Low-end accounting programs are catching up to their high-end cousins. Here's how to choose the one that's right for you
You don't have a choice. When you operate a business you have to keep track of what you earn and what you spend. Even if the IRS didn't have a vested interest in your bottom line, you would. To make the financial and managerial decisions that keep a company growing, you need accounting information.
Of course you can collect that information in different ways. Most large corporations have made the move to automation, to customized accounting software that does everything from producing data for financial statements to calculating the payroll for thousands of employees. OK. A $100,000 program may be overkill for your small business. But there is a middle ground between the clerks of yesteryear entering cash receipts with ink-stained fingers and the expensive customized programs and large numbers of financial staffers handling accounting in the modern conglomerate.
That middle ground is populated with what we call low-end accounting programs. Low-end used to mean inexpensive, basic. Today's low-end accounting programs are still inexpensive -- usually under $400 -- but they function more and more like high-end programs.* * *
About the Programs
If your needs are simple -- issuing invoices, writing checks, and printing basic financial reports -- a few programs are still available that can automate your books painlessly. One-Write Plus (from ADP) has been popular for years, primarily because the data-entry forms look like the forms that you fill out by hand when you use a manual one-write check system (those systems alternate pages of checks with pages of ledger; as you write each check, a line of carbon on the back of the check transfers the information directly to the ledger). The newest version, 5.0 for Windows, opts for ease of use, but it could offer more flexibility in customizing reports and forms. It does track salespeople's figures and handle payroll, so there is room for the software to grow with you. But if you need to monitor inventory or bid a job, One-Write Plus isn't the accounting program for you.
If it's sales information you need to track, Great Plains Profit (from Great Plains Software) may be just what you need. The program turns out two types of invoices: service invoices, which show the date and service rate of each line item, and product invoices, which show an ID number, a description, and the unit price and quantity of each line item. The program also allows you to record several types of sales transactions, including cash sales and refunds. And it lets you sell a good and a service on the same invoice because each line item is taxed individually.
Many small businesses have come to rely on their accounting software to help them quote on jobs. Profit's quotes for sales or services can easily be converted into invoices. And if it seems you're always quoting the same job for different clients, the program lets you save quotes for common jobs.
DacEasy's DacEasy Accounting & Payroll 95 produces quotes right from the invoicing screen. A check mark in the "quote box" makes the difference. When you're ready to bill a job you've quoted on, simply remove the check mark and you have an invoice.
If you're producing quotes, your business probably revolves around jobs or projects. That means you're going to need some way to track the costs of each one. Almost all the programs we reviewed have job-costing capability, but Peachtree Complete Accounting for Windows, a new offering from the producer of Peachtree Accounting for Windows, is the most sophisticated. It lets you break down a job into components -- the job itself, phases, cost codes, and cost types -- each an increasingly detailed cost analysis. In the construction industry the job might be a building and the phases the foundation, the walls, the plumbing, and the electrical work. The cost code (a prefix) is unique to each phase; the cost type (a numerical suffix) is common to all of them. The suffix for materials is 01. So PLM01 could be plumbing materials, and ELE01 could be electrical materials.
Intuit's QuickBooks Pro, one of the most popular accounting programs, also does job costing but on a much smaller scale. A job consists of a job type ("the Jones's kitchen") and a description ("refinish the cabinets and lay a tile floor"). You can also attach notes to each job ("the Joneses like shades of blue") and to a to-do list ("pick up tile samples by Tuesday"). Like those of QuickBooks Pro, the job-costing features of M.Y.O.B. Accounting (from Best!Ware) are basic but effective. An example: the program lets you set up budgets for each job and then track actual costs and income.
An honorable mention in the job-costing category goes to Profit. Although not up to Peachtree's standards, it does offer more detail than most of the other programs we sampled. When you're ready to start a job, you can enter estimated cost and revenue figures for materials, labor, and overhead. Then, as the job progresses, the "project card" calculates actual cost and revenue figures by category. It also shows estimated and actual gross-profit and profit-margin figures.
