And then there were three

The field of computer-assisted accounting has changed dramatically. For many years, the process of bookkeeping and accounting was best left to those professionals who understood the arcane tasks and uttered strange pronouncements like:

As accounting and bookkeeping progressed from NCR and Burroughs machines, to stand-alone mainframes with lots of blinking lights, then to time-sharing terminals, the processes became even more restricted. Even accounting practices developed specialist departments to face mechanization.

Fortunately, with easy-to-use computers and a generation of users who grew up expecting to have a computer at hand, there's not that feeling of intimidation for many users. At least not until they realize that they still don't speak "accountant-ese." Many accountants have had the experience of walking into a client and finding them staring at the monitor, frozen in place in front of a screen asking them to edit the default settings.

Still, the process of setting up and using accounting software has gotten to the point where most businesses, from "micro-business" to smaller multi-employee businesses, are at least willing to give PC bookkeeping a try. That's made entry-level accounting/bookkeeping products, like the ones reviewed here, a commodity item. You can find them in most big-box stores, and it won't be surprising to someday find them in the computer supplies aisle in the supermarket, right next to the inkjet toner cartridges.

HERE TODAY, HERE TOMORROW?

As with many things in life, accounting software started out simple, and as the hardware become more powerful, so did the capabilities and complexity of the software.

Many of the early vendors and their accounting packages have come, gone and been acquired. Names like VisiCalc, SuperCalc, BPI Accounting, SBT Software, Great American Software, AccountMate and Manzanita Software are not much heard anymore.

There are a number of smaller, relatively unknown accounting applications available if you look hard enough. But it's bad enough if you've recommended a product like Microsoft Office Accounting Professional, only to see it discontinued, and then had to explain to a client that even a giant company like Microsoft sometimes cuts its losses and runs. Do you really want to recommend an accounting system from a vendor that may or may not be around next year?

That pretty much narrows the market to QuickBooks, Peachtree Accounting and Acclivity, which was formerly known as MYOB.

IT'S HARD TO BEAT THE PRICE!

If your client can get away with a very simple bookkeeping system, there are several more that you can consider for them. The price for these - free - is hard to beat.

If your client has up to 20 customers and needs to invoice and track sales/services, and print checks, QuickBooks Simple Start Free Edition might do the trick for them. It's an easy upgrade path to the $99 regular Simple Start edition when your clients start to outgrow the free version.

Another possibility is Outright.com. This free online service provides basic bookkeeping, and allows you to work with your client. It does not, however, give your client the ability to generate invoices and print checks, which can be a serious limitation.

MOVING ON UP

One thing to consider when recommending a software package to your clients is how soon they will outgrow it. To some extent, both QuickBooks and Peachtree provide an upgrade path, with QuickBooks Enterprise and Peachtree Quantum. Both of these permit many more users than the standard entry-level editions, and even provide several features not found in the other editions.

But if your client is eventually going to need the functionality that comes from a full-blown mid-range or enterprise application, upgrading them is not going to be an easy task. It's probably not worth spending a lot of time dwelling on this, but if you think that the particular client is poised for rapid growth, you might want to consider what the upgrade options will be and how the recommendation of the initial software will dovetail with a future requirement.

WHAT DO THEY WANT FROM ME?

To be honest, most software at a particular level is pretty much the same from vendor to vendor. If one vendor comes up with a "gee-whiz" feature, you can bet something similar will show up in the packages offered by other vendors. That's true in office suites, as well as accounting applications.

What is different is the way that a particular vendor goes about offering those features and capabilities, and to what depth they are provided.

Making the decision even more difficult, two of the vendors in this roundup, Intuit and Peachtree, offer a variety of different editions, with more expensive editions providing more capabilities and/or vertical market orientation.

There are a number of items to create a punch list for you and your client to consider (which, incidentally, is usually a billable service, as is installing, configuring the system, and training the client's staff).

Some of these include the availability of vertical market editions; whether the inventory costing methods and BOMP/kitting capabilities are sufficient for the client; how payroll is handled; what customization and ad hoc reporting is available; what kind of support you can provide; what vendor support is available and how it is priced; and how active (and helpful) the user community is. All three vendors we looked at have an active third-party developer network, providing add-ins and add-ons to add features and capabilities to the vendors' application. This is another area to investigate with your client.

If the client's infrastructure is not very complete or if it's relatively old, another option to consider is whether the client is better off upgrading their equipment and network, or moving to an online version of the accounting system.

We reviewed the "retail" packages from Intuit, Peachtree and Acclivity. The editions we tested were the top of the line for what can be considered entry-level and were the versions offered to accountants. These editions have several capabilities, detailed in the reviews that follow, that are not found in the packages offered for client use. Additionally, both Intuit and Peachtree have more powerful versions of their accounting packages, which are more reasonably classified as mid-range, and, as such, are not reviewed here.

