SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

[X] Filed by the Registrant
[ ] Filed by a party other than the Registrant

Check the appropriate box:
[ ] Preliminary Proxy Statement
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Exchange Act Rule 14(a)-6(e)(2)]
[X] Definitive Proxy Statement
[ ] Definitive Additional Material
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12

TIMELINE, INC.
(Name of Registrant as Specified in Its Charter)

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[LOGO OF TIMELINE]

July 27, 2004

Dear Shareholder:

You are cordially invited to attend the Annual Meeting of Shareholders
of Timeline, Inc. to be held on Thursday, September 9, 2004, at 4:00 P.M.,
Pacific Time, at Timeline, Inc., 3055 112th Avenue N.E., Ste. 106, Bellevue,
Washington 98004.

The accompanying Notice of Annual Meeting of Shareholders and Proxy
Statement describe the matters to be presented at the meeting. In addition to
the formal business to be transacted, management will make a presentation on
developments of the past year and respond to comments and questions of general
interest to shareholders. I personally look forward to greeting those Timeline
shareholders able to attend the meeting.

Whether or not you plan to attend the Annual Meeting, it is important
that your shares be represented and voted. Therefore, please sign, date and
promptly mail as soon as possible the enclosed proxy in the prepaid envelope
provided.

Thank you.

Sincerely,

/s/ Charles R. Osenbaugh

Charles R. Osenbaugh
President, Chief Executive Officer & Director

TIMELINE, INC.
3055 112th Avenue N.E., Ste. 106
Bellevue, Washington 98004

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 9, 2004

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TO THE SHAREHOLDERS OF TIMELINE, INC.:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Timeline, Inc., a Washington corporation, will be held on Thursday, September 9,
2004, at 4:00 P.M., Pacific Time, at Timeline, Inc., 3055 112th Avenue N.E.,
Ste. 106, Bellevue, Washington 98004, for the following purposes:

1. To elect two directors, each to hold a three-year term expiring in
2007; and

2. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.

The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.

The Board of Directors has fixed the close of business on July 15, 2004
as the record date for the determination of shareholders entitled to notice of
and to vote at this Annual Meeting and at any continuation or adjournment
thereof.

The Proxy Statement is accompanied by a copy of our Annual Report on
Form 10-KSB for the fiscal year ended March 31, 2004.

By Order of the Board of Directors

/s/ Paula H. McGee

Paula H. McGee
Secretary

Bellevue, Washington
July 27, 2004

All shareholders are cordially invited to attend the meeting in person. Whether
or not you expect to attend the meeting, please complete, date, sign and return
the enclosed proxy as promptly as possible in order to ensure your
representation at the meeting. A prepaid envelope is enclosed for that purpose.
Even if you have voted your proxy, you may still vote in person if you attend
the meeting. Please note, however, that if a broker, bank or other nominee is
the record holder of your shares and you wish to attend and vote at the meeting,
you must obtain a proxy issued in your name from such broker, bank or other
nominee.

TIMELINE, INC.
3055 112th Avenue N.E., Suite 106
Bellevue, Washington 98004

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PROXY STATEMENT

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INFORMATION CONCERNING SOLICITATION AND VOTING

GENERAL

The enclosed proxy is solicited on behalf of the Board of Directors of
Timeline, Inc., a Washington corporation, for use at our 2004 Annual Meeting of
Shareholders. The Annual Meeting will be held on Thursday, September 9, 2004, at
4:00 P.M., Pacific Time, or at any continuation or adjournment thereof (the
"Annual Meeting"). The Annual Meeting will be held at our executive offices at
3055 112th Avenue N.E., Ste. 106, Bellevue, Washington 98004. The purpose of the
Annual Meeting is as described in this Proxy Statement, and in the accompanying
Notice of Annual Meeting.

We intend to mail this Proxy Statement and accompanying proxy card on or
about August 16, 2004, to all shareholders entitled to vote at the Annual
Meeting. A copy of our Annual Report on Form 10-KSB for the fiscal year ended
March 31, 2004, including financial statements, accompanies this Proxy
Statement.

VOTING AND OUTSTANDING SHARES

Only holders of record of our common stock at the close of business on
July 15, 2004, are entitled to notice of and to vote at our Annual Meeting. At
the close of business on July 15, 2004, there were 4,190,998 shares of common
stock outstanding and entitled to vote. Shareholders of record on such date are
entitled to one vote for each share of common stock held on each matter to be
voted upon at our Annual Meeting. The inspector of election appointed for our
Annual Meeting will tabulate all votes and will separately tabulate affirmative
and negative votes, abstentions and broker non-votes.

The presence in person or by proxy of holders of record of a majority of
the outstanding shares of common stock constitutes a quorum at our Annual
Meeting. Under Washington law and our Restated Articles of Incorporation,
assuming the presence of a quorum, directors are elected by a plurality of votes
cast.

A shareholder who attends the meeting in person or by proxy but abstains
from voting on any proposal will be included in the number of shareholders
present at our Annual Meeting for the purpose of determining the presence of a
quorum. Abstentions will not be counted either in favor of or against the
election of the nominees or other proposals.

If your shares are held in a brokerage account or by another nominee,
you are considered the "beneficial owner" of shares held in street name and
these proxy materials are being forwarded to you by your broker or nominee along
with a voting instruction card. As the beneficial owner, you have the right to
direct the broker/nominee how to vote your shares, and the broker/nominee is
required to vote your shares in accordance with your instructions.
Brokers/nominees who have not been given

specific voting instructions as to a matter by their clients may vote their
clients' proxies in their own discretion, to the extent permitted under the
rules of the National Association of Securities Dealers. Broker non-votes will
be included in determining the presence of a quorum, but will not be counted in
determining whether a matter has been approved. Please note that if your shares
are held by a broker/nominee, you may not vote your shares in person at the
Annual Meeting unless you obtain a "legal proxy" from the broker/nominee.

