JKHYJack Henry & Associates

We note from your disclosures on page 29 that you capitalize certain costs incurred to develop or purchase internal-use software. Please clarify how your policy for capitalized software developed or obtained for internal-use complies with the guidance in ASC 350- 40-25. Tell us what consideration you gave to disclosing your policy for capitalized software developed or obtained for internal-use.

Our reference to internal-use software within our Critical Accounting Policies on page 29 was intended as a general acknowledgement that we capitalized costs related to such software. Upon re-reading this disclosure, we believe we have made the unintentional implication that our policies relating to internal-use software are critical to the determination of our financial position, results of operations or cash flows.

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We will remove reference to internal-use software from our Critical Accounting Policies in future filings, unless a future determination is made that such policies are critical.

We acknowledge that ASC 350-40 is the governing guidance for capitalizing both the costs of acquiring third-party software and the internal costs of designing, developing and testing software that will be used internally and not marketed to customers. We further recognize that these rules are distinct from those contained in ASC 985. Most of the software we acquire for internal-use is acquired as “off-the-shelf” software that is not modified by us and for which we capitalize no internal costs. For our major software systems, such as our accounting, budget and customer relationship management systems, our capitalized costs may include some internal or external costs to configure, install and test the software during the application development stage. In accordance with ASC 350-40, we do not capitalize preliminary project costs, nor do we capitalize training, data conversion costs, maintenance or post-development stage costs.

When considering whether to disclose our policy for internal-use software, we referred to ASC 235-1-50-3, which requires the disclosure of principles that materially affect the determination of financial position, cash flows, or results of operations, that encompass important judgments, and that involve any of the following:

a.

A selection from existing acceptable alternatives b.

Principles and methods peculiar to the industry c.

Unusual or innovative applications of GAAP

We do not believe that our policy regarding the capitalizing of internal-use software costs materially impacts, or is likely to materially impact, the determination of our financial position, cash flows or results of operations. While estimation and judgment is required related to the determination of the amortization of these capitalized costs, we do not view those judgments as unique from those required for other capital assets and thus we have specifically included internal-use software in the discussion of our accounting policies governing Property and Equipment and Intangible Assets (see page 40 of our filing).

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Please quantify the amounts included in the “computer software, net” line item for capitalized costs incurred to develop commercial software products compared with those costs incurred to develop or purchase internal-use software for each period presented.

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In addition, tell us the amount of amortization expense attributable to commercial software products compared with the amount attributable to internal-use software for each period presented and tell us where these amounts are classified in your consolidated statements of operations.

The referenced line item, “computer software, net” does not include any costs incurred to develop or purchase internal-use software for any period presented. This line item includes only capitalized costs incurred to develop commercial software products. While we acknowledge that internal-use software is generally considered an intangible asset it has been our practice to include it within Property and equipment on our balance sheet. It is included within the “Equipment and furniture” component of our “Property and equipment” line item disclosed in Note 3 on page 42 of our filing.

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As of June 30, 2012 and 2011, the net balance of our internal-use software was $15.3 million and $15.2 million, respectively, which represents less than 6% of net Property and Equipment and less than 1% of total other assets and total assets for the periods presented. We also considered Regulation S-X 210.5-02 and note that internal-use software does not exceed 5% of total assets.

Based on these quantitative considerations, we do not believe our inclusion of internal-use software in Property and equipment represents a material misclassification and therefore, is not a departure from generally accepted accounting principles. We will continue to consider the propriety of this presentation in future years.

We include the amortization of our capitalized costs for internal-use software within depreciation expense. For the years ended June 30, 2012, 2011 and 2010, the total depreciation relating to internal-use software was $7.6 million, $7.2 million and $7.0 million, respectively. This depreciation is recorded within our Cost of support and service line item where the software is used by employees engaged in providing services to our customers, or is included within General and administrative expenses for software used in corporate-level activities like accounting or human resources.

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Please tell us what consideration you gave to disclosing the weighted-average amortization period, in total and by major intangible asset class. We refer you to ASC 350-30-50-1(a).

Our interpretation of ASC 350-30-50-1(a) is that the requirement to disclose the weighted-average amortization period, in total and by major intangible asset class is required only for intangible assets acquired in an asset acquisition or business combination in the period of acquisition. We did not acquire a material amount of intangible assets during the years ended June 30, 2012 or 2011; therefore, we believe that no disclosure is required under the guidance referenced.

