indispensable. It is now necessary to translate and interpret the data for your client. ProfitCents by Sageworks does this by compiling the data into an easy-to-understand narrative report…...

Loss discovery method of analysis for determining the correct method of loss

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Posted by Sageworks

The Loss Discovery Method is a slight variation of the historical loss and migration analysis methods. The key difference is that it uses an additional factor: time. Loss Discovery measures the time between:1.    when an institution recognizes that a customer cannot meet his or her obligations, and2.    when a charge-off…...

Probability of default and loss given default analysis

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Posted by Sageworks

Probability of Default/Loss Given Default analysis is a method used by generally larger institutions to calculate expected loss. A probability of default (PD) is already assigned to a specific risk measure, per guidance, and represents the percentage expectation to default, measured most frequently by assessing past dues. Loss given default…...

Determining the right measure of loss

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Posted by Sageworks

Chief financial officers at financial institutions have enough to worry about without the historical loss measure for FAS 5 loans. Unfortunately, key parties—from the Board of Directors to auditors to regulators—worry about it each time an ALLL calculation is performed. What measure is right? Does the loss period cover too…...

How can software help with your bank’s loan administration?

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Posted by Sageworks

For many institutions, loan administration systems exist as a series of disconnected spreadsheets. Over time, these spreadsheets can grow into lengthy, multi-tab documents for each loan with the details of which financial ticklers and policy covenants are required at what times.  The actual documents being tracked are often stored in…...

7 Ways to rev up your accounting firm after busy season

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Posted by Sageworks

By Nancy Fox, founder & President of The Business Fox Another busy season is just about under your belt. Whew. If you’re like many (even most) accountants, you’ve been lulled into “busy- season-itis” – that debilitating syndrome of keeping your head down (working on taxes and client matters only) between…...

Why are institutions not backtesting their allowance calculations?

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Posted by Sageworks

Banks and credit unions backtest their allowance for loan and lease losses (ALLL) in order to compare actual results for a defined period to the results forecasted by a model for the same period. This allows institutions to monitor model performance and adjust or revise it over time. It also…...

Success with automating loan administration – beyond time savings, eliminating institutional risk

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Posted by Sageworks

The value of automating your loan administration process extends beyond process efficiencies, and can even have lasting impacts by improving institutional risk management. With automated exception tracking and notifications when loans reach exception status, an organization can implement a new institutional standard for completeness and timeliness of records associated with…...

New ProfitCents help center has how-to’s, tips and assistance

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Posted by Sageworks

At Sageworks, we know that without our customers, our company is nothing. That’s why the major enhancements we recently introduced to our flagship ProfitCents platform are aimed at making the user experience more streamlined and more customizable so that ProfitCents customers can better meet their clients’ needs and win new…...

The pros and cons of using spreadsheets – abiding by regulatory parameters

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Posted by Sageworks

Banks and credit unions have utilized spreadsheets as a primary tool in risk management for decades. Unfortunately, over-reliance on these spreadsheets has become an area of serious regulatory concern, as many of the benefits offered by spreadsheets are often shadowed by potentially significant risks. Compliance with regulatory parameters is one…...

What is your current networking ROI?

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Posted by Sageworks

In this brief video, founder and president of The Business Fox, Nancy Fox, discusses how to calculate your networking return on investment (ROI). Fox highlights that you should be taking into account membership dues/fees, conferences, lunches, and travel expenses. She points out that on average, professionals spend $2,500 per year…...

Why should you automate loan administration?

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Posted by Sageworks

Many financial institutions have gotten by using their core system or a series of spreadsheets to manage tickler and covenant tracking as well as client communications. In today’s regulatory environment, however, banks and credit unions are being asked to minimize risk and standardize processes. An easy step with loan administration…...

Backtesting: Deeper investigation of specific portfolio segments

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Posted by Sageworks

Backtesting the allowance for loan and lease losses (ALLL) enables banks and credit unions to compare actual results for a defined period to the results forecasted by a model for the same period in order to evaluate accuracy of the model’s predictiveness. When evaluating specific portfolio segments, it is important…...

How often should an institution obtain new appraisals when using the collateral method?

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Posted by Sageworks

In a recent webinar, Garrett Morris, senior credit and risk management consultant at Sageworks, discussed how often an institution should obtain new appraisals when using the collateral method of loan analysis.  From the video: An institution should obtain new appraisals early - as often as they can. Even more sensibly,…...

Valuation best practices for private equity firms

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Posted by Sageworks

Whether being used for performance data or to win deals, valuations that private equity firms develop should be supported by a methodology that is: • Robust • Consistent, and • Transparent Robust. Valuations are most accurate (and defensible) when they are developed through a robust process. As the International Private…...

Breakeven analysis – when can you start making money

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Posted by Sageworks

For a Chief Financial Officer of a company, profitability is sure to be front-of-mind. Even if you have a great product and are generating consistent sales, many business owners and key decision makers can find themselves surprised that their business is still not making them any money.  According to the US…...

Due diligence in third party risk management

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An effective risk management process includes a continuous lifecycle for all third-party relationships and covers planning, contract negotiation, ongoing monitoring, termination, and due diligence and third-party selection. An in-depth assessment of a third party’s ability to perform critical activities while complying with regulatory guidelines should be performed before entering into…...

Party time at the branch

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Posted by Sageworks

By Banking.com Everyone in our industry acknowledges banks need to be different, and we’ve explored numerous initiatives on Banking.com, from video transactions to teller pods and community rooms.  But how about serving up a cocktail with your account statement? That’s one way to look at St. Petersburg, Fla.-based C1 Bank’s…...

How to develop an industry niche

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In this brief video, founder and president of The Business Fox, Nancy Fox, discusses how to develop a “rich” niche market. Fox highlights that there are three pathways to developing a niche market: industries, common factors, and motivations. In addition, Fox suggests thinking outside of the box when developing your…...

Sageworks to host 3rd annual Risk Management Summit this September

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The 3rd annual Risk Management Summit is returning to Nashville, TN, for a third straight year, but with a new date and venue. Bankers and industry experts will gather Wednesday, September 24th, through Friday, September 26th, at the newly-renovated Hilton Nashville Downtown. This location, directly across from the Country Music…...

What accountants say during busy season

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We all know that busy season is the time of year when accountants are spending countless hours in the office. So, we figured there had to be lots of phrases accountants use and questions they are asked prior to April 15th and wanted to share what we found. When we…...

Does your familiarity with spreadsheets make you complacent?

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Did you know that over 80 percent of bankers polled reported using spreadsheets for the credit analysis of their loan portfolios? More often than not these individuals are utilizing spreadsheets simply because it’s what they’re most familiar with. In fact, no longer is using spreadsheets an advantage in the professional workplace;…...

Common challenges with impairment analysis

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In a recent webinar, Garrett Morris, senior credit and risk management consultant at Sageworks, discussed common challenges with loan impairment.  From the video: Let's look at the general challenges faced when determining impairment. Examining those common challenges with impairment, we find there are quite a few.  First, using present value…...

Grow your own business bankers

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By Jeff Marsico, The Kafafian Group Commercial loan growth is difficult to come by these days. Some is a result of anemic economic growth and an uncertain business climate. These factors are beyond a banker's control. But what is within your control is the number and quality of business bankers…...

1 Easy way to go from tax accountant to trusted advisor

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If you could plant a seed this busy season that would help you grow your business the rest of the year, would you do it? Many accountants have found that they can quickly show clients they are more than tax preparers by providing something nearly all business owners want and…...

Infographic: Challenges facing private equity firms

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Private equity firms are increasingly facing challenges when it comes to portfolio valuations. These challenges include protecting the firm's reputation, information asymmetry, and transparency of information. This infographic identifies these challenges, provides solutions to create thorough valuations and the benefits of technological solutions.  Click here to download the full infographic. ...

2014 Community banking best practices: Define your institution’s credit culture

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Last week’s post that continued the 2014 community bank best practices series discussed the importance of mapping out your most common processes to increase consistency in the loan review process. This final post of the 2014 Community banking best practice series will explore the reasons why you should define your…...

5 funny accounting types to follow on Twitter

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Let’s face it, during busy season, many accountants don’t have time to watch “Late Night with Jimmy Fallon” or to catch re-runs of “The Office.” But you can still get a few laughs throughout the day by following some of these amusing accounting types on Twitter. Some have given special…...

Biggest networking mistakes for accountants

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In this brief video, founder and president of The Business Fox, Nancy Fox, discusses mistakes accountants make when networking. Fox highlights that the number one networking mistake for accountants is networking in the wrong groups and attending the wrong venues. In addition, Fox states that accountants most often network laterally,…...

Infographic: Cross-sell accounting services during busy season

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Cross-selling accounting services to your existing client base is a more economically efficient way to increase revenue, as opposed to acquiring new customers. The AICPA estimates that it costs 11 times more to acquire a new customer than to keep an existing one. The infographic identifies four steps to win…...

2014 Community banking best practices: Map your most common processes

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Last week’s post that continued the 2014 community bank best practices series discussed the importance of defining your bank's risk appetite to diversify risks in the upcoming year. This post will explore the reasons why you should map out your most common processes. In this clip from a recent Sageworks…...

4 Reasons to talk about succession planning with clients during busy season

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Accountants in the thick of busy season have so many demands on their time that it can seem impossible or undesirable to bring up anything new with clients when you meet or call. But this is a great time to explore whether clients have planned for the future of their…...

Ensuring directional consistency in qualitative factors

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The qualitative and environmental factors within the allowance for loan and lease losses (ALLL) are often a major challenge for banks and credit unions due to their inherently subjective nature. Additionally, very little guidance is provided in the 2006 Interagency Policy Statement on the ALLL. During a recent webinar, Sageworks…...

How to calculate present value of future cash flows for a TDR

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In a recent webinar, Garrett Morris, senior credit and risk management consultant at Sageworks, discussed how to use present value of future cash flows for a TDR when calculating loan impairment. From the video: Present value of future cash flows should be used when there is an expectation of cash payment…...

2014 Community banking best practices: Defining your bank’s risk appetite

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In last week’s post that continued the 2014 community bank best practices series, we discussed the importance of investing in project management training to better incorporate your employees in your strategic initiatives. This post will explore the reasons why you should, if you haven’t already, define your bank’s risk appetite.…...

3 Tips for busy season marketing and business development

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Guest Post By Elizabeth Fiore, CPAmerica International With busy season in full swing, it is easy to let the marketing and business development activities slip (you know, the ones which made you busy in the first place). It’s crucial for your pipelines that you continue your marketing and business development activities…...

5 places to take free business courses online

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By Bailey McCann, Funding Gates Bailey McCann Education is key if you want to stay on top of business procedures and trends, as well as learn about the latest software, applications, and technologies in your industry.  All those classes, workshops, and training tools, however, often come with a price tag that…...

More data required for Expected Loss Model

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It has been well documented that the FASB’s Current Expected Credit Loss (CECL) model, as it is presently proposed, will require banks of all sizes to recognize an immediate allowance for credit losses that represents all future expected losses to be incurred, as opposed to only those losses that are…...

Planning and contract negotiation for third party relationships

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On December 5, 2013, shortly after the OCC release, the Board of Governors of the Federal Reserve System issued “Guidance on Managing Outsourcing Risk” to supplement guidance previously issued on technology service provider risk. As banks continue to increase the number and complexity of third-party relationships, the OCC is concerned…...

Member and customer service is now defined digitally

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By Mark Arnold, president, On the Mark Strategies In the “good old days” of financial services (about 10-15 years ago, given the speed of technological advancement) the way banks and credit unions served consumers was defined more or less in terms of personal interaction. The majority of people still visited…...

Increase traffic to your website

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In this brief video, president of bbr marketing Bonnie Buol Ruszczyk, discusses the top sources of traffic to B2B websites. Ruszczyk highlights that the number one source of traffic is blogging. Many accountants have not yet added a blog to their site, and this is an opportunity to stand out against competitors…...

How to break down financial statements for clients

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In this brief video, Peter Brown, a Sageworks senior consultant, discusses how to put financial statements in simple terms for your clients. He notes that an income statement is a measure of performance over a defined time. Brown also provides definitions for the balance sheet, cash flow, and financial statements…...

Poll: Do you currently have a specialty niche?

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Nancy Fox recently hosted a webinar, Targeted Networking for Bigger and Better Lead Generation, which discussed how accountants can generate leads through in-person networking. Fox, Founder and President of The Business Fox, provides strategies for how to generate new leads. During the presentation, finance professionals were polled on if they have a…...

