by John M. Covaleski

Valdosta, Ga. - Knowledge Concepts Inc., a fledgling vendor of a new style of "knowledge management" software for accountants, is poised to significantly expand its industry presence via an alliance with software giant CCH Inc.

CCH has agreed to co-market KCI’s flagship product, FirmWorks, with its ProSystem fx Office suite. CCH officials say that FirmWorks, which significantly expands basic practice-management software capabilities, rounds out the functionality in its suite.

FirmWorks’ functions include maintaining and providing rapid access to all of an accounting firm’s client and prospect information including details on how previous engagements were handled; accounts receivable/payable; document management; time entry and purchase-order tracking.

ProSystem fx Office includes integrated modules for tax compliance, tax planning, trial balance, fixed assets, practice management, paperless tax and audit engagements, and Web site development

As it now works, FirmWorks integrates with Pro System fx Practice, the practice-management module. The integration allows client and service information from Practice to flow into FirmWorks, where it is organized for quick access by practitioners dealing with clients and prospects.

Typical use would be by an accountant responding to a client call. Prior to taking the call, the practitioner opens FirmWorks to retrieve all of the client’s billing information, including accounts payable; a record of all services performed for the client, including details on each action taken; a list of firm members who provided the services; and a listing of personal information and preferences of each of the client company’s key officers.

"ProSystem fx Practice and FirmWorks work well together," said CCH Tax Compliance president Kevin Robert. "The result is a solution that will meet all of a firm’s needs."

In its battle to gain greater market awareness, KCI has effectively hitchhiked on a fast-moving elephant. An estimated 4,000 accounting firms use CCH products, including 80 of Accounting Today’s 2002 Top 100 firms, according to CCH. KCI has 48 CPA firm customers.

"CCH should definitely help us grow since they have an excellent reputation for superior products and FirmWorks complements their offerings," said KCI founder Tom C. Davis, who is also among the accounting industry’s best-known consultants on the use of technology in practice management.

KCI and FirmWorks are part of a new genre of accounting firm knowledge management software applications for accountants. Other products with similar functionality include Interaction by Interface Software of Oak Brook, Ill., and PYA Practice Intelligence by PYA Solutions of Montreal. All the products are marketed with links that integrate them with ProSystem fx Practice and other vendors’ practice management applications.

However, KCI is the first to strike a formal marketing alliance with a vendor that has a large built-in base of accounting firm clients.

CCH has agreed to provide lead generation and sharing for Knowledge Concepts and to cross-advertise that vendor in its ProSystem fx marketing. In return, KCI recommends ProSystem fx Practice as its preferred practice management software for use with FirmWorks.

Davis and KCI co-founder John Stein are hopeful that the CCH alliance will also lead to integrating FirmWorks with other CCH applications, including "Client Relate," a system that scans users’ client databases to automatically pinpoint tax planning business prospects that may result from a new tax law change.

ProSystem fx marketing manager Jerry Connor acknowledged that additional integration links, including a tie-in to tax research-related practice management functions are a possible byproduct. "FirmWorks gives us a competitive advantage; it’s a capability most of our users don’t now have," he noted.

Thus far, KCI has been marketing FirmWorks as a product that must be integrated with practitioners’ existing practice management software systems, and it has developed links with those systems.

Its approximately 48 firm customers have FirmWorks integrated with either ProSystem fx Manage or with the practice management solutions available from accounting firm suite vendors Creative Solutions or CPA Software.

Davis and Stein said their customers typically range in size from 20- to 80-person firms. Thy also have one firm with several hundred employees.

Although the alliance requires KCI to recommend CCH’s ProSystem fx Practice, FirmWorks is still available for use with CSI, CPASoftware or solutions from other vendors.

CSI product strategy vice president Greg LaFollette said his company continues to have a good relationship with KCI, noting that Davis is a featured speaker at CSI’s users’ conference later this month. Dexter, Mich.-based CSI is a Thomson business.

LaFollette said KCI had also asked CSI to form an alliance but his firm declined. "We will support vendors with applications that can help our customers, but we don’t feel it’s appropriate for us to make money by marketing their products."

Knowledge management tools from KCI’s rival software vendors Interface and PYI are also being used by some CSI customers.

LaFollette praised Davis, but noted a potential hole in the software. "FirmWorks can be a valuable addition for some firms, but it has a limited audience," he said.

LaFollette said FirmWorks’ usefulness depends on a firm’s willingness to collect and transfer client and engagement information for the software’s database, and he noted that some firms might not be inclined to make that effort.

Even Davis agreed: "Anytime you talk about change, you need buy-in from an entire firm, and that can be difficult."

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