Accounting for taste

Accounting for taste

Scenario: you're a PC retailer, stocking a range of hardware, software and peripherals. A customer walks into your store and says she wants "something to keep track of the books and handle the home accounts" - what, she asks, should she buy? Mike Brown looks for an answerFor many home PC users, the problems associated with buying a record-keeping system don't begin with deciding which system will "do the job". The primary dilemma - and one for which the retailer should be able to offer guidance - is deciding what the job actually is. Is the customer's goal simply to keep track of the cheque book and make the task of reconciling bank accounts easier? Or is the task to cut down the tax agent's bill at the end of the year? Is the customer interested in tallying home inventory? Does he/she operate a small business?

Navigating through the maze of financial software programs that have hit the shop shelves in the past few years can be a daunting experience for the prospective buyer. There are vast numbers of systems, both "light" and "heavy", from which to choose, virtually all promising to save the user time and money. And from the customer's standpoint, bigger is not necessarily better - purchasing a more sophisticated, expensive package that incorporates, say, double-entry capability, makes no sense if the user doesn't know a debit from a credit.

If you're a software reseller, how can you direct your client to the system most appropriate to their needs? This isn't always an easy task - sometimes the customer doesn't really know what's needed, and hasn't a clue as to what's available. As well, sometimes you'll need to dispel the myth that an accounting package is the same thing as a spreadsheet!

Best sellers

The two top-selling personal/home bookkeeping programs on the Australian market today are Quicken and Microsoft Money. Greg Wilkinson, managing director of Intuit Australia, which publishes Quicken, says that most customers contemplating home accounting software are looking for something that will relieve them of the drudgery associated with keeping financial records.

"The major selling point for any per-sonal financial package," Wilkinson says, "is that of saving time for the user - that's the number-one objective people are giving our dealers when buying a program like Quicken. Customers buy these applications because they're finding that they spend a lot of time tracking things like bank account and credit card balances - and that can be a real chore if they're doing it manually or are attempting to accomplish the job with a spreadsheet. Also, most of the programs of this type are fairly inexpensive anyway - and because the products currently available for the home market are all similar in price, cost is not really an issue.

"One of the most important questions that software resellers should be asking prospective users of bookkeeping software is whether the product will be used for personal or business purposes. If the customer is buying a program primarily for home use, something like Quicken or Money will probably do the trick. But if he/she also operates a small business they'd be better off with something a bit more powerful. Resellers who market both hardware and software should be aware of the fact that in many cases the customer is buying a system with the idea of adding home accounting software some time later. Always ask if this is the customer's plan. If such a program is not bundled into the deal it could offer an opportunity for an extra sale," Wilkinson said.

When selling software without the computer to go with it, it's necessary, Wilkinson says, to ascertain what sort of hardware will be used, including RAM and hard-disk capacity. There's no point in sending someone out the door with the latest version of Quicken or Money if what they're going home to is an old 386 with 2MB of RAM - and some customers don't look at the system requirements on the back of the software box.

Accounting software resellers, says Wilkinson, can help prospective customers by asking some questions about what use they will make of the software:

What sort of hardware and operating system is the customer using? Most of the time, the program installation instructions will state the minimum amount of RAM and disk space the application will need, as well as operating system requirements.

Is the customer currently using an accounting package and wanting to switch to another product? If this is the case, you'll need to ensure that the customer will be able to convert - easily - from their present system. The documentation for most programs will state whether or not data can be transferred from other accounting programs. In the case of those wanting to upgrade to a later version of one they're currently using, virtually all programs will recognise - and convert - data files from older releases.

Does the customer use the services of a tax agent? If so, what does the tax agent usually require in the way of data? If the user wants to present year-end data to the agent on diskette, will the client's software integrate easily with the tax agent's?

It's reassuring to explain to nervous would-be buyers that most home accounting programs assume little or no bookkeeping knowledge on the part of the user. Usually, only three main tasks are involved: program installation and set-up of account balances; periodic entry of data from cheque and deposit butts; and production of user-nominated reports and charts. It's important, too, to be aware of the fact that in most cases the customer will have no prior experience in using home accounting programs - and may find instruction manuals intimidating - so assistance may be needed in getting the system up and running.

