What We Sell Is Between Our Ears

EXECUTIVE SUMMARY

CAROLYN SECHLER, CPA. HEADS A 14-MEMBER virtual office workforce (three employees are full-time) that serves 300 clients in several states and countries. Team members are from firms having strategic alliance agreements with hers and work on a project basis. CPA services include bookkeeping, write-up, tax returns and financial statements, while the consulting niche spans a range of interrelated management advisory and IT services. INSTANT MESSAGING IS THE BASELINE TOOL that lets a scattered virtual team communicate throughout the day. Using it to send files is faster than e-mail. Impromptu meetings bring four, five or six people into one chat area. Staff and clients must have high-speed access. Sechler works with CPAs in other states whom she has never met. BEING ACCESSIBLE ONLINE STRENGTHENS TIES with clients, circumvents crises and lets the firm find out early about new consulting opportunities. CLIENTS LEARN TO CONDUCT MEETINGS ONLINE —with or without a video component—and to use tools that upload and download data and share software in real time. In NetLedger, which talks to Excel, overseas clients can look at what’s going on as someone is doing the books. A PRACTITIONER WHO WANTS TO GO VIRTUAL should be realistic about balancing how much money he or she wants to make against how much time he or she wants to put into it. Ballpark figures for a computer and additional hardware, high-speed access, a basic tax package and current accounting software add up to about $10,000. A WORK-FROM-HOME MANAGER MUST HAVE good leadership skills and be able to supervise projects and people when he or she can’t see them. In any kind of business, Sechler advises, if someone likes to do the marketing, then let him—or her. Planning, agility, trust and communication are the components critical to the success of a virtual office.

MICHAEL HAYES is a senior editor on the JofA . Ms. Hayes is an employee of the American Institute of CPAs and her 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.

PAs considering a technology niche or even a total revamping of their work/life-styles can learn a lot from Carolyn Sechler, CPA. “I made an effort to be clear about who my client was going to be and who the people on my team were going to be,” she says. In serving nonprofits and high-tech startups, Sechler stays true to her firm’s mission and vision—“to make a difference and work from the heart”—while firm revenues have grown 10% to 15% per year.

“If there seems to be a way to do something faster and easier, I try it,” Sechler says, “so I always attributed my affinity for computers to laziness. I built microcomputers when I was in college, and I wasn’t afraid of them the way some traditionalists are.” From such instincts her practice has evolved to include IT and management advisory consulting in addition to standard CPA services. Now Sechler heads a 14-member workforce, both core staff and contractual alliances, that serves 300 clients from a virtual office spanning several states and two countries.

LEVERAGING TECH EXPERTISE

Early in Sechler’s career, a job as a bookkeeper and stints at several accounting firms exposed her to professional problems she used a computer to solve—back when small and midsize firms didn’t consider technology even an option. But she already was a sole practitioner when she came across a computer that had a 2,400-baud modem: “I bet there’s something I can do with that, I said.”

Because a big chunk of her business was in health care, she used the modem to get connected to a Jefferson City, Missouri, electronic bulletin board called Doc in the Box. “I wanted to see how I could differentiate myself,” she says. “The bulletin board gave me up-to-the-minute information about an innovation in orthopedic surgery just as I was coming up against a big firm for business from an orthopedic surgery group. I got the engagement, and it was an epiphany: Information is power.”

She got modems for both her home and office and created the first CPA Web site in the world in 1994. “At that time, all I could get was a home page,” Sechler says. “Then I registered www.azcpa.com and every other state plus cpa.com —when you didn’t have to pay for domain.”

Writing and speaking on technology followed. It kept her inspired, and it was a way to communicate and to leverage more time and technique. “The publicity brought me to the attention of a larger firm. It wanted the technology I could bring them, and I merged my practice with its.”

For two years she was one of five partners running a 40-person CPA operation. In the midst of being acquired by American Express, one of the partners told her he didn’t see a place for technology in accounting. Sechler had generated a lot of new business, wired everybody in the office to communicate both internally and externally by e-mail and was developing client Web sites, but the partner didn’t think the firm could sell technology. “He said, ‘You really need to be at your desk to be effective as an accountant,’” she recalls with a laugh.

“I’d been writing articles on why we should be virtual. So I decided rather than be bought out I would leave there and walk the talk. I took the entire practice—then about 200 clients and my assistant—and went home,” she says. “Family and life-style were just too important.”

