Are more CPA firms moving into software reselling or moving out of it?

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I am seeing more get out of the business because of the money and time involved for certification. Once they go through their customer base, it becomes difficult to sell, market, and support the product. Most CPAs don’t know how to sell or market.

Stanley Kania
Software Link
Alpharetta, Ga.

From our perch, we’ve not seen any firms moving into reselling, but neither have we seen more firms moving out of it. The New York Metro area does not seem to have a tide moving in either direction. If anything, it is a one-off situation.

Partner Insights

Arthur E. Nathan, CPA
Solution Strategists
Cranford, N.J.

I feel that more accounting firms are moving into the software reselling business, and those in the business are adding more product lines. But many enter this marketplace for the wrong reasons. Often, firms are enticed by lucrative software commissions and relatively high consulting fees. They then struggle with the intense and competitive sales process and the intense knowledge base [that] current software requires. They are quickly learning that to survive in this business it takes great resources, stamina, experience, and luck. We have experienced an increase in the number of firms that want to partner with us.

Eric Rogers, CPA
Rogers & Co. CPAs
Mineola, N.Y.

My sense is that accounting firms are moving out of the software reselling business for a variety of reasons: 1) The Final Four are looking to divest themselves of their consulting practices due to conflicts with their public company audit client base; 2) Partners in many larger CPA firms resist the introduction of technology services into their client base, fearing the risk of a lost revenue stream that might result from a failed implementation; 3) There are vast cultural differences between traditional CPAs and technologists; and, 4) Software sales in the last few years have slowed, so profitability has suffered.

Steve Templeton
Templeton & Co.
Royal Palm Beach, Fla.

Many accounting firms are no longer reselling software. Many of these firms sold only one or two software packages in the past and have discontinued this service due to liability, software publisher certification costs, and the loss of personnel interested in providing this service. However, they appear to be committed to the software and are referring clients to resellers as well as joining software publisher alliance programs.

Ilene Eisen, CPA, CITP
ie Solutions
Monterey, Calif.

I have worked for two regional firms that were Microsoft Business Solutions resellers. Both organizations—and several other firms in Minnesota—dumped their reselling business in the last year. Here are the reasons: 1) Even if the reselling division made a slight profit, it never reached the level of profitability that the firm expected; 2) CPA partners were not willing to risk losing a client for the marginal benefit provided by having a reselling division; 3) Some firms could not get comfortable with the independence issues; 4) Some firms have tried to share resources across the assurance services and the implementation services. 5) Finally, most CPA firms are not good at sales and marketing.

Scott Boedigheimer, CPA
Altara
Bloomington, Minn.

Originally, reselling was a great addition to our revenue stream. But we have made the decision to form alliances instead. With the increased demand for specialized software and the need for support and training, we were spread very thin. Now, we have opened a referral program from these software consultants for new accounting clients. Now, we can concentrate on what we do best: accounting, business consulting, and taxation matters.

Don Jex
Don Jex & Associates
Salt Lake City, Utah

I have seen more accounting firms moving out of the software reselling business because they are not making money or not the kind of money they think they should. Accounting firms need to understand that sales and marketing matter most in the software reselling business because you’re working on (generally) one-time projects. This is a hard thing for them to grasp when billable hours matter most to accounting firms who generally have a large part of their business in annually recurring work.

Steve Krueger
Virchow, Krause
Appleton, Wis.

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