The future of accounting software?

[james-ca]

This isn't exactly a comparison question, but it's aimed at those who know other systems besides QuickBooks.

I'm gathering additional material for an upcoming talk I'm giving in 10 days time.
I'm interested in the factors which underpin developments in accounting software products (for businesses) at all levels, from simple cashbooks to vast ERP systems.

This won't be a 'technical' talk, and it won't be about practice or tax software, just business/commercial matters.

I have quite a lot of data relating to larger systems, so its the small cashbooks to the medium sized products and their market that I am most interested in (but don't be put off from making any comment at all!)

Some starters:
Microsoft's role, including its imminent introduction of cut-down and cut-price systems
The role of the Internet as a connection medium, enabling remote
computing, e-business in all its forms, etc.
Any unfulfilled demands for functions?
Any/all external factors could be relevant. I'm not looking for essays, but I'd value those out there with opinions based on experience and reflection to contribute their thoughts!

I'm contemplating posting a link to the paper, after the talk.

Regards
Mike James
Systems Accountant
Auckland New Zealand

[james-ca]

Summary of talk to ICANZ

I will give an abridged summary here, for anyone interested. Please contribute your opinions. Business owner requirements are quoted in part from a CFO magazine survey from 1996; some statements have been quoted from responses on the UK Accounting web forum; other material is believed to be original. Opinions are my own.

The theme of the talk was ‘A personal review of selected SME products on the New Zealand market’ (following a request by the sub-group committee). The talk was held at the ICANZ conference centre in Auckland NZ, and given to the computer awareness sub-group, with about 200 attendees.

SME software includes simple cashbooks, full ledger programs and larger multi-user products. This talk focused on the full ledger programs. Some products will not be familiar to readers outside NZ.

Requirements of business owners, users and accountants were reviewed, and applied to selected products to see how they fare. Products used for demo included MYOB, QuickBooks and Moneyworks, a local offering.

Business owners want software to be reliable, with flexible reporting, easy to use and suitable to NZ conditions. The cost of software is less important. These days the trend is for greater connectivity, for example direct to or from banking software, or to government departments (IRD GST filings), plus e-commerce trading and document email . A notable local development is a link to the PPSR register, using xml data exchange (by Intersoft Systems). In the future I believe this will be a standard component for better credit management.

Users want to drill-down to or from anywhere, and fix mistakes easily. They also want good and flexible reporting, proper training, and explanatory help menus.

Accountants concerns with SME software include the pedigree of the vendor, reporting capability (most SME programs are inadequate), compliance with accounting standards including stock value, foreign currency, depreciation, GST accounting integrity (very few programs are water-tight, Moneyworks has the edge over the well-known programs),

Other concerns include end of year procedures, coding consistency (each program has means to assist there), audit trail (QuickBooks stands out), and data retention (MYOB is especially poor). Access and internal controls matter (each program offered some security features).

With time running out, I reviewed a number of up-and-coming products, all multi-user, which broke new ground in terms of features offered:

Empower by Intersoft, for ultra-reliable GST reporting.
Maxim by Maxim Software for a product which offers financials, distribution, contract management, light assembly (with BOM) and POS, all in one package, with cross-platform ability
Propella, by Focus Systems, a VB/Access/SQL offering with impressive features for import/distribution
Ezijobz, from Ezijobz NZ, with an unfinished GL module, but offers extensive features for tradespeople and service industries, with quotes, jobs, service contracts etc.

Future trends:
Microsoft Business Solutions and it’s approach to the mid-market with .Net offerings cannot be anything but a huge threat to existing suppliers of larger (mid-range and above) systems.
Mobility – access to your accounting software anywhere you can connect to the web
Connectivity – as outlined above
Regulations – in NZ there are moves to make audit of private companies compulsory
Licensing – moves by software vendors to a cheap initial purchase and subscription licensing are on the increase. This improves revenue stream and obliges users (sometimes against their wish) to stay current.
Open source applications – we have seen the introduction of Odessey from Mid-Comp in Australia as an open-source ERP-level product, aimed at distributors. There will be more.
Business process driving development – step away from modular programs to component delivery of processes
Browser software – not only use of software via browsers, but delivery of software the same way, rather than by CD; ASP solutions are an early example.
Service industry solutions – current market emphasis is for distribution/manufacturing sectors, and the service sector deserves as much attention.

Regards
Mike James
Systems Accountant
Auckland NZ
May 2003

[small101]

Originally posted by james-ca
This isn't exactly a comparison question, but it's aimed at those who know other systems besides QuickBooks.

