SecProbe.io

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Mail Stop 4561

      							September 16, 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
		Form 10-K for the Fiscal Year Ended September 30, 2004
		Form 10-Q for the Fiscal Quarter Ended December 31, 2004
		Form 10-Q for the Fiscal Quarter Ended March 31, 2005
      Form 10-Q for the Fiscal Quarter Ended June 30, 2005
      File No. 001-10147

Dear Mr. O`Neill:

		We reviewed the above referenced filings and your
response
letter dated August 5, 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

Note 1. Summary of Significant Accounting Policies

Revenue Recognition, page 40

Prior Comment Number 1

1. Your response states that you apply the provisions of SOP 97-2
to
your combined unit of accounting because the software license and
software training elements are the key elements.  You support this
conclusion, in part, by stating the hardware installation effort
is
relatively insignificant in comparison to the software training
effort.  Explain the following as it relates to your hardware
installation services:
* Why you believe that the significance of the hardware
installation
effort impacts the accounting literature that you should apply to
this unit of accounting;
* The nature of the services included in hardware installation;
* How you determine the significance of hardware installation,
i.e.
identify the metric used;
* The period over which hardware installation services are
delivered
and the time it takes to deliver these services;
* Whether hardware installation is significant to the hardware you
sell;
* Why software training services are considered in determining the
significance of hardware installation services;
* Describe the nature of your software training services, the
period
over which they are delivered and the hours expended on these
services.

Please be as detailed as possible in your response.

2. As it relates to your combined unit of accounting for software,
software training and hardware installation, tell us in percentage
terms the portion of the arrangement fee that relates to each
element.

Prior Comment Number 2

3. Your response states that your leases are classified as sales-
type
on a consolidated basis and that you are a dealer in computer
hardware.   In your prior response to our comments nos. 4 through
8
under the caption "Background" addressed in your letter dated
April
12, 2005 you explain that "...the company is not considered a
hardware dealer because it only sells one brand of equipment to
customers that use its software as opposed to a dealer that sells
many different customers for multiple uses."  Your prior response
to
our prior comment no. 5 addressed in your letter dated June 10,
2005
you explain "The company`s leases are classified as direct
financing
leases.  The leases are not classified as sales-type leases
because
the company is not considered a hardware dealer as it does not
generate a dealer`s profit on the sale of hardware."  Although
your
current response indicates certain reasons for classifying leases
as
sales-type leases, it is not evident how and why your assessment
of
lease classification has changed from your prior responses.
Please
reconcile your most recent response to your prior responses and
assessments in which you clearly indicate that you are not a
dealer
in hardware, that you do not generate dealer profit and that your
leases are direct financing leases.

4. Your response states that you are a dealer in computer hardware
as
you use leasing to market your computer systems and generate
profits
on your software arrangements, which include hardware.
Provide/clarify the following as it relates to your
software/leasing
arrangements:
* Explain how you use leasing as a means to market your computer
systems.
* Explain how you determine profit on hardware lease arrangements.
* Explain why you classify your leases as sales-type leases
considering the revenue recorded for leased hardware equals cost.
Please address how you apply the guidance in paragraph 6.b.i of
SFAS
13 in your response.
* Tell us how you considered paragraph 5.c.i of SFAS 13 as it
relates
to determining whether or not you have fair value for leased
hardware.
* Tell us whether the present value of minimum lease payments are
calculated on every leasing arrangement, computed at the interest
rate implicit in the leases and if so, why this amount is not
recorded as the sales price pursuant to SFAS 13, paragraph 17.c.

5. Explain how you allocate revenue for your arrangements between
your SFAS 13 and non-SFAS 13 deliverables and how you determine
the
relative fair values for those deliverables pursuant to paragraph
4.a.ii of EITF 00-21.  Provide an example to support your
response.

