EVALUATING SMALL BUSINESS ACCOUNTING SOFTWARE



EVALUATING SMALL BUSINESS ACCOUNTING SOFTWARE

Do you know that there are over 800 boilerplate small business accounting software packages and that 82% of this software is purchased at the retail level?

This means that most small business owners are relying on a sales-person to help them choose their accounting software; a sales-person who may (or may not) know computers, but in most cases, doesn't know the first thing about accounting. The result is many business owners are ending up with the software the sales-person wants to sell them, rather than the software they need.

An alternative is to ask an accounting expert for his or her input on which accounting software package best suits your specific needs. Your accountant will know the quirks that relate to your

industry and/or company, and can steer you toward software packages that can handle these problems.

With this in mind, the following is an outline of some of the techniques that we use to evaluate small business accounting software for our clients.

* Identify the software that fits a client's particular needs. Prioritize the software functions that the client is most interested in--for example, job costing, responsibility accounting, or payroll.

* Pick two high-end and two low-end packages that meet the above criteria to narrow down the choices. Next, evaluate the packages with regard to the following:

• Limitation of the Chart of Accounts. How many accounts and how much detail will the system allow? Is the Chart of Accounts standard or can it be customized, or both?

• Can the package handle an after-the-fact trial balance? This would be needed to post adjusting entries to the general ledger.

• Touch and feel of the software. Is the layout on the screen easy to follow and use?

• The ease of handling manual transactions, i.e., manual checks, journal entries, etc.

• Audit trail should be found on paper.

• Self-Help. Both the on screen and printed Help functions of the software.

• Is the Help function easily accessible on the screen?

• Does the package include Context Sensitive Help?

• Manual. Are they indexed well, written in English rather than computerese, laid out in a procedural level, and do they include numerous pictures?

• What does it take to get the job costing and inventory functions up and running?

• Sales invoicing.

• Ability to set discount rates, sales tax rates, and finance charges by customer

• Number of automatically calculated sales tax rates

• How many different types of invoices does the software generate and can they be customized?

• Is the automation prohibitive of small manual changes, or can we do a certain amount of customization to the package?

• Does the software company provide comprehensive terminal support to the user?

Obviously, each situation has its own nuances and the above techniques are just a guide to help you in your decision-making process.

However, it does make sense to seek professional advice when choosing an accounting software program, rather than relying on a sales-person at a computer store.

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