What is your favorite software for small business accounting?

For the specific niche of Mac users who travel and do business internationally, Xero is excellent. It's full accounting software with balance sheet and journal entry and does a great job with VAT and GST and multi-currency. Very easy to use, even if I'm here in Seattle and my client is in London or Amsterdam.

For simple income and expense for service businesses who don't need or want full GL software, FreshBooks and Harvest are popular, especially among Mac users. QB for Mac is not at all the same program as the PC version, and QB online is still buggy and doesn't work that well.

Now the dust has settled, I'll chime in.

I've been installing/implementing/using accounting systems in a wide array of industries and business types starting with a Data General system on a leased dial-up connection.

There is no "best" product. They all are either missing something or requiring you to change your business model to meet what the programmers feel is the ideal structure (not counting mandatory GAAP needs). There are good products that meet the needs of the business today and hopefully tomorrow. There are systems designed with management accounting in mind, finance, the CPA.

There are systems that have modules for vertical markets and there are systems made for the vertical market.

The answer is to find the best product, at the right total cost of ownership that will do most of what you need it to do without a lot of either additional programing costs or a zillion spreadsheets.

That is the best product.

In my opinion cloud based accounting will be the wave of the future for SMB's. I have several clients using sites such as Waveaccounting.com and Outright.com for their accounting.

QuickBooksPro has been my favorite. Have also used the tailored version for manufacturing. Now working on installing one for Real Estate Managment.

I have been following the discussion via the Focus notification emails and I went over to Tom Coyes website and was looking around and clicked on "The System."

If I didn't know what site I was on I would think that I was reading the capabilities of QuickBooks. Everything, with a couple of exceptions like the number of users, you have listed in your customized solution for small businesses QuickBooks can do:

(1) Integrate a CRM into sales - Yes
(2) Restrict access to certain areas - Yes
(3) Can attach documents to transactions - Yes
(4) Can email quotes, invoices etc - Yes
(5) Reports can be displayed, printed or emailed - Yes
(6) Sort transactions and other fields on reports - Yes
(7) Access to previous years activity - Yes
(8) Restrict ability to change previous year's transactions - Yes
(9) Modify & insert notes/memos on transactions - Yes
(10) Generate quotes (estimates) - Yes

While there might be more to your "system" to me it sounds like you are describing all of the features already available in the most widely used and supported small business accounting software application in the United States - QuickBooks.

Tom,

I have to jump in here. You are talking about two separate systems that integrate, similar to a Microsoft CRM and Dynamics (formally Great Plains). Frankly I don’t see what you are doing here that is new and exciting. I don't see the purpose of thinking that it's important to have QB email a subset of my clients and email list, since it, along with Dynamics, Sage, and many others are in fact accounting programs. Nor do I think it’s important to think my CRM system should be an accounting system. You are suggesting that since a CRM system isn't an accounting software solution or an accounting software solution isn't a CRM system, somehow your integrated system of the two components is better than QB. You are merely doing what programmers have done for years. Discounting the value of understanding accounting in order to be able to analyze effectively whether or not the cost of hiring you is in line with the overall goals of the organization. I also say that from a place of working hand in hand with many programmers who got the importance of accounting, marketing, operations and sales working together. The largest project was rolling out an integrated Microsoft CRM and Dynamics system and customizing the work flow and order flow that I wrote based on feedback of the entire team, sales, operations, marketing and accounting.

I use QB for my service SMBs and utilize third party CRM systems for their sales and marketing. I’ve used Sage products, and Microsoft products for manufacturing SMBs. Currently I have one client using Passport (formally Real World) and I’m not impressed mostly due to the user interface and lack of integration with a CRM system. Each has their usefulness and each has their complexity. The true talent comes in knowing what your client’s needs are and what their goals are. My goal for my clients is that they “outgrow” certain SMB software, but only if it makes sense for them to switch. A big mistake I encounter with SMBs is they are talked into large oversized systems that do much more than they will need for several years. It costs much more to purchase a large system and not use it than it does to incrementally grow into a system that fits each stage of your business.

Tom, You turned it into a discussion board...

I have been a part of the Inuit Family (user not employee) since 1999. As a QB pro you know that QB isn't always the right answer for everyone. They teach you that. I still use their products and plan on adding more. QB is my favorite and what I use in my firm and for my clients.

A member of my staff has started the Pro Advisor program and is getting there.