6. We note from your response that you review the estimated
residual
value of your leased assets annually.  Explain how you review the
estimated residual value of lease transactions annually pursuant
to
paragraph 17.d of SFAS 13, as you indicate in your response that
you
no longer track lease information after it is recorded by your
wholly-owned financing subsidiary.

7. We note from your response that  "...the company records all
hardware sales, whether subject to lease or not, in the same
general
ledger account, the company is unable to readily distinguish
hardware
sales subject to leases from other hardware sales."  It appears
from
this response you sell hardware that is not subject to lease.
Although in prior response letters (April 12, 2005 and June 10,
2005)
you have addressed your accounting for multiple element
arrangement
which include leased hardware and hardware maintenance, you have
not
provided an analysis of how you account for multiple element
arrangements that include hardware that is not subject to leases.
Please provide us with this analysis.

Prior Comment number 4

8. Your response indicates that you recognize revenue for the
combined unit of accounting using contract accounting because the
nature of the services is such that the service elements do not
qualify for separate accounting.  However, to apply contract
accounting to a software arrangement, the undelivered services in
the
arrangement must also involve significant production,
customization,
or modification of the software.  It does not appear that your
undelivered services involve significant production,
customization,
or modification of the software as your undelivered services do
not
involve software installation.  If this is correct, clarify how
you
apply paragraph 67 of SOP 97-2 to your combined unit of
accounting,
which requires that you recognize revenue as services are
performed,
or on a straight-line basis if no pattern of performance is
discernible.

9. Tell us how your current accounting for your combined unit of
accounting and PCS complies with paragraph 12 of SOP 97-2.  We
understand, based on your response to prior comment no. 1, you
believe that you meet the exception in the second bullet of
paragraph
12 of SOP 97-2 to recognize the undelivered services over the
period
during which the services are expected to be performed.  However,
as
your arrangements include an element for PCS, the services in the
combined unit of accounting are not the only undelivered element
in
your arrangements.  Therefore, as this exception applies `if the
only
undelivered element is services...`, it does not appear it is
applicable to your arrangements.  If you conclude that the
exception
is not applicable to your arrangements, all revenue from the
arrangement should be deferred until the earlier of the point at
which such sufficient vendor-specific objective evidence does
exist
or all elements of the arrangement have been delivered in
accordance
with paragraph 12 of SOP 97-2, as revised by paragraph 6.b of SOP
98-
9.  Please advise.

Prior Comment Number 6

10. We note your Appendix A and your proposed revisions to your
revenue recognition policy.  If your revenue recognition policy
requires revision based on consideration of our comments above,
please provide revised disclosures with your response.

Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2005

Statements of Consolidated Income (Unaudited), page 3

Prior Comment Number 7

11. We note from your response that you concluded the two-class
method should be used to compute earnings per common share as
opposed
to the if-converted method.  In addition we note your earnings per
share presentation and disclosures in your June 30, 2005 Form 10-
Q.
Tell us the following relating to how you computed your earnings
per
share pursuant to the Two-Class Method for prior periods
(presented
in your response) and for the three and six months ended June 30,
2005:
* How you considered reporting earnings per share for both
distributed earnings (dividends declared and contractual amount of
dividends) and undistributed earnings;
* How you considered the conversion of Class B common stock in
determining the denominator for the purpose of computing Class A
diluted earnings per share;
* How you considered disclosing your computation of allocating net
income, distributed earnings and undistributed earnings for the
purposes of computing Class A and Class B commons stock earnings
per
share.  Provide us with this computation for the three and six
months
ended June 30, 2005 and for the year ended September 30, 2004;
* How you considered the impact of computing earnings per share
pursuant to the two-class method on your SFAS 123 pro forma
earnings
per share disclosures;

If you determine that the information for Class A and Class B
common
stock earnings per share provided in your prior response and your
June 30, 2005 10-Q requires revision based on your consideration
of
the items above, please provide your revised earnings per share
with
your response.

