Buyers' Guide to Low-End Accounting Software
Wayne Schulz · Journal of accountancy online/Journal of accountancy · 1996
Selecting the best package for your needs. About a dozen years ago most accounting programs that cost less than a few thousand dollars were hardly worth the cost of the floppy disks they came on. As a result, accountants generally ignored them, advising clients either to invest in high-priced packages or let their CPAs handle the task. In recent years, however, the situation has changed: Much more powerful accounting packages that cost a few hundred dollars or less began reaching the market and small business managers were quick to recognize their value. For accountants, however, this rush by clients to buy their own accounting software created problems. Many of the products were unsuitable for the jobs they were intended to do. And even if the product did the job, often it was a headache for the CPA to export the data for the yearend accounting and tax work. The current crop of low-cost, Windows-based accounting software solves most of those problems: Data-export modules generally allow easy and accurate conversion and conveyance of data to the accountants' own accounting and tax software. In fact, despite the products' low cost, most users are pleasantly surprised by their power. For example, many provide a graphical representation of the check, invoice, purchase order, paycheck or report right on the screen in WYSIWYG (what you see is what you get) format. And almost all can tailor the look of the financial statement to display information in exactly the way the user wants to see it. The ability to click on a transaction in a report with a mouse and see the underlying source document (called drilling down) is becoming a standard feature in Windows accounting packages. Thus, it's possible to view an accounts payable aging right on the screen and then double-click to see the actual vendors that make up that total. If you want to see still more, double-clicking on the vendor will bring up a detailed view of all invoices outstanding. Menu choices automate the voiding of checks and invoices. The best Windows accounting packages feature tools called that walk you through the difficult steps required to set up your business on the software. Less sophisticated packages have only a checklist of the necessary setup steps. Once the setup is completed, the better packages have interactive tutors to guide you through difficult transactions. This article is a shopping guide for accountants who work for companies that are in the market for accounting software and for CPA firms that recommend accounting software to their smaller business clients. We reviewed eight products. All but one cost about $250 or less. The exception is BusinessWorks, which costs $995 and falls in the lonely niche between the low- and midprice products. MUST-HAVE FEATURES When evaluating an accounting package, insist on this core of features: * Checklists that prompt users when setting up the software or wizards that actually walk you through the procedure. * The ability to drill down to the detail level in on-screen reports. * Customizable financial statements, forms and reports. * Payroll tax tables that can be updated by users without purchasing yearly update disks. * Support for true multiuser processing. Be aware that some low-cost accounting packages lack true network support--a drawback if you or your client plans eventually to upgrade to a local area network (LAN). Some packages claim network compatibility but will allow only one person at a time to access the software. Virtually all the low-cost accounting packages require use of their own report writers to access the underlying data files. That should change in the future--allowing easy reading of all data files by the spreadsheet or database of your choice. Job costing, which is important to some businesses, is generally absent in this crop of accounting packages. …