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Choose The Right Accounting Software

One of the more complicated aspects of running a business operation is the function of accounting.  The selection of the correct software to use can make all the difference in the success of the business operation.  

For most small business operations there are two popular programs.  These are Quickbooks and Sage (also known as Peachtree).  Each has their respective advantages and disadvantages.  This article helps the business owner in his selection process.

First of all, this decision process is geared towards those operations with revenues of less than $5,000,000 per year.  This pretty much covers about 90% of all small businesses in the United States.  If your business is processing more than $5,000,000 per year, then you should seek guidance from your CPA to determine the best software to use.

Next, are you in a job or high cost item resale operation?  Examples include large project contractors such as site developers, apartment complex contractors, institutional contractors (construction of government buildings, hospitals, or military facilities).  For high cost item resale, these include new car dealerships, RV dealerships, farm equipment dealers, small boatyards, etc. then you should use customized software related to your industry.  If any of these apply then go with the software recommended by your CPA or industry consultant.

For most business operations, you earn less than $5,000,000 per year and you are not a job or high cost item reseller.  So then let’s move onto the next decision in the model.  Who will operate the software? 

Sage is designed with accountants in mind.  It is more complex to operate and assumes you have a core understanding of accounting.  If your daily transactions will be entered by one or two individuals and these individuals have accounting backgrounds, I highly recommend Sage.  The software is designed to operate along the lines of the traditional accounting processes.  It tracks data based on the standard ledgers and allows the accountant to pull data in a formalized method.  Furthermore, if your business will require an audit (most businesses do not have to complete an annual audit) then this software works well in meeting the compliance requirement for internal controls.

So now what is left is Quickbooks.  This is a wonderful software designed for the non- accountant to operate.  It is ideal for a multipoint entry concept.  You can teach just about anyone with some level of responsibility how to enter data related to their function in the organization.  The software even has a retail sales program to augment the basic accounting package.  For management, once they learn the basic reporting function, you can pull tremendous amounts of information to make decisions.

Both Sage and Quickbooks are ideal for the small business environment.  By using the decision model above, an owner should be able to select the best software to meet his or her needs.   Act on Knowledge.

If you have any comments or questions, e-mail me at dave (insert the usual ‘at’ symbol) businessecon.org.  I would love to hear from you.   If interested in my help as an accountant or consultant, contact me through the ‘My Services’ page in the footer. 

If you found this article helpful, please consider a donation to the site.  The donation button is just to the right.  Even if you don’t make a contribution, I encourage you to read more articles on the website to help you become a better business entrepreneur.

Other articles that may interest you and related to this subject matter include:

Using Quickbooks in Construction Accounting – an in depth article illustrating how to set up QuickBooks for construction.  It explains the concepts of Class Accounting, Phase Accounting, and Job Costing.

Create a File Structure for Accounting –  every office needs to access information in an easy to understand format.  This article explains how to set up your electronic file structure to allow for easy access to information.

About David J Hoare (420 Articles)
I spent 12 Years as a Certified Public Accountant, Over 20 Years of Practice in Accounting and Consulting, Controller in Management of Closely Held Operations, Masters of Science in Accounting, Prepared over 1,000 Business Tax Returns and Hundreds of Individual Returns

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