The New School

by Deidra-Ann Parrish

When it comes to accounting for the small business, there are a few schools of thought on getting the job done. You can do it the old-fashioned way, using some variation of a paper-based record-keeping system with physical files (an accountant’s nightmare), or even using an electronic spreadsheet program like Microsoft Excel. You can also rely on one of many capable desktop applications like the ones mentioned in our Desktop Accounting Software Buyer’s Guide. Or you can move ahead to what some are predicting will be the wave of tomorrow, online accounting.

With an online accounting system, all software is provided, housed, and maintained entirely on the Web via an application solutions provider (ASP). For many, this is the best thing since, well, since desktop accounting applications. It completely eliminates the need to purchase, install, and maintain accounting software applications. That means a small business can save hundreds, or even thousands of dollars on software. More notably, users gain remote access to records 24/7 and can include outside accountants and suppliers of their choosing.

Good deal, right? Proceed with caution here, however, because industry-watchers say that while ASP accounting packages are a tremendous boon for some, they aren’t one-size-fits-all solutions. Ray Boggs, vice president of Small Business Research for IDC in Framingham, Mass., says, “Upstarts and firms that are just beginning to put their processes in place are best suited for these solutions,” says Boggs. “Older companies will have a hard time because they’ll have to transfer existing data and learn new procedures.”

How do you know if this model is right for you? Moreover, how do you decide which product to use? It comes down to issues of fit and function. Does it fit your company model and does its performance meet your needs? If there is a long history with an existing accounting system, consider what it will take to import data to the online product.

Chuck Stevens, a CPA and partner at Cooney, Faulkner, & Stevens LLC in Cincinnati, Ohio, recommends online accounting to many of his clients but says a drawback is that importing mechanisms aren’t completely worked out. “If, for example, you have a desktop application other than QuickBooks and you want to transfer records online, you may not be able to do it,” says Stevens.

Or, do it easily. Data import is only one of several considerations in this category. As you begin to compare and contrast service features, some of the issues you’ll encounter are price, ease of use, data security, support provisions, and customizability. Of the growing assortment of accounting ASP solutions, we looked at five viable contenders: ePeachtree, eLedger, Intacct, NetLedger and QuickBooks for the Web, and reviewed their ease of use, strengths and weaknesses.


When companies say that their products are geared towards small businesses, they can be talking about five-person outfits or companies with 99 people. eLedger is definitely shooting for the lower end of the small business spectrum, but that’s no insult. It’s evident from eLedger’s homepage that the setup wasn’t created with cutting-edge types in mind. It’s built for those with simple demands who appreciate functionality, but can do without the frills. eLedger includes the standard accounting modules for general ledger, accounts payable, accounts receivable, invoicing, etc., and it handles data effectively in a Windows-influenced environment.

When moving through forms and fields, there is the option of stopping at any time to get additional clarity on any number or transaction on-screen. Simply click on it and eLedger drills down to provide history or origin — a helpful feature when trying to remember how a certain transaction occurred.

An exclusive eLedger feature called Flashpoint adds even more detail. It takes a snapshot of current business status based on a choice of key indicators. It also conveniently generates charts and graphs for export to Word and Excel.

For users who like sophisticated sites, keep in mind that eLedger’s somewhat amateurish look speeds results for users with 56K dial-up connections, as opposed to DSL or cable modem connections, which many small businesses don’t have yet.

For less than $20 a month, 10 users (plus an accountant) can access the account via Internet Explorer. Support is free for 90 days and must be purchased thereafter, starting at $14.95 a month.


Users of desktop Peachtree will quickly notice that this isn’t the same old application. ePeachtree was built from scratch to accommodate the needs of Web users so it looks and acts a little differently. It spares some of the rich graphics of its desktop counterpart to speed its performance. Still, it does a good job of delivering data simply.

Tool bars are formatted with intuitive drop-downs.Using the Setup button located on a vertical toolbar, a menu drops down with easy-access options like beginning balances, custom fields, and user passwords. Also on the toolbar are icons for individual modules like Customers, Vendors, General Ledger, Payroll, and Reports.

ePeachtree user Shari Gayda, vice president of MXN Corp. in Atlanta, has been using the product since April, and she says, “It’s the absolute best thing” for her four-member decentralized team to access records on the go. “We didn’t know we’d end up being a decentralized staff when we bought it, but ePeachtree allows for it, which is perfect.” Maneuvering in and out of fields happens fluidly, but Gayda points out that searching for data sometimes requires more sifting and scrolling than she’d like.

Forms like invoices and quotes resemble their paper counterparts. Reporting in ePeachtree is strong with more than 100 forms. The data can be exported to MS Excel and Word, a function some of ePeachtree’s competitors cannot perform. Another feature is the built-in pricing structure for inventory items. With five levels, users can assign different customers different price structures.

Support is not included in the basic monthly fee, costing between $9.99 and $14.99 depending on a company’s needs. Accessing ePeachtree requires Internet Explorer 5.0 for Windows 95 or higher. Limiting access to Explorer users seems a counter-productive move when one of the biggest perks for ASP software is supposed to be anytime, anywhere access.


For smaller companies on the growth track or those that want a serious accounting solution with room to spread out, Intacct makes a strong case. While Intacct claims to have “professional strength” functionality that’s better suited for medium-sized companies, the product works fine for small businesses as well.

It’s an impressive, crisp, and clear design that provides true accounting functionality such as double-entry, which allows you to enter debits and credits without restrictions. It also enables users to “close the books,” something not possible in other online accounting packages.

