THE CPA MANAGER

July 2000

INTERNATIONAL OPPORTUNITIES FOR SMALLER CPA FIRMS ON THE INTERNET

By Carl R. Borgia and Barbara E. Shrager

The Internet is a cost-effective way for a smaller firm with a limited marketing budget to procure new clients in the global marketplace. Attracting new clients through a website is possible because almost every business now uses the Internet for part of its information-gathering process. The Internet is a way to gain insight into competitors, trends, and resources and a way to conduct business.

When a professional services firm develops a website that clearly identifies and presents its strengths, potential clients can learn about the firm's skills and offerings at the precise moment they are in "buying mode." This parallels the yellow pages approach of providing information at the exact moment a service or product is needed.

A business interested in obtaining the right answers and achieving efficient results is likely to consider working with a firm, regardless of its size, if it can provide the needed expertise in a timely manner. Any accounting firm, for example, can take advantage of daily tax update services. But because smaller firms tend to have lower overhead, they can charge lower fees and provide highly personalized service.

Attracting Prospective Clients

Creating and maintaining a website generally costs much less than running a print, radio, or television advertising campaign. Large-scale direct-mail and telephone techniques present significant challenges for international marketing. In contrast, a website can reach a large population of prospects at possibly the lowest cost-per-exposure available. Perhaps the best aspect of promoting services on the Internet is that visitors to a site are there because the firm offers a service for which they have searched.

Various techniques can attract prospects to a website. The following are suggested:

* Register with the major search engines and web directories, and use intuitive keywords to help users find the site. Search engines organize websites into categories and often search for specific words in the opening paragraph of a web page. Some search engines start with top-level categories and let the user "drill down" to increasingly specific topics.

* Include web and e-mail addresses in all communications. Start with business cards and letterhead. Include the web address in the firm's article reprints, newsletters, and advertising and promotional material, print or broadcast. Rather than explaining all its capabilities fully in print materials that quickly become outdated, a firm can produce smaller brochures that direct prospects to the website. Because the Internet can be updated quickly and cost-effectively, information can be revised whenever changes occur.

* Consider new ways of sending out information. Develop a database of e-mail addresses to promote the firm to prospects that request an online newsletter and other updates that a site can provide. Use good judgment, because too much unsolicited e-mail can turn off prospects.

* Take advantage of other websites. Cultivate partnerships with professional associations and other businesses by hyperlinking to their websites.

Building an Effective Website

Whether a firm's focus is domestic or international, the website should present an appropriate corporate image, be easy to navigate, and contain information that appeals to the specific interests of prospective clients. Within these parameters, a website can be as simple or as complex as a company's goals and budget warrant.

A model site is content-driven and provides practical information that changes regularly. In addition to updates about accounting trends and regulations, a firm can establish a more aggressive presence by conducting online seminars on international specialty areas, running Q&A sessions, or offering limited, no-cost consulting services. A common practice is to provide an interactive section of the site that allows prospective clients to get a feel for the extent to which the firm shares their interests and attitudes.

A more advanced website will use a private network or a dedicated high-speed line that allows accounting work to be performed online. As part of a business pitch, a firm could include an online demonstration of its accounting procedures and documents and provide examples of its fee-based consulting services. The site could assure potential clients that account information is transferred and stored in an electronically secure and speedy manner. Maintaining privacy requires safeguards such as encryption, password protection, and backup account logs.

Firms seeking and serving international clients should also consider culture and language issues. Translation software is readily available and easily implemented, allowing users to view web pages in various languages; however, an effective website does more than that. The firm should tailor all text on the site to the languages in which the site appears, learn about cultural differences in how technology is used, and manage the website accordingly.

Small firms usually rent server space from a third-party ISP (Internet service provider). In a second phase of growth, the website can become more sophisticated and interactive, and increased traffic will make it more cost-effective for a firm to own its own servers. In a third phase, firms use the web to conduct significant business transactions.

Managing a website requires a commitment to review and update the site continually to keep it fresh, informative, and accurate. High quality, innovation, and consistency are requisites. Queries to a website's interactive elements must be answered promptly because the immediacy that Internet access provides creates the expectation of a quick response. A site that cannot accommodate a high volume of visitors trying to connect at one time is not doing its job.

The Internet as Client Management Tool

The Internet is an excellent way of managing client relationships. The following are benefits of online client management:

* Organization. Transferring and storing data in paper form is cumbersome and at times, clumsy. Many accounting firms are moving toward the paperless office. Electronic files can be retrieved at a moment's notice, removing the massive bulk of paper generated by hard copy and simplifying the process of locating documents.

* Speed. The Internet can be used to send financial documents anywhere in the world in seconds. Shipping documents overseas generally takes at least two days. The Internet shaves valuable time off each end of a transfer session.

* Cost-effectiveness. While maintaining a proprietary server or engaging an ISP does cost money, each data transfer costs the same as a local phone call, saving the firm and the client shipping and travel costs.

* Convenience. Clients' financial documents can be transferred in the file formats in which they were created. Moreover, a firm could allow a client to review current financial information online at any time.

* Security. Sending confidential client information by regular overnight mail is a sensitive issue. A security breach is more likely in a conventional information exchange than in an electronic information exchange. Packages can be lost or opened en route. Transferring client information electronically is actually more secure, because financials can be encrypted when sent, stored in an electronically secure area, and password-protected.

Common Concerns and Their Solutions

Valid concerns exist regarding how to safely do business online. The following are some of these concerns and responses to them:

* Psychological barrier. In all business relationships, building trust depends upon the firm's ability to impart a sense of reliability, professionalism, and skill. The firm must educate clients so that they are comfortable working over the Internet.

* Reliable connections. Although the Internet is the fastest way to send information, connectivity can be lost due to problems with a firm's or a client's local ISP. Service outages tend to be rare because the Internet itself has built-in backups for rerouting information.

* Delivery confirmation. An advantage of traditional shipping methods is confirmation that material was sent and received. Typically, e-mail does not produce a transmission receipt as with a fax. However, many communications protocols can be set to confirm every time an Internet transmission is successfully delivered to the recipient. If a document is undeliverable, an error code tells the sender that something went wrong.

* Security issues. Not all secure mechanisms are accepted worldwide. For example, the most powerful digital encryption standards cannot be exported from the United States. There are less secure encryption methods that are more universally accepted. However, the majority of international online banking and commerce is conducted securely and with great success.

After the Introductions

The Internet has evolved into a useful, accessible tool for research and marketing. A website enables more prospects to learn about a firm's services and determine how well the firm's skills and style match their needs. However, technology does not replace what happens after the research and introductions. In the long run, securing and maintaining clients relies first and foremost on consistent delivery of professional service and exceptional results. *

Carl R. Borgia, PhD, CPA, is an associate professor of accounting at Florida Atlantic University.
Barbara E. Shrager, PhD, ispresident of Attainment Marketing Partners, Inc., in New York City.

Editor:
Thomas W. Morris
The CPA Journal

The CPA Journal is broadly recognized as an outstanding, technical-refereed publication aimed at public practitioners, management, educators, and other accounting professionals. It is edited by CPAs for CPAs. Our goal is to provide CPAs and other accounting professionals with the information and news to enable them to be successful accountants, managers, and executives in today's practice environments.