News from Short Beach Business Services, LLC

I have met with several small business owners that have purchased accounting software at one of the 'box" stores, given it to their bookkeeper to install with little if any guidance, and wonder why they cannot get accurate, meaningful and timely reporting.

Not that many years ago all you needed for an accounting system was some ledger paper, a binder to organize it, good penmanship, and a 10 key adding machine.

During the 1970's mid sized companies were offered accounting software solutions usually supplied by a computer company such as IBM, Digital Equipment, or Burroughs. Many smaller companies continued with ledger paper and good penmanship.

Sometime during the late 1980's independent software developers started writing accounting applications that ran on the new personal computers. Many were single user applications by companies like Peachtree and Best Programs.

Today all this has been changed with the widespread use of the high performance personal computer, networks, and the internet. Software is now designed to run on any manufacturers' computer and the use of networks enables the sharing of data with multiple users in the same building or across the world as well as being integrated with other functions in the company like manufacturing and sales. With all of these choices how does the business owner make the correct decision?

The first step is to develop a Requirements Definition. Similar to a Business Plan, this document describes your business processes, activities to be automated, and information to be reported. It is important that this document be created with the assistance of an accounting professional that is knowledgeable of your business and the accounting principles that relate to it.

Ø Company History and Experience

o Age of Company - If they have been in business for a while, it indicates they will be around in the future. Be careful of unproven companies.

o Their Niche - If you are a manufacturer and their customer base is physicians offices, they are probably not a good solution.

o References - Talk to their customers that are in a similar business to yours and ask detail questions.

Ø Cost

o Features - Software that provides numerous features may not be cost justified because these features drive the price up and most users will never use them. For each feature classify it as needed, not needed, or nice to have.

o Needs - Don't lose sight of the reason for selecting the software. If the software exceeds your budget, but satisfies your needs, improves efficiency, and supports the information reporting you require, it is probably worth the extra cost.

Ø Ease of Use

o Intuitive - It should be easy to use, and not require specialized training. It should also easily fit into existing systems with which it will have to communicate. For example does the Order Entry System work with the Email System for ease of customer communication.

o Support - Does the vendor provide periodic updates, user groups, and a help desk?

o Maintenance - Does the company consistently work to improve the performance of the software? How often do they provide updates? How quickly do they respond to "Bugs".

o Training - Does the company provide on sight or web based training? How much does it cost and how much is included in the price of the software?

o Familiarity - If your company is currently operating in a Windows environment, does the new software maintain that same look and feel?

Ø Security

o What type and level of encryption does the company provide? SSL 128-bit encryption in considered top notch. Passwords are also important to allow access to the system. Can users rights be controlled at every level by use of a password?

Once the software has been selected it is important to have it implemented properly to get the most benefit from it. Even the best software fit for your company can easily turn into a disaster if it is not implemented properly. To insure the best outcome, with tight internal controls, I recommend establishing a team of employees who are knowledgeable about the operations and accounting requirements of your company. This team will also be responsible for documenting all procedures and training users in the proper use of the software.