Nearly four years after its debut, CPA2Biz, the online portal of the American Institute of CPAs, is projecting that the Web vehicle will turn a profit in 2006.
"We had two profitable quarters this year,"CPA2Biz chief executive Erik Asgeirsson told WebCPA during the Spring Council meeting of the American Institute of CPAs, here. "And we've reinvested some $1.5 million back into the business. Look how many quarters it took Amazon to show a profit. If our goal was to become profitable as soon as possible, we wouldn't be doing that. We've been cash-flow positive for two years."
After posting a loss of $3.14 million in fiscal '04, Asgeirrson said that the portal is projecting a loss of $375,000 for FY '05 and will become profitable in FY 2006.
Asgeirsson told Council members that more than 13,000 firms are now enrolled in CPA2Biz's Business Solutions Program, which offers banking and payroll services among others. The portal is also engaged in a targeted marketing effort via e-mail and direct mail pieces.
However, both the portal's historical financials and the institute's 2006 budget came under fire from the activist member group, CPAs Reforming Our Profession, known as CROP.
The group prepared a seven-page document and forwarded it to the AICPA Board, several past chairman and several members of Council, citing that despite several dues increases, the institute's net equity and liquidity has dropped markedly since 1998.
The CROP document also gave a timeline of historical transactions regarding acquisitions made by CPA2Biz and questioned what criteria determined the selection of Nationwide as the preferred provider for the institute's retirement program. The group also asked to see the consolidating workpapers.
"Why are we the only ones asking these questions?" asked Andy Blackman, a New York-based CPA and CROP member. "Council should be living up to their fiduciary responsibilities."
Meanwhile, CROP member Kendall Wheeler of California encouraged a no-vote on the proposed 2006 budget, which proposed to raise dues anywhere from $5 to $35, depending on the type of membership, and to hike credential fees an additional $50. Institute members however, overwhelmingly passed the budget.
Institute Chairman Bob Bunting responded to the CROP report saying that questions should be raised and encouraged members to read the report.
"However, the issue I take was not of the questions asked, but the innate distrust of the volunteer members. The questions have been asked and answered," Bunting said.