If you own shares through the Timeline Employee Stock Ownership Plan,
you can direct the trustees to vote the shares held in your account in
accordance with your instructions. The trustees may not vote any allocated
shares in the ESOP for which no voting instructions have been received.

SOLICITATION

We will bear the entire cost of solicitation of proxies, including
preparation, assembly and mailing of this Proxy Statement, the proxy and any
additional information furnished to shareholders. Copies of solicitation
materials will be furnished to banks, brokerage houses, fiduciaries and
custodians holding shares of our common stock in their names that are
beneficially owned by others to forward to such beneficial owners. We may
reimburse persons representing beneficial owners for their costs of forwarding
the solicitation material to such beneficial owners. Original solicitation of
proxies by mail may be supplemented by telephone, email or personal solicitation
by our directors, officers or other regular employees. No additional
compensation will be paid to our directors, officers or other regular employees
for such services.

SHAREHOLDER PROPOSALS

We must receive any proposals of shareholders that are intended to be
presented at our 2005 Annual Meeting of Shareholders not later than March 22,
2005 in order to be included in the proxy statement and form of proxy relating
to the 2005 Annual Meeting. In addition, any proposals to be brought before the
shareholders must comply with the procedural and other requirements contained in
SEC Rule 14a-8. We reserve the right to reject, rule out of order, or take other
appropriate action with respect to any proposal that does not comply with these
and other applicable requirements.

REVOCABILITY OF PROXIES

Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted. It may be revoked by delivering to our
Corporate Secretary at our principal executive office, 3055 112th Avenue N.E.,
Ste. 106, Bellevue, Washington 98004, either a written notice of revocation or a
duly executed proxy bearing a later date. Alternatively, it may be revoked by
attending the Annual Meeting and voting in person. Attendance at the Annual
Meeting will not, by itself, revoke a proxy.

PROPOSAL 1: ELECTION OF DIRECTORS

Our Restated Articles of Incorporation divide our Board of Directors
into three classes, each class consisting, as nearly as possible, of one-third
of the total number of directors. The Articles further provide that at each
annual meeting of the shareholders, directors will be elected for a three-year
term to succeed those directors in the class whose term has so expired.
Vacancies on the Board may be filled by persons elected by a majority of the
remaining directors. A director elected by the Board to fill a vacancy
(including a vacancy created by an increase in the Board of Directors) will
serve

until the next meeting of shareholders at which directors are elected, or until
such director's successor is elected and qualified, or until such director's
earlier death, resignation or removal.

Our Board of Directors is composed of five members. The director
nominees, Mr. Frederick W. Dean and Mr. Terry Harvey, are the nominees for the
class of directors to be elected at our Annual Meeting for a three-year term
expiring at the 2007 annual meeting of shareholders. If elected at our Annual
Meeting, the director nominees would serve until their successors are elected
and qualified, or until their earlier death, resignation or removal. Mr. Dean
and Mr. Harvey are current directors on the Board.

Directors will be elected by a plurality of the shares voted at the
Annual Meeting. The persons named in the enclosed proxy intend, unless
authorization to do so is withheld, to vote the proxies received by them for the
election of the two director nominees. If, prior to our Annual Meeting, either
nominee should become unavailable for election, an event that currently is not
anticipated by the Board, the proxies will be voted for the election of such
substitute nominee as the Board of Directors may propose. Mr. Dean and Mr.
Harvey have agreed to serve if elected and we have no reason to believe that
they will be unable to serve.

Set forth below is biographical information for Mr. Dean and Mr. Harvey.

Frederick W. Dean, age 52, has served as one of our Directors since
April 1998. He also serves as Executive Vice President and has been a Vice
President since our inception in April 1993. From 1979 to April 1993, Mr. Dean
served as Vice President at Timeline Services, Inc. He practiced public
accounting at Calahan, Reed & Gunn from 1978 to 1979, and at Arthur Andersen &
Co. from 1973 to 1977. Mr. Dean holds a B.A. degree in accounting from the
University of Washington.

Terry Harvey, age 53, has served as one of our Directors since October
2000. Mr. Harvey is currently Managing Director of Terry Harvey Associates Ltd.,
an information technology consulting firm specializing in the banking sector and
based in the United Kingdom, which he co-founded in October 2000. From 1989
through 1999, Mr. Harvey was Founder and Managing Director of Harvey Consultants
Ltd., which was sold to the Olsten Corporation in 1996. Mr. Harvey holds several
other non-executive roles in information technology companies where he has
invested and is a director of the following United Kingdom companies: Terry
Harvey Associates Ltd., Harvey Farms, Ltd., Tillwhim Farms Ltd., Harvey
Properties Ltd., Vislow Ltd. and Kume Associates Ltd. He holds an ONC in
sciences.

