If you're like most entrepreneurs, you run its OS, you surf the web with its browser, and its Windows logo is on just about every productivity application you use. So should you entrust your company's books to Microsoft as well?
The new edition of Microsoft Office 2003 designed for small businesses, which ships later this year, will include the brand-new Office Small Business Accounting program. Its principal selling point is its seamless connectivity to all your favorite Office applications. You can connect your books' key employee, vendor and customer records to Outlook's Contact Manager. You'll not only have a complete record of contacts with business partners over any medium, but also a history of your financial transactions together.
Customize invoices, purchase orders and other business forms in Word and e-mail or fax them from Outlook. Need to create different budgets or cash flow and pricing scenarios? Bring any of Accounting's lists or 60 standing reports into an Excel work sheet and what-if away.
There's already a dizzying array of tools under Office's half-gigabyte umbrella. You probably spend most of your day using one or more of them. But the stakes are higher with accounting software. It's not just your money--your books are a window into your company's most proprietary information and processes.
So can you bet your business on Microsoft's new accountant? Well, let's take a look at the pre-release beta.
For starters, the gold standard in small- and midsize-business accounting is Intuit's QuickBooks. A few noteworthy competitors, like Best Software's Peachtree Complete, appeal to a certain SMB subset. But QuickBooks rose to dominance overnight by making an often tedious chore palatable to entrepreneurs who lack training--or even interest--in accounting.
Unlike other competitors, Microsoft doesn't need to one-up the market leader. Most SMB owners and managers still don't use a desktop accounting program, so Microsoft could attract a sizable following just by showing the Office faithful the considerable benefits of controlling your own books and mining the data in them. However, it does need to match QuickBooks' uncompromising ease of use, and it does-in spades.
The easiest program to use is the one you're already familiar with. Small Business Accounting's graphical, multipaned desktop looks pretty much like the rest of Office, with quick links to frequently used companions like Excel. Microsoft adopted the widely used flowchart navigation aid that graphically shows you how transactions flow through your different accounting modules. Windowpanes contain commonly used accounts, tasks, to-dos, reports and tips related to that section of your books.
And the beta version doesn't just cater to the large number of service-oriented businesses--it has a surprisingly robust set of tools for product-oriented firms, too.
An inventory module tracks a product's parts, letting a small manufacturer, distributor, retailer or e-tailer set thresholds for automatic reorder. A complementary time-and-billing module lets mixed product/service businesses track billable or employee hours at different rates, transferring the results into a payroll module that interacts with online payroll services.
Project-oriented businesses like consulting firms can track income and expenses by job; a history of estimated vs. actual costs for both time and materials can make your bids more accurate.
Connect the Dots
Can Peachtree and QuickBooks do all this? Sure. But they don't have Small Business Accounting's in-the-bone connectivity with other Office applications.
Your team members can have better access to company data. Access to financial data is more restricted; only owners or managers can view or edit some records. That system isn't as flexible as QuickBooks--you can't easily offload bookkeeping humdrum on a clerk or an outside accountant.
But envision this scenario: You've customized your purchase orders and invoices in Word, and set your inventory reorder, payables and invoice triggers in Contact Manager. As parts, invoice and other alerts pop up, you look them over and forward orders or payments by e-mail or fax to customer and vendor addresses kept in Outlook. It's a de facto electronic distribution management system that could squeeze slack out of your supply chain and reduce time-consuming errors.
That said, the program is still in beta, so a judgment on its security and reliability can't be made yet. As destructive as bugs, crashes or unauthorized intrusions can be to your e-mail editor, they just can't happen to your books--ever. Your accounting program has to be bulletproof and bug-proof. Because of this, I wouldn't rush to put my books on Small Business Accounting at its debut; I'd wait to hear about the experiences of those who do.
is Entrepreneur's technology editor.