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Accounting for the software market

Accounting for the software market

The business accounting-software market, in contrast to that of lower-margin personal finance programs, has attracted huge numbers of players, and a wide range of prices. While that sort of competition offers buyers a liberal choice of products from which to choose, it also makes the decision-making process more difficult. And if you're a CFO with the responsibility of finding a product that will cater to the differing information needs of a number of department managers, the process can be downright nerve-wracking.

Craig Neyle, director of channel sales for Great Plains Software, has had years of experience in dealing with this end of the software market. When servicing customers in the mid-range bracket, he suggests, the dealer or reseller should have not only a basic understanding of debits and credits, but an in-depth knowledge of the client's business. "What's important to keep in mind," Neyle says, "is that the finance manager sitting across the desk from you may be out of a job if the package they end up buying doesn't do what the company needs for it to do - and if that happens, it's going to reflect badly on the reseller. That's why knowing exactly what your product can and can't do is crucial, and it's why you need to be up-front with your customer as to your product's limitations, if it comes to that. If a client happens to mention that they need a general ledger, for example, that can handle entries for prior periods after month-end close, you'll find yourself in trouble if you recommend your product knowing - or not knowing - that it can't do that sort of thing."

Resellers in this business, Neyle suggests, need to have a strong working knowledge of accounting in order to communicate effectively with clients and prospects. "Although many consultants in the accounting-software field are qualified professionals, you don't need to be a chartered accountant or a CPA," he says. "But you should know how the modules in your package actually 'work'. For example, knowing how the accounting system will handle retained earnings at year-end, how to produce consolidated reports from multiple companies, and how to correctly integrate the financials, or back office, with the key business applications; that's the sort of thing I mean."

One of the better-known mid-range accounting-software programs, published here in Australia but sold throughout the southern hemisphere, is Attache. Designed for companies employing from five to 100 employees, Attache's "Business Partner for Windows" suite encompasses standard accounting modules: customers, suppliers, invoicing, purchasing, general ledger and payroll; there are also a number of supplementary facilities, such as a report writer. Each full module is purchased separately and retails for about $1000; what are termed "sub-modules" (for example, the bank reconciliation feature) are sold for $300 each. If customers wish to do so, they can also rent Attache, starting at $100 per month - renting rather than buying means that all rental payments are tax-deductible. One of the remarkable facts about this package is that Attache's authors claim it will run on just about any sort of PC that's come out in the past 10 years (even that old dinosaur, the 386!) and works with 8MB of RAM. Customers may also be interested in some of Attache's other features, such as a graphical forms designer for adding company logos to invoices, customised screen and document layouts for the purchasing module, and an option to prevent payment to any supplier whose invoices are in dispute.

Attache says its products are year-2000 compliant and "GST ready".

Attache's Business Partner for Windows will operate on Windows 3.x or higher; it utilises 10MB of storage space if all modules are installed. For a PC operating as a multi-user server, the recommended minimum is a 486DX with 8MB of RAM.

Accpac For Windows, distributed in Australia by MicroChannel, is marketed in differing versions. The "Accpac Plus Series" is designed for small-to-medium size firms and incorporates a concept called a "System Manager"; all modules in the program - general ledger, debtors and creditors, inventory and order entry - operate in and out of this "hub" module, which presumably cuts down on the amount of resources, and therefore time, needed to complete a task such as, say, production of a receivables-aging report. The System Manager also controls system security, ensures data integrity, and manages audit trails.

Accpac's General Ledger module has some features not normally found in other GL applications; you can, for instance, post a transaction to it on a provisional ("what-if") basis only, to see the effect the transaction would have on financial statements - using this facility a company could, for example, test the consequences of a large capital expenditure on both the balance sheet and P&L statement. Users may also spread an account balance over a number of different accounts on a percentage basis, which might be handy for cost-allocation purposes. And it's also possible to keep account transaction historical details on file - for up to 998 years!

The other modules in Accpac's suite aren't greatly different to what you'd normally expect to find in most accounting programs of its ilk. The help screens, though, are thorough, usually with a number of levels of detail available.

Accpac Plus is designed to operate with Windows 95 or later, or Windows NT 3.51, with at least a 133MHz Pentium processor and 32MB of RAM, plus at least 200MB of storage space. It may also be run on a peer-to-peer network, with the same platform and hardware requirements as above. For Novell NetWare users, at least Novell NetWare version 3.11 and Btrieve for Netware version 6.15 are required.

Accpac Plus retails for $1450 per module, with an additional $1450 payable for a network pack, which will allow up to four users.

One of the most impressive of mid-range financial applications is Great Plains Dynamics C/S Plus Release 5.0. It's been carefully designed, has plenty of online assistance available and is very fast.