THE BOARD OF DIRECTORS RECOMMENDS
A VOTE "FOR" ELECTION OF MR. DEAN AND MR. HARVEY

DIRECTORS AND EXECUTIVE OFFICERS

Our directors and executive officers as of July 15, 2004, are as follows:

NAME AGE POSITION
--------------------------- --- ------------------------------------------

Charles R. Osenbaugh 55 President, Chief Executive Officer, Chief
Financial Officer, Treasurer and Director
Craig R. Perkins 48 Vice President of Products and Technology
Michael G. Evans 50 Vice President of World Wide Sales
Donald K. Babcock 67 Director
Frederick W. Dean(1) 52 Director
Terry Harvey(1)(2)(3) 53 Director
Kent L. Johnson(1)(2)(3) 60 Director

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(1) Member of Nomination Committee
(2) Member of Audit Committee
(3) Member of Compensation Committee

Officers are appointed by the Board of Directors. Each executive officer
named above will serve until his or her successor is appointed or until his or
her earlier death, resignation or removal. It is expected that each of the above
officers will be reappointed by the Board of Directors immediately following the
Annual Meeting.

Two of the five directors on our Board of Directors are "independent"
within the meaning of the listing standards of The Nasdaq Stock Market.

Set forth below are the names and certain biographical information for
directors whose terms continue after our Annual Meeting and for our executive
officers. For the biographical summary of our directors whose current terms
expire at the Annual Meeting, see "Proposal 1. Election of Directors" above.

DIRECTOR WITH TERM EXPIRING AT THE 2005 ANNUAL MEETING

Charles R. Osenbaugh, age 55, has served as Chief Financial Officer,
Treasurer and a Director since our inception in April 1993, and has held the
position of President and Chief Executive Officer since November 1996. Mr.
Osenbaugh also previously served as our Secretary. From April 1988 to April
1993, Mr. Osenbaugh served as Executive Vice President, Chief Executive Officer
and a Director, and from April 1993 to July 1994 as President and a Director of
Timeline Services, Inc. From 1975 to 1988, Mr. Osenbaugh was a partner of Lasher
& Johnson, a Seattle, Washington law firm. From 1973 to 1975, Mr. Osenbaugh
practiced public accounting with Arthur Andersen & Co. He holds a B.B.A. in
economics and a J.D., both from the University of Iowa, and received his CPA
certificate in 1974.

DIRECTORS WITH TERMS EXPIRING AT THE 2006 ANNUAL MEETING

Donald K. Babcock, age 67, is one of our founders and has served as a
Director since our inception in April 1993. Mr. Babcock returned to the position
of Senior Technologist with us in October 1999 after working for Seagate
Software, Inc. for 18 months as a Program Manager. He previously was Senior Vice
President of Research & Development and Chief Technologist for Timeline, Inc. He

was also a founder of Timeline Services, Inc. and served as a director from its
inception in 1977 until its merger into our company in July 1994. From 1977 to
April 1993, Mr. Babcock also served as Senior Vice President and Chief
Technologist of Timeline Services, Inc.

Kent L. Johnson, age 60, has served as one of our Directors since our
inception. He is Chairman and Managing Director of Alexander Hutton Venture
Partners, LP, a Seattle, Washington-based venture capital firm he co-founded in
1999. From October 1994 to December 1999, Mr. Johnson was President and
co-founder of Alexander Hutton Capital, L.L.C., an investment banking firm that
specialized in equity capital formation for emerging growth companies. Mr.
Johnson currently serves as a director of several private companies, and devotes
considerable time to private investment activities. Mr. Johnson has a B.B.A. in
Business Administration from the University of Washington and an M.B.A. from
Seattle University, where he serves on the Board of Trustees and the Business
Advisory Board of the Entrepreneurial Center.

OTHER ARRANGEMENTS

In April 2003, we entered into an agreement with Fidelity National
Information Solutions, Inc. (FNIS) pursuant to which FNIS obtained a license to
use and sublicense our products to provide financial reporting and analytics for
real estate lenders and settlement companies. As part of that agreement, we
granted FNIS a right to designate a representative for appointment or election
to our Board of Directors upon 60 days' notice to us. FNIS has not exercised
this right and has not indicated to us that it presently intends to exercise
this right. Until FNIS exercises this right, a representative of FNIS is
entitled to attend Board meetings as a non-voting observer.

EXECUTIVE OFFICERS

In addition to Mr. Dean and Mr. Osenbaugh, following is biographical
information for our other executive officers.

Craig R. Perkins, age 48, has been with us since our inception in April
1993. He served as Director of Consulting Services until 1998 and Director of
Product Management until 1999. In November 1999, Mr. Perkins was named Vice
President of Products and Technology. From 1988 to April 1993, he was a member
of the consulting department for Timeline Services, Inc. Mr. Perkins previously
practiced public accounting with Ernst Young & Co. in Winnipeg, Canada and
Bermuda. He has a Bachelors degree with honors in accounting from the University
of Manitoba and is a Chartered Accountant.

Michael G. Evans, age 50, has been associated with us since 1995. He
managed our international operations from 1995 until the management buy-out of
the London-based operations (Analyst Financials) took place in 1997. From 1997
until March 2000, Mr. Evans acted as Managing Director of Analyst Financials,
which we reacquired in June 2000. Mr. Evans rejoined Timeline in March 2000, and
was appointed Vice President of World-Wide Sales in the fall of 2000. In June
2004, Mr. Evans again assumed the responsibilities of Managing Director of
Analyst Financials. Prior to joining Timeline in 1995, Mr. Evans was a director
of Comshare, Inc. for a period of 10 years, responsible for the Financial
Applications Division. Mr. Evans qualified as a chartered accountant with Ernst
& Whinney in 1979 and holds an ACA certificate. He earned a Bachelors degree in
political science at the University of Kent at Canterbury.

BOARD COMMITTEES AND MEETINGS

The Board of Directors, which held three meetings during the 2004 fiscal
year, has an Audit Committee and a Compensation Committee. The Board of
Directors established a Nomination Committee effective June 2004. Each director
was in attendance at more than 75% of the meetings held of the Board and any
committees on which he served during his tenure as a director in fiscal 2004.

