AccountMate: What's Old is New Again

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The newfound independence at AccountMate Software Corporation is good for its hundreds of business partners. That's the view of both the company's executives and resellers. Since AccountMate management purchased the company from Sage in 2004, AccountMate has enhanced its accounting modules and emphasized that small is beautiful. Sage is a billion-dollar company. AccountMate is somewhere under $10 million.

The smaller company makes a big difference to John Kane, owner of Chatsworth, Calif.-based Albany Business Systems an AccountMate reseller.

Kane says he embraces the return to a direct line of communication. Now, Kane says, if he has a problem he can pick up the phone and call AccountMate's president and chief executive officer, David Dierke. The direct access to AccountMate's decision makers results in instantaneous decisions.

Partner Insights

AccountMate which was founded in 1984, was acquired by the former Softline in 2000, and was then swallowed by Sage in November 2003. However, since Sage had already acquired one source-code product, Accpac Pro Series, with its purchase of Accpac, it agreed to spin off AccountMate to three principals, CEO Dierke, COO David Render, and CTO Tommie Tan.

The company is something of a cross between AccountMate, and the former SBT Accounting Systems, purchased by Accpac in 2002. Tan, with AccountMate since 1989, has been the product line's chief architect. Both Render and Dierke held executive sales job at SBT, with Dierke leaving that company before its purchase by Accpac. He joined AccountMate during the Softline era. Two other members of the management team, Donna DeRosa, director of product marketing, and Omar Sary, vice president of international operations also worked at SBT. The team has produced a company that has been profitable since its inception.

With the change, AccountMate resellers found themselves dealing with a vendor with 45 employees, much smaller, but very familiar with the source-code market. And they say that makes a difference.

"They are more willing to listen and make changes based on what we say," agrees Vernon Ikeler, owner of Torrance, Calif.-based ISYS Business Systems. "They are working very closely with the business partners. It is much more of a team effort."

AccountMate is not looking to grow its number of resellers substantially, but it does have an ongoing recruiting process to replace the five percent of VARS it loses annually.

Updating Things

Among the first things that needed attention was updating the company's product line. At the time it renewed its independence, Render recalls, AccountMate had not upgraded its AccountMate LAN package since 1995. Softline had marketed a competing product and the prior management did not believe the upgrade was worth the investment.

AccountMate dusted off the LAN software, which serves small businesses, and shipped it in June with new modules and a new user interface. The company also sells AccountMate MSDE Software for businesses with up to five concurrent users that want SQL, and AccountMate SQL Software, for those with high transactions volumes and heavy user loads.

New add-on modules include RouTek for AccountMate, a route sales and management software package, that can run on hand-held devices and which integrates with AccountMate's accounting software. The complete package costs $4,995. Also introduced this year was a CRM add-on called InfoTrac for AccountMate from InfoTrac Solutions, a Canadian company, which costs $5,000 for up to five users.

AccountMate also struck up a relationship with RedTail for an EDI module. Render says that broadening the product line has made a difference in the activity level of its channels.

"As a result, dealers who were inactive are coming out of hibernation," says Render referring to those resellers who have done business with AccountMate over the past three years, but not within the past 12 months. "That is one reason why we don't want to terminate or alienate our inactive clients."

As many as half of AccountMate's 600 resellers can be classified as inactive, many of them smaller resellers whose end users do not need to upgrade or add on to their modules for a while.

"We want them there when the customers (end-users) come back to life," says Render.

AccountMate has no plans to alter its reselling requirements. Margins range from 30 percent up to 45 percent for a typical software solution costing $20,000. By selling services, VARs can often push the total installed price to about $80,000.

However, those prices still are lower than the competition. Kane says AccountMate's price is as much as half that of some other vendors. But while price is an important factor, it is not the sole factor on which Kane sells the product.

Kane says, "We sell on the basis that it is a better program. So we're giving the customer a better program at a lower price."

AccountMate's Business Partner Program has three classifications, VARs, Vertical Solution Partners, and Business Partner Integration Partners.

For $3,995, a VAR can become an AccountMate reseller. The cost includes a start-up kit that consists of not-for-resale software. It also covers marketing materials, three days of training, and one year of technical support.

Because of its nature as a source-code product, sixty percent of the AccountMate software sold is customized by the resellers. To do that and be successful, VARs need two characteristics, says Render. They must have accounting software sales experience complemented by a staff of technologists who are familiar with Microsoft's Visual Fox Pro programming language.

To capitalize on its VARs' ability to modify software, AccountMate revised its tagline to "Software That Fits" from "Solutions That Fit."

ISYS's Ikeler says AccountMate's customizable software is critical to attracting and serving clients.

"The modifiable source code is where clients get the biggest bang for their buck," says Ikeler.

For example, if a customer's purchase order form requires 25 characters versus a pre-established five, the VAR can rewrite the order entry form.

"The system can be modified to fit the companies unique needs instead of the company changing to fit the software," says Ikeler. "We haven't run into a situation where we weren't able to meet a customers' needs in terms of flexibility."

Ikeler, a former CPA and corporate comptroller, has sold AccountMate for 15 years. Last year the firm, with four full-time employees had revenue of $500,000.

Ikeler says when other accounting software vendors say their products are customizable, what they mean is the software allows users to select from a number of predetermined choices. AccountMate gives users unlimited options.

One criticism by resellers of AccountMate's software is that there is little or no support for dated applications.

"I'd like AccountMate to have better technical support for its older versions," Ikeler says. "However,' he added, "it's a problem throughout the industry."

He cited many customers run older versions because they can't afford to invest in new versions or upgrade their existing software.

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

ACCOUNTMATE SOFTWARE SNAPSHOT
HQ: Novato, Calif.
Phone: (800) 877-8896
Web: www.accountmate.com
Revenues: Less than $10 million
Employees: 45
Founded: 1984
Products: AccountMate for SQL; AccountMate for MSDE; AccountMate for LAN

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