It used to be pretty easy to define "entry-level" accounting software. It was either available at retail, like QuickBooks and Peachtree, or direct from the vendor and under a certain price point, like MYOB.
It's not quite that easy these days. For one thing, a growing number of accounting applications are appearing in the cloud. Some of these are tied with familiar PC applications; some are only available in "the cloud," and not on in-house PCs. Additionally, cloud-based applications like Mint and Outright offer pieces of the accounting puzzle, rather than a more complete whole, but do this at very low, or even no, cost.
As an accountant who has clients to advise and often support, it means that there are more choices than ever. It also means that you need to exercise even more caution than was necessary in the past. Hitting that "sweet spot" where the software is a good fit for the client's needs is getting harder.
On one hand, accounting software, even at the entry-level, is becoming ever more sophisticated and feature-laden. This is both a boon and a bane. The boon is that clients can use the software that they are familiar with for a long period of time before having to upgrade to a higher-end package, which has a completely different interface, features and database. The bane is that many "entry-level" packages are so feature-rich that unless you or your client knows how to turn off features and make them disappear from the user interface, training new users and daily operations become much more difficult.
The fact that your client can buy QuickBooks or Sage Peachtree Accounting off the shelf at Staples or a big-box store often gives a false impression that these applications are easy to set up and configure. Granted, they are almost self-installing, but fine-tuning any accounting application to a specific client's needs and operations requires knowledge of both of these on the client side, and an in-depth understanding of the accounting application on your end.
RISE IN BUSINESS VENTURES
And while the recession of the past several years has taken a terrible toll on businesses of all sizes, it has also spawned explosive growth in micro-business ventures by many who have lost their jobs, or decided to supplement their income. Many of these are "one-man" (or -woman) bands, but still need to keep records, and frequently perform many of the same business operations as business entities thousands of time larger. With businesses of this kind, walking the thin line between features and usability is a must.
The recession hasn't been particularly kind to the accounting software business as well. Intuit and Sage have most of the small-business market for accounting software to themselves. When it comes to retail off-the-shelf software, any other software vendor gets to share whatever crumbs are left over.
This has prompted a number of interesting developments in this segment of the market. Perhaps one that sticks out more than the others is the re-emergence of Simply Accounting in the U.S. market. Simply Accounting was developed in Canada, and enjoys the enviable position of being one of the most popular accounting packages in that country. A few years ago, Sage decided to bring out a Spanish-language version of the application, geared to the vast number of Latino-owned businesses. At the moment, this appears to have been a very savvy marketing decision. While the Spanish version of Simply Accounting is not included in this roundup, it is very much worth your consideration.
Micro-businesses require some thoughtful consideration before making a recommendation. But so do businesses that are poised for growth. One great failing with entry-level accounting is that it is just that. For the most part, however, entry-level refers to the number of simultaneous users that the software supports. All four of the packages included here support multiple users.
None of the entry-level packages supports more than a handful of users. In some cases, this is a licensing issue; in others, it's simply a function of the load that the software imposes on the network.
If a company's needs exceed the capability of the particular package it's using, then an upgrade is going to be necessary. Another reason that companies upgrade is that they require the ability for more staff to be able to simultaneously access the application.
In the first case, if more functionality is required, your client will probably have to migrate to another package, and very possibly to another vendor. If it's a matter of needing the ability to support more users, Intuit and Sage offer "Enterprise" versions of their products that support considerably more users than the standard versions. If it's a network load situation, your client may be able to just upgrade to a more powerful server.
As software becomes more generic, it also becomes more feature-rich. The differences are primarily in the specific functions offered, rather than in the way the software operates or in the reports provided.
The two major vendors of accounting software in this market segment, Intuit and Sage, have both added enormous functionality and customizability over the years, to the point where vertical editions, third-party add-ons, and innate customization features permit a very close tailoring to your client's way of doing things. This makes deciding which package to recommend for a specific client a more arduous task. In many cases, it boils down to the requirements of a specific function such as inventory or payroll.
HOW WE TESTED
We did not examine any of the cloud-based accounting software offerings. There are a growing number of these, and they are well worth your consideration, but also worth a roundup of their own.
