Personal computers revolutionized a lot of things, including the way that bookkeeping and accounting is performed. Before the Apple //, TRS-80, and IBM PC, bookkeeping was a manual process, and general ledgers were, for the most part, exactly that — large hard-covered binders containing T-Account paper with manual entries. Sure, computers were being used for accounting, but with the buy-in costing tens of thousands of dollars on the low end, the average small business or accounting firm could at best afford an accounting machine such as those sold by NCR and Burroughs.

You can still spend thousands or even millions of dollars on accounting software and the equipment to run it on, and numerous companies do. But this is for mid-market or enterprise class software, not software suitable for your SMB clients. Software offerings from BPI Software, long gone, DacEasy, and Peachtree (both now Sage companies) changed the accounting software landscape forever.

These vendors, and the others that followed them, not only made it affordable for many small businesses to gain the advantages of computerized bookkeeping and accounting, but also introduced most of the operating features we take for granted today. These include adding accounts on-the-fly, drop-down menus, auto-fill, context-sensitive help, and perhaps most importantly, wizards to guide small business clients through the processes of setting up and using the software. All of these features and more were first introduced in entry-level software, and migrated their way into mid-market and enterprise software products.

Not only has entry-level software changed the way that many businesses operate, it has had a large impact on the way that many small-to-midsized accounting practices operate as well. With large numbers of SBM clients moving bookkeeping in-house, the write-up business, which was the mainstay of many smaller practices, has changed considerably. Savvy practitioners have adapted to this change, letting the client do the grunt work (transaction entry) and charging for setup, custom reports, adjusting entries, and closing entries. In many cases, services that were formerly included in write-up billings now need to be broken out so that the client understands why they are being billed, even though they are “doing everything themselves.”

Setup and maintenance is another large revenue generating area. Yes, some of your clients would be able to install and configure their software without a problem. That’s what the wizards are there for. Wizards, however, presuppose that the client performing the setup actually has a good grasp of how their business operates and the workflows that take place. Sometimes they do, sometimes they don’t, and sometimes they think they know more than they actually do and require a billable visit from you to straighten out the setup.

Actually interpreting the financial statements for a client on a periodic basis is another popular service that many practices provide. It’s a rare practice that hasn’t gotten a call from a client wondering how they can be showing a profit when their cash in bank balance is almost zero.

There aren’t a lot of products in this market category any more. Some have disappeared over the years, others, such as DacEasy, have moved up market, and can no longer be considered entry-level. We tested four products that we consider entry-level, primarily on the basis of price. Three of these are easy to find at retail, and the forth, MYOB, is available directly from the vendor or from its resellers.

All four of these packages offer many similar features. The largest differentiator is the approach that the particular vendor has taken. Several offer payroll, and the inventory costing methods available differ between vendors. Every vendor also offers ancillary services and products to boost the capabilities and reach of its accounting application.

In testing each of the four packages, we installed the software and the vendors’ sample clients, entering transactions, printing reports, and performing some customization. We also examined features that are new this year. All of our testing was performed on a dual-core Lenovo ThinkPad, a notebook that is typical of that which might be carried to a client site of used in the office.

Intuit QuickBooks Accountant’s Edition 2008

If you go strictly by number of units sold, Intuit holds the largest share of the entry-level market, with Peachtree taking second place. Both of these vendors go back and forth every year, with Peachtree introducing a new feature, which is then picked up by QuickBooks, and vice-versa. That results in both of these applications having more similarities than differences.

The two vendors, however, take somewhat different approaches to accounting and bookkeeping. Peachtree started out in the 1980s offering double-entry accounting software for the CP/M operating system, while Intuit’s QuickBooks evolved from its original Quicken personal financial software.
So the emphasis that drives QuickBooks has been primarily on making bookkeeping an easier-to-use process. As the software has evolved, it has morphed into a full-featured accounting system, but the emphasis has always been, and continues to be, making small business financial management as painless as possible.

This type of user also has somewhat different needs than one who wants a more accounting-directed application. For example, QuickBooks does not include payroll. If payroll is needed, a user can subscribe to Small Business Payroll and manage the payroll process from within QuickBooks.

Inventory costing is another area where QuickBooks offers a bit less flexibility. As with many of the products in the entry-level market, QuickBooks provides only the weighted average and specific cost methods. Still, it makes up for this by incorporating extensive inventory management features including Unit of Measure conversion (for breaking out individual unit prices from a batch purchase), a sales order fulfillment worksheet showing a single comprehensive view of all pending orders so that a manager can make “ship-to” decisions.

Intuit has also done a lot of work on increasing usability, making an already easy-to-use product even easier. The help function has been improved a bit, but the real eye-opener is something Intuit calls QuickBooks Coach and Tips. When you specify a task, the application highlights the navigation flowchart to walk you through the task sequence, and provides pop-up windows that briefly describe the specific task to be accomplished. This can be turned on and off, but for a new QuickBooks user, it’s a reassuring bit of hand holding.

