Accounting and bookkeeping haven't always been particularly easy to accomplish. Before the advent of mechanized bookkeeping, keeping track of financial transactions, and their ultimate effect on a business, was a matter of sorting transactions into the proper category and recording them by hand into paper ledgers, using specialized paper to physically emulate the T-Account concept.
The advent of the computer changed all that. First with mainframe computing, then with more affordable minicomputers, and finally with very affordable PCs.
Packaged accounting applications became available fairly early on, but in almost every case, they required extensive modification for each client. This expensive customization pushed the price into the realm where your client had to have a fairly moderate-sized business to afford the ongoing cost.
That's a far cry from today's off-the-shelf software. At the entry level, your clients can go into any big box store and purchase a complete and sophisticated accounting system that they, for the most part, can install themselves. At some point, however, if your clients' businesses grow, chances are good that they will need to step up to a mid-range system. This can happen for several reasons.
One that's gotten very common is that the client simply has more staff that want or need to use the application than the package supports. Accounting systems can bog down under heavy use, regardless of how powerful the computers they're being run on are.
Almost all mid-range accounting systems, whether in the cloud or in-house, are built around some version of SQL. The advantage in using one of these SQL products is that they are both scalable (accommodate increases in users) and able to handle very high transaction loads. If your client is running their accounting system in-house, beefing up existing hardware can have a very definite effect on overall system response.
Mid-range accounting systems give businesses more control over how their accounting system is configured, and provide advanced capacity and functionality to those of your clients who have multiple subsidiaries and divisions, or operate in more countries than just the U.S.
These products are, for the most part, modular, with a system manager module as the entry point and center for overall system configuration and maintenance. This modular approach allows your client to purchase just the features and capacity they need, then add onto this when their needs change. It is, of course, possible to mix and match, having a general ledger and accounts receivable/payable from one vendor, and HR, payroll, manufacturing and/or distribution inventory, or human resource management, all from different vendors. But a mid-range accounting vendor can provide all or most of these additional modules and allow your client to expand their capabilities with a minimum of time and effort, and without the need to use complex export and import routines.
Another reason to move a client from an entry-level to a mid-range accounting system is accessibility to the data collected and generated by the accounting system. Many mid-range applications have enhanced budgeting and dashboard capabilities, which simplify the use of this data by management.
FOR YOUR CONSIDERATION
In selecting a mid-range accounting system to recommend to clients, there are a few more areas that you (and they) should give some consideration to. Possibly the most important of these is whether they can upgrade in place by selecting a step-up version of the software they are already using. If they can, it will probably be the path that presents the least number of problems.
And while some vendors provide migration paths from an entry-level system to their mid-range system, moving data from one system to another is not trivial. Even more daunting is getting your client's staff trained on the new software.
With a new client that looks to be on the growth fast track, it may be best to recommend a mid-range product from the get-go. Some of the products reviewed here can be purchased with a single-user license, and have the ability to go from there to several hundred users. Others, like QuickBooks Enterprise Solutions and Peachtree Quantum, start with a five-user license, which may be quite acceptable to your client. That's especially true if they anticipate rapid growth and want to plan for it from the initial choice of their accounting system.
Sticker shock is also something that you might want to prepare your client for. It's not uncommon for a mid-range system to run in the low five figures, and since most of these applications are sold, installed and maintained (with a yearly renewal and/or service contract), the final cost can be considerably greater than just the purchase price.
We tested seven mid-range systems, two of which are Software-as-a-Service, or "cloud-based." Make sure that your client is aware of the pitfalls, but just as aware that the right choice can result in better business decisions and a smoother workflow. Either or both of these benefits can help justify the effort and cost of moving to more capable software.
Cougar Mountain Software
Cougar Mountain Software had modest beginnings, initially being sold strictly through advertisements in early computer magazines. Today, it has two major product lines, its namesake application (Cougar Mountain Accounting) and Denali. Both product lines are sold directly by Cougar Mountain, and through select resellers.
Denali is available as either software that is installed by the user or reseller, or pre-installed on a server from Applianz. Cougar Mountain isn't unique in this approach - several other vendors, including Sage, offer Applianz servers with their applications pre-installed. This is an excellent approach, as it cuts out the bother of installing and configuring the applications, and your client winds up with a compact, dedicated, high-quality server to boot. It's a bit more expensive than just purchasing the modules and installing them yourself, but in many cases, the extra cost is money well spent. We tested Denali on an Applianz server located remotely. Connecting through a Web browser over the Internet, a user would have the same experience we did, with very acceptable response times over our Optimum Online broadband. Response would obviously be even better on an internal network.
