Small Business Owners Enjoy Software Even They Understand

By Bates, Robert | The National Public Accountant, November 2005 | Go to article overview

Small Business Owners Enjoy Software Even They Understand


Bates, Robert, The National Public Accountant


New small business software and upgrades arrive in the marketplace every day. Historically, however, some businesses avoid buying new software or upgrades because they increase costs and open the door to potential data losses during the conversion process. Plus, going back and forth between versions can be difficult. Today, because of advances in software technology, many of those businesses are willing to upgrade because they're more interested in communicating easier, accessing data online from off-site, integrating with Microsoft (MS) Excel and MS Word, and e-mailing invoices.

During the last 15 years, I have used some of the software packages reviewed in this section and experienced mixed results. I've found that accountants often criticize smaller, under-$1,000 packages for being unable to close a period properly or adjust previously posted entries. However, I've discovered just as much instability/inflexibility with $100,000-plus software featuring complex code.

With proper planning and controls, all four software options reviewed here can be quite sound in terms of those issues.

Intuit's QuickBooks has the largest market share because it is an affordable option for small business owners. By acquiring Solomon, Navision and Great Plains, Microsoft is taking a shot at the small business market with its Small Business Accounting 2006 package. Other players like Peachtree (from Sage Software) and NetSuite (an Oracle spin-off) also are strong competitors in the small business arena.

All four packages offer ease of setup as a selling point and are geared toward the owner or bookkeeper who is not an accountant. QuickBooks and Peachtree also have industry-specialized solutions for businesses, such as real estate, construction, non-profits, professional services and manufacturing.

When advising a small business client who is in the throes of selecting new software, you should suggest comparing each package's features, including reporting methods, ease of data input, flexibility and user-friendliness, the number of licenses required and their cost, and user support and its cost.

For example, how much is licensing for one user? Five users? 10 users? Regarding support, some companies earn up to half their revenue by selling support plans. How much support can your client afford? It's common for the cost of a tier one or tier two software package to start in the low five figures--depending on the complexity of the software.

Something else to consider in a buying decision is this: If you do not plan to use the software forever, how easy is it to extract the data within a couple of years? Importing/exporting may be limited to certain file types or incompatible with the package you switch to later, and that can create time-consuming, costly data re-entry or data loss. (See paragraph one above!)

A small business owner can count on upgrading--most likely sooner than later--because new technology and software features are launched constantly, and the owner will want them. For example, I just helped a client run a credit card transaction from a desktop--no credit card machine was required! The transaction posted itself into Peachtree, and the sale posted immediately to the general ledger. What business owner (or accountant) wouldn't love that?

The main task when contemplating a software purchase is to view the demonstration and compare it to your current solution. Also, be sure to plan for what is involved with a change--such as downtime and training--before making an informed decision.

You can count on continued improvements to small business software as customers provide feedback to the companies that create them and the companies become more savvy about the needs of their clients--and the accountants who advise them.

--Robert Bates, CPA

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