AUDIT COMMITTEE

The Audit Committee assists the Board in fulfilling its responsibilities
to provide oversight with respect to our financial statements and reports, our
independent auditors, the system of internal controls and the audit process. Its
primary duties include reviewing the results and scope of the audit and any
other non-audit services provided by our independent auditors, and reviewing and
evaluating our internal control functions. The Audit Committee also has
authority for selecting and engaging our independent auditors and approving
their fees. The Board has adopted a written charter for the Audit Committee, a
copy of which was included as Appendix A to the Proxy Statement for fiscal 2003.

The Audit Committee currently consists of Terry Harvey and Kent Johnson.
Each member of the Audit Committee is financially literate, and the Board has
determined that Mr. Johnson is qualified as an "audit committee financial
expert" within the meaning of SEC regulations based on his accounting and
related financial management expertise. Mr. Johnson is also the chairman of the
Audit Committee. Each of the Directors on the Audit Committee is considered an
"independent director" within the meaning of the listing standards of The Nasdaq
Stock Market. During the 2004 fiscal year, the Audit Committee met five times.

COMPENSATION COMMITTEE

The Compensation Committee makes recommendations to the Board of
Directors concerning compensation, including stock option grants, for our
executive officers. The committee meets as needed. The Board of Directors has
not adopted a written charter for the Compensation Committee.

The Compensation Committee currently consists of Terry Harvey and Kent
Johnson, each of whom is considered an "independent director" within the meaning
of the listing standards of The Nasdaq Stock Market. The Compensation Committee
did not meet during fiscal 2004.

NOMINATION COMMITTEE

Candidates have traditionally been recommended to the Board by our Chief
Executive Officer or one of the other directors, and there has not been a formal
process for identifying new director nominees. Effective June 2004, the Board of
Directors established a Nomination Committee for purposes of nominating
directors and for all other purposes to be outlined in a Nomination Committee
Charter. The Board is currently drafting a Nomination Committee Charter. The
Nomination Committee will establish policies concerning the identification of
candidates, including candidates recommended by shareholders, the evaluation of
candidates, the recommendation to the Board of candidates for the Board's
selection as director nominees, and the recommendation of candidates for the
Board's selection as nominees for appointment to the committees of the Board.

The Nomination Committee is composed of Kent L. Johnson, Terry Harvey,
and Frederick W. Dean. Currently, two of the three members of the Nomination
Committee qualify as "independent

directors," within the meaning of the listing standards of The Nasdaq Stock
Market. The Nomination Committee did not meet during fiscal 2004.

POLICY ON SHAREHOLDER NOMINATION OF DIRECTORS

Previously, candidates for election to our Board of Directors were
recommended to the Board by our Chief Executive Officer or by one of the other
directors, and there had not been a formal process for identifying new director
nominees. With the creation of our Nomination Committee in June 2004, in the
future, candidates for election to our Board of Directors will be nominated by
our Nomination Committee and ratified by our full Board of Directors for
nomination to the shareholders.

In identifying candidates to be directors, the Nomination Committee
intends to seek persons it believes to be knowledgeable in our business or
having accounting, software or other relevant industry experience, or some
aspect of it which would benefit our company. Our Nomination Committee believes
that the minimum qualifications for serving on our Board of Directors are that
each director has an exemplary reputation and record for honesty and integrity
in his or her personal dealings and business or professional activity. All
directors should possess a basic understanding of financial matters, have an
ability to review and understand our financial and other reports, and to discuss
such matters intelligently and effectively. The Nomination Committee will take
into account whether a candidate qualifies as "independent" under applicable SEC
rules and exchange listing requirements. If a nominee is sought for service on
the audit committee, the Nomination Committee will take into account the
financial and accounting expertise of a candidate, including whether an
individual qualifies as an "audit committee financial expert." Each candidate
also needs to exhibit qualities of independence in thought and action. Finally,
a candidate should be committed to the interests of our shareholders, and
persons who represent a particular special interest, ideology, narrow
perspective or point of view would not, therefore, generally be considered good
candidates for election to our Board.

Our Nomination Committee is open to receiving recommendations from
shareholders as to potential candidates it might consider. The Nomination
Committee gives equal consideration to all director nominees, whether
recommended by our shareholders, management or current directors.

A shareholder wishing to submit a director nomination should send a
letter to the Nomination Committee, c/o Corporate Secretary, Timeline, Inc.,
3055 112th Avenue N.E., Ste. 106, Bellevue, Washington 98004. The mailing
envelope must contain a clear notation indicating that the enclosed letter is a
"Director Nominee Recommendation." The notice must also be accompanied by a
written consent of the proposed nominee to being named as a nominee and to serve
as a director if elected. In making recommendations, shareholders should be
mindful of the discussion of minimum qualifications set forth above; although
satisfaction of such minimum qualification standards does not imply that the
Nomination Committee necessarily will nominate the person so recommended by a
shareholder. In addition, for nominees for election to the Board proposed by
shareholders to be considered, the following information must be timely
submitted with the director nomination:

. the name, age, business address and, if known, residence address of
each nominee;
. the principal occupation or employment of each nominee;
. the number of shares of stock of Timeline, Inc. beneficially owned
by each nominee;
. the name and address of the shareholder making the nomination and
any other shareholders known by such shareholder to be supporting
such nominee;
. the number of shares of stock of Timeline, Inc. beneficially owned
by such shareholder making the nomination, and by each other
shareholder known by such shareholder to be supporting such nominee;

. any other information relating to the nominee or nominating
shareholder that is required to be disclosed under SEC rules in
order to have a shareholder proposal included in our proxy
statement; and
. a representation that the shareholder intends to appear in person or
by proxy at the annual meeting to nominate the person named in its
notice.

