My friend Brian Tankersley, occasional contibutor to The CPA 
Technology Advisor and seemingly full-time lecturer for the K2 organization, was kind enough to allow me to share his analysis of the current state of entry level client accounting packages. Brian's a CPA.CITP practitioner from Tennessee and, more importantly, a darn smart technology analyst. I'm guessing you'll find this piece as valuable as I did ---- and then go check out Brian's blog. Meanwhile ---- enjoy the read.
gll
As most readers of this blog know, the "Big Three" publishers of entry level financial management software are fighting in the small business space for the hearts and minds of small business owners. The battle has been joined by Microsoft (Office Accounting 2007, the new name for the product formerly known as Small Business Accounting 2006) and Sage (Peachtree Quantum 2007) against incumbent Intuit (QuickBooks 2007 Premier Accountant Edition), and all three have made wholesale changes to their offerings since the beginning of the conflict to help us get more completed in less time. A partial listing of some of the major changes in the last two years includes:
New database (QuickBooks), database version (Peachtree), or entirely new product (Microsoft)Significant increase in integration with Microsoft Office (all)
Feature sets targeted at Accountants have been created or extended, including:
Methods for an accountant to obtain a copy of the Client's information, make entries, and send just the changes back to the client
Fixed Asset Management System integrated into Accountant version of the products(QuickBooks and Peachtree have this feature, and Office Accounting 2007 reports that it has this feature as well, however, I have not personally verified that it contains the ability to run 4 different books of depreciation - Book, MACRS, Ace/AMT, and State, so I am unable to personally confirm that the scope of the new Microsoft offering is consistent with the offerings from Sage and Intuit at this time)
Enhanced Payroll offerings (all)
Role-based security model (all, although some offerings are stronger at this than others.)
New partnerships with third party service providers to allow the software publisher to sell services to customers beyond custom forms and checks, including, but not limited to:
Credit Card Processing
Outsourced Payroll Processing
Ability to have your client pay your invoice online
Work with online services such as Google (Desktop Search and Adwords) links to QuickBooks) and Microsoft’s eBay integration.
Many of the vendors are also giving away copies of their products to CPAs who participate in certain CPE training programs, including those offered by K2 Enterprises (Full disclosure: K2 Enterprises is a significant client of mine, and many of their classes include one or more versions (full licensed version or trial version) of the three major entry level packages. K2 also consults for all three of the “big three” applications, so don’t say we didn’t mention it.)
The latest push for market share has all three competitors basically giving away low end versions of their product targeted at new businesses. Long time followers of the entry level accounting system space will recall that Peachtree has been giving customer rebates which make lower end versions of their product free to end users after rebates for a few years, and earlier this year, Intuit joined the fold with a free limited version of QuickBooks Simple Start. With the launch of Microsoft Office Accounting 2007, Microsoft is now giving away a free application called Office Accounting Express 2007. The free versions of each application are located at the following websites:
QuickBooks Simple Start Free Edition
Office Accounting Express 2007
Peachtree Accounting 2007 - (*trial) Since the free version of Peachtree 2007 is generally sold at retail and made "free" through mail-in rebates, users will have to watch the office supply store ads to identify when and where a complimentary copy of Peachtree (after rebates) can be obtained. Two sites for watching for these ads are www.salescircular.com and www.sundaysaver.com.
The newly enhanced versions of these products now make it possible for even the smallest businesses to have a computerized accounting system, and make it easier for public accountants to collaborate with clients using the accountant version of each of these packages. With the attractive prices, as well as the related multi-million dollar marketing and advertising campaigns, this may finally be the year when those shoebox clients finally discover what they've been missing by using a columnar pad as their primary business management tool.
With the opportunities come some needs, and as I look forward at Tax Season 2007, I'm seeing some possibly unmet needs which represent revenue opportunities for accounting firms, including:
Supporting Your Clients - While consulting with multinational corporations on international tax matters sounds more impressive at parties, the reality of most accounting practices is that there are a lot of potential clients out there who need our help with their books, but are unable (or unwilling) to pay a partners' hourly rate to teach them to analyze the Company's books and records for errors. Firms with a large, well-trained bookkeeping staff have an opportunity here to expand their offerings to include accounting software support through many of the (relatively) low cost partner programs, including the QuickBooks ProAdvisor program ($399 or $499), the Sage Software Accountants Network ($299 and up, depending on what products are licensed), and the Microsoft Professional Accountants Network (free, or $299 with the Microsoft Action Pack). The programs include discounted (or in some cases, free) software for your firm's internal use, support plans, and opportunity to sell packages at a profit. Would you rather support your client, or have your competitors support them?
Training and Technical Reference- All three programs offer training to help you become more technically competent with the packages, as well as training modules which can be used by your staff when training individual clients or when conducting "hands on" seminars. The packages also include some form of technical reference (usually PDF) so you can solve common issues without contacting customer support. Some of the training programs allow you to become a "certified consultant" in their product and receive preferred placement for lead referrals from the publisher. These training manuals typically also include sample company files which can be used to teach basic skills in a controlled environment.
Support For You- The programs also include some technical support, but the scope and extent of support included with membership varies significantly. The three programs are all designed to help you solve issues which are beyond your capabilities so you can hold yourself out as a solution provider with confidence.
Updates - All of the programs include options for updates during the membership period, and most provide network members with updated copies of products during the membership period.
Income Opportunities - While independence rules and contingent fee regulations can make it more complex for CPAs to participate in some vendor commission programs, most vendors offer to share their income on client referrals for services such as printing or payroll processing in some manner.
With the free distribution of many of these applications, most CPAs will need to develop a strategy to deal with all of the big-three entry level applications. While many have had a plan for some time, one can expect that free copies of these applications would accelerate their adoption, even in the smallest businesses. Accordingly, a plan for dealing with each of these applications should be prepared before January arrives, and even though there isn't much time left, a motivated firm can capitalize on these opportunities before the Holidays, and enhance its capabilities to provide clients with business management solutions for many of their 2007 New Years' Resolutions - and also help you enhance your bank account.
