W ith financial and technological
backing from strategic partners, the AICPA and the
state societies are about to enter the information
highway’s express lane through a Web site that
will bring CPAs and their clients closer to each
other and the world of e-commerce. 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
online. 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.
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.
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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.
—Robert Tie 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. |