We did review four applications that could be considered "entry-level." Two of these are retail products - you can purchase QuickBooks and Sage Peachtree Accounting off the shelf. The other two, Acclivity AccountEdge and OpenGate Small Business Software, are not retail products.
All four of these products were installed and tested on the same machine - a Lenovo X1 laptop. This is an Intel second-generation i5 based machine, and is of the same class that you would probably take to a client, or use on your desk.
AccountEdge has had an interesting history. Originally the software was developed by MYOB as a Mac application. It was ported over to Windows, and today, renamed from Premier Accounting, it's available for both platforms. The original developer was purchased by an Australian group of investors, and the U.S. operation was spun off, then purchased by Acclivity. In previous years, the software was available in several editions, but currently AccountEdge is just a single product, and at $299 includes a very comprehensive set of sub-ledgers, including inventory and payroll.
New features include mobile support for iPads and iPhones, a time-tracker add-in for your clients who bill by time, retainer and progress billing functionality, and a workable payroll. Acclivity offers a payroll tax service, so your client won't have to modify tax charts or do calculations. Credit-card processing is another option. Inventory offers kitting and bill of materials, and the software provides bank reconciliation, in addition to other bank-related operations such as writing checks and making up deposits. Multi-user network licenses are available if your client requires them.
Installing AccountEdge is fast and easy, and Acclivity provides about 100 editable chart-of-accounts templates to ease the task of creating a custom chart of accounts for your client. Reports are attractive, and there's a report designer that lets you customize the existing reports and generate new ones. AccountEdge's user interface is attractive, and nicely designed. We experienced no difficulty navigating around in it.
Given the modest cost of AccountEdge, it really offers a good value. An accountant's copy is free for the asking, so you might want to take Acclivity up on its offer and see if AccountEdge will work for any of your clients.
QuickBooks Premier Accountant's Edition
Unless you've been in suspended animation for the last decade or so, it's hard to imagine that you haven't become aware of QuickBooks. In this particular market segment, Intuit has the largest share. There are a number of reasons for that.
One major reason is that Intuit still relies on retail sales. That's not to say that the upgrade market isn't a major source of revenue for them, only that they aren't indifferent to the income stream generated by having QuickBooks on the shelves of both office supply chains and the big-box chains.
But another reason for QuickBooks' market success is their Accountants' Channel support. Intuit was quick to recognize how influential accountants are in the choice of accounting software for their clients, and developed a coherent approach to gaining accountants' support early on.
QuickBooks and its only real retail competitor, Sage Peachtree, are very similar in most respects, but each approaches the market from a different perspective. QuickBooks has always been more oriented towards the non-financial user, while Peachtree evolved from a firmly accounting, rather than bookkeeping, base.
Still, today both have exceptional capabilities as accounting systems. Additionally, both vendors have a line of editions ranging from the very basic to extremely sophisticated. Intuit has done a slightly better job in supporting the more basic user than Sage, and has gone further with its online efforts, at least to the present time.
On the other hand, QuickBooks still lacks an included payroll system, and offers somewhat more limited inventory features than Sage Peachtree does.
Both vendors offer an Accountant's Edition, and the QuickBooks Premier 2012 Accountant's Edition is what we tested. The Accountant's Edition has the same functionality and looks as the version your clients would use, but includes a number of features of value to you. Functions like client data review, the ability to read client QuickBooks files from prior years' editions, the ability to reclassify transactions in batch mode instead of one by one, and similar tools makes the Accountant's Edition a must for any accountant who has clients using QuickBooks, and is a powerful incentive for an accountant to recommend the software to a client not currently using it.
And while pretty much all accounting software these days can be mapped to various tax preparation packages, transferring QuickBooks balances into Intuit tax prep products, including TurboTax, ProSeries and Lacerte, is fairly painless.
New features in the 2012 edition include an inventory center that consolidates inventory tasks and reports, the ability to see time and billing-related tasks in calendar view, a new lead center to help your clients track sales leads, batched time sheets, and the ability to access report templates created by other QuickBooks users.
QuickBooks supports up to five users. If your client has a need for a greater number of simultaneous users, the Enterprise Edition is available with up to 20 user licenses, but with the same familiar user interface and operations.
OpenGate Small Business Software
Price: Starts at $399
A number of years ago, there were several vendors that made source code for their applications available to the end user, usually for a moderately hefty fee. This let the client modify the application far beyond what even a vertical edition could offer.
