Cost-Conscious Technology
Check out these high-performance, low-cost software options.
By Daniel Dern
Small businesses, whether they're CPA firms providing accounting services to clients or companies managing their own books, have to be cost-conscious—and that extends to their choice of accounting and business software.
Some accounting software and online services are free, like Intuit's QuickBooks Online or PostBooks,an open-source program that provides not only accounting, but also ERP, CRM and financial reporting. And you can’t get much cheaper than free.
JAVA & Co. Small Batch Recipes, a gourmet syrup, sweet shop and gift store based in Henry, Ill., started off its technology upgrades with Microsoft's free, downloadable Accounting Express. "Our accounting needs were basic—no employees," explains JAVA’s owner Jamie L. Knoll. "Recently, we upgraded to their professional system with full-integration capabilities—payroll, inventory, etc. It is userfriendly with great customer service, and has the basic software accounting components we utilize."
You can certainly purchase basic accounting functions affordably. For $100 and under for a single-user, you can enjoy options like Microsoft Excel, or starter programs from Intuit or Peachtree. While you can spend up to $13,000 for a 40-user license with, say, Peachtree Quantum, the company’s Product Marketing Manager Chris Claude points out that you can save dramatically on license and update costs by signing up for the Sage Accountants Network. For $419, you can get the latest version of Peachtree Quantum Accountants Edition, which otherwise would cost about 10 times that amount. And you get support and training thrown in.
Who’s the Leader?
There are dozens, even hundreds, of accounting packages for small, medium and large businesses, including add-ons and industry specific products and versions. SAP, for example, has around 20 different manufacturing versions. (Lists, links and reviews of many of these accounting/ financial management packages can be found at Accounting Software World.
The biggest player by far, according to Ray Wang, VP of Forrester Research, Inc., is Intuit, with approximately 80 to 85 percent of the market, followed by Peachtree by Sage, with 5 to 8 percent of the market. Major names within the remainder include, in no particular order, Everest Software, IntAcct Corporation, Microsoft and NetSuite Inc. Forrester is in the process of compiling a survey that will provide a big picture view of the most in-demand software packages.
In the meantime, an IDC survey that asked 1,000 small and midsized firms, "What software do you primarily use for accounting?" found that the most popular was "overwhelmingly Intuit in general and Intuit QuickBooks Pro in particular, followed by Peachtree and Microsoft Money," explains Ray Boggs, VP of SMB research at IDC. Interestingly, he notes, "Six percent still use Microsoft Excel."
"The reason that Intuit is overwhelmingly widely used is because it pioneered the idea of small-business accounting as a larger product, having all these other functions that a small business needs to better manage itself," says Isaac M. O'Bannon, technology editor for The CPA Technology Advisor. "Both Intuit and Sage have developed very tailored versions for specific industries, such as for retail, wholesale, nonprofits and construction."
For mid-sized companies, says Boggs, "The market is much more competitive, but Intuit is still number one. And instead of Peachtree and Microsoft Money, it's Sage MAS90 and Microsoft Dynamics GP."
"As the company grows, small to mid-sized businesses should consider solutions like Sage Software MAS 90 and the Microsoft Dynamics product line," confirms Mickey Scheffki, CPA, partner, director of technology consulting at Clifton Gunderson LLP. "These solutions offer more flexibility and cover all areas of business management. They allow for solutions tailored to your specific business type.
"Companies with extensive industry specific needs normally move to a variety of industry specific software products, like Deltek Vision, Sage MasterBuilder, Sage MIP and Sage Medware," she adds.
In the enterprise space, based on worldwide revenues, the main players are SAP, Oracle, Sage, Intuit and Microsoft, with no one company having more than 20 percent of the market, Boggs comments.
The Intuit Family
Taking a closer look at the top of the list, Intuit's family of products for accountants includes QuickBooks Premier Accountant, which provides all-in-one bookkeeping, write-up and financial reporting tools, starting at $399.95.
"Productivity improvement and practice growth are accountants' highest priorities today," says Sanjiv Waghmare, VP of customer user experience at Intuit.
New features added in QuickBooks Premier Accountant 2009 to meet this demand include Client Data Review, which serves as a “detective tool” to find and fix errors in clients' books, saving accounting professionals many hours of tedious and time-consuming work. Also, Intuit Statement Writer enables accounting professionals to easily create and update professional-looking financial statements, saving them hours of time in each engagement.
Premier Accountant includes all related Intuit 2009 accounting programs intended for use in concert with clients. For example, Simple Start, Pro, Premier and the Premier industry specific editions allow an accountant to access the same screens and features as his or her clients.
