All About Accounting Software

There are a host of accounting solutions available to small-business owners. A number of sites offer basic accounting and payroll solutions for free, and then there are the low-priced products offered by Sage, Intuit Software, and their competitors. This month in the United Kingdom, two London-based designers are adding their own accounting solution to that list of those catering to SMBs: Brightbook.

Borne of the two designer’s disinclination to keep books, Brightbook is intended to change the way people feel about accounting. The founders are James Henderson and Warwick Leicester, who both run small businesses and were unsatisfied with Sage’s Peachtree application—Henderson notes that Peachtree wasn’t especially lacking in features, it just wasn’t the simplest, most straightforward offering for him.

Brightbook therefore aims to make the bookkeeping process painfully simple, and during their first stage of business (and marketing), the product is free. The founders’ goal is to build a user base offering the bare bones, gratis platform, and then eventually monetize by developing paid features. They also hope to begin working with accountants on the platform—Henderson claims he has already proselytized his own clerk.

There are a number of risks in offering a free product, but Brightbook already has about 1,200 users singed up (many of them leveraged through the accounting product’s Facebook page), which adds to the idea that the Britons might really be on to something. It will be interesting to see how Henderson and Leicester are able to grow this very simple product into something more—and whether they become serious competition for the larger SMB accounting software providers.

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As we mentioned last month, we wanted to give our readers some insight into the accounting solutions available to small businesses, and when they should switch from SMB-geared platforms, so here’s our estimation on the latter subject:

QuickBooks has been around for almost three decades, and owns about 85% of the small business accounting market. A large number of small businesses will only ever need this Intuit software for their accounting requirements, but a portion of these companies will certainly outgrow QuickBooks—and it’s important to know whether your own company’s needs exceed what QuickBooks can deliver.

For most of its existence, QuickBooks allowed five users maximum, and any company with more concurrent users switched to another accounting software after crossing that threshold. Now, QuickBooks allows up to 30 simultaneous users, so the decision to switch isn’t entirely a size-based one. Another factor potentially stopping users from switching to a mid-range accounting system? Price—the QuickBooks Enterprise Solution (the platform supporting up to 30 users) costs about $3,000, while at best, midrange accounting software ranges from $25,000 to $30,000. Because of mid-range systems’ costs, some companies whose needs exceed QuickBooks will stick the program because there are a large number of supplementary add-ons available.

Still, even if you balk at a hefty price tag, there are several reasons to take the plunge and invest outside of QuickBooks. Obvious causes include an increase in sales or number of employees, or a need for industry-specific accounting functionalities. A slightly less apparent reason is accounting controls—while QuickBooks has an audit trail, but some of the more complex accounting systems offer better support.

There are many who recommend using QuickBooks for as long as it’s fitting, but Intuit executives have stated plainly that their products are not intended to ride the wave of expansion from SMB status to larger enterprise. The most important thing, of course, is to assess accounting needs accurately, and then decide what type of accounting and financial software to choose—just don’t be shy if you need something more than QuickBooks!

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Technorati Tags: Intuit, Mid-Range Accounting, Quickbooks, Small Business Accounting