Simplified

The Story of a Company

As World War II ended in 1945, Mr. Charles Hosbein entered the bookkeeping business from his home on South Cedar Street in Lansing, Michigan. Records show that Mr. Hosbein seemed to operate as a divisional office of Simplified Tax Records, Inc., a New York business dedicated to providing bookkeeping and tax record systems for business use, and that he held exclusive rights to the Simplified name for the Lansing area.

In 1950, Mr. and Mrs. Fred S. (and Kathryn S.) Vorn bought the business known as "Simplified Tax Records Company" from Mr. Hosbein. In 1955, necessitated by the new I-496 overpass, the company moved from their 3022 South Cedar Street location, constructing its own building at the current location of 4305 South Cedar Street. From 1955 to 1965, Simplified experienced phenomenal growth and at one time was known as the largest locally owned bookkeeping and tax service.

Purchased in mid-1965 by Mr. Robert Jacoby, and incorporated later that year as "Simplified Bookkeeping & Tax Service, Inc," the company continued to expand, offering services in May 1968 to 880 business accounts. From her distinctive pink desk and file cabinet, Mrs. Irma Jacoby effectively managed 70 or so employees at Simplified during these years. A 1965 addition doubled the size of the existing building, and offered a separate tax office entrance to the lower level.

Mr. Donald J. Burke, a C.P.A. from Grand Rapids, Michigan, purchased the majority interest in the company in 1983 from Bob Jacoby, and operated the company with his wife, Janet, until his untimely death in November 1989. His transitional tenure included establishment of a separate C.P.A. practice, accommodating needs of clients and employees, and the opening of an Owosso location.

Judith M. Stegman, C.P.A., purchased the majority interest in Simplified from the Estate of Donald J. Burke in 1989, and during her years of ownership proceeded to update the building with the wiring and cabling demanded by the ongoing computer revolution. She added a new front entrance to the building in 1999, and completed the process of buying out the interests of minority shareholders who had invested in the company in 1965.

Ryan Lowe, a young C.P.A., returned to mid-Michigan from Chicago to purchase the company in January 2004. A year later, his colleague from Price Waterhouse, Nikali Luke, moved to Lansing with his wife Nora, and became an equity partner in the company. Mr. Lowe and Mr. Luke completed an entire interior remodeling of the 4305 South Cedar Street location in 2005. During their ongoing tenure with the company, Simplified has opened branch offices in Williamston (2006), DeWitt (2007), and Charlotte (2009).

A Story of Change

In the mid 20th century, when Simplified was established, businesses manually maintained ledgers to track income and expenses; local, family-owned businesses were the norm; income tax returns were typed, summarized in just nine lines on page one, and due by March 15. Simplified's business reflected the market, catering to the many mom and pop businesses in local communities throughout all of Michigan, bordering cities, and beyond. This was before the heyday of Walmart, chain stores, franchises, and fast food outlets - it was a day of local businesses on each corner, owned by people known to one another.

At the same time, there was a growing complexity to federal and state payroll and income tax rules, and these small businesses needed professional assistance. Simplified Tax Records Company provided just this assistance, in a structured way. There were manual pre-printed forms for everything - and carbon copies were a necessity. Forms to record daily sales, breaking them down for sales tax purposes (known as the pink sheet); forms to summarize information from cash register tapes (another evolution!); forms to compute payroll checks and give receipts to employees; forms to list all the checks that were paid by a company, and indicate what the payment was for (the green sheet); forms to record cash paid outs, with copies for payee, payor, and bookkeeping firm - forms for just about everything! A monthly exchange of completed forms and blank forms was made between business owner and Simplified "field man" at the beginning of each month. Divided into 9 different "pickup routes", Simplified representatives personally visited each client on one of the first three working days of each month - ready to answer questions and maintain close contact.

Sometimes a manually completed pink sheet or a green sheet will still show up in the monthly materials Simplified receives from clients in the 21st century, but far and wide, the transition is complete to electronic recordkeeping. That transition has its own history, and Simplified's evolution in record handling helps tell the story.

1945 to about 1967

Business clients sent expense receipts, and records of sales. Simplified's double-entry and single-entry rooms each held 15-20 bookkeepers at desks, desks with ten-key adding machines, ink pads and date stamps, bells to call the file clerk, and perhaps even ash trays. Ledgers were maintained in pencil; profit & loss statements, some balance sheets, and tax returns were hand-written on ledger paper and stored in identifiable red "Simplified bookkeeping & tax record system" binders. Some important forms were typed by secretaries.