A few vendors still offer this option, but they are in the mid-market segment. Intuit and Sage wouldn't dream of offering source code to anyone other than a certified developer. It's just too easy to muck things up when you start playing around down at this level of an application.
OpenGate Software, however, takes a somewhat different approach in its Small Business Accounting. OpenGate is not primarily an accounting software developer. Its main business is in developing and selling tools to be used with Microsoft Access. These include Designer (a database builder) and User Interface, Dashboard, and other tools.
Using their own tools, OpenGate has built a very credible accounting system, with the added bonus that you can purchase the templates and macros that create the application. It's not even all that expensive. The application sells for $399 (single user) and the fully customizable edition is $999. Of course, even though the system is built on top of Access, it's still pretty easy to screw the system up if you don't know what you are doing. On the plus side, a knowledgeable Access developer could really make a very on-target vertical system with this application.
Interestingly enough, OpenGate doesn't make much noise about the core accounting features. Rather, it concentrates on the sales and order capabilities, the purchase order features, and the rich functionality of prospect and customer relationship management, marketing campaign management, and the ability of the software to provide your client with customer support for its own products and services.
That's not to say that accounting itself is ignored, though it is limited to cash basis. The Small Business Software system includes a workable fixed assets, but does not provide inventory or payroll, which may preclude its use in some of your clients.
Business intelligence is an increasingly important feature, even in entry-level applications, as it gives the user a quick overall snapshot of important areas of their operations. OpenGate's system includes a fair number of dashboards, and it's not difficult to create custom ones if needed.
Installing Small Business Software is a bit more involved than the other three packages included in this roundup, and a typical client would probably defer this task to you. The user interface of the application also has a somewhat different look than you might be used to, though we didn't have any trouble with data entry or navigation.
OpenGate's Small Business Software isn't going to put a major dent in Intuit or Sage's sales. But it's an interesting approach if your client needs more customizability than what is offered in a stock retail product.
Sage Peachtree Premium Accounting
Despite numerous name changes over the years, Peachtree Accounting is one of the longest lasting accounting products on the market, having been available since 1985. Since its acquisition by Sage Software, the name keeps changing. Last year it was Peachtree by Sage, this year it's Sage Peachtree, and at the last Sage Insights conference, Sage announced that it was moving towards a uniform numerical branding method, so next year it might be Sage 50 Accounting.
As confusing as all the name changes may be, the underlying product is still Peachtree Accounting. As in previous years, Sage and Intuit trade off between introducing new features and catching up with the new features their competition introduced last year.
Sage and Intuit take slightly different approaches to this segment of the accounting software market. One of these is the importance that each vendor places on retail sales. Sage Peachtree is available as a retail, off-the-shelf product, and is usually found pretty much wherever QuickBooks is sold. But Sage has said that it places somewhat less importance on the revenue stream produced by new retail sales, and more importance on the support, renewal and upgrade revenue streams. Like QuickBooks, Sage Peachtree has a version of the software, Sage Quantum Edition, that supports many more users (up to 40) than the standard edition provides for. But Sage Peachtree has an additional advantage that QuickBooks lacks - an extensive upgrade path all the way to mid-range enterprise-capable accounting products.
Peachtree Premium Accounting 2012 also provides several features that are not found in QuickBooks. Peachtree has always offered a more extensive inventory capability, with more costing methods than most other entry-level applications provide. Peachtree Premium also includes a payroll module, though, as with QuickBooks, tight integration with payroll service bureaus is provided for those clients who don't wish to prepare their payroll in-house.
For the 2012 edition of Premium Accounting, Sage has increased business intelligence features with its more abundant dashboards; made it easier to copy transactions, rather than re-entering a new one; added a new Vendor Management Center; expanded workflow automation; extended payroll fields; and improved features introduced in prior years' editions.
Unlike Intuit, Sage has pretty much abandoned the very entry-level segment, other than its Simply Accounting product. But both QuickBooks Premier and Peachtree Premium have a lot to offer. The expanded inventory and included payroll offered in Sage Peachtree Premium will make it a better choice for some of your clients who require these subsidiary applications. For other clients, however, the huge user base of QuickBooks users will make it a more attractive choice.
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 tech-related subjects.
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