Software Market Remains Strong for Low-Cost Accounting

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.

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.

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.

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.

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.

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.

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.

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.