Enhance client relationships — even during busy season

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Accountants, especially during busy season, have significant demands on their time, so it's critical to understand how to balance a desire to develop deeper client relationships and work-related time constraints. The first step is to recognize that overhauling every client relationship at once is unrealistic and that not all clients are…...

Poll: 85 percent bankers say FASB’s CECL proposal will increase ALLL reserve levels up to 50 percent

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Posted by Sageworks

**The FASB issued the final CECL standard on June 16, 2016. For up-to-date information and resources, access the updated CECL Prep Kit. There has been much debate about the FASB’s CECL model and how it will impact bank and credit union reserve levels. But by how much do bankers expect the…...

Are banks easing their underwriting standards?

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Posted by Sageworks

Although industry underwriting standards tightened down briefly during the past decade’s economic crisis, recent trends have shown that more banks are easing their standards, according to the Office of the Comptroller of the Currency's 19th Annual Survey of Credit Underwriting. Among other factors, the report identifies an industry-wide increase in liquidity…...

How to develop valuations with Sageworks Valuation Solution precision

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Posted by Sageworks

Sageworks, the leader in the financial analysis of privately held companies and maker of ProfitCents, today unveiled a business valuation platform that helps CPA firms, private equity firms and valuation firms determine an accurate and legally defensible value for private companies. Sageworks Valuation Solution, a commercial grade, web-based solution, will…...

FASB’s CECL model: How much more data will be required?

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Posted by Sageworks

**The FASB issued the final CECL standard on June 16, 2016. For up-to-date information and resources, access the updated CECL Prep Kit. Preparing for the Financial Accounting Standards Board’s (FASB) proposed Current Expected Credit Loss (CECL) model has been a recent topic of concern among many bankers. There are significant differences…...

What is content marketing?

Sageworks
Posted by Sageworks

In this brief video, president of bbr marketing Bonnie Buol Ruszczyk, discusses content marketing. Ruszczyk highlights that content marketing should communicate how you are different from competitors and should demonstrate how value is in the eye of the reader. According to Ruszczyk, content should be thought of from the reader's…...

How to make your business stand out

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Posted by Sageworks

Most businesses face steep competition. According to the US Small Business Administration, to be successful and break away from the pack, one of the first steps in your business development plan should be to determine your market and identify why they should give their business to you.  Make sure that…...

How to say “no” to an accounting client this busy season

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Posted by Sageworks

Busy season is a time when accountants may find themselves regretting having taken on a particular client, especially when completing the work takes time that could have otherwise been spent on a more pleasant, profitable or valued client. While many accountants would love to have more business to generate more…...

Risk management guidance on third party relationships

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Posted by Sageworks

Examiners have always expected banks and credit unions to perform appropriate vendor due diligence prior to engaging a third party. But with October 2013 guidance, Third-Party Relationships, the OCC provided definitions and guidelines for OCC banks as a risk management framework. As the announcement points out, banks face new and…...

Will revised regulations waive credit unions’ personal guarantee requirements?

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Posted by Sageworks

This year could mark the beginning of eased personal guarantee requirements with the loosening of Member Business Lending (MBL) regulations. According to the National Credit Union Administration’s (NCUA) Office of General Council (OGC), personal lending is just one of the numerous items potentially up for the agency to revisit in 2014. This…...

The truth behind CPA firm client satisfaction

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By Jean Marie Caragher, President of Capstone Marketing The improving economy may cause CPAs to be overconfident about their ability to retain clients. In the 2011 PCPS CPA Firm Top Issues Survey, retention of current clients showed up on every segment's top-five list, while it only made two groups' top…...

How can an automated ALLL solution help with the FAS 5 process?

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Posted by Sageworks

During a recent webinar, How to Calculate Your FAS 5 Reserves, Sageworks consultants discussed how automated ALLL solutions can help banks and credit unions calculate their FAS 5 (ASC 450-20) reserves. From the video Let’s review the bullet points. It saves time in data aggregation. People say, “I spend so…...

5 Things you need to do to make your business better this new year

Sageworks
Posted by Sageworks

By Bailey McCann, Funding Gates Bailey McCann A new year offers many reasons to get excited about your business once again.  The possibility of new clients and customers is one reason to celebrate.  The launch of a new line of product or services very well could be what keeps you working…...

Credit union best practices for MBL systems

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Posted by Sageworks

Business lending has more complex variables and carries more risks to credit unions than other types of lending, according to the National Credit Union Administration (NCUA). That’s why it’s important for credit unions to incorporate critical elements of a sound member business lending program, including having MBL data processing systems…...

Backtesting in ALLL calculations

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Posted by Sageworks

Backtesting is an exercise that compares the actual outcome with model forecasts during a defined period - a period of time that was not used to develop the methodology. A good starting point for any measure of efficacy is backtesting a reserve methodology on the portfolio. At the simplest level,…...

CPA: How I became a “broker of services”

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Posted by Sageworks

Many accountants desire to reduce reliance on providing often-commoditized services such as tax preparation and financial statements, but how do you get your practice moving in another direction? One option is to take on the role of “broker of services” – someone who advises clients and occasionally puts them in…...

Rethinking accounting marketing

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Posted by Sageworks

In this brief video, president of bbr marketing Bonnie Buol Ruszczyk, discusses how marketing for accounting firms has changed over the years. Ruszczyk highlights that accounting marketing has shifted from an outbound marketing approach, such as telemarketing and print and radio ads, to an inbound approach including search engine optimization…...

An accountant’s checklist for client meetings

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Posted by Sageworks

Building relationships with your accounting clients requires trust, rapport and an atmosphere for open dialogue. Many accounting firms use a checklist to prepare for client meetings and to facilitate information exchange. Here are some questions that many accountants who are clients of Sageworks have found helpful when interacting with their…...

How to implement content marketing in your accounting firm

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Posted by Sageworks

By Bonnie Buol Ruszczyk, president and CEO, bbr marketing Everyone’s talking about it and most accounting firm owners have a sense they should be doing it, but what exactly is content marketing? In a nutshell, it’s a marketing paradigm that opts for providing something of value as a method of…...

6 Ways to tackle C&I risks

Sageworks
Posted by Sageworks

Commercial and Industrial (C&I) loans have become a larger part of many institutions’ portfolios due to market demand, examiner feedback and pressures to stay profitable. But there are risks in C&I lending, such as inexperience in the area and inadequate strategic planning. In order to approach it conservatively, here are…...

Report: Current lending challenges similar to those in 2011

Sageworks
Posted by Sageworks

Credit Union Times recently highlighted a new Aite Group report, Top U.S. Lenders Tackle Risk and IT Challenges: Not Their First Rodeo. The report was comprised of two surveys conducted in 2011 and 2013, that covered lenders’ most pressing concerns in the current environment. The 2013 survey was a follow-up to…...

How to ensure your accounting firm’s best busy season ever

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Posted by Sageworks

The work schedule is set and everyone at your accounting practice is organized and pumped up to dominate the workload this busy season. Nevertheless, it’s not too late to take some steps that will make this your best busy season ever:  1. Track cross-selling opportunities. Many clients meeting with you…...

Disclosure reporting for ALLL

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Posted by Sageworks

With the release of the July 2010 FASB Accounting Standards Update 2010-20, banks were required to increase transparency pertaining to financial reporting. Robert H. Herz, the FASB chairman, stated: “The global financial crisis highlighted the need for additional information about a company’s financial instruments, including loans and other financing receivables.…...

What is the best way for accountants to approach a prospective client?

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Posted by Sageworks

In this brief video, Peter Brown, Sageworks senior consultant, discusses how accountants should approach a prospective client. Brown outlines the importance of developing relationships. This clip is from a Sageworks’ webinar entitled “How will you win your next new client?” In this webinar, Brown points out that social media and emails…...

OCC notes ‘disconnect’ between credit trends, ALLL releases

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Posted by Sageworks

Federal regulators are concerned about a “growing disconnect” between underlying credit trends and releases from banks’ allowances for loan and lease losses (ALLL), highlighting the importance of a defensible ALLL calculation.  In its recent semi-annual assessment of risk, the Office of the Comptroller of the Currency highlighted several key risk…...

6 key components that all loan administration systems should have

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Posted by Sageworks

Loan administration is a critical element for the safety and soundness of an institution. While the sophistication of a loan administration system will depend on the size of the institution and the complexity of its portfolio, there are some functions that should be integrated in all: 1. Accessibility of data for…...

3 Key attributes to look for when evaluating your reserve calculation

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Posted by Sageworks

In the brief video below, Sageworks explains the three key attributes to look for when evaluating your reserve calculation. From the video: The three key attributes that regulators are going to stress and look for when evaluating an institution's allowance calculation. The first key factor is to make certain that…...

What is the appropriate working capital for your clients’ industry?

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Posted by Sageworks

In this brief video, Peter Brown, Sageworks senior consultant, discusses positive versus negative working capital. He notes that manufacturers, wholesalers, and most retailers typically have positive working capital, or a current ratio in excess of 1:1. On the other hand, restaurants, hotel, airlines, and many utilities have negative working capital,…...

How to develop cash flow analysis

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Posted by Sageworks

There's nothing quite like cash. It is necessary to start, maintain and grow business operations. However, many small business owners struggle with managing and sustaining their cash reserves. Flawed cash flow analysis or insufficient capital can drastically and negatively affect daily business operations, as well as loan eligibility. Cash flow,…...

FASB rulings cast doubt on financial instruments convergence

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Posted by Sageworks

The Financial Accounting and Standards Board (FASB) took measures towards removing itself from merging with the International Accounting Standards Board (IASB) last week with several provisional rulings on its project on accounting for financial instruments. With regards to classification and measurement, the board determined that it would not move forward…...

Is your accounting firm actively engaged on Linkedin?

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Posted by Sageworks

Bonnie Buol Ruszczyk, president of bbr marketing, recently hosted a webinar for Sageworks, How to Generate Leads through the Web. In this webinar, Bonnie provided key strategies for improving your firm's presence on social media, as well as other content marketing strategies. During the presentation, finance professionals were polled on if…...

What is the difference between FAS 5 and FAS 114 loans?

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Posted by Sageworks

In a webinar on How to Calculate Your FAS 5 Reserves, Sageworks consultants discussed the difference between FAS 5 (ASC 450-20) and FAS 114 (ASC-310-35) loans. From the video: What is the difference between FAS 5 and FAS 114 loans? In order to understand FAS 5, it is important to understand…...

What is the difference between ASC 450-20 (FAS 5) and ASC 310-10-35 (FAS 114) loans?

Sageworks
Posted by Sageworks

In a webinar titled How to Calculate Your FAS 5 Reserves, Sageworks discussed the difference between ASC 450-20 (FAS 5) and ASC 310-10-35 (FAS 114) loans. From the video: What is the difference between ASC 450-20 and ASC 310-10-35 loans? In order to understand ASC 450-20, it is important to…...

Who is in charge of value at your accounting firm?

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Posted by Sageworks

By Ron Baker, Author of "Implementing Value Pricing: A Radical Business Model for Professional Firms" I have had the privilege of posing this question—Who’s in charge of value in your accounting firm?—to thousands of professionals around the world. I’m usually met with a momentary staring ovation, and then someone will…...

How the SBA can help grow your small business

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Posted by Sageworks

Growing and financing a business is an incredibly difficult undertaking; the Small Business Administration (SBA) has a wealth of resources available to help small businesses meet their financial needs, including debt financing, surety bonds and equity financing. Debt FinancingThe SBA cannot directly lend capital to small businesses. However, that does…...

5 Ways for small businesses to give employees “affordable” holiday bonuses

Sageworks
Posted by Sageworks

By Bailey McCann, Funding Gates Bailey McCann When it comes to the holidays, there are a lot of ways you can reward your employees for their hard work. As much as you’d like to spend big money on gifts for everyone, that isn’t always feasible. So, what do you do to…...

Fed calculations contradict that of many large banks

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Posted by Sageworks

The Federal Reserve is likely to calculate lower capital ratios for large lending institutions than lending firms' own internal calculations, according to a recent letter from the Federal Reserve. This is due to the fact that Fed estimates are predicated on historical data, showing that industry assets grew in the…...

Is your accounting firm on pace to succeed in the future? Part 2

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Posted by Sageworks

In Part 1, we discussed how firms that are considered pioneers in technology, by the CCH report, have the highest revenue growth and ranked significantly higher on many work environment scales. Today, we’ll talk about why they scored better based on staffing strategies and technology strengths. Here’s a brief recap…...

