iLumen Financial Information Network Helps Give Firms A Real-Time View Of Privately Held...

What would be the impact on your firm if partners could see clients' financial performance almost in real time - and could act upon the data? Whit if such a tool enabled partners to be true financial counselors and charge for higher value sendees? What if the tool provided industry benchmarks that

Bob Woosley wanted such a tool when he was a partner at Atlanta-based Frazier & Deeter. He realized his role was to advise private businesses, but he felt a frustrating disconnect between himself, his clients and their numbers, "These clients were producing monthly accounting information that I wasn't seeing. I was flying blind during the course of the year, and yet I was positioned to be their trusted business advisor?" he recalls.

Woosley's frustration became an obsession. After years of consulting with industry experts, fine-tuning and dreaming big, he developed a system that may well be changing the world of private business and the practice of public accounting: the iLumen Financial Information Network (www.ilumen.com).

The network enables private companies to upload their monthly trial balances from any accounting system via their accounting firm's Web site. iLumen's patent-pending technology automates the collection, analysis and benchmarking of financial data to provide a continuous connection between private companies and their financial advisors.

Given the overwhelming embrace it's receiving nationwide from accounting firms of all sizes, as well as banks, it appears Atlanta-based iLumen is a success, although it is just in its infancy. Woosley won't give specific figures on number of clients or sales, but he says growth is exponential. He expects the network to expand "several fold" this year and beyond. With new accounting firms, banks, associations and industry groups joining the network every week, and their clients uploading monthly, the data available for benchmarking is growing 105% quarterly.

Large firms such as RSM McGladrey already use the network, but iLumen's focus is middle-market accounting firms. It has alliance deals with associations such as IGAF Worldwide, The Leading Edge Alliance, AGN North America, BDO Seidman Alliance, PKF North America, RSM McGladrey Network and others.

Small firms are seeing the benefits as well. For Tom Filomeno, president and CEO of Filomeno & Co. of West Hartford, Conn., the network proved a huge success for its 20 clients currently up and running on iLumen. He says software like Excel, Peachtree or QuickBooks may map results on a client's office computer, but what clients like with iLumen is that their CPA is viewing the information too. "Private business owners are so busy generating the numbers. They don't have time to look at them and evaluate them. They like it that we can," Filomeno said.

Tom Murphy, executive vice president of manufacturing and wholesale distribution for RSM McGladrey, points out that the iLumen system offers more than just the monthly reporting, data graphing and yearly trending. iLumen also takes the data from the client and offers a benchmarking capability that, for private companies, has never been available on a monthly basis until now.

"That is very significant," Murphy said. "There is annual data out there, but it's not necessarily consistent or comparable, not as timely or as detailed as this information. This provides our client servers with timely financial information that they can use to help our clients perform better. It's all about increasing shareholder value."

RSM McGladrey participated in a pilot program and was the first accounting firm to test and help modify the system. For the past year, RSM has been introducing the product on an office-by-office basis and is committed firm wide through 2008.

Woosley calls analysis the CPA's birthright. However, many CPAs get so bogged down in compliance issues that their advisory role falls by the wayside. "Monthly tracking reminds us of our advisory role and helps us get there," Filomeno said.

But "getting there" is not instantaneous. It is a process. Anyone can see from a graph of monthly sales figures that, as Woqsley puts it: Up is good. Down is bad. The issues become much more complex when a CPA factors in the benchmarking tool and tries to put the numbers in the context of a client's industry.

"Advisory issues take thinking on the other side of your brain than compliance issues," Filomeno said. "You have to be more open and interpretive of the information. The opportunity to perform analysis has had a positive impact on our team members." This is the "fun part" of the profession, notes Woosley, and the beauty of the network.

The more businesses that submit their periodic financials to the network, the more vibrant the picture becomes for a wide range of industries.

Currently all major business sectors are covered, and increasingly, numbers arrive to complete industry sub-sectors. With millions of private companies contributing to the wealth of the nation, Woosley and his partners believe it is time to provide an accurate picture of performance.

"Nobody really knows how these industries are doing," Woosley says. With the amount of data now at a critical mass, private companies in various industry sectors, groups and classes can benchmark their results against others in their industry - usually by size and geography, also.

The company has three annual subscription fee options ranging from $1,950 per office for a large firm to $295 per client for an individual. There is a separate $295 annual fee for benchmarking which firms can wrap into the price they charge clients for accessing the network. Once on the network, a company is able to access the system through the accounting firm's Web site, see comparative trends, get ongoing industry Webcasts from iLumen industry analysts, and can be notified of expanded coverage based on their geography and company size.

"The private company sees value immediately. The CPA gets context and has a richer discussion with the client. And with the ability to track hundreds of companies in one industry, the network gives visibility into the growth of the private sector," Woosley says. Accounting firms now are expressing interest in the network because their competitors offer the service, which has become a differentiator in the proposal process. Some firms that are using the system include BKD of Springfield, Mo.; Lattimore Black Morgan & Cain of Brentwood, Term.; and the Atlanta firms Windham Brannon and Tarpley & Underwood.

One of the challenges Woosley overcame was raising the millions of dollars required to build a world-class application that was "scalable, very elegant, very secure." The fact that the company is funded entirely by individuals is testament to the power of his vision.

Woosley's simple goal to become more connected to his private business clients has blossomed into a network of global proportions that efficiently offers insight and context to CPAs and private businesses everywhere.

"I believe I'm righting a wrong in the CPA profession. Every CPA worth his salt went to school not just to do tax returns, but to become a business advisor. When you are able to turn this on for them, a whole new world opens up."