How the Internet is Changing the Practice of Accounting, with Michael Platt

Mike Platt
How the Internet is Changing the Practice of Accounting
Presented by: Michael Platt
CEO of AccountingWEB

Visit the AccountingWEB Workshop Calendar for upcoming workshop sessions.


This session covered the electronic and web-based developments that are affecting the ways that CPA firms are building, managing and growing their practices. The presentation will explore the impact of the Internet on hiring, administration, staff development, client development, client service, and the impact on the future role of the relationshp between the CPA and his or her client.

Read the full transcript below.

December 19, 2000 Workshop sponsored by: TaxACT.com

TaxACT.com

Biography

Michael Platt, President and CEO
AccountingWEB, Inc.

Recently named as one of the "Top 100 Most Influential People in Accounting," Michael has been an integral part of the US accounting scene for the last fifteen years. He has worked with many of the top CPA firms in the country through his tenure at Associated Accounting Firms International, and Moore Stephens North America, two of the largest associations of independent accounting firms in North America. Focusing on assisting accounting firms to run their businesses better, Michael has organized hundreds of conferences and participated in dozens of Task Forces on diverse topics ranging from management, marketing, technology, and human resources, to tax, audit and consulting services offered by CPA firms.

Michael brought the AccountingWEB system to the USA in July 1999 when he accepted the position as President and CEO. He continues to serve the profession in this capacity where he has taken on the cause of bringing the power of the Internet to the practice of Accounting.

Full Transcript of Workshop

Session Moderator: We want to thank all of you for attending today. Our presenter is Michael Platt, CEO of AccountingWEB.

Recently named as one of the "Top 100 Most Influential People in Accounting," Michael has been an integral part of the US accounting scene for the last fifteen years. He has worked with many of the top CPA firms in the country through his tenure at Associated Accounting Firms International, and Moore Stephens North America, two of the largest associations of independent accounting firms in North America.

Focusing on assisting accounting firms to run their businesses better, Michael has organized hundreds of conferences and participated in dozens of Task Forces on diverse topics ranging from management, marketing, technology, and human resources, to tax, audit and consulting services offered by CPA firms.

Michael brought the AccountingWEB system to the USA in July 1999 when he accepted the position as President and CEO. He continues to serve the profession in this capacity where he has taken on the cause of bringing the power of the Internet to the practice of Accounting.

Michael Platt: Thanks Gail. Hello everyone, thank you for choosing to spend an hour with us today talking about the way the Internet is changing the practice of accounting. Let me invite you to interject with thoughts, comments or disagreements as we proceed today. I want this to be an interactive, two-way learning experience
and encourage your participation.

It is obvious from the barrage of media attention that the Internet is affecting everything in our daily lives. But how is it affecting the day-to-day practice of accounting? How will CPA firms need to adjust their processes and systems to accommodate these changes? And where will these changes be felt the most?

To explore these issues, we'll look at the major areas involved with building, managing and growing a practice. Recognize though, that EVERY function and activity currently performed in a CPA firm probably has a tool associated with it on the Web. From the mundane (ordering lunch on-line for a client meeting) to the important (committing to a new client service to be delivered over the Web), EVERYTHING is being touched by the Web.

But before we explore the impact of the Internet on the major areas of accounting, let me share one caveat about the Internet. Just because a piece of information is published on a web page doesn't make it gospel.

Robert Gold: But it might as well be!

Michael Platt: Let me say that again. JUST BECAUSE A PIECE OF INFORMATION IS PUBLISHED ON A WEB PAGE DOESN'T MAKE IT GOSPEL. The same due diligence, source checking, dealing with reliable partners, identification of trustworthy sites is critical to the successful implementation of all that the Web has to offer.

Robert - you're right on target - most see things in print as gospel, and they're not.

Keep this caveat in mind as we proceed today.

Now, having shared that caveat, we can explore what the Internet can do and is doing to change the way the practice of accounting is being conducted.

We will touch on eight main areas of a practice: Hiring, Staff Retention, Administration, Staff Development, Client Development, Niche Development, Technical Research, and new Client Service Opportunities.

Feel free to jump in at any time . . .

Hiring: The Internet is now the number one medium of choice used by students and experienced professionals to identify job opportunities. Increasingly, it is becoming the number one tool for employers to find recruits. Here's an interesting stat: PricewaterhouseCoopers now finds 90% of its hires through the Internet, uses outside agencies only about 15% of the time, and has reduced its cost-per-hire from $23,000 to $280.

Robert Gold: That doesn't bode well for the recruiting industry.

Michael Platt: The recruiting industry indeed is in a state of upheaval

How many of your firms are on that path to cost savings?

