An international accent: one firm took a radical turn from traditional services to a focus on the Latin American market.What an a firm do in the face of increasing competition for traditional services clients? Sotomayor & Co., a 14-person firm in Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, , transformed its practice to take advantage of the opportunities available to CPAs who understand the growing market for CPA (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000. services in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. . Economies in the region are flourishing, which means that businesses and CPA firms in Latin American countries List of American countries Nations:
A RADICAL DEPARTURE Ivan J. Sotomayor came to the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. from Ecuador when he was 16, receiving his formal education in this country. Despite Sotomayor's heritage, his professional efforts were not always directed toward Latin America. Even four years ago, his firm performed mainly traditional services for local U.S. businesses. However, Sotomayor began to notice two troubling developments. First, he saw that companies outside the profession were beginning to compete for clients like his own, turning professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. into commodities. He also worried about the increasing competition among CPA firms. "There is a commercial street here called Ventura Boulevard Ventura Boulevard is one of the primary east-west thouroughfares in the San Fernando Valley; as it was originally a part of the El Camino Real (the trail between Spanish missions), Ventura Boulevard is the oldest route in the San Fernando Valley. It was also U.S. that passes through about seven cities Seven Cities may refer to:
Sotomayor chose to make a drastic change in his firm's business. Up until about three years ago, a large part of his practice was made up of trust tax work performed for banks, an outgrowth of his early experience managing a trust tax department for a large bank. Despite his extensive background and contacts in the field, he found the pressure to lower fees as competition intensified in·ten·si·fy v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies v.tr. 1. To make intense or more intense: was an overwhelming reason to exit this niche. To reposition his firm, Sotomayor resigned his unprofitable trust tax engagements. "We lost a substantial amount of billings, but we believed it was necessary." He thought the business would be lost to the competition sooner or later and preferred to orchestrate or·ches·trate tr.v. or·ches·trat·ed, or·ches·trat·ing, or·ches·trates 1. To compose or arrange (music) for performance by an orchestra. 2. his own transition rather than have it forced on him. The firm reallocated resources and invested money and time in new areas. The change affected firm personnel as well. A partner in the trust area, as well as staff members, left to go to a large firm. They were replaced with people who had experience in either international business or in health care. Sotomayor had decided the firm would focus on the latter service both in the United States and in Latin America. His reasoning for choosing the two specialties was simple. "In these areas, there was not that much competition and no reason for large companies outside the profession to try to compete." For example, while a large financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. company might want to get involved in trust taxation work because of the related investment business opportunities, health care management is too complicated a discipline for a corporation not already specializing in that field. On the international side, Sotomayor believed a small firm would always be able to find a niche because personal relationships are so important in Latin American culture Latin American culture is the formal or informal expression of the peoples of Latin America, and includes both high culture (literature, high art) and popular culture (music, folk art and dance) as well as religion and other customary practices. . To effect its transition, the firm hired a principal with 20 years' experience in health care. Sotomayor also continued his membership in associations, such as the National CPA Healthcare Network, which offers seminars and conferences and the use of resources among the 34 U.S. member firms. "We didn't have to reinvent the wheel (jargon) reinvent the wheel - To design or implement a tool equivalent to an existing one or part of one, with the implication that doing so is silly or a waste of time. This is often a valid criticism. ," he notes. "They provided us with all the information we needed about this field." Most of the firm's U.S. engagements in that area involve helping doctors and hospitals with business management and adapting to new payment systems. To broaden his international practice, he has made good use of joint ventures with other CPA firms or businesses. "We are a small firm, so we don't have the staff to service every industry," he says. By sharing knowledge and experience with a local firm in the region--or with a U.S. business with specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. Latin American expertise--Sotomayor's firm has been able to lengthen length·en tr. & intr.v. length·ened, length·en·ing, length·ens To make or become longer. length  en·er n. its reach.
For example, it has teamed with a firm that performs marketing research
in Latin American countries to provide marketing consulting for clients.