Our reviews were conducted with the single-user version of the software and with sample data provided with the application. All three of these vendors can provide multi-user versions of their application. Our installation and testing were performed on a Lenovo ThinkPad T400s, a fairly typical business laptop running Windows 7 Ultimate.

Acclivity AccountEdge

Acclivity LLC

Rockaway, N.J.

(800) 322-6962

www.accountedge.com

If the AccountEdge name seems familiar, but the vendor, Acclivity, does not, don't assume that the software has been picked up by another vendor. What has happened is that MYOB was originally a U.S. company, but its accounting software by the same name became very popular in other countries. This eventually resulted in an acquisition by one of its largest dealers, located overseas. The U.S. operations were eventually acquired by Acclivity, which has now replaced the MYOB corporate identity.

Unlike QuickBooks or Peachtree, AccountEdge does not come in multiple editions with different levels of features and usability in each. Rather, there are single-user and multi-user editions, identical except for the number of users supported. AccountEdge is also available in a Mac version, which was the original offering of Acclivity's software. Accountants with one or more clients using AccountEdge are eligible for a free Accountant's Copy, which allows file exchange with the client.

When first introduced, AccountEdge was based on a program on the Mac that used virtual cards to contain data. This gave the application a very different look. The Windows version introduced several years later still used the underlying analog of cards but changed the interface. The current version has a very familiar user interface, with a navigation flowchart walking the user through the overall subtasks involved in performing a particular overall task. A set of buttons for accounts, sales, banking, payroll, inventory, time and billing, purchases, and a general purpose card file bring up different navigation flows. Documentation is fairly minimal, but most users won't have any problem figuring out where they have to go and what to do in a particular screen.

Individual screens have a very plain appearance, but they are easy to use. As is becoming fairly standard, you can attach images and documents to other records, such as inventory. The "Card File" allows a user to add custom items to track and report on. Inventory costing is provided on a weighted average or specific cost basis, and your client can create BOMP items from discrete inventory items.

Reports are not fancy, but are quite usable, and filters provide a modest amount of customization. Payroll is rudimentary, but sufficient for many of the users who comprise the target market for the application. Acclivity provides a payroll tax table and forms and checks service if desired. Direct deposit and credit-card processing are offered as optional services.

AccountEdge is not a retail product. It needs to be purchased directly from Acclivity or one of its resellers, which is why it has never achieved a lot of market recognition. Still, the many years the software has remained in the market, while most of its competitors have gone belly-up, says a lot for the loyalty of its users and reseller base.

QuickBooks Premier Accountant's Edition

Intuit Inc.

Mountain View, Calif.

(800) 4-INTUIT

www.quickbooks.com

While Peachtree and Intuit pretty much share the retail market, they tend to have very different kinds of users. Feature-wise, at the same edition level, QuickBooks and Peachtree Accounting are very similar in functional capability.

Real improvements in functionality are generally made by one vendor, and if they prove desirable, show up in the other vendor's offering soon after, maintaining functional parity.

QuickBooks and Peachtree started off targeting two very different kinds of users. Peachtree, which has been available somewhat longer, was a very direct double-entry accounting system, and was aimed at an accounting or bookkeeping professional who was used to making CD and CR entries, as well as dealing with general journal and subsidiary journals.

On the other hand, QuickBooks grew out of a need to supply small-business owners and sole proprietors who were trying to use Quicken to manage their business with a more powerful application more suitable for use in a business environment. In some ways, Peachtree started out as a full-blown accounting system, while QuickBooks had to grow into the role.

Initially, this made QuickBooks a lot easier to use for the average small-business owner, which gave the application a market lead that it holds to this day, especially with small businesses that want simplicity over power.

That's not to imply that QuickBooks is not as powerful or capable as Peachtree Accounting, just that the two vendors have placed somewhat different emphases on different areas. For example, QuickBooks customers tend to have pretty basic inventory needs, so Intuit has not placed a lot of emphasis on inventory costing. Peachtree, on the other hand, was primarily an accounting system from the get-go, and, as such, has provided a variety of inventory costing methods from its inception.

Both vendors go the extra mile in other areas of inventory management. For example, QuickBooks has a useful sales order fulfillment worksheet that helps a manager decide how to apply existing inventory to pending orders.

Installation, configuration and use have always been pretty simple with QuickBooks products. Intuit continues to improve the usability from year to year. While the user interface hasn't changed noticeably from last year's edition, it's much easier to apply the customization that your client does with one invoice style, including logos and background graphics, across other invoices they use. This wasn't impossible to do previously, but required that each invoice be individually changed. Now with one mouse click, the changes are applied across all the invoice templates being used.

