2008 Review of Small Business Accounting Systems

From the June/July 2008 Issue

Accountants who provide services to small businesses frequently find themselves in the role of diagnostician, trying to find out why a particular client is hemorrhaging cash and what the short- and long-term chances of survival are for the company. They also assist in determining what strategies will best brace the entity and help develop financial processes that are sound and grounded in solid accounting practices. This is a critical role because when challenges are recognized early enough, problems can be averted or minimized.

But still, a 2007 study by the Bureau of Labor Statistics cites that more than half of small businesses (56 percent) fail before lasting four years. Among the most failure-likely industries are hospitality (particularly restaurants and bars), transportation and apparel. While these sectors may stand out as the most vulnerable, all small businesses are at risk since they face a myriad of challenges such as cash flow, budgeting and strategic planning. And they frequently rely upon individuals with limited financial and business management experience.

These entrepreneurs may well be experts at their particular niche, but running the business side of any of these entities is a constant juggling match, especially when margins are small or seasonal variations must be accounted for. And then there’s the people management aspects — customers, vendors, employees. Each has specific needs and expectations; and without meeting those needs, the business will experience trouble. They depend on you, their accountant, to help them achieve success, and it starts with effectively managing all these business processes and people interactions. This review focuses on accounting and management programs designed for small businesses. Much more than just bookkeeping software, modern SMB systems often include advanced integrated functions for invoicing, point-of-sale, inventory control, payroll, contact management, electronic banking and e-commerce activities.

While these systems have grown in functionality, they have often become increasingly difficult to use for small business owners. Fortunately, in addition to these associated business functions, the technology vendors who develop such programs have also focused on the role of the public accountant. In addition to increased security controls and audit trail functions, some systems now include tools specifically designed to help transfer data to the professional’s accounting system for write-up, reconciliation, adjustments and other services, while still allowing the business to operate and use the program. This is a vast improvement from the end-of-month crunch time that once dominated many accounting firms.

Enhanced accountant supervision and access to client business data has also been achieved through remote access technologies, sometimes referred to as virtual write-up services. With online access functions, professionals can log into a client’s accounting system from their own office and perform tasks as needed, without requiring data transfer or client visits.

The latest innovations along these lines, however, are toward an integrated model where everybody — accountant and all clients — is working on the same system, just with different access rights and interfaces. I think of it as a bicycle tire, with the accountant at the hub and the spokes leading out to each individual client. Client “spokes” can only touch one point of the accounting system, while the professional can reach out to each of the clients. The actual accounting data is always under the control of the accounting firm, with clients logging in through online portals to run their bookkeeping and associated business programs. This model appears to be the best at maintaining total data integrity and security, while also strengthening the client-professional relationship.

The products reviewed here vary from fully web-based systems to traditional installed programs, and each has different core strengths and purposes. When selecting a business management and accounting system, finding one that matches workflow needs and the dynamics of a business’ niche is critical. At the same time, it must be usable; if it isn’t easy to learn and use, the entity won’t see the most benefit, and the accountant may wind up spending too much time repairing honest (or dishonest) errors. So if you are helping a client find a new system, make sure they understand how important accurate transactions and record keeping are to the health of their business. Hopefully, this will improve their diagnosis and help them achieve long-term success.

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A-Systems Corporation - Visual Bookkeeper
overall rating
A-Systems has been producing construction accounting software programs since the late 1970s. The company has since developed an accounting system called Visual Bookkeeper, which is geared for general small business use...
AccountantsWorld - Accounting Relief
overall rating
AccountantsWorld has offered the web-based Accounting Relief system for some time now, but as the system was continually developed over the past few years it has evolved into the first truly “unified” accounting system that offers an interface for both the professional accounting firm and one for each of their clients.
AME Software Products, Inc. - Accounting Made Easy!
overall rating
AME Software’s Accounting Made Easy is a full suite of general small business accounting applications, providing GL, AP, AR, checkwriting, basic fixed asset depreciation and 1099 reporting.
CheckMark Software - MultiLedger
overall rating
Although it may not have the brand recognition of some of the other software companies in this review section, CheckMark Software has been developing small business accounting and payroll systems longer than most of them, starting in 1984 with payroll and general ledger.
Intuit - QuickBooks Premier
overall rating
Many factors contribute to QuickBooks being the most widely used small business accounting software in the world, with more than 3.7 million businesses in the United States alone, and with 250,000 professional accountants using a QuickBooks product.
Microsoft Office Accounting Professional 2008
overall rating
When it initially debuted, many professional accountants were a bit skeptical of Microsoft’s Office Accounting. This was in part due to the tech giant’s previous half-hearted attempts at entering the small business accounting space.
MYOB US - Premier Accounting Small Business 2008
overall rating
MYOB has been producing accounting products for the global small business community since the late 1980s and focuses several of these products on the U.S. market, most notably its AccountEdge and FirstEdge systems for Mac users, and Premier Accounting and BusinessEssentials for PC users.
NetSuite - NetSuite Small Business
overall rating
NetSuite was an early pioneer of on-demand computer programs, a.k.a. purely web-based systems. It's Small Business version is geared for small and mid-sized businesses and integrates all primary accounting functions and customer interaction functions into a web-based solution that supports more than 12 languages and multiple currencies.
RealEasyBooks Inc. - ezREB
(Sidebar) - As many small business accounting products on the market have continued to develop more and more features and, unfortunately, have grown correspondingly more complex, one developer has intentionally decided to keep its program fairly bare bones.
Sage - Peachtree Premium Accounting 2009
overall rating
Sage Software’s Peachtree line has maintained the number two position in the small business accounting space over the years because of its relationship with its users and professional accountants who service these small businesses.
Thomson Reuters - Client Bookkeeping Solution
overall rating
Client Bookkeeping Solution (CBS) is a small business bookkeeping and management system from Tax & Accounting, a business of Thomson Reuters (formerly Thomson Tax & Accounting). The program is not offered directly to small businesses, but rather through professional firms using the CS Professional Suite.