What Level of Accounting Software Is Right For Your Business?

 By Mike Fitzgerald

In an earlier article, I summarized how to recognize when it was time to upgrade from your existing accounting and business management system.  The next crucial step is recognizing what level of system you should be looking for and what you can afford.  Accounting and business management software is often broken into 5 categories, but the line between each level is a bit blurry.  As you move up the ladder of systems, you should expect more functionality, capacity for higher volume levels, greater customizability, and better interaction with external systems.   However, with the added capabilities there are higher costs and a greater reliance on outside support and services.

1. Entry-Level Bookkeeping Packages

Often the first step after a manual system, these packages will produce invoices, checks and a basic financial statement.  They have limited inventory and order processing capabilities and often must be supplemented with lots of spreadsheets and manual reporting.  These packages typically are priced under $500 and generally you are on your own for installation and training.  QuickBooks and Peachtree are two popular packages in this category.   The average company profile would be under $1M in sales, less than 20 employees and 1-3 users on the system.

2. Small Business Accounting Packages

Representing a relatively narrow market, these packages will do everything that the entry level bookkeeping packages do, plus the basics of order processing, inventory control, purchasing and in some cases light manufacturing.  In addition, they are sometimes used as back-end accounting packages for low-cost industry specific software.  They are typically priced under $5,000 and you should expect to spend an equal amount in training and implementation assistance.  A couple of popular packages in this category include BusinessWorks and BusinessVisions.  The average company profile would be $2-$3M in sales, less than 50 employees and 2-5 users.

3. Mid-Range Accounting Systems

These packages should handle most of the day-to-day processing and reporting needs of most small-to-medium sized businesses.  In addition, they typically come with reporting and productivity tools that allow users to customize databases, screens and reports and exchange data with a wide range of external applications.  In addition, some offer integrated e-commerce applications and web interfaces.  Generally priced between $10,000 and $30,000 you should also budget 50%-75% of the software cost for implementation and training.  Two of the more popular packages in this category of software include MAS 90 and Great Plains.  The average company profile would be $5M-$50M in sales, 50 – 250 employees and 5–50 users.

4. Entry Level Enterprise Systems

These packages offer all of the features and flexibility of the Mid-Range packages but introduce the concept of Enterprise Resource Planning into your organization.  Used by mid-range companies with very specific system needs and larger companies with limited IT staffs, these installations often involve customization and specialized applications.  Prices range from $25,000 - $250,000 with implementation, customization and training often running from $25,000 - $100,000.  Two packages in this level of software are Enterprise Suite and Navision.

5. Full ERP Systems

Larger companies with larger IT staffs and higher processing volumes typically use the top of the line of business automation software.  These packages range in price from $200,000 to over $1,000,000 and implementation budgets can go way over the $100,000 level.  Two of the leading solutions in this category are SAP and JD Edwards.

The right business software solution will allow you to fully integrate virtually all of the accounting, business management, customer service and management reporting needs of your company. It will also offer you immediate access to information and improve the profitability of your inventory system.  Serving your customer’s needs is key to the long-term success of any company and these business systems help ensure that your customers are receiving the products and services when they need them.  The bottom line for your company is that efficient business management software will have a positive impact on your company’s growth.

 (Editor's note: Michael Fitzgerald is President of The Fitzgerald Group, a leading New England’s largest reseller and provider of, training and support organization for two leading accounting software packages, MAS 90^® and MAS 200^®. The Fitzgerald Group offers more than 50 years’ experience in implementation and training.  Clients include businesses in the accounting industry, as well as manufacturers, distributors, sales processors, restaurants, specialty promotional products, and the hospitality industry.  The firm maintains its corporate headquarters at 2 Commercial Street in Sharon, Massachusetts, and also maintains an office in Southern New Hampshire.  For additional information on products or services, please call 781-232-1212 or visit the company’s website, www.thefitzgroup.com)

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