Academic journal article Journal of Accountancy

How to Select the Right Accounting Software

Academic journal article Journal of Accountancy

How to Select the Right Accounting Software

Article excerpt

A process for evaluating the best packages for your organization.

There's an old saying, If you ask the wrong question, you're likely to get the wrong answer. That certainly applies when CPAs ask which accounting software product is the best. The fact is, there is no best. There is no single product that suits everyone's needs, but there are probably several that suit one company's specific requirements. So, since the problem is matching software products with a user, the correct question is: How should I go about finding the packages that are right for my business or client?

When it comes to accounting software, the search begins by examining both the products' features and the vendors behind the products. Because accounting software contains hundreds--if not thousands--of features, this may seem like an overwhelming task. While such assessments are not exactly easy, they are not overly difficult, because only a handful of features are critical to making the right choice and we will focus on those features.

In evaluating a package, here are the key questions you should ask:

* Does the software provide customization tools?

* Is the vendor financially sound and reliable, and can it provide the technical resources my organization will need?

* Can the product deliver the type of financial reporting I require?

* Will the underlying technology meet my current and future needs?

* Is the product's account-number structure suitable for my business?

* Since e-business has become so important, does the package provide Web integration?

* Can it handle foreign currency?

* Is it easy to use?

* How much does it cost?

The articles in this series examine all these questions--with the goal of providing directions for identifying software products that meet your requirements.

CUSTOMIZATION

The single most important question you need to resolve before deciding on an accounting software package is whether it can be customized--and, if it can, whether the customization will meet your requirements.

In the 1980s, the most successful accounting software developers allowed users to modify their products' source codes--the underlying programming that could be altered only with the vendor's permission--and even then only a programmer with knowledge of the product could modify the source codes to add fields, calculations and capabilities to the product.

Many users accepted vendors' invitations to modify the software. But they soon discovered modification was a very expensive and complicated job, involving months of programming. Worse, while such efforts were successful for many customers, others were left in chaos when the modifications didn't work properly, leaving their financial recording and reporting tools inoperative or badly compromised.

Source code modification had all even graver drawback. Once a code was changed--even slightly--the product no longer could be upgraded without losing those modifications. So the product's users faced a no-win choice: If they wanted to upgrade, they had to forgo all the modifications that had made the product fit their specific needs. The vendors also were unhappy: They couldn't generate new revenue because, after spending a fortune modifying a product, users generally opted to stick with the old version rather than risking--and financing---a second source code modification.

A further complication was the fierce competition among vendors to add as many features to their software as possible on the theory that, if they didn't, their products wouldn't rate well against the competition in the comparison reviews featured in many professional magazines and trade journals. And as more features were added, the software became more difficult to use.

Today, most of the leading accounting software products offer a good alternative to source code modification. …

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