Accounting 2.0

by Victoria Hall Smith

New advances help you crunch numbers like the big guysBy now you have taken a long, hard look at your numbers from 2000 and digested the implications for your business, good or bad. You may have discovered that your accounting system hasn’t evolved at a pace with your business. So, it may be time to upgrade that old accounting software. The choices for easy-to-use yet comprehensive, multi-user systems have increased significantly. These products have features usually found on the high end, but they are priced and scaled for small businesses.

This is made possible for a few reasons: One is that some mid-range and high-end manufacturers, seeking a piece of the growing small business pie, are developing essentially simplified versions of their more expensive systems. Another reason is purely technological: Accounting systems are only as good as their underlying database and, in the past, the best were built into the most expensive systems. But database technology is no longer a cantankerous mystery, bringing the cost of development down so that powerful systems are available to small business.

For those companies outgrowing their off-the-shelf package, more robust replacements are available to grow with your business without breaking the bank. The prices, while not cheap, belie the power and functionality of some of these systems. Even packages like QuickBooks Pro and Peachtree Complete, have added features that are unexpected at their low prices.

The more capable small business systems, like their high-end siblings, sell through certified value-added resellers (VARs) and there’s a reason for that. Their greater depth and breadth of features make for a more complex setup and require careful installation and configuration to reap their full benefits. Many of the VARs for accounting software are accountants themselves, so they have the knowledge to help you determine your financial needs and select the most appropriate system. The local VARs help the manufacturers provide a complete solution, from installation and training to maintenance. Of course, there are fees for these services, but the resulting increases in efficiency and productivity are well worth the price you pay.

The influence of the Internet is clear in the latest versions of these systems. Besides browser-like interfaces, all have some sort of web site for tapping into the wealth of information online and, in some cases, for conducting seamless e-commerce. They’re also community centers of a sort, where users join chats and discussions with other small businesses and link to hundreds of sites for products and services. Tying these systems to the Web makes sense, even if e-commerce isn’t in your plans, because your accounting system is an integral part of your complete operational solution.

How We Tested
Those contemplating an upgrade for their financial system may use this buyer’s guide to gain some insight into a few of the choices. We looked at ease of use, customization, scalability and compatibility with common small business applications. We also looked at how the price matched the level of their features.

All of these systems were tested on an Acer Veriton 933 MHz, Pentium III with 128MB of RAM, and we needed every bit of that speed and memory. Look at the system requirements for all of the packages reviewed and you’ll see what we mean. For an assessment of their networking capabilities, we relied on the experiences of the users who depend on these systems every day.

We tested a spectrum of systems, from QuickBooks at the entry level, to Sage’s BusinessWorks at the high end. We looked at QuickBooks and Peachtree from the perspective of someone who has low volume but high-ticket items or who’s just outgrowing Quicken or MS Money. The other three are clearly for small businesses that are ready for more sophistication and multi-user power. We found them to have amazing power and capabilities for small businesses, and we think you will too.

QuickBooks Pro 2001
Rating 90

Easily the most recognized name in our test group, QuickBooks was spawned years ago when Quicken (personal accounting) users asked for the same ease of use in a business accounting system. It’s at the low end of our group both in cost and depth of features. Based on its own research, Intuit has optimized QuickBooks for the 70 percent of its service-based small business users. The company has added about a dozen new features, enhanced a dozen more, and brought the ease of use and navigation up to the level it should have been at long ago.

The new feature that could most positively impact your bottom line is the ability to e-mail or fax invoices from within QuickBooks Pro 2001. This eliminates printing, folding, stuffing, addressing, and stamping. It will also greatly shrink billing costs and help you get paid faster, minimizing those overdue receivables. If you sign up for the Online Billing services, you can add an imbedded link in the e-mailed invoice to a Web site so customers can pay bills online. Automatic download of the completed transaction information into QuickBooks eliminates data entry.

That auto download can also aid tracking company credit card use by your employees. “For me,” says Robert Goldberg, owner of a Daytona Beach, Fla., auto repair service, “the online capabilities are the most important.” Goldberg says data from employee purchases using American Express and QuickBooks Visa are reflected almost immediately in QuickBooks, helping him control costs and inventory. These capabilities are only operational with a QuickBooks Merchant Account, however.