SHAREHOLDER COMMUNICATION WITH THE BOARD

Shareholders who wish to communicate with our Board of Directors or with
a particular director can send correspondence to our Corporate Secretary, c/o
Timeline, Inc., 3055 112th Avenue N.E., Ste. 106, Bellevue, WA 98004. The
mailing envelope must contain a clear notation indicating that the enclosed
letter is a "Shareholder-Board Communication" or "Shareholder-Director
Communication." All such correspondence must identify the author as a
shareholder of our company, and clearly state whether the intended recipients
are all members of the Board of Directors or just certain specified directors.

Depending on the subject matter of the communication, management will do
one of the following:

. forward the communication to the director or directors to whom it is
addressed;
. attempt to handle the inquiry directly, for example where it is a
request for information about the company or it is a stock related
matter; or
. not forward the communication if it is primarily commercial in
nature, if it relates to an improper or irrelevant topic, or if it
is unduly hostile, threatening, illegal or otherwise inappropriate.

At each Board meeting, management will present a summary of all
communications received since the last meeting that were not forwarded and shall
make those communications available to the directors.

In addition, any person who desires to communicate any matter
specifically to our Audit Committee may contact the Audit Committee by
addressing a letter to the Audit Committee, c/o Corporate Secretary, c/o
Timeline, Inc., 3055 112th Avenue N.E., Ste. 106, Bellevue, WA 98004.
Communications addressed to the Audit Committee may be submitted anonymously, in
which event the envelope will not be opened for any purpose, other than
appropriate security inspections. Otherwise, such mailing will be forwarded
directly to the Chair of our Audit Committee for his review and follow-up action
as he deems appropriate.

COMPENSATION OF DIRECTORS

During the fiscal year ended March 31, 2004, the non-management members
of the Board of Directors (currently Mr. Harvey and Mr. Johnson,) each received
$1,000 or the equivalent in shares of common stock each fiscal quarter for their
service on the Board. As of March 31, 2004, $3,000 in fees had been accrued but
not paid to each of Messrs. Harvey and Johnson for their prior years' service on
the Board. Effective April 1, 2004, the non-management members of the Board of
Directors will no longer receive a quarterly fee for their services; however, as
in the past, at any time that a new member is appointed to the Board of
Director, he or she will receive a one-time option grant for 10,000 shares of
common stock, which will vest ratably over three years from the date of the
grant. We maintain liability insurance on our directors and officers. Management
directors receive no additional compensation for their service on the Board of
Directors.

DIRECTOR ATTENDANCE AT ANNUAL MEETING OF SHAREHOLDERS

We do not have a formal policy requiring director attendance at our
annual meeting of shareholders; however, all directors are encouraged to attend.
At last year's annual meeting of shareholders, four of our five directors were
in attendance.

CODE OF ETHICS

We have adopted a code of ethics applicable to our principal executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions. We filed a copy of the Code
as Exhibit 14.1 to our annual report on Form 10-KSB for the 2004 fiscal year,
which may be accessed through the SEC's website at www.sec.gov.

REPORT OF THE AUDIT COMMITTEE

The Audit Committee of our Board of Directors serves as the
representative of the Board for general oversight of our financial accounting
and reporting process, system of internal control, audit process, and process
for monitoring compliance with laws and regulations. Management has primary
responsibility for preparing our financial statements, our internal controls and
our financial reporting process. Our independent registered public accounting
firm for fiscal 2004, KPMG LLP, was responsible for performing an independent
audit of our consolidated financial statements in accordance with the standards
of the Public Company Accounting Oversight Board (United States) and for issuing
a report on its audit.

In this context, the Audit Committee has met and held discussions with
management and the independent registered public accounting firm. Management
represented to the Audit Committee that our consolidated financial statements
were prepared in accordance with generally accepted accounting principles, and
the Audit Committee has reviewed and discussed the audited consolidated
financial statements with management and the independent registered public
accounting firm. The Audit Committee also discussed with the independent
registered public accounting firm matters required to be discussed by Statement
on Auditing Standards No. 61 ("Communications with Audit Committees").

The Audit Committee also reviewed with Timeline's independent registered
public accounting firm the written disclosures required by the Independence
Standards Board's Standard No. 1 ("Independence Discussions with Audit
Committees"), and considered the compatibility of nonaudit services and the fees
paid by Timeline for those services with the independent registered public
accounting firm independence.

Based upon the Audit Committee's discussion with management and the
independent registered public accounting firm, and upon the Audit Committee's
review of management's representations and the report of the independent
registered public accounting firm to the Audit Committee, the Audit Committee
recommended to the Board of Directors that the audited consolidated financial
statements be included in our Annual Report on Form 10-KSB for the fiscal year
ended March 31, 2004 filed with the Securities and Exchange Commission.

Audit Committee of the Board of Directors
Terry Harvey
Kent L. Johnson

THE FOREGOING AUDIT COMMITTEE REPORT SHALL NOT BE DEEMED TO BE "SOLICITING
MATERIAL" OR TO BE "FILED" WITH THE SEC, NOR SHALL SUCH INFORMATION BE
INCORPORATED BY REFERENCE INTO ANY PAST OR FUTURE FILING UNDER THE SECURITIES
ACT OR THE EXCHANGE ACT, EXCEPT TO THE EXTENT WE SPECIFICALLY INCORPORATE IT BY
REFERENCE INTO SUCH FILING.

