Before write-up became a popular application, trial balance software ruled the market.The popular ATB (Accountant’s Trial Balance) is probably one of the best-known accountant-oriented applications ever created, even years after it ceased to be marketed.
As computers became ubiquitous in accounting practices, the focus shifted from trial balance to write-up. Still, while not as popular with accountants as in its heyday, trial balance software continues to sell, and deserves a place in the toolkit of many accountants, even if they also use write-up software.
That’s because while trial balance and write-up software have some things in common, such as the ability to print financial statements, they are actually very differently focused.
In many practices, write-up is used to produce a client’s original books of record — a general ledger and all of the requisite subsidiary ledgers as well. Many write-up packages include after-the-fact payroll, and some roll in the ability to run live payrolls for clients. Because of this orientation, data entry is targeted at capturing input from source documents, such as invoices, checks and bills.
Trial balance software is different. In many practices, it has one or more of three major uses. One of these is to produce a set of financials as quickly and with as little effort as possible. A second major use of trial balance is to feed data into a tax prep package — essentially using the application as a data entry and organizing engine. Because batch and summary entries are frequently used in inputting data into a trial balance application, you can input weeks, months or even a year’s worth of transactions in a matter of hours.
Finally, trial balance software is often very useful in conducting audits, both internal to a client, such as in meeting Sarbanes-Oxley requirements, and external, where the accounting practice is certifying the financials. Compilation and review engagements are also a frequent use of trial balance software, as are performing-period and year-end closings.
These types of engagements require features such as workpapers, leadsheets and the ability to attach supporting documents and even scanned documents to the client’s files.
Several of the packages we tested also include engagement management features, and this capability is optional on several of the other tested packages. This is a useful feature to have, especially when conducting a complex engagement.
The centerpiece of a trial balance application is, as you might easily imagine, the trial balance report. Many accounting and bookkeeping packages produce a trial balance, which is simply a summary listing of every account’s period-ending balance. That’s not very useful for many practitioners, so the format of the trial balance report contained in an accountant-oriented trial balance application often provides a more usable format. Exactly what format this report takes varies from vendor to vendor, but generally it follows the format of a working trial balance that lets the practitioner develop adjusting, closing and other necessary entries.
NOT JUST STATEMENTS
Because many practices use trial balance software for more than just grinding out a quick set of financial statements, it’s important to investigate what other capabilities a package provides, and whether these capabilities are integral to the application or are extra-cost options.
One feature that’s very useful in creating adjusting and closing entries is a depreciation/amortization calculator. Lack of this is not always a deal-breaker, as this type of utility is commonly available as a stand-alone, but it’s nice to be able to do a quick calculation to verify a figure.
Leadsheets, workpapers and an engagement manager are also nice capabilities to have, especially if your practice does auditing, compilation and review work. For these types of engagements, or SOX compliance work, being able to attach electronic notes, supply footnotes to the financial statements, and collect and store electronic documents such as e-mails and scanned documents, are all desirable features.
Keep in mind that document management is fast becoming a common feature in many types of financial software, including trial balance. If the particular package that you are interested in does not provide this capability, it’s easy enough to add a third-party application, such as Nuance’s popular PaperPort.
To help in your decision-making, we reviewed five applications, using sample clients and data provided by the vendors. We tested data entry, made adjustments, printed reports, and tried out features such as document management and report customization, if available.
None of the packages we tested require a high-powered PC. In fact, many users will run this application on a laptop, so as to be able to work easily at a client site. Because of this, we tested all of the software on a Lenovo ThinkPad X300, a lightweight ultra-portable with a solid-state hard drive and Windows XP Pro.
We also installed Microsoft Office XP to allow us to test integration and to provide Excel for running Pendock Mallorn’s AFP, which is an Excel-based application. Finally, to test Accounting Relief, which is an online software-as-a-service application, we attached a Sprint/Novatel USB Wireless Ovation Broadband adapter to the Lenovo to simulate wireless Internet access from a client site.