As to your other Question:
Industry specific software has been around for a long time. It will always be around but as to it being the "wave" of the future I don't think so. If anything is headed towards being the "wave" I'd say hold on to the QB surfboard.

What Douglas Millington said..................

I love QuickBooks. Not just because I make a great living with it - teaching people how to use it for their small businesses, but also for the reason that I tell my clients - like Doug said there so much support out there for it from the intuit community to people like myself. In fact a few years ago I was hired by a contractor to essentially learn and then teach them how to use Master Builder (originally an intuit product, now a a Sage product) for their business. In the end and thousands of dollars later I managed to convince them to switch back to QuickBooks - to the Contractor's edition. The main reason was I could not get any help with Master Builder. I am normally very good and an extremely quick study when it comes to figuring these things out on my own, let alone with help but with Master Builder there simply was no help. I had gotten in touch with someone from Sage who sent me a link to a "training video". All that it was, was the same sales video they use to get you to buy the product. Any additional help would cost bare minimum $1,500.

I tried to customize a report in Master Builder once. Once. I found Calculus 3 much easier to learn. I would add a field that seemingly should show up with data on the report and get nothing. Very frustrating. With QuickBooks it is so much easier. I click 'Reports' - 'Custom Transaction Detail Report' and then I can have at is choosing the things I want to appear and leaving off the things I don't want.

So I am a big fan of QuickBooks for the ease of use and the easy access to getting help from people like me when and if you need it. Use my blog as an example - it's all free I promise. Let me know if you have any questions :)
http://nerdenterprises.com/blog/

Hi Tom, Can you be a little more specific on those issues? I am thinking that accounting software is more than a tool. It is accounting "nothing else"
Thank you,
Constantin

This is such great insite thank you for all this wonderful feedback.

During my time here at Focus as an ERP Specialist I conducted nearly 3000 surveys in just over a year. I spoke with many people at small organizations (say 50 and under) that were using industry specific solutions for their accounting. Just off the cuff, I'd say the most common industries seem to be construction, architecture & engineering, real estate, and manufacturing. Quickbooks, Sage's Peachtree & Timberline, and MS Excel are still king but more and more people are looking for software that reflects the nuances of their businesses and provides easier access. I agree with Wray that the trend towards cloud/hosted/SaaS solutions for SMB accounting cannot be ignored. Offerings from Netsuite, Intacct, and MS Dynamics really seem to be addressing common pain points, and are doing it in a more cost effective way than ever before.

Constantin, I don’t want to turn this into a discussion board but here it goes:

Many believe that an AS helps you manage your business. This is partially true for a small number of businesses only and absolutely not true for a large number of businesses.
Where it’s partially true: wholesale, retail businesses. The reason being the workflow is simple. The Purchases & Sales processes are simple and hardly change over time; your AS records past activities and returns what’s left in the business.
Where it’s partially true: small manufacturing: the work flow is rigid and rarely changes over time. If it does, it’s just by a small increment. Your AS helps on the sales/purchases side as above and a bit on the manufacturing processes side.

Where it is absolutely not true: Transport, Engineering, Hi Tech, Travel Agency, Freight Forwarders, Event management, Equipment Rental, Property management + dozens and dozens of other type of businesses in the services sector.

How can your QB help in a small (3 recruiters) employment agency for example? All it can do there is the accounting, nothing else. Suppose the agency sends dozens of potential candidates to a client/potential employer who is looking for a receptionist and he turns them all down. Does your QB keep track of this? Nope. Suppose now that the client hires one of them. This is precisely when your AS software kicks in by recording the invoice. The same way a funeral home gets your business when you die, your AS goes to work when the deal is consummated. What happens before that totally bypasses the accountant and his tool.
Suppose you invoice the client and a week later he barks back because the amount seems excessive to him. Can your AS with a couple of clicks, starting from this client’s invoice show the 2 or 3 interviewers who interviewed the dozens of candidates with their resumes and the date+time+length of the interview + the interviewers comments for each candidate and email the whole thing to the clients as a justification of your high fees? Of course it cannot. Now imagine this with a med size outfit with 10 interviewers and 1000s of resumes. Did your QB do anything else besides accounting and record keeping? This is absolutely not a smallisolated case but very very common.

Have you ever seen an AS being used without a parallel system alongside it? So far I have not. In order to bridge the gap between accounting and operations, users create and maintain parallel systems. They have to otherwise they can’t function. This is simply because an AS is an account’s tool not a business tool.