RELATIONSHIPS WITH THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

During fiscal 2004 and the two prior fiscal years, KPMG LLP has served
as the independent registered public accounting firm for our financial
statements. On June 30, 2004, we entered into an engagement agreement with
Williams & Webster P.S. to serve as our new independent registered public
accounting firm for the fiscal year ending March 31, 2005. Williams & Webster
will commence its engagement with its review of our financial statements for the
quarter ended June 30, 2004. The change in independent registered public
accounting firms was made subsequent to the filing of our Annual Report on Form
10-KSB for the 2004 fiscal year. KPMG LLP has agreed to continue to provide
services to us related solely to the information regarding our 2004 fiscal year
that is included in this proxy statement. Following filing of this proxy
statement, our client-auditor relationship with KPMG will cease.

Representatives of KPMG LLP and Williams & Webster P.S. are expected to
be present at the Annual Meeting and will have an opportunity to make a
statement if they so desire and are expected to be available to respond to
appropriate questions.

The decision to engage Williams & Webster and to replace KPMG as our
independent registered public accounting firm was approved by our Audit
Committee.

During our two most recent fiscal years and the subsequent interim
period through June 30, 2004, there were no disagreements between us and KPMG on
any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements, if not resolved
to KPMG's satisfaction, would have caused KPMG to make reference to the subject
matter of the disagreement in connection with its reports.

The audit reports of KPMG on our financial statements as of and for the
years ended March 31, 2004 and 2003 contained a separate paragraph stating that
"as discussed in Note 1 to the Consolidated Financial Statements, the Company
has suffered recurring losses; and has an accumulated deficit at March 31, 2004.
These factors raise substantial doubt about its ability to continue as a going
concern. Management's plans in regard to these matters are also described in
Note 1. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty."

During our two most recent fiscal years and the subsequent interim
period, we did not consult with Williams & Webster regarding any matter or
event.

AUDIT AND RELATED FEES FOR FISCAL 2004 AND 2003

The following table sets forth the aggregate fees billed by KPMG LLP for
professional services rendered to us during the past two fiscal years ended
March 31, 2004 and 2003. The Audit

Committee has considered these fees and services and has determined that the
provision of these services is compatible with maintaining the independence of
KPMG LLP.

2004 2003
---------- ----------
Audit Fees (1).................................... $ 111,000 $ 85,000
Audit Related Fees ............................... N/A N/A
Tax Fees ......................................... N/A N/A
All Other Fees.................................... N/A 1,500

- ----------
(1) "Audit Fees" represent fees for professional services provided in connection
with the audit of our annual financial statements and review of our
quarterly financial statements included in our reports on Form 10-QSB, and
audit services provided in connection with other statutory or regulatory
filings.

SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information regarding the
ownership of our common stock as of July 15, 2004 by: (i) each current director
and nominee for election as director; (ii) our Chief Executive Officer and each
of the executive officers identified in the Summary Compensation Table
(collectively, the "Named Executive Officers"); (iii) all directors and
executive officers as a group; and (iv) each person known by us to beneficially
own more than 5% of our common stock. Unless otherwise indicated, each person's
address is: c/o Timeline, Inc., 3055 112th Avenue N.E., Ste. 106, Bellevue, WA
98004.

Shares of Common Stock Beneficially Owned (1)
-------------------------------------------------------------
Options/warrants Total
Number Exercisable Beneficial Percent
Beneficial Owner of Shares Within 60 Days Ownership of Total(2)
- ------------------------------------------------ ---------- ---------------- ------------ -------------

Charles R. Osenbaugh(3) 409,061 236,000 645,061 14.6%

Frederick W. Dean(4) 182,786 44,000 226,786 4.8

Craig R. Perkins(5) 49,191 49,000 98,191 2.3

Michael G. Evans(6) 58,122 750 58,872 1.4

Donald K. Babcock(7) 157,537 2,000 159,537 3.8

Kent L. Johnson 54,872 3,000 57,872 1.4

Terry Harvey 214,741 10,000 224,741 5.4

Timeline Inc. Employee Stock Ownership Plan(8) 402,059 - 402,059 9.6

All directors and executive officers as a
group (eight persons)(9) 1,136,187 351,000 1,487,187 32.8

- ----------
(1) This table is based upon information supplied by executive officers,
directors and principal shareholders. Unless otherwise indicated in the
footnotes to this table and subject to

community property laws where applicable, each of the shareholders named
in this table has sole voting and investment power with respect to the
shares shown as beneficially owned.

(2) Based on 4,190,998 shares outstanding at the close of business on July
15, 2004.

(3) Option numbers include (i) an aggregate of 100,000 shares issuable under
two performance-based stock options held by Mr. Osenbaugh which vest and
become exercisable when the common stock closes trading at $5.00 or more
per share for 10 consecutive days, or on the seventh anniversary of
their original grant provided Mr. Osenbaugh is currently in our
employment, and (ii) an aggregate of 50,000 shares issuable under
performance-based stock options held by Mr. Osenbaugh which vest and
become exercisable when the common stock closes trading at $7.50 or more
per share for 10 consecutive days, or on the seventh anniversary of
their original grant provided Mr. Osenbaugh is currently in our
employment. Share numbers include 90,625 shares held in the Timeline,
Inc. Employee Stock Ownership Plan for Mr. Osenbaugh's account. Does not
include: (i) 311,434 shares held in the Timeline, Inc. Employee Stock
Ownership Plan for which Mr. Osenbaugh serves as a trustee and shares
investment power, for which shares Mr. Osenbaugh disclaims beneficial
interest except to the extent of his pecuniary interest; and (ii) 15,015
shares held in an individual retirement account belonging to Mr.
Osenbaugh's spouse, 5,000 shares held in trust for Mr. Osenbaugh's
niece, and 1,000 shares held in each of Mr. Osenbaugh's two daughters'
accounts, for all of which shares Mr. Osenbaugh disclaims beneficial
interest.

