by Seth Fineberg

Lincoln, Neb. - Mention the name Software Technology Inc. to most CPAs, and they will likely say that they have never heard of them. Mention TABS III, the company’s leading time and billing product, and the majority will know what you are talking about, but few will have ever used it. STI plans to change all of that.

Over the years, the company has been able to modify its products for CPAs and, with recent improvements to its products and marketing, STI seems ready to take on other established time and billing vendors.

STI claims to be a solid company, with its original owners still in place and a profit posted every quarter of its nearly 25-year history, without any outside funding. But through most of its existence, it has been lawyers, not accountants, who have gravitated towards its time and billing products.

STI’s product line consists of five key products, TABS III and PracticeMaster being its top sellers, with some add-ons for report writing, general ledger and accounting functions.

The company was formed in 1979, and its founders, Brad Berlin and Jerry Gleim, are still quite active in the business as chief executive and chief operating officer, respectively.

In 1984, Brad’s brother, Dan Berlin, came on board as president, and later met Ken Merkt, a CPA with what was then Ernst & Ernst. Merkt spoke at a trade show where STI had a booth. He claimed that STI’s software was “the best he had ever seen,” Berlin recalled.

Shortly thereafter, Merkt joined STI as its executive vice president, and he is credited with “helping tweak the products for CPAs.”

STI’s primary competition appears to be Irvine, Calif.-based Best Software’s Timeslips, an established time and billing program. STI is offering Timeslips users a 20 percent price discount for converting to TABS III, along with a 30-day money-back guarantee.

“This offer really addresses smaller practices; they are our target,” said Dan Berlin. He noted that STI sells to firms varying from a single professional to up 50 timekeepers, but their “sweet spot” is firms with from five to 15 timekeepers.

And at $295 for a single user, TABS III is priced below Time-slips’ $399 single-user tag as well as several other products in the same target market. TABS III also under-prices several other products, such as BillQuick, CaseWare Time, Time Matters and Client Navigator, though Berlin said that STI does not compete as directly with those.

Berlin also said that the company does not compete on price alone. He believes that STI’s products’ overall capabilities provide an edge over the competition. “Others don’t have a practice management system or a proper accounting system like we do,” he said. “We don’t just offer a stand-alone product, but all the back office and front office capabilities firms need.”

Key components of STI’s marketing efforts are its channel and customer base, some of which are one in the same. Marketing director Scott Baird said that 95 percent of customers recommend TABS III to others.

STI’s reseller channel is 200 strong, one-third of which have certified reseller status, having achieved an “established number of installations” and gone through WebEx training, according to Baird.

STI offers its resellers pricing margins of 40 percent after the first sale, requires no fees up-front, and sets no sales quotas, Baird said. Having no fees up-front “gets them to the table,” he added.

Baird also claimed that STI generates numerous leads for its channel and is one of the top time and billing product advertisers. It runs print ads in trade publications and banner ads online, does direct mailings and attends numerous trade shows.

Software Technology Inc.
Lincoln, Neb.
www.softwaretechnology.biz
(402) 423-1440
Year founded: 1979
Employees: 70 (est.)
CEO: Brad Berlin
COO: Jerry Gleim
President: Dan Berlin
Main products: TABS III, PracticeMaster, General Ledger System, GLS Report Writer, Accounts Payable System.
End users: 300,000+ licenses.

Berlin said that product enhancements come fairly regularly as well, something that the channel greatly appreciates. The most recent updates are to its lead products, TABS III and PracticeMaster.In TABS III version 11, due out in the third quarter, planned enhancements will focus on collections reporting, budgeting time and enhanced time tracking. The new system will enable firms with multiple professionals to see where someone is adding a new project and decide where to add their time.

TABS III will also have refined data entry screens, making reporting “more aesthetically pleasing” and offering more options so that people can customize what they see in a report, according to Berlin.

PracticeMaster version 11, also due out in the third quarter, will have improved calendaring functionality and two-way integration with Microsoft Outlook for calendars and Palm PDAs.

The company is also improving integration between its PracticeMaster, TABS III and GLS products, as well as with QuickBooks.

“We handle the mobile accountant now with our remote capabilities with TABS III and PracticeMaster,” Berlin said. “In the future we will be utilizing more Web technologies, and maybe we will look more into client portals.”

Most resellers and customers appreciate the functionality of STI’s products, but all seem to stay because of the company itself. “Honestly, the strongest point of these products is the company. That is what has kept us a reseller for 15 years,” said Jim Brendle, a vice president with ProSystems Inc., an STI reseller in Charlotte, N.C.

“They have great products too, but they are easy to deal with and always provide us with good leads, offer good margins and continued residuals,” he said.

Brendle said that, at one time, he sold Timeslips and, though no longer an official reseller, he still recommends it when he feels that “it is the right fit for a firm - mostly those that just want to get bills out the door.” But, he added, more often than not, it is TABS III that gets sold, as it is “comparatively easy to learn” and strong when it comes to allocating collected dollars back to the timekeeper.

In addition to STI, ProSystems also resells Best’s BusinessWorks, MAS 90 and MAS 200 accounting software, as well as Microsoft Business Solutions’ Great Plains line.

“STI seems to really keep up with what’s going on in terms of accounting programs and we have found the updates that come to us are very good,” said Bette Gosule, managing partner at Milton, Mass.-based CPA firm Gosule, Butkus & Jesson, which has used TABS III for 15 years. “The product does what we want and if a partner wants a particular kind of report and it doesn’t work, I just say pick up the phone, call STI and they will walk us through it.”

Still, STI has a ways to go to gain widespread recognition from CPA firms. Most of the rival time and billing products are well established and firms traditionally don’t often change what they have due to the time and cost involved.

However, there are signs that many CPA firms aren’t overwhelmingly satisfied with what they have. A recent survey by the American Institute of CPAs and the CPA2Biz portal indicated that CPAs are only moderately satisfied.

“No one is completely happy with what they have and we are beginning to think about using practice information differently, so perhaps that’s where STI’s products could break in,” said accounting firm practice management consultant Tom Davis, president of Valdosta, Ga.-based T.C. Davis & Associates. However, he admits that STI products just aren’t on his clients’ radar. Yet.

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