One way to alleviate the customer's "what-if-I-stuff-something-up?" fear is to advise inexperienced users to set up a test file to be used for experimentation. What's entered into the test file won't affect the data in the one used for "real" entries. And most personal finance programs - including Quicken and Money - allow the user to go back and change any mistakes, even when viewing a report.

The upgrade treadmill

Some software publishers (including Intuit) include listings of authorised training centres that offer tuition in their product. Community centres and TAFE colleges may also provide training, and it's helpful to have this information available to the customer. There's also a growing trend among publishers to include online help, which can give step-by-step instructions, utilising both sound and video, on how to use most features.

Software houses have had a tendency in recent years to debut product "upgrades" with alarming regularity. A given release of an accounting package is often followed only months later by version X.1, which, despite the hype, doesn't appear to do that much more than the earlier version. If an uncertain customer asks your opinion on whether to upgrade to the product's latest rendition, what should you advise? It's a tough question to answer, in some instances - why direct the customer to a "new improved version" which contains changes that are little more than cosmetic? The PC sales manager of a large retail franchise, who asked not to be identified, is adamant that "there's no way we'd try to talk a customer out of a sale - even for something as inexpensive as software. It's strictly up to them whether they upgrade."

He felt that uncertainty about what the customer will eventually use the product for works in favour of making the sale. "You have to keep in mind that, even though in the end they might not get any extra benefit out of an upgrade straight away, you never know if - in the long run - it'll make the job easier for them," he said. He is also an advocate of sending customers further up the line for answers his staff can't provide. He said "if they have specific questions about an upgraded product that we can't answer, we refer them to the publisher or distributor, right on our in-store phone".

Cost effectiveness

Many potential customers will be interested in how much money, if any, personal finance programs will save on tax-return preparation fees. Phil Hunt, director of Australian Operations for tax agent H&R Block, says that, if used properly, programs like Quicken and Money should help to cut down on the amount of preparation effort spent, and consequently the fees charged, by tax agents. "When you visit a tax agent, you pay for his or her time," Hunt comments. "So, obviously, the less time involved by the tax agent on doing things like classifying or adding up expenses, or preparing financial statements, the less a client will pay in the way of charges. If a client, especially one engaged in a small business, has all the needed information readily available, it means less work for the tax agent and, presumably, less of a fee. We still will need to see documentation, though, on some things like group certificates and receipts for tax-deductible items."

Both Quicken and Money include reports that will summarise tax-related income and expenditure items. As well, the user can nominate and change taxable or deductible categories.

Many individuals nowadays, especially those of retirement age, are share portfolio owners and look for software that will give them information on things like total share holdings, earnings from dividends, price history and the like. Both Quicken and Money provide this sort of data; it wouldn't hurt, either, for savvy resellers to familiarise themselves with some of the investment-management features that a particular application offers. Quicken, for example, will allow the user to set up an investment account to track multiple securities, update share prices based on their market values, and calculate capital gains and losses.

Once the customer has indicated the primary use of the software, you can recommend the most appropriate package. For those needing software for home use only, here are a few suggestions:

The publishers of Quicken claim that it's the world's biggest-selling personal financial management software package, and has an estimated 85 per cent share of Australia's personal finance software market. An American edition was first released in Australia in 1993, with subsequent versions revamped to reflect local accounting and spelling conventions.

Quicken Version 6 for Windows (version 7 is planned but not yet released) is designed for both home and small-business implementation, but business users with more than a couple of employees, or who want to track debtors and creditors, would be better off with Quicken's big brother, Quickbooks. Besides cashbook facilities, the program also offers:

Asset management

Bank reconciliation

Loans and mortgages

Portfolio management

Cashflow management

Cheque printing


User defined reporting

Users can also elect to purchase Quicken Deluxe, which contains all of the standard Quicken features plus invoicing and home inventory.

If the user is spreadsheet-proficient, and will be using Quicken for both home and business use, it's helpful to note that Quicken reports can be copied and pasted into applications such as Microsoft Works or Excel. This is useful for the business manager who wants to "massage" the figures further, perhaps to perform some "what-if" analysis.

