At first blush, an online business can look like a good access ramp to the road of work-life independence - especially for budding entrepreneurs whose comfort with information technology is high, but whose access to cash or financing is low.
Richard J. Morochove, FCA, CA∙IT, is president of Morochove & Associates Inc. in Toronto. For 15 years, he’s been advising clients about effective e-business marketing and growth strategies.
“Building a successful online business can be more complicated than it looks,” he cautions. “Customers need to find you online, so your website must be ‘optimized’. It needs to include key words that are search-engine friendly and be directed to your target market – the people who want to buy what you’re offering.
“A basic business-card website can cost just a few hundred dollars to set up,” Richard says. “But expect to get what you pay for. If you need an online catalogue with shopping carts and the ability to process credit card payments, it can be much more expensive.”
Beware, though. As your website becomes more complex, the risk that it can be compromised grows, too.
“It’s possible to have a secure Internet commerce connection,” says James Belesiotis, CA, CA∙IT/CISA in Toronto, “but there are inherent risks that come with using the Internet.” James specializes in advising clients about mitigating the risks in electronic systems, helping them use information technology to protect their company’s information and finances.
“Hackers ‘sniff’ for data travelling through the Internet and can read it using mathematical models,” James says. “If your business controls don’t properly manage the ordering, shipping and collection processes, fraudulent transactions can slip through undetected. Your company may risk shipping an incorrect product, sending it to the wrong address, or sending it without the proper collection-and-credit security for the transaction.”
And then there’s the risk of repudiation – clients who deny that they ordered or bought your products, when in fact they did.
To make matters worse, the tax authorities will look at Internet sales to ensure they’re properly included in your annual income. And it’s not just income tax they look at, but sales taxes on products, and delivery fees that also need proper audit trails.
“Your website is an arm of your business and subject to the same controls. This is fundamental,” says James.
“Make sure your website has all the information people will want to find there, in a format that’s logical and intuitive,” says Richard. “Include price lists, locations, and any extras that set your business or products apart from the competition. Add a separate contact page so someone visiting your site can easily contact you for additional information.”
Both James and Richard agree that purveyors of online businesses should not scrimp on professional help to develop their websites. There’s no substitute – or recourse – for ensuring that your business, and your client’s information and confidence is kept safe and secure.
Inst. of Chartered Accountants——
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The Institute of Chartered Accountants of Ontario is the qualifying and regulatory body of Ontario’s 33,000 Chartered Accountants and 5,000 CA students. Since 1879, the Institute has protected the public interest through the CA profession’s high standards of qualification and the enforcement of its rules of professional conduct. The Institute works in partnership with the other provincial Institutes of Chartered Accountants and the Canadian Institute of Chartered Accountants to provide national standards and programs that are used as examples around the world. </em>