When I install a system for a new client the sequence of events is very revealing an always the same: In the beginning the client watches very closely the deployment with a fair amount of doubt (It’s not QB, it can’t be any good). When he sees that it produces more, and more precise reports than his one size fits all AS, he goes to sleep and leaves me alone. Later, when he sees the new features being added week after week on the operations side, he gets excited and starts requesting more features for his operations and wants more users on the network. He does not want to hear about accounting features any more, and concentrate exclusively on the operations. All my clients went through a similar stage. Are these people dumb? Certainly not. They know that Accounting is a dead function and money is made or lost in operations, not in accounting.

Are you still convinced that Accounting is everything to a business and an AS is more than a accountant’s tool?

In my previous post I asked the author of the original question to specify if she was referring to the tool for the outside accountant or the tool for the business entity. These are 2 different functions with very different needs therefore requires different tools. You know the adage about the hammer and nails; same principle here. When your only tool is an accounting software, all businesses look the same and you’ll inevitably try to plug it in any business, every business regardless of nature, shape, size and complexity

I am surprised that you didn’t navigate to my site for info before asking your question; all the above is explained there and much more.

Thank you Tom, I really appreciate your thoughts about these issues. I don’t want to turn this into a discussion board too. So, please think that your opinion is important for me. I will explain what I was thinking when I ask you to be a little more specific.
You told me that your clients “know that Accounting is a dead function and money is made or lost in operations, not in accounting.”
My opinion is a little different. With AS in place, Accounting can not be a dead function. Was maybe, a “post active” function before AS and become “pro active” today with the new technology that is Web Accounting and of course ERP.
I was thinking a little, to a phone company or travel companies which are set-up to work 24 hours per day without any human contribution to the business. The accountant or operation management duty is to look from time to time over the books and to answer eventually, to clients concern. Only think is to have access to internet. Wait a little and you will see more creative and pro active function of accounting in place. The business core of all those companies is in AS and not in operation.
Accounting like a profession will become more and more intellectually and accounting function integrated in a business function.
The fact that only 10-20% of the today AS capabilities is used in the business operation is because of misunderstanding of relationship between operation and accounting.
I am very interested in what you are doing that is MiniERP. I don’t have the chance to pass your entire site, but I am confused about the big issues: separation or integration of accounting? Thank you again for your notes.

In the UK solutions like Kashflow, Arithmo, Xero are really getting a lot of traction among SMB owners for the flexibility and ease of use. You can compare them side by side here

http://www.getapp.com/compare/accounting-software-UK

Brightpearl got several positive reviews http://www.getapp.com/reviews/listing/brightpearl-application

I want to turn our discussion, if this is possible, to the relationship between accounting and accounting software. I know software developers consider accounting software as an object ("a tool, nothing else"). In my opinion, accounting software is more than a tool. Accounting software could take many responsibilities from the duties of the accountants, so they can work on other more valuable activities of the organizations. Today, accounting software is more and more integrated in accounting activities and decisions. If we understood that than we can think what is our expectation from accounting software.

Hi Constantin,

I'm a little confused about the relationship between accounting and an accounting system and where you want to move the discussion.

Accounting as devised by Pacoli was a systematic approach of recording financial transactions so one could later analyze them.

The analysis portion of that statement is what makes an accountant different than just a bookkeeper (no offense to bookkeepers who are great!).

In many businesses, there are multiple individuals entering data into the accounting system. Some are entering it in the financial portion of the system, others the managerial portion, but it really doesn't matter, the point is that the accountant doesn't have to be the only person.

Part of the accountant's role is to analyze each account for a ride range of tests (I don't want to make this an audit lesson) and then look at the books from both a P/L and B/S perspective as well as financial ratios. There are a lot of other ways to look at the information contained in an accounting system.

So what else would an accountant do? If your talking about business advice or other services, well accountants went into those fields to enhance their earning potentials, but that isn't what's taught in our colleges and universities and it's not on the CPA exams.

So again, more than happy to move the discussion, but I'm not sure where you want to move it to?

