SecProbe.io

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      							May 17, 2005

Mr. Finbarr J. O`Neill
President and Chief Executive Officer
The Reynolds and Reynolds Company
One Reynolds Way
Dayton, Ohio 45430

	RE:	The Reynolds and Reynolds Company
      File no. 001-10147
		Form 10-K: For the Year Ended September 30, 2004
		Form 10-Q: For the Quarterly Period Ended December 31,
2004
		Form 10-Q: For the Quarterly Period Ended March 31, 2005

Dear Mr. O`Neill:

	We reviewed the above referenced filings and your response
letter dated April 12, 2005 and we have the following additional
comments. Please note that we have limited the scope of our review
to
certain accounting policies and practices in your financial
statements and related disclosures.  Where indicated, we think you
should revise your documents in response to these comments.  If
you
disagree, we will consider your explanation as to why our comment
is
inapplicable or a revision is unnecessary.  Please be as detailed
as
necessary in your explanation.  In some of our comments, we may
ask
you to provide us with supplemental information so we may better
understand your disclosure.  After reviewing this information, we
may
or may not raise additional comments.

Please understand that the purpose of our review process is to
assist
you in your compliance with the applicable disclosure requirements
and to enhance the overall disclosure in your filing.  We look
forward to working with you in these respects.  We welcome any
questions you may have about our comments or on any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

Annual Report on Form 10-K for the Year Ended September 30, 2004

Consolidated Balance Sheets, page 35

Prior Comment no. 2

1. We have considered your response to our prior comment no. 2 and
do
not find your reasons for omitting a consolidated balance sheet
and
statement of cash flows persuasive. As previously requested,
revise
future filings to present consolidated balance sheets and
statements
of cash flows without segregating your automotive solutions and
financial service assets, liabilities and cash flows. Further,
ensure
to classify your assets and liabilities between current and long-
term
pursuant to Article 5-02 of Regulation S-X.

2. As noted in our prior comment no. 2, we would not object to
your
presenting "tiered" financial statements as supplemental
information
in addition to your consolidated financial statements if you
believe
they are useful and meaningful to investors.  If you choose to
present tiered information within your primary financial
statements,
it should immediately follow the corresponding consolidated
financial
statement.  For example, if you present a tiered balance sheet, it
should immediately follow your consolidated balance sheet,
preferably
with the word "supplemental" in the title of the tiered financial
statement.  Other alternatives may be to present this information
either in a footnote to your primary financial statements or in a
separate statement following your primary financial statements as
supplemental information.  In addition, when "tiered" financial
statements are presented, your disclosures should include an
explanation of why the information is being presented, and if
presented for selective financial statements (balance sheet only,
for
example), you should explain why.  Finally, we would expect the
company`s audit report to include any such supplemental statement
that you file.

Prior Comment no. 3

3. We note that you have recorded current and non-current deferred
costs and license fees at September 30, 2004 and 2003.  With
respect
to these deferred costs and license fees tell us the nature of the
transactions that resulted in you recording these costs/fees, your
policy for recognizing these costs as an expense, the
authoritative
literature that applies and if applicable, how these costs relate
to
your deferred revenue.

Note 1. Summary of Significant Accounting Policies

Revenue Recognition, page 40

Prior Comment no. 4

4. We note that you consider your hardware installation service to
be
software related and subject to SOP 97-2.  Supplementally, clarify
why your hardware installation services are considered software
related when your hardware element is not software related.  Tell
us
how you have considered EITF 03-5 when making this determination.
As
part of your response, clarify whether your hardware installation
services include any software installation services or whether you
have a separate software installation service element contained in
your arrangements.

5. We note that your hardware element is accounted for as a
leasing
arrangement in accordance with SFAS 13.  Tell us the
classification
of your leases pursuant to the criteria in paragraphs 6 through 8
of
SFAS 13.  Further, tell us how you considered the disclosure
requirements of paragraph 23 of SFAS 13 for your lease
arrangements.
We may have additional comments based on your response.

