CPA Practice Advisor

AUG 2018

Today's Technology for Tomorrow's Firm.

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AUGUST 2018 ■ www.CPAPracticeAdvisor.com 27 BUILDING YOUR NICHE PRACTICE business, complexity, uncertainty, etc.) along with assessing your specific firm attributes (risk tolerance, competency, level of service choices, etc.) as you carefully consider whether these prospective clients would be a good fit for the firm. As part of this risk assessment, firms should discuss and review the potential legal ramifications with an attorney who specializes in this industry. As part of your process in assessing “risks,” never forget that your professional acts and decisions will be judged in hindsight. Therefore, if your firm decides to service cannabis clients (or any other higher-risk clients, for that matter), be extremely attentive to the following rules in the malpractice world: • Professional standards for CPAs are merely the floor — juries hold CPAs to even higher standards. • A CPA’s job is to advise the client of opportunities and warn the client of risk. • CPAs are scriveners — lack of documentation is viewed as evidence of potential malpractice; jurors expect CPAs to have strong documentation, and the lack of it is viewed as not having met the “burden of proof.” • “Guilt by association” can impact CPAs in a dispute. Loss Prevention Best Practices Apply appropriate safeguards to address the added risk threats associated with cannabis clients. The following are some best practices to consider: • Meet principal(s) face to face. • Perform background checks on all principals. • Insist that clients have ongoing legal representation. • Obtain written consent annually to interact with client’s attorney. • Document, document, document! • Have a signed and detailed annual engagement letter clearly articulating scope and limits as well as enhanced “protective clauses.” CAMICO provides a sample engagement letter template to CAMICO policyholders (“Cannabis Client Tax Engagement Letter”). • Document all planning, work, consultations and communications (internal and external). • Obtain a management representation letter annually (regardless of type of service) that affirmatively confirms the client’s understanding of, and compliance with, state laws and regulations. Consider creating a Crisis Management Plan (or enhancing an existing one) to manage the firm’s potential reputational risks. A crisis management plan should be based on the potential consequences of servicing cannabis clients and should include engaging with a qualified attorney and public relations firm (for incident responses), as well as specifying who will speak on behalf of your firm. More information about CAMICO insurance solutions and risk management programs is available at www.camico.com. ■ Reprinted with permission. Copyright CAMICO 2018. All rights reserved. graphical ads placed on industry- and brand-specific websites your target market views. Graphical ads do not cost more to use than a text ad, other than for design work. If you plan to use text ads, consider unique ways to attract clients, from the services you offer, to the phone number you’re using. For example: High Standard Accounting: Denver Co. - Serving the cannabis industry for more than 5 years. Financing relationships, tax + accounting services, and more. Call today. 1-800-HIGH-CPA Email Marketing Let website visitors add their email address to your list by creating, posting, and sharing informational articles with your target market. Begin by creating an informational piece. Then design a website landing page that prompts visitors to enter their email address to view the article. Tip: The more fields you request on this page, the less likely someone will complete it; however, if they do, that’s more data than you get with just an email request form. Be sure the visitor knows they are granting permission for you to email them marketing and communications materials. This is usually done with a link to your terms and conditions and privacy policy, Once you have a good number of emails, continue to share relevant information cannabis clients can use, including tax regulations, tax filing dates, human resource tips, bookkeeping tips, cloud-based storage solutions, and more. Keep the emails short with one focused call-to-action, such as contact us for a free consult, register for a webinar, attend our conference to learn more, etc. Social Media Social media is a much more forgiving media than online advertising or traditional marketing. Therefore, it may be a channel your sales team will want to leverage to draw in new clients. With the term “cannabis” having a high-popularity rating, be careful how you use it. Be more specific if you plan to target medical marijuana companies by using the hashtag #medicalmarijuana or #mmj. Consider following industry influencers to see what they are sharing and determine if you can share, comment, or draw from their posts to create content of your own. Influencers like @JoinGreenRush, @WeedFeed, @TheMMExchange, and @InvestorIdeas are some you may want to watch. Finally, create a Twitter list, Facebook group, and/or Instagram feed to stay in contact with your target market. Those direct connections to your audience give you and them a unique opportunity to start conversations, increase brand awareness, and influence market share. As with any new industry, consider a solid amount of target market research before jumping into any marketing initiatives. The more you know about your target market — where they are; what they are reading; where they spend time online; what social media tools they use; etc. — the faster you can get in front of them with your solutions. ■

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