12. Tell us how you determined that your disclosure controls and
procedures were effective as of March 31, 2005, December 31, 2004
and
September 30, 2004, considering your controls did not detect your
misapplication of SFAS 128 within your financial statements.  In
addition, tell us how you considered the impact of your revised
earnings per share presentation and the revision to your internal
controls over financial reporting, if any, in your June 30, 2005
Form
10-Q disclosures pursuant to Item 308 of Regulation S-K.

Prior Comment Number 8

13. We have read your response regarding the reclassification of
auction rate securities and your conclusion that the impact of the
reclassification is not material to your prior annual and interim
financial statements.  In addition we note your response that
"Quantifying, in percentage terms, the magnitude of a variance is
only the beginning of an analysis of materiality..."  Although SAB
Topic 1 M indicates that qualitative factors should be considered
when misstatements are quantitatively small it does not suggest
that
the qualitative factors should be considered when items are
quantitatively material.      Considering the significant change
to
cash and cash equivalents, marketable securities and cash flows
from
investing activities we do not agree with your conclusion that the
impact of the reclassification is not material to your financial
statements.  Amend your   September 30, 2004 Form 10-K and
December
31, 2004 Form 10-Q to properly report  auction rate securities in
your financial statements and to disclose the reason for the
reclassification (i.e. to comply with SFAS 95) and the
quantitative
impact on the financial statements (consolidated balance sheets
and
statements of cash flows).  In addition revise your discussion of
liquidity in Management`s Discussion and Analysis in your filings,
as
needed.

Prior Comment Number 9

14. We reissue our prior comment no. 9 relating to your conclusion
that disclosure controls and procedures were effective as of
September 30, 2004 and December 31, 2004.  Tell us how you
considered
the reclassification of your auction rate securities in
determining
that your disclosure controls and procedures were effective as of
September 30, 2004 and December 31, 2004, considering your
controls
did not detect the misclassification of auction rate securities
within your financial statements.

Management Discussion and Analysis of Financial Condition and the
Results of Operations

Key Issues, page 13

15. We note that as a result of your decision to stop selling RGS
Suite on July 19, 2005, you will write-off capitalized software
development costs in the forth quarter ended September 30, 2005.
Tell us the result of your evaluation of the RGS Suite capitalized
software costs as of June 30, 2005 pursuant to paragraph 10 of
SFAS
86.  As part of your response, tell us how your consideration to
stop
selling the RGS Suite software impacted the net realizable value
of
this software as of June 30, 2005.

Controls and Procedures, page 22

16. We note your disclosure that "Finbarr J. O`Neil, the company`s
Chief Executive Officer, Carolyn. S. Wall, the company`s Vice
President, Finance and Stephen A. Delong, the company`s Vice
President, Controller and Chief Accountant, conducted an
evaluation
of the effectiveness of the company`s disclosure controls and
procedures pursuant to Exchange Act rule 13a-15 as of June 30,
2005,
and each has concluded that such disclosure controls and
procedures
are effective in ensuring that all material information required
to
be disclosed in our periodic reports filed under the Exchange Act
is
recorded, processed, summarized and reported within the time
periods
specified by the Securities and Exchange Commission`s rules and
forms. Please clarify whether your officers concluded that your
disclosure controls and procedures are also effective to ensure
that
the information required to be disclosed by the Company in reports
that it files under the Exchange Act is accumulated and
communicated
to your management, including your Chief Executive Officer and
Chief
Financial Officer, to allow timely decisions regarding the
required
disclosure.  We refer you to Exchange Act Rule 13a-15(e).  Tell us
what consideration you gave to including this information in your
disclosures.

*****

      As appropriate, please amend your filing and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response.  Please submit all correspondence and
supplemental
materials on EDGAR as required by Rule 101 of Regulation S-T.  You
may wish to provide us with marked copies of any amendment to
expedite our review.  Please furnish a cover letter with any
amendment that keys your responses to our comments and provides
any
requested information.  Detailed cover letters greatly facilitate
our
review.  Please understand that we may have additional comment