NORCROSS, Ga. -- With chief financial officers' jobs becoming more complicated, Interactive Planning Systems plans to make a killing. Founded in 1982, IPS is the largest provider of PC-based financial planning systems to banks, thrifts, and credit unions.
Of IPS's 22 products, its best sellers help banks calculate interest rate risk, mark assets to market, file call reports, and supply tax information.
CFOs may not have heard of IPS, however, because third parties like Fiserv and Bisys sell more than half of the company's software. IPS products are used in 4,500 financial institutions.
Alternative to Development
IPS now has connections with 150 third-party sellers. Instead of developing a new product itself, Fiserv might negotiate to distribute IPS software. Jerry Weiner, chairman, said the company is well known enough in the industry that he doesn't worry about customers knowing who really developed the product.
"The only thing we really care about is that our customers are getting taken care of properly," he said.
IPS's most popular product, now in 1,800 institutions, is Accounts Payable. The software helps banks pay bills, manage cash, and print checks. The program automatically updates the bank's general ledger.
The next-best-selling product, Investment Portfolio Accounting, with 1,200 customers, is designed to perform mark-to-market calculations and generate general ledger entries. The third top product is Fixed Asset Accounting, which helps 990 banks with federal and state tax depreciation accounting. It tracks a bank's assets and insurance.
A CPA and a Lawyer
Mr. Weiner, 42, and Larry Urbach, 41, who is president of the company, met at the University of Connecticut and eventually landed in the Atlanta area. Mr. Weiner was a certified public accountant and Mr. Weiner a lawyer with the Environmental Protection Agency.
The two were bored by their jobs and saw a opportunity for banking automation as the personal computer took off. They used their savings to start IPS in a garage 12 years ago.
"The problem in those days was that the power of the PC wasn't great enough to handle it [automation] for more than just the smallest institutions," Mr. Weiner said. "We hit the market at about the right time for a general ledger product."
Another reason for IPS's success is the influx of regulations in the past few years.
"Compliance is so pervasive and so intertwined in everything we do," said Mr. Weiner. Mr. Urbach added: "If the regulations require it, we put it into the product."
Technology has expanded compliance as well, Mr. Urbach said.
"I don't know if there are more regs now because the government's gotten bigger or because there are more ways to sort and report," he said. "I'm curious if the government would require you do things if you weren't able to."
Heady Growth
Following market trends, Mr. Weiner and Mr. Urbach developed 10 products in eight months.
The company passed $1 million in sales for the first time in 1986. IPS grew 50% from 1987 to 1988. IPS made its first acquisition in early 1992, buying a $2 million software company in Dallas.
After the acquisition, IPS grew 20% in 1992 and 27% in 1993. The company had $7.6 million in sales last year, and Mr. Urbach predicts sales will be close to $10 million this year. He said IPS plans to spur growth by acquiring more companies.
The company's first customers were small to medium-size banks in states without branching, such as Texas, Ohio, Illinois, Michigan, and Wisconsin. Mr. Weiner said their customers -50% banks, 30% thrifts, and 20% credit unions -- have come to trust their advice.
"They look to us not only as a software provider but as a quasi-consultant to interpret regs," he said.
IPS offers three services to their customers, said Mr. Urbach: an unlimited number of toll-free calls, updates as they occur, and compliance with all regulations.
The executives said the company's strong relationships with bank services have helped them build a large customer base.
Mr. Urbach said their 80 employees refer to the two men, who live on the same street with their families, as "Mom and Dad." Although Mr. Weiner owns a little over half of the company, with Mr. Urbach owning most of the rest, they say they run it as an equal partnership.
