One of the best things about my role as a certified public accountant in a vibrant economy such as Massachusetts is how I get to meet and work with companies of all sizes, across a broad range of industries. Like most people reading this blog, I’m an avid consumer of information and love to share what I read. While I have not been blind to the past 18+ months, and I understand the basic principles of macro-economics, I’ve often pondered where the economists get their data. To be sure, there are exceptions to every observation, but the vast majority of MFA’s clients and prospects that I’ve spoken to have found success despite the recession. In some cases, success may be measured by results that beat otherwise dismal 2009 budgets by a wide margin, whereas others saw revenue growth during 2009 of 20% to 400%, and still others were successful in raising significant new rounds of equity capital on terms favorable to the company. Admittedly, cost cuts were made in many cases as the recession first settled in, and the job market has yet to recover in many cases, but when I look around at all the anecdotal evidence that I see on a daily basis, I’m sometimes left wondering who exactly the recession has hit so hard.

Perhaps I am a greater optimist than others, and am looking at things with rose-colored glasses, but a Q1 survey conducted by Financial Executives International took the temperatures of CFOs nationwide, and got some encouraging results.  While they’re not exactly dancing on the grave of the recession, those surveyed did seem to feel that signs of growth are visible and that their own companies have reached or are close to reaching a turning point. The survey centered on FEI’s “CFO Optimism Index,” which indicated a slight improvement over Q4 2009, but a significant jump from the all-time low when the glass was decidedly half empty in Q1 2009.   A press release on the survey notes that “significantly, CFOs are predicting double-digit percentage increases over the next 12 months in net earnings (26%), revenue (13%), capital spending (13%) and technology spending (10%).”

Now that’s optimism! Perhaps this has something to do with the third and fourth quarters during 2009, where I personally saw most of the positive 2009 data points. And the most recent Q1 didn’t look too shabby either (though not as great as Q3 and Q4 of last year!). I’m sure it also helps that the stock markets in general have been showing continued improvement over the course of the most recent trailing twelve months.

Do you believe the survey accurately reflects the situation today?  Is it just my sunny disposition talking, or are you also seeing positive signs? I’d be fascinated to hear from others on this subject.

An Accounting Today post pointed us to a link worth sharing: the IRS’ new informational pages on the small business health care tax credit.  The pages walk through the process of applying for the credit, has a frequently asked questions link, and spells out the eligibility rules such as:

- Providing health care coverage. A qualifying employer must cover at least 50 percent of the cost of health care coverage for some of its workers based on the single rate.

- Both taxable (for profit) and tax-exempt firms qualify

- Firm size. A qualifying employer must have less than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible).

- Average annual wage. A qualifying employer must pay average annual wages below $50,000.

- Both taxable (for profit) and tax-exempt firms qualify.

With the seemingly constant focus on health care, this credit should be a positive for qualifying businesses.

Employee Benefit Plans have become a greater area of concern for the Massachusetts Division of Unemployment Assistance, especially with regard to the “fair share contribution” (FSC) requirement of the Massachusetts Healthcare Reform Act.  Employee Benefit News published a comprehensive piece on how the increase in audits is showing that many employers are coming up short despite their efforts and intentions.

The article is worth a read in its entirety, but I wanted to call out one section that summarizes the test to help guide compliance of FSC:

(1) Threshold coverage: Does the employer employ 11 or more full-time equivalent employees in the Commonwealth for the relevant testing period? If the answer is no, then the employer is not subject to the FSC requirement and need not pay an annual fair share employer contribution to the Commonwealth.

(2) FSC testing: If the answer to Part 1 is yes, then the following tests are applied: (more…)