WBJ Talking Tech:
What’s New in Small Business Accounting Software?
March, 2006
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If you have browsed through any technology magazines or small business publications this year, chances are that you have seen an advertisement for small business accounting software. Why so much advertising? Has that much changed since previous years? The answer largely depends on your perspective.
The most significant development is Microsoft’s new product offering in the small business segment. As anyone who is familiar with Microsoft will tell you, they are a good software development company, but perhaps even a better marketing company. Thus, if you haven’t yet heard about Microsoft’s Small Business Accounting 2006, chances are that you soon will. Intuit has countered with a marketing campaign of their own that touts many of the new “features” in the latest release of their QuickBooks 2006 product line.
I had a chance to review Microsoft’s new offering and also compared it to QuickBooks and some of its most significant new features. My findings and recommendations may surprise you.
In their advertisements, QuickBooks claims an extensive list of new features unique to the 2006 version. Let’s start first with what hasn’t changed. QuickBooks still offers a range of products from Simple Start to Premier versions. The Premier version retails for $399 and comes in a variety of flavors to meet the needs of different industries such as retail, contractors, and not-for-profit. In reality, the industry specific versions aren’t significantly different and most users will be satisfied with the features in the less expense Pro edition. Regardless of the version you end up with, you’ll find a familiar interface throughout all QuickBooks products.
New to the product this year is an improved “Home Page” and navigators for each of main functions such as customers, employees, etc. The improved interface helps new users find their way around, but experienced users may not see much use for it. Also new to 2006 (but mostly transparent to end users) is a redesign of the underlying QuickBooks database. While Intuit has good intentions (such as faster searches and less conflicts in multi-user versions) I discovered a number of issues with the new database, particularly if used in a network environment. If you have a multi-user, networked version of QuickBooks I recommend you postpone any upgrades until next year’s release.
It is important to recognize that it is not necessary to upgrade your accounting software every year. For the most part, tax law changes only impact payroll, so while a current payroll subscription is mandatory, software version updates are not. As evidenced by their massive marketing efforts, Intuit would like you to buy the newer version of their product every year, but to save time and money I recommend you only upgrade every three years unless there is a specific feature enhancement you require.
Microsoft’s Small Business Accounting 2006 was originally released in September, 2005. The software can now either be purchased on its own (retail price $179) or as a bundle included with Office Small Business Management Edition. This is the first version of this product and it shows. Since its initial release, Microsoft has already issued two service packs to address software stability and other issues. That being said, I was impressed with the simplicity of the user interface and integration with other Office products, such as Word and Excel. Particularly useful is its integration with Outlook 2003 with Business Contact Manager. If you are already using Business Contact Manager to manage customer contacts or already own Office Small Business Management Edition, you may especially like Small Business Accounting. For most other users, feature-by-feature, QuickBooks is still a much more robust product and is the better choice.
Microsoft appears very committed to this product and market segment, and I don’t expect them to stay behind Intuit for long. Look for continued feature improvements in future versions of Small Business Accounting.
Of course, it is important to note that these are not the only two accounting products available for small businesses (although with all of their marketing, sometimes it may seem that way). There are also other very capable products, such as Peachtree, MYOB, and NetSuite.
For those of you who own a small business and are not currently using any accounting software, any of these products would be a better option. Statistics show that many small businesses fail as a result of poor accounting information. Software designed specifically for small businesses can help tremendously in identifying trends and issues within your specific business.
Congratulations if you are already using small business accounting software. In order to get the most out of your product, be sure to stay current with your payroll updates and continue to monitor the vendors’ new product offerings to see if any of new features make sense for your business.