November 1967

Simplified shareholders report a plan for the "expanded use of electronic data equipment" and acquisition of "electrostatic copy machine". Up to this time, some bookkeeping records were being sent to Capital Business Services for processing. Bookkeepers at Simplified manually completed summary input sheets, delivered them in "punch jackets" to CBS on Michigan Avenue, reviewed the printed profit and loss statements and payroll reports and made corrections as needed before delivery to clients. Quite a process!

July 1970

The decision was made to lease an IBM System/3 to service all clients in-house. Simplified was one of the first accounting services to utilize the IBM System/3, which was installed in the basement level, and required a full-time programmer, operator, and two full-time keypunchers. Nearly all software was custom written. The System/3 featured a small punch card which could encode up to 96 characters per card, and worked with Report Programming Generator II (RPG) programming language (from IBM archives) . Bookkeepers prepared operating statements, sales tax and payroll taxes on the System/3.

Winter 1974

The company began to process some income tax returns on computer.

July 1978

Simplified reports having converted the payroll system from card to disk, hoping to save cost of a rented card sorter ($190/month).

1980 and 1981

Simplified purchased an IBM System/34 to replace the System/3, donating it for student use to Kellogg Community College. All software had to be re-written for the System/34, and Simplified began then to use IBM's Client Accounting Financial Records System (CAFRS) for more sophisticated accounting needs. The System/34 was a minicomputer that featured an off-line storage mechanism that utilized "magazines" - boxes of 8-inch floppies that the machine could load and eject in a nonsequential fashion. It ran quite nicely on 64K of memory (from Wikipedia).

1983 to 1989

Even a number of Simplified's current tax preparers recall these days of meeting with clients, filling out input sheets, preparing a manual estimate of the tax return results for the client, sending input sheets back and forth with data entry personnel (in and out of house), reviewing draft returns and approving them for final printing - usually on 3-part carbon forms. Re-runs of tax returns were a major concern. Most business returns were still prepared manually. Computers were certainly helpful, but not nearly the "intuitive" working partners that they later came to be. Sometimes we could schedule a coffee break for the time we knew it would take a computer to "calculate" a complex return!

Late 1989

Simplified purchased an upgraded electronic postage machine and its first fax machine, which featured thermal rolls of paper.

May 1990

After considering a move to the IBM System 36 or AS/400, the paradigm-changing decision was made to convert Simplified's entire operations to a network-based personal computer system, at an initial cost of $60,000. This change required all new programming, much of which was commercially available, workstations at most desks, and operationally, it required that data entry be done by the bookkeepers and accountants themselves - no more data entry personnel! The first network server was 4MB, and accompanying workstations were each 640K to 1MB. The IBM 34 continued to be used for several years for payroll checkwriting services, until suitable replacement software could be found.

1995

Finally, with all else under control, Simplified moved from rotary phones to an office-wide voice-mail system, with phones on the desk of each bookkeeper and accountant. This year, too, included a ban on smoking in the building.

1997

Simplified saw another major computer network upgrade, expanding workstations to all desks and tax preparers. New windows-based tax software revolutionized income tax processing, so that tax preparers began to prepare returns on the computer while meeting with clients. Tax law complexity continued to increase, as turnaround times decreased with new computer efficiencies.

1999 to 2003

With the expansion of client accounting software, such as Quickbooks, and the flexibility of spreadsheet software, Simplified began a move to foster provision of a variety of accounting services to meet the needs of any client.

2004 to Now

Simplified's new management team brought considerable technological expertise, and new efficiencies continue to be revealed. The computer network has been converted to a Terminal Server environment, giving employees access to company information anywhere in the world. The phone network has been converted to a voice over IP system, which links all offices on a single telephone system. Once heavily dependent upon paper-filled file cabinets, electronic filing systems have advanced Simplified rapidly towards a nearly paperless office!

Simplified's history in Michigan reflects more than revolutionary computer changes - it reflects the personality of Michigan and Michigan's economy over the past half century. Early photos show employees "dressed up" for a day at work, and a formal Christmas party planned, with champagne to run "until it ran out". Smoking wasn't restricted in the office until 1995. The ups and downs of Michigan's economy - especially the downturns of the early eighties, the early nineties, and now - are reflected, as is the diversity of the thousands of businesses served by Simplified over the years. With new government regulations and taxes not dying away, the founding premise for a "simplified" recordkeeping system lives on.