10 Objectives loan review systems should address

Sageworks
Posted by Sageworks

It is essential that all regulated financial institutions have an effective loan review system, even if they aren’t expected to maintain a separate loan review department, according to a recent article by CEIS Review. The loan review system provides critical and objective information to executives about credit quality, portfolio trends…...

Final rules implementing Volcker Rule

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Posted by Sageworks

On Tuesday, December 10 five federal agencies announced final rules to enforce section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly known as the Volcker Rule. The rules generally prohibit banking institutions from engaging in short-term proprietary trading of securities, derivatives, commodity futures and options on…...

Valuations: 4 things that make private companies different

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Posted by Sageworks

While Wall Street firms get a lot of publicity (especially when it comes to mergers and acquisitions), most of the 27 million U.S. businesses are privately held. For accountants and others in financial services, that means a multitude of opportunities can arise to use valuations in planning for succession, evaluating…...

What is the average number of services per client for top CPA firms?

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Posted by Sageworks

In this brief video, Lauren Prosser of ProfitCents points out that 25-40 percent of new business that CPA firms generate, come from additional work with existing clients. Prosser provides insight on the cost-effectiveness of introducing new services to an existing client, as opposed to winning a new client.  This clip…...

Update on FASB and IASB models: Convergence?

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Posted by Sageworks

Given that bankers and even Comptroller of the Currency Thomas Curry have gauged the CECL model, as it stands in current proposals, could increase bank reserve levels by 30-50 percent, the FASB’s proposed current expected credit losses (CECL) model has garnered much attention. The latest on CECL, information coming from…...

Interpreting FAS 5

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Posted by Sageworks

In a webinar on How to Calculate Your FAS 5 Reserves, Sageworks consultants discussed the ambiguous nature of the FAS 5 (ASC 450-20).  From the video: The topic of the day is our FAS 5s, also known at ASC 450-20. We are talking about one of two major components or guidances…...

The discovery process for accountants

Sageworks
Posted by Sageworks

In this brief video, Lauren Prosser of ProfitCents describes the objectives of "The Discovery Process" for CPAs and accountants. Prosser provides insight on how to identify opportunities to sell more accounting services to existing clients. She also discusses shifting your focus from the problem to the solution, developing client-centric definitions,…...

Why community banks should stick around

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Posted by Sageworks

Slate’s Matthew Yglesias recently published a blog post that argued against the need for community banks. He claimed that microbanks have three, basic problems: “they are poorly managed”, “they can’t be regulated” and “they can’t compete.” The policy he hopes for is to “simultaneously contain the size and leverage of…...

What is the biggest source of traffic for accounting firms?

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Posted by Sageworks

Bonnie Buol Ruszczyk, president of bbr marketing, recently hosted a webinar for Sageworks, How to Generate Leads through the Web. In this webinar, Bonnie provided key strategies for improving your firm's presence on social media, as well as other content marketing strategies. During the presentation, finance professionals were polled on what…...

Moving from the OTS to the OCC: A brief history

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Posted by Sageworks

Once vitally important for consumer and mortgage lending needs, the Office of Thrift Supervision (OTS) experienced a steady decline in size and importance during the past fifty years. In the 1960s, the OTS (which pre-1989 was known as the Federal Home Loan Bank Board) regulated institutions that were responsible for…...

Number of FDIC-backed banks fall to record lows

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Posted by Sageworks

Recent FDIC data indicates that the number of federally insured banks and financial institutions has dipped below 7,000 for the first time since the Great Depression. At the end of September, only 6,891 banks have such standing, with analysts predicting that number to fall below 5,000 before 2025.  While consolidations…...

12 Signs of loan administration danger

Sageworks
Posted by Sageworks

To keep good loans from going bad, proper monitoring of the portfolio is necessary. The following signs of danger can help banks and credit unions informally assess the adequacy of their loan administration system. Positive responses to the items below suggest additional risk. 1. Federal examiners or auditors have identified…...

7 Sources of content marketing ideas for accountants

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Content marketing is one way an accounting firm can shift its marketing strategy from an outbound, push-oriented approach to an inbound approach that pulls clients and potential clients in for the firm and helps generate leads. Bonnie Buol Ruszczyk, named for the second year in a row by Accounting Today…...

Key characteristics of FAS 5

Sageworks
Posted by Sageworks

In a recent webinar on How to Calculate Your FAS 5 Reserves, Sageworks consultants discussed key quantitative and qualitative characteristics of FAS 5 (ASC 450-20).  From the video Tell us more about the key characteristics of the FAS 5 - or the quantitative and qualitative factors?  Again, we have already identified those…...

Bankers’ top exam advice on the ALLL

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Posted by Sageworks

Banks and credit unions spend months preparing for safety and soundness examinations, and one area that has received regulatory scrutiny in these regulatory reviews is the allowance for loan and lease losses. Even if the bank or credit union hasn’t recently made a significant change in the ALLL, this area…...

OCC releases guidance on deposit advance products

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Posted by Sageworks

Last week the Office of the Comptroller of the Currency (OCC) published final guidance for national banks and savings associations. The regulation addresses risks and expectations associated with deposit advance products. “The OCC encourages banks to offer responsible products that meet the small-dollar credit needs of customers,” Comptroller of the Currency…...

What are 2 common loan documentation dangers?

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Posted by Sageworks

A bank or credit union’s loan portfolio can be the biggest source of risk for their safety and soundness. To keep good loans from going bad, proper monitoring of the portfolio is necessary. Having ineffective loan administration can pose many common documentation dangers for banks and credit unions, such as…...

What is the #1 reason why businesses fail?

Sageworks
Posted by Sageworks

ProfitCents by Sageworks recently hosted a webinar, How to Help Business Clients Win Loans, which discussed key strategies on how to assist clients with winning loans more effectively. Peter Brown, senior consultant at Sageworks, mentioned that by helping your clients work through their needs for capital, you will deepen the…...

Loan documentation dangers: Incomplete financials

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Posted by Sageworks

The loan portfolio can be the biggest source of risk for a bank or credit union’s safety and soundness, but that risk does not end with underwriting and origination. Proper monitoring of the portfolio is necessary to keep good loans from going bad. And while it’s rare that a bank…...

FDIC and OCC propose new liquidity regulations

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Posted by Sageworks

The FDIC and the Office of the Comptroller of the Currency (OCC) recently proposed additional regulations aimed at improving the liquidity risk management of large financial institutions. The proposed regulations are materially the same as those passed by the Fed late last month and applies to • Banks with $250…...

Are your clients aware of the services you offer?

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Posted by Sageworks

In this brief video, Director of ProfitCents Professional Services Lauren Prosser points out that two-thirds of clients are not aware of all of the services that accounting firms offer. Prosser provides insight on how to identify opportunities to sell more accounting services to existing clients.  This clip is from a…...

Is your accounting firm on pace to succeed in the future? Part 1

Sageworks
Posted by Sageworks

A new report released by CCH suggests that pioneers and early adopters to new technology are best suited to succeed in the current accounting landscape. As a brief preface, let’s talk about the four main categories of adopters. First there are the pioneers; they are risk takers and first movers.…...

Poll: Biggest areas of change when transitioning from OTS to OCC

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Posted by Sageworks

With the 2011 closing of the Office of Thrift Supervision (OTS), the institutions it once regulated have mostly transitioned to a new charter whereby many are regulated now by the Office of the Comptroller of the Currency (OCC). Since the transition, both regulators and the institutions have faced challenges that…...

The importance of qualitative and environmental risk factors in the ALLL calculation

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Posted by Sageworks

In a recent webinar on How to Justify a Change in Your ALLL consultants at Sageworks discuss the importance of qualitative and environmental risk factors in the ALLL calculation. From the video Everybody’s favorite topic - yours and mine as well - let’s talk a little bit about qualitative and…...

Why do business owners choose a competitor?

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Posted by Sageworks

In this brief video, Sageworks’ senior consultant Peter Brown discusses why clients select a certain accounting firm. Brown highlights that 23 percent of business owners choose a competitor due to lack of industry knowledge. He also points out that there is a misconception among accountants that clients choose a competitor…...

Member business lending: Opportunity for credit unions

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In March of 2011, only 30 percent of credit unions provided credit to businesses, according to the National Credit Union Administration (NCUA). However, member business lending has increased consistently as of late and the trend is expected to continue. This is in large part due to member business loans (MBLs)…...

A shift in the top 5 issues for CPA firms

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Guest Post By Elizabeth Fiore, CPAmerica International As the economy has improved, it’s no surprise the top issues facing CPA firms have also shifted from 2011 to 2013, according to The PCPS CPA Firm 2013 Top Issues Diagnostic Report published by the AICPA.  “Putting the economic uncertainty of the past…...

Fed details newer and more stringent stress testing requirements

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On November 1, the Federal Reserve Board released the 2014 Comprehensive Capital Analysis and Review (CCAR) Summary Instructions and Guidance, detailing stress testing practices for large bank holding companies in the coming year. For the last four years, 18 bank holding companies have been required to comply with the Comprehensive…...

Advice from Summit speakers: 3 Ways to mitigate risk

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Bankers in today’s environment face a number of challenges, including understanding and complying with ongoing regulatory changes, developing and conducting adequate stress testing methods, and justifying or defending changes in their allowance reserves. But there are many things bankers can do to mitigate risk in those areas, according to several…...

Historical loss rates for ALLL calculation

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Historical loss rates significantly impact the reserve amount, as they determine the reserve needed for impairment in FAS 5 loan pools. Often these pools of loans make up a substantial portion of the bank's or credit union’s portfolio and reserve calculation, so gathering and accessing data for historical loss rates…...

Advantages of web-based software in banking

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The transition to web-based software solutions is among the most noticeable trends in the financial services industry. Web-based programs mean that users can access programs through their web browser and do not require a download or install. This common practice has a lot of institutions asking the same question: What…...

Poll: Does your firm track cross-selling opportunities identified vs. closed?

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ProfitCents by Sageworks recently hosted a webinar, Cross-sell accounting services: How to identify opportunities to sell more accounting services to existing clients, which discussed how to lay a foundation for your accounting firm's sustainable growth by cross-selling services to your existing client base. Lauren Prosser, Director of ProfitCents Professional Services, outlines…...

How do clients want to be approached about additional service offerings?

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In this brief video, Sageworks senior consultant Peter Brown discusses how clients would like to be approached about your firm’s additional services. Brown highlights that 50% of clients would prefer a phone call or visit over an email or message via social media. He suggests to use times of the…...

Incorporating Basel III reforms for stress testing

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Late last month the Federal Reserve Board published two interim rules that explain specifically how banking institutions should apply Basel III reforms into their projections for the next round of capital plan submissions and stress tests.  The information is important because the upcoming stress testing and capital planning cycle, which…...

3 Key risk areas in member business lending

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As part of Sageworks’ ongoing video series addressing some of the challenges and questions regarding credit analysis, Garrett Morris, senior risk management consultant at Sageworks, explains the three key risk areas in member business lending. From the video There are three key risk areas in member business lending: Can my…...

Poll: Does your firm have a formal client service plan?

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ProfitCents by Sageworks recently hosted a webinar, Cross-sell accounting services: How to identify opportunities to sell more accounting services to existing clients, which discussed how to lay a foundation for your accounting firm's sustainable growth by cross-selling services to your existing client base. Lauren Prosser, Director of ProfitCents Professional Services, outlines…...

How my accounting firm raised prices

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Is it time for your accounting firm to raise prices?  Most top U.S. accounting firms are generating revenue growth by offering services that go beyond traditional work such as tax preparation and bookkeeping: valuations, strategic planning and other business advisory services.  But it’s hard enough for some accountants dealing with…...

How CPAs can find niche markets with industry data

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There’s been a lot of media coverage the past few years about identifying niche markets and how CPAs should invest resources into targeting/creating them. Given demands already placed on you and your practice, it is important to know why niche markets are worth finding.  For one, the niche industries you’ll…...

4 Ways industry data can improve your commercial credit analysis

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Commercial lending can be a large source of credit risk for any bank or credit union, especially for institutions in which commercial analysts are unfamiliar with the companies being analyzed or their industries. In that scenario, it’s like trying to read a book but not knowing the language. Or, at…...

Infographic: Top 5 ways accountants can use industry data

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While industry data can be a valuable resource for accountants, it’s not always easy to identify the best ways to use it. In this infographic, learn the top 5 ways accountants can use industry data to create value for their clients and their firm.      Sageworks provides private company…...