We tested the QuickBooks Accountant’s Edition, which can mimic any of the other editions to maintain compatibility with the particular edition that your clients are using as well as slipstream adjusting and closing entries into your clients’ books. Intuit also offers less expensive editions such as QuickBooks Pro as well as industry-specific editions of Premier for retailers, manufacturers, contractors, and nonprofits. These are not true vertical applications but have been preconfigured and tweaked to be more appropriate for a particular type of entity.

QuickBooks Premier is available in a multi-user configuration that can support up to five users. If your client needs to accommodate more simultaneous users than that, they should consider the Enterprise Edition, which can handle up to 20 simultaneous users.

This provides an upgrade path of sorts. While Microsoft and Peachtree have mid-market accounting products available, most QuickBooks users will never need the expense or complexity that this kind of upgrade entails. The Enterprise Edition does add some additional features, but its biggest benefit is that your clients’ staff will not need any retraining when moving from Premier to Enterprise.

Intuit offers a wide range of ancillary services to go with QuickBooks. These include credit-card processing, merchant service for Web stores, a time tracker for businesses where staff and employees track their time, and integration with Google Maps and Adwords.

A big plus for many accountants is the amount of support available through their accountants network. When added to the easy transfer capability into Intuit’s tax prep products, it’s easy to see why QuickBooks continues to remain a favorite of both accountants and their clients.

Microsoft Office Accounting Professional 2008

Over the years, Microsoft has jumped in and out of the small business accounting software market, while consolidating its position in the mid-market.

The latest effort, Office Accounting 2008, seems to have some legs — this is the fourth year that the product has been in existence. And while it doesn’t have a substantial piece of the market when compared to QuickBooks and Peachtree, it’s a very credible bookkeeping application for your SMB clients.

Unlike QuickBooks and Peachtree, which offer multiple versions of their software, Office Accounting is available only in two versions. For those really small clients, there’s a free Express Edition, which is similar in functionality to QuickBooks Simple Start and Peachtree First Accounting. While the price is attractive, the limited functionality may reduce the attractiveness.

The Microsoft Office Accounting Professional 2008 edition is much more feature rich, and at $199 (or $149 if your client is upgrading from any other accounting package), it’s both affordable and usable. The software is also available as part of an Office 2007 Suite. This is an attractive option if your client doesn’t already have Microsoft Office, as the tight integration with Office applications such as Excel and Word is one of the major selling points of Office Accounting Professional. This makes it easy to do more sophisticated analysis and customized reporting. At a minimum, Office 2003 is required to install and operate Office Accounting Professional.

We had no trouble installing or configuring Office Accounting Professional. The application uses Microsoft’s SQL Express 2005 as its underlying database, but the installation and configuration of this is transparent to the end-user. The Outlook-like user interface, with multiple panes, will be instantly familiar and comfortable to many Office users, which will help cut down on training time.

Office Accounting Professional 2008 isn’t really comparable to QuickBooks Premier or Peachtree Premium, it’s priced and featured closer to the Pro versions of these applications. As with QuickBooks, Office Accounting Professional 2008 lacks an in-house payroll, though Microsoft has arranged for a user to partner with ADP for this function. Inventory provides only a single costing method, FIFO rather than the more common weighted average. On the plus side, Office Accounting Professional does include some features that are unusual at this level such as multicurrency capability and fixed-asset tracking.
Unlike the other packages in this roundup, there is no formal “accountants’” version of the software. There is an “accountant view” incorporated into the package to allow you to manage multiple clients, and an “Accountant Transfer Wizard” that allows you to incorporate adjusting and closing entries into your clients’ books.

Microsoft has added a substantial numbers of new features with this edition. Some of these include a Spanish Language edition, an online resource center, new budgeting and Excel analysis tools, business templates, and others. Accountants can now create custom charts of accounts based on their own template. None of these is a showstopper, but in total, they do add up to a bookkeeping application that is likely to appeal to some of your clients. 

MYOB Premier Accounting

The other three packages in this roundup are retail products. MYOB is not. You or your client would need to order it from the company’s Web site or purchase it from a reseller. MYOB is available in several editions, we reviewed the Premier Accounting edition, but there is a less expensive Business Essentials version as well as two accounting packages for the Mac. A free Accountant’s Copy is available to accountants who have at least one of their clients using Premier Accounting.

In fact, MYOB was originally developed as a Mac product, and was migrated to the Windows environment years ago. This gave the application a somewhat different user interface — one that’s loosely based on a virtual card file. Many of the screens have tabs that enable a user to navigate between tasks. While it’s not quite a standard Windows interface, it is quite intuitive and very easy to master, which should reduce staff training time.

The suite of applications includes standard tasks such as A/R, A/P, and a very usable inventory. You can attach images and other documents to records, so the inventory can actually have a picture of the item, so an employee can see what the item looks like rather than relying on a part number or description. Costing, as is common at the entry-level, is limited to weighted average and specific cost.