Wayne

Thank you, Wayne, for the quick answer. I was thinking to clarify a few questions regarding relationship between accounting and accounting software.
I want to find answers about what the accounting software means for accounting professionals, end users of accounting information, and software developers ? I am thinking that accounting software should be more then a tool for accountants and users.
If I am more specific to the question, I consider accounting software as part of accounting activities and of course as part of AIS and not something that can be independently viewed.
One more question. What do you think? In the future,could be accounting software like ERP considered an accounting activity? QB advertised that their accounting software don't need knowledge of accounting.
Thank's to all for the answers to this question

No one has yet mentioned Mamut (was MYOB) and yet it is one of the most versatile and easy to use accounting packages available - not to mention that it is inexpensive. I have used MYOB for over ten years now on both Macs and PCs for several small charities and would highly recommend it.

In India, TALLY is best software for all type of Industries. TALLY is known for International Brand and also having clients outside INDIA. TALLY Comes with ERP Solutions also that provide best features. :)

Both the hosted Peachtree and hosted QuickBooks offer complete solution for small business accounting. Hosted Peachtree or hosted QuickBooks are more cost-effective, reliable, efficient, secure, robust, and include all the features of desktop versions. For more information, click on the links given below -
http://www.ideamarketers.com/?articleid=2142832

http://www.morefreeinformation.com/Art/153392/32/QuickBooks-Hosting-A-Perfect...

There are a number of accounting softwares available in the market for small businesses but i feel quickbooks is the best software for accounting purpose... As by using this your work is almost half and you can even concentrate on other more important tasks as well..
You can check this link even, you will some more information about using quickbooks..

http://www.myrealdata.com/quickbooks-hosting.html

I prefer Quickbooks for accounting purpose.. as it is easy to handle and secure with full data back up. You can check this useful article:

http://www.articlesnatch.com/Article/How-To-Access-Quickbooks-Applications-An...

An accounting software is a tool, nothing else. I am not sure if you are referring to the tool for the outside accountant who does the books for his/her clients or to the tool for the business entity? These are two different perspectives, two different set of needs.

Constantin:
1) The difference between web accounting and local accounting is the same difference between having your dinner at a local restaurant or taking it home in a foam container, the food is exactly the same. Each option has its advantages and disadvantages; you choose one over the other depending on your life style and the way you want to work. I am in the process of designing a web version. Some of my clients are not interested (a web version would add nothing to them) others are half interested. A future client might be very interested.
2) Phone Company or Travel Company that are set to work around the clock… I think you need much more than a QB or whatever I can offer. I assumed we were talking about accounting for SMBs here, not large companies.

Douglas:
1) The site was written 4+ years ago and has not been updated since. Technology and programming languages have evolved dramatically since.
2) You looked at it as an accountant and oversaw the little excerpt on the right margin which is the most important aspect. It says:
" The accounting part might probably represent 1/2 or even 1/3rd of the entire application depending on the complexity of your business processes." What do you suppose the other 1/2 or 2/3 is about? The company’s business processes of course. Listing all the operational features would take at least 1 page per type of business and dozen of pages to list them all.

Let’s go through your list point by point
1) CRM integration with sales is a feature that has been around for 6/7 years already. If I am not mistaken QB added it 2 or 3 years ago. One of my clients needed to email a FAQ sheet to a subset of his customers (~120 out of 480+). The system was set up to send 1 email every 20sec. Do it one after the other and your ISP will catch it as spam and cut you off for 1 hour or so. Imagine this happening to a biz. Can QB do mass emailing by any chance?
2) A client hired a temp for a specific task. He wanted her to update certain records only (360+) and be able to access the system 1 day a week (Tuesdays and 9am-1pm only). A specific form was designed just for her such that all she could see and access was that form on Tuesdays within the specified hours. When the project was completed, the form was scrapped. Can QB do that?
Expl 2: One of my clients stores people’s the entire credit card info in the system. The info is encrypted thus appears on the screen as gibberish. To decrypt the user has to enter a specific password. When she does, a small window pops up with all the info. The window stays open 60sec, enough time to process the client’s credit card, after that closes by itself. I have no fear that one day someone steals the hard drive, the sensitive info is encrypted and the file backed up on a remote server.
4) This is old stuff. I am talking about being able to attach any type of file and hover your mouse over the link to see a thumbnail of the picture or excel sheet or whatever and open it, if you like, within the application itself in a pop up window.
5) Users want to be able to collate several pdf files into one and email it. In a travel agency each trip is made up of 1 invoice (usually 1 page), a passengers list (usually from1 to 2 pages, but no limit) + eDocuments (usually 1 to 4 pages, but no limit), tjese are separate files. The agent has the ability to email any document individually or combine any of them into a single pdf file with 1 click. How about QB?
6) I am not talking about sorting (too ancient a feature to mention it), I am talking about filtering (totally different need). I am not talking about doing it in reports (old stuff) I am talking about pop up windows displaying in a spreadsheet like form, say, the 230 clients you have in CA and filtering and re-filtering at your heart content to show, say, lawyers only and click on one of the names and display in another pop up window all his invoices or all the instances he attended your seminars on new tax laws. This is already old stuff. How about QB
7) and 8) One of my clients has to have his books audited every year. The system is set up such that:an agent/sales person can go back and modify her invoices within 24hrs. Past that, she has to report to the supervisor who has the ability to modify any invoice within 3 days. The only people who can modify a transaction after that are the owner and myself. Two weeks past the YE no one can modify anything except myself and stays that way while the books are being audited . Once all adjustments have been entered, I lock all past year records, no one can modify anything. I did not create this security model, it was requested by management and they got it.
9) I am not talking about simple memo fields. I have a client who likes to describe in detail in the invoice the job done on a project and turns the thing into a novel (some of descriptions have up to 20 lines of text) with bold, underline, different fonts, color, etc… just like MS word. He also wants the ability to find anything in the description. For example he remembers writing 2 or 3 invoices a long time ago with the word IKEA in description and wants to find those invoices. He can do it with 2 clicks. How about QB?
10) Of course QB can generate quotes. All of my clients except one don’t need a quote feature. I don’t overload them with something they don’t need. QB does