Some vendors have worked very hard to migrate their applications to the Web, usually as a hosted application. AccountantsWorld took a different tack. While initially their accountant-oriented application suite, dubbed the Accountant’s Office, was PC-based, as AccountantsWorld continued to develop and improve the suite components, they were redesigned as Web-based applications. Today, AccountantsWorld provides the entire Accountant’s Office as SaaS. This provides an excellent user experience, while freeing the accountant from having to worry about software upgrades and backup. It also provides an accounting practice with carefree scaling capability. You don’t have to worry about adding hardware as you add clients or engagements.
As with many of the vendors reviewed here, AccountantsWorld has a comprehensive collection of applications that tie together seamlessly. These include practice management, a service-bureau-type payroll, several other applications that accountants will find useful, and Accounting Relief, the application included here.
Accounting Relief has something of a split personality. While it has features that make it a terrific trial balance application, it also has additional features that make it equally useful as a write-up application. This makes it a good choice for practices that need both a trial balance approach for compilations, reviews and audits, SOX compliance, and other such engagements, as well as having to perform client write-up for other clients.
For trial balance use, Accounting Relief provides excellent and very usable reports including trial balance worksheets and a variety of adjusted trial balance report presentations. There is a good amount of customizability available if the included report formats don’t quite meet your needs.
Leadsheets, workpapers and tick marks are important capabilities in many types of engagements, including audit and SOX compliance. Accounting Relief makes these easy to implement and use. When using Accounting Relief as a data engine for tax prep, you can map the output to feed directly into a number of popular tax packages, as this is one area that AccountantsWorld does not produce software for.
It’s not difficult to set up a new client, and the configuration can be accomplished from a blank slate, using provided entity-type templates, copying a similar client, or importing the chart of accounts and balances from QuickBooks or Peachtree. You can also set up Accounting Relief for client data entry, though this feature is probably more used when the application is used for client write-up. A new user interface, just implemented, makes using Accounting Relief even easier than in the past, though we had no criticism with the interface it replaces.
We tested Accounting Relief using a laptop with a Sprint wireless broadband connection. This approach was very satisfactory. Keep in mind, though, that using Accounting Relief requires an Internet connection, and a broadband connection will provide better results than a dial-up connection. If you plan on using the application at client sites, make sure that you will be able to gain sufficient Internet access.
The pricing model makes Accounting Relief very attractive for practices that have a number of different kinds of engagements that would normally call for both trial balance and write-up packages. The $995 per-year fee (when paid up front) lets your practice have unlimited clients, including client access for doing their own data entry. If you just have a few clients or engagements that you want to use Accounting Relief for, you can do so for $99 per client or have unlimited clients for $99 per month on a monthly, rather than yearly, up-front basis.
CASEWARE WORKING PAPERS
CaseWare does not offer a large number of accountant-oriented applications, but those that it does offer, including CaseWare Time, Idea and the Working Papers reviewed here, are all excellent examples of design and implementation.
As with several of the applications reviewed in this roundup, Working Papers is not specifically a trial balance application. Because of its flexible design, it can easily be used for client write-up, as well as generating fast financials.
Still, Working Papers’ feature set, which is based around a document-oriented design including different kinds of workpapers, as well as document imaging and management, makes it a perfect application to use in conducting audits, compilations, reviews and SOX compliance work. The document management capabilities include the ability to store not only documents and scanned images, but also e-mails with a client’s records. Working papers has excellent security, and files can be locked down to restrict access from unauthorized users.
CaseWare also includes Tracker, which is an engagement management utility; optional add-ons, including Connector, CaseWare Scenarios and CaseWare Benchmarking, are available for specific audit and review requirements, as are additional templates and boilerplate documents. Working Papers contains CaseWare Audit, CaseWare Review and CaseWare GAAP Financials to further automate the process of conducting audit and review engagements, as well as generating GAAP-compliant financials.
