CHAPTER 5ACCOUNTING SOFTWARE AND

PRACTICE

SMALL BUSINESS ACCOUNTING SOFTWARE

All the material in this chapter was downloaded from the web. Fair use doctrine in

effect.

SMALL BUSINESS ACCOUNTING SOFTWARE REVIEW BY PAMELA

STEVENS (3/26/2014)

Using small-business accounting software to keeping track of payments, wages and other money matters.

This type of software ranges from introductory products that cover basic accounting tasks such as QuickBooks Pro and Sage 50 to comprehensive, scalable solutions that do nearly everything, like QuickBooks Enterprise or Sage 50 Premium.

HTTP://ACCOUNTING-SOFTWARE-REVIEW.TOPTENREVIEWS.COM/SMALL-BUSINESS/ To help you make a decision, we show you which

modules are included in each bundled bookkeeping software package, all displayed in a side-by-side comparison.

For this small-business accounting software roundup, we selected products based on their availability as downloadable software rather than only as online, subscription-based accounting services.

ACCOUNTING SOFTWARE: WHAT TO LOOK FOR

All companies, from independent contractors to large businesses, require a way to track invoices, expenses, customer interactions and payments.

Companies that need to manage a diverse inventory will need an advanced inventory module.

The best software provides all the modules you need in order to manage a small business

ACCOUNTING SOFTWARE: WHAT TO LOOK FOR

GENERAL ACCOUNTING accounts receivable, accounts payable, invoicing, billing and general ledger capabilities

ACCOUNTING SOFTWARE: WHAT TO LOOK FOR

REPORTING & ANALYTICS Accountability – the ability to generate reports for the owner, tax

preparer, potential investors, lenders Availability of prefigured reports; balance sheet, income statement Budget and Forecasting tools

PAYROLL & EMPLOYEES Time sheet management, vacation and sick-time tracking,

commission tracking, tax forms (W-2,W-4) Automatic deposits and 401(k) payment tracking

ACCOUNTING SOFTWARE: WHAT TO LOOK FOR

INVENTORY & SERVICES Vendor information Reorder points, bar codes and costs per unit Ability to job cost (if custom manufacturing)

PRODUCTIVITY & INTEGRATION FEATURES Offer remote access, automatic backup, search tools, batch

processing and other convenience features Time and expense tracking, vendor payments Ability to integrate bank feeds and payroll services

ACCOUNTING SOFTWARE: WHAT TO LOOK FOR

Scalability As business grows, accounting software packages need to

adapt Adding modules

Adjust to different demands

Have ability to cover dispersed business locations; input / output

PROS AND CONS: ACCOUNTING SOFTWARE VS. ONLINE ACCOUNTING SOLUTIONS

SECURITY Pro: If you own a small company, a larger online service may actually be able to

provide you with more security than you can yourself. Con: You have to depend on the service to provide you the level of security you

desire. Many larger banking firms keep their interactions entirely within their own network to lock down access.

ACCESS Pro: Online services can be accessed from anywhere using a web connection.

Additionally, you do not have to use a VPN to access the solution. Con: Anywhere access comes with some risk. You have to trust external Wi-Fi

connections to be secure – and that your employees are protecting screen views from onlookers.

PROS AND CONS: ACCOUNTING SOFTWARE VS. ONLINE ACCOUNTING SOLUTIONS

UPFRONT COSTS Pro: Generally, the initial upfront costs for an online solution is less

than the purchase of software. Con: Online services often require a contract commitment, which may

cost more in the long run.

COMPATIBILITY Pro: Most online solutions are completely cross-platform compatible.

Some are even compatible with iPads and Android devices. Con: You have to have web access to use the service, whereas a

software solution will sync up once you connect again.

PROS AND CONS: ACCOUNTING SOFTWARE VS. ONLINE ACCOUNTING SOLUTIONS

UPDATES Pro: Online services are always up to date, and those updates are managed by

the service. Con: Software may require you or your IT team to manage updates and

patches. However, it also gives you the control to manage updates as you wish.

BACKUP Pro: Cloud-based services back up your data for you. The best will store your

data geo-redundantly. Con: You have to depend on third-party services to keep your data secure. Plus,

you will have to keep your subscription current to maintain access to your online data.

PROS AND CONS: ACCOUNTING SOFTWARE VS. ONLINE ACCOUNTING SOLUTIONS

RESOURCE USAGE Pro: The service has to maintain the hardware and IT team to keep your

accounting services running. Con: Good bandwidth is required to run these services. If your company is

located remotely without good access to the internet, this could be a challenge.

FORENSICS Pro: Most online companies have protocols in place to deal with government

subpoenas or audits. Con: It may be difficult to quickly retrieve your data for forensics from a third-

party vendor. Any company that has to manage numerous security compliance issues will need to be extra careful about the solution chosen.

PROS AND CONS: ACCOUNTING SOFTWARE VS. ONLINE ACCOUNTING SOLUTIONS

PRODUCTIVITY Pro: Some companies report an increase in production

when their employees have access to the solution remotely. For example, a sales team member can submit orders remotely without having to call the order in or go into the office to prepare it.

Con: A good internet connection is required to maintain productivity. If your internet is prone to go down often, using an online service may greatly hinder your productivity.

ACCOUNTING SOFTWARE

QUICKBOOKS PRO 2014 (INTUIT) QuickBooks Pro generates more than 150 preconfigured

reports in addition to custom, memorized, favorite, recent and contributed reports.

Manage employee data, payroll, payroll taxes, sick and vacation time, and direct deposit.

Intended for small business owners Verdict: 10 / 10 by Pamela Stevens

ACCOUNTING SOFTWARE

SAGE 50 Sage 50 meets all basic accounting needs, including the

reports that CPAs require. 140 preconfigured reports THE VERDICT: 9.88/10

ACCOUNTEDGE PRO AccountEdge Pro for Windows includes all accounting

modules in one purchase with more than 100 templates. The Verdict: 8.85/10

OPEN SOURCE SOFTWARE

GNUCASH: http://www.gnucash.org/ GnuCash is free thanks to the open source movement. GnuCash runs on the following operating systems: Windows,

Mac OS X, GNU/Linux, *BSD and Solaris. GnuCash is based on double-entry accounting with a decent

range of financial reports

EXCEL-BASED ACCOUNTING: 8 REASONS WHY EXCEL IS BETTER

Excel is widely available and can be easily manipulated to perform recordkeeping and analysis. According to IRS publication 583, “Except in a few cases,

the law does not require any specific kind of records.” Business owners can choose any recordkeeping system that clearly shows income and expenses.

Quicker learning curve than most accounting software? If you are fluent in Excel yes – otherwise NO!

CHAPTER 5 SUMMARY

There are a large number of accounting programs available to the small business owner. Which one is ultimately chosen is a function of the level of accounting knowledge and computer savvy.

The most important selection criteria is the level of complexity of the business and the ability of the software to grow with the business.

Also important is the ability of the software to assist the owner/manager in analyzing the business on an ongoing basis using general or specialized reports.