MYOB’s payroll is modest, but will be sufficient in most of the businesses to which this package will appeal to, and a tax table update service is available to keep your clients current with the latest withholding amounts. MYOB also integrates with outside payroll service bureaus. Direct deposit is offered as a separate service as is credit-card processing.

The software also includes a basic human resources application called “staff files.” This allows your client to track employee vacation and sick days, salary reviews, and raises. This is a very nice feature to have, and surprising to find in software at this price.

Other applications include employee time tracking, budgeting, and contact management. Multiple users can be added easily with the purchase of additional user licenses.

MYOB doesn’t have the market recognition that the other vendors’ applications enjoy. Still, considering how many years it’s managed to remain in the ever more competitive entry-level market, and the large world-wide user base, it is definitely worth taking a look at.

Peachtree by Sage Premium Accounting 2009

For many accountants Peachtree Premium Accounting is “real” double-entry accounting. While some of the other vendors have gone a long way towards divorcing the accounting process from that of recording financial transactions, Peachtree has never made any bones about the fact that it is accounting software first, and anything else second. That’s not to say that Peachtree is necessarily any more difficult to use than software from any other vendor, just that the software has traditionally appealed to more of an accountant/bookkeeper base, or a small business owner/manager with some financial expertise.

At the same time, Peachtree Premium doesn’t force an uncomfortable user interface on its customers. There are the same sorts of task-flow navigation panels, menus, and wizards that you might expect to find in any modern application. Nor is setup necessarily more complicated than any other entry-level accounting package we looked at. Peachtree’s wizards walk your client through the setup process, and there are sufficient boilerplate setups and charts of accounts to provide an ample skeleton for most entities.

For those clients that would benefit, Peachtree provides industry-specific editions for construction, distribution, manufacturing, and non-profits. These are not true vertical applications, but have been tweaked to provide additional features for the specific target industry. An Accountant’s Edition allows you to work on your clients’ books, and offers some additional features, such as consolidations, that are specifically for the practitioner. The Accountant’s Edition, which allows you to prepare entries and merge them with your clients’ books, is priced the same as the Premium edition, while industry-specific editions cost an additional $100.

Peachtree Premium 2009 continues to offer a wide range of “big business” type features such as an included payroll, and a very robust inventory providing the most common costing methods such as LIFO and FIFO in addition to weighted average and specific cost. These capabilities make Peachtree Premium usable in some companies that simply would not be able to use QuickBooks. It’s also not uncommon to find Peachtree being used in large enterprises for divisional accounting, with the results being rolled up into a more upscale application at the headquarters level. Premium Accounting already had the capability of doing consolidations, a feature more likely to be of value to mid-sized businesses rather than the smaller-sized companies.

As with the other vendors included in this roundup, Peachtree has added some new bells-and-whistles this year. With the 2009 edition, Peachtree Premium can now store up to three years worth of financial data, which allows your clients (or you) to do trend analysis in addition to the already standard budgeting and planning. Of course this data collection starts with the current year, so it may be a while before this feature really reaches its full value. The Business Status Center, introduced last year, is a dashboard-style summary page of important company metrics, and the latest version of Crystal Reports 2008 lets you or your client create customized and ad hoc reports if the wide variety of existing reports does not contain exactly the report needed. Last year’s edition introduced a host of new features included extended decimal places for unit pricing, broadcast invoices, and the ability to attach images and other documents to financial records. These features continue in place.

As with the other vendors reviewed here, Sage offers a number of other services and partnerships to increase the functionality of its Peachtree accounting applications. These include a full-service payroll which provides a service-bureau payroll for those clients who don’t want to run this application in-house — Payment and Bill Pay Solutions — a link to ACT!, an online backup service, and Web site and Web store creation.

Peachtree has always offered multi-user capabilities, though additional licenses are necessary to include up to five named simultaneous users. As with QuickBooks, Peachtree also offers a step-up version called Peachtree Quantum, which can support up to 30 concurrent users. Less feature rich (and less expensive) editions are also available for those clients of yours who don’t require all of the functionality of Premium Accounting.

Company Information:

QuickBooks Premier Edition 2008
$449 (single user), $1,199 (three-user)
Intuit, Inc.
P.O. Box 7850, MS 2535
Mountain View, CA 94039-7850
(800) 4-INTUIT

Microsoft Office Accounting Professional 2008
$199 (without Office Professional)
Microsoft Corp.

MYOB Premier Accounting
$299 (single user)
300 Roundhill Dr., Suite #2
Rockaway, NJ 07866
(800) 322-6962

Peachtree by Sage Premium Accounting 2009
$499 (single user), $1,199 (multi-user five-user)
Sage Software SB, Inc.
1505 Pavilion Place
Norcross, GA 30093
(877) 495-9904

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access