How to Choose the Right Accounting System Reseller
A Business Software Tip by J. Carlton Collins, CPA
In this article, independent industry expert J. Carlton Collins reveals the specific advice he gives his clients to help them select an accounting system reseller.
I am frequently asked by prospective customers, "How should we go about selecting an accounting system reseller?" I don't take this question lightly because the wrong decision can lead to grave consequences. The information needed to make such a decision, however, is not readily available. Surveys and studies confirm that the number one complaint in all of accounting software is inferior resellers. Presented below are my 12 actions to take when choosing a reseller.
12 Actions to Take When Choosing a Reseller
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Understand the consequences.
Are you ready to say "I Do?" The customer-reseller relationship is like a marriage—the reseller you choose will most likely be with you for a long time to come. You should not make the mistake of assuming that your reseller will install your system and then disappear. Just the opposite is true. You will need to rely on your reseller for many years to come to provide you with assistance, updates, enhancements, add-on modules, training, advice, and troubleshooting. A mutually trustworthy and respectful relationship is most desirable. Therefore, you should evaluate several resellers closely, check references, and choose wisely.
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Use specific reseller selection criteria.
Our criteria for selecting a mid-range reseller includes:
- At least three experienced consultants on staff, with at least two years of experience each.
- All consultants trained and certified and in good standing with the vendor.
- All consultants receive annual training, as evidenced by certificates of completion.
- At least one support person dedicated full time.
- At least 35 customer implementations under their belt.
- At least three customer references who check out fine.
- Vendor reference that checks out fine.
- Evidence of a sustained marketing program (this is a good indicator the reseller is doing things right).
- Attendance of vendor's annual conference by at least one consultant.
- Physical inspection of facilities meets expectations.
- Background check with the U.S. Better Business Bureau is positive.
- Background check with your CPA, or a local CPA, is positive.
- Background check with credit bureau is positive.
- Reseller is able to demonstrate availability of time to meet your needs.
(To view our criteria regarding high-end or entry-level resellers, please visit the ASA research page on the subject. Exceptions can be made in some cases. For example, a new company that employs a seasoned installer may not have achieved the required number of customer installations under that company name, but that same installer may obviously have installed dozens of systems in the past.)
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Don't blindly trust vendor referrals.
Reseller referrals from the vendor are not necessarily your best option. Some vendors simply refer you to the reseller that is next on their list, rotating referrals among all resellers in a given territory. Using this approach, you may, or may not, receive the best referral in your area. In fact, you may receive the worst referral when the system is based on chance. Further, be aware that the vendor will usually not give you more than one reseller name from which you could choose. If you intend to find all resellers in your area for a given product so that you can evaluate them and choose the best option, you will need to consult a variety of other sources to identify these players.
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Use other sources of referral.
In the United States, the Yellow Pages are a good source for identifying resellers in your area, but this source does not help you distinguish dependable resellers from undependable ones. Reseller Web sites are a better source for reseller names, and many Web sites list awards and other credentials that can be helpful—assuming the Web site content is accurate. Word of mouth referrals are a good source, and in most areas of the United States, you can call your state CPA society for a referral.
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Be careful when using Web-based referral sources.
Many of them are shams that simply take your information and sell your name to the highest bidding reseller, even shoddy resellers. The best Web-based referral sites are those that refuse to include shoddy resellers and list all of their resellers for you to plainly see. As an example, www.accountingsoftwareconsulting.com (which is my reseller Web site) displays all reseller names and contact information, but only for resellers that meet our established criteria.
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Evaluate the reseller.
As you meet with various resellers to evaluate potential accounting systems, you should take time to ask certain questions in order to evaluate the reseller as well. For example, you should ask the reseller about each of the criteria described in bullet point two above. You should also note the reseller's level of professionalism and respect for you and your staff. In the final analysis, you may like the product, but dislike the reseller. In this case, you may want to investigate other resellers for that same product.
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Assess the reseller's ethics and professionalism.
As a general rule, the better resellers seem to adhere to high standards of ethics and professionalism. They generally do not talk poorly of their competition, they do not pressure you into a decision, and all dealings appear to be above board. You should avoid any reseller that you think is dealing in grey market or illegal copies of software.
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Ask about availability and personnel.
Before you sign on the dotted line, you should ask your reseller to provide you with the start date, estimated completion date, and all dates that the reseller intends to be at your offices. Also ask the reseller to include dates for significant milestones along the way (such as dates for group training sessions, data conversion, and launching the system live). Ask your reseller to provide you with a list of names of those employees who will be implementing your system and working on your job. The dates are essential because you want to make sure you are on the same timeframe, and you want to pin your reseller to a start and completion time in writing. The assignment of staff is important as well because you want to make sure that your job is staffed with seasoned employees who know what they are doing, not inexperienced staff who bring little benefit to your job. Make sure that you check references on the staff who are assigned to your job, and don't sign anything unless they check out fine.
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Get details of services.
Also before you sign a contract, ask your reseller to provide you with a detailed plan of action, including tasks to be performed and budgeted time allotted for these tasks. If no such plan exists, then you may be right to question the professionalism of the reseller. This document will help you make sure the reseller delivers all of the services included in your agreement.
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Check references.
The most important step you should take is to check references. If the reseller can give you at least three good references that say good things about them, the product and the reseller staff, then that's good enough for me. If they can't meet this simple requirement, then things should smell a little fishy. Continue your search. Key questions to ask include:
- Did XYZ Reseller install your system on time and on budget? If not, explain.
- Were you pleased with XYZ Reseller? Would you use this reseller again?
- Which staff members were involved on your job, and can you please rate each?
- Are you pleased with the accounting system?
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Know the typical fees.
Many first time purchasers of accounting software encounter severe sticker shock regarding the cost of implementing accounting software systems. The cost of implementing a midmarket to high-end accounting software system will typically range from 1:1 to 2:1 compared to the cost of the software. In smaller cities and rural areas of the United States, such as Rome, Georgia or Birmingham, Alabama, the range is typically 1:1. In larger cities such as Atlanta, Georgia or Dallas, Texas, the range is typically 1.5:1. In the largest cities, such as Boston, New York City, and San Francisco, you should expect to pay closer to 2:1. For example, if you purchase $25,000 worth of software, you could expect to pay $25,000, $37,500, and $50,000 in implementation fees in Birmingham, Atlanta, and New York City respectively. Remember, this is just a rule of thumb, and the difference in these implementation costs mostly reflects higher building rent and higher labor costs.
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Make sure they're good listeners.
Keep in mind that the best resellers will listen to you and make the effort to understand your business, your needs, and your goals. They will then work with you patiently to help you achieve these goals.
Selecting the right reseller is critical to a successful implementation. The skill set needed to make a modem, hub, or printer work is not necessarily the same skill set needed to be a good systems implementer. Since 90 percent of an implementation involves training your people, look for resellers that are patient, personable, and respectful of you and your staff. Do your homework and always check references. Secure dates and anticipated milestones in writing before signing on the dotted line. Pay your reseller as work progresses; never pay too far in front of the work to be performed.
J. Carlton Collins, CPA, president of ASA Research, LLC, is an independent author, lecturer, and analyst in the accounting systems industry. He has installed more than 200 accounting systems and delivered 1,800 lectures around the world on the subject of accounting systems and technology. Collins has published extensive accounting system reviews which can be seen at www.AccountingSoftwareAdvisor.com.
Contact Collins at Carlton@AccountingSoftwareAdvisor.com with questions or comments.
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