Helping public-sector clients keep their books straight
Small software firm here markets product designed to meet state's standardsMarch 24th, 2011
Small cities and other local governments throughout Washington and parts of Oregon rely on software that's designed and sold by a relatively young Spokane company, BIAS Software Inc., to track daily management and financial operations.
Company co-owner Mark Felchlin says the 4 year-old company is growing by about 15 to 20 clients annually, with hopes of continuing at that steady rate, and expects to sign its 100th client later this year. He says the company has increased its revenues by about 25 percent a year for the last three years.
BIAS's software is designed specifically for public entities, such as cities and water, fire, park, and conservation districts. In Washington, such entities are required to submit annual or semi-annual financial reports to the Washington state Auditor's Office using a statewide set of standards referred to as BARS, which stands for Budgeting, Accounting, and Reporting System.
Felchlin says Washington is the only state in the U.S. that uses BARS specifically. BIAS's software allows small, local governments to manage in a BARS-compliant manner their annual budget reports, payroll, utility billing, cash receiving, and to issue business licenses and building permits.
"Our niche is that we developed our system around the Washington state BARS system, which gives us an advantage over outside players because our system is designed for the state reporting that Washington requires," Felchlin asserts.
BIAS targets mostly cities with populations below 20,000 and small government entities such as fire districts. He says the majority of its clients are based in Washington. Its largest client is the city of Arlington, about an hour's drive north of Seattle.
In the Inland Northwest, its clients include the cities of Airway Heights and Liberty Lake, as well as the Spokane Regional Clean Air Agency and the Spokane County Conservation District, Felchlin says.
Local government jurisdictions in Oregon also can use BIAS's software because Oregon doesn't have a statewide standard for its audit reports.
"It's wide open in Oregon and (entities) can use whatever they want," Felchlin says. "But in Washington, it's restricted. The state auditors came up with a code system, and we thought we could implement it in other areas that could take advantage of it because it's an accounting structure that allows them to easily find information."
Though the company was incorporated in 2006, the software that it markets was developed 24 years ago by company co-owner, Wes Hein, a fourth-generation farmer from the small farming town of Fairfield, Wash., located about 30 miles southeast of Spokane.
Hein says he hasn't had any formal training in computer programming and created BIAS's programs using a software application-design program developed by a company called Magic Software Enterprises.
He says he initially wrote the software for use on his farm because he wanted to create a better method to record and track grain prices. "I didn't like any of the software out there, so I wrote my own," he says.
He says he sold the software to other farmers, then modified it so that municipalities and other small government entities could use it. Spangle, Wash., was the first municipality to which Hein sold the accounting software, that occurring in 1991.
Hein says he decided to quit farming in 2006 to focus on updating and improving the accounting software's capabilities full time, and that's when Felchlin came on board after leaving a job in banking.
Customers purchase the rights to use BIAS's software, rather than owning the software outright, and pay an additional annual service contract fee that covers any software upgrades, as well as technical support needs and financial consulting services.
Felchlin declines to disclose a dollar range for the charges customers typically pay.
For smaller entities that don't have large budgets, BIAS offers a monthly pricing arrangement for the initial software rights purchase, which varies in cost depending on what features an entity needs, such as financial or citizen services. Citizen services include utility billing, permitting, and licensing.
Besides designing and selling its accounting and municipal management software programs, and providing the previously mentioned technical and financial-management support, BIAS offers periodic workshops designed to provide them further assistance, Felchlin says.
The company also hosts annually a three-day conference in Spokane for its clients and encourages city clerks and other elected officials from the entities it serves to come. The conference features speakers from state offices, such as the Department of Revenue and the auditor's office, as well as educational workshops on how to create annual budgets and use the features of its software, Felchlin says.
Says Hein, "We invite guest speakers that have information our users would like, and we have some classes on our software, and then we have speakers come in to help the clients do their job outside of the software."
BIAS's offices are located east of downtown, at 302 E. Pacific. It employs seven people, including two support technicians and two certified public accountants who help users effectively navigate the software and manage finances.
"The CPAs can provide more in-depth financial information," Felchlin says. "Most smaller governments can't afford to have that kind of person on staff, so we fill in that gap and can provide those higher-level accounting skills, and that has helped us grow."
Felchlin says some of BIAS's bigger competitors that offer similar accounting software are Springbrook Software Inc., of Portland, Ore., and Tyler Technologies Inc., based in Dallas.
He adds that one factor that's helped the company expand its client base has been referrals from the software's current users who tell other municipalities and special taxing districts about BIAS.
"Our clients explain it to people and tell them about the benefits," he says. "In software, you maintain a relationship with your clients and we have a contract that's tied to them to continue that relationship, so we hear from them every day and get to know them."
He adds that all of BIAS's employees can take technical-support calls, but the company has two main support technicians.
Hein still remains the company's main software designer, and he says the interaction he has with BIAS's clients on a daily basis helps him further develop its programs to be the most efficient for its users.
"I can see how they are using a product and watch them work," he says. "The interaction with users from a design perspective is very useful, and for a company our size, we all interact with our customers so we can make the software better and faster."