Winning new clients: Why do firms win business in the final bidding stage?

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In this brief video, Sageworks senior consultant Peter Brown discusses how to win new clients for your firm. Brown provides insight on how to keep your firm on top by looking into the future and identifying key factors that will help you win new clients. This clip is from a…...

Collateral valuations for reserve calculation

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Measuring impairment based on the Fair Market Value of Collateral is the most commonly used valuation method for calculating impairment for FAS 114 loans. These loans are and should be considered collateral-dependent, meaning that it is expected that repayment of the loans will be derived from the sale or operation…...

CEIS: Controls necessary to manage increase in hybrid asset based lending

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Many banks are initiating or expanding their interest in hybrid asset based lending operations, according to a recent article by CEIS Review. But their success and effectiveness in the area varies. CEIS notes that the portfolio and income fee diversification are important, but “the increased activity should be fully vetted…...

2 Questions accountants should ask about their analytical procedures

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One of the top issues that accounting firms have faced with implementing SSARS 19, the standards for compilation and review, is that analytical procedures are poorly designed or documented, according to a recent CPE course booklet by Perry M. Henderson, CPA.  Download a Guide to Audit & Review Best Practices and…...

How small businesses can avoid a tax audit

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By Bailey McCann, Funding Gates Bailey McCann First the bad news – small businesses are often the go-to target for the IRS if they are looking at who to audit.  Small businesses take a number of deductions that can be hard to justify without rock solid paperwork and receipts (like…...

Why should institutions have a comprehensive ALLL?

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Posted by Sageworks

In a recent webinar on How to Justify a Change in Your ALLL, Sageworks consulting staff explained why institutions should have a comprehensive ALLL and the benefits of comprehensive calculation.  From the video:  In comprehensive calculation essentially you want to be performing the most comprehensive, robust, detailed calculation that you can…...

5 Resources for accountants helping clients with health-care questions

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Are you getting calls from self-employed clients and small business owners who are trying to investigate the options for health care plans on healthcare.gov? It wouldn’t be surprising, considering CPAs have historically been among the top resources for human resource compliance issues. You and your clients may have run into…...

Identifying the best reports for stress testing

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According to experts, tackling the richest data points first can also help banks generate meaningful reports analyzing risks sooner. As you add data, the detail of your analyses can always be stepped up. Sean Delehanty, senior credit officer of Omnibank, N.A., said that once OmniBank had gathered substantial data, it…...

Obtaining loan portfolio information for ALLL calculations

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Obtaining loan portfolio information and keeping this data updated can be both time consuming and difficult, but the information is very important to a bank’s Allowance for Loan and Lease Losses (ALLL) calculation. The amount of data available in an institution’s loan processing or core system that can be utilized…...

3 Keys to effective loan review

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By Tim McPeak, Sageworks There will always be risks inherent in loan portfolios, and effective portfolio management and loan control functions are critical to the overall risk management function of banks and credit unions. The loan control function is typically spread over three functional areas within the institution: credit administration,…...

UCC revisions highlight ongoing guidance changes for financial institutions

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The first major changes in more than a decade to many states’ requirements for UCC (Uniform Commercial Code) filings took effect recently, highlighting one of the many credit-risk management issues that financial institutions deal with on an ongoing basis. Constantly changing rules and guidance can make it challenging for banks…...

Client service plans: Pairing client opportunities with accounting firm services

Sageworks
Posted by Sageworks

In a recent video, Lauren Prosser, director of ProfitCents Professional Services, explains the first objective to prepare a meaningful client service plan.   In this brief video, Lauren explores the second key objective to a meaningful client service plan and how to pair the opportunities you identified and qualified in step one with…...

CPAs, don’t be “Just the tax guy/gal”

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Some accounting industry watchers warn business owners against relying on their CPAs for business advice, but many owners are apparently ignoring the advice. Most top U.S. accounting firms report that common sources of firm revenue growth include niche services such as business valuations, litigation support, strategic planning and business advisory…...

Next in line for stress testing requirements? Credit unions

Sageworks
Posted by Sageworks

Last month, NCUA Board Chairman Debbie Matz indicated that the agency is drafting a proposed rule that would require credit unions with more than $10 billion in assets to complete an annual stress testing analysis. Credit unions’ largest banking counterparts, banks over $10 billion in assets, are already required to…...

Auditor switching tied more to relationship woes than to pricing

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Posted by Sageworks

Why do clients change audit firms? For years, accounting firms have lamented that audits have become commoditized, with clients leaving multi-year relationships because they were able to get a lower price. Indeed, some studies have found that a major reason clients switch is that they decide audit fees are too…...

Sageworks to host 2nd Annual Risk Management Summit in Nashville

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Posted by Sageworks

On Thursday, December 5th and Friday, December 6th, 2013, Sageworks will host the 2nd Annual Risk Management Summit at the Gaylord Opryland Resort & Convention Center in Nashville, Tennessee. It will feature keynote speakers and discussion on the ALLL, stress testing and risk management best practices. Speakers will include Sageworks’…...

3 Tips for better meetings with your accounting firm’s clients

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Client meetings are an integral part of being a great accountant. The most important of these meetings is often when you’re tasked with presenting the client with your financial analysis. Making the most of this meeting can do wonders for establishing client trust and retention. Some points to consider when…...

Credit administration among top OCC “Matters Requiring Attention” (MRAs)

Sageworks
Posted by Sageworks

Recently, the Office of the Comptroller of the Currency’s National Risk Committee released its Semiannual Risk Perspective, a twice-yearly report that outlines some of the emerging threats to the safety and soundness of the U.S. financial system. Using data as of Dec. 31, 2012, the report outlined at a high…...

Motor vehicle and motor vehicle parts and supplies merchant wholesalers (NAICS 423120) industry trends

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Posted by Sageworks

The motor vehicle and motor vehicle parts and supplies merchant wholesalers industry includes automobile and other motor vehicle merchant wholesalers, motor vehicle supplies and new parts merchant wholesalers, tire and tube merchant wholesalers and used motor vehicle parts merchant wholesalers. Automobile and other motor vehicle merchant wholesalers sell new and…...

4 recommendations for better forecasts

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Posted by Sageworks

Business owners or financial officers know the value of accurate forecasts. Whether the objective is determining revenue for the month, the year or the next few years, a company’s revenue forecast, for example, often impacts or dictates spending levels, hiring, sales promotions and a million other business decisions.  If the…...

Personal care services (NAICS 812199) industry trends

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Posted by Sageworks

The personal care services industry includes businesses that provide appearance care services to individual customers. Hair, nail and skin care services as well as other personal care services comprise this industry. Hair, nail and skin care services provide hair care services, provide nail care services, provide facials or apply makeup.…...

FASB’s plan to boost reserves supported by OCC’s Curry

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Posted by Sageworks

Comptroller of the Currency Thomas Curry has strongly endorsed an accounting proposal that may force banks to increase reserves, calling industry concerns that the plan will boost allowances by as much as 300 percent “exaggerated.” In a speech to a banking conference hosted by the American Institute of Certified Public…...

Hardware, and plumbing and heating equipment and supplies merchant wholesalers (NAICS 423720) industry trends

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Posted by Sageworks

The hardware, and plumbing and heating equipment and supplies merchant wholesalers industry includes wholesalers in hardware, plumbing and heating equipment and supplies, warm air heating and air-conditioning equipment and supplies and refrigeration equipment and supplies. Hardware merchant wholesalers sell hardware, knives or hand tools. Examples of hardware merchant wholesalers include…...

How can accounting firms provide value to clients?

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Posted by Sageworks

Knowing how your accounting firm can provide value is critical to being able to market, price and execute on value-added service offerings, such as financial forecasting, industry specialization, strategic planning or succession planning. More than a third of firms recently describing their top niche services cited these services as growth…...

Commercial and industrial machinery and equipment rental and leasing (NAICS 532411) industry trends

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Posted by Sageworks

The commercial and industrial machinery and equipment rental leasing industry includes firms involved in construction, transportation, mining and forestry machinery and equipment rental and leasing and office machinery and equipment rental and leasing. Construction, transportation, mining and forestry machinery and equipment rental and leasing firms rent or lease aircraft, railroad…...

Other heavy and civil engineering construction (NAICS 237990) industry trends

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Posted by Sageworks

The other heavy and civil engineering construction industry includes firms that work on heavy and engineering construction projects excluding highway, street, bridge and distribution line construction. This industry includes channel construction, land drainage contractors, marine construction, nuclear waste disposal site construction as well as dam construction. The work performed in…...

The best online trading platforms for small business investors

Sageworks
Posted by Sageworks

By Bailey McCann, Funding Gates Bailey McCann Small business owners may consider investing as a means of growing capital for their business or providing an additional layer of financial security for themselves. Self-directed investments can be an excellent choice for these small business owners, as they give business owners complete control…...

Plastics product manufacturing (NAICS 326150) industry trends

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Posted by Sageworks

The plastics product manufacturing industry includes firms that process plastics into intermediate or final products. Firms in this industry use processes including compression molding, extrusion molding, injection molding, blow molding and casting. This industry comprises firms involved in plastics packaging materials and un-laminated film and sheet manufacturing, plastics pipe, pipe…...

Plastics product manufacturing (NAICS 326150) industry trends

Sageworks
Posted by Sageworks

The plastics product manufacturing industry includes firms that process plastics into intermediate or final products. Firms in this industry use processes including compression molding, extrusion molding, injection molding, blow molding and casting. This industry comprises firms involved in plastics packaging materials and un-laminated film and sheet manufacturing, plastics pipe, pipe…...

2013 University report demonstrates difficult environment for new business financing

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Posted by Sageworks

Pepperdine University tracks the quarterly demand for and access to capital for small and medium sized businesses. The school recently released their Second Quarter “Private Capital Access Index.” This report, created through the responses of nearly two-thousand business owners, notes that nearly 60% of respondents believe the current lending environment…...

Miscellaneous nondurable goods merchant wholesalers (NAICS 424990) industry trends

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Posted by Sageworks

The miscellaneous nondurable goods merchant wholesalers industry includes farm supplies merchant wholesalers, book, periodical and newspaper merchant wholesalers, flower, nursery stock and florists’ supplies merchant wholesalers, tobacco and tobacco product merchant wholesalers and paint, varnish and supplies merchant wholesalers. Farm supplies merchant wholesalers sell animal feeds, fertilizers, agricultural chemicals, pesticides,…...

Utility system construction (NAICS 2371) industry trends

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Posted by Sageworks

The utility system construction industry includes water and sewer line construction firms, oil and gas pipeline construction firms and power and communication line construction. Water and sewer line construction firms construction main, pumping stations, treatment plants and storage tanks. Examples of water and sewer line construction include distribution line construction,…...

Lumber and other construction materials merchant wholesalers (NAICS 423310) industry trends

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Posted by Sageworks

The lumber and other construction materials merchant wholesalers industry includes lumber, plywood, millwork, wood panel, brick, stone, roofing, siding and insulation material merchant wholesalers. Lumber, plywood, millwork and wood panel merchant wholesalers sell lumber, plywood, wood fiber products, wood fencing, doors and windows for frames and wood millwork. Brick, stone…...

Grocery stores (NAICS 445110) industry trends

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Posted by Sageworks

The grocery stores industry includes stores such as supermarkets and convenience stores. Supermarkets and other grocery stores sell canned and frozen foods, fresh fruits and vegetables, fresh and prepared meats, fish, poultry and other general food products. Convenience stores or food marts sell milk, bread, soda and snacks. Generally, convenience…...

Automotive parts, accessories, and tire stores (NAICS 441310) industry trends

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Posted by Sageworks

The automotive parts, accessories and tire stores industry includes automotive supply stores that sell new, used and/or rebuilt automotive parts and accessories as well as stores that sell new and/or used tires and tubes. Examples of automotive parts and accessories stores include truck cap stores, automotive stereo stores and speed…...

5 Recommendations for determining appropriate qualitative adjustments

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Posted by Sageworks

While the calculation of the historical loss experience offers a reasonable starting point in determining an appropriate loss rate to be applied against loan pool balances in determining appropriate FAS 5 (ASC 450-20) general reserve levels, “…historical losses, or even recent trends in losses, do not by themselves form a…...