For companies that manufacture or retail goods, keeping track of inventory is crucial. Several low-end programs can help. M.Y.O.B. Accounting has several good inventory features, among them parts assembly and automatic back orders. Two drawbacks though: you have to be running on an accrual basis (recognizing expenses and income when they're incurred or earned, not when cash actually changes hands), and you have to calculate the value of your inventory on an average-cost basis.
Peachtree Complete Accounting for Windows offers one of the most impressive inventory modules of all the programs we reviewed. It allows for three cost methods: average cost, LIFO (last in, first out), and FIFO (first in, first out). It also handles assembly items and can track inventory in a cash-based business.
What about payroll? Do you plan to process your own payroll as you grow? That's a sticky subject, especially with accountants. Depending on the size of your company and the complexity of your payroll (types of benefits, number of extra deductions, and the like), you may want to use an outside service. But if you've decided to try it yourself, you must understand how to report special deductions and file payroll taxes.
The programs that include payroll features handle federal tax calculations for you. DacEasy Accounting & Payroll 95 has comprehensive payroll options. There are four earnings types (salary, hourly, overtime, and commission), and you can add others (say, bonuses and mileage) as well. Federal, state, and local tax tables are part of the program, and they can be updated when rates change. DacEasy Accounting & Payroll 95 also tracks sick days and vacation time. It lets you monitor how many hours have been taken and how many hours are still available.
QuickBooks Pro has many of the same payroll features found in the DacEasy software. The program's flexibility is impressive. For example, it lets you set commission percentages and distinguish between taxable and nontaxable earnings. And the program manual is one of the best for explaining how to set up your payroll. Using graphics of actual screens, detailed tables, and conversational text, it walks you through the process of creating a list of payroll items and the employee cards.
Great Plains sells Great Plains Payroll for Profit, an add-on to its basic accounting program. The price for both is in line with what you'd pay for the programs that are all of a piece. And once you install the add-on, Profit has pretty much the same payroll capabilities as DacEasy Accounting & Payroll 95 and QuickBooks Pro.* * *
Choosing a Program
You're starting out (or over). You've seen an accountant to help clarify the kind of accounting system you should install. But you don't have the funds or the need to hire an accountant to record your daily transactions. What's the right software for you?
Obviously there are programs out there that can handle all kinds of accounting tasks, from recording sales and expenses to tracking inventory and sick days. And you may be tempted to buy a program that has all the bells and whistles. But remember, there's a price for expanded capabilities. Extra features can compromise ease of use -- one of the biggest advantages of a low-end accounting program. Yes, to-do lists may be a big help for keeping track of sales calls and the timing of collection reminders. But do you want a to-do list to pop up every time you go to enter a bank deposit?
More features also mean more time learning a program. "I won't spend time and money to teach people about the features we don't need," you vow. "I'll just concentrate on those we do." But it's not that simple. Whatever a program can do is built into the software, and you have to understand all of a program's functions to know which ones you want to use. You may not need Profit's service and product invoices, but you do need to understand the differences between them to choose the right one for your business. That M.Y.O.B. Accounting offers "100+ financial and management reports" is great. Producing reports is one of the biggest benefits of automated accounting. But trudging through more than 100 of them to find the few that fit the needs of your business can be a waste of time.
So the first step in choosing an accounting program is to identify your needs. Consider more than just the accounting aspects of the programs; adopt a management point of view. Take a good look at how your business functions and decide which features you need to keep things running smoothly.
Second, consider the users' computer skills and eagerness to learn a new program. What kind of training are users going to need? Have they worked with an accounting program in the past? Do they like working with computers? At the very least, users should be part of the software decision.
Third, think about how you're going to use the program. If you're on a network, security is important. Peachtree's Windows programs are network-ready right out of the box and offer password protection at the module level. On the other hand, QuickBooks Pro doesn't even have a network version.
Fourth, be sure your hardware meets the software's system requirements. Accounting programs use a lot of hard-disk space -- anywhere from 3 MB to 38 MB -- and you're going to need plenty of room for your data as well.
