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THE BUSINESS OF ACCOUNTING

I was recently asked to participate in a roundtable discusson on The Business of Accounting sponsored and published by the LosAngelesBusinessJournal.Belowareafew,poignantexcerpts regarding the current state of business and trends in the marketplace, from that published dialogue. State of the Economy Economic conditions continue to be challenging, especially when it comes to growingrevenue.Costsavingsisstillparamount to being successful, as everything has become negotiable.Everybusinessmustunderstandwhatdrives their profit, and make every attempt to differentiate themselves in their respective market. Cash Flow Cash is Kinghas never been a truer statement. Businesses are self-financing more than ever and using credit lines less, in order to truly have an emergency fund available. Accounts receivables and inventory are twoareasthatneedtobemonitoredtightly.Cashallowsyoutoprofit from other peoples mistakes. Use of Technology Havingastrongtechnologyplatformenablesbusinessestobemoreproductive and achieve acompetitiveadvantage.Favorabletaxlawshelpcreatethecashneededtoinvestin technology (and other capital expenditures). Challenges The lukewarm credit market continues to hamper operations and expansion plans. Less predictable commodity pricing is also creating tremendous uncertainty, especially in industries that utilizethelongtermbidprocess.Doyourhomeworkandhavecontingencyplans. International Commerce First came cost reduction by replacing domestic buying and manufacturing operationswithoffshorepurchases.Nowitisrevenuedriven,asoverseasmarketsare growing faster than our domestic market. Federal, State and Local Regulations California is and will continue to be one of the most regulated states.Regulationschangeoftenwithlittleconcernontheirimpactonbusiness.Feesarecreatedas agencies scramble to post results to justify existence at current staff levels. California Tax Changes With our state deficit, it is either raise taxes or cut back on expenditures withthebiggestonebeingstatepayroll.Thelatterismoredifficultduetothe influence of labor unions, so plan for increased taxes at the corporate and/orindividuallevel.Alwaysbelookingfor ways togetyourshareoffederalandstatetaxincentives.Payonlywhatyoulegallyhaveto! Accounting Firm Choice Its all about the people you work with having knowledge in your industry and, most importantly, the ability to turn that knowledge into useful advice delivered in a proactive and timely manner. As one client told me, fees are secondary to knowing your firm (SingerLewak) is watching our back at all times. If you would like a copy of The Business of Accounting special section of the LABJ or would like to ask us for more insight, please do not hesitate to contact me .

David Krajanowski, CPA Managing Partner