DOS-based accounting software for small businesses.
In last year's technology issue (November 1994), the author reviewed four accounting packages for small businesses that operated off the Windows platform. Recognizing that a large percentage of PC users are still operating in a DOS environment, and when it comes to processing accounting transactions, the graphics may just not be needed, Ms. Haas did a similar review of six DOS-based accounting packages.
Inexpensive, off-the-shelf software for performing routine accounting functions makes it possible for small businesses to gain many cost-effective benefits of computer technology. These programs allow routine accounting functions to be handled in a fraction of the time required by a manual system. For example, to record a sale the small-business user merely selects "sales invoicing" from the menu, chooses the customer and items sold from on-screen customer and inventory lists, and then enters the quantities sold. All other invoice details, including selling price, billing and shipping addresses, and shipping and payment terms are automatically filled-in by the software and printed onto shipping documents and invoices. Customer payments are automatically applied against open invoices. A customer's account can be aged and a statement printed, with late payment charges computed, at the touch of a few keys. When the user selects "posting" from the menu, all journals, ledgers,and perpetual inventory records are updated by the program. A sales tax summary report can also be printed to expedite tax reporting.
Once the software is installed, there is a three-phase setup.
Background Data. Phase one starts by entering background data, such as, business name, addresses, fiscal year, tax identification number, and telephone and fax numbers. Much of this default information appears on documents and reports without additional typing. Next, account balances are input to a computerized chart of accounts. Businesses may design their own chart of accounts from scratch, or choose one provided by the software and tailoring it to their needs. To take full advantage of the program's capability as a management tool, budget and historical data for each account should also be entered.
Set Defaults. The second phase includes setting up the defaults for each active accounting function or module. For example, sales tax rates and shipping, payment, and credit terms must be established for accounts receivable. These will be utilized and printed on all applicable documents without additional typing. In addition, the specific accounts to be debited or credited must be established as posting defaults. These initial settings may be modified anytime or overridden for individual transactions. For internal control purposes, multilevel passwords can limit modification privileges to authorized personnel.
Enter Data. The third phase consists of entering the company's data for each active module. Master-file information for customers must be entered for accounts receivable, vendors for accounts payable, employees for payroll, etc. This task is time consuming, particularly for companies with a large databases. If management is anxious to get automated quickly, customer and vendor master-file data can be entered "on the fly" as actual transactions are recorded. This approach will reduce setup time but increase the time to record daily transactions until all customers and vendors are entered. For some functions, such as payroll and inventory, the data base must be established in advance so it may be accessed and updated when recording transactions.
Setup is the most difficult and, at times, frustrating part of getting automated. It's tedious, requires much patience, and sometimes requires calls to technical support lines for assistance. Most small business owners seek guidance from their accountants to insure the accuracy and setup of the initial trial balance and chart of accounts. This is particularly important because setup errors will likely have a pervasive effect. Also, many setup decisions require a good understanding of how accounting systems work in a computer environment. Sometimes the use of non-technical accounting language in the manuals can be confusing to users rather than helpful. All the systems provide on-screen tutorials using sample company data. These tutorials provide a convenient way to learn the program and reduce the time needed to set up and master the software.
Some programs design each accounting functional area as an optional module. This allows a business to begin with the general ledger package and add other modules as it acclimates to an automated system. The module approach provides more detailed information and generally allows automating more functions; although, it does make the systems more complex to set up and use.
Ideally, a business should convert to an automated system, effective the beginning of a fiscal year. While it's time consuming to enter prior months of activity to gain a full year's transaction history on the computer, once the initial setup data is input, all the time saving advantages of an automated system are available.
Transactions are recorded by completing on-screen orders, invoices, deposits, or checks. Some programs generate shipping documents, inventory picking forms, and purchase orders or reminders when an inventory item reaches a predefined reorder point. These on-screen forms may be printed immediately or in batches onto laser or dot matrix forms, or the business may continue to complete manual forms. Computerized forms look more professional, eliminate transposition and computation errors, and are faster to produce than manual forms. Posting transactions will automatically update all journals, ledgers, reports, and financial statements. In real-time systems these updates occur immediately; in batch systems, updates occur only after batch posting.
Beyond increased efficiency and prevention of computation errors, an important benefit of computerized accounting is increased management control. Computerization eliminates the laborious task of manually summarizing journals, posting to ledgers, and preparing worksheets; the software updates them automatically. Monthly customer statements, with applicable cash discounts and finance charges computed, and vendor payment schedules are immediately obtainable. Unadjusted trial balances and financial statements are instantaneously available. Accruals can be set up as recurring transactions expediting the adjusting process. At year-end, the tedious process of closing temporary accounts and updating equity accounts is handled effortlessly by the software.