6. We note that you have established vendor specific objective
evidence (VSOE) of fair value for the recurring component
(software
support and hardware maintenance) of your arrangements based on
the
renewal rate.  Clarify whether your arrangements contain separate
renewal rates for your software support and hardware maintenance
or
whether they only contain one renewal rate for the recurring
component.  Supplementally clarify,
* Whether you have established VSOE of the fair value of your
software support based on a separate renewal rate for such service
in
accordance with paragraph 57 of SOP 97-2.  If not, tell us how
your
current method of establishing VSOE of fair value for your
software
support is appropriate considering that your recurring component
contains a non-SOP 97-2 deliverable.
* How using the renewal rate to establish fair value of your
hardware
maintenance service complies with SFAS 13.  Tell us how you apply
the
guidance in SFAS 13 to establish fair value of your hardware
maintenance element.  Further, tell us whether your hardware
leasing
arrangements include a separate fee for maintenance services or
whether the maintenance services are included in the total
hardware
consideration.

7. Your response indicates that you recognize revenue for your
software license, installation and training elements of your
arrangements over the system implementation period as the solution
becomes available for use by the customer since VSOE of fair value
does not exist for these elements.  Paragraph 12 of SOP 97-2
states
that, `if sufficient VSOE evidence does not exist for the
allocation
of revenue to the various elements of the arrangement, all revenue
should be deferred until the earlier of the point at which such
sufficient VSOE does exist or all elements of the arrangement have
been delivered.`  Considering this guidance, supplementally tell
us
why you believe that it is appropriate for you to recognize
revenue
on these elements of your arrangements prior to the point at which
such sufficient fair value of VSOE exists for all elements of the
arrangement.

8. We note that your customers do not sign a certificate of
acceptance until implementation services have been completed.
Supplementally, explain how you have determined that uncertainty
does
not exist about customer acceptance considering that you have a
business practice of allowing returns for credit during the
implementation phase of your arrangements.  See paragraph 20 of
SOP
97-2.

9. Your response states that documents are normally sold apart
from
software in a separate contract without any other elements.
Supplementally tell us how your revenue recognition is impacted
when
documents are included as an element of your software
arrangements.
As part of your response, clarify whether you have established
fair
value of your documents element in accordance with EITF 00-21.

10. Your disclosure for multiple elements does not appear to fully
comply with the requirements of SAB 104, Topic 13.B Question 1, to
clearly state the accounting policy for each unit of accounting as
well as how units of accounting are determined and valued.
Supplementally, tell us how you plan to more fully comply with
this
guidance.

Prior Comment no. 6

11. We note that you have classified hosting revenue as software
revenue even though you have concluded that your hosting revenue
is
outside the scope of SOP 97-2 based on the provisions of EITF 00-
3.
As paragraph 5 of EITF 00-3 states that such arrangements are
considered `service contracts`, revenue derived from such
arrangements should be classified as service revenue.
Supplementally, tell us how you plan to comply with this guidance.

Prior Comment no. 7

12. Your response states, in part, that you continually develop
new
applications that integrate with your core system.
Supplementally,
clarify whether you are required to or have a practice of
delivering
any new applications that you develop to your customers during the
financing period.  If so, tell us whether these deliverables are
considered specified upgrade rights, unspecified upgrade rights or
additional software products based on the guidance of SOP 97-2 and
how you account for such rights.

Note 12.  Segment Reporting, page 55

Prior Comment no. 10

13. Your response indicates that the way you have grouped similar
services in the Form 10-Q for the quarter ended December 31, 2004
is
appropriate based on the provision of paragraph 37 of SFAS 131.
However, we note that you have grouped all your services for your
Software Solution segment into one amount.  Supplementally, tell
us
why the services classified in your Software Solutions segment,
including hosting, installation, training, hardware maintenance
and
software support, are similar.

Quarterly Report on Form 10-Q for the Quarter Ended March 31, 2005

Statements of Consolidated Income (Unaudited), page 3

14. We note your presentation of Basic and Diluted Earnings Per
common share.  Tell us why you have not disclosed reconciliations
of
the numerators and denominators for your earnings per share
computations pursuant to paragraphs 40 and 41 of SFAS 128.  In
addition, considering you have Class A and Class B common stock,
tell
us what consideration you have given to the two-class method for
computing earnings per share pursuant to EITF 03-6.