Denali is one of those accounting systems that remain usable and scalable from one user to over a hundred (though performance and response may fall off with large numbers of users and/or transactions). It's a modular system, so it can be configured to a particular client's needs, but at almost $500 per single-user module and somewhat more for payroll, Denali isn't going to replace QuickBooks or Peachtree on the entry-level side of the market.
Navigation is attractive and easy to follow, with flow charts for general system task flow and buttons on a top tool bar to select individual applications. There's also a task panel on the left side of the screen that brings up different flowchart views.
There is a nice selection of reports, and while they aren't particularly fancy, they do contain the information that a client requires from them. The reports are generated by a non-accessible version of Crystal Reports, and if your client or you want the ability to do custom or ad hoc reports, Crystal Reports is available as a $199 option.
Cougar Mountain Software has been around for several decades, and in addition to the fact that it's been able to thrive all this time, it has also built up a large stable of third-party developers, so there are a lot of enhancements that your client can add.
Accountants, for the most part, are slow to recommend new technology to their clients. After all, if it doesn't work, who are they going to blame - the vendor or the accountant?
SaaS and cloud-based computing are no longer "new" - two of the three foremost vendors in this area (the third is AccountantsWorld) have been offering mid-to-high-range accounting software for more than a decade. Founded in 1999, Intacct has a large user base and a solid product.
Offering most of the modules that would be necessary for clients ranging from small to enterprise, Intacct scales effortlessly and without any user burden other than adding accounts, customers and vendors. Inventory, multi-currency, global consolidations and revenue management are not included in the core offering, but are available if needed. Intacct partners with other software vendors, such as Salesforce CRM, Avalara Sales Tax Management, BNA Fixed Assets, and a number of others to offer "best-of-breed" extensions to the core accounting system. Intacct also integrates seamlessly with payroll systems from ADP, Paychex and CompuPay.
For 2010, Intacct added Clarizen project accounting, integration for workflow management, and several additional features. Many of the partnerships and integrations are for enterprise-sized entities and will be of limited interest to most of your SMB clients. That's fine - it's better to have more available than you need than to need a feature or capability and not have it available.
Since Intacct does the set-up and maintenance, there's little to worry about, and Intacct uses SunGard, one of the better-known vendors in this area, for backup and recovery. There are numerous customizable dashboards, and reports can be configured to be simple or complex, depending on need and use.
One notable feature that Intacct touts is the ease of migrating from QuickBooks, and it provides a toolkit to automate this process. This is not something we tested, but if you're looking for a migration path for your QuickBooks users, and don't think QB Enterprise Solutions is the best way for your client to go, it would be definitely worthwhile to investigate this for your client.
SaaS and computing in the cloud are popular these days, but NetSuite has been offering its online accounting system for over a decade. NetSuite offers much of the same advantages as the other cloud-based accounting systems in this roundup. These include easy set-up and configuration, as well as not having to worry about maintaining the system and backing up. An additional benefit is almost unlimited scalability. You can, of course, recommend NetSuite (or Intacct) to a smaller client, but as with Intacct, NetSuite was originally designed as an enterprise-level accounting system, and has offices worldwide, as well as the ability to accommodate accounting requirements in numerous countries.
As an enterprise-level system, NetSuite also offers the ability to work well in meeting governance and compliance requirements, such as Sarbanes-Oxley. Because NetSuite has so many customers that are subject to SOX, it needs to maintain internal controls at a high level. Of course, NetSuite isn't responsible for the documentation and reporting aspects of SOX; your client's management will still have to make those assurances.
As befits a mid-to-high-end system, all of the subsidiary ledger applications are available, as well as HR, CRM, supply chain management, and a very sophisticated planning and budgeting capability. Dashboards are informative and customizable, and can offer benchmarks so your client can do comparative analysis against other companies in the same market. Screens are laid out so that navigation and use are intuitive. Reports are informative and attractive, with numerous filters to focus on the areas that your client needs to inspect. Drill-down is available at several levels, from data entry, reporting, and the various dashboards.
Intacct and NetSuite offer similar (for the most part) features, as well as benefits. Both permit use by clients at various levels of need, sophistication and capacity. With a price model based on users and modules, it's easy to adjust each client's accounting system for the best fit.
