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Who's #1?

The leading personal finance programs square off--and face new challengers.

Little-known fact: About one-third of personal finance managers, or PFMs, are being used to keep the books for growing businesses--and for good reason.

It's much easier for a busy entrepreneur to get up and running with Intuit's new Quicken Home & Business 2008 or Microsoft Money Plus Home & Business 2008 than double-entry alternatives. If yours is one of the many service businesses without major inventory or transaction flow, you can save a lot of time managing both your personal and business finances using just one interface.

Quicken and Money let you jump between both account types or see your entire financial condition at a glance. And they do all this while effortlessly keeping business and personal accounts separate. It's all too easy for a Schedule C business to get sideways with its cash flow or attract attention from the IRS by mingling business and personal expenditures. Both programs automatically place transactions into the correct accounts and allow adjustments to be made easily.

Both Quicken and Money can reduce--but don't eliminate--bean-counting drudgery. And their business tools can speed invoicing and estimating; vendor and customer tracking; and the management of receivables, payables or a small inventory. Customizable business reports cover everything from common financial statements to job costing and tax planning. Both have the same features, but ironically, Money does business far better than Quicken.

This year, both face something new: a market crowded with a dozen or so Web 2.0-based alternatives that claim to do them one better. "Moneydance's simple, intuitive interface makes taking care of your finances a breeze," the company says. Uh, no it doesn't--and for the record, nothing can. Bean counting is work no matter what tool you use.

At least Moneydance, unlike most newly minted PFM sites, is on the right track--as are Geezeo, Mint and Yodlee. But all are far from ready for prime time. Just what makes a good PFM?

Safety First
Security comes first, and most solutions do have that base covered. But brand is another necessary consideration when surrendering your most sensitive information. How would you like to input a passel of account information only to find the website 404 one day like the once-promising FinPortfolio? Quicken has been a safe bet for about 70 percent of PFM users for the past 24 years; Money a distant second for 15 years. Neither Fortune 500 brand can afford security mistakes.

Next in importance is how well your PFM works with assorted banks, brokerages and credit card companies--how completely and easily downloaded transactions flow into your account registers. Quicken and Money can harvest every kind of transaction from all your institutions in a single download. Yodlee's downloads were spotty; Geezeo's and Moneydance's spottier. Mint was actually pretty good at it. But they're all in the caterpillar stage--in beta or just out of beta--without business (or even complete personal) functionality. Other Web 2.0 sites have even less. They're novel but fairly watery mixtures of personal budgeting and wisdom-of-the-crowd blogging--all talk and no accounting.

Don't get me wrong: There's plenty about Quicken and Money I don't like. That includes all the useless interface bric-a-brac they come up with every year to justify product upgrades. Forget those--and forget the new ones next year. Both programs need to revert to the edit-in-place, checkbook-and-register interface of versions gone by and let users choose which views and tools they want in overlapping windows.

I look forward to the day when somebody gets the Quicken Lite thing right and there's real competition in the space. But that day isn't today.

Mike Hogan is Entrepreneur's technology editor.

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This article was originally published in the December 2007 print edition of Entrepreneur with the headline: Who's #1?.

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