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Estimated reading time: 2 minutes, 37 seconds

CCH Customer Tax Spending Nearly Doubles

Nancy McKinstryCCH has been able to get its tax and accounting customers to nearly double their spending on the company's predicts over the last three years. That figure emerged in a question-and-answer session that followed the report of 2009 financial results by the company's parent Wolters Kluwer last month.

 

 

Asked about the average customer spend, Chief Executive Nancy McKinstry pointed to the Amercian tax and accounting business as an area in which the company was able to convince end users to increase spending by adding features to modules and getting them to buy new modules.


"We have been able to raise customer spending about $5,000 three years ago to about $10,000 this past year, that’s because they are buying more of those modules," McKinstry said in a session in the Netherlands, where her company is based.

McKinstry said Wolters Kluwer pursues a policy of annual price increases and that it had sought an average increase of 2 percent to 3 percent late 2009.  While she continue that because of the economic conditions, "There were more conversation with customers about price—more discounting at the high end, we are confidient we will realize the two to three percent in price [in 2010]."

The company's U.S. tax software applications were cited as factors in Wolters Kluwer's performance for the most recent year. One was the impact of its acquisition of the IntelliTax line (the former Orrtax). That deal had a positive effect because it was a higher-margin product, executives said, although the product itself was discontinued.

Executives pointed to sales growth in its tax software packages, along with ProSystem fx Document and Scan software and its TeamMate line as factors in producing strong growth in its U.S. Tax and Accounting and Canadian operations in  2009. Revenue for Tax, Legal & Accounting, which includes the results for CCH, grew to about $1.2 billion, up 2 percent from 2008 results. The percentage was based on change in revenue measured in euros.

Acquistions added 4 percent to TAL revenue growth. There was a 3 percent decline in the underlying business which the company said stemmed from the migration from print to electronic subscriptions along with the impact of the economy on transction product lines, such as books. Operating profits at TAL dropped to $209.2 million, down 5 percent when measured in euros.

Companywide revenue was about $4.64 billion for 2009, up 2 percent from 2008, while ordinary net income reached about $579 million for the year just ended, virtually unchanged from the prior year.

Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
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