We will include the weighted-average amortization period, in total and by major intangible asset class, in our filings

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for any future period in which a material amount of intangible assets are acquired.

We acknowledge that:

• the company is responsible for the adequacy and accuracy of the disclosure in the filing;

staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

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We note your response to prior comment 2. Please address the portion of our comment asking you to explain how the commercial software product amortization expense is classified in your consolidated statements of operations. In this regard, tell us the amount of amortization expense allocated to cost of licenses, cost of support and service and cost of hardware for each period presented.

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Your response should explain your basis for the classification within cost of sales since the majority of the amortization expense appears to be classified as cost of support and service.

For the years ended June 30, 2012, 2011 and 2010 total amortization expense on our commercial software products was $24.8 million, $23.1 million and $17.8 million, respectively. The amortization expense is all classified within costs of sales in the caption cost of support and service in our consolidated statements of operations for each the years ended June 30, 2012, 2011 and 2010, respectively.

When determining our basis for allocating commercial software product amortization expense to cost of licenses and cost of support and service we considered the revenue that is generated by our

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commercial software products; commercial software products do not generate revenue associated with hardware sales. Our commercial software products generate both license revenue as well as support and service revenue. License revenue represents the fee a customer pays for licensing our software followed by an annual maintenance during the period they use our software. Within support and service revenue, these products contribute revenue through annual maintenance contracts and through outsourcing contracts, which represent the large majority of our revenues. We considered that support and services revenue comprised 89%, 88% and 86% of total revenues in each of the annual periods ended June 30, 2012, 2011, and 2010, respectively and also considered the recurring nature of the revenue in concluding that classification of the amortization of the commercial software to the cost of support and services line item is appropriate. In drawing that conclusion we also contemplated whether the amortization should be allocated between the cost of license caption and the cost of support and service caption; revenues being the most likely basis for such an allocation. In contemplation of an allocation we observed that both the maintenance revenue and outsourcing revenue are recurring in nature and not subject to significant fluctuations in revenue from year to year. On the other hand, license revenue, especially on a product-by-product basis, may fluctuate significantly year-to-year since significant license revenue occurs only in the period of new customer acquisition. The fluctuation in license revenues would potentially result in unpredictable and variable rates of allocation of the amortization between cost of license and cost of support and service that we believe would be confusing to the reader when interpreting the results of operations; making such an allocation less meaningful to a user of the financial statements. We also considered that such an allocation would have resulted in $1.5 million, $1.4 million, and $1.3 million of amortization being allocated to costs of license for the periods ended June 30, 2012, 2011 and 2010, respectively. Based on the considerations described herein, we believe the allocation of all the amortization expense to cost of support and service represents a systematic and rational allocation of the amortization expense.

In future filings, we will enhance our disclosures to further clarify that our cost of license includes only direct costs of third-party software and that cost of support and service revenue includes all of the amortization expense related to the capitalized development of our commercial software products.

We acknowledge that:

• the company is responsible for the adequacy and accuracy of the disclosure in the filing;

staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

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You disclose here that two of your three core banking platforms and one of your two credit union platforms are IBM-based, and later in the Business section you state that in addition to having an established remarketing agreement with IBM, you have maintained a long-term strategic relationship with IBM dating back to the development of your first core software applications over 30 years ago.

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We note further your risk factor disclosure stating that if your strategic relationship with IBM were terminated, it could have a negative impact on the continuing success of your business. Given such disclosures, please describe in your response letter your agreements with IBM and the extent of your dependence on them, in quantified terms to the extent possible, and tell us how you determined that they are not required to be filed as exhibits to your Form 10-K pursuant to Item 601(b)(10)(ii)(B) of Regulation S-K.

Item 601(b)(10)(i) of Regulation S-K requires the filing as an exhibit of any material contract “not made in the ordinary course of business which is material to the registrant and is to be performed in whole or in part at or after the filing of the registration statement or report or was entered into not more than two years before such filing.” Item 601(b)(10(ii) provides that "[i]f the contract is such as ordinarily accompanies the kind of business conducted by the registrant and its subsidiaries, it will be deemed to have been made in the ordinary course of business and need not be filed

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unless it falls within one or more of the following categories, in which case it shall be filed except where immaterial in amount or significance." The categories following include the category noted in the Staff's comment, in Item 601(b)(10)(ii)(B): "Any contract upon which the registrant's business is substantially dependent, as in the case of continuing contracts to sell the major part of the registrant's products or services or to purchase the major part of registrant's requirements of goods, services or raw materials or any franchise or license or other agreement to use a patent, formula, trade secret, process or trade name upon which the registrant's business depends to a material extent."