Instant tax summary worksheets enable a company to meet external reporting requirements in a fraction of the time required by a manual system. Decision makers are provided with up-to-date reports that compare current, budget, and historical data and identify cash requirements. Some programs even depict these results graphically. Moreover, these reports are available on demand providing management with immediate feedback to correct problems and improve results.
Software Evaluation Procedures
Six DOS-based software programs were chosen for testing using actual data from a small business. Setup procedures described in each manual and the guidance of context sensitive help were followed. Technical support in getting started was consulted whenever delays were encountered or a satisfactory status could not be achieved. After setting up a test company database, transactions were entered for a brief accounting period. Computerized information for orders, invoices, checks, and statements was printed onto appropriate computer forms. Many other sample documents were printed, including journals, ledgers, and financial statements. Budget and graph features, when available, were also utilized. A brief description of the highlights of each reviewed program follows. In addition, a comparison of the major features is presented in the accompanying tables.
The Six Packages
Businessworks 10.0. This is a full-featured program with a modular design that grows with a business. A prospective user must purchase the system manager and add modules to automate other functions such as general ledger, accounts payable, payroll, etc. Each module is sold separately, making Businessworks the most expensive system reviewed. Bundling modules can, however, result in savings. The program vertically integrates with a wide selection of software including, point-of-sale, time clock/payroll, report writer, utility, and specialized industry packages.
Although setup is complex and a basic understanding of accounting principles is essential, the clearly written manuals use an uncomplicated sequential approach. In addition, 90 days of unlimited free (including toll-free) telephone support easily covers the entire installation period. Navigation is smooth with pull-down menus, and processing is very quick. Menu options are streamlined and very specific; it's not necessary to wade through layers of submenus to complete tasks.
This is one of the most comprehensive programs tested. It has great flexibility in displaying and printing data, processing transactions, and reporting. Flash reports, one convenient feature, highlights key financial data for each accounting module. Although accounting functions are modular, processing of transactions is real time so updated results are immediately available.
The program has gone through many improvements and revisions. Distribution is primarily through CPAs and reseller groups. Special services available to CPAs include unlimited toll-free support to a reserved, dedicated telephone line.
DacEasy 6.0. This is a modular program that offers many functions, including comprehensive inventory, at a reasonable price. Payroll is an add-on module. Convenient features include automatic telephone dialing, letter merging, and data compression. Functions, such as data query, report publisher, and graph, allow users to design reports and view data in many ways. Substantial time is required to master the complex techniques needed to use these features.
Setting up is broken down into easy-to-follow steps in two succinct manuals. The program is modular with pull-down menus that can be accessed by keyboard or mouse. A good understanding of basic accounting is necessary. After entries are posted, they cannot be edited. Correcting and reversing entries may require the expertise of a seasoned bookkeeper or accountant.
The software has been through multiple updates and revisions and works mostly trouble free. There are more than six add-on programs including, payroll, order entry, point of sale, estimating, job costing, and executive information system. The professional service department at DacEasy is dedicated to meeting the needs of CPAs and their clients. The Accountant's Club includes toll-free technical support, sales and marketing support, and opportunities to become certified DacEasy consultants.
One Write Plus 4.5. This is a no frills program that offers many features, including payroll, for a low price. The inventory function is limited to tracking quantities, using super track cards, and a single cost and selling price for each item. One Write Plus offers many standard reports which cannot be customized.
Users will find the system easy to set up and run. Only a basic understanding of debits and credits is needed to comprehend the succinct manual. Setting up is straightforward because of the program's similarity to a manual system and a convenient audio tape which guides new users. The system is not modular, and navigation techniques include pull-down menus, mouse, scroll, and button bar. Some hardware incompatibilities between the test equipment and the program were eventually resolved. Priority, toll-free support on dedicated telephone lines, and free upgrades are offered to CPAs.
Peachtree 9.0. Peachtree Complete for DOS is a comprehensive program with payroll, inventory, job cost, and order entry included in the basic package price. The accounting functions are modular - users may opt to activate only the modules that they need. A brief tour of key menu options is provided by an on-screen slide show. Surprisingly, the basic package does not include a bank reconciliation function.
