Firms know the importance of taking care of their clients with constant communication. However, is a customer relationship management system the best way to go?

For smaller firms and sole practitioners, not necessarily.

Though Software-as-a-Service and subscription-based systems do make CRM more accessible to smaller firms, sophistication and a reluctance to learn a new way of managing contacts can be a real deterrent to getting a firm through the process of implementation and adoption. And for many smaller firms it can be too complicated, not to mention expensive, a project to take on - particularly since many partners are already working one on one with clients and are not in a team setting where information-sharing is critical.

In fact, the cost of set-up for a smaller firm can run upwards of $25,000 and up to $600 per user.

At Wilkin & Guttenplan in East Brunswick, N.J., marketing manager Avery Quayle has the task of managing just over 6,000 contacts and uses Microsoft Outlook to do it - even though a CRM system is on her wish list. "As the firm evolves, there are certain things that it would be nice to do that Outlook can't do, but as of right now, there are no plans for an upgrade," she said.

Vinay Navani, a partner at W&G who helped to set up the firm's contacts initially, said that Outlook is used and popular among his firm's staff, and it allows for sharing of information when necessary. He said his firm could upgrade - with its 70 employees and 13 partners - but his concern is that a CRM system wouldn't be used to its fullest.

Currently, the contacts span all of the firm's niches, clients, referral sources and prospects. "Every contact has an owner, a person that is ultimately responsible for keeping that contact up to date," Navani said. "At minimum, each contact will have at least three categories assigned to it: a mailing list, a type and an owner."

Quayle said that she has help from staff to manage the database on a full-time basis, but ultimately updates the contact list once a quarter by hunting down partners to make sure their people's information is accurate.

Cassandra Cella, marketing manager at Fazio, Mannuzza, Roche, Tankel, LaPilusa in Cranford, N.J., uses both Outlook and CCH's ProSystem fx Practice Management to manage the firm's contacts.

Cella said that though the combination of the two systems is efficient because of the exporting functions and the ability to track the growth of the firm's practice niches, there are limitations - especially in the area of marketing. "CRM is something I'm exploring," she said. "But I want everything I have to be up to snuff before I move in a new direction. If you run too fast, it's not effective."


CRM is a different animal for smaller firms or sole practitioners, according to Jim Metzler, vice president of small firm interests at the American Institute of CPAs, because partners or those who are working independently are much more likely to be present to every client in the firm and, therefore, the sophisticated technology of CRM is not needed.

"On a large client team, the need for CRM and the benefits for CRM are huge," Metzler said. "In the small firms, you kind of know everybody."

Small firms are able to get the elaborate features of CRM by using systems they already have, Metzler said. They'll use features from their practice management, time and billing, or due date systems to remind them when it's time to communicate with their clients.

Using the due date system is especially popular, according to Metzler, because it becomes a practice management system. They'll see an impending due date, be reminded that they need to contact the client 30 days out, and start communicating with them about what is needed for that deadline.

This, however, though convenient, isn't the best way to engage with clients, Metzler said. It's also not enough communication. "What you have is the work driving the contact, rather than the partner initiating the contact," he said. 'That's a big pit CPAs fall in."

Another problem, according to Nancy Manzo, a Seattle-based CRM consultant, is that when a small firm gets larger - say 20 to 30 professionals - there's a higher risk of error using a system like Outlook. "Small firms probably have a network environment, so Outlook is posted on the Exchange server so people can check other people's calendars," she explained. "Then some firms have public folders. It's not a very sophisticated way of doing things, but it's certainly something firms do and can do. But Outlook wasn't meant to be a relational database."

Manzo added that while price is a factor for many firms deliberating on a CRM system, it's also finding the right software fit, making sure the firm is ready culturally for the implementation and adoption, and then dealing with data clean-up - a process that is daunting.

"From my experience, small CPA firms are not willing to spend the resources to invest in a high-level functioning CRM system," agreed Molly Dore, principal of the Dore Marketing Group, also based in Seattle. "CRM is typically on the low-priority list."

Dore, who previously worked as director of marketing at a small firm in Seattle for five years, said that her firm used T&B practice management software to track client information and handle incoming marketing communications. For non-client and referral sources, she would use Outlook. "It was not an ideal process," she said. "But in the small firms, with limited budgets, you make do with what you have and make it happen."

Still, firms that are growing out of their current contact management system typically consider several options, according to David Cieslak, principal at Arxis Technology in Simi Valley, Calif. First, they ask if any CRM functionality is available within their current practice management solution.

"Since considerable value within a CRM solution is based on integration with other key applications in the business, it's critical to consider this first," said Cieslak.

Cieslak said that if nothing is available or firms want to consider other options, products such as SugarCRM and enter the conversation. "These products are feature-rich, but affordable.", according to Manzo, is perceived as a low-cost provider since it's a hosted solution, and for smaller firms without a lot of IT resources, it may seem like the right choice. The company's "Professional" version is $65 per user per month and the "Enterprise" version - the most popular - is $125 per user per month.

"But as you get larger - say, a 100-professional firm - that translates to about $78,000 a year plus charges to possibly customize the system," Manzo said.

Finally, if firms are looking for high-end solutions, they consider products such as MS Dynamics CRM or Sage CRM, explained Cieslak. "And since most all solutions are now available in a SaaS subscription model, rapid deployment and Web accessibility have quickly become standard features."

But for Metzler, it's not about the system you have, it's about how you use it.

"Good contact management strengthens client retention," he said. "Until you know how to make contact and know what the powerful questions are and create that relationship, contact management is only as good as the person making the contact and developing that connection."

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