'A clear mission'

Washington, D.C.-based Top 100 CPA and business advisory firm Raffa has had a technology practice since the 1990s, but it's only more recently that it has discovered how new technology practices such as outsourced accounting and cloud computing are helping to better serve its primary client niche - government and traditional nonprofit entities.

Technologies aside, Raffa's deep commitment to the nonprofit sector - which accounts for nearly 75 percent of firmwide revenues and 55 percent of revenues from its technology unit - goes beyond the usual engagement and client meetings.

Nearly every member of the 220-plus practice is personally involved in one or more philanthropic endeavors, causes or organizations, according to firm technology partner Seth Zarny.

Zarny explained that Raffa has one of the highest numbers of donated hours to the nonprofit community compared to any other accounting firm in the D.C. Metro area.

"The staff involvement in activities that support the nonprofit community is unparalleled. Every Monday at the partner meeting, a question will come up about volunteering for a walk or fundraiser," added Glenn Anstead, senior manager of Raffa's technology unit. "It's one thing to donate money and promote, but you will see [managing partners] Tom and Kathy [Raffa] at the head of the line during a walk. When everyone sees the guys at the top volunteering their time, it's encouraging."

GROWTH THROUGH TECHNOLOGY

Though not necessarily looking to establish a national footprint, Raffa's recent foray into outsourcing and the cloud has been opening more possibilities to bring in business outside of its established regional presence, as well as to other practice areas inside the firm.

Because of its core client niche, Raffa is also finding itself well-positioned as more nonprofits look to technology to operate more efficiently.

"We are seeing somewhat of a shift with nonprofits; they are more cost-sensitive and we are seeing more higher CFO-level work that they can't afford to hire for," said Zarny. "The nonprofit space is a clear mission for us. The quality of work needs to be at the highest level, so it ends up attracting more clients for us over time. Keeping clients and keeping clients happy are more important than everything."

Zarny also explained that with the firm having a technology practice, they have more of a competitive advantage than firms without one: "We can see trends happening at least two years or so ahead of firms who don't have a tech practice."

Business process outsourcing is garnering more attention from its key client area, and so in January the firm started an outsourced accounting practice within its technology division, which is headed up by Julie Jones. Currently 85 percent of Raffa's outsourced accounting business is from its nonprofit clients, she said.

"Most nonprofit groups don't want to think about doing accounting. On the outsourcing side, we can provide a level of service to where we can be the CFO, install a system, and anything in between," said Jones. "We can also have managers manage their workloads better; it's a very different structure from an outsourcing perspective."

The firm is also looking to see how cloud-based financial management and accounting solution Intacct will assist the outsourced accounting practice. Raffa became an Intacct partner in July and is already seeing potential to both sell and utilize the product for its clients and other areas of the firm.

"Intacct is a natural progression for us," explained Anstead. "The whole relation between accounting systems to the advent of the Internet and being able to allow accountants and managers to get out of the office gives them the opportunity to leverage the Internet to connect back into accounting systems. We are seeing the same thing happening with traditional on-premises [ERP] systems from Microsoft, where now the market has said we need access to our applications anywhere and anytime, so they are ramping up to provide hybrid-cloud services."

VAR STAR

Raffa's technology practice has grown to a 22-member team in the seven years since Zarny joined the firm. At that time, the firm was a Microsoft Great Plains and Solomon VAR (now Dynamics GP and SL), earning little more than $500,000 in revenue. The firm still resells those products in addition to Intacct, and technology unit revenues have soared to $3.7 million in 2010, ranking it among Accounting Today's VAR 100.

Zarny had his own technology consultancy, Information Resources, for nearly 19 years until it was ultimately purchased by ePartners in 2004. He came to Raffa shortly after to head up the tech practice, and he claims that the group's success hasn't entirely come from increased software sales.

"I like to tell our clients I don't make more if I sell another module; it's an annuity relationship, so we're in it for the long term. We're not a super-sales organization; software is a vehicle to provide value to the client," said Zarny. "We recently had a partner retreat to focus on what really defines us, and it came out that it's our commitment to our clients, first and foremost. Serving the nonprofit space, that is a big deal, and we all show it through the time we put in outside the office as well."

Zarny admits that having such a firm-wide level of commitment to the nonprofit sector has caused them to be selective about their hires, and can make it exceptionally challenging to assimilate acquired firms into Raffa's culture.

That said, the firm is eyeing growth outside the D.C. Metro area, and believes that technology and its dedication to the nonprofit sector will reel in future business.

Raffa is currently exploring regions with high concentrations of nonprofit groups, Boston and New York in particular. The firm is also conducting a series of webinars targeting that sector to highlight Raffa's services.

"Technology is viewed [by other partners here] as one of the leading practices in the firm; it helps that we are viewed positively and are able to grow and assist the firm," said Zarny. "We also believe we are in a position to be a leader. Even among the largest firms, the size of their nonprofit practices can be smaller than ours, so there is no reason we can't be one of the absolute leading firms in the country. With distance and support, technology plays a big role in that goal."