Software market remains strong for low cost accounting

by Ted Needleman

In what is good news for the many in accounting who advise very small businesses, the market for low-cost accounting software remains strong.

Many small businesses have still not computerized, or have only partially computerized. A considerable number of small business owners still prepare their bills and statements using Excel or Word, rather than an accounting package. Also driving growth are businesses that have outgrown their existing accounting software or are just unhappy with the way their existing software operates.
Accountants and consultants are well aware of the concept of "starter" accounting systems. Because few users clearly understand what to expect, or what they actually need from an accounting system, it used to be that a large proportion of first-time accounting software users eventually switch packages.This last reason for buying a new accounting package is seen less frequently. That’s not because purchasers are better informed. Rather, it’s because software in this category has become a lot more generic. There are differences between the different packages, but these differences are more in the area of interface and use than in features and capabilities.

Remarkably, that’s because the vendors in the low-cost accounting software market are among the most innovative in the industry. While the software may not cost very much, that doesn’t mean that your clients are being shortchanged on features and capabilities. Many of the features that we’ve come to take for granted in accounting software at any price level, such as drop-down menus and adding accounts on the fly, were pioneered by these vendors.

In fact, in a feature-for-feature analysis, it’s not uncommon to find that a $300 accounting package has more functionality and ease of use than a $3,000 package. What is different is the ability of the more expensive package to work effectively on a greater scale, with more users, multiple divisions and even distributed over multiple computers.

The most important factor in choosing any accounting package, is in understanding the way the business in which the software will be installed actually works. An application that interrupts, rather than enhances, the natural workflow of the business will not be considered successful by the owner or the employees. That’s still an area where firms can generate revenue and really assist clients.

How we tested

We tested six of the newest packages. Simply Accounting and Peachtree Complete Accounting were in beta form when we first started looking at them, though these new versions were scheduled to be available by the time this story appears.

We tested each package on the same platform Ð a 1.9-GHz Intel Pentium 4 with 1GB of RAM. This is much more computer than any of the low-cost accounting packages actually require, though you or your client will need at least a 266-MHz Pentium and Windows to run any of the software we tested. We also tested each under the Windows XP Professional operating system, and experienced no compatibility problems. We did not test any network capabilities of the software.

We looked for ease of set-up and use, and operating features.

Simply Accounting Pro Version 9, Accpac

Simply Accounting is, with the new Version 9 release, available in several versions. We reviewed Simply Accounting Pro - the high-end of this line. The Pro designation indicates that the software includes time and billing management features, following in the footsteps of the Pro version of QuickBooks and the Complete version of Peachtree.

The standard version of Simply Accounting, which is pretty much the same software without time-tracking features, is much less expensive at $39. This version includes multi-media help, which actively takes you or your client through the process of various tasks.

Accpac also has a very aggressive accountant’s program, so you can get a copy of Simply Accounting, without the multi-media feature, for just a $10 shipping and handling charge. This lets you take a close look at the software to determine how appropriate it is for your clients.

Simply Accounting was originally the product of a Canadian company, Bedford Software. This company was purchased many years ago by software giant Computer Associates and folded into the Accpac division. The software is still tremendously popular in Canada, and has features, such as the availability of Canadian payroll and taxes, which, not only continue its popularity with our northern neighbor, but make Simply Accounting very attractive to companies that conduct business across North America.

This latest Version 9 release is a true multi-currency system, so it’s just as viable for use if your client is doing business with a southern neighbor as it is with a northern one.

Given the very reasonable price, Simply Accounting is a comprehensive application. The General Ledger is bolstered by accounts payable and receivable, and there is a very serviceable payroll, and even inventory and job costing. In Version 9, Inventory has been enhanced with bill of materials.

The new time and billing functionality is somewhat rudimentary, with time billed out on a unit rate. This requires that flat-fee billings be entered with a unit rate that totals the fee, and a unit of 1. On the upside, you can enter both actual and billable time, and the time entry screen has a timer that can be used to establish the amount of time spent on the client or customer.