Working Papers is easy to install and configure, and you can use the sample clients as templates for your own clients, as well as import client data from other applications. Working Papers has excellent integration with Microsoft Office applications, and the optional Connector utility improves this integration even more, so that you can use Office almost seamlessly from within Working Papers. You will also find Working Papers’ user interface both familiar and easy to navigate.
Working Papers works well in a multi-user setting, and notes can be left in a client’s records for other staff members working on the same engagement. A nice new feature with the current release is that adjusting entries are automatically marked with the person who performed them, making it easy to track back entries if necessary.
CCH PROSYSTEM FX TRIAL BALANCE
Suites of integrated software have become very common, especially in the accountant-oriented market space. The two biggest players in this space are the Tax & Accounting business of Thomson Reuters, and CCH, with its ProSystem fx Office suite. Both vendors offer a huge selection of software to choose from. CCH’s ProSystem fx Office has more than a dozen modules. This lets you tailor your set of applications to specifically meet your requirements. Get a new type of engagement? Purchase a new application module. Drop a service from your practice? Don’t renew that module when it comes up for renewal.
An integrated suite also provides the opportunity to share relevant client data between applications. This can speed data entry by avoiding redundant entries, and reduce the possibility for errors.
This create-your-own approach does have a downside, however. With ProSystem fx, Engagement Management and Document Management are optional modules. By the time you are finished configuring a robust and comprehensive system for your practice, the bottom line can be substantial. Think of it like buying a new car: The “starting at” price that you see in the ads and commercials bears little resemblance to the sticker price once the options are added in. Of course, this is just as true of the other vendors that offer a build-your-own approach to a full practice suite.
Unlike some of the other applications in this roundup, ProSystem fx Trial Balance is not intended to serve as a write-up application. CCH offers another module for that purpose, and Trial Balance is optimized for data entry, making adjustments, and generating financial statements and workpapers. “Dynalink” lets you transfer balances into various ProSystem fx tax prep programs, and “Quiklink” lets any changes that you make in a client’s trial balance flow into their tax return.
ProSystem fx Trial Balance is also designed to be used in audit/review engagements, as well as compliance work. The software offers industry-specific leadsheets, classifications and other workpapers, which is a very nice feature, as is the ability to support nonprofits and work with consolidated enterprises. More than 30 pre-defined ratios are incorporated for analytical review, and it’s not difficult to define your own if necessary.
We had no difficulty installing, configuring or using ProSystem fx Trial Balance. License keys were supplied on diskette, but fortunately we were able to locate our USB floppy disk drive. If you know your account information, you can also download the license key over the Internet.
ProSystem fx Trial Balance provides a lot of customizability. You can format statements and reports to pretty much your exact specifications. Many practices won’t bother, however, since with more than 70 reports, it’s not difficult to find ones that meet your needs. Reports are easily exported to Excel for further analysis, or to PDF format for easy e-mailing.
ProSystem fx Trial balance is the most expensive of the five apps we reviewed. At the same time, the $1,350 single-user price is not too much to ask for an application this functional.
TRIAL BALANCE CS
Things have been busy lately at the former Creative Solutions. Last year, it adopted the Thomson Tax & Accounting name of its parent, and more recently, Thomson merged with Reuters to become Thomson Reuters.
Regardless, the CS Professional Suite product line remains one of the most comprehensive accountant-oriented application suites available. As with CCH’s ProSystem fx Office, the CS Professional Suite uses an underlying database that provides seamless integration between the modules that make up the suite. In fact, Creative Solutions was first with this approach, at least in the accounting practice suite area.
The Trial Balance CS application is pretty much just that. It isn’t really appropriate for write-up — there’s a separate CS module for write-up. You also won’t get engagement management or document management features in the Trial Balance CS module. They are available separately as additional CS applications, as is Financial Analysis CS, which considerably extends the amount of analysis that you can perform on a client. If you need some or all of these functions, the $600 base price can climb considerably, and you most likely will need some of these additional modules if your practice performs audit, review or compliance engagements.
