CPA Internet portal gears up for launch.
The site, cpa2biz.com, is the product of an independently incorporated joint venture between the AICPA and state societies. It currently offers online CPE and other features useful to members. But soon it will expand, making available a broader array of traditional and new products, services, communities and capabilities so CPAs can better serve their clients and employers.
Because it functions as a gateway to various professional and commercial online resources (see sidebar, "Tools of the Trade"), cpa2biz is considered a Web "portal." It is expected to be open for business by the end of this quarter, capitalizing on CPAs' reputation as the financial advisers that small business owners consider most trustworthy.
"Building this site isn't easy," cpa2biz CEO Brett L. Prager--an entrepreneur with a decade's worth of success in the online professional services market--told the JofA in an interview, "but that's why CPAs and those who rely on them need it so badly.
"The profession is a very broad constituency and we want to do a great job for every member. But initially that may be hard to achieve," he conceded, "so we're starting by doing a few important things well and building on that foundation"
The team passed its first project milestone in the fall of 2000 by establishing CPAWeb.org, a "transitional" Web site that laid the foundation of the portal's technological infrastructure, including a national membership database for the Institute and the state societies. Focused on members' needs only, CPAWeb offers online CPE courses and catalogs, CPE transcripts, professional literature, practice management aids and association links to member services.
And that's just the beginning, Prager said. "Our goal is to provide an integrated suite of applications CPAs can offer their small business clients to relieve them, for example, of having to key payroll data twice--once into a payroll application and again into their general ledger. Integrating payroll and other business data not only cuts costs by reducing keystrokes, it also boosts profitability by making it easier to understand and improve a business's operations."
State society members serving on the cpa2biz advisory board play a central role in guiding the development of the portal. Members include Brent C. Johnson of the Florida Institute of CPAs, Grady Hazel of the Society of Louisiana CPAs, J. Thomas Hood III of the Maryland Association of CPAs, J. Clarke Price of the Ohio Society of CPAs, Albert E. Trexler of the Pennsylvania Institute of CPAs and Jeannie Patton of the Utah Association of CPAs.
On the Launch Pad
Not quite a year ago--in May 2000--the AICPA council approved the Institute's plan to develop the resources necessary to make cpa2biz a reality. Earlier, AICPA President and CEO Barry C. Melancon's ongoing efforts to implement the CPA Vision had brought him in contact with Prager.
With support from council, Melancon and Prager became cpa2biz's chairman and CEO, respectively and they began to assemble a team of accounting, customer service, Internet and publishing specialists, and secure adequate capital and technological resources for their plan.
Two more stages will follow CPAWeb in the portal's sequential "rollout" strategy. In its second phase, cpa2biz gradually will introduce online capabilities that will continue its focus on meeting CPAs' immediate needs. For example, online automation of payroll, 401(k) and other administrative services will enable practitioners to better manage their firms, and Web site support will assist them in the use of e-commerce and related services to build up their clients' and employers' businesses. Implementation of this stage, tentatively scheduled for May, requires council's approval.
CPAWeb will then shut down, and cpa2biz will seamlessly absorb its operations and functions without interruption. Meanwhile, development of the portal's infrastructure will continue.
In the rollout's third stage, cpa2biz's business-to-business (B2B) features will become available to help CPAs "e-enable" their clients and employers so that they can conveniently and economically buy and sell products and services on-line. This last stage is scheduled for the end of this quarter.
A Special Advantage
When developers were first planning the portal, they were confident the market for online CPA services was big enough to justify their entry into it. With the expansion of the global economy and the growth in e-commerce, they saw an opportunity for CPAs to establish closer relationships with clients and promote their services to a wider audience.
Small businesses often cannot afford the advanced technology and expert advice needed to participate fully in e-commerce. But, despite the relatively diminutive size of many of these companies, in sheer numbers they add up. Businesses with annual revenue under $100 million or fewer than 500 employees represent approximately half the United States' gross domestic product, according to Prager.
These businesses place much trust and confidence in their CPAs--a fact borne out by recent research. According to a March 2000 survey by Peter D. Hart Research Associates, Inc., of Washington, D.C., CPAs have the highest positive influence rating of any advisers to small businesses. To gain access to the full market potential these small businesses represent, then, CPAs need to connect even more closely with their clients. It follows that any vehicle providing that capability should attract interest--not only from participants but from investors as well.
Seeking ways to merit CPAs' attention and loyalty, the portal's creators compared their planned site with others in the field. "Every third party out there had technology and resources similar to what we were planning," Prager recalled. "But they lacked the most important ingredient: a close relationship with CPAs and their clients. We, however, have those connections through the AICPA and the state societies."
If cpa2biz makes the most of those ties, they could add up to a powerful competitive advantage.
Who's Paying for All This?
According to Prager, the AICPA currently holds a 60% stake in cpa2biz, half of which the state societies will get when the portal goes public. The remaining 40% is held by Institute management and external partners including Microsoft Corp., accounting and tax publisher The Thomson Corp., insurer Aon Corp., payroll services provider Automated Data Processing, Inc., and e-commerce consulting firm Metiom, Inc.
Together, Microsoft and Thomson have provided $50 million in funding for cpa2biz. Prager said he expects others to put up an additional $7.5 million in funding.
But he emphasized that venture capital's suitability was more important than its quantity or availability. "Everyone's money comes with different strings," he said, "and we need to make sure we take the money that's right for our business."
Since public offerings by technology start-ups are currently out of favor in the equity markets, a cpa2biz IPO will be on hold at least until those conditions improve. "Right now, even the greatest company in the world might not get a good reception," Prager said. "Things may be better a year from now, though."
When the right time comes, Prager expects the Institute and the state societies will each take a 20% share in the cpa2biz offering. He also anticipates that strategic partners and investors--both institutional and individual--will buy the balance of shares.
"If we go public," Prager said, "our main motivation will be to put stock in members' hands." In its current form as a closely held corporation with a limited number of shares, cpa2biz's equity cannot be evenly distributed among members.
In the Short Term
Prager's immediate goal is to show council that cpa2biz is off to a good start and ready to launch its enhanced member services segment in May.
Next on his list is getting CPAs to sign up. Prager wants to enroll 25 firms in a pilot program cpa2biz is assembling to ensure the portal's functions serve CPA firms as well as intended. "Over a hundred firms want to get in," he said. "But we can't admit them all because our current resources are limited. Right now, it's important to serve these firms well and not spread ourselves too thin."
Success in getting the pilot program up would bode well for the proposed June B2B launch intended to fill out the portal's initial suite of products and services.
cpa2biz Tools of the Trade
Some features cpa2biz will provide to CPAs and their clients include:
* News feeds each user can customize.
* CPA "communities."
* Online CPE.
* Web-site development and hosting.
* Electronic procurement tools to buy goods and services online.
* Electronic recruitment tools to attract potential employees online.
* Links to a wider variety of professional literature.
* Advanced professional research tools.
* Online member services.
* Tools for maintaining online product catalogs, processing online sales transactions and tracking customers.
Robert Tie is a Journal senior editor. Mr. Tie is an employee of the American Institute of CPAs and his views, as expressed in this article, do not necessarily reflect the views of the AICPA. Official positions are determined through certain specific committee procedures, due process and deliberation.
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|Publication:||Journal of Accountancy|
|Date:||Apr 1, 2001|
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