H-R Industries Inc., a Dallas manufacturer of printed circuit boards, needed payroll and accounting software for its IBM Personal Computer, so the company did the logical thing. It sought the advice of its accounting firm, Alexander Grant & Co. As luck would have it, Grant was selling just such a software package, which H-R Industries promptly bought for a mere $9,000.
This is, in fact, a fairly common scenario these days. Software is one of the hottest products now being offered by the national certified public accounting firms. "Everyone is computer happy " notes Jerome P. Solomon, the partner in charge of the Boston office of Pannell Kerr Forster, the CPA firm, and the accountants are responding accordingly -- both to gain new clients and to keep existing ones happy. Besides Alexander Grant, other big firms hawking software include Main Hurdman and Arthur Andersen.
What the CPA firms don't tell their clients is that the systems they offer -- including general ledger, accounts payable, accounts receivable, and multistate payroll software -- may be available at the neighborhood computer store for about a third of the price.
For example, the software that Alexander Grant is now selling for about $11,000 is produced by Cyma Corp., a software company in Mesa, Ariz. The Alexander Grant system is, in fact, a duplicate of the product Cyma ships to some 2,600 retailers each month under its own brand name. Granted, the CPA firm helped Cyma improve the software, requesting some 33 different changes before accepting the system for use. But those changes have been incorporated in Cyma's commercial version. "It's the same product," says Cyma senior vice-president Patrick L. Ryan, "that retailers are selling to Joe's Shoe Store, down on the corner." And Joe's Shoe Store is paying a lot less -- more like $3,000 at retail.
What, then, does a company get from the accountants for the additional $8,000 or so? According to Bruce H. Howard, director of Alexander Grant's computer software group, the CPA firms provide detailed users' manuals along with at least 80 hours of staff time to get the system up and running, as well as ongoing support. They also provide annual updates and other software improvements.
"A lot of people compare the price with the one at ComputerLand," Ryan says. "You can't do that. Many times, a retail dealer doesn't even know what a general ledger is, much less what it is going to do."