Up to 20 different price structures can be set on your inventory with the new Price Levels option, but only as percentages of the base price, so it still limits how you record purchases of the same item. Each purchase must be recorded under a different item/part number, making for cumbersome sales. The Price Levels option wasn’t live in the pre-release version we tested, so check it carefully if this is an issue for you.

QuickBooks is still best suited to businesses with limited inventories. The online banking tools, which were already strong, have been tweaked in this version. Transaction matching has been improved for bank statement downloads, so there’s no longer the need to manually categorize online transactions and credit card expenses. And finally, a spell-checker has been added for all of the forms including invoices, estimates, receipts, PO’s, and even checks. It’s about time!

Peachtree Complete Accounting 8.0
Rating 88

Peachtree Complete Accounting 8.0 is priced competitively with QuickBooks Pro but it has a broader range of capabilities. The company claims to maintain inventories as large as 500,000 items. Peachtree also includes a separate module to guide users along the slippery slope of monitoring fixed assets.

While not as quick to adapt e-commerce tools, Peachtree continues to improve the core accounting functions. A new tax liability-reporting tool pulls together all payroll numbers by tax type, simplifying those quarterly and year-end reports. Customization of report designs is expanded and a new wizard does all the heavy work. Although Peachtree Complete’s reporting is stronger than QuickBooks’, design choices are limited. Wisely, Peachtree now supports data export to Seagate Software’s Crystal Reports for custom analysis and reporting.

The improved audit trial is a favorite of Joyce Tucker who, for the past 31 years, has overseen the accounting at Superior Crane and Conveyor. Based in Charlotte, N.C., Superior designs, engineers, sells, and services conveyor systems for distribution centers. The company has been using Peachtree for the past 10 years to cost and track jobs and keep tabs on its 20 employees’ time billing. “We have four bookkeeping stations on our network,” explains Tucker, “and one is devoted to tracking all of the time billing.” Tucker says the company can invoice the day after the billing is generated, “making a tremendous difference in our cash flow.”

One of our beefs with Peachtree in the past was lack of usability, but that is improved in this version. Peachtree Today is a daily start screen with lists for instant access to daily accounting tasks and access to Peachtree’s online services and business resources. Clicking on My Business produces an instant snapshot of your business including reports and graphs of all your important current numbers.

My Resources is a gateway to the online resources including a new Instant Web site Creator. A quick, five-page presence on the is Web is easily created and hosted for free by Peachtree. At present, the hosted Web sites can’t accept credit card transactions online, but the Peachtree Merchant Account is now available for desktop use or processing of e-mailed or on-file credit card information. It’s treated as another payment option in this version but Peachtree is in the process of retooling to take full advantage of online capabilities. In addition to providing everything for a complete e-commerce solution, the next version will also debut online banking and bill presentment and payment.

My Resources is also where to find Peachtree Web Accounting. This new service allows remote access via the Internet to Peachtree files to enter orders or to check customer contact information or inventory levels. Users can sync laptop and desktop files through the new PeachSync service that’s included.

Peachtree offers a well-rounded accounting system that easily supports larger inventories. The new Web Accounting service is a standout for this version, giving businesses the power of Web client computing without moving everything over to an ASP model.

AccountMate Small Business Pak
Rating 92

AccountMate, known for its corporate accounting systems, seems an unlikely source for a package just a step up from Peachtree. But with last fall’s release of its Small Business Pak, that’s exactly what it provides. While not cheap at $3,995, you have everything in the Visual AccountMate/LAN Version 5 general ledger, accounts payable, accounts receivable, and a 3-user System Manager with a 250MB database size limit. An optional module such as Inventory, Payroll or Sales Order is also included. It’s quite a bargain considering the additional features, functionality, customization, and flexibility usually reserved for corporate systems costing several times the price. AccountMate is well-suited for distribution and manufacturing users or anyone with serious transaction and inventory needs.

AccountMate can be customized more easily than those written in Visual FoxPro. And yet, the user interface looks much like the low-end packages. Everything is instant. Users access the task or module of choice and fill in the blanks, whether creating an invoice or editing sales tax rates. There are more spaces to fill in because of the increased level of detail and functionality. For example, the Inventory Control Module defines details like an item’s cost method, warehouse, bin number, or multiple substitutes. It also records the movement of every product, whether sales, returns or transfers, even between warehouses. All of the details can be whipped into one of the many built-in reports. The MS SQL and IBM AS/400 versions of the Small Business Pak include Seagate Software’s Crystal Reports.