Another nice feature is the Business Manager Ð a central screen where you can see the current calendar, any notes that you may need to leave and a set of tabbed screens with memos, payments due and other items of immediate attention. These business summary screens, which seem to be the next hot thing in accounting software, appear in different formats in several of the packages we reviewed, and are a terrific idea.

Simply Accounting has always been an excellent entry-level accounting system. With a lower price and enhanced feature set, Accpac is making it even more attractive.

DacEasy Accounting for Windows Version 11

Best Software

Best Software owns a lot of the business software market. Along with the former State of the Art, Best Software also owns Peachtree, TimeSlips, BusinessWorks and DacEasy. Because some of these vendors had competing products, product positioning has become a high art within the Best group.

DacEasy is one of the most re-positioned products. Back in the early days of personal computing, DacEasy was one of the first vendors to offer an affordable and comprehensive accounting application. The original DacEasy was not a modular accounting system. Rather, it was one very large application which offered general ledger, accounts payable, accounts receivable and inventory.

The price tag for all of this was $89, an amazing price when you consider that many accounting software vendors were selling individual application modules for hundreds, or even thousands of dollars per module.

In the intervening years, DacEasy has been steadily refined and its price has naturally risen. It had been priced at as much as $299 per module, but its new version is priced at $299 for an entire package that includes General ledger, Accounts Payable and Receivable, Inventory, Purchasing, Billing, Fixed Assets and Custom Report Writer all in the same box. The new price tag seems to put it in direct competition with another Best solution Ð Peachtree Complete (see as follows).

DacEasy’s good features and differences from the rest of Best Software’s product line tend to get lost in the shuffle. For one thing, DacEasy still doesn’t include Payroll. That and modules for Point of Sale and Order Entry are options.

Inventory is very sophisticated for a product at this price point. You can set up multiple warehouses; use standard, average or last price costing; do back-order tracking; and perform bill of materials. If you have clients with hefty inventory requirements and a tight budget, DacEasy is one of the first low-cost accounting programs to consider.

We also liked many of DacEasy’s other features. As with several other low-cost programs that we tested, DacEasy has a central Business Center screen, where a summary of the business’ information is displayed. Most users will benefit from this.

Other modules are all nicely done, and offer a pretty standard array of features and reports. DacEasy provides good financial graphics, and a lot of customization capability.

As with most of the low-cost software reviewed here, DacEasy includes excellent integration with Microsoft Office, so you can use Word and Excel to extend the capabilities of the accounting package. A custom report writer is also provided.

QuickBooks Premier 2002: Accountant Edition, Intuit

It’s hardly any secret that Intuit wants accountants’ business. That’s evident in its ownership of Lacerte and Pro Series tax preparation products, as well as its various accounting industry-oriented advisor programs.

This year, in addition to rolling out several new levels of its QuickBooks general business market products, Intuit also introduced a special Accountant Edition, which is the product that we tested. The Accountant Edition is a special-purpose version of the new QuickBooks Premier line.

With the introduction of Premier, Intuit is not abandoning the other versions of QuickBooks. Your clients will still be able to purchase QuickBooks Basic and QuickBooks Pro.

All three product lines benefit from a number of enhancements. One of these is that Intuit is actively and aggressively pursuing integration with third-party products, which will make the various QuickBooks offerings more industry-specific.

Intuit has opened up the file logic to developers in these other areas, and has created a QuickBooks Solutions Marketplace where accountants and their clients can shop for more vertical adaptations of QuickBooks. These aren’t true vertical market applications, but with better and more seamless integration of third-party products, many of your clients will get the best of both worlds Ð QuickBooks’ ease of use and reliability, and a more appropriate approach to their specific business.

The new Premier 2002 is similar in most ways to the familiar QuickBooks Pro. But it provides more analysis tools and data entry options, a higher level of password security options and the capability for a future Remote Access enhancement. It is also somewhat more expensive, costing $499 compared to Pro’s $279.

The real news, however, is the availability of the Accountant Edition for this year’s Premier 2002. This new edition is keyed especially to accountants’ who have clients that use QuickBooks. It provides a special Accountant Navigator that makes it simple for the accountant to find those reports and entry screens that he uses most often, and adds password protection to the closing date, so that this important function can be made more secure.

