William F. Gurrie & Co. Ltd., a CPA and consulting firm in Oak Brook, Ill., has offered niche accounting services for municipalities over the last 71 years.The founder and namesake started by helping his clients with financial services - i.e. bonds, as well as other services such as payroll - a "total violation of the independent laws back then," said Kelly Zabinski, a CPA and manager at Gurrie. "Obviously, today we only provide financial services for them."
During those 71 years, the financial services provided by managers like Zabinski to local municipalities in Illinois have come to include software services as well. "Almost all significant-sized municipalities use niche software," added Zabinski. However, the smaller municipalities "are still using Excel."
Ease vs. specificity
While enterprise resource planning software providers agree that their partner and niche add-on developer base is growing and thriving, many CPA firms are still noting that their smaller clients favor QuickBooks and Excel over the feature-rich niche solutions.
"Our smaller companies are still using QuickBooks," said Rob Casey, a partner in the technology, manufacturing and distribution group at the Atlanta-based CPA firm of Habif, Arogeti & Wynne LLP. "The majority are on QuickBooks because it is quicker and easier to use. They may have big dollar amounts, but the number of contracts they have is smaller."
Yet even QuickBooks recognizes the profit and merit in producing niche solutions. While their packages - QuickBooks Simple Start, Pro, Premier and Enterprise - are flexible, QuickBooks also offers niche-specific products such as QuickBooks Contractor, Manufacturing and Wholesale, Nonprofit, Professional Services, and Retail, which works in conjunction with the QuickBooks Point of Sale application.
"Intuit knows what those niches are looking for, so pre-packaged solutions make it that much easier for the companies," said Linda Geery, a senior manager at Gilbert Associates Inc., a Sacramento, Calif.-based CPA firm. "We do have some clients specifically buying QuickBooks' niche market software. It can certainly improve efficiency and has good interim reporting tools."
In the spring, QuickBooks added to their ProAdvisor program by creating a certification for ProAdvisors in the QuickBooks POS system. Another new niche program for QuickBooks advisors is the Retail Solution Provider program for experienced accountants advising and auditing retail companies. The new program, explained Steve Cook, director of accountant programs at Intuit, requires accountants to help their retail clients set up the POS system. In exchange for their expertise, QuickBooks parent Intuit offers the accountants major discounts on QuickBooks' products and a dedicated partner manager.
"The partner manager is a seasoned representative who is familiar with the retail market and knows how to work in this market," said Cook. "This benefit is incredibly helpful in getting their practice going. Their partner manager is their single point of contact to help [accountants] with their POS needs, and can provide access to tech support."
QuickBooks also has a partner program of over 400 members, said Cook.
For CPAs with niche clients in a slightly higher-spending bracket, Intacct, Microsoft and Sage Software Inc. all offer partner networks that build niche software solutions on top of their ERP products.
Tectura, one of MBS's biggest partners and resellers, entered into the niche market in 2001 and has grown to encompass 65 offices in 19 countries. This MBS partner starts with the base of Axapta, Navision, Great Plains or MS CRM, and adds vertical products in such areas as manufacturing distribution, processing chemicals, food and beverages, equipment manufacturing, and life sciences.
"We're always evaluating new markets," said Tom Galambos, senior vice president of industry and vertical solutions at Tectura. "Right now we're more focused not on building a solution, but to bring products to the U.S. that we have in Germany or Europe, and the same thing in the other direction. We are more about filling in the dots than jumping into new verticals."
Finding your niche
For the most part, CPAs and niche software providers alike don't see one specific niche industry growing above the rest. Most are satisfied with the niches they are in, and are not looking to immediately expand into other niches any time soon.
"We don't want to taint our client base and do what others are already doing well," said Ernest Zoumot, director of software product management at CCH, a provider of tax and accounting software and research. "We gather information from monitoring and, with watchful eyes and customer surveys, ask what types of things they would be interested in. But what we're trying to leverage is what we're best at - trial balance, audit and tax."
Sage has one of the most extensive partner programs available for the business software industry. Like QuickBooks, it also offers niche-specific software products like the Peachtree series: Accountants' Edition, Construction, Distribution, Manufacturing and Nonprofits.
"What we see is people want software geared towards their business," said Taylor Macdonald, executive vice president of channel and sales operations at Sage Software. "The sweet spot is to be in the market you know well [as a partner] and have a great level of expertise."
Intacct offers a traditional partner program like Sage and Microsoft, with independent software vendors attaching their niche software to work as an add-on application to the Intacct ERP base solution. But Intacct also offers CustomERP, a feature released last July, as an open-source-code customizing tool for their partners that allows them to build niche-specific features for the Intacct ERP module.
"Really, software has limitations," said Intacct's chief marketing officer, Craig Remy. "That's why we built CustomERP, it's still one solution that an outsourcer can go in and customize it to your industry."
For accountants like Gurrie's Zabinski, however, advising her clients to buy niche software just does not pay.
"I don't see value in it," said Zabinski. "You pay an auditor maybe an extra $1,000 to perform the niche-specific auditing, but you can pay $2,500 for the module or features. [And] to buy a license for every client and buy every single different program my clients are on - I just can't afford that."
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