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AcctTwo Blog

When Buying Accounting Software, Bigger isn't Always Better

Growing Pains

So you're the CEO or CFO of a small to mid-sized business that's seen a lot of growth. In its infant stages, it made sense for your company to use an accounting solution like Quickbooks or Peachtree, but now you're in need of more complex functionality. Spreadsheet-based reports are becoming unmanageable and prone to too many errors. As your business is growing, you'd like to have better visibility into what's happening real-time, so you can be strategic and plan for the future. Maybe you've grown so fast that you've had all of your data in Excel, and you're taking months to complete your year-end-close process, going through bank and credit card statements, invoices and expense reports (don't be embarrassed - it's more common than you think, even for companies with tens of millions of dollars in revenue).

The Big Boys

It may make some sense to you at this point to look at the big boys, the well-established players in this market - Sage, Microsoft Dynamics, and SAP. They've been around a while. They likely have powerful robust solutions for you, and may offer application suites that will solve more than one of your problems in one fell swoop. Well..not so fast. Times they are a changing. Smaller companies with SaaS products are offering best-of-breed applications to handle accounting, CRM, HR, and almost every business need there is - often specializing in certain industries. These solutions can be implemented quickly and far less painfully and charged on a subscription basis.

Maybe it's because of this trend that the old-reliables are looking a little shaky these days. In the accounting world, Sage's product line is fragmented from various aquisitions over the past few years that don't seem to fall into any well-defined product strategy. We posted some information about Sage last week, specifically the future of its much-used Sage 500 product. Back in November we wrote an article about Sage as well as the turmoil at Microsoft, where that company's focus seems to be on the difficulties of other products instead of on its Dynamics line, which has been slow to adopt any kind of focused SaaS strategy. We also looked at SAP, who has announced the decommissioning of Business ByDesign, one of the only other major multi-tenant SaaS accounting products apart from Intacct and Netsuite. These are arguably the big three, and none of them are inspiring much confidence when it comes to product strategy or taking advantage of cloud-computing trends.

Not So Suite

Another thing to consider is whether to buy a suite of solutions that can handle your accounting, HR, payroll, CRM, etc. Or do you go after best-of-breed apps that are individually better suited to your needs and your specific industry. With the proliferation of these applications and API integrations, businesses can take advantage of the best solution for each of their needs, rather that the best solution for one or some of their needs. These best-of-breed SaaS products can often integrate with each other and with existing applications right out of the box.

Best-of-breed apps have other potential advantages. SaaS technology allows instant updates across the entire customer base, because all users share the same code-base. While suite-based SaaS vendors can provide this advantage, the cycle of upgrades can be more complicated and more costly. When one segment of the suite, let's say it's accounting functionality, gets an update, developers have to consider and test the impacts to other pieces of the application. This extra time and cost is passed on to the customer.

Whereas suite-based solutions dilute their investment dollars and their research and development across multiple software functions, the best-of-breed developers are more focused, less distracted, and can hone in on the specific functionality their customers want. They don't have to be all things to all users, building functionality that a common denominator of users need.

These are some important things to keep in mind as your business expands. Make sure that you're looking at the best solution for your needs, and don't get blinded by the size of the vendor or the number of applications they have. Quality is better than quantity.

About AcctTwo

AcctTwo is a leading consulting firm and reseller of cloud-based accounting and financial management software. AcctTwo’s sophisticated systems solve the issues growing middle market companies face today. AcctTwo also outsources back office processes, allowing clients to focus on the core competencies of their business. AcctTwo provides the people, processes, technology and office facilities to perform these functions, while allowing clients to collaborate interactively through an on-line portal.

AcctTwo is headquartered in Houston, Texas. For more information, please visit http://www.accttwo.com or call 713-744-8400. Connect with AcctTwo on LinkedIn, Twitter,Facebook, Google+, or Youtube.


AcctTwo and the AcctTwo logo are trademarks of AcctTwo Shared Services, LLC. All other company and product names mentioned herein may be trademarks of their respective owners.

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