Finding the Best Small Business Solution for Your Clients

From the March 2013 issue.

Finding a suitable small business accounting application continues to be a challenge for many practitioners.

While some choose to install a single solution for all clients, many accounting professionals are moving clients into cloud-based accounting applications, whether they are true Software as a Service applications (SaaS) or hosted versions of on-premises software.

We used a common list of review criteria for the reviews of both the SaaS and On Premises applications. A summary of the review criteria for these segments appears in the sidebar.

On-Premises Applications

Although the market for on-premises accounting products is fairly mature, the products reviewed show that there is still room for innocation in this space. The products reviewed have a wide range of capabilities and supported industries, and many products have made significant enhancements since our last review of this segment in July 2012.

While the capabilities of the cloud-based small business solutions are increasing rapidly, on-premises applications still offer stronger feature sets, and better meet the needs of many established small businesses. Few web-based applications support or plan to add sophisticated features like job costing, inventory tracking for light manufacturing, and industry support for the needs of non-profits and construction companies.

Most accounting professionals work with clients on their chosen products in this space, and these products will have a following for years to come.

• Major developments in this space include:
• Many of the tools support exporting reports to an Adobe PDF format.
• Third party report writer support (ODBC) is available for most applications.
• Foreign currency support is available on many of the applications.
• Merchant services and mobile payment processing are available for most applications.
• Some of the applications support multiple inventory valuation methods (FIFO, LIFO, Average Cost) and/or multiple warehouses.

SaaS Accounting for Small Business

Online accounting products continue to grow rapidly, and 2012 was no exception. After our first annual review of SaaS Small Business Accounting applications in the May 2012 issue, we discovered a number of new products, and have expanded this review to cover more of these applications as they have evolved into solutions in their own right.

We have selected six products which are designed to be entry level accounting solutions for a self-employed and businesses up to around ten employees. Although some of the tools will support larger businesses, and others focus on the needs of smaller businesses, they are all credible solutions for a large segment of users who are currently using spreadsheets, personal finance applications, and a wide range of other solutions to do basic accounting.

Although commercially hosted versions of many of the on-premises applications are available (e.g. Hosted QuickBooks Premier 2013, Hosted Sage 50 Complete Accounting 2013, we chose to exclude these versions from our review. We will review hosting providers later in the year, and plan to discuss these solutions further at that time.

The SaaS Small Business Accounting segment has become very competitive in the last year, and most products are incorporating improvements at least four times a year. While some products have more than one version, the differences between the available versions are typically driven by an attempt to segment customers into groups based on package of available features.