Industry niches in accounting: 5 Questions to consider

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Posted by Sageworks

By Lauren Prosser, Director of ProfitCents Consulting Services, Sageworks In a previous post, we began to explore the three critical questions any firm must answer when crafting an industry niche-driven growth strategy. We first looked at a 7-step approach for identifying key industry trends and changes defining the industry environment…...

Other motor vehicle dealers (NAICS 441228) industry trends

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Posted by Sageworks

The other motor vehicle dealers industry includes recreational vehicle dealers and motorcycle, boat and other motor vehicle dealers. Recreational vehicle dealers sell new and or used recreational vehicles typically referred to as RVs. Additionally, recreational vehicle dealers often also provide repair services and sell replacement parts and accessories. Examples of…...

Health and personal care stores (NAICS 446191) industry trends

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Posted by Sageworks

The health and personal care stores industry includes pharmacies and drug stores, cosmetics, beauty supplies, and perfume stores, optical goods stores and health food supplement stores. Pharmacies and drug stores sell prescription or nonprescription medicines. Cosmetics, beauty supplies and perfume stores sell items such as cosmetics, perfumes, toiletries and personal…...

Other fabricated metal product manufacturing (NAICS 332999) industry trends

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Posted by Sageworks

The other fabricated metal product manufacturing industry includes firms that manufacture fabricated metal products such as metal valve manufacturing. Metal valve manufacturing firms produce industrial valves, fluid power valves and hose fittings, plumbing fixture fittings and trim and other metal valves and pipe fittings. Examples of metal valve manufacturing include…...

Other miscellaneous store retailers (NAICS 453998) industry trends

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Posted by Sageworks

The other miscellaneous store retailers industry includes pet and pet supplies stores, art dealers, manufactured mobile home dealers and tobacco stores. Pet and pet supplies stores sell pets, pet foods and other pet supplies. Art dealers such as art galleries retail original and limited edition works of art. Manufactured mobile…...

Miscellaneous durable goods merchant wholesalers (NAICS 423990) industry trends

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Posted by Sageworks

The miscellaneous durable goods merchant wholesalers industry includes wholesalers that sell sporting, recreational, toy, hobby, jewelry goods and supplies and precious stones and metals. Sporting and recreational goods include billiard supplies and sporting firearms and ammunition. Toy and hobby goods include games, fireworks and playing cards. Jewelry goods and precious…...

What is the importance of industry analysis?

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Posted by Sageworks

Industry analysis is critical for any business professional looking to stay competitive. Whether we’re using it to gauge the competition or track our own progress, we regularly monitor our own performance. But are we really getting the most out of the information provided to us?  When you ask someone what…...

Highway, street, and bridge construction (NAICS 237310) industry trends

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Posted by Sageworks

The highway, street, and bridge construction comprises firms that provide construction services of highways, streets, roads, airport runways, public sidewalks and bridges. Specialty trade contractors providing services related to highway, street and bridge construction are included in this industry. Additional examples of services included in this industry are airport runway…...

What is relationship-based banking and lending?

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Posted by Sageworks

This video is a segment taken from a recent webinar hosted by Sageworks and CECO Management Consultants. For the full recording, visit “Relationship-Based Banking: How to Balance Risk & Relationships.”   From the video Relationship-based banking is defined as the provision of financial services by a financial intermediary on the…...

Management, scientific, and technical consulting services (NAICS 541690) industry trends

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Posted by Sageworks

The management, scientific, and technical consulting services industry includes firms that provide management consulting services, environmental consulting services as well as other scientific and technical consulting services. Management consulting firms provide advice and assistance to businesses and other organizations on strategic planning, financial planning, marketing, human resource policies, production planning…...

Gasoline stations (NAICS 447190) industry trends

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Posted by Sageworks

The gasoline stations industry includes businesses that sell diesel fuel, gasohol, gasoline and other automotive fuels. These gasoline stations often also have a convenience store on site that sells food mart items. In addition to these retail services, some gasoline stations may also provide automobile repair services as well as…...

Legal services (NAICS 541110) industry trends

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Posted by Sageworks

The legal services industry comprises the offices of lawyers, notaries and other legal services. Lawyers or attorneys provide legal advice and representation in areas of law such as criminal, corporate, family, estate, patent, real estate and tax. Notaries draft, approve and execute legal documents including real estate transactions, wills and…...

Offices of other health practitioners (NAICS 621399) industry trends

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Posted by Sageworks

The offices of other health practitioners industry comprises the firms of independent health practitioners with the exceptions of physician and dentist offices. Included in this industry are the offices of chiropractors, optometrists, mental health practitioners, physical, occupational and speech therapists, and audiologists and podiatrists. Chiropractors manipulate and adjust the spinal…...

Other amusement and recreation industries (NAICS 713990) industry trends

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Posted by Sageworks

The other amusement and recreation industry includes golf courses and country clubs, skiing facilities, marinas, fitness and recreational sports centers and bowling centers. Golf courses and country clubs operate gold courses along with dining facilities. Skiing facilities operate skiing areas and operating equipment such as ski lifts and tows. Additionally,…...

Accounting, tax preparation, bookkeeping and payroll services (NAICS 541219) industry trends

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Posted by Sageworks

The accounting, tax preparation, bookkeeping and payroll services industry includes offices of certified public accountants as well as firms that provide tax preparation and payroll services. Certified Public Accounts (CPAs) audit financial statements, design accounting systems, prepare financial statements, develop budgets and provide advice on accounting related matters. CPA firms…...

General freight trucking (NAICS 484122) industry trends

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Posted by Sageworks

The general freight trucking industry includes firms providing general freight trucking services. General freight trucking handles and transports a wide variety of goods in a container or van trailer. The general freight trucking industry provides services such as local pickup, local sorting, line-haul, destination sorting and local delivery. Local general…...

Other Miscellaneous Manufacturing (NAICS 339999) industry trends

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Posted by Sageworks

The other miscellaneous manufacturing industry comprises firms manufacturing jewelry and silverware, sporting and athletic goods, dolls, toys, and games, office supplies (except paper), signs and all other miscellaneous items. Jewelry and silverware manufacturing involves the manufacturing, engraving, chasing or etching of jewelry and metal personal goods. Sporting and athletic goods…...

Agencies, brokerages, and other insurance related activities (NAICS 524298) industry trends

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Posted by Sageworks

The agencies, brokerages, and other insurance related activities industry includes firms that sell annuities and insurance policies and firms providing employee benefits and insurance related services. Firms that sell annuities and insurance policies act as agent or brokers. Examples of other insurance related services that firms in the industry provide…...

How to prepare now for FASB CECL model: Part II

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Posted by Sageworks

**The FASB issued the final CECL standard on June 16, 2016. For up-to-date information and resources, access the updated CECL Prep Kit. With the changes that could occur as a result of the FASB’s CECL model, many financial institutions are uncertain as to what they can be doing now to prepare.…...

Traveler Accommodation (NAICS 721199) industry trends

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Posted by Sageworks

The traveler accommodation industry includes hotels and motels, casino hotels, bed-and breakfast inns and other traveler accommodations. Hotels and motels provide short-term lodging facilities along with food and beverage services, recreational services, conference rooms and convention services, laundry services and parking. Casino hotels provide short-term lodging facilities with a casino…...

Printing and related support activities (NAICS 323120) industry trends

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Posted by Sageworks

The printing and related support activities industry includes services such as printing on apparel, paper, metal, glass and other materials as well as prepress and postpress services. Firms providing printing services perform postprinting activities such as folding, cutting or laminating the materials they print. Types of printing services comprise commercial…...

Services to buildings and dwellings (NAICS 561790) industry trends

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Posted by Sageworks

The services to building and dwellings industry comprises firms providing services such as extermination and pest control, cleaning, landscaping and carpet and upholstery cleaning. Extermination and pest control firms exterminate and control birds, mosquitoes, rodents, termites and other insects and pests. Cleaning services comprise custodial services, service station degreasing, housekeeping,…...

Smart retirement investments for small business owners

Sageworks
Posted by Sageworks

By Bailey McCann, Funding Gates Bailey McCann If you run a small business, retirement can be tricky. You can’t exactly just tell the HR department to pull 10 percent out and put it in the company 401(k). However, there are several options for small business owners and independent contractors.  Even though…...

How to prepare now for FASB’s CECL model: Part I

Sageworks
Posted by Sageworks

**The FASB issued the final CECL standard on June 16, 2016. For up-to-date information and resources, access the updated CECL Prep Kit. The December 2012 issuance of the Financial Accounting Standard Board’s (FASB) latest proposal brought about the Current Expected Credit Loss (CECL) model. With it came a number of changes…...

Building finishing contractors (NAICS 238390) industry trends

Sageworks
Posted by Sageworks

The building finishing contractors industry includes firms providing specialized services to finish buildings. Included in this industry are drywall and insulation contractors, painting and wall covering contractors, flooring contractors, tile and terrazzo contractors, finish carpentry contractors and other building finishing contractors. Drywall and insulation contractors provide services related to drywall,…...

Computer systems design and related services (NAICS 541512) industry trends

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Posted by Sageworks

The computer systems design and related services industry includes information technologies firms providing services such as custom computer programming services, computer systems design services, computer facilities management services and other computer related services. Customer computer programming services include writing, modifying, testing and supporting software. Computer systems design services include planning…...

Machinery, equipment, and supplies merchant wholesalers (NAICS 423830) industry trends

Sageworks
Posted by Sageworks

The machinery, equipment, and supplies merchant wholesalers industry includes wholesalers of machinery, equipment and supplies related to construction, mining, farm, garden, industry and transportation. Examples of merchants that distribute machinery and equipment used in construction, mining (except oil well) and logging activities include excavating machinery and equipment merchant wholesalers and…...

Limited-service eating places (NAICS 722513) industry trends

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Posted by Sageworks

The limited-service eating places industry includes eating places providing food services where patrons generally order and pay before eating. Most of these establishments do not have waiter/waitress service. They provide limited services such as cooking to order (i.e. per special request), bringing food to seated customers or providing off-site delivery.…...

Building material and supplies dealers (NAICS 444190) industry trends

Sageworks
Posted by Sageworks

The building material and supplies dealers industry includes firms that sell new building materials and supplies. This industry comprises of firms such as home centers, paint and wall paper stores and hardware stores. Home centers retail lumber, plumbing goods, electrical goods, tools, housewares, hardware, lawn and garden supplies and other…...

Stop competing on price alone: Why accounting firms are transitioning to Type 2 services

Sageworks
Posted by Sageworks

Competition in the accounting industry is fierce, which can pressure some CPAs to compete for business using pricing alone. But many accountants realize this is a losing proposition: Competing on price means they have to have more clients in order to cover expenses, leaving CPAs less time per client to…...

Offices of dentists (NAICS 621210) industry trends

Sageworks
Posted by Sageworks

The offices of dentists industry includes practices operated by health practitioners holding the degree of D.M.D. (Doctor of Dental Medicine), D.D.S. (Doctor of Dental Surgery), or D.D.Sc. (Doctor of Dental Science). These practices provide general dentistry, specialized dentistry or dental surgery. Services provided can be comprehensive preventative, cosmetic, emergency or…...

How do banks perform stress tests?

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Posted by Sageworks

A financial institution will complete a bank stress test in order to analyze effectively the impact of adverse outcomes on the institution’s financials. But, unlike regulatory guidance around ALLL methodologies, how banks should perform stress tests is a little unclear. Guidelines for institutions involved with the Supervisory Capital Assessment Program…...

Automobile dealers (NAICS 441110) industry trends

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Posted by Sageworks

The automobile dealers industry comprises new car dealers and used car dealers that purchase and sell automobiles and light trucks such as sport utility vehicles, passenger vans and cargo vans. New car dealers retail new and used vehicles, provide repair services and sell replacement parts and accessories. Examples of new…...

Client service plans: Opportunity identification

Sageworks
Posted by Sageworks

In a recent video, Lauren Prosser, director of ProfitCents Professional Services, explains four tips to prepare a meaningful client services plan.   In this brief video, Lauren explores the first key objective to a meaningful client service plan and how to better identify opportunities and client needs. From the Video The…...

Offices of physicians (NAICS 621111) industry trends

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Posted by Sageworks

The offices of physicians industry includes independent practices of health practitioners having the degree of M.D. (Doctor of Medicine) or D.O. (Doctor of Osteopathy) providing general or specialized medicine in fields such as anesthesiology, oncology, ophthalmology or psychiatry. These health practitioners may operate centers, clinics, other private or group practices,…...

