by Roger Russell and John M. Covaleski
Hauppauge, N.Y. - While software vendor AccountantsWorld hailed the sale of its Tax Relief tax preparation line to rival Creative Solutions Inc. as an opportunity to expand as a Web portal provider of accounting tools, observers of the transaction praised CSI’s ability to land the product and its approximately 6,700 customers.
In mid-July, Creative Solutions, a Thomson business, announced that it had acquired the Tax Relief line and is making a “special offer” to transition those customers to its UltraTax line, providing users with UltraTax at Tax Relief’s current price for the next three years.
AccountantsWorld said that the deal allows it to “devote all of our resources to greatly enhancing our remaining products and services, and to introducing new services to help accountants manage and grow their practices.”
The Hauppauge, N.Y., company, formerly known as Micro Vision, has been steadily beefing up its position as an Internet-based vendor of software and services for accountants since it launched the AccountantsWorld Web site in 1999. As a sign of its increasing Web focus, it dropped its original name and adopted AccountantsWorld as its corporate identity late last year.
“At this point, there is no company concentrating solely on practice development for accountants,” said AccountantsWorld president Chandra Bhansali. “We’ll give them everything they need to develop - all the software and Internet services to help them get new clients, plus training and education.”
He stressed that, while focusing on its Web-based line, his company would continue to offer its other desktop-based applications, which include the Accountant’s Relief client write-up software, after-the-fact payroll and fixed-asset computation products, and the PFP Relief personal financial planning software.
Accounting profession technology authorities commenting on the deal underscored the benefits to Dexter, Mich.-based CSI. “For Creative Solutions, this makes a lot of sense - they pick up more customers, which is something that’s hard to come by,” said Tom C. Davis, a Valdosta, Ga.-based CPA and consultant who advises firms on technology matters.
Davis noted that CSI - along with tax software industry rivals CCH, developer of the Pro System fx line, and Intuit, developer of Pro Series and Lacerte - have led a surge of tax preparation software product and company acquisitions in recent years. These larger vendors have been buying to build market share for their product lines, which include suites that integrate tax preparation with several other applications that are key to accounting professionals.
The exact number of UltraTax users was unavailable, but the product is in use at 11,000 firms, according to CSI’s submission to Accounting Today’s 2003 Top 100 Products report.
Other authorities, including one person who is privy to the acquisition, said that CCH and Intuit may have also been bidding on Tax Relief. However, Bhansali called the speculation “rumors.”
“It’s a good deal for CSI,” said Tempe, Ariz.-based consultant Roman Kepczyk. “They have a very strong product for small-to-midsized firms. They’ll probably be able to keep most of the Tax Relief users. They’re priced less than Lacerte and CCH, so the Tax Relief customers will fit into their existing client base.”
Suite integration is a major plus for CSI, according to Kepczyk, who is also chairman of the American Institute of CPAs’ Information Technology Committee. “I always thought the struggle would be between CCH and Intuit for suite supremacy, but it looks like the real battle will be between CCH and CSI,” he said.
While officials from CSI and AccountantsWorld both say that Ultra Tax and Tax Relief are targeted for use by the same type of small and midsized accounting firms, others say that UltraTax is a higher end and higher priced.
Meanwhile, Bhansali pledged that AccountantsWorld would focus on developing its Web site offerings for practice development. “Most companies that specialize in practice development just provide inspirational or marketing seminars,” he said. “We’re the first true company devoted to practice development for accountants, and we’ll take full advantage of the Internet.”
Bhansali said that he had been approached by a number of companies over the last five years, but decided that “now is the time, because we want to concentrate on new services.”
He said that he chose CSI because, “Their product line is probably the closest to Tax Relief.” He added that CSI has “the most comprehensive converting system for our users.”
Some observers questioned the decision by AccountantsWorld to dispose of its most loyal customers at a time when it hopes to build up its portal business. Launched in 1983, Tax Relief is among the oldest tax preparation software products still on the market.
AccountantsWorld also risks that Tax Relief users will be upset by the deal, and balk at returning to that vendor for Web services. For example, Tax Relief user Alan Lipke, a sole proprietor CPA in Lynbrook, N.Y., said that transitioning to UltraTax could pose problems for him.
“UltraTax is worksheet-related, but with Tax Relief you could work directly on the form. I don’t like worksheets - they’re just an extra step,” he said. He also noted, “Tax Relief had a great billing program built right into the module; with UltraTax, I’m afraid it’s going to be an extra.”
Lipke moved to Tax Relief after the vendor of his previous tax preparation application, Pencil Pushers, was acquired by CCH. “It’s the same thing,” he said about the CSI deal.
Bhansali believes that his Accountants-World Web site, with over 60,000 registered users, puts him in a special position to leverage his offerings via the Internet.
“Our activities on the Internet side expanded at such a fast rate, we could not do full justice to both Internet services and practice development on the one hand, and tax preparation on the other. It became clear that the Internet was where we could make a significant contribution to the accounting profession.”
Bhansali emphasized that the sale involved only the tax prep program for Tax Relief, and that “only a small fraction of employees have been let go” as a result of the sale.
For the future, Bhansali thinks that he has chosen the right path. “The Internet will have a greater effect on accounting than PCs had. We think that Tax Relief customers, once they go through the transition, will make more money and become more productive if they also continue as customers of AccountantsWorld.”
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access