The limited online capabilities in the LAN version are what made Dennis Grande upgrade to the SQL version. Co-founders and co-owners of The Turtle Company in Westwood, N.J., Grande and his wife, Kim, started the business in their basement using QuickBooks. As demand for their BookSox, a stretchy, fabric book cover for children, grew and their staff swelled from 3 to 20 to 45 during back-to-school months, they upgraded to QuickBooks Pro. They quickly realized, however, it could not handle their expanding database and the five-user limit was unacceptable. Grande says the move to something as serious as AccountMate’s SmallBusiness Pak was a tough decision but one he’s never regretted. “During the two years our Web site has been up,” explains Grande, “we’ve gone from 3 hits a month to as many of 162,000 a month with sometimes 8,000 order entries a month. And with the SQL system, the whole process is automatic, from order entry to the packing slip.” He says training seasonal temps takes only three days, most of it spent on customer and phone skills rather than on how to input an order.

ACCPAC Small Business Series 4.2A
Rating 80

ACCPAC Small Business Series comes from Computer Associates-owned ACCPAC International, best known for its Corporate Series targeted at medium-sized businesses with up to 500 employees. Like the small business solutions from AccountMate and Sage, it’s modular and easily scales to accommodate growth and future upgrading to the Corporate Series.

Starting with support for 10 users, it’s ready for most networks, including peer-to-peer, and is integrated with MS SQL Server to provide the power needed for e-commerce accounting. ACCPAC provides online services through its eAdvantage Suite of e-commerce tools, including eTransact, its “business-to-everyone” Web store solution. It works just as well as an extranet for established customers to place new orders and follow up on others.

The version we tested used Pervasive Software’s SQL, which it installed first before allowing us to start building our database. The setup was complex enough that we could see why products like these are sold through resellers who install and customize the software to clients’ specific needs. Powerful systems by their nature are complex.

The user interface for each task or module is standard with blanks, icons and menus everywhere with navigation that is similar to Windows Explorer. A file structure representing each of the modules occupies the left half of a split screen with available features and tasks on the right half of the screen.

One of the strongest offerings in this package is the account number structure. With remote offices, divisions or subsidiaries, it is imperative to assign long account numbers so you can trace them separately. In the ACCPAC Small Business Series general ledger, accounts can have up to 45 alphanumeric characters and up to 10 segments for better tracking.

Built-in reporting requires MS Excel for financial abstracts but Crystal Reports ships with the package for serious analysis. Online capabilities were beefed up in the most recent version to include online banking and e-mail reports from within the general ledger. Automating recurring tasks like batch printing or custom reporting is given more than lip service with a strong macro function that’s easily operated via buttons right on the toolbar.

Sage BusinessWorks Gold
Rating 80

Sage Software’s entry into accounting software is BusinessWorks. In the Gold version that supports up to 48 concurrent users, it’s compatible with most common small business networks.

Unlike the others, all of the modules are priced separately and although the price for the core functions is a bit higher, the additional modules like inventory, order entry, etc., cost about half as much as the competition. Figure around $2,000 for a single-user system and $3,000-$4,000 for a multi-user.

Sage went to great lengths to integrate typical applications as seamlessly as possible, adding links to small business favorites such as GoldMine customer relationship management software and TimeSlips time and billing software. It’s also an indication that Sage recognizes the need for accounting power among small businesses selling services rather than products.

The BusinessWorks general ledger accounts can have up to 30 alphanumeric characters but only about 8,000 total accounts. Accounting for up to 999 separate departments can be maintained with unlimited journal entries.

More than 200 built-in templates handle common reporting needs but for third-party analysis packages, BusinessWorks files can be exported in more than 30 different formats including dBase, Access, Excel, WordPerfect, Quattro Pro, and Comma-Separated Variable. One feature we especially liked is the Flash report that can provide an instant analysis of any module. For example, while working in accounts receivable, clicking the Flash report icon can quickly update the total outstanding receivables or the top five invoices due this week. A Flash report provides a quick overview of company finances including various measurements like current ratio and acid test, providing greater detail and insight than similar reports from other products.