Architectural, engineering, and related services (NAICS 541310) industry trends

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The architectural, engineering, and related services industry includes firms providing services in fields such as architecture, landscape architecture, engineering, drafting, building inspection and mapping. Architecture firms in this industry design residential, institutional, leisure, commercial and industrial buildings. Landscape architecture firms provide services related to garden planning, golf course or ski…...

Spreadsheet concerns in risk management: Consistency

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Financial institutions use spreadsheets for a variety of tasks including the loan loss reserve, credit analysis and stress testing. Unfortunately, spreadsheets are prone to error and complications, and are often sources of problems when examiners are present. While their complexity is one of the major concerns voiced by regulators, consistency…...

Foundation, structure, and building exterior contractors (NAICS 238190) industry trends

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The foundation, structure, and building exterior contractors industry comprises of firms that hire contractors to provide services to complete the foundation, frame, shell and other basic structures of buildings. Contractors employed within this industry include poured concrete foundation and structure contractors, structural steel and precast concrete contractors, framing contractors, masonry…...

Crafting Industry Strategies? Use this 7-step approach

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By Lauren Prosser, Director of Profitcents Consulting Services When coaching firms on crafting an industry niche-driven growth strategy, there are three critical questions that we work together to answer. In a series of upcoming posts we will address each of these questions in detail. The first step is to assess…...

Activities related to real estate (NAICS 531390) industry trends

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The activities related to real estate industry includes firms providing real estate services (except for lessors of real estate and offices of real estate agents and brokers). Comprised in this industry are real estate property managers and real estate appraisers. Real estate property managers include residential property managers as well…...

Looking for a loan? Research your options first

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Applying for a business loan can be an intimidating and arduous process, and it can be confusing to have an application rejected with very little explanation. Mark Swanson, acting president and CEO of Northside Bank in Adairsville, Georgia, sees this frequently when he meets with business owners who have been…...

Other professional, scientific, and technical services (NAICS 541990) industry trends

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The other professional, scientific, and technical services industry includes firms providing a variety of professional, scientific and technical services. Such services include marketing research and public opinion polling, photographic services, translation and interpretation services and veterinary services. Marketing research and public opinion polling describes services such as broadcast media rating,…...

Automotive repair and maintenance (NAICS 811198) industry trends

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The automotive repair and maintenance industry includes comprises of firms providing repair and maintenance services for passenger cars, trucks, vans, trailers and all other automotive vehicles. These firms employ mechanics with specialized technical skills to provide services including general automotive repair, automotive exhaust system repair, automotive transmission repair, automotive oil…...

Full –service restaurants (NAICS 722511) industry trends

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The full-service restaurants industry comprises establishments providing food services as well as waiter/waitress services to patrons. Waiter/waitress services mean that patrons who order are served while seated and pay after eating. These establishments may provide food services along with other services, including the sale of alcoholic beverages, takeout services or…...

Residential building construction (NAICS 236118) industry trends

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The residential building construction industry includes firms providing construction, remodeling or renovation services to single-family and multifamily residential buildings. Single-family residential buildings are those in which each housing unit is separated from its neighbors by a ground-to-roof wall and has no housing units constructed above or below. Multifamily residential buildings…...

Nonresidential building construction (NAICS 236220) industry trends

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The nonresidential building construction industry includes firms providing construction services for industrial and commercial buildings. Industrial buildings include assembly plants, paper or pulp mills, pharmaceutical manufacturing plants, steel mills, food processing plants and waste disposal plants. Commercial buildings include airport buildings, parking garages, farm buildings, fire stations, warehouses, religious buildings,…...

Spreadsheet concerns in risk management: Complexity

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For decades, financial institutions have utilized spreadsheets as a primary tool in the effective management of risk. However, an over-reliance on spreadsheets has become an area of serious concern among regulators. Some of the apparent benefits are often shadowed by underlying, significant risks. Complexity is one of the major concerns…...

Lessors of real estate (NAICS 531190) industry trends

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This industry includes lessors of residential buildings, lessors of nonresidential buildings (except mini warehouses and self-storage units), lessors of mini warehouses and self-storage units and lessors of other real estate property. Residential buildings include single-family homes, apartment buildings and town homes. Mini warehouses and self-storage units provide secure space such…...

Poll: Why business clients choose a competitor

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ProfitCents by Sageworks recently hosted a webinar, How Will You Win Your Next New Client, which discussed key strategies on how to position your firm to take on new clients and expand service offerings to your existing client base. Peter Brown, senior consultant at Sageworks, mentioned that the central focus…...

Other specialty trade contractors (NAICS 238990) industry trends

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The other specialty trade contractors industry group includes contractors providing site preparation activities. Site preparation activities include blasting, building demolition, foundation digging, concrete breaking and cutting for demolition, septic system installation, excavating and underground tank removal. Also included are firms providing construction equipment rental with operator. Additionally, this industry group…...

Building equipment contractors (NAICS 238290) industry trends

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This industry includes electricians, wiring installation contractors, plumbers and heating and air-conditioning contractors. The industry also includes installation and service contractors providing services such as door installation, escalator installation, service station installation and pipe insulation installation. Electricians and wiring installation contractors in this industry provide services such as alarm system…...

When can a loan in FAS 114 be moved back to FAS 5 status?

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A loan can be moved back to FAS 5 status at any point that the loan has sufficient performance to no longer be deemed impaired. For example, in contrast to a TDR which once a TDR always a TDR, we may have a non-accrual loan that has performed as agreed,…...

Avert risk & improve risk rating strategies using stress testing data

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By Cathy Moore, Sageworks The OCC notes that financial institutions that perform stress testing “have the ability to minimize the impact of negative market developments more effectively” than those that do not have a stress testing process in place. What does this mean for bankers? Avert risk It means that…...

Stress testing: Not just checking a box

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By Cathy Moore, Sageworks While it’s recognized that institutions of all sizes could benefit from stress testing on a regular basis, the ambiguity of previous regulations and their big bank-focus prompted many institutions to delay stress test implementation. This is especially true of the smaller, community bank market, where institutions…...

Four tips to prepare a meaningful client service plan

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In a recent survey conducted by ProfitCents Professional Services, 37 percent of public accounting firms polled indicated that they do not have a formal client service plan in place.   In this brief video, Lauren Prosser, director of ProfitCents Professional Services, explores the 4 key objectives of meaningful client service…...

Basel III’s “minimal” impact on community banks

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The Federal Reserve approved a final rule yesterday that will lead banks to maintain stronger capital positions. Ben Bernanke, chairman of the Federal Reserve, explained in the announcement, “With these revisions to our capital rules, banking organizations will be better able to withstand periods of financial stress, thus contributing to…...

In good times, review business practices

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Lawrence Barger, CPA with Alpern Rosenthal recently wrote an article in a newsletter describing practices that manufacturing business owners should observe, now that the industry's recovery has proven to be sustainable. These practices can be helpful for companies in all industries, as they reassess business strategies. 1. Renegotiate loans and…...

Top priorities for CPA firms: Retaining and training staff

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Staffing is among the top management issues facing CPA firms, according to a recent survey by Sageworks, a financial information company. That’s not surprising, considering many firms are experiencing a staffing crisis as they lose significant percentages of top staff. In this post, Lauren Prosser, director of ProfitCents Professional Services,…...

Benefits of using an automated, web-based system for managing your ALLL

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Allowance for loan and lease losses has been a challenging issue for financial institutions over the past few years. Sageworks recently polled over 130 financial institutions, and 84 percent of the banks were using Excel for their ALLL calculations.   Some of the benefits of using an automated system over…...

Here is why you should consider continuous budgets

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An article recently featured on CFO.com, written by Jon Louvar, explains why corporate planning on a monthly or quarterly basis instead of annually can improve the accuracy of the numbers and the efficiency of the process. Continuous budgeting, when the budgeting process is more frequent than once a year, means that…...

Why audit planning is critical

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In this brief video, Lauren Prosser, director of Profitcents Professional Services, explores how changes and clarifications to audit standards in recent years have placed an increased importance on audit planning and have underscored the critical role it plays in the engagement.   Summary Professional guidelines governing financial statement audits and…...

Determining the appropriate size of a FAS 5 segmentation

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Institutions often ask how to best determine the appropriate size and granularity for FAS 5 segmentation. It comes down to finding an appropriate balance between ensuring that you are granular enough to find and capture the inherent risks associated with each homogenous pool, while also ensuring that you are not…...

Why top down stress testing is important

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By Emily Li, Sageworks According to the OCC, a “top down” portfolio stress testing approach applies “estimated stress loss rates under one or more scenarios to pools of loans with common risk characteristics.” It provides an aggregate view of a portfolio or portfolio segment during stress scenarios, rather than analyzing…...

Increased regulations cause heavy workload for many CPAs

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Increasing regulatory requirements, and the many requirements already put in place, are often seen as a daily complication for CPAs and accounting firms. They are not only costly and burdensome, but very complex, leaving many CPAs spending the majority of their workday on regulatory policies. With staffing shortages and technological…...

3 risk rating best practices

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Posted by Sageworks

In Sageworks’ Bank and Credit Union Examination Survey, risk ratings were repeatedly mentioned as a key topic discussed by examiners in financial institutions’ most recent federal safety and soundness exams. [To see an updated version of this survey and the related discussion of risk ratings and examiners' concerns, download the…...

Who is responsible for stress testing?

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Though the term “stress testing” might still cause confusion, more and more examiners and bankers are beginning to accept the practice and embrace the accompanying benefits.  As more institutions implement loan portfolio stress testing, an issue that could cause problems is overarching responsibility. Who in the bank owns stress testing?…...

How does one determine if a loan is impaired?

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Under FAS 114, a loan is impaired when it is probable that a bank will be unable to collect all amounts due, including both interest and principal, according to the contractual terms of the loan agreement. Generally, a loan is impaired for the purposes of FAS 114 if it exhibits…...

FASB CECL model vs. IASB credit deterioration model, pros and cons

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Posted by Sageworks

**The FASB issued the final CECL standard on June 16, 2016. For up-to-date information and resources, access the updated CECL Prep Kit. The FASB and IASB have released separate exposure drafts, outlining their distinct, proposed plans for the recognition and reporting of credit losses. The release of these drafts marked a…...

Credit unions can build member business lending for improved exam results

Sageworks
Posted by Sageworks

Business lending has been increasing among credit unions in recent years, and with this increase has come an increased focus on member business lending (MBL) and the specific risks associated with it, according to an article in CUES’ Credit Union Management magazine. Brian McLaughlin, president and founder of Tullamore Consulting…...

Add objectivity to qualitative risk factor adjustments in your ALLL

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The qualitative risk factor adjustments are one of the most subjective parts of the ALLL process.  The nine recommended qualitative risk factors mentioned in the 2006 Interagency Policy statement is a good start. Then develop a qualitative scoring matrix, you can pick trends and have values assigned to the trends…...

About the IASB’s credit deterioration model

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Posted by Sageworks

On March 7, 2013, the International Accounting Standards Board (IASB) released a new exposure draft, Financial Instruments—Expected Credit Losses, wherein they proposed that entities should recognize and measure a credit loss allowance or provision based on either a 12-month expected credit loss or, if the credit risk has increased significantly…...

Keys to a sound member business lending program

Sageworks
Posted by Sageworks

If your credit union conducts member business lending (MBL), National Credit Union Administration wrote a must-read article discussing four critical elements of a sound member business lending program. Capital adequacy and planning Boards of directors should define their risk levels and accordingly ensure the credit union has enough capital, sometimes…...

Top priorities for CPA firms: Improve your marketing, business development

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Marketing and business development are top priorities for CPA firms recently surveyed by Sageworks. In this post, Lauren Prosser, director of ProfitCents Professional Services, explains how to improve these key strategic areas. By Lauren Prosser Previously, I described how a recent survey of CPA firms by Sageworks’ ProfitCents Professional Services…...

Leverage what you learned during busy season

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Busy season is the perfect time to learn more about your clients and their businesses. Think back to the conversations you had and what they shared with you. Did they mention any changes or concerns with their life or business?  Even if you weren’t able to spend a lot of…...

Monthly vs. quarterly calculations for your ALLL reserve

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The regulatory guidance tells us that at a minimum we have to perform a quarterly calculation. However, the advantage of doing monthly calculations is that you can accurately project how your reserve will change over a month and the quarter. These projections are coming from the work on the FAS…...

Where to find data for stress testing

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By Cathy Moore, director at Sageworks In a recent post, we reviewed what types of data should be used in stress testing, whether the institution is using a top down or bottom up approach. But, where can the analyst find this data if it's coming from disparate systems? Key loan…...

