Find the Right Accounting Software in 5 Easy Steps

by J. Tol Broome, Jr.


FIVE AFFORDABLE ACCOUNTING SOFTWARE PACKAGES

According to Carlton Collins of K2 Enterprises, there are over 300 "legitimate" accounting software solutions and a few hundred "wanna-be's." One of the features you will find on the K2 Enterprises Web site is a ranking of the top accounting software programs for businesses of varying sizes. The recently updated list of the Top Five Low-end Accounting Software Solutions (for companies with up to $5 million in annual revenue) consists of the following, with retail pricing including the eight core modules of general ledger, accounts receivable, accounts payable, payroll, inventory, order entry, job costing and system manager:

1. BusinessWorks for Windows 12.0 (Sage Software; $3,275 single user; $3,915 five users) ... While BusinessWorks is the most expensive of the five on this list, Collins says there is little to criticize. In fact, it is cited as having the highest level of customer/CPA satisfaction of any of the lower- priced products reviewed by K2 Enterprises. Collins says BusinessWorks is excellent for inventory-heavy businesses with multiple locations and a lot of inventory. The package also can be purchased by module, which might save you money.

2. M.Y.O.B. Premier 1.0 (M.Y.O.B. Software; $449 single user; $647 five users) ... Collins indicates that M.Y.O.B. is particularly popular around the world due to its Goods and Services Tax (GST) and Value Added Taxes (VAT) capabilities. Features include an Easy Setup Wizard, an industry-specific chart of accounts, and flowcharts to help navigate the system.

3. Peachtree for Windows 6.0 (Sage Software; $149 for up to five users) ... Collins cites Peachtree as "arguably the best value of all accounting software." It includes 13 modules and is known for its ease of use. Collins also says that Peachtree has a very effective inventory accounting component, as well as unique e-commerce features.

4. QuickBooks Pro 6.0 (Intuit; $149 single user; $500 five users) ... QuickBooks for Windows is the best-selling accounting software package in the world, with over two million customers, according to Collins. While he cites QuickBooks as the most effective solution for "getting cash in and out of the door, and for getting monthly financial statements," he adds that it has limited capabilities for helping with inventory management.

5. One Write Plus 7.0 (Sage Software; $70 single user; $350 five users) ... As with QuickBooks, this is an easy-to-use, inexpensive accounting software solution. However, it also has limitations with inventory management and would be best suited for a simple craft business with little inventory.

One other accounting software solution highly recommended by Collins is Net Ledger, a remote access system for which the user pays a monthly fee of $4.95. To check out this system, visit the Web site (www.netledger.com).

No matter the size of your craft venture, the efficiency of your business will be enhanced with a good accounting software package. If you are operating on an older system or still doing things by hand, you should consider acquiring a new accounting software system to save time and increase organization. Good accounting software will make you more efficient with the general ledger, accounts receivable, accounts payable, payroll, inventory, order entry, job costing, systems management and other key accounting functions.

Finding the right software system for your craft business is critical. Therefore, careful consideration of systems capability, customization for your business needs, training, support, and ease of use are crucial.

Making the wrong decision can be damaging to your craft business, according to Carlton Collins, CPA and partner with K2 Enterprises, an accounting technology training and consulting company located in Atlanta, Ga. "For many of us, selecting the wrong accounting software can be a complete disaster," explains Collins. "It usually takes a complete installation of the system and a month of operation to tell if the product will meet your needs -- and by then, it is too late."

How can you avoid selecting the wrong software? Here are five key steps to help you make the right choice for your business:

Step 1: Consider your special needs
Assess what you need the software to do for your business. For example, if you export or import, make sure the package will accommodate these transactions. If your overseas business requires invoices or other correspondence in another language, this will limit your choices. Other needs might include electronic banking, the ability to deposit and withdraw money to and from your account from multiple locations, payroll and e-commerce.

