2008 Review of Small Business Accounting Systems

These entrepreneurs may well be experts at their particular niche, but running
the business side of any of these entities is a constant juggling match, especially
when margins are small or seasonal variations must be accounted for. And then
there’s the people management aspects — customers, vendors, employees.
Each has specific needs and expectations; and without meeting those needs, the
business will experience trouble. They depend on you, their accountant, to help
them achieve success, and it starts with effectively managing all these business
processes and people interactions. This review focuses on accounting and management
programs designed for small businesses. Much more than just bookkeeping software,
modern SMB systems often include advanced integrated functions for invoicing,
point-of-sale, inventory control, payroll, contact management, electronic banking
and e-commerce activities.

While these systems have grown in functionality, they have often become increasingly
difficult to use for small business owners. Fortunately, in addition to these
associated business functions, the technology vendors who develop such programs
have also focused on the role of the public accountant. In addition to increased
security controls and audit trail functions, some systems now include tools
specifically designed to help transfer data to the professional’s accounting
system for write-up, reconciliation, adjustments and other services, while still
allowing the business to operate and use the program. This is a vast improvement
from the end-of-month crunch time that once dominated many accounting firms.

Enhanced accountant supervision and access to client business data has also
been achieved through remote access technologies, sometimes referred to as virtual
write-up services. With online access functions, professionals can log into
a client’s accounting system from their own office and perform tasks as
needed, without requiring data transfer or client visits.

The latest innovations along these lines, however, are toward an integrated
model where everybody — accountant and all clients — is working
on the same system, just with different access rights and interfaces. I think
of it as a bicycle tire, with the accountant at the hub and the spokes leading
out to each individual client. Client “spokes” can only touch one
point of the accounting system, while the professional can reach out to each
of the clients. The actual accounting data is always under the control of the
accounting firm, with clients logging in through online portals to run their
bookkeeping and associated business programs. This model appears to be the best
at maintaining total data integrity and security, while also strengthening the
client-professional relationship.

The products reviewed here vary from fully web-based systems to traditional
installed programs, and each has different core strengths and purposes. When
selecting a business management and accounting system, finding one that matches
workflow needs and the dynamics of a business’ niche is critical. At the
same time, it must be usable; if it isn’t easy to learn and use, the entity
won’t see the most benefit, and the accountant may wind up spending too
much time repairing honest (or dishonest) errors. So if you are helping a client
find a new system, make sure they understand how important accurate transactions
and record keeping are to the health of their business. Hopefully, this will
improve their diagnosis and help them achieve long-term success.

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