The CPA-VAR Connection


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Mike Fitzgerald has no doubts about the effectiveness of his alliances with CPA firms.

By Robert W. Scott

When he asks why they contact his reselling firm, the Fitzgerald Group, he says the accounting firms rattle off the reasons: "I get your newsletter. I've attended your conferences. I've seen your ads in the state society newsletter."

Partner Insights

Fitzgerald also has no doubts about the kind of business that CPA firms steer toward the Fitzgerald Group, a Sharon, Mass.-based accounting software reseller that handles much of the Best Software line. "We recognized that the quality of the referral by a CPA firm is far higher than any other referral," says Fitzgerald. He continues that, "If every 10 referrals from Best turn into a new client, it takes two referrals from CPAs to produce a new client."

The Fitzgerald Group was founded in 1994. Before that, Fitzgerald, who is not a CPA, ran reselling operations as part of a CPA firm for seven years. He has been working with accounting firms all that time. "We got a start by helping CPA firms with their technology needs," says Fitzgerald.

The company works with about 75 firms. Half of these are members of the Best Software Accountants Network, while the other half, which his firm got without the help of Best Software, "used to be in the State of the Art channel," says Fitzgerald. State of the Art was the company that Sage purchased that is now Best Software's Mid-market Division. Many of Fitzgerald's partners are CPAs that had resold MAS 90 software when SOTA was authorizing firms "if you were breathing and a CPA," he says. But after Best tightened reseller qualifications a few years ago, many accounting firms dropped their reselling roles. However, "they want to stay connected because they are using the software or have clients using it," he says.

A CPA Builds a CPA Program

Many of the most active reselling firms that offer CPA programs are themselves CPAs who were once in public practice. So it's not surprising that when SAP launched its CPA program in May, it turned to a CPA reseller for the program's design.

"As partners, it's our obligation to educate CPAs," says Betty Carlini, a CPA who operates reselling firm AVC Business Advisory Solutions in King of Prussia, Pa. The SAP program was built on elements developed by Carlini, who was once a firm instructor with KPMG and who also worked with Price Waterhouse.

SAP is seeking to cultivate relationships between CPA firms and VARs through its CPA Advisor Program. If CPAs refer a lead to a reselling firm and the deal closes, the purchase will get a discount on SAP's Business One software.

But to make sure CPAs become familiar with the product offering, Carlini developed CPE courses to teach accountants about Business One. It got approval for its program from Pennsylvania first, and that received the imprint of the National Association of State Boards of Accountancy, and Florida.

"The courses are designed for a couple of different people," says Carlini. "That includes CPAs who have clients using Business One, and other professionals who may be using SAP at the division level."

The firm's Web page actively promotes the CPA relationships. It exhibits and speaks at CPA conferences and advertises regularly in state society publications.

It has a button for its CPA Alliance program on its home page and also provides a link so that accountants can sign up for BSAN. The Fitzgerald Group also conducts its own technology conference that draws representation from 75 to 100 CPA firms annually. And it offers initial systems evaluations at no charge to CPA firm clients, along with providing free introductory training on MAS software.

One of Fitzgerald's partners, Boston-based Parent McLaughlin & Nangle, illustrates just why accounting firms that have been involved in technology turn to other organizations for help. The firm's best MAS staff person moved to Florida a few months ago, so where previously Fitzgerald might have performed 20 percent of the MAS 90 work that the firms are involved in, it now performs about 80 percent.

"We use him for all installation and ongoing support of MAS 90 software," says Chuck Lee, a CPA with Parent McLaughlin who is involved in business development. "For us to have the various skill sets needed, we're better off working with somebody like that. It's more profitable."

It's not just a matter of the CPA firm handing off technology issues to Fitzgerald. The CPA still provides a number of technology services. Parent McLaughlin has a large practice with banks, and provides IT security services to them, and it also offers database design and Web site development. The two firms also make joint calls at client sites, although Fitzgerald often goes solo, representing Parent McLaughlin. In turn, the CPA firm keeps its eye out for opportunities to turn over to Fitzgerald, such as a client who needs to upgrade accounting software.

"We try to leverage the relationships we've got," says Lee. "If we've got a client that pays $30,000 to $40,000 a year for audit and tax services, there is a good chance they are spending $10,000 to $15,000 a year for IT services."

Trouble Getting Started?
So with many CPAs gun shy about technology, but with their clients still needing technology services, it would seem natural for CPAs to pursue alliances. But it's more often the VAR that is cultivating these relationships, even though VARs are often not sure how to start.

Jennifer Wilson, who operates the consulting firm ConvergenceCoaching, says that CPA-VAR alliances are "like a trade secret." For reselling firms who understand how to operate these programs, "a significant portion of their leads are generated from CPAs," she continues.

Wilson acknowledges that many VARs are hesitant to take the plunge because they perceive developing these programs as taking a lot of the owners' time, while CPAs, she continues, should be showing more interest since "Sarbanes-Oxley raised the question of what's appropriate to deliver in terms of services to clients, especially on the audit side."

Even CPA firms that have exited or spun off technology operations need to have some place to send clients who have technology-related questions, she says. However, for the relationships to succeed, VARs must recognize the widely different values of CPA firms.

"Every single firm and practitioner with the firm will have a different value system and a different perspective," says Wilson. "It's not just about cash. It's not just about billable hours. It's not just 'Let me offload this client situation.'"

There are limitations to the ways that accounting and reselling firms can do business. That is partially defined by state regulation, in the cases of states that do not allow CPAs to receive commissions. Most CPA firms do not take the cash even when they can.

"We'll give them a finder's fee," says Reagan Stanley, a partner with Stanley Stuart Yoffee & Hendrix, a Maitland, Fla.-based Solomon reseller. Firms can keep the fee "or have us donate it to their favorite charity. They tend to keep it," he says. More typically, CPA firms opt not to receive cash. Stanley Stuart will provide the accounting firm a day's software training, which is worth about $1,200.

But after seven or eight years, Stanley says the program is not the biggest source of leads. "What we're finding is that the CPA firms are not pro-active," he says. In many cases, the small accounting firms do not have clients large enough for mid-market accounting software, while larger firms are often focused on niches. "I wish the CPAs were a little more reliable," he says.

Vendor Confusion
If CPAs and VARs are confused about alliances, it's equally hard to measure just how successful formal vendor programs are. Before its purchase by Best Software, Peachtree claimed upwards of 15,000 CPAs in its AccountCare program and more in the Sage Accounting Alliance. Since the various programs have been rolled into the Best Software Accountants Network, the number of enrolled has dropped to 8,000.

MYOB Links Consultants and CPAs

As a smaller player in a retail accounting marketing dominated by Intuit's QuickBooks and Best's Peachtree, MYOB needs to make all the noise it can with CPAs.

The Rockaway, N.J.-based accounting software manufacturer has been providing accountants with not-for-resale copies of the MYOB Plus and AccountEdge for Mac and teaching them how to use the programs. That way "we get over the 'Who are you guys? mentality," says Todd Salkovitz, the company's Philadelphia-based partner relations manager. MYOB does not have resellers. But it does have a channel of certified consultants and it is also trying to increase its links with CPAs. By educating the CPAs, the consultants have a better opportunity of approaching the accountant's clients.

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