Patrick Ryan: Will you be discussing "Subscribing to Web-Based Accounting Services?"

Michael Platt: Patrick - I will touch upon that - yes

Robert Gold: Our recruiting page on our web site,http://BennettGold.ca attracts a lot of inquiries.

Michael Platt: What can/should you be doing on the Internet regarding hiring?

 

  • Career sections of firm websites must be developed, updated and maintained regularly. Educating recruits on the benefits of your firm and the opportunities that exist will be key.

 

 

  • Use those same sites to identify potential recruits for your firm. If you want to find professionals, go to where they hang out. Job sites are getting a tremendous amount of traffic and there are lots of people looking for a better job.

 

  • For some of the best information on advanced Internet recruiting techniques that I have found, go to Airsdirectory.com

Let's take a look at staff retention.

Unless you completely ban access to the Internet, your employees will have access to the same tools you do to find job opportunities, information on career advancement, competitive salary information, posting resumes, etc. While at quick glance it would make sense to ban access to these resources, in the long run that is a losing proposition. The longer-term solution is setting Internet usage policies and informing your employees what is and is not acceptable use of the Internet.

How many of you have usage policies in place??

Robert Gold: Does common sense count?

Michael Platt: Robert, I wish it did. Things are probably less litigious in Canada than the US, and we tend to make policy statements a little more! By encouraging use of the Internet, rather than blocking it, you can help educate and guide your employees to sites that can help them personally and professionally, deepening their loyalty to your firm as one that cares enough to help them improve.

David Burgess: We have no time to surf, too busy working.

Michael Platt: David, you are correct - accountants should never "surf" the Internet.

Robert Gold: And everyone has net access at home.

Michael Platt: But you will need to spend some time finding those sites that are most beneficial to you. But more on that later…

Luisa Gale: I am sure we all have "policies" in place but the reality is that a person will be free to use the internet as they see fit and common sense and good work ethics come into play.

Michael Platt: Luisa - Common sense - and management of that employee - will have to come into play

Let's take a look at the area of administration

 

  • Part time administrative help is available through the Internet for routine typing, report generation, etc. Not only is this assistance available cheaper and quicker than traditional temp staff, it is also available without the need for available office space, computers, phones, etc. Many times these temporary professionals are stay-at-home workers two time zones away, but they can be a great benefit for crunch time workloads. (elance.com, freeagent.com)

Luisa Gale: That's true but we can't sit and baby-sit an employee all day

Michael Platt: Luisa - think about how you handle someone who abuses phone time or sick time or tardiness - same issue

Back to admin . . .

 

  • Purchasing supplies and equipment can be greatly streamlined and can be much less expensive through auction purchases, reverse auction purchases, direct-from-the-manufacturer purchases or consolidators such as CPA4sure.com, which boasts 60,000 technology related products for sale.

 

  • HR administration modules are available on the web for everything from tracking HR issues to scheduling to compliance testing to staff evaluations to skills competencies. CPE tracking cpe-tracker.com is also a new area that is helping CPA firms save time and money.

 

  • Benefits administration packages are also available providing web-based access to all tracking needs for employee benefits. The web offers 401k availability that never existed before.

 

  • Free information resources such as HR.com have resources, products, links, etc. in many HR specialty areas.

Robert Gold: Speaking of tracking - and back to a previous issue - products like Surf Control allow you to monitor staff Net usage. How do you feel about that?

Michael Platt: I think these kinds of products are good, are tested, are used by a number of corporations, and can be used effectively in accounting firms.

What is your opinion on that Robert?

Robert Gold: We have a core group of about 20 people - all with a good amount of Canadian common sense. We don't use it. However, in a larger environment it is almost a necessity.

Michael Platt: Common sense - if it were common - would prohibit the need for a lot of this!

What is the risk to all of this? A more informed staff now has full access to all the rules, regulations and state laws regarding personnel administration, and a disgruntled employee may more readily research remedial activities against the firm. However the upside is that a more well informed staff can transfer that knowledge to clients and help them bulletproof their HR systems.

Robert Gold: You cannot stop access to information - it's silly to think otherwise.

Michael Platt: Let's take a look at staff development issues for a moment . . .

How can the Internet be used to teach humans how to better deal with other humans? Can you really take an "interpersonal communications" course on the Internet? It seems almost absurd that this medium can inject itself into personal development efforts, but inroads are being made in personal development, as well as significant inroads into professional skill building and technical competency.

Online training is readily available today. Available in bite-sized chunks, online training can enhance a skill set with laser point accuracy that the user can learn any time of the day at a very reasonable cost. Many online course providers are registered with NASBA.