(4) Includes 22,173 shares held in the Timeline, Inc. Employee Stock
Ownership Plan for Mr. Dean's account.

(5) Includes 24,710 shares held in the Timeline, Inc. Employee Stock
Ownership Plan for Mr. Perkin's account.

(6) Does not include 5,185 shares of common stock, or 5,500 shares issuable
under stock options, held by Mr. Evans' spouse

(7) Includes 20,361 shares held in the Timeline, Inc. Employee Stock
Ownership Plan for Mr. Babcock's account.

(8) Beneficial ownership consists solely of shared investment power.
Trustees of the ESOP do not have voting authority over shares in the
ESOP that have been allocated to participants' accounts.

(9) Consists of Messrs. Osenbaugh, Dean, Perkins, Evans, Babcock, Johnson,
and Harvey. Includes an aggregate of 157,869 shares held in the
Timeline, Inc. Employee Stock Ownership Plan.

EXECUTIVE COMPENSATION

COMPENSATION OF EXECUTIVE OFFICERS

The following table shows for the three fiscal years ended March 31,
2004, 2003, and 2002, respectively, certain compensation awarded or paid to, or
earned by, the Named Executive Officers. Other than the Named Executive Officers
listed below, no executive officer earned more than $100,000 in salary and bonus
for the 2004 fiscal year:

SUMMARY COMPENSATION TABLE

Long Term
Annual Compensation Compensation
---------------------------------- ---------------------------
Restricted Securities
Name and Fiscal Stock Underlying All Other
Principal Position Year Salary ($) Bonus ($) Other ($) Awards($) Option(1)(#) Compensation ($)
- -------------------------- ------ ---------- --------- --------- ---------- ------------- ----------------

Charles R. Osenbaugh, 2004 $ 90,000 $ 170,308 - - - $ 557(2)
President, Chief 2003 90,000 - - - 25,000 6,286(2)
Executive Officer, 2002 122,500 - - - - -
Chief Financial Officer

Frederick W. Dean, 2004 90,000 55,812 - $ 4,750 - -
Executive Vice 2003 90,000 - - 7,500 - -
President 2002 100,250 - - 2,250 - -

Craig R. Perkins, Vice 2004 90,000 119,388 - - - -
President of Products 2003 90,000 24,761 $ 6,881 - - -
and Technology 2002 111,375 - - - - -

Michael G. Evans, Vice 2004 140,933 15,839 - 4,750 - 18,843(3)
President of World- 2003 127,516 - 9,131 7,500 - 17,057(3)
Wide Sales 2002 119,975 - 1,063 2,250 - 15,843(3)

- ----------
(1) All referenced options granted are exercisable at prices equal to or higher
than the fair market value of the common stock on the respective dates of
grant.

(2) Includes the value of our discretionary contributions made to the Timeline
Inc. Employee Stock Ownership Plan in March 2002, and allocated to the
respective Named Executive Officer's account at December 31, 2002.

(3) Includes employer contributions to employee pension plan.

STOCK OPTION GRANTS IN LAST FISCAL YEAR

No options were granted to the Named Executive Officers during the 2004
fiscal year.

AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END 2004 OPTION VALUES

The following table shows certain information regarding the value of
unexercised options held at fiscal year end by each of the Named Executive
Officers. No stock options were exercised by any of the Named Executive Officers
during the 2004 fiscal year.

No. of Shares of
Common Stock Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at Fiscal Year-End at Fiscal Year-End
------------------------------------ ------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
------------------------------ --------------- ------------------ --------------- ------------------

Charles R. Osenbaugh 86,000 150,000 $ - $ -

Frederick W. Dean 44,000 - - -

Craig R. Perkins 49,000 - - -

Michael G. Evans 750 250 - -

EQUITY COMPENSATION PLAN INFORMATION

The following table gives information as of March 31, 2004, the end of
the our most recently completed fiscal year, about shares of our common stock
that may be issued upon the exercise of options, warrants and rights under our
equity compensation plans described in the footnotes following the table below.
See also Note 11, "Shareholders' Equity," to our Consolidated Financial
Statements for the fiscal year ended March 31, 2004 included in our Annual
Report on Form 10-KSB filed with the Securities and Exchange Commission.

(a) (b) (c) (d)
Weighted Average
No. of Shares to be Exercise Price of
Issued Upon Exercise of Outstanding No. of Shares Total of Shares
Outstanding Options, Options, Warrants Available for Reflected in
Plan Category Warrants and Rights and Rights Future Issuance (1) Columns (a) and (c)
- ---------------------------- ----------------------- ----------------- ------------------- -------------------

Equity Compensation Plans
Approved by Shareholders (2) 319,625 $ 1.31 254,750 574,375

Equity Compensation
Plans Not Approved by
Shareholders (3) 296,000 $ 1.36 - 296,000
----------------------- ------------------- -------------------
TOTAL 615,625 $ 1.33 254,750 870,375
======================= =================== ===================

- ----------
(1) Excludes from this calculation the number of shares reflected in Column
(a).

