It used to be easy to define entry-level accounting software -- QuickBooks, Peachtree, and MYOB pretty much covered it. That's far from the case now. With microbusinesses becoming ever more popular, and new accounting and bookkeeping applications based in the cloud, your clients have a wider range of options.

A changing definition of entry-level accounting is also altering the landscape. Many small businesses don't need, or even want, the complexity that is inherent in most entry-level accounting applications. Rather than estimates, statement and inventory, sometimes all your clients need is an application where they can send out invoices and record payments, with reports that are limited to what's billed, what's owed, and general ledger and profit and loss reports. In other words, basic bookkeeping.

To be honest, that's not far from where we started out 30-plus years ago, with electric checkbook software for the Apple II, Commodore Pet and 64, and the TRS-80. But the electric checkbook evolved into One-Write Plus, then Quicken, and as time went on, the software became more and more capable and more and more complex.

But limited functionality, even if that is what your client really needs, doesn't always come with a small price tag. It costs money to produce media and packaging, generate user documentation, and distribute the units produced. And the ones that aren't sold are either returned to the distributor, trashed, or sold at deep discounts.

That's one of the reasons that electronic distribution has become so popular -- there are no physical manufacturing or distribution costs, and no surplus units of the software. Of course, the two most popular vendors of accounting software, Intuit and Sage, still offer physical units of their software. Point of sale is still an important sales channel for them, and that implies boxed software on the shelves of office and big box superstores.

But even here, it's not unthinkable that the future will see a change even in the physical distribution of accounting software. Redbox, which produces DVD and Blu-Ray movies on demand, has thousands of units in supermarkets and other locations. The Redbox DVD on-demand model doesn't need a lot of fiddling to be adapted to producing application software discs on-demand, with no need for large shelf space or inventory. It doesn't take much to imagine being able to pick up a DVD for QuickBooks or Sage while shopping at a nearby supermarket. Indeed, many supermarkets already carry computer supplies and even printers.



One big game changer that's emerged over the years is the proliferation of online bookkeeping products for both individuals and small businesses. For the most part, these provide the essentials that many of your smaller clients need, such as invoicing, a general ledger-type report, and possibly even check printing capability. With many clients moving rapidly to making payments electronically where possible, the ability of most of these services to import bank statements and easily classify transactions is only going to become more popular, and in many cases it's going to displace in-house accounting and bookkeeping.

To assist you in helping your clients decide what the best solution is for their needs and circumstances, here's a quick look at six bookkeeping/accounting applications -- three of them the traditional in-house editions and another three available online.

While we didn't look at them, both Intuit and Sage offer entry-level bookkeeping applications online. Intuit's is QuickBooks Simple Start for $12.95 a month (with other online editions available at increasingly higher monthly fees). Sage's cloud-based entry-level product is Sage One, and is priced at $29 a month. For your smaller business clients, one or the other may offer an excellent combination of affordability and usability.

We also didn't look at Outright and Mint, two popular cloud-based offerings. These are really intended to be financial management applications, rather than true accounting systems.

Regardless of whether you or your client(s) choose to go in-house or in the cloud, keep in mind that the trend in the accounting software industry is to move to a subscription-based pricing model. That's true in other application markets as well -- Microsoft is "selling" Office 365 solely as a subscription product.

To some extent, this approach is attractive, since all subscription-based plans include support and upgrades built-in. The downside is that it forces you and your clients to upgrade every year whether you want to or not. Many users are running on accounting packages that are three or four years old (or even older) and are quite happy remaining with their current package.


AccountEdge Pro 2013

Acclivity Group LLC

Sometimes, with companies changing names and product names, it's easy to feel that you're playing the shell game when you are searching for a particular product.

To simplify, AccountEdge Pro was previous called Premier Accounting. And Acclivity Group was the company formed when former management purchased the U.S. and Canadian version rights from MYOB. So though the names (and management) have changed, it's still basically the same company that's been selling accounting software since the early 1990s. So with two decades behind it, it's a good bet that you can have confidence that your clients won't be left high and dry in the future.

The 2013 edition has some new features. Acclivity has added document management, allowing invoices and other documents to support transactions. Add-ins let your client process credit cards.

AccountEdge isn't sold at retail; it has to be purchased directly from Acclivity or one of its resellers. If a client of yours is using AccountEdge Pro, Acclivity will, if you are a CPA or chartered accountant, send you an Accountant's Copy so you can work with their files.