Has anyone tried online training yet?

Will this replace face-to-face CPE as we all know it today? Not entirely. Will it enhance the skill sets and competency of today's professionals? Without a doubt! Among some of the online CPE providers are Micromash.com, Passonline.com, Fmnonline.com.

Robert Gold: Does this count?

Michael Platt: Robert - it's a good start!

Michael Platt: Try these providers out. Some courses are as low as $7.95. See how it works and get into the groove of it.

Donna Locke: We have had Pro2Net recommended by a sister firm in Houston.

Arlen Pecka: I think online education is going to be big...once they can insure that the person taking the class is who he says he is.

Robert Gold: It won't work for exams!

Michael Platt: Arlen - I think that is key. But distance learning through teleconferences is allowed as CPE and this is just an extension of that!

David Burgess: I think it can only compliment the classroom.

Michael Platt: I don't see the classroom going away ever. We're still social beings needing social interaction. In a less formal learning environment, the Internet is crawling with tools such as on-line dictionaries, thesauri, writing tips, communication tips, etc. that a staff member can utilize to improve his or her own performance. If you haven't tried any of these tools or online training yet, give it a shot!

Arlen Pecka: The convenience of online education is what will help make it so big. We are a society that loves convenience.

Lets move on to client development…

Identifying prospective clients, marketing to them and retaining them once they become clients, has been enhanced by the Internet. "Mass individualization" is available to communicate with targets and clients in a way never before feasible.

Robert Gold: This is a meat and potatoes issue.

Michael Platt: What are some basic things you can do on the Internet for client development?

Here are a few ideas . . .

 

  • Use e-mails to communicate with targets and prospects

 

  • Regularly scan major client industry association web sites and gather information to e-mail to your "A" clients to alert them to certain developments that may affect them

 

  • Scan client's competitor web sites, and alert clients when significant developments occur

 

  • Develop a firm newsletter online and send it to clients regularly, inviting them into your web site for more information on XYZ subject

 

  • Consider using a facility like the AccountingWEB workshop room for on-line press conferences. Imagine if you had a story to tell a nationwide audience, and invited media professionals into this very facility that you're in right now. You could reach a nationwide audience quickly, easily and "live," could present your information, and could participate in a Q&A session with transcripts available afterwards to help ensure the integrity of quotes in any article written about you. (Contact our office if you would like more information on using this workshop room)

 

  • Even some of the basic tools out there can help in day-to-day activities: Have a client meeting across town? Why not check the weather forecast Weather.com, check road conditions (usually available on your local TV station web site), download driving directions Mapquest.com, and scan the local headlines through a reminder service to see if your client has been in the news recently. Or congratulate her if you see her son recently won the city's Little League championship. If you take the time and know where to look, you can gather an incredible amount of information and really impress your client!

Robert Gold: Check out http://PrivacyDetective.com to see a brilliant firm marketing effort - with an educational twist.

Michael Platt: Robert - can you tell us a little about the "twist"?

Robert Gold: Go to PrivacyDetective.com and you will get it - Promise!

Michael Platt: Spoken like a true marketer!

Robert Gold: Who me?

Michael Platt: What other ways are people using the Web for client development?

Is anyone using any of the above-mentioned techniques?

Robert Gold: We use a newstracker service to find articles for our E-CommerceALERT.com service.

Michael Platt: Excellent. There are several news tracking services - many are free

Let's take a look at niche development as a subset of client development…

Got a well-defined niche specialty that truly makes you unique? Geographic boundaries are no longer stopping you from marketing your service to companies across the country. How? Consider the following:

 

  • Buy an e-mail list of targeted companies and include them in your e-mail newswire.

Robert Gold: SPAM!

Michael Platt: Many do consider this spam mail. If that is distasteful to you, buy a mailing list and send a direct mail piece inviting them to sign up for your newswire.

Luisa Gale: Junk Mail - what's the difference?

Thomas Buckley: Buy where?

Michael Platt: Thomas - there are several e-mail buying services. It depends on your audience as to where to find them.

Jeff Roblin: We're here to provide value-added services.... not nuisance material.

Scott Cytron: Often, the names on some of the more credible lists want to receive notices.

Donna Locke: What about inviting your clients to give you their e-mail address and those of others they think would be interested.

Elaine Crookston: I really enjoy looking at so-called junk mail. You never know what's out there until you see it!

David Burgess: The best way would be a guest book

Michael Platt: By the way, AccountingWEB agrees with Robert's comment on Spam - we do not send our information to anyone unsolicited.

