Today's Technology for Tomorrow's Firm.
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June/July 2015 • www.CPAPracticeAdvisor.com 5 FROM THE TRENCHES Accounting Software Choices for Accounting Firms and Their Clients Te challenge of this month's column is trying to explain the maturing of the accounting sofware publishers and evolu- tion in the accounting sofware market, while trying to help you fully appreciate the nuances of the evolving market and needs of clients. However, one thing has remained clear: the most important thing is to solve the client's business problem in the best way possible. Are you helping your clients do that? Brian Tankerley CPA.CITP, Dr. Bob Spencer, CPA.CITP and I, along with our whole K2 team, have had the responsibility of reviewing and maintaining listings of leading solutions in the accounting sof- ware, ERP, reporting, analytics, and ver- tical market space for more than 30 years. Te pace of innovation is as fast as it ever was, perhaps accelerating, and the choices are ex panding. If your organization is using the same sofware that you have used for more than 20 years, that may be OK, or it could be a productivity drain. So What Are The Most Impor- tant Accounting Software and ERP Programs available? It is important to remember that several factors have infuenced the direction of accounting products. A short list includes: I nter net, globa l ization, mobi l ization, ecommerce, hosting (Cloud or SaaS), business analytics, and micro-verticaliza- tion. For small business services clients, the needs can be prety simple. Adding inventory and costing frequently requires more capable sofware. Adding volume, multi-locations, multi-currency and con- solidations requires even more complexity. As the organization becomes larger and more complex, the needs grow. As noted in prior columns, a key concern is the lack of a selection process being applied on new system implementations, and choices being made on implementing new systems without appropriate thought about the future, or for that mater, current needs. Systems will frequently stay in place for 10-11 years, much longer than the prior 7 year average. You should choose a system that can grow with your frm or client's needs for the next 3, 5 or 7 years. Changing systems can be terribly disruptive and using external systems like Excel for reporting can lead to errors and wasted efort. Financially, monthly licensing, hosting and SaaS has made far more capable sof- ware available for less capital investment. Finally, you should not overbuy or under buy accounting sofware. You can review our view of the market at www.account- ingsofwareworld.com and see that prod- ucts can be sized by their ft in the market from Tier 1 (SAP, Oracle, Workday) down to Tier 5 (Quick Books, Sage 50, Wave, possibly FreshBooks), and everything in- between. Further, if you take the time to understand a client's needs, it becomes obvious that one size does not ft all. However, most frms can only support one or two products before the depth of knowledge required overruns the team's collective ability. Tis fact has led to the dominance of QuickBooks in many public practice frms because this one product could ft many clients. It also led to both direct sales by publishers as well as the traditional sofware Value Added Reseller (VAR) indirect model. For example, in the lower tiers of the accounting market, including entry level and SMB sofware, there are a number of products that can be used by f irms to support clients. Included are: • FreshBooks – invoicing for Schedule C type clients • Sage One – accounting and project management • Wave – accounting with inexpensive payroll • BillQuick – yes, there is accounting sofware behind this time and billing solution • Xero – accounting with payroll and accountant friendly tools • Accounting Power – an accountant- centric system with good payroll • QuickBooks Online – the major focus of Intuit for accounting at this time • NetClient CS with ACS and Client Access – Tomson's client accounting system • QuickBooks desktop – a well-known and popular system with many installers and add-ons However, as soon as true inventory and costing is required, we break into a new class of products that can support much larger and more complex businesses. • CYM A – notable payroll and Human Resources management • Epicor Online and ER P – a strong distribution and manufacturing system that also handles retail and services. • Intacct – mid-market system supporting multiple verticals • Microsof Dynamics NAV – custom- izable distribution sofware with good drill down capability • Microsof Dynamics GP – good general mid-market account • Microsof Dynamics A X – distribu- tion and manufacturing system • Open Systems – a robust system with NFP, construction and other vertical support, with the personalization capability, this system fts many industries • Sage 50 – a robust and fast system with good business analytics • Sage 100 – a tried and true mid-market product that has good inventory and costing, typically used in distribution and light assembly • Sage 300 – global accounting and distribution • Sage 300 Online – a robust system updated for online use • Sage X3 – distribution and manufac- turing system Of note is that many of the SaaS prod- ucts are being chosen because of their ability to do rapid deployment and scale up and down. While the SaaS products are maturing, the traditional products have responded w ith comparable or better pricing in hosted environments. In almost all cases, the traditional products have superior operational features because they have been in the market longer and more Randy Johnston is executive vice president and partner of K2 Enterprises and Network Management Group, Inc. He is a nationally recognized educator, consultant and writer with over 30 years' experience. He can be contacted at randy.johnston@cpapracticeadvisor.com . A ccounting sofware choices have never been more numerous, full- featured and capable than the products ofered today. Some of you are brand new to the accounting space and some of you grew up purchasing mini-computers to run sofware you had to write yourself to run in your frms. I've had the pleasure of writing code myself, as well as siting with so many entrepreneurs, including CEOs, VPs of Development and VPs of marketing helping them create sofware and making you aware of it. By Randy Johnston