by John M. Covaleski
New York - Analysis tools, which automatically make sense of the business data that is stored in accounting software systems, are the newest wave of technology that is being marketed to accountants who provide consulting services to small and midsized businesses.
In the past year, three business software vendors have hit the North American market with aggressive plans to recruit accountants as resellers or users of new analysis tools that work in conjunction with accounting software applications designed for the SME market.
Those vendors - Accpac International of Pleasanton, Calif.; Cary. N.C.-based SageWorks; and Australian-based AccTrak 21 - all view relationships with accounting professionals as critical to the success of their systems. And the systems, to varying degrees, take general ledger data from a business’ accounting solution to perform the following functions:
• Track and detect significant period-to-period changes in any of several key performance indicator areas.
• Benchmark a company’s financial performance against industry peers or against the company’s own earlier performance.
These are only the basic common features for all three vendors’ products. To be sure, each program differs significantly in its level of capability and sophistication and in how it’s operated. For example, AccTrak 21 and Accpac each offer financial analysis systems that integrate with, and extract data from, accounting software that each of those vendors also produces themselves.
Meanwhile, SageWorks is a stand-alone product that generates analysis reports based on data that is extracted from other vendors’ accounting applications. However, it’s likely that adjustment could be made to allow each of the analysis programs to work with other vendors’ accounting applications.
SageWorks, for example, can work with any data that is formatted for Microsoft Excel, meaning that it can work with any accounting software application that outputs to that spreadsheet system. Intuit Inc. is already making SageWorks technology available in its QuickBooks accounting software as a program privately labeled as Expert Analysis.
While each vendor offers different types of tools, they all make the same underlying claim: by providing rapid analysis of already-compiled accounting information, their tools enable accounting professionals to step forward in providing consulting that are services related to the analysis.
"Accountants understand their business clients extremely well, but there’s widespread recognition they can do more - that they have lacked the time and tools to provide the truly meaningful advice they want to provide," said Andrew Varlamos, senior vice president of AccTrak 21. That company is building a national U.S. sales channel of accounting professionals for a product line that’s already established in Malaysia.
AccTrak 21, which is headquartered in Bermuda with an operations base in Melbourne, Australia, has been among the most aggressive new entrants to the U.S. business software market in the past year. Its product line consists of an accounting suite, which is designed primarily for small businesses outgrowing the functionality and speed available in QuickBooks and other retail-sold accounting software, and complementary add-on modules and features that handle almost all aspects of business management.
Varlamos is hopeful that his company’s financial analysis features will entice accountants to resell or recommend the product to their clients. The analyses add-ons include a program that can track a company’s key measurements of solvency, such as ratios on receivables and net profit margin, on a monthly, weekly or daily basis.
AccTrak 21’s report generation system, which uses online analytical processing or OLAP database technology, includes the ability for the reports to be generated by the vendor or for the accountant to produce the reports independently.
Theoretically, if the program detects an area where a company’s numbers are deteriorating, the accountant could step in to advise the client. For example, if accounts receivable ratios are widening, the accountant could, on a consulting basis, advise the client on how to get more timely payments, thereby avoiding bigger problems later.
Enabling accountants to step in with so-called value-added advice is what all of this new wave of business analysis software vendors are striving for.
"We are at a time when accounting firms can use business analysis tools to differentiate themselves from their competitors and uncover a whole new source of consulting work beyond traditional audit, accounting and tax services," said Bill Copeland, strategic accounting alliance vice president of Accpac International, which is marketing a Business Analysis Suite.
Accpac’s suite features a broad array of tools including the ability to isolate any of several key business performance areas for a company and benchmark them against industry peers or against the company’s previous history; budgeting and forecasting; and the ability to perform "what-if" analyses of various business scenarios - including predicting the likely outcome of specific consulting recommendations.
Accpac, for its part, said that it has attracted about 60 accounting firm users of its suite and developed marketing relationships with industry networks, including CPA Network of Stony Brook, N.Y. The network is recommending the suite to its 35 accounting firm members, most of which provide services to companies of $1 million to $20 million in annual revenue.
"This Accpac suite picks up where the financial statement leaves off, and it gives accountants a real base from which to deliver consulting services," said CPA Network executive director Neil Guilmette.
In mid-September, AccTrak 21 underscored just how important accountants are to the business analysis movement when it appointed a new chief executive for U.S. operations - Wayne Harding, senior director of channel development for CPA2Biz, the Internet portal distributor of services from the American Institute of CPAs.
Harding, who has been active in many AICPA technology initiatives and was a senior executive with the former Great Plains Software company, could provide
AccTrak 21 with a major boost in gaining accounting industry recognition. At least two other software vendors had also been trying to attract Harding to executive positions that are focused on the accounting industry.
Cary, N.C.-based SageWorks expects to crack deeper into the accounting industry by leveraging some well-established marketing alliances for its analysis technology. In addition to its relationship with Intuit and QuickBooks accounting software, the company also has marketing alliances with banking companies, Wells-Fargo, in San Francisco, and New York-based Citibank.
Intuit is using SageWorks’ ProfitCents product, which extracts financial data from a business’ general ledger to produce an analysis report that compares how that company’s financial performance ranks with the performances of similar companies in its industry. The banks are using SageWorks CreditCents’ technology to keep up to date on their clients so they can help clients with outstanding loans to avoid or work their way out of financial problems that could cripple their ability to repay the loans, Hamilton said.
SageWorks products also include a recently released more powerful Infinity version of ProfitCents, as well as two separate products that are designed for use by investors. All of its products develop reports by using proprietary SageWorks technology systems that are patented or have patents pending.
SageWorks also recently began making its systems available on the CPA2Biz portal. Harding, while still employed at CPA2Biz, hailed the vendor’s entry on that platform.
"SageWorks is the right product at the right time. The new legislation over financial reporting calls for more transparency and this kind of analysis capability brings that greater transparency," Harding said. Even though he moved to AccTrak 21, Harding will likely remain with CPA2Biz in a consulting role for at least a while.
Despite AccTrak 21’s hiring of the influential Harding and SageWorks’ affiliation with QuickBooks and CPA2Biz, Accpac may have the biggest accounting industry marketing advantage. It already has some 70,000 registered users of its major accounting products, Pro and Advantage Series, and a channel of 1,400 resellers, many of whom are accountants or are affiliated with accounting firms.
Accpac launched the program in May as part of a bigger strategy to work more closely with accountants to reach the small business market, in general. "Public accounting firms have long had the keys to the castle - the financial compilations of thousands of clients," chief executive David Hood said when the suite was launched.
