<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS RESTATED SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF TOWNE SERVICES, INC. FOR THE THREE MONTHS ENDED MARCH
31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<RESTATED>

                             
<PERIOD-TYPE>                   3-MOS
<FISCAL-YEAR-END>                          DEC-31-1998
<PERIOD-END>                               MAR-31-1999
<CASH>                                       5,962,000
<SECURITIES>                                         0
<RECEIVABLES>                                6,469,000
<ALLOWANCES>                                  (406,000)
<INVENTORY>                                          0
<CURRENT-ASSETS>                            12,728,000
<PP&E>                                       6,722,000
<DEPRECIATION>                              (2,220,000)
<TOTAL-ASSETS>                              33,787,000
<CURRENT-LIABILITIES>                        6,807,000
<BONDS>                                              0
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                    53,920,000
<OTHER-SE>                                 (27,178,000)
<TOTAL-LIABILITY-AND-EQUITY>                33,787,000
<SALES>                                      7,493,000
<TOTAL-REVENUES>                             7,493,000
<CGS>                                        1,520,000
<TOTAL-COSTS>                                9,224,000
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                             (72,000)
<INCOME-PRETAX>                             (1,659,000)
<INCOME-TAX>                                  (114,000)
<INCOME-CONTINUING>                         (1,545,000)
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                (1,545,000)
<EPS-BASIC>                                       (.07)
<EPS-DILUTED>                                     (.07)