HOME SWEET HOME

In the five years since that decision, Sechler has managed her practice from home. The team of her virtual office has grown from two people to 14, of whom three are full-time employees. The rest of her team is contractual, based on strategic alliance agreements with firms having specialized knowledge of nonprofits and technology startups. Work is distributed on a project basis. “We establish an hourly rate for the work, I explain the project, we agree on a fee based on number of hours and we set a due date,” she says. Employees earn the equivalent of “street” rates for comparable positions. Team members work their own schedules. Deadlines and budgets must be met and quality maintained, but the rest is up to them. “Our firm attracts high-caliber people who love the nonprofit and high-tech areas, as well as the freedom offered by this arrangement.”

Instant messaging is the firm’s baseline tool that makes it possible. “We’ve used ICQ software—it’s free—since its inception. We’ve got a ‘buddy list’ running all the time that lets our team communicate throughout the day. I can send a quick message or send files to any of them by instant messenger, which is faster than e-mail. We have impromptu ‘conversations’ that bring four, five or six of us into one chat area.

“I meet with my core staff of four (three besides me) on ICQ every two weeks,” Sechler says. “At 9 a.m. we all tune in—and we can archive the chats. What’s the point of making people go anywhere when they can be comfortable?” Sechler works with CPAs she has never seen in Alabama, Nebraska and North Carolina and also in British Columbia.

In any kind of business if you’ve got somebody who likes to do the marketing, you want that person to do it, Sechler says. “The practitioners I work with rely on me as a rainmaker and to manage projects. I interact with the clients to keep the communication going and they keep the research going so we have good leveraging tools. I act as air traffic controller, so to speak.

“When I see some weakness—whether it’s in the technology, a client or the business plan—I go out and find what we’re going to use next to solve it. We act as beta sites for a lot of software, particularly ASP developers, and we’ve beta tested for Intuit and e-Ledger. I write about my findings.” The firm doesn’t recommend software that hasn’t been tested in-house for a few months, she adds.

“The team handles most of the rest, such as preparing returns and the analytical work. I still prepare and issue some returns, but primarily I review the others’ work. CPAs on the team also review returns and financial statements. I’m happy to let them, but I can step in and do it if needed. And I have,” she says.

An ICQ snapshot shows “meeting” participants. Far right, a “buddy list” shows who’s online; an eye by Helen’s name means she can see most on the list but is hiding. Right, some ICQ preferences.

PER DIEM CFO

The firm’s clientele consists primarily of nonprofit organizations and technology entrepreneurs. Since entrepreneurs need venture capital and nonprofits need venture partners in the form of grantors, they share similar professional needs.

Sechler’s management advisory services dovetail with information technology consulting. She shows clients how to operate their organizations more effectively within the context of budget, tools, software, labor and other resources. She does strategic planning with boards of directors and teaches the leadership the basics each year: how a nonprofit is formed, how to read the financial statements, tax returns and other compliance issues.

The firm builds an annual mutual agreement for requested/required services (who will do what by when), which includes unlimited e-mail and phone support for an annual fee. It presents 12 invoices with the agreement. Sechler says, “Our billing process is minimized, our cash flow is smooth, and the client is paid in full on the delivery of the tax return and related products.” The firm reviews the arrangements annually and revises them as needed.

The firm’s CPA services include bookkeeping, write-up, tax returns and financial statements, while the consulting niche spans a range of interrelated management and IT services. Although traditional CPA services are core, clients learn to use technology to stretch their dollars, Sechler says. For example, a great deal of business travel is avoidable, and her cost-saving tips to clients include:

How to conduct meetings online, with or without a video component.

How to use tools such as www.placeware.com , which allows data uploading and software sharing in real time.

“We teach our 300 clients independence, but we give them support because we’re here online. They can see the results. Many clients are on instant messaging with us and are comfortable about saying, ‘Carolyn, you’re online right now. Could you answer a question for me?’ What we’re selling is between our ears—not in some fancy office.” Being accessible online keeps Sechler on top of things so that fewer crises develop, and the frequent communication lets the firm find out early about new consulting opportunities.

IF THE CLIENTS FIT

Potential clients who want to know how to structure their business may consult with Sechler on whether their organization makes sense as a nonprofit. If it’s concentrating on making a difference rather than making money, it probably does, she says. “We decided we really wanted to work with people we believed in. We choose our clients carefully—just as they carefully choose us,” Sechler says. “We make sure their mission fits with what we want to do.”

