AccuFund Flexes Its Flexibility

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AccuFund entices resellers with the leeway to sell its accounting software and modules for government and nonprofits in whatever way fits their own individual sales goals. While the company is aggressively seeking resellers, it is not just looking for those interested in selling high-dollar volumes, but also resellers that may sell only three or four systems per year.

"We pride ourselves on being a very flexible and friendly software vendor,'' says president Peter Stam. "We are happy to have small-volume sellers, and we don't penalize them for not making a minimum dollar amount."

That suits Pat Nalley, owner of Nalley & Associates, just fine. The Occidental, Calif.-based firm, which has been a VAR since 1986, generated $200,000 in revenue last year from fees on various accounting software products, including Best Software's MIP and Kintera's FundWare lines.

Partner Insights

"I'm not much of a go-getter at this point. I want to work at a more measured pace,'' says Nalley, who considers herself an AccuFund referral VAR. "One of the things I like about working with AccuFund is it allows resellers to set their goals and they don't hammer on us to meet their expectations."

The Needham, Mass.-based company also realizes that resellers like Nalley that handle AccuFund's accounting software suite may also sell competing products.

"Yes, I would prefer to have a reseller who sells only my product,'' Stam says. "But, I am realistic about the limited number of potential partners available and when the customer compares AccuFund and its features, we can let our product stand on its own merits."

By offering flexibility, AccuFund has grown its reseller base to 30 VARs today from 12 in 2002. AccuFund's channel program, called the AccuVAR Partner Program, was established in 2001 when the company was spun off by 20 Pines Resources, which developed the original AccuFund package to enhance the visibility of its add-on software for government offices including sheriffs' departments and nonprofit organizations such as Head Start.

The software products encompass accounting development/fund-raising management, and its stand-alone, specialty modules which include Purchasing with Inventory, Requisition Management (which requires the purchasing module), Loan Tracker, and Business License and Sales Tax.

Stam says there are three accounting software markets within the government and nonprofit sector: agencies over $50 million, up to $50 million, and less than $1 million. The latter is the largest group consisting of small municipalities, regional economic development offices, and local chapters of the American Red Cross.

Stam claims that off-the-shelf accounting products are insufficient for many clients because the software cannot be customized to perform the specialized reporting that can be configured with AccuFund.

The company's small size sometimes represents a barrier to both end users and resellers.

"The first VARs were taking a chance,'' Stam says, referring to their earning potential with a novel product. "But as the visibility increases, so do the number of VARs."

AccuFund resellers such as Mountaineer Computer Systems have come up short in competitive bids because of AccuFund's lower market profile. "That has hurt us in some bidding situations," says Jeffrey S. Feamster, vice president of Lewisburg, West, Va.-based Mountaineer.

Small-Town Touch

AccuFund recruits its VARS through a number of venues that include word-of-mouth and trade advertising. According to Stam, 85 percent of AccuFund's revenues, which he declined to disclose, are generated from its primarily small town resellers.

"What we've found is that in the rural parts of the country, these people have strong allegiances with their customers,'' says Stam.

Since many resellers are neighbors with their clients, in many cases their close proximity results in a lot of repeat business locally and regionally from word of mouth.

Ninety percent of Mountaineer's clients are small governmental districts. An exclusive AccuFund reseller, the reseller's three full-time employees generated $450,000 last year.

"I think AccuFund is an excellent fit for government and not-for-profit. It's responsive to those users' needs,'' Feamster says. "You could use it in a commercial situation but the horsepower behind it is overkill."

He continues that the software is well suited for inexperienced personnel within small city governments, local community action groups, or charities, because it is easy to learn and use.

"Our client base is not very sophisticated," Feamster says. "One of the things I have always liked about AccuFund is their modules are consistent and can be integrated with HR, utility billing, and sales tax."

Feamster says Mountaineer's strategy is not to position itself as a sales firm, but more as consultants who understand their clients' business. A CPA who has extensive experience conducting audits, Feamster says he can address questions beyond AccuFund's software to include day-to-day operations, numbers needed for an annual report, and reports that need to be generated for an audit.

"Since we don't sell three systems a month, we've got to generate revenue from somewhere,'' Feamster says.

Mountaineer is not poised to become a high-volume reseller. According to Feamster, "We'd rather have 10 happy clients than 50 we've sold to but we don't know what happened with them."

That is akin to Finley & Cook's philosophy. The Shawnee,Okla.-based reseller and CPA firm offers AccuFund among an accounting software lineup that includes Serenic's Navigator and Kintera's FundWare.

Manager Linda O'Neal says the firm was very careful selecting the products it represents to make sure the software it delivers will not only meet the client's needs today, but tomorrow.

"AccuFund is priced where it's affordable for nonprofits that have a limited budget for a new accounting system,'' says O'Neal. The software, O'Neal says, can be modified to fit a client's individual needs, whereas most software products, especially in the $8,000 to $25,000 price range cannot.

"The other thing I really like is the value to the client for the cost,'' Nalley agrees. "I felt in all good conscience that I had to offer it to my client base."

Classifications

AccuFund's resellers are classified as either "referral" or "volume" VARs. Depending upon their status, VARs receive from 5 percent up to 50 percent of the licensing fees.

Stam says the average client sale is approximately $14,000, with most margins falling into the 25 percent to 40 percent range. To be considered as a volume VAR, a reseller must sell more than $40,000 of AccuFund software annually.

AccuFund pricing starts at $3,995 for a single user, up to between $50,000 and $60,000 for 20 users of its entire accounting and development suite, including employee time entry and electronic requisition approvals.

VARs pay a $2,000 fee to join the program, plus an annual renewal fee of $100.

In return, authorized firms receive support from AccuFund on installations, access to Webinars, and assistance with proposals during the first two years.

As for the longstanding $100 renewal fee, none of the VARs said they were aware of anyone that had been charged the annual fee.

"We have not imposed it yet,'' says Stam. "We would rather they put it towards coming to our training sessions."

Training is mandatory for resellers. AccuFund hosts two training programs annually in May and November, priced at $225 per session. One covers sales while the other provides advanced training on the software.

"Once a year, at a minimum, we [Finley & Cook] participate in a training session and it is well worth the investment," says O'Neal. "AccuFund is a user friendly system and most implementation training can be done in less than a week."

Riccardo A. Davis is Associate Editor of Accounting Technology and can be reached at riccardo.davis@sourcemedia.com.

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