The Company enjoys a long-standing business and strategic relationship with IBM, which as Staff has noted extends back to the development of our initial core systems over 30 years ago. This relationship of cooperation and mutual interest is not embodied in any specific contract, however the Company is a party to a Business Partner Agreement with IBM, which is the remarketing agreement we referred to in our Form 10-K, pursuant to which the Company sells IBM hardware and hardware maintenance services (the "IBM Contract"). While the overall relationship between the Company and IBM remains important to the Company and sales of IBM products and services historically accounted for material portions of the Company's revenue, the Company's business is now not "substantially dependent" on the IBM Contract. In determining that the Company's business is not "substantially dependent" on the IBM Contract, the Company's management considered, among other things, the fact that the Company's revenues resulting directly from the IBM Contract constituted less than 3% of the Company's total revenues in fiscal year 2011 and less than 4% of the Company's total revenues in the preceding two fiscal years.

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases for Equity Securities

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Your performance graph disclosure should present dollar amounts for the plot points provided for each of the three graphs reflecting cumulative total return. See Instruction 2.b of the Instructions to Item 201(e) of Regulation S-K. Without the presentation of the dollar amounts for each plot point it is difficult to obtain a meaningful understanding of how your stock price performed against the comparison indices.

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You may wish to present the dollar amounts in a table or in another easily accessible manner.

The Company acknowledges the Staff's comment. The Company intends to include a table including the dollar amount information in our future performance graph disclosures. Read in the reply ↗

We note your statement that ASU No. 2009-13 did not have a material impact on your revenue recognition because nearly all of the Company’s revenue arrangements are subject to ASC 985. Clarify your statement that nearly all of your arrangements are within scope of ASC 985 when you sell hardware and related services. Indicate why such deliverables would be subject to the new statement.

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Further, we also note that the majority of the Company’s software arrangements are not tangible products with software components. Clarify whether the arrangements that are not in the majority have tangible products with software components and, as such, are not within the scope of ASC 985. Please provide an analysis of the impact of these new standards on your revenue arrangements.

We acknowledge that the hardware components we resell, whether or not those sales can be considered part of a software arrangement, were scoped out of Topic 985 by ASU No. 2009-14. Where our hardware sales are related to a software arrangement, the hardware components simply provide a mechanism to deliver our software to our customer, so we have concluded that our software is not essential to the functionality of the hardware components.

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All non-hardware elements within our software arrangements, including all service elements, relate to the delivery, implementation and maintenance of our software and remain within the scope of Topic 985. As a result, hardware is the only element of these arrangements that does not fall within the scope of Topic 985. Despite this, as a single element, the hardware's revenue recognition would not be impacted by the issuance of ASU No. 2009-13. Both under the current and prior guidance, our hardware revenues are recognized upon delivery. Further, as a reseller of hardware components, the amount of revenue allocated to these components has always been consistent with fair value either specifically, based upon pricing in our reseller agreements, or based on reference to the marketplace as those components are sold by other entities.

While ASU No. 2009-14, did effectively remove all of our hardware revenue from the scope of Topic 985, thus making them subject to other areas of generally accepted accounting principles, this change did not require a change in the timing or extent of our revenue recognition for such hardware components.

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You state here that there has been “no change in internal control over financial reporting that has materially affected, or is reasonably likely to affect, the Company’s internal control over financial reporting, except for the integration of iPay which was completed during the fourth quarter of the year ended June 30, 2011….” In your Management’s Annual Report on Internal Control Over Financial Reporting, however,

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you state that the integration of iPay completed in the fourth quarter “is not considered to have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting.” It is unclear from these disclosures whether the completion of the iPay integration during your fourth quarter of 2011 constituted a change in your internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, your internal control over financial reporting. Refer to Item 308(c) of Regulation S-K and advise.

The Company acknowledges the Staff's comment. The Company's characterization of the impacts of the iPay integration on its internal controls over financial reporting was unintentionally inconsistent between Management's Annual Report on Internal Control over Financial Reporting and Item 9A. As was disclosed in Management's Annual Report, the Company determined the integration of this material business combination did not represent a material change in our internal controls over financial reporting.