SERVICES TO TWO CULTURES These are the kinds of services that Sotomayor's firm provides to Latin American clients: * Serving as a U.S. accounting and consulting resource or companies with international ambitions. "Major changes are taking place in the economies of Latin American countries," Sotomayor says. "Companies there are trying to institute contemporary management techniques." At the same time, due to the business upturn, "more clients want to have a presence in the United States, mainly because they eventually would like to get financing from the U.S. investment banking community and to be closer to the fast-growing Hispanic market in the United States." The firm assists those businesses with their U.S. activities. In many cases, this is done through a joint venture, as was the case when a large firm in the Dominican Republic Dominican Republic (dəmĭn`ĭkən), republic (2005 est. pop. 8,950,000), 18,700 sq mi (48,442 sq km), West Indies, on the eastern two thirds of the island of Hispaniola. The capital and largest city is Santo Domingo. asked Sotomayor's firm to serve as the U.S. accountant for a client. The U.S. firm also gives and receives referrals through contacts in organizations such as the Inter-American Accounting Association (Sotomayor chairs the AICPA AICPA See American Institute of Certified Public Accountants (AICPA). delegation to the IAA IAA abbr. indoleacetic acid Noun 1. IAA - a plant hormone promoting elongation of stems and roots indoleacetic acid auxin - a plant hormone that promotes root formation and bud growth 2. and is also a member of this organization's executive committee), which has members in 23 countries in the Americas. * Working with newly privatized health care concerns. Sotomayor's firm and one in Colombia are launching a cooperative health care consulting practice, a specialty Sotomayor also offers to U.S. clients. "Latin American countries have gone through major changes in terms of moving away from government control of this area. They are privatizing everything." As a result, hospitals and other health care entities are anxiously seeking advice in accounting and auditing. In the joint venture, the firm will advise on hospital financial audits, which are now necessary because of a government effort to place effective controls on newly privatized entities, Sotomayor says. The local firm will supply knowledge of the home country's accounting and auditing standards, while Sotomayor's firm will offer experience in implementing good accounting practices and in working with private-sector health care entities, a new breed of business in Latin America. "Although they have their own rules, they want to use the control methodologies used in the United States." Another part of this niche will involve helping hospitals and clinics to implement internal control systems to provide more reliable and worthwhile financial systems. Sotomayor notes that because fraud and corruption have been problems in some sectors of Latin American economies, there is now a push to introduce controls to prevent them from reemerging. * Helping businesses adopt international standards or convert their financial statements into U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). . "We see a growing demand for conversion to international standards," Sotomayor says. "Some countries have adopted them as their own," so Latin American companies turn to U.S. firms for help in understanding methods and applications for these standards. "Firms with a good handle on international standards and how they relate to U.S. standards will have a great market waiting for them," he predicts. * Assisting businesses to achieve ISO (1) See ISO speed. (2) (International Organization for Standardization, Geneva, Switzerland, www.iso.ch) An organization that sets international standards, founded in 1946. The U.S. member body is ANSI. 9000 certification. Many U.S. companies have this certification, an internationally recognized benchmark used to assess the viability of quality control systems. Because U.S. businesses often require that their trading partners be certified See certification. , Latin American companies are working to gain certification, especially since the economic upturn in that part of the world began three years ago. Although his firm doesn't offer this service, Sotomayor also notes that Latin American companies often seek systems consulting help from more experienced U.S. consultants because they are racing to bring their systems up to speed. A BOUTIQUE Boutique A small investment firm specializing in offering specific, but limited services to a select number of individuals. Notes: These investment firms are the alternatives to large financial supermarkets. They provide a highly personalized environment for investing. WITH A FUTURE After four years as a boutique, the firm is now reaping the benefits of its transformation. How can other CPAs achieve similar success in the emerging economies of Latin America? "My advice is to learn the language," Sotomayor says, "but I don't just mean the words, especially since English is the business language used throughout the continent. I mean the culture." As an example, he cites the completely different work rhythms experienced in the United States and in Mexico. "In Mexico, workers get into the office at around 9 or 9:30, work until 1, take a three- to four-hour lunch and then work until 10 or 11 at night. I adapt to their culture when I'm there. I also tell my Mexican clients and friends about how different the U.S. work schedule is." Noting the important differences in the economies, products and cultures among the 23 countries in the Americas, he says CPAs should make well-informed choices about the best practice development candidates. Once the field has been narrowed, the best route for practice development is to join a trade or professional organization that focuses on the chosen country or industry. Besides offering networking opportunities, Sotomayor says, associations are excellent vehicles for learning more about various cultures from natives or from Americans who have lived abroad. "Organizations can give you an introduction to ways of doing business in different countries, their cultures and their sensitivities." Trade and professional organizations exist for all regions of the world, so this is good