When you asked your accountant about choosing accounting software for your business, is this about how the conversation went:
YOU: "I want to get my books in order for the new year. What accounting software do you think I should use to do that?"
YOUR ACCOUNTANT: "I think you really should use QuickBooks. Many of our clients use it and it is a very popular package."
Here is my translation of what your accountant really meant...
"Since we don't know about or use any other accounting software other than QuickBooks, it has to be the right choice for you. Oh, and by the way, even though we're accountants, we really only know how to use QuickBooks for what WE need it to do. When it comes to helping you understand how to use it for what YOU need it to do, we really can't help you there either".
SAD BUT TRUE
Unfortunately, I have heard this dialogue repeatedly over the years.
The conversation on the topic of accounting software is usually very slanted in terms of what will make it easiest for the accountant. Not what will make it easiest for you on a daily basis.
And that's too bad. It doesn't have to be that way.
WHAT IF QUICKBOOKS IS OVERKILL?
In my mind, there is no question that QuickBooks is a fantastic software package. Especially when you consider the price point. It provides an incredible amount of tools and functionality that allows small businesses to keep track of their finances. I have been providing QuickBooks consulting and training services since 1999 and plan to continue doing so for many years.
For many small businesses, QuickBooks may simply be overkill. These businesses don't need a full-blown general ledger and all the complication that comes with it.
SOME REAL WORLD OBSERVATIONS
Tradtitional accountants tend to get the jitters if they aren't working with accounting software that has the capability to prepare a balance sheet, trial balance, journal entries and historical detail back three centuries ago (ok, that last point is an exaggeration, but you get the idea).
Here is the reality as it applies to many small businesses (and I'm talking about those with revenues less than $100-$200k):
- My experience has shown that if they do run a balance sheet, it is almost completely wrong a large percentage of the time. Why bother with it then? Let the accountant prepare a correct one at the end of the year instead.
- If you mention the phrase "journal entry" to many small business folks, their eyes instantly begin to glaze over.
- Many accountants don't trust the numbers they get (for good reason in many cases), and they end up completely re-keying data into their own bookkeeping or tax preparation software. So if they do this, why are they forcing their clients to live in the world of QuickBooks when simpler alternatives exist?
WHAT ALTERNATIVES ARE OUT THERE?
The beauty of "web 2.0" is that there are some new accounting software vendors that offer some really compelling products.
A few of them that come to mind:
WHAT DO YOU NEED YOUR ACCOUNTING SOFTWARE TO DO?
This is the key question that your accountant should be asking you to help you make an informed decision.
For example, if you need your accounting software to handle purchase orders or sales orders, many of the examples listed above will get knocked out of consideration because they don't offer that functionality. And that is perfectly fine. You've identified what you need and they might not have it.
What if you only need your accounting software to take care of invoicing some clients, keeping track of a checkbook and producing a profit and loss statement every month so you can see how the business is doing?
If that is the case, the world of alternatives just got bigger.
EASIER DOESN'T MEAN MISTAKE-FREE
If you are an accountant reading this post, I know what you're thinking. It doesn't matter how easy the software may be - we'll have clients that mess it up. And you are absolutely right.
The issue of whether a business should even be doing their own bookkeeping and accounting is definitely one that is debated frequently. But you know the outcome of that debate - until a business owner has tried to do the books themselves first, they don't see the value of outsourcing it or bringing someone on board who "gets it". Why not try to make it as easy as possible right out of the gate, rather than introduce all the complexities of QuickBooks first thing?
GRADUATE TO QUICKBOOKS - THE ULTIMATE GOAL?
QuickBooks has been around for decades now. They have a 90%+ share of the small business accounting market for good reason. Everyone know about them.
However, all you need to do is follow a Twitterstream for a few days, and you'll no doubt see comments coming through such as (these are actual quotes I have seen!):
- "I think QuickBooks just broke my brain"
- "QuickBooks is making me pull my hair out. Soon = bald."
- "There it goes again. QuickBooks sucking all the oxygen out of the room. How rude."
When I first discovered Freshbooks a few years ago, I struck up a great conversation with a VP (who has since left the company). One remark he made really rang true, and it was:
"We hope that our clients ultimately get big enough and sophisticated enough to graduate to the world of QuickBooks. If they do that, everyone is a winner."
I couldn't have said it any better myself.
WHAT'S YOUR TAKE?
It would be great to know more about your perspective on this issue that many small businesses face every day.
Feel free to post a comment in the box below!