Forms creation and customization have been improved and expanded, and it's easy to customize a company snapshot dashboard with the data that the decision-maker needs to know at a glance. A Doc Center on the home screen lets you add documents of all kinds so that they can be accessed through the system. This is useful for keeping receipts, copies of contracts, and the like.

Other optional features, like Check Solutions for QuickBooks, which lets your client scan a check (assuming that they have a scanner) and automatically match the payment up with an outstanding invoice, are useful time- and effort-savers. Intuit provides some of these enhancements, while others are provided through a large and robust third-party developer network.

As with Peachtree Accounting, QuickBooks is available in several editions that vary in cost and capabilities. Industry-specific editions are also available. As mentioned earlier, Intuit provides a free version of QuickBooks Simple Start, which is a good way for a smaller client to get their feet wet. And moving in the other direction, QuickBooks Enterprise Solution can support up to 30 users.

Peachtree by Sage Premium Accounting Accountant's Edition

Sage Software SB Inc.

Norcross, Ga.

(877) 495-9904

www.peachtree.com

When each application was first introduced years ago, the difference between Peachtree and QuickBooks was pretty easy to determine. Peachtree was "real" double-entry accounting, and QuickBooks was the very successful Quicken home finance program bulked up to meet the needs of a typical small or micro-business.

That distinction isn't so easy to make these days. Over the years, and many iterations and upgrades, the two applications are more alike than different. Still, Peachtree's lineup, especially at the higher end where Premium Accounting resides, is somewhat more accounting-oriented than QuickBooks. Not a lot, but features like extended inventory costing that offers LIFO, FIFO, weighted average, and specific cost, tend to make Peachtree just a bit more attractive to financial professionals such as accountants and controllers. And a fair number of Peachtree users are larger entities, which use Peachtree Accounting for divisional or branch accounting.

It's difficult to think of Premium Accounting as entry-level. While an enterprise-level company probably wouldn't feel comfortable having Peachtree Premium Accounting as its central accounting system, the application is functionally capable of being used at this level if the enterprise chart of accounts account numbering will fit within Premium Accounting's COA mask. The review copy of Premium Accounting that we tested used Pervasive Software's PSQL database as its underlying platform. Theoretically, at least, PSQL is capable of scaling up to an enterprise level, though even Peachtree's Quantum Edition doesn't make this claim. Compatibility with Crystal Reports gives an experienced developer the ability to extensively extend Premium Accounting's already powerful reporting and report customization.

Consolidations, not usually required in most smaller businesses, are available if required. And industry-specific editions for construction, manufacturing, distribution and nonprofits are available for your clients in these businesses, as are less expensive editions with fewer functions for clients that don't require all of the features of Premium Accounting. Peachtree's high-end Quantum Edition can support as many as 30 simultaneous users - more than is usually found in a typical small business.

One area where Peachtree Premium Accounting can definitely be considered entry-level is in its installation and set-up. Installing any application that requires SQL can sometimes be a horror, but Premium Accounting's installation takes care of the details and requires no user input other than where you want the software installed. With wizards to walk your client through installation and set-up and configuration, many of your clients will be capable of doing the install themselves, though a large number of them will want you to do fine-tuning.

In terms of features and capabilities, Peachtree Premium Accounting provides much of the same functionality as more upscale (and expensive) programs, but it's not difficult to use. Easy-to-understand flowchart-style navigation panels have become the standard user interface for many accounting applications, and Premium Accounting follows this convention.

Data retention for up to three years, a dashboard of important company metrics, broadcast invoices, and document management functions that allow you to attach images to records are all features that have been introduced in recent years.

For the 2011 edition, Peachtree hasn't introduced any jaw-dropping new features, but instead has concentrated on adding incremental improvements to features already included in the application. An Inventory and Services Management Center provides an easy-to-understand dashboard about a single inventory item (including kitted items) or services. Job costing has been improved with features like a stoplight-like red-yellow-green indicator.

Other improvements include streamlined service billing, better job reporting, and improved change order processing. A Setup Adviser screen on a side panel provides related instructions about what the user needs to do to set up records, including those for customers, vendors and inventory items.

As in the past, additional products are available that enhance the core accounting system. These include several more advanced payroll offerings, including service bureau processing and direct deposit, credit card processing, remote backup to Iron Mountain's secure facilities, integration with Act!, and a host of products from third-party developers. Peachtree has also built a strong accountant's partner plan over the last several years for those who want to resell Sage products or provide support services to their clients.