Microsoft Plays Numbers Game

Everyone knows that an 800-pound gorilla sits wherever it likes. And when a gargantuan software giant such as Microsoft demands a seat at the table, its entrenched competitors have little choice but to acknowledge it. Today, Microsoft entered the accounting business with its Small Business Accounting 2006, a viable solution for companies with fewer than 25 employees, and it’s best suited to retail and service businesses.

In accounting, Intuit’s Quickbooks and Sage’s Peachtree have long dominated the small business scene and evolved into powerful, comprehensive packages. While Small Business Accounting (SBA) arrives late to the party, it offers a surprisingly comprehensive and competitive feature list for a first-time entry. And its core strength is an ability to integrate data with Microsoft Office in ways that no program before it can.

Our coverage of SBA comes in two parts. This story, part one, reviews SBA on its own merits as an accounting package, and how it supports the needs of small businesses. Part two, which will appear tomorrow, compares the product against its competition: QuickBooks and Peachtree.

Office Angle
SBA’s strength is its unprecedented integration with Microsoft Office applications: Word, Excel and Outlook. If you already use Excel to analyze finances and Word to write their letters, it makes sense to use these applications to support functions in the accounting software. Integrating the functions also means you don’t have to keep typing the same data into different applications.

Other accounting applications acknowledged that they live in a Microsoft-dominated world and let you export data — most commonly financial data — into Microsoft Excel for analysis. But SBA takes this capability far beyond that.

Microsoft Small Business Accounting
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In SBA, you can export every list and report to Excel for analysis or data sharing. The resulting spreadsheets are complete reports with professional-looking headers and scrollable data tables. Conversely, you can import customer, product and vendor lists from Excel into SBA and also create custom templates in Word to be used as sales orders, credit memos, quotes, customer statements and more.

The program offers options for performing functions such as writing letters, which launch the corresponding Office application. In many cases, these options also load associated data or templates.

Further synergy comes with Microsoft’s new Outlook 2003 with Business
Contact Manager, a special, business-oriented flavor of Outlook. This integration lets you share customer information (including financial histories), track billable time and manage employee time records and store the data in a single place.

The features add a new level of complexity to Outlook, but with time, it’s a workable solution. To obtain this new version of Outlook, you’ll need to purchase the more expensive Microsoft Office Small Business Management Edition 2006, which includes the standard Office applications.

By the Books
SBA covers the accounting bases with features to help you manage sales and inventory, create and process invoices, perform banking, manage payroll and track jobs, sales and more. It’s impressive that a first-time entry contains such a comprehensive feature set.

It also handles credit card purchases, prints receipts and checks, pays bills and manages multiple bank accounts. You can use the program to monitor and forecast cash flow, track profits and losses and summarize them by class or business segment. Adhering to accounting fundamentals, the program tracks edits and changes and maintains an audit trail.

SBA also includes features to let you bank online, however, as of this writing, only one bank had signed on to support this feature. Knowing how Microsoft operates, this is sure to increase.

When it comes to sales, the program create quotes, invoices and purchase orders and converts quotes into invoices. SBA lacks e-commerce features to create a Web site that makes and records sales in its ledgers, and it can’t handle drop-shipped products ordered and sent directly from a manufacturer. Another missing capability: it can’t track commissions.

Inventory features let you track and forecast items, create multiple-item kits, apply labor costs for kit assembly and set points at which you’ll receive an alert telling you it’s time to reorder product. SBA’s inventory features adequately manage the needs of service and retail businesses, but may fall short of meeting the more demanding tracking needs of manufacturers.

Payroll features do the job, and an optional payroll service that’s affiliated with Automatic Data Processing Inc. (ADP) automates the process. If you prefer to process payroll in-house, you can Microsoft’s integrated Excel solution.

Microsoft Small Business Accounting
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Of course, all the data in the world won’t help if you can’t make sense of it. SBA’s nearly 60 reports — from profit-and-loss to cash flow to item profitability and customer transaction history — help you gain fiduciary perspective.

Multi-user support lets your employees share customer, financial and other business data. You can authorize various levels of access based on an employee’s responsibilities. And, for companies that organize their business around specific jobs, SBA tracks revenues and expenses on a per-job basis. It then monitors and compares job profitability by overlaying progress against quotes.

Getting Started
SBA’s six-step Wizard walks you through the process of entering business information and makes setting up accounts, customers, vendors and inventory painless. Although the program offers only 17 predefined charts of accounts from which to choose, they’re an adequate start for most service and retail businesses. The program also imports data from QuickBooks.

Microsoft Small Business Accounting
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Small Business Accounting 2006 serves up an intuitive, familiar interface with pull down menus that resemble those of the Microsoft Office applications. Like the top-selling accounting programs, SBA offers a customizable home page that displays a financial snapshot with reminders, predicted cash flow, vendors and customer information.

The interface displays graphical flowcharts that depict the accounting process and provide convenient access to functions. Buttons in the lower-left portion of the screen provide additional access. The program memorizes transactions and you can add frequently entered transactions as templates in order to reuse them.

One annoying factor: our system occasionally crashed, despite the fact that it far exceeded the software’s minimum requirements (PC with an Intel Pentium 450MHz or faster processor (Pentium III recommended), Microsoft Windows 2000 with Service Pack 3 (SP3) or later, or Windows XP or later operating system, 280 MB of available hard disk space, 256 MB of RAM or more recommended, Super VGA (800×600) or a higher-resolution monitor and a CD-ROM or DVD drive).

Bottom Line and Availability
It’s rare for a debut program to offer a competitive alternative to programs that have evolved for years. But Microsoft Small Business Accounting 2006 is a viable package that can support the needs of small businesses. Be sure to check back tomorrow to see how SBA stacks up against Peachtree and QuickBooks, and whether it’s worth switching.

You can purchase Small Business Accounting as a stand-alone product for $149 after a $30 mail-in rebate. It’s also available as part of Microsoft Office Small Business Management Edition 2006, which combines Small Business Accounting 2006 with Word 2003, Excel 2003, PowerPoint 2003, Publisher 2003, Access 2003 and the new version of Office Outlook 2003 with Business Contact Manager. This package sells for $569 ($399 upgrade), after a $100 mail-in rebate.

Over the last ten years, Wayne Kawamoto has written over 800 articles, columns and reviews about computers, new technologies, the Internet and small businesses. Wayne has also published three books about upgrading PCs, building office networks and effectively using and troubleshooting notebook computers. You can contact him through his Web site at

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