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2008 Review of Small Business Accounting Systems

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.

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

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
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
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!
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
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
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
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
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
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
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
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.