(2) Consists of our Amended and Restated 1994 Stock Option Plan, and
Directors' Nonqualified Stock Option Plan.

(3) Consists of:

(i) a performance-based option to purchase 75,000 shares of common
stock granted to Mr. Osenbaugh in November 1997, 50% of which
vested when the closing price of our

common stock was at $2.00 or more for 10 consecutive days, and
50% of which vested when the closing price of our common stock
was at $3.00 or more for 10 consecutive days;

(ii) a performance-based option to purchase 50,000 shares of common
stock granted to Mr. Osenbaugh in February 1999 which vests on
the earlier of when the closing price of our common stock is
$5.00 or more for 10 consecutive days, or February 2006, if Mr.
Osenbaugh is then in our employment;

(iii) a performance-based option to purchase 50,000 shares of common
stock granted to Mr. Osenbaugh in November 1999 which vests on
the earlier of when the closing price of our common stock is
$5.00 or more for 10 consecutive days, or November 2006, if Mr.
Osenbaugh is then in our employment;

(iv) warrants to purchase 21,000 shares of common stock granted to
various of our service providers in September 1998 in
consideration for services performed, exercisable at $1.00 per
share and which expired in April 2004, and

(v) warrants to purchase 100,000 shares of common stock granted to
one of our development partners in March 2003 in consideration
for an $84,000 payment, exercisable at $1.62 per share and which
expire in March 2007.

CERTAIN TRANSACTIONS

One of our directors, Terry Harvey, is a major shareholder in Harvey
Jones Ltd., a South African-based distributor of Timeline products. During
fiscal 2004 and 2003, we received $32,156 and $72,000, respectively, in sales
and support revenues generated by this distributor through our wholly-owned
subsidiary Analyst Financials Ltd. Harvey Jones distributed our products
pursuant to our standard distribution agreement, and we believe our distribution
agreement with Harvey Jones was made on terms no less favorable to us than could
have been obtained from an unaffiliated third party distributor. During fiscal
2004, Harvey Jones' distribution agreement was assigned to an unrelated party
who acquired that part of Harvey Jones' business.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our officers and directors,
and persons who own more than 10% of our common stock, to file reports of
ownership and change in ownership with the SEC. Officers, directors and greater
than 10% shareholders are required by SEC regulations to furnish us with copies
of all forms they file pursuant to Section 16(a).

Based solely on its review of the copies of such forms received by it,
or written representations from certain reporting persons, we believe that,
during the 2004 fiscal year, all such filing requirements applicable to our
officers, directors and greater than 10% beneficial owners were complied with.
Subsequent to fiscal 2004 year-end, one of our directors, Fred Dean, filed a
late Form 4 to report a purchase transaction that occurred in May 1998.

OTHER BUSINESS

As of the date of this Proxy Statement, the Board of Directors knows of
no other business that will be presented for consideration at the Annual
Meeting. If other matters are properly brought before the Annual Meeting, it is
the intention of the persons named in the accompanying proxy to vote the shares
represented thereby on such matters in accordance with their best judgment.

By Order of the Board of Directors

/s/ Charles R. Osenbaugh

Charles R. Osenbaugh
President and Chief Executive Officer

July 27, 2004

TIMELINE, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned shareholder of Timeline, Inc., a Washington corporation (the
"Company"), hereby appoints Charles R. Osenbaugh and Donald K. Babcock, or
either of them, with full power of substitution in each, as proxies to cast all
votes which the undersigned shareholder is entitled to cast at the Annual
Meeting of Shareholders (the "Annual Meeting") to be held on Thursday, September
9, 2004, at 4:00 P.M. Pacific Time at Timeline, Inc., 3055 112th Avenue N.E.,
Ste. 106, Bellevue, Washington 98004 and any adjournments or postponements
thereof upon the matters set forth on the reverse side of this Proxy Card.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF YOU SIGN THIS PROXY WITHOUT OTHERWISE GIVING
VOTING DIRECTION, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF BOTH NOMINEES
LISTED IN PROPOSAL 1, AND IN ACCORDANCE WITH THE RECOMMENDATIONS OF A MAJORITY
OF THE BOARD OF DIRECTORS ON ALL OTHER MATTERS TO BE CONSIDERED AT THE MEETING.
The undersigned hereby acknowledges receipt of the Company's Proxy Statement and
hereby revokes any proxy or proxies previously given.

(Continued and to be signed on the reverse side)

DIRECTORS

1. Directors Recommend: A vote for election of the following Directors
01. Frederick W. Dean 02. Terry Harvey

Mark X for only one box:

[ ] For All Nominees

[ ] Withhold All Nominees

[ ] Withhold Authority To Vote For Any Individual Nominee,
Write Number(s) Of Nominees Below

Use Number only ____________________________________

2. In their discretion, the proxies are authorized to vote upon such other
matters as may properly come before the meeting or any adjournments or
postponements thereof.

I PLAN TO ATTEND THE MEETING [ ]

If you receive more than one Proxy Card, please sign, date and return all such
cards in the accompanying envelope.

PLEASE SIGN, DATE AND RETURN THIS PROXY CARD TODAY, USING THE ENCLOSED ENVELOPE.

Signature(s) _______________________________ Date____________
Please sign above exactly as your name appears on this Proxy Card. If shares are
registered in more than one name, the signatures of all such persons are
required. A corporation should sign in its full corporate name by a duly
authorized officer, stating his/her title. Trustees, guardians, executors and
administrators should sign in their official capacity, giving their full title
as such. If a partnership, please sign in the partnership name by authorized
person(s).