Of course, Intacct provides basic accounting, but it offers more than that. A Human Resources module allows companies to view employee and department expenses. A solid module, indeed, but it’s questionable whether many small companies will find it useful. A top-notch budgeting module can forecast expenses and track outcomes, another unprecedented function for this type of solution.

Intacct’s strong suit is its ability to produce specialized reports. For instance, a healthcare company with unique reporting requirements can obtain just the right templates and modules via Intacct’s seamless third-party applications. The company has a vast assortment of relationships with such providers.

With feature-richness, there’s always the possibility of user confusion but Intacct doesn’t cut corners on support. The $49.95 monthly fee includes a live support link provided by, and phone support from 6 a.m. to 6 p.m. Pacific time. (When we called the live support, it took less than 10 seconds to get a response.)


NetLedger kicked up a lot of dust last year when it entered the market as the well-armed new kid on the block against desktop software leaders Peachtree and Intuit. Beyond the basic accounting modules, users are treated to additional perks that make this a solid offering for under $5 a month.

Users — like Allen Vollen of Vollen Associates Inc. in Burlingame, Calif., — are happy just using basic features. “I used to use Quicken on my desktop and a year ago I switched to NetLedger because I needed a way to send customer invoices over the Web,” says Vollen.

Saving time is a common benefit among online accounting systems and NetLedger is not unique in this area. It distinguishes itself, however, by blending a straightforward design with a rich suite of features that provides users with room to grow.

There are two online “centers” (available at additional cost), which give key players access to designated information. The Employee Center lets staffers interact with billing and expense reports. The Customer Center allows customers to access invoices.

IDC’s Boggs says online accounting products will really gain momentum once e-commerce functionality is built into them. NetLedger makes the biggest strides in that direction with its Yahoo Stores option, an add-on feature that provides basic e-commerce functionality.

To get rolling, a Startup prompt guides users through basic information fields such as company, customers, and projects. Pick functions from a palette including time tracking and payroll, which previous versions didn’t include. After setup, entering new data is simple. NetLedger provides a slew of preformatted forms that adjust to fit individual needs. Reporting is also easy and flexible with more than 50 different report templates. Like Intacct, NetLedger enables users to drill down for detail on transaction entries. When sending out a transaction, the drop-down menu provides a list of recipients and delivery formats.

One of its drawbacks is its slowness, which is a product of both the traffic on the host site and the speed of the user’s Internet connection. It’s also not as flexible as the QuickBooks desktop application that the majority of users compare it to. It does, however, offer support for both Netscape and Explorer browsers.

QuickBooks for the Web

As one might expect from such a dominant player, Intuit delivers a good Web version of its desktop accounting package. According to Intuit, QuickBooks for the Web (FTW) targets companies with fewer than 20 employees, or those without an accounting background. QuickBooks desktop users won’t find all the feature-richness they’re accustomed to but they will find a smart combination of functionality and a user-friendly environment.

One strength of QuickBooks FTW is its intuitive design. When setting up shop for the first time, a clean, easy template collects company, client, banking, and vendor data. Thereafter, users have an Alerts field, where reports of new account activity are posted for review, and a Shortcuts field that quickly executes common functions such as writing checks or entering charges. Every step of the way, QuickBooks FTW provides helpful wizards where true novices can get more information on form functions and descriptions, and navigational tips.

Helpful little perks also make QuickBooks shine. An exclusive “QuickFill” feature automatically recalls contact data and fills them in after typing just one or two of the first letters. It makes writing checks and processing forms easier. An instant data refreshing mechanism ensures that information is updated constantly. The basic service agreement also comes with 50 faxes per month, which is more than enough for most small operations. Users can designate faxes to certain contacts and QuickBooks does the rest.

It loses points, however, for its inability to integrate with Word and Excel. Stevens, of Cooney, Faulkner & Stevens, participated in the early adopter program for QuickBook’s Web application and he says this shortcoming is problematic when transferring and receiving data from clients.

What We Think
There are pros and cons to each of these products, but when you look at the functionality, ease of use, and expansion options, NetLedger is the best bang for the buck for the true small business. This company knew it was up against market vets like Peachtree and QuickBooks and developed a powerful and easy-to-master product. For less than five dollars a month, NetLedger manages numbers according to a company’s needs. And with a little extra dough, it can expand into e-commerce. We also like the small but important fact that NetLedger works with both Netscape and Explorer for the Internet.

Although Intacct is a little high-end for most smaller companies, it deserves recognition for delivery of true accounting functions, and commitment to customer support.

QuickBooks for the Web gets a thumbs up as well, especially for providing a robust application that’s friendly, even to novice users. Its QuickFill data entry feature, and helpful wizards are great touches.

Questions To Ask

What Service Are Included In The Monthly Fee?
A vendor’s fee doesn’t always include technical support and could increase if your inventory grows.

What Applications For Importing and Exporting are Supported?
If your data currently resides in some other application make sure it can move over to the accounting ASP easily. Also, make sure your data can be exported to whatever accounting system your accountant uses.

What Security Provisions Are In Place To Protect Data Integrity?
Some ASPs use a third-party data storage provider to physically store all of their clients’ data. Ask your provider where your data is being stored and how it is being protected from hackers, mishaps, or natural disasters.

Do I Have To Use A Particular Internet Browser To Access My Data?
Requiring the use of one specific browser type, such as Internet Explorer or Netscape, limits the ability to access your data anytime, anywhere.

Is E-Commerce Functionality Available Or Even In The Works?
Any business that has or plans on having an e-commerce element will greatly benefit from having the ability to seamlessly manage these types of transactions.

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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