advice no matter what a firm's international focus might be. Sotomayor is involved in the IAA, the California Society of CPAs global opportunities committee and the Latin Business Association. "Join an organization and make yourself visible," he advises. "Especially in Latin America, you have to develop personal relationships. The people there find it very hard to do business only on the telephone, as opposed to how we work here." He estimates that he spends about 20% of his time traveling. He also keeps his visibility high by serving as a guest speaker on Latin American business for various associations that focus on Latin American business. "Most people involved in these organizations are at the top of their profession in the various countries. Get to know them, get a feeling for how they do business. The members usually develop very close relationships," which Sotomayor attests is the first step into the flourishing Latin American business community. RELATED ARTICLE: Problem: Increasing competition for traditional services clients from inside and outside the profession. Solution: Repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. the firm into a specialized boutique concentrating on Latin American business. RELATED ARTICLE: Firm Profile Name: Sotomayor & Co. Year opened: 1992. Location: Woodland Hills and West Covina, California West Covina is a city located in eastern Los Angeles County, California. As of the 2000 census, the city had a total population of 105,080. As of 2002, it is the 50th largest city in California. . Total personnel: Fourteen. Number of partners: Three. Number of CPAs: Five. Areas of concentration: Health care; international business. Percentage of fees in Accounting: 25%. Auditing: 10%. Tax: 30%. Consulting: 35%. Types of clients: Small to midsize manufacturers and service businesses. Marketing programs: Memberships and participation in associations. Best thing we did in the last five years: Refocused practice away from traditional services into boutique services. Worst thing we did in the last five years: A merger that didn't work out. How the practice will change in the near future: Continued focus on specialized areas. RELATED SUMMARY: EXECUTIVE SUMMARY * BUSINESSES AND CPA firms in Latin American countries are eager for help in bringing their accounting and management practices up to the highest international standards. * SOTOMAYOR & CO., a 14-person firm in Southern California, offers a variety of services to Latin American clients, including serving as a U.S. accounting and consulting resource, working with newly privatized health care concerns, helping businesses adopt international standards or convert their financial statements into US. GAAP and assisting businesses to achieve ISO 9000 certification. * TRADITIONAL SERVICES were the firm's main focus only five years ago, but firm leaders perceived increasing competition from within and outside the profession. After an initial drop in billings when traditional engagements were resigned, the firm's new boutique services are thriving. * ENTERING THE LATIN AMERICAN market involves learning about the culture and obtaining the right contacts. Both these goals can be accomplished when CPAs Join international trade and professional organizations dedicated to the region or industry they seek to serve. RELATED ARTICLE: For More Information Here are some Web sites with information on Latin America and Inter-American trade. * CIBER-CENTRO. A bilingual resource that includes a trade directory, research materials, newsgroups This is a list of newsgroups that are significant for their popularity or their position in Usenet history. As of October 2002, there are about 100,000 Usenet newsgroups, of which approximately a fifth are active. and more: www.cibercentro.com * CINDOC, Latin American databases: www.eurosur.org/CINDOC/are-alat.htm * Directorio de America Latino-Global Net. Spanish-subject Web index: www.dirglobal.net * Economatica, a financial database on South American countries: www.economatica.com * Inter-American Development Bank Inter-American Development Bank (IDB) international organization founded in 1959 by 20 governments in North and South America to finance economic and social development in the Western Hemisphere. : www.iadb.org * International Monetary Fund. Includes statistics on economic issues in Latin America: dsbb.imf.org * Latin American Network American Network is cable/satellite television network. It broadcasts only American shows. Is part of Televisa Networks, as affiliate on Televisa. Programs broadcast by American Network Talk Shows
* Latin American newsletters: www.latinnews.com * Latin trade Latin Trade is a monthly magazine covering global business in Latin America and the Caribbean. Similar to Forbes and Fortune Magazine in coverage, the magazine was founded in 1993 and now publishes 87,000 copies 1 each month in Spanish, Portuguese, and English. magazine: www.latintrade.com * National Law Center for Inter-American Free Trade. Includes bimonthly bi·month·ly adj. 1. Happening every two months. 2. Happening twice a month; semimonthly. adv. 1. Once every two months. 2. Twice a month; semimonthly. n. pl. Inter American Trade American Trade, the trade that the United States has with foreign nations or within itself. The Government actively promotes exports and seeks to prevent foreign countries from maintaining trade barriers that restrict imports. Report, InterAm Database for Mexican and Latin American laws: www.natlaw.com/index.htm * Organization of American States Organization of American States (OAS), international organization, created Apr. 30, 1948, at Bogotá, Colombia, by agreement of Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, the Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, : www.oas.org * U.S. Agency for International Development: www.info.usaid.gov * U.S. Information Agency The U.S. Information Agency (USIA) was the public diplomacy arm of the U.S. government. The USIA existed "to further the national interest by improving United States relations with other countries and peoples through the broadest possible sharing of ideas, information, and : www.usia.gov * U.S. trade representative: www.ustr.gov * World Bank: www.worldbank.org * World Health Organization: www.who.ch |
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