Great Plains have obviously put a lot of thought into this product. The system's layout has been made easy, with minimal keyboarding required. The Dynamics Plus main screen is uncluttered, containing a menu bar and icons for six functions, with modules listed below each function. To screen-query details for a particular debtor invoice, for example, you simply click the "Enquiry" icon, choose the "Sales" option, then click on the appropriate invoice.

Accountants with a need for instant gratification won't be disappointed with Dynamics Plus - response time for virtually all tasks is almost immediate, even for complex reports, which means that "need-it-yesterday" requests can be filled pronto.

Enhancements to this version of Dynamics Plus include the ability to produce a detailed trial balance report, which prints the transaction description, source document and transaction source for each item. The system will also warn you if there are budget amounts set up for accounts selected for deletion. Dynamics Plus has also increased the number of "drill-downs" available for investigating transaction details.

Dynamics C/S Plus modules include general ledger, bank reconciliation, receivables and payables management, sales and inventory, with an Australian payroll module planned for next year. There are also modules for order processing and bill of materials.

System requirements for Dynamics C/S Plus recommended by Great Plains include a Pentium P-266 processor or greater with 2 or more CPUs, or DEC Alpha 4100 or greater with 2 or more CPUs; 5GB of storage space is required, and 512MB of RAM is preferred. The recommended configuration in a typical multi-user environment also includes a Windows NT 4.0 Server with Service Pack 3.

Pricing on a Great Plains' "core module" suite (GL, AR, AP, Fixed Assets, Bank Reconciliation and Multicurrency) begins at $5000 per user in a typical network environment, with the price gradually dropping with additional users. Add another $2000 per user for the distribution modules (Sales Order Processing, AP Order Processing, Inventory and Bill of Materials).

Sybiz, the Australian financial-software company that's been around for over 20 years and that now has over 50,000 product users, has two products for mid-range clients.

Sybiz Vision is touted as software that's ideal for companies who've grown and need something more powerful than off-the-shelf small-business packages. Modules include general ledger and cashbook, debtors and creditors, inventory, payroll, job costing and bill of materials. In addition, there are modules for telemarketing and point of sale. There are all sorts of "goodies" built into this product - not all will be of interest to every user, but they do add just a bit of extra value to a program that does its job well.

The inventory module has a helpful feature which allows users to gauge sales and gross profit for selected product lines. Because Sybiz stock data can be exported to other applications (such as spreadsheets), use of this feature would make it possible, presumably, for a retail customer to identify and, if necessary, drop unprofitable stock. You can also apply blanket price increases on a percentage basis for selected product groups, which is handy for those firms that do that sort of thing periodically.

Sybiz's creditors and purchase orders module has a few convenient options to simplify the jobs of accounts payable and purchasing staff. The system, for example, will warn if a payment is drawn up to a supplier which doesn't match the purchase order. There's also a facility that, if needed for cash-budgeting purposes, will make entries to the relevant general ledger account(s) for undelivered goods. And finally, Sybiz will remind the user to cut purchase orders for stock items which are running low.

Sybiz Vision single-user modules vary in RRP, from $600 for Sales or Purchase Orders to $1750 for General Ledger. A second user licence is $1150.

Sybiz Vision also has a "little brother" version, Sybiz Vision Lite, that's around three-quarters as functional as the full-blown system. It can't handle foreign currency transactions, for example, and won't automatically add finance charges to overdue accounts, but has a bank account reconciliation facility and can remit payments to suppliers electronically.

Sybiz Vision Lite retails for $1750 for the entire single-user package; a three-user version can be purchased for $3450.

Minimum system specs for Sybiz Vision/Lite include a DX4/100 processor and 16MB of RAM. Either will run on Windows 3.11 (although Win 95 is preferable) or NT 3.51. Both single and multi-user versions are available.

Released in October is Sybiz's e-commerce application, VisionNet. Linked to a client's Sybiz software, VisionNet creates HTML Web pages which customers can use to access information such as a company's products, stock availability and pricing. It also allows for online customer order-entry and, for those clients who want to stay on top of their creditors' accounts, up-to-date information on accounts payable.

A complete VisionNet system with all modules has a street price of $5900.

Focus Software's CBA 2000 system has, to use a colloquialism, more modules than you can poke a stick at - 20 in all - including two different types of general ledger.

CBA's Fixed Assets module allows for multiple depreciation methods, meaning it will track this expense for either taxation or internal purposes. Upon disposal of an asset, the module will also automatically calculate recovered depreciation, offset depreciation (if the company is buying a replacement asset) and any gain or loss upon disposal of an asset.

The "standard" General Ledger module has a number of interesting components to make life easier for the bean-counters. Each ledger account, for example, may have up to 99 budgets defined for it, and the forgetful user can set up "short codes" for an account ("BANK", for example, could be the code for the general bank account), which allows for easier location of data. As well, limits can be set for the length of time transaction details are kept on file.