What data is needed for stress testing

Sageworks
Posted by Sageworks

For credit risk stress testing, financial institutions can choose from several different approaches, according to regulatory guidance. The most common approaches to stress testing are bottom up or top down.  For many financial institutions, bottom up stress testing may be the more useful exercise, particularly for institutions with high levels…...

What are your firm’s priorities?

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Posted by Sageworks

Accounting professionals were recently surveyed by Sageworks to identify management issues that firms consider a top priority. In this post, Lauren Prosser, director of ProfitCents Professional Services, discusses 5 different categories most important to firms.  By Lauren Prosser If your CPA firm is like most, its biggest assets are the…...

Infographic: Approaches to stress testing

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See the latest infographic from Sageworks, describing the difference between bottom up and top down stress testing approaches and explaining other acceptable methodologies.    For more information on who must perform stress tests, some of the benefits the analysis would provide, and some of the challenges financial institutions might face,…...

When should a bank start using migration analysis?

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Posted by Sageworks

Migration analysis is a rigorous analytical process recommended by the regulatory agencies to determine financial institutions’ allowance for loan and lease losses; however, it is often underutilized in lieu of other, easier processes. The purpose of migration analysis is to determine what rate of loss an institution has incurred on…...

What is FAS 5?

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Posted by Sageworks

FAS 5 refers to the original FASB pronouncement FAS 5, Accounting for Contingencies, which is included in the FASB Accounting Standards Codification (ASC) subtopic 450-20, Contingencies: Loss Contingencies.  FAS 5 is the primary, authoritative accounting document concerning the accrual of an Allowance for Loan and Lease Losses (ALLL), setting forth…...

When should you weight your historical loss rates?

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Posted by Sageworks

Regulatory guidance tells us that we can have a look-back window of anywhere between 1 year (4 quarters) to 5 years (20 quarters). Most commonly, we see institutions use a look-back period of anywhere between 8 to 12 quarters. You would weight your loss rates to be heavier on the…...

Best stress testing reports

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Posted by Sageworks

For financial institutions that are just beginning to stress test the portfolio or those re-evaluating current processes, a good place to start measuring effectiveness is the usefulness of the stress testing results or reports.  The primary benefit of stress testing reports shouldn’t be to “check a box” but instead to…...

5 Ways to uncover mid-year client opportunities

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Guest column by Lauren Prosser, Director of ProfitCents Professional Services, Sageworks Inc. Spring is a time of optimism, so it's a great time for accounting firms to look for fresh opportunities to grow the business. In this post, Lauren Prosser, director of ProfitCents Professional Services, offers five ways accounting firms…...

Should you offer business advisory services?

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Posted by Sageworks

Offering business advisory services to your clients will not only add value to the success of their business, it will also drive revenue to your firm and prevent you from competing on price. AICPA recently posted an infographic that shows 87 percent of business decision makers respect CPAs as valuable assets…...

Stress Testing- Drafting a “Battle Plan” for the CRE Portfolio

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By James Adams, Sageworks Addressing the National Defense Executive Reserve Conference in Washington, D.C., in 1957, President Dwight D. Eisenhower made a fascinating observation. “In preparing for battle,” he said, “I have always found that plans are useless, but planning is indispensable.” Even though events never materialize exactly as planners envision, the…...

Adding more value to the role of Chief Audit Executive

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Posted by Sageworks

Chief audit executives (CAEs) face countless challenges with the various regulations they must meet and with ensuring that investors have faith in the company’s numbers. Many CAEs have focused most, if not all, of their time on regulatory compliance. That focus is now shifting over to value-added services intended to…...

Assembling appropriate FAS 5 (ASC 450-20) pools

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Posted by Sageworks

In an earlier video, we discussed some of the common challenges regarding the allowance for loan and lease losses processes. In today’s video, Sageworks discusses specific challenges related to the FAS 5 pools.   From the video In terms of the pooled loan analysis, in the past it has been…...

Common pitfalls of cash flow analysis while estimating FAS 114

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Posted by Sageworks

A commonly used impairment calculation method is assessing the net present value of future cash flows from an impaired loan. As part of this calculation for each loan, the bank has to make certain assumptions when building the cash flow schedule. Here we outline 2 common pitfalls that bank accounting…...

Challenges in the estimation of the ALLL Process

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Posted by Sageworks

The Allowance for Loan and Lease Losses has been a challenging process for financial institutions over the last several years with the changing regulatory requirements. Mike Lubansky, director of consulting services at Sageworks, discusses some of the most common challenges in the ALLL process in the video below.    …...

Stand out and above your competitors

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Posted by Sageworks

It's important to know who your competition is and how you can stand out from what they offer. AccountingWEB recently posted an article that describes how to better know your competitors and what advantages they may have. These steps will include what to look for when doing your research and…...

FASB’s CECL Model: Changes that impact financial institutions

Sageworks
Posted by Sageworks

**The FASB issued the final CECL standard on June 16, 2016. For up-to-date information and resources, access the updated CECL Prep Kit. Responding to criticisms that the current allowance model does not adequately estimate losses until it is too late, the Financial Accounting Standards Board (FASB) issued a new version of…...

Allowance for loan and lease losses: Steps to reduce subjectivity

Sageworks
Posted by Sageworks

Sageworks recently hosted a dinner and discussion event, "The Allowance for Loan & Lease Losses: How to Justify Change & Remove Subjectivity." Held in Houston, Texas, the event featured Sageworks consultants and Briggs & Veselka’s David Munn. This guest post by David Munn outlines his presentation at the event, which addressed reducing…...

When it comes to cash, who you gonna listen to? Me or Warren Buffett?

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Guest post by John Calia, partner, The SCA Group No sooner than I said it, Warren Buffett made a liar out of me. I wrote an article for CFO Magazine at the end of last year titled, “Three New Year’s Resolutions Every CFO Must Make in 2013.” Top of the…...

Sageworks’ private company report released for January

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Sageworks’ monthly report on the state of privately held companies in America, released today, shows that private companies in the United States continued to increase sales and improve their net profit margins in the period ending in January 2013. Overall, sales are strong, though growing at a slower rate than…...

Five things to know about the recent FASB proposal

Sageworks
Posted by Sageworks

The Financial Accounting Standards Board (FASB) recently proposed a new model for accounting for credit losses that, if adopted, could force banks to boost their loan loss reserves and recognize losses from loans more quickly.  U.S. banks and financial institutions may have to increase their loan loss reserves by as…...

Profit margins for private gas stations below average

Sageworks
Posted by Sageworks

See more updated data on the gas station industry here and here. Gas prices continue to rise, but interestingly enough, only a small portion of the profit is actually going into the pockets of gas station owners. According to industry data from Sageworks, private gas stations have lower net profit margins…...

Changes in ALLL reserve calculations

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Posted by Sageworks

These days, you must have more than just the right answer for your ALLL reserve calculation, says Drew Roberts, President of Burton, Roberts & Meredith, LLC. In this guest column, Roberts discusses how ALLL regulation has changed and what institutions can do to improve.   3 is the new 1.5…...

Poll: 84% of institutions using Excel for ALLL calculation

Sageworks
Posted by Sageworks

What platform are institutions currently using to assist with their ALLL calculation? Sageworks recently polled over 130 financial institutions and found that 84% are using Excel, while the majority of those using third party ALLL solutions use a web-based ALLL methodology. The poll was conducted during a recent webinar, FASB's…...

3 Concerns examiners have with C&I lending

Sageworks
Posted by Sageworks

Sageworks analyst Libby Bierman and Sageworks risk management consulting staff recently conducted a webinar to discuss three concerns that bank regulators have voiced in recent months regarding increasing competitive pressures in the commercial and industrial (C&I) lending space. In this video, Sageworks staff discuss the concerns, which center on: Inexperience…...

Streamline your writing using the 9-step process

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Posted by Sageworks

In a recent post, AccountingWEB discusses how to simplify your report writing using nine easy steps.   3-8-1 Streamline Your Writing Using the Nine-Step Process How long does it take you to get your reports out? And how painful is it? No one knows better than an auditor that most…...

SBA 7A loan program

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Posted by Sageworks

In part I of the video series on niche lending strategies for financial institutions planning to shift their loan portfolios from commercial real estate to commercial and industrial loans, we discussed accounts receivable factoring and how that is one way to achieve higher profitability. Today, we discuss how banks can…...

Advising small business clients on personal guarantee negotiations

Sageworks
Posted by Sageworks

In a recent post, AccountingWEB discusses how to advise your business owner clients about personal guarantees and what choices they have. A personal guarantee is almost impossible to get around when signing a commercial loan, but there are a few things your clients can do before signing.  Advising Small Business…...

Accounts receivable factoring: A niche C&I lending strategy

Sageworks
Posted by Sageworks

The slow growth economy has prompted many financial institutions to shift their loan portfolio from commercial real estate to commercial and industrial loans. However, these institutions face a challenging market landscape, weak loan demand from qualifying borrowers and regulatory scrutiny. To help overcome some of these challenges, Justin Barr, president…...

12 Metrics CPA firms should track

Sageworks
Posted by Sageworks

Lauren Prosser, Director of Professional Services, Sageworks Inc., wrote a recent guest column for AICPA discussing the key metrics firms should measure to operate at its highest efficiency.    The Defining Dozen: 12 Metrics CPA Firms Should Track This time of year, CPA firms are thinking and planning ahead for their…...

Potential risks for institutions new to C&I

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Posted by Sageworks

  Since more banks and credit unions have started to expand their C&I portfolios, the subtleties that come with C&I lending could expose banks to several, specific risks if they lack experience and resources. Different data sources. For financial institutions accustomed to consumer or development loans, C&I loans require a…...

Achieving profitable C&I loan growth in today’s economy

Sageworks
Posted by Sageworks

This guest post by Justin Barr, President of BankDATAWORKS.com, summarizes his presentation on niche commercial & industrial loan strategies for financial institutions that are working in today’s market. The New Normal: How to Achieve Profitable C&I Loan Growth in Today’s Economy was the most recent webinar in Sageworks’ 2013 webinar…...

“Raising” a strong credit culture

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Posted by Sageworks

Creating an effective credit culture within your financial institution is a lot like raising a child, says Ancin Cooley, Principal of Synergy Bank Consulting. In this guest column, Cooley discusses four integral components that can transform your credit risk culture. Cultivating an effective credit culture: Four key components By Ancin Cooley…...

The future of credit unions’ Allowance for Loan Losses (ALL) estimates

Sageworks
Posted by Sageworks

Too much? Too little? Or just about right? That’s the Goldilocks-like quandary that credit unions are facing with respect to calculating the Allowance for Loan Losses (ALL), according to a recent column published on CreditUnions.com. Credit union executives should be aware of the possibility of major changes to the ALL…...

4 “Risky” questions to ask about risk-weighting methodology

Sageworks
Posted by Sageworks

Written by Shea Dittrich, director at Sageworks With the proposed changes to the risk-weighting methodology, regulatory agencies are moving towards an approach that measures capital by risk. This new method allows banks to implement strategic plans—what concentrations in which to focus lending, for example—that take into account their business objective and…...

Compensation trends in commercial lending

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Posted by Sageworks

Want to achieve higher growth and returns on investment from your commercial lending operations? Results from the 2012 Crowe Financial Institutions Compensation Survey suggest that one important tool for doing so may be better use of incentive compensation. The ABA Banking Journal recently published a summary of the survey’s findings…...

Five traits future community bank CEOs must possess

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Posted by Sageworks

Financial institutions looking for their next CEO often have difficulty finding the perfect candidate, says J. Timothy O’Rourke, President and CEO of Matthews, Young & Associates, Inc. In this post, O’Rourke describes traits that community bank CEOs must possess in 2013. Finding your institution’s next CEO By J. Timothy O’Rourke…...

It’s a great time to be an internal auditor

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Posted by Sageworks

AccountingWEB recently posted a study that discusses salary growth for internal auditors in 2012. Increasing regulatory compliance demands are said to be the main reason for this growth with those specializing in information technology, fraud and forensics seeing the highest salary increases. Internal Auditors See Steady Rise in Pay By Frank…...

Cross-sell more services this tax season

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Posted by Sageworks

Too busy to sit and talk with your clients during tax season? In a recent post, Kreston International discusses how you can prepare for a meaningful conversation with your clients and offer more services without taking up too much of your time. Marketing New Services During Tax Season Does your firm…...