The General Journal is also enhanced in the Accountant Edition, with automatically numbered entries, repeatable memo fields and a one-click reverse journal entry feature that will get a lot of workout in many accountants’ offices. You can also import and export report templates, which makes it easy for you to standardize the output from various clients who use QuickBooks. QuickBooks will also be offering an off-site data storage and backup facility as a subscription service.

Many accounting firms do have at least several clients that use QuickBooks. Using the Accountant Edition will make it easier for your firm to service these clients.

MYOB Plus for Windows Version 11, MYOB

MYOB’s first MYOB accounting product was for the Macintosh computer. It wasn’t until years later that MYOB for Windows was introduced and became the company’s mainstay product. Still, MYOB never forgot the platform that gave it its start. There has always been a Macintosh version of MYOB available, and two new Macintosh accounting products, MYOB AccountEdge and MYOB FirstEdge, were introduced late last year. AccountEdge is the Mac equivalent of MYOB Plus for Windows, while the new FirstEdge is for Mac owners who need an even more entry-level accounting product.

As with several of the low-cost products we reviewed, MYOB Plus is built around the analogy of a card file. There are cards for customers, vendors and employees. These cards hold history information and can be used for cross-application tasks, such as bulk mailings. Previous revisions have kept MYOB competitive with products from other vendors in this same lower-cost price class.

You can save forms, invoices and statements in Adobe PDF format, and e-mail them to customers Ð a nice touch in these days when terror scares make the mail less reliable and timely. As with a growing number of products, MYOB now supports downloadable bank statements, which can save a considerable amount of time when doing bank reconciliations.

Recent versions of MYOB Plus have incorporated Microsoft Office connectivity, so the current version makes it easy to use MS Word for mass mailings and MS Excel for additional financial analysis. Many of your clients will not need to use this functionality, however, as the reports and other printouts in MYOB are highly customizable. MYOB for Windows is also open data base compliant, so it works with Microsoft Access, Excel and Crystal Reports.

The most noticeable difference in MYOB Version 11, however, is the user interface. MYOB was one of the pioneers in task-oriented visual interfaces for accounting software. This new Command Center retains those lessons and experiences, but improves upon them. Icon buttons across the top of the window panel are labels Accounts, Banking, Sales, Time Billing, Purchases, Payroll, Inventory and Card File. Click on any one of these, and a flow chart is displayed directly below. Click on a flow chart task, and a lower-level flow chart appears until the requisite task is selected. This makes it easy for an unsophisticated user to find exactly what they need to do next.

MYOB provides a serviceable payroll and inventory. Inventory can be maintained on average or last price, or you can customprice an inventory item, which is helpful for those clients who use actual or specific item costing. Time and billing capability is also offered in MYOB Plus for Windows and includes an on-screen timer.

Complete Accounting 2003 Peachtree

Peachtree has always been considered by many accountants as a "real" accounting product, because it has always complied with the double-entry model. You can switch between interfaces, using the easy task-oriented Navigator or a more traditional accounting interface.

Previous years have added many of the features and functions that underscore the "Complete" in the product’s name. The inventory and payroll are more than serviceable, and for many more complex clients, their robustness will prove an attractive incentive.

Peachtree and Intuit were both quick to offer time and billing capability in their higher-end offerings. Peachtree’s time and billing is very comprehensive, handling both hours and expenses. Job costing is available, and the tools for creating estimates for jobs and projects are excellent.

The vendor has offered fixed assets as a part of Peachtree Complete Accounting for the last several releases. The newest edition Peachtree Complete features the FAS, one of the market’s leading fixed assets products, which is developed by another division of Best Software.

If your client can use the fixed assets management capabilities, this is an excellent extra feature because the PAS in Peachtree Complete is available in different versions and price points to match users’ specific needs.

Peachtree is also concentrating on ancillary products that further enhance the core Complete Accounting product. These include Peachtree Contact Manager, which is built around a custom version of ACT!, and a new Peachtree Online Backup service, that lets your clients store their valuable backup data off-site.

