Top Three Criteria FFLs Should Use for Selecting ATF Compliant Bound Book Software

For many in the firearms industry, the “bound book” is well known as the regulated record for tracking the lifecycle movement of a firearm through the commercial sector and between licenses and non-licensees. Perhaps less well known are the unintended consequences of relying on software company advertising and advice as the sole determination of your needs as an FFL.

The following are three important considerations when selecting an electronic Bound Book provider for your Federal Firearms License.

ATF Rul. 2016-1 Compliant Software is Different than FFL Compliance 

When it comes to selecting an electronic bound book, consideration needs to be given not only to compliance with ATF Ruling 2016-1, as so many advertise, but also what that term really means. FFLs find the greatest compliance and financial investment when shopping with a keen awareness and aversion of the “fly by, drop in” A&D installation kit offered by software companies who lack on-hand, operational FFL expertise.

FFLs are most successful when they fully understand the capabilities of the electronic bound book software, including the source and use of firearm data, the location of backup files and user access rights. Consider asking the following questions during your purchase:

• I understand the software is 2016-1compliant, but will my process be compliant?
• Who reviews your software for ATF compliance when the regulations change?
• How is each requirement of the Ruling accounted for?
• Will you guide me through the necessary steps and required ATF notifications when converting to new A&D Book software?

Implementation by a software vendor without any operational/regulatory experience is the equivalent of expecting a car manufacturer to ensure you do not break any traffic laws.

Firearms Software Expertise is Different than Firearms Business Expertise

Shopping for an ATF 2016-1 compliant bound book means knowing the details about the combined software and services expertise of your provider. Unfortunately, most software vendors don’t employ any ATF compliance experts and merely rely on outside, third party expertise. Such expertise may – hopefully – come with a deep knowledge of the regulations (e.g., an independent attorney), but often lacks any experience in implementing an FFL’s Standard Operating Procedures to ensure regulatory compliance (e.g., an attorney or regulatory expert formerly employed by an FFL). 

Consider asking the following questions:

• Can you evaluate the status of my current bound book data – am I ATF compliant?
• Will you assess the status of my ATF compliance in 90 days?
• What can I and should I do with my legacy records and systems/books?

Don’t Stop at Compliance – Your Provider Should Prove FFL Cost Savings

FFLs using paper-based records invest 4-5 minutes to acquire and validate firearms into their chosen ledger. And, for every disposition FFLs invest another 4-5 minutes to dispose and validate a firearm. Dispositions to a non-licensee via ATF Form 4473, or those involving NFA firearms, often require additional time.  FFLs using standalone technology can reduce their overall processing time by over 50%, bringing total Acquisition and Disposition time for each serial number down to 1-5 minutes.  Even more savings can be realized when A&D software integrates seamlessly into your already existing systems.  In such an environment, Acquisitions and Dispositions are automated and zero additional labor is spent on firearms records on a daily basis!

For example, a wholesale FFL may acquire and dispose of 300,000 firearms per year. Running at top efficiency, that would require approximately 300,000 minutes between acquisitions and dispositions.  At $17.00 per labor hour (business’s total investment, not employee’s hourly rate), that equates to $85,000 or $3.53 per firearm.  Integrating with an ATF Rul. 2016-1 compliant A&D Book can largely eliminate that cost and those resources can be directed to more productive and revenue-generating work!

Consider asking the following questions during your purchase:

• Do I know all the features of the software and which should I implement?
• Are there changes to my FFL business process that could save more money?
• What are the costs to integrate the software to my systems and when will I realize ROI?

Before selecting your electronic bound book software provider, talk to other software users – not the businesses whose names are in the software brochures – businesses that are in your area with similar business models (i.e. if you are a gun shop talk to a gun shop, not a manufacturer). Ask the software provider about clients’ inspection results and how they supported those clients if/when issues were detected. It is important to know if your provider can support you through your inspection process and supply functional solutions if issues are uncovered.

Orchid Advisors provides ATF and ITAR compliance services to manufacturing, distribution and retail FFLs. The firm offers FFL and Export licensing, deep record inspections, e4473 / NFA eForms, Electronic Bound Book software and delivers the largest online ATF and ITAR compliance training platform available.  Together with its partners, Orchid delivers the only integrated firearm compliance, technology and legal solution.