By the way all the above is really old stuff, nothing impressive. It means not much to an accountant but a lot to a business and its manager and its employees.

Also:
- I add/scrap features at client request for free, QB add some lipstick on the dog and charge for it.
- I update payroll tables for my clients at no charge; the info is available free of charge from the tax authorities. QB nickel and dime you to death. My clients hate this sort of practice, I hate it even more.

I have to stop here otherwise Focus will ban me from their site.
Cheers

Stacy:
I’ll try to be brief and to the point:

You: “You are talking about two separate systems that integrate…, “
Me: I never talked about 2 separate systems. You totally missed the point, and a number of others too. Read my other comments; visit my site and read what it says, although not up todate the fundamentals are still there.

You “Frankly I don’t see what you are doing here that is new and exciting”
Me: Did I ever say anywhere at anytime that what I was doing was new and exciting??? Never. On the other hand, I did say and maintain that once I set up and configure my system in a company it will beat whatever you can cobble together and at a much lower cost.

You: “You are merely doing what programmers have done for years.”
Me: Yes, absolutely true… with 2 differences. 1) I started doing it, not years ago but a few years ago, 2) I also do the accounting for my clients; in fact, that’s my main function, the system is merely a tool.
I tried once in the past to do what you are currently doing, i.e. cobble together disparate products and feed them to the client. I had to find a better way because it didn’t make sense neither to me nor to my clients.
Stacy, did I ever suggest anywhere, at anytime that no one else can do the same? Never, because the fact is anybody can do the same and… even better. The difference between you and me is that you feed your clients whatever Microsoft or Sage or Intuit have cooked for the masses; I feed my clients light, healthy, homemade food that I cooked and that fit what they want to eat not more, not less. You have little control over the tools you are using and pricing, I have 100% control over my tool and pricing. I know exactly what’s in there. If something goes wrong, I can fix it within a few hours and at no cost; if the client has a question or request the response is quick. Try doing the same with Sage.

You:" ...rolling out an integrated Microsoft CRM and Dynamics system and customizing the work flow and order flow."
Me: This is easy to do with manufacturing or distribution. The workflow for manufacturing and distribution are well know, well documented, pretty similar from one company to another, and change very little overtime. Therefore, the programming is much easier than it is for many, many other types of businesses. Stacy, can you do the same with businesses like services, transport, freight forwarders, event management, engineering, travel agency, + dozens and dozens of other types of businesses? Pretty sure not; I know what MS Dynamics can do and cannot do, I used it in the past.

You: “The true talent comes in knowing what your client’s needs are and what their goals are…”
Me: You need no talent, you need a couple of ears + common sense. All I need to do is ask Kristina in charge of Registrations, Judy in charge of Invoicing in an event management business (for example), and they’ll tell me what’s wrong with their current system; talk to the manager and you get another set of needs, and so on. Put it all together and you get what’s initially needed. Keep refining the product over time and you get an intelligent, agile, low cost solution that espouses the company’s processes. I don’t see any talent in this, just common sense.