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The disclosure made in Item 9A represented an attempt to inform the readers of the completion of the integration of iPay, even though that integration was not considered to have materially affected the internal controls over financial reporting. Because this integration was completed during the fourth quarter of fiscal 2011, we do not expect to discuss this integration or its impacts to our internal controls over financial reporting in future filings. However, if future material business combinations result in integrations that have the potential to materially impact our internal control over financial reporting, we will present this consistently within future filings.

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We note that the proxy card describes the advisory vote to approve executive compensation as follows: “To approve a non-binding advisory vote on the compensation of our named executive officers.” This language appears inconsistent with the applicable requirement set forth in Rule 14a-21 under the Exchange Act.

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For guidance, please refer to Question 169.07 of our Exchange Act Rules Compliance and Disclosure Interpretations, and confirm supplementally that in the future your descriptions of the advisory vote will comport with the referenced Rule.

The Company acknowledges the Staff's comment, confirms that it is now aware of the Staff's guidance provided in Question 169.07 of the Exchange Act Rules Compliance and Disclosure Interpretations, and confirms that future proxy card descriptions of the advisory vote to approve executive compensation will comport with Rule 14a-21 under the Exchange Act.

We acknowledge that:

• the company is responsible for the adequacy and accuracy of the disclosure in the filing;

staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action

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with respect to the filing; and the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

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You disclose that your CEO and CFO concluded that your disclosure controls and procedures are “effective in timely alerting them to material information relating to the Company required to be included in [y]our periodic SEC filings.” These effectiveness conclusions are stated in terms that are more limited in scope than the definition of “disclosure controls and procedures” as defined in Exchange Act Rule 13a-15(e).

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In your response letter, please tell us whether the effectiveness conclusions of the CEO and CFO were made with respect to the company’s controls and procedures as that term is defined in Rule 13a-15. In future reports, please ensure conclusions concerning the effectiveness of disclosure controls and procedures are expressed in a manner that conforms to the scope of disclosure controls and procedures, as expressed in the referenced regulation. This comment also applies to your Forms 10-Q for the interim periods ended September 30, 2007 and December 31, 2007.

The effectiveness conclusions of the CEO and CFO that were made in the described filings were made with respect to the Company's "disclosure controls and procedures" as defined in Rule 13a-15. The Company acknowledges the comment and agrees to revise its disclosures in future filings as requested by the Staff.

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As we understand the request, we intend to modify our disclosure in Item 9A of our future 10-K filings, and in Part I, Item 4 of our future 10-Q filings, to include disclosure that our CEO and CFO have concluded that our disclosure controls and procedures are effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. We will also confirm that for this purpose disclosure controls and procedures include controls and procedures designed to ensure that information that is required to be disclosed under the Exchange Act is accumulated and communicated to the Company's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

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We refer to the discussion of your related party transactions with each of Central Bank and First Future Credit Union during fiscal year 2007. Your disclosure does not appear to address how the terms of these two related party transactions compare to the terms the company offers to its unaffiliated customers. See Item 404(a)(6) of Regulation S-K.

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Tell us in your response letter whether your arrangements with Central Bank and First Future Credit Union were on terms that were no less favorable to the company than arrangements with other, unaffiliated customers. Alternatively, explain why you believe such information is not material to investors in light of the circumstances of the particular transactions. * * * * * * * Please 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. If you amend your filing, you should also provide a marked copy of the amended filing that conforms with the provisions of Rule 310 of Regulation S-T. Marked copies such as those in HTML format that show changes within paragraphs help us to expedite our review. Please furnish a cover letter with any amendment that keys your response to our comments and provides any requested information. Detailed cover letters greatly facilitate our review. Please understand that we may have additional comments after reviewing any amendment and your response to our comments.

We have concluded that the related party transactions with each of Central Bank and First Future Credit Union during fiscal year 2007 were on terms that were no less favorable to the Company than arrangements with other, unaffiliated customers. In our future proxy statements we intend to specifically disclose this conclusion.

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The Company acknowledges that:

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The Company is responsible for the adequacy and accuracy of the disclosure in its filings;

Staff comments or changes to disclosures in response to staff comments do not foreclose the Commission from taking any action with

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respect to the filings; and

The Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

We hope that the foregoing is fully responsive to your comments. Please contact the undersigned at (417) 235-6652 if you have any further questions or comments.

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