Larger organisations may prefer the Advanced General Ledger, in which up to 1000 different companies can be handled, with different base currencies. This module will also allow pre-defined allocation accounts, so that an entry to a nominated account is automatically split over several cost centres or companies.

Focus Software is expecting the release of version 3 of its CBA 2000 product in December this year. It will include over 80 enhancements; assets will be able to be nominated as temporarily "suspended" for depreciation purposes, overdue payments to creditors will be flagged, a report listing "top customers" according to sales will be available, and the ability to nominate default bank accounts for transactions has been added.

Minimum system requirements for CBA 2000 include a 486 with 16MB of RAM, for single use, to a UNIX for 100-plus users. 100MB of storage space is required. CBA 2000 sells for $1350 per module, plus a $1350 management fee.

Beta testing on Focus Software's newest product, Greentree, is in progress, with the company expecting some modules of the program to be launched by the end of this year. Focus, apparently in response to rumours in the field, is adamant that Greentree is meant to build on CBA's functionality, not replace it.

Greentree's promotional material states that it will be an online real-time integrated system, which means that the ledgers are updated as the information is entered into the system. There's also the capability of customising screens so that displayed information can be modified or deleted as desired.

Modules in the new application due for release later this year include general ledger, payables and receivables, cash management, foreign currency, and system tools.

Greentree will operate via Windows 95 or greater and will require 32MB of RAM for single use and a minimum of 16MB for each user in a networked environment. It will need approximately 160MB of storage space.

Greentree's marketing consultants advise that Greentree's pricing structure hasn't been set as yet, but will be competitive with Great Plains, Plat SQL and Sun Systems.

After-sales support is an important issue for most accounting software customers. Craig Neyle says that it's a good idea, during the pre-sales process, to meet and assess the people who will actually be operating the system. "If a reseller is acting in both sales and support roles," Neyle believes, "he or she can often tell how much technical assistance, or tutoring, the system user will need by asking about that person's background and experience in computerised accounting systems. If the operator has been working in this area for a number of years and has a fair amount of accounting and computer knowledge, chances are that problems they encounter will be mainly on questions beginning with "How can I?", rather than "What is?".

Neyle also maintains that, because the sale of a mid or upper-range financial software package usually means the beginning of a long-term relationship with the client (Australian companies, on average, only replace their financial systems after about eight years), the reseller should be aware that ongoing contact with the customer is critical to the long-term success of that relationship. "Informing your client about upgrades to the product is always important, and most resellers are going to do this anyway," he comments, "but you can't underestimate the value, either, of a telephone call every few weeks to see how things are going with the customer's business in general. Congratulate them when they win an important sale and commiserate when things slow down. Make your customer's personal and business objectives the key driver in all of the products and services that you provide to them. It shows, to use an old bromide, that you care. And you can never tell - it might just lead to some new business."

As mentioned earlier, the mid-range accounting software market is becoming crowded nowadays, with an ever-increasing number of participants. So what's next? Frank O'Donoghue, director of Sydney-based Applied Business Technology, believes in the future we'll see the task of providing accounting and other financial services for small and medium companies gradually being managed by outsiders. "Delivery of applications has undergone incredible change," he said in an address to the Australian Computer Society recently. "We continue to witness the rapidly declining cost of communications and almost exponential improvement in processing speeds, or 'bandwidth', of the connections available. The longer I work in this industry, the more I see it coming full circle. In the '70s we had 'Shoe-box Bureaus'; clients sent their hard-copy source documents to bureaus like CAS for processing and they would send you back the results. In the '80s the advent of the PC accounting packages meant that the lower cost of ownership of an internal system justified bringing such processing in-house. The advent of the Internet and resultant growth in communications capabilities is now driving us 'back to the future'. Many organisations now offer outsourcing services for the hardware side of the technology. The CBA/EDS agreement for over $5 billion in outsourcing demonstrates the value of this market initiative. The natural extension is the delivery of accounting application services to the next layer of business. Already a few organisations, ourselves and some accounting practices included, are moving into this area. The concept of an off-site IT facility, professionally managed, which runs the accounting application for their clients, is gaining acceptance. No back-ups, no storage problems, no reliability problems, no internal IT staffing, no software support, no software maintenance costs. These facilities will be increasingly used by a large sector of SMEs." If O'Donoghue's predictions are borne out, it's going to mean a massive restructure of an entire sector of the software industry - and, undoubtedly, the demise of a number of key players.

Contacts

Attache Software

Tel (02) 9929 8700

Accpac

MicroChannel

Tel (02) 9906 3666

Great Plains Software

Tel (02) 9900 3000

Sybiz Software

Tel 1800 683 783

CBA and Greentree

Focus Software

Tel (07) 5476 9737


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