Sageworks ALLL: improving ALLL efficiency

Sageworks
Posted by Sageworks

Sageworks recently polled financial institutions that use Sageworks ALLL, our allowance for loan and lease losses solution, for their reserve calculation. From the survey, we received some positive news about how this solution is helping banks and credit unions reduce the time required for the ALLL estimation while also reducing…...

How client sharing can grow your accounting firm

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Posted by Sageworks

In a recent post featured by Accounting Today, Sarah Johnson, Chief Growth Strategist with Inovautus Consulting, discusses the benefits of sharing clients to secure you firms future success. Should your firm take on this process? Why sharing clients is caring...and can help you grow By Sarah Johnson, Inovautus Consulting Transitioning…...

What the FASB proposal means to financial institutions

Sageworks
Posted by Sageworks

In a recent post, we described what the recently released FASB proposal regarding the expected loss model for the allowance for loan and lease losses and the potential impact this will have on financial institutions. But how should financial institutions begin to prepare, and what should they do now? Download…...

FASB proposes major revisions to accounting for credit losses

Sageworks
Posted by Sageworks

For the past few years, the Financial Accounting Standards Board (FASB) has been discussing the adoption of the “expected loss model” for the Allowance for Loan and Lease Losses (ALLL). On December 20, 2012, FASB issued a Proposed Accounting Standards Update that finally defines the actual accounting framework and clearly…...

Member business loan cap for credit unions

Sageworks
Posted by Sageworks

If a business needs a loan, the business owner’s first stop will most likely be a traditional bank. But if S. 2231/H. R. 1418, the Credit Union Small Business Lending Enhancement Act is enacted, the local credit union might become another option for the loan-seeking business owner. It's not that…...

Mergers & acquisitions: Proper communication is key

Sageworks
Posted by Sageworks

Building a strategic plan to properly handle communication throughout your institution during a merger is critical, says Lauren O’Connell, President of O’Connell Consulting Group. In this post, O’Connell discusses some things to keep in mind when creating your plan. The telephone game and mergers By Lauren O’Connell When you were…...

Lending environment changes, room for a PD Model

Sageworks
Posted by Sageworks

Starting with the financial crisis, there has been a decided shift in the lending environment. Banks and credit unions with commercial lending have turned away from Commercial Real Estate loans (CRE) in favor of Commercial and Industrial Loans (C&I). If the C&I portfolio is well managed, it can be a…...

Retailers managing inventories

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Posted by Sageworks

A one-week strike at the Ports of Los Angeles and Long Beach ended last week, bringing a sigh of relief to retailers in the thick of replenishing goods for the holiday shopping season. News reports had indicated the work stoppage had some retailers worried about their ability to replenish hot-selling…...

Qualities clients look for in a CPA

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Posted by Sageworks

This guest post by AccountingEDU.org, discusses important qualities that not only sets a CPA apart, but also helps develop a trusting relationship with clients that will last for years.   7 Traits Clients Look for In a CPA Finding a good CPA is a lot like finding a good contractor or a…...

Professional skepticism in the audit process

Sageworks
Posted by Sageworks

In the Staff Audit Practice Alert Number 10, issued on December 4th, 2012, the Public Company Accounting Oversight Board (PCAOB) recognized and emphasized the need for all audit firms to apply professional skepticism. They define professional skepticism as “an attitude that includes a questioning mind and a critical assessment of…...

Accounting firms transition to value pricing

Sageworks
Posted by Sageworks

In a recent blog featured by the AICPA, Jim Boomer, CIO of Boomer Consulting, Inc. explains how and why many accounting firms are transitioning to “Value Pricing” from other billing strategies. What does this involve? And how could it help both the firm and its clients?   Billing: Where's the…...

Applying for a business loan? Why personal finances and credit scores matter

Sageworks
Posted by Sageworks

Many business owners are required to submit their personal finances and credit scores for commercial loan applications, but why? In most cases, the owner is the guarantor for the loan and either contributes or receives income from the business. In addition, it is common especially for sole proprietors, to mix…...

Survey: Cash accounts would shift if special FDIC insurance ends

Sageworks
Posted by Sageworks

More than half of the financial professionals in a recent survey said they expect to move at least some of their organizations’ cash and short-term investment portfolios from non-interest bearing bank accounts if unlimited FDIC insurance expires at the end of the year, according to the Association for Financial Professionals.…...

Asset quality improves, banks remain cautious: CEIS survey

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Posted by Sageworks

Most banks have continued to show improving trends in terms of asset quality, levels of criticized and classified loans, and nonaccrual and delinquency rates, according to the new 2012 Q2 Client Survey conducted by CEIS Review. The survey also found that the industry remains conservative in terms of new originations.…...

5 Year-end business tax tips to consider now

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Posted by Sageworks

  Guest column by Lauren Prosser, Director of Professional Services, Sageworks Inc.   A recent Gallup survey found eight in 10 Americans consider it extremely or very important that Congress and President Obama agree on a plan to avoid the so-called fiscal cliff -- automatic budget cuts and the expiration…...

5 Steps for improving commercial loan presentations

Sageworks
Posted by Sageworks

Breaking into the commercial lending paradigm to improve your commercial loan presentations can be difficult, says Gary Welsh, Banking Services Manager at Condley and Company, a leading bank advisory and full service accounting firm. In Part 2 of this guest column, Welsh provides five suggestions to help get things right the…...

Sageworks to host allowance for loan and lease losses forum

Sageworks
Posted by Sageworks

On December 3rd and 4th, Sageworks will host an ALLL Forum for banking associates and industry experts. The forum will feature in-depth discussion regarding allowance for loan and lease losses (ALLL) calculations, Q&A with ALLL experts, best practices for managing the reserve, recent enhancements to Sageworks’ ALLL solution, and an…...

3 Quick tips to establish small business credit

Sageworks
Posted by Sageworks

Many small businesses have trouble attaining lines of credit or loans because they don’t have established credit scores.  The Catch-22 is that you need successful transactional histories to increase credit scores, but most suppliers and vendors are hesitant to conduct business on credit if your credit scores are too low…...

Basel III and community banks

Sageworks
Posted by Sageworks

Basel III can be a touchy subject for community banks and rightfully so given the new requirements with which they’d have to comply if Basel III is implemented for these banks. In an article featured in American Banker, a consultant in the industry explains what could happen if community banks…...

Companies conducting self-evaluation

Sageworks
Posted by Sageworks

When a company is evaluating its own financial health to plan for growth or for a downturn, an assessment of the company’s current situation and the probability of default helps create a more complete picture. The same is true for a company that is considering applying for a loan. Knowing…...

Getting loan presentations right the first time

Sageworks
Posted by Sageworks

The key to clear, complete and concise commercial loan presentations is beginning with the end in mind, says Gary Welsh, Banking Services Manager at Condley and Company, a leading bank advisory and full service accounting firm. In Part 1 of this guest column, Welsh elaborates on the concept and how to…...

Tax season preparation

Sageworks
Posted by Sageworks

Featured first in Accounting Today. Chris Frederiksen, chairman and CEO of the 2020 Group and a partner of ProfitCents, recently spoke with Accounting Today and suggested what accountants can do now to prep for a more successful 2013 tax season. Invest in a decent scanner. You can’t rely on someone…...

Why maintain a healthy business credit relationship

Sageworks
Posted by Sageworks

Drive down any major road, and at some point you could run into trouble: A wreck that has shut down traffic, construction causing delays, or a dangerous object in your lane you must swerve to miss. Obviously, your best chances of avoiding a major problem are when you have warning…...

ALLL: Under scrutiny from regulators and accountants

Sageworks
Posted by Sageworks

With the high level of attention and scrutiny around the allowance for loan and lease losses (ALLL) during the past few years, it’s no wonder that there may be some confusion between the different parties involved: bank management, examiners, and the accounting firms that sign off on the reserve and…...

Ensuring the creditworthiness of partners

Sageworks
Posted by Sageworks

Uncertainty remains the mood of the day, with surveys showing that a sizable portion of private companies are worried that a potential lack of demand is the top barrier to growth. Business owners must protect themselves against financial and operational risks, even as they balance the need to service customers…...

Strategic first steps to control your institution’s destiny

Sageworks
Posted by Sageworks

Whole-system planning is imperative for a financial institution’s strategy development, according to John Oliver, President of Laurel Management Systems, Inc. In Part II of this guest column, Oliver discusses some starting points for effectively implementing whole-system planning in order to take control of your institution’s destiny. Strategy development to ensure…...

Factors that affect small business credit

Sageworks
Posted by Sageworks

Many small private businesses are finding it challenging to access financial resources for growth at a time when lenders are still cautious and facing pressure to avoid risky loans. Many businesses already know this, because they have seen their borrowing requests rejected by a lender. Others may be considering starting a…...

Run a better bank: 4 Key steps to build a staffing model

Sageworks
Posted by Sageworks

This guest post by John Owens and David Harrop, founders of BCI Financial Services Consulting, summarizes their presentation on how to improve productivity and efficiency through benchmarking and staffing models. Run a Better Bank: Using Productivity & Efficiency Metrics to Improve Profitability was presented as part of Sageworks' webinar series.…...

Bankruptcies’ pressure on lenders and borrowers

Sageworks
Posted by Sageworks

It has become critical for businesses of all types and for lending institutions to spot signs of financial sickness before they are fatal. “If you have a business relationship with another firm and that firm goes under, that can have an adverse impact on your business and your ability to…...

Look to the future – not the past – for future success

Sageworks
Posted by Sageworks

The key to a financial institution’s future success is recognizing that an evolving market translates into a need for proactive, continuous planning from the bottom-up, says John Oliver, President of Laurel Management Systems, Inc. In Part I of this guest column, Oliver elaborates on the importance of whole-system planning. Strategy…...

Different options for assessing default risk

Sageworks
Posted by Sageworks

Options for Assessing Default RiskOptions for conducting financial due diligence and for assessing default risk are numerous, though many of the methods have shortcomings.Qualitative MethodsOne of the most basic and informal ways companies can evaluate another business is to check credit references. Many companies do this. Indeed, checking credit references…...

Business credit: Making informed credit decisions

Sageworks
Posted by Sageworks

Private companies pose unique challenges for banks and others trying to quantify the credit risk associated with those companies in an automated and standardized manner. Since privately held firms aren’t required to share financial information with outsiders, the number of parties with access to accurate, detailed information about the business…...

Who should look at business credit?

Sageworks
Posted by Sageworks

In today’s uncertain economic times, businesses have to be more cautious about who they do business with. Businesses have countless suppliers and moving parts, how is a business owner supposed to identify a singular high-risk area? To help business owners, Sageworks has identified multiple scenarios where a business should conduct…...

Businesses reducing credit risk in tough economic times

Sageworks
Posted by Sageworks

Recent challenges in the U.S. have bolstered the need for examining credit risk. The financial and operational risks to business owners are evident in several statistics. Business bankruptcies peaked at nearly 61,000 in 2009, and they have declined to around 47,000 in 2011. However, the 44,435 business bankruptcies that have…...

CPA firms: What are your competitors focusing on?

Sageworks
Posted by Sageworks

By: Craig Weeks of CPA Profit Plus and Sageworks, Inc. Scenario:  You are an accountant with management responsibility in a small to medium size firm.  You understand the idiosyncrasies related to your practice and the surrounding locale, but when it comes to longer term management strategies it often feels like…...

What is your ALLL I ‘Q’?

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Posted by Sageworks

ALLL Methodology: How to Justify and Document Your Qualitative Factors  By: Ancin Cooley Did you know that the most common exam issues related to Qualitative Factors are inadequate portfolio segmentation (i.e. geographic area), lack of directional consistency, and poor documentation? This post will test your knowledge (and sense of humor)…...

How to balance and improve CAMELS ratings: Efficiency and transparency

Sageworks
Posted by Sageworks

As explained in a previous post, the CAMELS rating is a measure of a financial institution’s riskiness based on the bank’s financial statements. The rating includes an assessment of several, interrelated components within the financial institution so a change in one component can impact—sometimes negatively—a bank’s rating in another component.…...

How to balance and improve CAMELS ratings

Sageworks
Posted by Sageworks

For the average banker, the word "camels" may evoke the image of the beloved, desert-living transportation device, but it could also evoke memories of their institution’s last regulatory exam. The CAMELS rating is a measure of a financial institution’s riskiness based on the bank’s financial statements. Examiners assign ratings, based on…...

Update on the health of private U.S. companies