Accounting for the needs of SMEs

Finance and accounting software can be critical to an SME. With a wealth of options out there, we identify the best options for a range of users.

Finance and accounting software is widely used by small and medium-sized enterprises (SMEs) to save time and money by automating repetitive processes and simplifying financial reporting. However, as an increasing number of suppliers target smaller businesses, deciding which package to choose is becoming more complicated.

Over the years, software suppliers have been adding more innovative features to their finance packages, such as web interfaces and better integration with supply chain and other applications, and they have also altered products to make them more useable for non-accountants.

Large software suppliers, such as Microsoft, SAP and Oracle, have tailored financial software products to SMEs, and there are also many specialist suppliers and web-centric service providers.

Enterprise resource planning suites from the likes of Pegasus, Lawson Software, Oracle and SAP include web-based modules for common finance and accounting tasks so that multiple employees can use the system simultaneously from multiple locations. However, budget constraints mean that most SMEs will still opt for client server-based systems.

"If you are a larger organisation with more than five accounting personnel, you may want some international capability, multi-currency, and a more open coding structure for general ledger, but at a much lower price point than a full ERP package. Something like Sage Line 200 and 500 could be a good option," said Nigel Rayner, research vice-president at analyst firm Gartner.

In addition to Sage, client server-based financial software packages for SMEs include Intuit Quickbooks, Pegasus Software's Opera, and Micro­soft Dynamics Great Plains.

Microsoft Great Plains

Microsoft's Great Plains suite offers general ledger, accounts payable, and accounts receivable modules, as well as bank reporting, cash flow management and easy reconciliation.

Microsoft has also developed Office Accounting Express 2007, which is a simpler program for managing business finances in small or home-based businesses.

Pegasus Opera II

Another popular desktop accounts system is Pegasus Software's Opera II, which is used by about 20,000 organisations. Among these is Calcot Manor, which uses the software to manage the finances of its Cotswold-based hotel business.

Calcot Manor has a £7m turnover and employs more than 300 staff. It requires good payroll and human resources functions in its finance and accounting software.

The hotel implemented Opera II with a Pegasus XRL business intelligence tool and Opera's Payroll and HR module. The package includes Online Filing Manager, which allows Calcot Manor to submit end-of-year forms via the Government Gateway portal.

Jan Dyne, accounts manager at Calcot Manor, said the migration to Opera II was quick and easy, taking just a couple of hours. The product has a Windows interface, which helped with usability, she said.

"Payroll is easier than it has ever been many of the processes are performed automatically, so you do not need to be a payroll expert. This saves time and reduces the potential human error of the traditional manual procedures," said Dyne.

Intuit Quickbooks

Intuit says its Quickbooks 2006 software requires no previous knowledge of accountancy. Its Quickbooks Simplestart software was adopted by Linda Gilligan, the owner/manager of chocolate fountain business Absolute Chocolate, in 2005.

Despite having a financial services background, Gilligan said the small business accounting package that her accountant had recommended was too confusing. A friend recommended the Intuit software, which she found more straightforward.

"I found Quickbooks Simplestart very easy to use straight away, and at first I used it extensively for 'data catch up', so I had a record of my customers and finances from the very beginning of the business. It is simple to pull client information out of the application, and I find that it makes invoices very easy to put ­together," said Gilligan.

She receives about five orders a week for her chocolate fountain service, and said that the bookkeeping software is well suited to a business of her size.

Coda Dream

In contrast to Quickbooks' approach, Coda's Dream SME accounting system was "designed by accountants for accountants".

Travel company Roxton Bailey Robinson Worldwide implemented Coda Dream in October 2005, replacing an accounts system that had evolved over five years without being properly structured, said finance director Andrew Murray.

Murray said he had the choice of spending a large amount of money restructuring the incumbent system or starting again, and he had implemented Dream at a previous company.

Dream consists of the core nominal, purchase, sales and cash ledgers additional ledgers for particular businesses administrative purchasing fixed asset accounting and reporting. Its strength is its ability to dig into the forms and input documents behind the financial figures that are represented, said Murray.

Roxton Bailey Robinson installed the software on a single Intel 3.06GHz Xeon server running Microsoft Windows Server 2003, SQL Server 2003 and a 132Gbyte hard drive.

Murray said that because the system was based on the Microsoft .net Framework, he was able to write routines in Visual Basic to extract data from the booking and customer relationship management systems that also accessed the SQL Server database. The ability to import this data has saved the company a lot of time, particularly for the three members of staff who previously had to re-key information.

Symmetry Bluqube

Although client server finance systems have proved their worth, browser-based software can offer lower set-up costs and predictable charges. Symmetry Bluqube is an example of a financial and management accounting system that is completely web-based, and is designed for use by non-finance professionals.

The system is aimed at companies that have a turnover of £3m to £250m, and up to 800 users, and it can integrate with other financial systems. According to the supplier, the product was designed to simplify the complexities faced by finance professionals.

Infrastructure asset management software company Exor migrated from two standard desktop accounting packages to Symmetry Bluqube when it needed to extend its finance system to support the firm's global expansion.

Kay Quance, Exor's finance director, said, "The old system would regularly fall over we would lose data and it was just too slow. We also needed to increase our level and sophistication of reporting, both for our investors and to individual departments in the business."

After Exor moved to Bluqube, Quance said the firm gained a more structured approach to implementation and integrating with other applications, such as Order Book.

"With Bluqube, there is full integration, which means that we only have to enter information once. And because this is shared with the core accounting system, we can produce more detailed and meaningful reports.

"Our month end used to take two people up to a week, now it is done in a couple of days," said Quance.

Bluqube costs between £20,000 and £180,000, depending on the products selected and the number of users.


Intrabiz develops bespoke web-based accounting systems. A system it built for the National Childbirth Trust has simplified work for the charity's 330 volunteer branch treasurers, speeding up the preparation of accounts and centralising the monitoring and control of financial processes.

Belinda Phipps, chief executive at the National Childbirth Trust, said the benefits of adopting a web-based system included having a consistent accounting product across all branches, with head office gaining on-demand access to the charity's national accounts and key performance indicators.

She said the cost of the system was lower than an equivalent client server system, and it gave the National Childbirth Trust the ability to audit accounts remotely. Previously, the finance director had to wait until paper copies had been filed by each branch to audit them.

The web-based system has also cut the time it takes volunteers to enter accounts data for the quarter. It now typically takes volunteers a few hours, rather than several days, said Phipps.

Interprise Suite

Interprise Suite is one of an emerging breed of products which aim to combine the advantages of desktop and web-based finance software.

Based on a smart client, service oriented architecture (SOA), Interprise runs as a traditional desktop suite, offering a rich user interface and easy printing, but it can also be accessed remotely via a browser, without requiring Citrix or Microsoft Terminal Services to run.

Interprise Suite uses a single database to offer customer relationship management, business intelligence, accounts, e-commerce, e-mail, reports, order processing and trade counter functions. It is free for a standard single-user version and costs £1,500 per five-user licence.

Gartner said several finance software suppliers were going down the SOA route, including Workday, which was founded by ex-Peoplesoft executives. Some suppliers are also offering finance software as a managed service over the web.

However, Rayner said there had not been much take up of software as a service in accounting, because many firms are concerned about security and integration with their own systems.

"The [software as a service] products at the lower end are still mostly client server, and all of them have web capabilities, and perhaps a whole set of web-based modules. The challenge is that SMEs do not really need a web-based finance or accounting system because they can run it on a local area network," said Rayner.

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