Note 2.  Reclassifications, page 6

15. We note that you have made significant changes to your
previously
reported consolidated balance sheets and statements of cash flows
related to reclassifications of auction rate securities from cash
equivalents to short-term investments.  Supplementally, explain to
us
how you determined that prospective disclosure of these changes
was
appropriate and tell us what consideration you gave to
characterizing
these changes as restatements and amending previously filed
Exchange
Act reports.  In addition, tell us how you considered this change
in
concluding that your disclosure controls and procedures were
effective as of September 30, 2004 and December 31, 2004.

16. We note that you have determined to classify your auction rate
securities as current.  Supplementally, tell us whether any of the
securities that have been classified as current have long-term
maturity dates.  If so, justify the classification as current by
addressing how you determined that you have a reasonable
expectation
of completing a successful auction within the subsequent twelve-
month
period.  Refer to SFAS 115, paragraph 17 and ARB No. 43, Chapter
3A.
Further, tell us what consideration you gave to disclosing the
actual
maturity dates of these securities and the judgments and
assumptions
involved in determining the classification.

17. We note you have revised your consolidated statements of cash
flows to comply with SEC guidance.   We also note from your
disclosure that prior to revising your cash flows, inter-company
receivables, which were included in trade receivables, were
historically included in operating activities.  It appears from
this
disclosure that inter-company receivables are recorded in trade
receivables and have not been eliminated in consolidation.
Confirm
to us that all inter-company balances have been eliminated in your
financial statements and that there are no inter-company
receivables
or payables recorded in your consolidated balance sheet.

Controls and Procedures, page 20

18. We note that your Chief Executive Officer and Chief Financial
Officer have concluded the company`s disclosure controls and
procedures are effective "after implementing the aforementioned
actions".  Given the exception noted, it remains unclear whether
your
Chief Executive Officer and Chief Financial Officer have concluded
that your disclosure controls and procedures are effective as of
March 31, 2005.  Please revise your disclosure to state, in clear
and
unqualified language, the conclusions reached by your Chief
Executive
Officer and Chief Financial Officer on the effectiveness of your
internal controls and procedures.  For example, if true, you can
state that your disclosure controls and procedures are effective
including consideration to the identified matters, so long as you
provide appropriate disclosure explaining how the disclosure
controls
and procedures were determined to be effective in light of the
identified matters.  Or, if true, you can state that given the
identified matters, your disclosure controls and procedures are
not
effective.  You should not however, state the conclusion in your
current disclosure, which appears to state that your disclosure
controls and procedures are effective except to the extent they
are
not effective.  We refer you to Exchange Act Rule 13a-15, Item 307
of
Regulation S-K and SEC Release No. 33-8238.

19. Supplementally, tell us whether you considered the
"segregation
of duties concerns" to be a material weakness.  If it is a
material
weakness expand your disclosure to describe the factors you
considered in determining that your disclosure controls and
procedures were effective as of March 31, 2005.

20. We note your disclosure that "...except as mentioned above,
there
have been no changes in the company`s internal controls over
financial reporting that occurred during the fiscal year period
covered by this quarterly report that has materially affected, or
is
reasonably likely to materially affect, the company`s internal
controls over financial reporting".  Revise, to state clearly, if
correct, that there were changes in your internal control over
financial reporting that occurred during this quarter that have
materially affected, or are reasonably likely to materially
affect,
your internal control over financial reporting.

*****
	Please respond to these comments within 10 business days and
file your response letter via EDGAR.  Please understand that we
may
have additional comments after reviewing your responses to our
comments.

You may contact Christopher White, Staff Accountant, at (202) 551-
3461, Thomas Ferraro, Review Accountant, at (202) 551-3225 or me
at
(202) 551-3226 if you have any questions regarding these comments.

							Very truly yours,

							Craig Wilson
							Senior Assistant Chief
Accountant

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The Reynolds and Reynolds Company
May 17, 2005
page 1

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