Trial Balance CS installs easily, and you can copy a sample client template or import client data from another CS application, Excel or QuickBooks, so getting up and running is fast and almost effortless. As with all CS applications, you have a great amount of customization available, both in reports and even in data entry screens. You can set up tickmarks, and create comprehensive footnotes and graphics for financial statements. It also provides a basic set of boilerplate ratio analysis for financial statement presentations.
As delivered, Trial Balance CS is a good tool for quickly developing adjusting and closing entries, generating comprehensive financials, and providing a streamlined data entry capability for tax prep. For other types of engagements, such as audit and compliance, you will most likely have to purchase one or more additional CS modules.
ACCOUNTING FOR PRACTITIONERS RELEASE 5 GOLD
Years ago, when PCs first became popular in accounting practices, it was very common to find applications that were created in Lotus 1-2-3. 1-2-3, and its predecessor VisiCalc, made it easy for a user to create a moderately complex application without having to learn a formal programming language.
As the years went by, programming became more popular, and applications based on spreadsheets became less common, though there are still plenty of them around.
And that brings us to Accounting for Practitioners, which is a complex set of spreadsheets, designed to be run on top of Microsoft Excel, that comprise a full-featured trial balance application. As such, it requires that the target PC have a version of Excel installed and available. Some previous versions of AFP have worked with versions of Excel as far back as Excel 97. The current version requires a slightly more recent version, and will work with versions from Excel 2000 up to the present Office 2007 version.
Don’t blow off AFP just because it is constructed using Excel spreadsheets. Excel has some excellent tools, such as pivot tables, macros and a host of complex calculation operators, which make it a good base for constructing complex financial applications. And AFP makes very good use of many of these embedded capabilities. A further benefit is that while some of these spreadsheets are locked to make sure that you don’t screw them up by accident, if you are a competent Excel programmer, or have one available, you can add your own custom routines and features into AFP. Chances are, however, that you will find more than enough functionality and utility in the application that you won’t be moved to touch the code.
AFP comes in three editions, each adding features and the number of users licensed to use the product. The “Light” version has the fewest features, and is basically targeted at practitioners who want to use it as a data collection engine for tax prep. The 2008 release can directly export into CCH and Thomson Tax and Accounting tax prep software, and this capability for Lacerte and Drake is under development.
We tested the Gold version, which has all of the bells and whistles and can support up to 15 simultaneous users (the Standard edition supports up to five users). Other features included in both the Standard and Gold editions include leadsheets, ratio analysis, amortization schedules, client engagement and report letters, notes to the financial statements, and the ability to lock files for security in engagements that require enhanced security, such as audit or SOX compliance. The Gold version that we tested also adds document imaging and management, budgeting, trend analysis, and the ability to output reports in PDF format.
Installing, configuring clients and using the application is a bit different from the other applications we tested. After all, this is basically a set of spreadsheets. At the same time, each sheet has detailed instructions at the top that explain how to use the functions and features, and a comprehensive PDF manual is also included for any questions that aren’t explained within the applications (and there aren’t many of these).
The only downside we can think of to AFP is that you’ll need a copy of Excel for every staff member who is licensed to use the application. At the same time, we can’t see a staff member not having a copy of Excel to use anyway.
AFP5 is easily a terrific “poster child” for what can be accomplished with Excel, and Pendock Mallorn continues to add features with every new release without losing the backwards-compatibility with older versions of Excel.
Ted Needleman, a former editor of Accounting Technology, is a consultant and freelance writer based in Stony Point, N.Y.
Pricing: Unlimited use — $995 per year, $99 per month, $99 per client.
CaseWare International Inc.
Pricing: Single user — $499;
up to five users — $1,399.
CCH ProSystem fx Trial balance
CCH Tax and Accounting
Pricing: Single user — $1,350.
Trial Balance CS
Thomson Creative Solutions Inc.
7322 Newman Blvd.
Pricing: Single user — $600.
Accounting for Practitioners Release 5 Gold
Pendock Mallorn Ltd.
Stone Mountain, Ga.
Pricing: Gold — $1,299; Standard — $899; Light — $599.
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