The program allows great versatility in the display and printing of documents which results in a complex setup process. Although it uses traditional journals and ledgers, each module has its own separate manual that requires many steps. For example, order entry and accounts receivable require intricate decisions be made in respect to printing orders, picking slips, packing slips, invoices, and customer statements. In addition, multiple options for customized reports and graphs further complicate the setup process. A very good understanding of debits, credits, and basic accounting principles is essential. It is most suitable for a well-established business requiring considerable sophistication in its accounting system and extensive flexibility in documentation and reporting. It's too complex for a very small business which just wants to automate basic functions.
Peachtree offers a great variety of technical support options including local support services and services just for CPAs. Because Peachtree has been through many improvements and revisions, most of the bugs typically found in emerging products have been exorcised.
QuickBooks 2.0. This is an excellent choice for a brand new or small business not requiring a perpetual inventory. Payroll is available as an add-on. The QuickBooks package states, "No need to know a debit from a credit - ever!" and this is true. The simplicity of the program and the straightforward manuals allow business users to run the software with minimal support. An on-screen slide show, QuickTrainer, on-screen tips which offer guidance to the user as tasks are performed, and unlimited free technical telephone support (except for toll charges), help the user learn the system quickly. In addition, QuickFill and QuickZoom are innovative features which speed up transaction entry and data viewing.
Accountants may find the lack of traditional journals and ledgers a bit unorthodox. Balance sheet accounts have registers to directly record increases and decreases. It is, however, a true accounting program and a natural step up for small businesses using Quicken. It even provides an import feature for Quicken users. This is low cost, entry-level software that will automate basic functions such as check writing, invoicing, billing, and receipts quickly.
Simply Accounting 4.0. This is a menu-driven program which provides basic functions of general ledger, accounts receivable, accounts payable, payroll, project tracking, and perpetual inventory at a low price. In addition, a point-of-sale product is available. Simply Accounting will automate invoicing, billing, check writing, and cash receipts with a simple, no-frills design. Traditional journals and ledgers are used.
Program guidance is provided by two manuals and a tutorial workbook. In addition, a brief accounting principles manual explains the basic debit and credit concepts necessary to set up and use the program. Simply Accounting is uncomplicated and easy to learn because of a consistent menu structure. Many tasks, however, require users to wade through many submenus to complete tasks.
The software zeros out accumulated balances in payroll at the end of each calendar quarter and recommends, for efficient operation, clearing out details of fully paid transactions in journals and vendor and customer ledgers. This requires that paper reports be printed or the data stored on backup disks if transaction details are to be maintained. Reports are limited to a stock variety. Data can be exported to word processing and spreadsheet programs if customization is needed.
Choose According to Your Needs
It's important that a company select software appropriate to its size and needs. Generally, the more features and customization options provided, the more complex it will be to set up and master the program. When selecting an appropriate system, companies should consider technical support options and costs, data capacities, and the types and degree of customization needed for the various outputs (forms) from the software. In addition, [TABULAR DATA OMITTED] [TABULAR DATA OMITTED] [TABULAR DATA OMITTED] the accounting skills of the staff and access to an accountant's advice should be strongly weighed. Some businesses require full-featured programs that provide comprehensive perpetual inventory and great flexibility in report design such as Businessworks, DacEasy, or Peachtree. Small business owners with more limited accounting background and budgets would be better off selecting less complex software such as One Write Plus, QuickBooks, or Simply Accounting. These programs have more limited features, particularly in the report customization options, but probably require less assistance to set up and use.
Software developers welcome suggestions from their users and are constantly upgrading, increasing flexibility, and improving features. Most of the programs are inexpensive and come with trial-period and money-back guarantees. All the systems are more trouble free if run outside the Windows platform. Many programs, however, are available in graphic user interface versions using the Windows platform. Many Windows programs are neither as flexible nor full featured as the DOS versions and often have inherent problems (bugs) that have not yet been fully exorcised. In addition Windows-based software is usually slower at processing than DOS based software.
Many programs have common features that are not listed separately in the accompanying Exhibits. All the systems provide context sensitive help, tutorials, and a period of free telephone support. Multilevel passwords limiting access may be set up for all of the software. All of the programs allow multiple company and departmental accounting and generate mailing labels. In addition, all allow memorization of recurring transactions, provide automatic closing and updating of equity accounts at year end, and pro forma comparative reports using budgeted and prior period data.
Amy Diller Hass, CPA, is assistant professor of business at Kingsborough Community College of CUNY.
|Printer friendly Cite/link Email Feedback|
|Author:||Haas, Amy Diller|
|Publication:||The CPA Journal|
|Date:||Nov 1, 1995|
|Previous Article:||Developing capitalization rates for valuing a business.|
|Next Article:||Just-in-time information: wireless technology and the professional.|