Step 2: Weigh your options
Discover what is available to you. Most small craft businesses can run on packages that cost well under $1,000 to install. Even in the lowest price ranges, plenty of software packages are available.

Take time to educate yourself about all of the available options. Talk to other craft business owners, your CPA and anyone else who might provide guidance in your decision. Collins, who also is the editor of Accounting Software News, recommends making a list of all systems you find. "Include products that you are aware of, products you read about, products you hear about, products listed on the Internet, etc. If possible, talk to your competitors and ask them what they use, and add these to the list as well," he says. As you begin to list the features of each option, Collins adds, this process should help you eliminate poor choices.

You may also find the K2 Enterprises Web site (www.k2e.com) to be a valuable tool in your selection process. This is one of the most informative Web sites I have seen on the topic of accounting software.

Step 3: Compare the product features
After identifying all of the viable options for your craft business, the next step is to compare the list of features each package provides with the needs of your business.

To learn more about each program's features, first visit the Internet sites of the vendors and compile as much information as is applicable. Then, contact each vendor and ask for brochures and other collateral materials to be sent to you. Many also will provide an evaluation copy of the software with sample worksheets, charts, etc.

As you evaluate the features of each software solution, Collins advises that you ask the following questions:

Most small craft
businesses can
run on packages
that cost well
under $1,000
to install.


NETWORK WITH OTHER CRAFT BUSINESS OWNERS

There have been a number of discussions on The Crafts Report Online's Discussion Board about choosing software for crafts businesses. You can browse the already posted messages to see if you can find comments about the software you are considering, or post a question about it.

You can also browse ads in trade magazines like The Crafts Report for software programs that might tailor to crafts businesses.

If you are looking for other types of software systems for your business, check back for Tol Broome's upcoming columns on inventory, billing and scheduling software.

Step 4: Contact a good reseller
Collins says working with a reputable, well-established reseller is key to finding the best system. The reseller can help you with your choice based on the specific needs of your craft business. Demos of the various software programs also should be available from the reseller. If you are considering software from more than one vendor (e.g., Sage, Intuit and M.Y.O.B.), then you may need to see more than one reseller.

"You need to identify the best reseller in your area for the products you are considering and arrange for them to demonstrate their products to you," advises Collins. "They should be able to do this in about two to four hours. They should take time up front to ask you extensive questions about your company and your needs. If they don't do this, watch out."

Collins warns that the meeting with the reseller will be a sales pitch, but it does provide an opportunity for you to ask pertinent questions. During the demonstration, you should inquire about their available time, their installation methodology, their track record for getting the systems up and running properly and on time, and for at least three references.

Another important reason to find a good reseller is for the installation and training process. While it is important to find a reseller who can get things running quickly, it is more important to find someone who is willing to take the time to train your staff properly. Regardless of how "easy to use" your new system is, it won't do much good unless you take the time to fully understand what it can do and how to do it. These things take time. Collins recommends finding someone who will sit down and hold your hand for hours and be patient as they teach you how to use the software.

Step 5: Check references
Before making a final decision, it is important to check references. Find other craft business owners using the same software to give you feedback. Additionally, if you run a home-based business, ask the reseller to provide other home-based businesses or micro-businesses.

Collins says there are six key questions to ask when checking references:
1) Do you use XXXXX software?
2) When did you install it?
3) Who performed the installation (company and name of reseller)?
4) Did they do a good job and install the system on time?
5) Are you satisfied with the product?
6) What problems have you had with the product?

Take your time when you are choosing an accounting software solution. Making the right choice should significantly improve the efficiency of your craft business by giving you more accurate and timely financial information and by giving you more time to spend on your work.

J. Tol Broome, Jr. has worked for 16 years in commercial lending, and has extended more than 25 SBA guaranteed loans and hundreds of small business loans since 1983. He has written on business topics in Nation's Business, The Writer, Bank Management and various trade publications.

MARCH 2000: TABLE OF CONTENTS