E-commerce is supported with the addition of Sage SiteCreator for users with software subscription plans or support agreements. It quickly publishes a basic site using more than 60 different template styles with various color schemes, and Sage hosts it for free. Transactions will soon be managed via Sage WebTrader, the engine for order taking that includes a shopping cart, checkout page, online payment, order confirmation, and merchant notification. Sage views this as an entry-level, complementary offering, but offers the more powerful Sage e-Business Manager when upgrading to its MAS 90 system.

Tom Kelly of Corona, Calif.-based Hansen Beverage Company doesn’t need a Web site but takes advantage of Sage’s online services to accept sales orders from large clients through Sage’s Electronic Data Interchange (EDI) program. Kelly has been using MAS 90 since the business started in 1990 and says it’s helped with the company’s growth to 100 employees and $85 million a year in sales. “The order entry and inventory system made the difference for us,” says Kelly. Since Hansen is a public corporation, he must submit timely and accurate reports to the SEC. “MAS 90 is a little weak on customizing some of the financial reports but I have it set up to automatically dump data into FRX [a reporting tool similar to Crystal reports], so I’m always in compliance,” adds Kelly.

What We Think
For a long time, QuickBooks and Peachtree were the only choices for small businesses that couldn’t afford the tens of thousands of dollars needed for the only available step up: the high-end systems. The market has changed but both are still strong contenders for low-volume businesses with limited users. Peachtree has the edge on offering Web access to data, as well as inventory and reporting, especially since it now includes Crystal Reports. Plus, Peachtree allows laptop and desktop synchronization through its PeachSync service. QuickBooks has done a much better job of facilitating e-commerce,and is now networkable for up to five users. Also, QuickBooks provides e-mail and faxing capabilities for invoices and billing statements.

AccountMate, ACCPAC and Sage have all developed comprehensive systems that without question can transform any small business taking a leap up. AccountMate’s Small Business Pak was the easiest to use right out of the box with an excellent multimedia tutorial. Its Inventory Control module and Crystal Reports encapsulates a company’s productivity and profitability, item by item. Its database, however, is more limited than the other two, so upgrading to the bigger system might come sooner than later, depending on your growth. Additionally, it has limited data export capabilities, which could lead to a company revamping its entire accounting system before AccountMate can even go live. ACCPAC’s account numbering system makes it the most flexible for businesses with multiple facilities, and is ideal for online banking and e-mailing reports from within the general ledger. But it’s also the most complex and will undoubtedly require the most training. It also requires MS Excel for reports. BusinessWorks from Sage offers the most seamless integration with other popular productivity applications and its strong exporting capability gives it the edge on user flexibility and data sharing. In addition, BusinessWorks optional modules for inventory and order entry cost half as much as the competition.

We’ve only touched on a few of the many tools these systems offer growing small businesses. Because they are so powerful and so comprehensive, we advise talking to certified dealers who can help you make the best decision for your unique needs.

Questions To Ask
Before upgrading your current accounting system or starting to shop for a new one, Brad Balmuth, a New Jersey-based CPA and small business consultant, advises identifying your needs first. “We always ask our clients to tell us what isn’t working for them with their current system,” says Balmuth, “and what they think their top five needs are in a new system.” Here are some general questions Balmuth says you should ask when shopping for a new system.

How Customizable Is The New System?
Can it meet your needs and do so without major programming? You want software that can be customized by a user or administrator for forms, reports, and user interface. You also want open source code if your needs are serious and require a consultant.

Is The New System Networkable?
Chances are you’ll have more than one user and, by now, we all know the productivity benefits of a network. Even if you don’t currently have a network, but growth projections indicate one is most likely in your future, make sure the accounting system is ready and waiting when the time comes.

How Scalable Is The New System?
As you grow, so must the accounting system. Otherwise, you risk losing time and money when setting up an entirely new system and converting or manually inputting all your old data. Unless you plan no growth, look at the system’s upgrade path and the entire range of capabilities in the enhanced versions.

How Strong Are The Support Services?
Your focus is on your business, not maintaining or troubleshooting an accounting system. Look at the level of support, the cost, and the physical proximity. Can the support service troubleshoot remotely by dialing in to the system or does a tech have to make a trip to your location? If the nearest tech is a two-hour drive away, how will that downtime affect your bottom line?

Small Business Computing Staff
Small Business Computing Staff
Small Business Computing addresses the technology needs of small businesses, which are defined as businesses with fewer than 500 employees and/or less than $7 million in annual sales.
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