The Peachtree Advantage
"We offer 10 'flavors' of Peachtree, ranging in cost from $99 to around $13,000," explains Claude. "Peachtree First Accounting, MSRP $99, is suitable for small businesses with basic accounting needs, or someone currently using paper or Excel. Peachtree Pro includes inventory and payroll support and additional reporting tools, and is good if you deal with employees or 1099 contractors. Peachtree Quantum supports up to 40 users, can handle larger transaction volumes and perform faster, and provides additional security."
Peachtree offers two products specifically for use by accountants: Peachtree Premium Accountants Edition and Peachtree Quantum Accountants Edition. "The Accountants Editions will allow an accountant to access any other Peachtree product in that same release, so whatever version an accountant's clients are on, the accountant can work with them, look at their data, open and edit, etc.," says Claude.
Given the disparity in market share, it's worth asking what in particular Peachtree offers that Intuit doesn't. Differentiators from Intuit products, according to Claude, include security features like peruser audit tracking and lock-down after two years. "We are known for our inventory management solutions," he says. "For customers looking for strong accounting and/or business management, but who also carry heavy inventory, we have a niche for them."
Microsoft Flexibility
Not surprisingly, Microsoft has a number of accounting products, including Microsoft Office Accounting Professional and Microsoft Office Accounting Express 2009 (which integrates with Office), plus other small-business through mid-market offerings like the Microsoft Dynamics products.
"Some companies are technically small but have more complex processes and need something like this, or other mid-level programs like QuickBooks Enterprise," says O'Bannon. "These offer greater inventory controls, more user capabilities, more pricing structures and geographical support for multiple locations."
Software as a Service
Accounting power is now available not only as software you install or websites you browse, but also as SaaS (Software-as-a-Service) solutions, accessed through your network connection.
Business SaaS offerings from NetSuite, for example, are aimed at businesses rather than accountants, specifically, and include accounting, CRM (Customer Relationship Management), eCommerce, inventory management and ERP. These offerings support a variety of languages and currencies.
Intacct’s Intacct Accountant Edition, a cloudbased accounting system "designed specifically for CPA firms and their small-business clients," includes general ledger, accounts payable and receivable, cash management, financial reporting, order entry, purchase order, analytics and dashboards. The only financial management solution endorsed by the American Institute of Certified Public Accountants (AICPA), Intacct Accountant Edition starts at $60 a month.
What’s Best for You?
There are "over 4,400 common features found in today’s top accounting software products," says J. Carlton Collins' Evaluating Accounting Software. Collins offers seven steps for basic evaluation of your accounting software options:
1. Print a financial statement to the screen.
2. Customize a data input screen.
3. Enter an inventory item.
4. Process a sales order.
5. Evaluate the account number structure.
6. Drill down and around.
7. Integrate to popular add-on report writers and tools.
“If the product passes my initial review, then a more detailed evaluation is warranted. However, if the product fails this test, I usually conclude that the product is not worthy of further consideration,” Collins explains.
"Make sure that the product you need meets your business requirements," stresses Wang. "The best ways to tell a good choice is to see what your competitors are using, and see what the resellers for your industry are offering."
"In evaluating a set of tools, the cleaner, crisper and more focused your definition of the functions you need, the better solution you'll be able to identify," states Bill Hurley, managing partner in the Downers Grove, Ill. office of national CPA firm Barsema, Tuzik & Hurley, Ltd. "Buy according to that specification, recognizing that you won't get a 100-percent solution."
Also look beyond accounting to what else the tools can do for your business, says Scheffki. "Companies are looking to their data and the programs that create and access it to (also) provide CRM, inventory and other functions that really help them run their business.
The accounting aspect is essential, but businesses want to do more with their data; they want this system to be business management rather than just accounting."
For example, says Scheffki, "Deltek Vision, which is for projectbased consulting organizations like architects and engineers, managing people and resources, doesn’t just do accounting, but also does project management, cost allocation, milestone tracking and other tasks. This is where the real value to the business is."
In some cases, specific features will drive the decision. For instance, "If you're doing historical forensic accounting, using QuickBooks allows you to extract all transactions beginning with the first entry," says John Tyler, president of Cambridge, Mass.-based Tyler Lynch PC. "You can then export the data to Excel and engage in data-mining techniques. This way you can easily reach back to prior years' details."
And when evaluating price, remember that, as with any acquisition, it's not the price but the TCO (Total Cost of Ownership) that matters, as well as the value delivered. A low price can easily be overshadowed by the length of time it takes to install, and the need for expensive support or pricey add-ons. A higher price can quickly pay for itself if it makes tasks go quicker, increases productivity, or gives you access to higher-value features.