Many of these features were available in the last version of Peachtree Complete Accounting. The enhancements for this new release include: Drill-downs have been added in several areas, and new screens have been added in some areas, such as credit memo entry. You can now add more custom data to many screens, including Inventory, and the inventory record now has additional tracking information including SKU, Weight and Buyer ID.

There are several new features that will appeal to both old and new users. Peachtree has added Direct Deposit to the payroll system. This lets employers offer this function as an employee perk. You can easily generate financial statements on a daily basis, and there is an improved QuickBooks conversion to make it even easier for former QuickBooks users to move to Complete Accounting.

Peachtree

One-Write Plus Release 8

You might want to think of One-Write Plus as a classic product. It is one of the least expensive applications in this low-cost group, and the version that we tested, Version 8, was introduced in August 2000. That’s almost two years ago, which is a long time for a software product to go without an update. This usually happens when a product is at the end of its life, which Peachtree assures us is not the case with One-Write Plus. In fact, an update is due sometime later this year, or early next.

The reason for the length of time between One-Write Plus updates is simply that there has been little pressure put on Peachtree for such an upgrade from the product’s current user base. And the new customers for One-Write Plus will be quite well served by the current release of the software.

Based on the manual one write bookkeeping system, where writing a check or invoice on carbon-paper backed forms also makes a journal entry, this popular package has been around for more than 15 years. Over the years, One-Write Plus has received a new user interface, and expanded functionality, but has still retained the basic fill-in-the-form approach that has made it an endearing favorite. In fact, many of the more "sophisticated" accounting products have recently embraced a similar approach.

Setting up One-Write Plus is very simple. The core of the software is Accounts Payable and Accounts Receivable, and client, vendor, and employee information is entered on "cards" Ð forms that emulate a manual record-keeping approach. One-Write Plus provides a basic computerized payroll, and your client can enter and maintain the tax tables if they wish. Version 8 of the software adds some additional features in this application, such as vacation and sick-time tracking. There’s even a very basic inventory and simple financial graphics.

In fact, many of the clients who would use some of the more advanced features in One-Write Plus will probably forgo the product in favor of a somewhat more upscale offering, such as one of the other packages reviewed here.

Just about every accounting practice has a couple of clients that would benefit from One-Write Plus. These are the really small businesses, perhaps home-based, that currently use a manual one-write system, giving your practice the journals to post and generate financial statements. Many of these businesses cost more to service than the revenue that they generate, a situation that can be remedied by getting them up and running on One-Write Plus, and charging them the same fee to make the adjusting entries every month or quarter.

For the price, One-Write Plus may not have all the bells and whistles of some of the other packages detailed here (though it does have some of them), but it’s a great value.

Outsourcing options

The six packages that we tested are among the most popular in this price range. There is a viable alternative, however, though it is a bit more expensive. The application service provider channel for accounting software is proving to be one of the more successful attempts in this service area.

While e-Ledger has come and gone, there are two accounting ASPs that have been more successful. Perhaps the most successful vendor in this area is Oracle’s Small Business Suite. This enhanced Internet-based accounting system is provided by NetLedger, which recruits accounting professionals and other business advisors as product consultants and resellers.

Oracle Small Business Suite’s price, starting at $1,200 per year for a single user, really takes it out of the low-cost category, but many small businesses will find this offering, which includes accounting, sales force management, customer support and even a Web site where employees can access payroll information, a very attractive alternative to doing it themselves on in-house PCs. With an ASP model, NetLedger does all of the updates, including payroll tax tables.

Intacct Corp. is another ASP in the accounting market. This vendor sells its services strictly through a reseller channel, so if you have clients where the

Intacct service makes sense, you might want to consider becoming a partner. Pricing is dependent on the level and amount of services that are used, but can be as little as $10 to $20 a month for a single-user entity.

Both of these online ASPs are more expensive than any of the low-cost in-house packages we reviewed; however, both offer one advantage that none of the six, in-house packages that can provide; almost infinite scalability. With both of these ASPs, you can go from one user to 100 users without having to reinstall the software or undergo any significant amount of reconfiguration. This makes the ASP approach very attractive to some of your clients, such as start-ups, that expect very significant growth within a short period.