Small Business Accounting Software Review - 2004

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• June-July 2004 Issue
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Choosing accounting software for a small business is not easy. Many factors have to be taken into consideration before an educated decision can be made. These factors include ease of use, modules included and available, upgrade and expansion capability, and finally, cost. We are aware of the increasing number of small businesses that open their doors every year, and, for all of their differences, in several very important ways, they are identical. Every small business owner needs to adequately track and record income and expenses. Every small business owner needs to pay his or her employees.

Every small business owner needs to report and deposit employee taxes. Every small business owner needs to provide an adequate paper trail for themselves, their accountant and outside auditors. These are basic business necessities. But many new entrepreneurs are not satisfied with basic business necessities. This new breed of entrepreneur is looking for software that goes beyond the necessities. They're looking for software that provides powerful management tools, e-mail capability, customized reporting options, and maybe even an accounting primer for non-accountants. And they don't want to spend tens of thousands of dollars for such features.

Is this possible? The answer is yes.

In this review, we looked at 10 accounting/ financial software products that are designed specifically for the small business environment. We looked at seven areas, including cost, which is sometimes the most important factor for companies with limited budgets. We also looked at modularity, expandability and scalability. What modules are included? What add-ons are available? If my company grows, is the software able to handle that growth? Can I export data into spreadsheets? Can I import data from third-party software vendors? These are important questions that need to be addressed. The next area we looked at was ease of use. Can I be up and running fairly quickly or will I have to invest time in learning to navigate the system? Help and training is another important aspect that potential users have to analyze. If I have a problem, can I get an answer fairly quickly? Is there a decent help file available if I have a question? Reporting is also another important factor, which is addressed, as is audit trail, integrity, and accountant control tools. While it is simple to establish an audit trail, and maintain control tools, true system integrity is difficult to determine during a review. The last area considered here is company vision, which is simply a brief statement of where the company has been in the accounting market and where they appear to be heading.

Prototype Company: Following is an example of a company that might use a small business accounting product: a service-based company, employing 10 people, with 75 active customers, adding an average of five customers per month. The approximate number of bills processed per month is between 15 and 25. There are two system users, an accountant/bookkeeper and a payroll processor. Employees are paid biweekly, and the company's annual revenue is $1,250,000.

We know that this example does not fit all businesses. Retail business owners will also need an inventory module to track sales and receipts of product. And any service-related business should have a basic time and billing module to track, record and bill clients accurately.

The products reviewed here have a level of sophistication previously found only in higher-end accounting/financial products. In today's market, being a small business owner no longer precludes you from having a top-notch accounting software package. The products reviewed here are proof of that .