I'm gathering additional material for an upcoming talk I'm giving in 10 days time.
I'm interested in the factors which underpin developments in accounting software products (for businesses) at all levels, from simple cashbooks to vast ERP systems.

This won't be a 'technical' talk, and it won't be about practice or tax software, just business/commercial matters.

I have quite a lot of data relating to larger systems, so its the small cashbooks to the medium sized products and their market that I am most interested in (but don't be put off from making any comment at all!)

Some starters:
Microsoft's role, including its imminent introduction of cut-down and cut-price systems
The role of the Internet as a connection medium, enabling remote
computing, e-business in all its forms, etc.
Any unfulfilled demands for functions?
Any/all external factors could be relevant. I'm not looking for essays, but I'd value those out there with opinions based on experience and reflection to contribute their thoughts!

I'm contemplating posting a link to the paper, after the talk.

Regards
Mike James
Systems Accountant
Auckland New Zealand

[small101]

ERP for the Small and Medium Businesses around the World
Globalization of the economy, and competition have seen most large organizations installing ERP/CRM systems. The Internet has acted like a giant "Client-Server", making it viable to integrate the big guys with the small guys, who could be their suppliers, dealers or distributors. Eventually the entire logistics chain, from the suppliers, the manufacturer to the distributors becomes a value-added chain, to serve the industries customers, in time, at a high quality and low cost. This puts increasing strain on the systems of the small businesses, to be able to cope up to the rapidly increasing speed and lowered margins. They have to get on to the bandwagon and improve their processes, much like what the big guys did in the 90s.

This shift means that no longer can the SMEs be content with stand-alone systems. Their systems have to be able to talk to that of their business partners. Most small business accounting systems, like Quickbooks, PeachTree, MAS90 etc. have limited capabilities for that. Larger (and much more expensive ERP systems, like GreatPlains, Navision, MAS500, Solomn etc.) have that functionality. They cost in the US$ 20-100,000 range. They scale well though and can be customized to suit a variety of businesses. SAP has of late being trying to penetrate this market with their BusinessOne and Microsoft is getting into this space. Despite that for most of the developing economies and businesses on the other side of the "Digital Divide" these solutions are beyond their means.

Open Source, as was pointed out in an earlier post is making strides. Compiere, (see www.compiere.org and for learning/implementation details also see www.leo-systems.com ) a leading ERP/CRM software, for SMEs. Ranging from $2-200 million, is an affordable solution. It has been downloaded over half a million times from the Internet. It is scalable from 10-100s of users. It can be economically hosted to provide service to small users, around the world, over the Internet. It supports multiple languages (English, French, Spanish, Chinese and several others are already supported, more can be added on the fly almost, taking about 8-10 weeks of translation work). It handles multiple currencies, organizations, etc. It has been developed using a active metadata -dictionary, so you can configure it, for different businesses, without writing any programs. For extending it, you can add entities/tables, and write Java code, only for the updating/transaction processing logic. As such it is very stable. It can be rapidly implemented and upgraded, as new versions are introduced.

Currently it runs on an Oracle database, but their are plans afoot for database independence, Postgres/Firebird. It already has the functionality for distribution, service and light manufacturing. Volunteers are adding additional modules. It has a lot of a Tier 1 functionality, even web based customer call center !

As usual, being Open Source you get the source, and do not have to pay royalties/service fees every year.

Anyone who has outgrown QB or accounting packages in that league, and who is evaluating other ERP's should look at this.

====================
Originally posted by james-ca
This isn't exactly a comparison question, but it's aimed at those who know other systems besides QuickBooks.

I'm gathering additional material for an upcoming talk I'm giving in 10 days time.
I'm interested in the factors which underpin developments in accounting software products (for businesses) at all levels, from simple cashbooks to vast ERP systems.

This won't be a 'technical' talk, and it won't be about practice or tax software, just business/commercial matters.

I have quite a lot of data relating to larger systems, so its the small cashbooks to the medium sized products and their market that I am most interested in (but don't be put off from making any comment at all!)

Some starters:
Microsoft's role, including its imminent introduction of cut-down and cut-price systems
The role of the Internet as a connection medium, enabling remote
computing, e-business in all its forms, etc.
Any unfulfilled demands for functions?
Any/all external factors could be relevant. I'm not looking for essays, but I'd value those out there with opinions based on experience and reflection to contribute their thoughts!

I'm contemplating posting a link to the paper, after the talk.

Regards
Mike James
Systems Accountant
Auckland New Zealand