A guest book and an invitation to opt in to a distribution list is the best way to get qualified leads.

What else can you do for niche development?

 

  • Beef up your own web site for this service and get listed on the major search engines.

Robert Gold: Each niche service needs its own web site. Register domains like crazy.

Michael Platt: Now before you ask, I'm not prepared to answer the question - what's the best way to get listed on the search engines!

David Burgess: Search engines I think are the number 1 way to a web site

Scott Cytron: Include your Web site on all collateral pieces, including business cards and outlines for speeches.

 

  • Michael Platt: Connect with a nationwide association in your niche area and give a presentation on your service using an online chat feature such as this one.

David Burgess: Cyber-marketing is very important to your website.

Michael Platt: There are plenty of people looking for experts - the Internet is just one additional distribution vehicle for this!

Robert Gold: Viral marketing is important to your growth on the web.

Patrick Ryan: This workshop is on "How the internet has changed accounting”... what are your feelings - are there credible accounting services currently being offered over the web?

Michael Platt: Patrick - if I can ask you to hold that question for just a couple of minutes I will address it. Thanks

Whether your call is cyber-marketing or viral marketing or just plain "whip up some interest," marketing is as essential on the web as it is in bricks and mortar business.

Robert Gold: And how rampant is marketing among CPA firms in the "real" world??

Michael Platt: OK, let's move on - Patrick is right, this is about how the practice of accounting is changing with the Internet. We could spend 5 years talking about CPA marketing skills...

Michael Platt: Let's look at Competitive Research: There is a tremendous amount of information available on your competitors online. With little effort and little cost, you can:

 

  • Enroll to receive a competitor's online newsletter.

 

  • Scan the headlines to find stories in which your competitor is mentioned

 

  • Subscribe to a reminder service (www.mindit.com) to alert you whenever a change is made on a competitor's web site.

 

 

  • Search the Internet to identify which sites are linked to your competitor's web site and approach them as possible prospects.

http://doc.altavista.com/help/search/linksearch.html Alta Vista has a pretty good product tool in this area. Do a search on your own firm and see who's linked to you!

Let's look at technical research

The Internet can be a bottomless pit of information, and those that will succeed will be the ones who can best navigate this vast sea and get to "information" rather than just "data."

In the area of technical research, a number of well known providers like CCH and BNA and RIA all have developed online research capabilities, taking their paper and CD products and making them web-based. The beauty of this is that no matter where you are - at home, at the office, at a client facility - the latest research information is available at your fingertips.

David Burgess: Researching through the web is awesome

Michael Platt: One resource you may want to explore is our own workshop from this past summer on using the Internet for Audit & Accounting research. Paste the following link in your browser to get you there: http://www.accountingweb.com/cgi-bin/item.cgi?id=20798&d=101

OK Patrick, what about the whole area of client services through the web?

This is an area that's being turned upside down by the Internet, specifically by new ASPs (companies that host all software programs on their computers and your data is transmitted securely for storage and manipulation on their servers).

Consider the following: tax return preparation is available on line for free now; bookkeeping, payroll and many back office systems are available through upstart and more established ASPs; financial planning, tax planning, filing of state tax returns, and many functions previously reserved for CPA firms are available at a fraction of the cost.

What are the opportunities? Some of these traditional accounting services that were previously unprofitable for you may be available in a private label environment whereby your client can come to you to access many of these services. That would keep you in the loop, and keep you in more of an advisory role.

But let me raise the caveat again –

Just because it's a business on the web doesn't make it a reputable business - check the people, the funding, the track record, etc.

Robert Gold: You better look for a WebTrust seal on the ASPs - or the real caveat emptor will rule!

Michael Platt: There are a number of great ASPs that are going to be superstars soon. A few of them have representatives on this workshop session -

What about attest functions, like audits over the Web? This past June, INTACCT and Deloitte & Touche announced the first web based auditing program for mid sized companies. Clients input data regularly to allow their CPA audit access throughout the year, rather than just at year-end as some currently do.

Do we have anyone from Intacct online today??

Thomas Buckley: What do you think about Netledger.com?

Michael Platt: Thomas: I think they have a good range of products and seem to be making good inroads. What are your thoughts?

Thomas Buckley: I signed up with them but that's all - still investigating

Michael Platt: Do the research that you would with any other business partner

Patrick Ryan: Deloitte & Touche and Intacct's first web based auditing program for mid-sized companies is available in two weeks.

Opportunity: with access to client data throughout the year, you can make a more meaningful impact on future operations of the client by recognizing anomalies early on and helping them steer their business in a more profitable direction.