Fifth, talk to people who have first-hand experience with the program you're considering, or look for people in your business and ask what they're using. But don't cross a program off your list because it didn't work well for someone else. Dig deeper. Find out exactly what the problem was. It may turn out that the difficulty wasn't with the program but with the training or the user or the planning that went into buying and installing the software. You can also call the software company directly and ask questions about your company's needs.
Once you purchase your software, the timing of the installation can make or break implementation. Check your calendar and last year's sales figures. Don't start to automate your books if you're about to enter, or are already in, your busy season. Other time constraints to pay attention to are the start of your fiscal year and your staff's vacation schedule.
Automating your accounting system is an investment of time and money. If you choose the wrong program, it can cost you. Try not to waste resources on features you won't use or on programs that don't meet your needs. Only the right accounting program can produce the information you need to make the right financial and managerial decisions.* * *
Ellen DePasquale (email@example.com) is a consultant and writer specializing in personal and business finance.
WINDOWS-BASED ACCOUNTING PROGRAMS
Cougar Mountain Software Inc., Boise, ID (800-388-3038, http://www.cougarmtn.com)
Cost: $399.50 per user; network, $1,499.50 for 250 users
Technical support: One-hour free in first 60 days; call 800-727-0656.
|Job Costing||with module|
DacEasy Accounting & Payroll 95
DacEasy Inc., Dallas, TX (800-DAC-EASY, http://www.daceasy.com)
Technical support: Free and unlimited in first 30 days; call 214-248-0205. Support programs available.
Great Plains Profit 2.0
Great Plains Software Inc., Fargo, ND (800-926-8962, http://www.gps.com)
Cost: $79; payroll module, $99
Technical support: Free and unlimited in first 30 days; call 800-723-3333. Support programs available.
M.Y.O.B. Accounting 6.0
Best!Ware Inc., Rockaway, NJ (800-322-MYOB, http://www.bestware.com)
Cost: $79.95; with payroll module, $124.95
Technical support: 15 minutes free in first 30 days; call 800-617-2328. Support programs available.
One-Write Plus 5.0
ADP, Norcross, GA (800-228-0068)
Technical support: Free and unlimited in first 30 days. Support programs available.
Peachtree Complete Accounting for Windows 4.0
Peachtree Software Inc., Norcross, GA (800-228-0068, http://www.peach.com)
Technical support: Free and unlimited in first 30 days. Support programs available.
QuickBooks Pro 4.0
Intuit Inc., Menlo Park, CA (800-781-6999, http://www.intuit.com)
Technical support: Free and unlimited.
Don't despair if your business isn't ready to make the leap to a Windows-based accounting program. Several DOS-based programs are still on the shelves.
Cougar Mountain Software's ACTPlus Accounting (from $399 per user to $1,499 per network of 250 users) is one of the last of the great DOS programs. The options are listed in a simple menu format, but the terminology -- phrases like transaction processing and journal entry maintenance -- is unnecessarily confusing. In addition, all of the data-entry screens are plain; none look anything like a real-life form.
Still, if you can get past the no-frills interface, ACTPlus Accounting is a powerhouse. The inventory features rival Peachtree's Complete Accounting for Windows, and there are two security passwords for each module regardless of whether you're running the program on a network. Its payroll-module features include an unlimited number of custom payroll deductions, benefits, and tips.
Both Peachtree and DacEasy continue to support their own DOS programs: Peachtree Complete Accounting for DOS ($249 per user, $299 for multiusers) and DacEasy Accounting for DOS ($249). The two companies have been competitors for years, and their programs are alike in many ways. One difference: Peachtree Complete handles payroll and calculates depreciation on trucks, buildings, equipment, and other fixed assets as standard functions; to carry out those functions with DacEasy Accounting, you're going to need two modules.
One-Write Plus is also available in a DOS version for $69 a user. Unlike its Windows counterpart, this incarnation comes with both job-costing and inventory capabilities.
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