QuickBooks Professional Bookkeeper

Intuit Inc.

It probably doesn't come as news that Intuit's QuickBooks has the lion's share of entry-level packages being used. The 2013 editions are probably not going to lose many users to in-the-cloud accounting, since most of the QuickBooks products are now available in online versions. As in previous years, Intuit offers different editions of QuickBooks for selected vertical industries, as well as editions that vary slightly in features (more features, more expensive).

New this year is the QuickBooks Professional Bookkeeper 2013 edition. Available as either a single purchase or a monthly subscription, QuickBooks Professional Bookkeeper 2013 is similar to the latest version of QuickBooks Pro 2013 but offers several enhancements that a bookkeeper with multiple clients will find useful. These new tools include a File Manager, so the bookkeeper can launch the correct version of QuickBooks that each client uses, and batching capability for invoicing time and expenses. More than a thousand client transactions can be maintained in Excel and batched or pasted into the client's books. The bookkeeper can also work on two different clients' files at the same time.

For those clients that maintain their own QuickBooks files, a bookkeeper can create journal entries and e-mail them to the client for them to post.


Sage 50 Premium Accounting

Sage USA

For years, the two most recognizable names in entry-level accounting software were Intuit's QuickBooks and Sage Software's Peachtree Accounting. An overhaul of the naming across Sage's entire product line two years ago muddied the waters somewhat, but even though the Peachtree accounting line is now Sage 50, it's still basically the same Peachtree software we've known for decades.

As in its previous name incarnation, Sage 50 comes in several additions. These add features as the edition increases in price. Sage 50 is also available in a variety of vertical editions, and, as with QuickBooks, an Accountant Edition is available so that you can work on your clients' books, making adjusting and closing entries remotely. Unlike Intuit's QuickBooks, the Accountant's Edition is only available to members of Sage's Accountants' Network.

At the top of the product line is Sage 50 Premium Accounting. This edition is available in one-user, three-user and five-user versions. Just as Intuit offers an Enterprise Solution for companies needing dozens of licenses, Sage offer a Quantum Edition for your clients that need to license more than the five-user maximum that Premium Accounting permits.

Sage 50 is a mature product, and for 2013, the software has received only minor polishing. This year, Sage is pushing its service plans for both the client and the accountant.

Some of what Sage claims as features in Sage 50, such as Business Analysis, are actually add-on packages with their own subscription fees, but having a very large choice of add-ons gives your client a lot of flexibility in customizing the accounting system to their own needs.




One interesting phenomena that's emerging from cloud-based accounting is that you can, apparently, get something for nothing. And it's definitely worth more than you paid for it. Freshbooks is a good example, but other cloud-based applications also often offer a free level of use.

All of the price levels of the application, which vary from free to about $40 a month, offer almost the same features, though the paid versions toss in a few additional ones. But even with the free version, your client gets the ability to track expenses and time, and print a nice selection of reports. Invoices can be e-mailed or printed and sent by regular mail. Your clients can track the payments that they make offline as well as electronically, and Freshbooks even provides multicurrency capability. That's a lot of application for free.

Of course, there's a catch. In this case, it's a limitation on how many clients you can have (three for free), how many additional staff can access your Freshbooks customers/clients (none), whether you can access automated bank imports for expenses (no), and project management features (none). All of these change to some extent as the monthly cost goes up.

Still, if you have a client (or a practice) that is limited to three or less customers, the free version of Freshbooks may be all you need.



Kashoo Inc.

Based out of Vancouver, Kashoo is a good alternative, for the most part, to performing accounting/bookkeeping in-house. It lets your clients perform the standard business tasks like invoicing, recording purchases, downloading bank statements and reconciling them, and producing the most-used reports, including financial statements. Your client can print checks or record electronic payments. Kashoo can even import from Freshbooks, which many people already use for invoicing.

Other features we liked are a very nice and informative dashboard that's customizable to your client's information needs, and the ability to export the client's data at any time, should they want to switch to another accounting system or just perform additional analysis using Excel.

As with most cloud-based applications that offer a free version, there's a kicker. You'll never get billed with the free version, but you (or your client) are limited to 20 transactions a month. For those of us who plan on continuing with the mortal coil, the monthly cost of Kashoo isn't going to an unbearable burden. Both the $16-a-month plan and the $20-a-month plan offer the same features and the same unlimited transactions. The difference in price reflects how you are billed. If you pay for a year at a time, the price works out to $16 a month. If you pay month by month, the cost rises to $20 a month.