QuickBooks Enterprise Solutions
You've got to give Intuit credit where credit is due. They take great pains to know their customers, their market, and how to serve both. QuickBooks Enterprise Solutions was developed to address and keep those QuickBooks users who would start looking at other accounting systems when they bumped into user and transaction limitations with the other versions of the software.
Considering how QuickBooks started out as a pretty basic, easy-to-use bookkeeping system, it is impressive how sophisticated an accounting system it has developed into, while basically keeping its ease of use. With hundreds of third-party developers, even the non-Enterprise version can be greatly enhanced and customized.
Enterprise Solutions 11.0 still has the 30-user cap, which puts it solidly into the arena of a midsized business. With this latest release, Intuit continues to add features. While Enterprise Solutions' feature set for the most part parallels that of QuickBooks Premier, it does have its own further enhancements. Inventory capability has been expanded so that products can be tracked in multiple warehouse locations, and easily transferred between locations. Reporting has been enhanced with additional reports provided, and the ability to combine the same report from different companies essentially allows you to set your client's divisions or locations up as separate companies and consolidate them when necessary. With optional software, you can directly access a client's underlying database and use the data in ODBC-compliant applications such as report writers.
With the Accountant's Version of Enterprise Solutions, you can work with two open company files at the same time. This allows you to do some sophisticated analysis and comparisons. And when multiple staff members are logged on simultaneously, they can send messages to each other using an integrated instant messaging feature.
While many of the mid-range accounting packages we tested are really designed to be installed and configured by a reseller, QuickBooks Enterprise Solutions was a breeze to install, and with a prior version of QuickBooks Premier on the test system, we were able to open the existing file, have Enterprise Solutions update it for the different file system, and be off and running.
Sweetening the pot, the price of Enterprise Solutions has come down over the last several years. The 30-user edition is priced at $8,000, while the 10-user version is $5,000. Advanced Inventory is an option that adds a $699 yearly fee to the mix.
That's pretty much a bargain if the software will meet your client's requirements. And QuickBooks Enterprise Solutions 11.0 can be purchased directly from Intuit, though this vendor has a very attractive accountant's program if you want to get more directly involved in the purchase.
Open Systems Inc.
Open Systems has been selling software since before the days of PCs. Traverse is Open Systems' Windows accounting system and the new Version 11 is almost completely rewritten from the previous one. The client now runs under Microsoft .Net, while the server portion requires Microsoft SQL server 2008 R2.
Unlike some of the other mid-range accounting systems that are designed to straddle the needs of small and midsized businesses, Traverse is a mid-range application system and makes no apologies for it. It is pretty much infinitely scalable, compliments of the SQL Server 2008 R2 foundation, and could very easily be used by a smaller enterprise-type company.
Open Systems itself offers 10 modules for Traverse, and numerous others are available as enhancements and third-party add-ons. The Traverse core modules encompass a system manager, general ledger, multi-currency, AR, AP, payroll, enhanced payroll tax reporting, banking, bank reconciliation, and fixed assets. Additional modules are available to add business intelligence, EDI, CRM and e-business.
Open Systems offers tailored versions of Traverse for a number of vertica
ls including accounting (for your own use), distribution, manufacturing, retail/POS, construction, service companies, and not-for-profits. Software development tools are available in the event that your client requires extensive customization of their system.
Traverse runs on the server side under Microsoft SQL. In the past, we installed it using MS SQL 2005 Express without difficulty. Traverse 11.0 requires SQL Server 2008, and includes SQL Server 2008 Express, which must be upgraded with a service pack (SP1) that needs to be downloaded from Microsoft's download site. Open Systems sells Traverse strictly though its reseller network, so installation problems are going to be the reseller's to solve, not yours or your client's.
This newest version of Traverse offers considerably more customizability than in the past. Reports are not extensive, but it's easy to bend them to a client's particular needs, and creating ad hoc or custom reports is not a Herculean task. Screen layouts can be tailored to the user, hiding, deleting or even adding fields.
Traverse probably wouldn't be your first choice for a client stepping up from QuickBooks or Peachtree. For a smaller business, Traverse might be intimidating, especially on the administration side. But for a solid and growing midsized company, Traverse represents a solution that can handle a business with 100 employees or hundreds.