Michael Platt: If I can invite any of the ASP people online today to comment - what should prospective customers be looking for when they approach you?

Michael Platt: What kind of questions should they be asking?

Robert Gold: How about: "Who are you." Get credentials, testimonials, etc. Do not be a guinea pig or beta test for anyone.

Michael Platt: Who are you? Who is behind this? What have the principle people done prior to joining?

Patrick Ryan: Regarding NetLedger - isn't this service primarily for SOHOs (not SMEs or fast growth small and medium businesses)?

Michael Platt: Patrick - I'd have to refer you to their marketing material to answer that question

There are an abundance of great ideas for ASPs, and community input from groups like this will have to help guide the early adapters.

Some other trends to be aware of:

 

  • Auctions like Ebay are now available for professional services - everything from management consulting to bookkeeping can be purchased at auction prices. So, if you are competing JUST on price, better change your model quickly.

Robert Gold: Would you trust an auctioned bookkeeper? The ones we know are too busy to accept work. What kind of quality would you be assured of?

Michael Platt: There are some clients who might be perfectly satisfied. There are also clients who will use auctions as a leveraging tool to get you to lower your fee. Just be aware that these people are out there, and they will be influencing the dynamics of the environment that you work in.

Jeff Roblin: You get what you pay for...buyer beware

 

  • Michael Platt: Individuals are putting out "consultant" shingles right and left through sites like guru.com, offering highly targeted assistance at a distance at a lower cost.

Here's an interesting one - · Payroll services in India are available to take a company's payroll information at 5:00pm and have all payroll completed and sent back by the time the client company opens its doors at 8:00am - at a fraction of the cost of doing payroll locally.

You think that will have any affect on how you do things in the future?

Elaine Crookston: Does that mean available anywhere in the world?

Michael Platt: Elaine, yes - there's no reason why your payroll needs to be done in your zip code, or your time zone or your country!

Organizations such as international accounting associations can help guide you to these overseas opportunities

Patrick Ryan: The first ever totally integrated online payroll service with an online accounting service was just released by Intacct - has anyone here used it yet?

Michael Platt: Client service is the key to all of these relationships - service service service!

Jeff Roblin: I think the key is 'keeping your client service PRIVATE' over the Internet.

Arlen Pecka: Good Point.

Donna Locke: Client service has ALWAYS been the key to excellent marketing and service!

Michael Platt: Donna - you raise a great point. Nothing has changed but the number of potential competitors - many of whom are difficult to distinguish between each other. But don't discount the ones who can benefit your firm and your services!

Low cost competitors will be picking up many of the bottom-of-the-market products and services. This is your opportunity to bring additional value to the relationship and help guide your clients on how to use the Internet effectively and profitably!

Arlen Pecka: No matter what you do, there will always be someone who will do it cheaper, faster, etc. etc. I think it is important to make your clients your friends.

Robert Gold: Friends? Won't work if you don't service the heck out of them.

Michael Platt: How will all of this change the core competencies needed in tomorrow's CPA firm? Hiring Internet savvy staff is a given. But today's professionals need "cybrarian" skills - tomorrow's librarian with the ability to navigate and use the Internet effectively - and the ability to think beyond what they were taught to find the applications that are suitable for their disciplines.

The ability for management, client service staff, marketing staff and administrative staff to know how the Internet can help them in their particular areas of responsibility will not only be necessary, but will be demanded as a prerequisite. Each of these groups will have to know how to find and access the data they need quickly, inexpensively and accurately to maximize the resources available to them.

Arlen Pecka: I think service is a "given"

Michael Platt: A number of community sites like accountingweb.com, pro2net.com, and accountantsworld.com can help digest a lot of what's out there and can serve as jumping off spots to point professionals to the information available that is most relevant to them.

Let me reiterate my caution from earlier - web sites and web-based tools are only as good as the companies behind them, and the companies are only as good as the people behind them. So even if the medium to connect with this information is a non-personal box, the human touch is critical in ensuring that data is transformed effectively into information, into knowledge, and into an action plan that you can do something with.

Let me end with some advice that we've been sharing with the members of AccountingWEB - "Surfing" is not what CPAs and accounting professionals should be doing on the Internet. With some research time set aside to locate the appropriate resources, and with the assistance of community sites like those identified above, professionals in tomorrow's accounting practice will be able to harness the power of the Internet and use it to change for the better the way they do business.

Robert Gold: That deserves an "Amen"!

Michael Platt: Let me encourage you to try these new areas and don't be afraid of them.

You are all smart enough to be able to turn these great tools into tools that can help you build your business.

Thanks for the time this afternoon and for everyone's input!

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