That's really not a lot for what your client gets. And if you have clients who use Kashoo, you can enroll in the Kashoo MVP program where accountants can add their clients' businesses for $12.99/month per client business with no maximum, a branded login page, and lots of goodies like training and Web and iPad apps.


Wave Accounting


There must be something about the air in Canada that encourages the development of accounting software. Simply Accounting was developed in Canada and is still one of the most popular in-house accounting applications, though Sage has renamed it Sage 50-Canadian Edition (so you don't confuse it with Sage 50 formerly Peachtree Accounting). Kashoo (above) is based in Vancouver, while Wave is based in Toronto.

Regardless of geographic location, Wave is a terrific bargain. Not only is it good for a variety of small-business types, but it's mostly free. Invoicing offers a lot of flexibility in formatting and branding, and invoices can be printed or e-mailed. Your client can issue estimates, and work in multiple currencies. All of this is free regardless of how many transactions are performed per month.

Accounting is double entry, though this is not really evident to the user, and can draw transactions from bank statements, credit card accounts, and other sources, minimizing data entry. Wave produces the most common reports, including financial statements and various aging reports. And these can be viewed online, or created in PDF format for e-mailing or printing.

So where is Wave's revenue stream coming from? With some "free" services and Web sites, the revenue stream comes from ads placed on the site, sort of a digital form of controlled circulation. But Wave doesn't have ad revenue, or ads. What does provide the revenue stream is its Payroll service, which isn't free. It also isn't very expensive, and is based on how many employees are being paid in a pay period. The first five are billed at $5 each and the next 14 are only $2 each (per pay period). Direct deposit is available.

Most of the online/cloud accounting services offer a free trial. Wave offers a free everything (except payroll).



Xero Ltd.

One of the major benefits of using cloud-based accounting and bookkeeping is that you can access the application from anywhere. That works both ways. The application supplier can also be located anywhere - in your backyard, or, like Xero, starting out in New Zealand. As long as the application suits your client's needs, it doesn't really make a difference where it's physically operating. But offering an application to the entire world means that the application has to be designed to be suitable for a large number of different geopolitical areas. Fortunately, Xero seems to have done quite well in this area.

One thing that you may find very attractive is that Xero provides basic capability in areas including payroll and inventory. To be honest, these capabilities are fairly limited -- you have to calculate each payroll check by hand and enter the amounts from gross to net.

Xero's real strength is its long list of add-on partners. If your client needs more elaborate payroll, they can get it through ADP while still doing other accounting tasks in Xero. This is true in a wide variety of areas, and there are usually multiple suppliers in areas such as expense tracking, CRM, inventory and more. Unlike some of the other cloud-based accounting applications, Xero can print checks using easily available check stock.

Pricing starts at $19 a month; at that price, your client can send five sales invoices, pay five bills a month, and reconcile 20 lines of bank statements. More realistic is the $29-a-month plan, which raises those limits from five to hundreds. The $39 plan provides multicurrency capability. If you think that a cloud-based solution might be viable for a client, Xero is worth taking a look at.




Yendo is based in Ireland. That emphasizes the way the Internet makes physical location less important, but it also points out some potential problems in set up and use. While there are a lot of similarities in accounting and bookkeeping throughout the world, some things are done differently in other countries. For example, in setting up Yendo, you can put in sales tax or value-added tax rate. In most places in the U.S., this is not a simple single rate, which diminishes the usefulness of this particular feature. And Yendo does not let you generate checks. You can enter purchases into the system, but you need to make them outside of the software. Again, this is just an artifact of how checking is handled in different countries.

On the plus side, Yendo does provide a modest CRM capability, which is nice for your clients who can use it. And reports are plentiful and easy to generate. By setting you up as a user, your client can allow you to access their transactions and general ledger. And your client (and you) can access Yendo on a laptop, smartphone or tablet, from anywhere there is an Internet connection.

At a base price of $9 a month for a single company and one user, Yendo may be a good choice for some of your smallest clients. But as with all cloud-based entry-level accounting, there are some compromises that need to be made.

Ted Needleman writes frequently on software, hardware, and technology-related subjects, and was previously the editor-in-chief of Accounting Technology.

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