Review of Small Business Accounting Programs -- 2006

From the June/July 2006 Issue

About 25 million small businesses exist in the United States, and each was started by entrepreneurs with slightly different goals, strategies and expectations than the others. Some cherish their customer relationships above all; others focus on efficiency, while still others are interested in only the money. While a few entities that focus too narrowly on specific areas may get by on luck in the short term, long-term successful businesses are those that realize it takes a carefully balanced blend of customer care, vendor management, employee and asset management, and fiscal discipline to achieve positive bottom-line results.

Small business management programs are designed to help them achieve this balance, but the subject of accounting for these entities can be tricky. While larger concerns can hire trained bookkeeping and internal accounting teams, smaller businesses generally can’t justify the expense, leaving the principals of the entity or their multi-role managers to handle the day-to-day books and then contracting the monthly services of their accountant for more detailed and complex functions.

Therefore, one of the keys to the success of a small business management program is in its ease of use and intuitive operation. Just as many of your clients may get a lost look when you start speaking about accelerated depreciation or accrual-based accounting, small business personnel may find themselves in that same fog if forced to use a program that uses only accounting lingo. People without an accounting education need a system that doesn’t mandate they learn accounting, but rather works the way the small business does and feeds data into the accounting system. Fortunately, most small business software vendors have figured that out, although they vary in their success.

How a system handles human relationships is also an integral component since these various groups impact every penny that comes through the business. From customers and receivables, to vendors and payables — and never forget employees — making sure money flows from and to the right places at the right time is crucial. For retail, wholesale and distribution concerns, the relationship between a small business and its inventory must also be carefully managed, with the system telling the user what and how much of something is available or is coming, what things are out of stock and need to be ordered, and even when to order. For some of these businesses, point-of-sale devices or barcode scanning may also be necessary.

Everything else that a small business management application does is productivity-enhancing icing, from integration with programs for analysis and editing (like MS Word and Excel), to synchronization with Outlook for mail and contact management. All of the programs in this review cover the basics of accounting: GL, AP and AR. And all provide at least options for inventory, payroll and other features. A few of the systems offer time-based billing capability, built-in analysis tools, forecasting and cash flow projections, while others offer added value services such as credit card acceptance, full-service payroll, and EFT capabilities for payables and receivables. A host of niche features can further aid small businesses, such as multi-currency and multi-language capabilities.

This review of small business accounting systems evaluates programs in the following areas: Ease-of-Use/Basic Functionality, Modules/Customization/Expandability, Reporting & Management Functions, Audit Trail, Integrity & Accountant Control Tools, Import/Export/Integration, Help & Support Options, and Relative Value. The key to helping your client find the right program is to first assess their business’ real needs, and then have them test drive a couple of programs that come closest to meeting those needs.