Sage North America
When it comes to accounting software, Sage reminds us a lot of the iPhone. Regardless of the size of your clients, or the complexity of their needs, Sage has "an app for that." Sage has accounting solutions for pretty much any company size or complexity in the SMB market, and many of their high-end products are popular with enterprise-size companies as well.
BusinessWorks is one of those accounting systems that has been around a very long time. Originally acquired from Manzanita Software years ago, it was actually the first accounting system specifically developed for Windows. Over the years, it has changed considerably, and is currently a solid modular system for companies with up to 45 concurrent users.
Along with the system manager, which is required, BusinessWorks modules encompass GL, AP, AR, OE, job cost, payroll, cash management, integration with Microsoft Office, and a link to Sage's Act! CRM software. The software can also integrate with Crystal Reports and F9 Report Writer if your client needs to generate an ad hoc or specially formatted report. There are a wide variety of standard reports through the entire system, and these can be extensively customized with the included custom report writer and spreadsheet creator. Navigation is simple, and you or your client can create shortcuts for frequently used options or tasks. You can also specify tasks to be launched at start-up, which is useful when your client has a staff member assigned to a single task such as order entry.
Like many accounting applications aimed at the mid-market, BusinessWorks 2011 is not a retail product. It's only available through a reseller, who will also provide installation, configuration and support. But we had no trouble whatsoever in installing it ourselves. BusinessWorks uses Pervasive SQL as its database foundation, and installed and configured it automatically.
BusinessWorks 2011 is a mature product, so new features for this release are relatively minor, increasing ease of use for many data entry tasks, faster searches in applications like payroll and purchase orders, and faster and easier creation of new reports from existing templates.
And if BusinessWorks 2011 isn't going to work for a particular client, Sage gives you and your client a basketful of other accounting systems to choose from.
Peachtree Quantum by Sage
Sage North America
When it comes to off-the-shelf accounting software, Peachtree Accounting may not boast as many users as QuickBooks, but its share of the market is nothing to be ashamed of. And, as with QuickBooks, Peachtree users often find themselves in the position of needing to step up to a mid-range product.
Peachtree has taken essentially the same approach with Quantum as Intuit did with QB Enterprise Solutions. The interface is very close to Peachtree Premium Accounting, as is the feature set. Premium Accounting's concurrent number of active users tops out at five. Quantum uses a different database foundation, Pervasive SQL, which both speeds up transaction processing times when there are a large number of transactions happening, and ups the user limit to 40, which will probably be the underlying cause for that greatly increased number of transactions.
That's 10 more users than QuickBooks Enterprise Solutions offers, a situation that is sure to be remedied in the near future. At this user level (30 to 40 users), both Intuit and Sage provide feature-rich offerings that will be usable by midsized companies (up to about 50 to 75 employees), or as a divisional accounting system that flows into an enterprise system like SAP.
Quantum is slightly more expensive than Enterprise Solutions (the 30-user Enterprise Solutions is $8,000, while the 30-user Quantum is $10,150), but it's more likely that the decision to go with Quantum, rather than Enterprise Solutions, will be made on the basis of a user's current accounting system, how much flexibility they need in inventory costing methods, and if they want Crystal Reports and/or easy integration with Sage's Act!
As with QBES, Peachtree Quantum can be self-installed by you or your client. It will upgrade an existing version of Peachtree Premium Accounting in place if it exists, making the step up a very simple chore.
If you're starting from scratch, the software doesn't require a dedicated IT professional to install and configure. The Pervasive SQL database is installed and configured during the install phase, which keeps you from having to wrestle with SQL set-up and configuration, which is very often a difficult task.
The application automatically installs and configures the Pervasive SQL database (which is a special version configured specifically for Quantum). This eliminates the complex configuration that is sometimes necessary when using an application based on SQL. Quantum comes on three discs. The first is the accounting system, the second installs Crystal Reports 2008 if desired (Quantum can be used without installing Crystal Reports), and a third disc contains training videos, a nice touch.
Peachtree Quantum is a good choice for your clients who already use Peachtree Premium Accounting and are bumping up against the product's limitations. It's also a good first choice for a company that already has five or so staff that will need to access the different system components.
Ted Needleman is senior director of the Technical Services Division of Industry Analysts Inc., an independent market research firm and testing laboratory. He was previously the editor-in-chief of Accounting Technology, and writes frequently on software, hardware, and technology-related subjects.
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