Sechler encourages employees to challenge procedures and policies and to examine any new policy, product or procedure to make sure the firm can clearly explain what’s in it for all parties, and why a change is being made. When a special issue or problem arises, someone on the team researches it and prepares a “white paper” that goes to all affected clients. The papers are archived on the firm’s Web site. Throughout the year the staff reviews clients, new or existing, for suitability to the practice and will refer them elsewhere if they’re not a good fit.

Sechler remembers two clients who weren’t sure they wanted a professional accountant without a proper address. They worried about what people would think. Ultimately, the clients—one was a law firm and the other a consultant—had Sechler teach them how to convert their organizations to telecommuting. “They said, ‘Wait a minute, the service is still the same. The return is still right. And the advice is good. I guess nothing really is missing.’”

TOOLS THAT MAKE IT WORK

Because the firm’s staff is not housed in the same building, it doesn’t have to worry about networks, but both staff and clients must have high-speed access. “That’s one of the things we’ve had to tell everybody to use. In some cases, we went to cable modem about four years ago,” says Sechler. “Its speed and access were unsurpassed at that time.” In areas where cable is not available, the firm now uses DSL as an alternative.

Of the accounting packages available as ASPs, Sechler prefers NetLedger ( www.netledger.com ). Funded by Oracle, it’s “basically a QuickBooks living on the Web,” Sechler says. “My clients and I can look at the accounting at the same time anytime—in some cases while one of our firm’s bookkeepers with access at a different level prepares the monthly activity.”

A user can set an astonishing number of levels of access. “I can have the treasurer look at everything, or everything except payroll, or write a check but not make deposits. There are many areas where we can make the rules,” Sechler says. “It costs just $10 per user per month to use NetLedger, and there is no charge for the subscribing CPA. I explain to my clients, ‘You can go out and buy a $5,000 software package—or pay $10 a month for this.’ For clients relying on grantor or contribution money, it’s a great opportunity.” An expensive package may have a few more bells and whistles to produce reports automatically, but by exporting data from NetLedger to Excel Sechler can customize reports so clients get what they want.

“I’ve got clients with board members in many countries. NetLedger’s been a great solution for our clients in Belgium, Budapest, Dublin, Melbourne and London because they don’t have to wait for anything. I can have this moment’s activity sitting in NetLedger when they decide they want to take a look at what’s going on.”

Sechler also uses Office 2000, SuperForms, QuickBooks and Intuit’s tax package called ProSeries, which QuickBooks talks to (see “Tools You Can Use” ). “I can upload and download updates smoothly from the Web with it. The support’s very good, and I like using it. It’s been good to me. It’s one of the few that were really doing a good job in the 990 area, which is for the nonprofits’ tax return—a nonstandard area. Not a lot of packages really support that area well,” she says.

CAN YOU JUST TRUST PEOPLE?

To people wanting to emulate her approach, Sechler suggests that they make absolutely certain that they are self-motivated. “Be realistic about how much money you want to make balanced against how much time you want to put into it,” says Sechler.

“What are you willing to do? Are you willing to challenge a few of the rules?” Taking an accounting firm out of bricks and mortar and managing it from home challenged just about every convention, she says.

For Sechler a distinct workspace has been a necessity. When she worked from a spare room in the house, she found it hard to quit for the day. In 1997 she bought a property with a guesthouse, where her office now is. It’s just enough separation, she says.

When asked about the cost of getting started in an at-home CPA business, Sechler threw out some ballpark figures for a computer, additional hardware, high-speed access, a basic tax package and current accounting software. “For $10,000 you can get rolling,” she says.

Another important point, she says, is whether a candidate for a home-based business has good management and leadership skills. “Also, are you ready to deal with those times when people have problems and you have to get the work out no matter what because you promised the client? If you think you’re just going to kick back,” Sechler says, “it’s not going to happen. In an office if people get sick, the work has to be redistributed. Being in a virtual workplace doesn’t change that.”

She recommends that a person considering basing any business at home think about how to deal with project management when he or she can’t see people. “Are you prepared for that?” she asks. “Can you live with it? Can you just trust people? That’s really it: If you can’t trust people, this kind of arrangement doesn’t work.”

Sechler welcomes any questions: Carolyn@azcpa.com .