Choosing Accounting Software that is Right for You

It is like a jungle out there that requires to muddle through more than 150+ different accounting software products that are claiming to do the job better than the others. In a situation like this, the most important thing to know is the category where the buying entity falls into. If the need of the software is to help keeping a personal account, that should be the priority. The entity could be any kind of professional like a lawyer, a doctor, a dentist, a merchant, an accountant etc, without employees. Whether it is for tax purposes or to realize year-end profit and loss, the accounting software could become handy to balance the books at the end of the year.

Or there could be a small business involved that hires less than 20 employees, with a yearly sales volume of less than five million dollars. If that is the case then the business belongs to what is known as an entry-level (entry) whose number is close to five million US companies.

If the business is big for this category, it would fall into Small to Medium Businesses (SMB). This category has a sales volume of $100 million and less than 100 employees, and there are close to 516,000 businesses that belong to this category.

If it is bigger for this category it then belongs into Small to Medium Enterprises (SME), and these are businesses that have a sales volume of $500 million or less and they hire 500 employees or less. There are close to 84,000 companies that belong to this category.

If the business is bigger to the above category then it will be categorized under a category that requires Enterprise Resource Planning (ERP) and it is among companies whose volume of sales is more than $500 million, and hire more than 500 employees. The number of companies that belong here are around 17,000. This shows what kind of general categories are available that require a tailor-made product for their particular needs, because as the size and the turnover of the company gets higher, obviously the needs that have to be met will also rise.

The price of the products could start from less than $100 for small out of the box software program and could go up to $50 million depending on the size and need. This is just for providing the software and maybe the other requirements that go with it that have to do with the training of staff, backup until the system is up and running, and the like. Still some of them could be out of the box products even if they cost millions, whereas it is possible to install some of them at the premises of the vendors and accessing the application through the Internet is possible.

The preparation phase varies on the particular size of the business, because it could be prohibitive to make mistakes if the cost of the software to be installed is into millions of dollars, and it has to be done right on the first try.

It is very difficult to go through all the names of the available accounting software products since their number is big for one particular sector, but all of them should have at least the basic features like accounts payables, receivables, billing, expense, payroll, trial balance, income statement, and from there their sophistication could peak in relation to what they cost and the features they are equipped with.

What is important next to knowing where the entity belongs exactly is what are the special features that it will need depending on exactly what the business could be doing. Missing out on any key features will necessitate in the long run to upgrade or to introduce what is lacking, and that is another source of expense that could add up. This fallout could be prevented by assessing one’s need carefully on the outset and making sure those needs will be met by the particular product that will be picked.

Otherwise, the business will be dependent on systems known as “renegade systems” in the industry. Buying these products will become essential to give the existing system the capability that it lacks. In addition, because there is a huge lack of integration in the software industry, it could end up being time consuming if it needs double or more entry, a pitfall to avoid by any means.

One good thing here is it is easy to go over the household name products or the top selling vendors, but that does not guarantee full satisfaction, because mostly products could become household names due to the size of the advertising money spent on them. That is how we all hear about a given product’s existence. The second way of knowing about a product is when it captures attention because of what it is capable of doing, and if it is good it will get a lot of free media coverage, and there is also word of mouth that will be triggered only if the product is good in most cases. As a result, there is always a blurring of the line between what is good and what is overblown.

Consequently the top few products for entry level accounting are:

> Accpac’s Simply Accounting Basic, it has an online version and a PRO version.
> Features include invoices, electronic checks, projects, inventory, payroll in-house, reports and graphs, tracking taxes at all level, budget, integrates with word and excel, audit, two currencies, and more. It is similar to the PRO for the most part, although the PRO has some advanced features. Price basic $49.99 and PRO $299 one user, $699 for five users.
> Bestsoftware’s Peachthree Accounting.
> Different features from Simply Accounting Basic, electronic banking, electronic fund transfer, online account access, online bill payment, and inventory control. Price $50 to $299. This one seems much complicated even if the Basic PRO might match it head on.
> Intuit’s Quick Books Basic has an online and Premier versions.
> Anything different from the above, Quick Books accepts credit card payments, can create forecast, works with 325+ popular software applications, work with data over the Web from any PC, and is remote connection enabled. Price Simple Start $99.95, PRO $299.95.
> Microsoft’s Microsoft Money Small Business
> Special features from the rest; accessing financial information from various sources and seeing them at one place, has advantages at the time of tax filing because of the external access it has, better personal finance, and it seamlessly integrates with its own Windows products. Features Deluxe price $34.98, Microsoft Money Standard $22.17
> Myob’s MYOB AccountEdge.
> MYOB AccountEdge is for Mac users and sells for $299, while the Business Essential sells for $99. The PRO sells for $299 and none of them offer what the others are not offering, nor there is no sign that their version is an enhanced one in anyway than the others.

One thing to notice here is except MYOB, the rest of the vendors mentioned above are among the suppliers for the other three levels of businesses that we have touched on above SMB, SME, ERP. They are joined by other household names like Oracle, Peoplesoft, Sap, Lawson, Epicor, and the rest of them who are providing the market with all sort of software that are geared toward Accounting software, CRM solution, PR software, Enterprise solution, and Enterprise Resource Planning solution (ERP).

Overall, among the few things to take notice of while buying an accounting software or upgrading is it is helpful if it is user friendly, because the time required to get familiar with it will obviously be less, which is a plus, and it will scale down the training requirement.

The capability issue is also important, because, as an example, the advent of the Internet has necessitated to do things online. Wiring pays to employees’ accounts, or sending electronic checks, doing all sorts of banking on the Web like accepting payments online or paying for goods and services online from an account are among the few. It is also useful if it is possible to integrate the software in such a way that it could keep track of an online bank account’s activity or bill customers online, or if it could be integrated at least with the other top brand name accounting products and applications, especially for a lacking capability. Also knowing in advance how long the product will last without costing money for upgrade, and if it has to be upgraded it is good to know if the vendor has that capability or previous track record, otherwise changing the whole system might be necessary.

The other key issue is to know what kind of support system the vendor has in case a problem develops. It is important that the vendor has to have a Web presence as it is easy and cost effective to find most answers from the Web site.