Quicken users can have the system set up, automatically, a pre-defined set of common household and small business income and payment categories. These can be added to and deleted as necessary, even when in the process of entering a transaction. It's also possible to get an idea of what bank balances will look like in the future, on a current cash-flow basis (if income and expenditure levels don't change) or with projected figures.

Quicken Version 6 for Windows requires Windows 3.x or higher, a minimum of 8 MB of RAM and 13MB of disk space. A Mac version is also available.

Intuit's Quickbooks 5.0 and Quickbooks Pro, like their MYOB counterparts, cater to the business user who finds accounting terminology "challenging". Both products shy away from any mention of debits and credits and, indeed, only compel the user to decide which is which when making journal entries.

Quickbooks and Quickbooks Pro both handle cheques, purchase orders, payables, receivables and invoicing; Pro boasts advanced job-costing and budgeting features, as well as a module for estimates and bids. The main screen is, like MYOB's, well thought out and non-intimidating, prompting the user to first choose a general area of activity and then a specific type of transaction.

The reports module in Quickbooks is great for users who are into nitty-gritty. If you're viewing, say, a profit and loss statement and one of the figures doesn't make sense, just double-click on it - the system will then display the breakdown of that particular sum, showing the origin of all entries which make up its total, in increasing levels of detail.

Quickbooks and Quickbooks Pro run on Windows 3.1 or higher, with a 486 processor, 16MB RAM and 32.1MB of hard disk space. There is no Mac version available. Customers are allowed 30 days of technical support.

In terms of functionality, Microsoft Money 98 is almost identical to Quicken Version 6 for Windows. Except for some terminology and its user interface, there's essentially no difference between the two. Money also offers Quicken users a "product tour", which explains variations in its terminology and features. In terms of hardware, Microsoft recommends using Money with a 486 (with at least a Pentium 90 processor), with a minimum 12MB of RAM on Windows 95 or 16MB for Windows NT. The system also requires at least 20MB of hard-disk storage.

Customers needing a bit more grunt have a number of options:

Datatech software, publisher of MYOB, says two out of three Australian accountants recommend MYOB for small businesses. MYOB has a number of products in its family, depending on the number of staff on the payroll and how much detail the user wants in the way of reports.

The stripped-down edition, MYOB FirstAccounts, is designed for small, service-based businesses with up to three employees. It combines the usual cashbook facilities with, among other functions, invoicing and purchase-order issuing (and allows customisation of forms), general ledger and job costing.

Inexperienced users may find MYOB a bit "fiddly" at times - setting up a new account, for example, requires the operator to firstly nominate the new account number and then go back and "edit" the account to add details such as account name, opening balance and so on. As well, you must designate whether the new account is a "header account" or a "detail account" and whether it's "postable" or "non-postable", which some people may at first find confusing. The screen design, however, is uncluttered and the help facility is just that - helpful.

Three other MYOB products, Accounting, Accounting with Payroll and Premier Accounting, offer the same features as FirstAccounts, but with additions like stock tracking, a greater number of reports and, except for Accounting, a built-in payroll module. There is also a neat feature - MYOB OfficeLink - which allows the user to export report data for viewing in a Microsoft Excel spreadsheet. OfficeLink can also be used, in conjunction with customer or vendor databases, to create customised letters using Microsoft Word or WordPerfect. And, for the user who hates stuffing envelopes, all four of MYOB's products now offer an electronic remittance facility for either vendor or payroll payments.

MYOB can be purchased in both Windows and Mac editions. For Windows users, the publisher recommends using it with Windows 95 or greater, with 16MB of RAM and 50MB of hard disk space. The Mac version requires Mac OS 7.1 or better, with 8MB of RAM and 50MB of disk space. MYOB customers receive 60 days of free introductory telephone support.

Accounting software developers have come a long way in recent years in designing products that are as painless to use as can reasonably be expected; increased competition has forced this to happen. The result of that competition, especially in what's becoming a saturated US market-place, will ensure that we'll be seeing more overseas publishers going to the trouble of localising software to meet Australian accounting conventions.


Intuit Australia

Tel (02) 9562 7922

Microsoft Australia

Tel 13 2058

Datatech Australia

Tel (03) 9222 9777 Tel (02) 9770 9000

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