Small Business Software Review Research Proposal

Pages: 10 (2916 words)  ·  Style: APA  ·  Bibliography Sources: 8  ·  File: .docx  ·  Level: College Senior  ·  Topic: Business

Small Business Software Review

The intent of this analysis is to evaluate and compare small business accounting software applications that are designed for between 5 and 10 users in a small business to the feature, usability and price level. This analysis will also be used as the basis for creating a small business software application using ASP.Net and C# application programming languages. The core functionality that a small business accounting system has includes the areas of General Ledger, Accounts Payable, Accounts Receivable, Inventory and integration to accounting-related applications including financial reporting and expense management. With over 70 vendors in the small business accounting software marketplace, with an increasing number moving from licensed to hosted or Software-as-a-Service (SaaS) delivery models (Meeks, Swann, 2009) the need for defining feature-based development that takes into account functionality, usability and price is critical. While there are literally dozens of applications, the three most predominant are Microsoft Small Business Accounting, Intuit QuickBooks Pro and Basic, and Peachtree (Sage) Accounting. This analysis will concentrate on these three applications and also evaluate their ability to integrate into 3rd party applications as well. Across all enterprises, small businesses included, the need for being able to create process workflows that rely on accounting data to accomplish goals in engineering, marketing, product development, sales and service are also evaluated. This analysis will illustrate how companies are no longer isolating their use of accounting data.

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Analyzing the Functionality of Accounting Applications

Research Proposal on Small Business Software Review Assignment

The three most dominant small business accounting packages all are relatively equivalent in terms of their support for the baseline of what many experts consider being the minimum accounting functionality needed by a small business (Collins, 2006). The three application suites included in this analysis, Intuit QuickBooks Pro and Basic, Microsoft Small Business Accounting, and Peachtree (Sage) Accounting each support critical accounting features including chart of general ledger and accounts-based ledgers, report generation including pro forma financial statements, P&L statements, pro forma and multi-department balance sheets, and cash flow statements. Each of these suites is built upon the foundation of Accounts Receivable (a/R), Accounts Payable (a/P) and Inventory Management modules. Accounting experts define these as the most critical components in any manual or automated accounting system in that they provide the necessary databases of transactions on which an entire company's present and future financial condition is based (Nikitkov, Sainty, 2008). As each of the three applications included as part of this analysis rely on the foundations of AP, AR and Inventory Management, all of them support audit trails to the transaction level as well. Audit trails are critically important for small businesses that are publically-held as they must comply with the Sarbanes-Oxley Act (SOX) Act of 2002, stating that all material financial events must be reported within 72 hours (Section 404 of the Act), and that their financial records are representative of their actual performance (Swartz, 2008). This is why it is critically important in the design of any small business accounting system that the assumption be made that the small businesses using the software may be publically held and therefore required to file with the U.S. Securities and Exchange Commission every quarter. This requirement only applies to those companies who are publicly-traded in the United States. It can cost a small business nearly $6M or more to get into compliance with the many requirements SOX (Swartz, 2008) and therefore many smaller companies are going private. Accounting features in each of the applications being analyzed in this report reflect both sets of decisions, namely going in the direction of SOX compliance after getting listed on a U.S. stock exchange on the one hand, or choosing to get delisted and go private on the other (Swartz, 2006). This inherently changes the complexity of creating small business accounting applications as both private and public ownership scenarios must be reflected in the application itself, the level of integration to outside data sources, and the reliance on audit standards as well (Swartz, 2006).

As a result of this need to concentrate on SOX compliance, each application also supports cash flow projects, XML-based linking into Microsoft Excel, Great Plains Financial Accounting Software, and several others (Meeks, Swann, 2009). The combining of projection data and support for data integration gives accountants and financial planners more flexibility in responding to SOX-based reporting requirements. SOX compliance is a major cost factor for any publicly-traded company today and continues to grow in terms of its complexity over time. The need for creating process-based workflows to enable greater levels of SOX compliance has long been a requirement of larger, more complex organizations yet the implications for smaller, publically held companies has been often ignored (Saunders, 2003). This translates into the opportunity to create a more process-centric workspace within the accounting application being created, which would allow for specific modules or process components to be organized into workflows and then compiled into composite applications that are highly collaborative in structure and use (Cong, Du, 2007).

In terms of communications functionality, each of these applications supports Outlook-based e-mail notifications, custom-defined alerts and messaging, and integration with many of the popular server-based and hosted e-mail programs as well. The use of popular messaging protocols including support for Yahoo Mail and Google Mail Alerts across the majority of accounting applications also is making it possible for companies to create their own accounting information systems independent of the licensed application itself (Qazi 2005). In other words what is happening is that given the support for popular messaging protocols and the pervasive adoption of hosted e-mail through Hotmail, Google and Yahoo, companies are creating informal Accounting Data Alert systems so managers can get text messages of specific financial conditions, using these hosted e-mail platforms as the means to connect electronically through PDAs, cell phones and pagers. It is a critical design element to support the popular messaging protocols and also think more from a network standpoint and less about just a productivity workflow at the individual level. All three companies in this analysis have in fact done this with their support for third-party messaging platforms, relying on Application Programmer Interfaces (APIs) to enable this level of functionality (Cong, Du, 2007). This is also part of creating a greater level of integration to eventually allow for customer data from Customer Relationship Management (CRM) data to be integrated into the accounting system, and conversely, have the accounting data published to the CRM system as well (Giardina, 2004).

In addition to all of these areas of functionality there is also the unmet need in nearly every small business to migrate data off of legacy systems (Qazi 2005) and into the new accounting system. This can be as simple as uploading Microsoft Excel worksheets, or as complex as translating ASCII-based files from decades ago into data sets which can eventually be used as part of a broader financial analysis. Each of the applications included in this analysis support data import, export and only Microsoft Small Business Accounting supports Extract, Transfer & Load (ETL) functionality which makes it possible to create entirely new data sets out of legacy data. ETL can also be extremely useful in creating more unique data sets depending on the objectives your company is attempting to achieve. The concept of bringing together two completely different data sets and seeing what insights they provide based on analyzing them in conjunction with each other is called a "mash up" in the language of Web 2.0 (Cong, Du, 2007). Mash-up applications are often created using AJAX as it provides for rapid updates to Web-based applications and is compatible with XML which provides for integration to financial and content databases. Across all three applications then Microsoft, given its support for AJAX in its development environment for.NET, in addition to its expertise in ETL of financial data to support all Microsoft business applications, is best positioned to capitalize on the developments in small business accounting being driven by Web 2.0 technologies (Cong, Du, 2007) and social networking (Bernoff, Li, 2008). Taken together then all the features analyzed in this section have a significant impact on the usability analysis of these applications, which is discussed in the next section.

Assessment of Accounting Software Usability

Each of these three suites of accounting applications have been in existence for well over ten years, with Peachtree having nearly two decades of development invested in its applications, features and platforms. When comparing functionality relative to usability, the latter is much stronger in these applications as they have traditionally been known for their lack of intuitive design. What has assisted in the development of more usable accounting software however has been the consolidation taking place in this market. Sage Software acquired Peachtree software and quickly added more ergonomically-oriented features to the product. Beginning with the Peachtree First Accounting 2008 Edition, Sage began adding in more usability-based enhancements including an interactive, Web-based online start-up guide and series of tutorials customizable on a dedicated websites. Sage has deep expertise in enterprise software (Meeks, Swann, 2009) and as a result also created… [END OF PREVIEW] . . . READ MORE

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