Picking the Right Software Bookkeeping Program

Making the Purchase
When it comes time to purchase, you can check online sites such as Amazon.com or discount retailers like Best Buy. Because the cost of these packages are rarely more than a couple hundred dollars, it's probably not worth wasting too much time looking for the best deal. Unless you have very specialized needs, it's smart to pick one of the major brands such as Peachtree or Intuit's QuickBooks because these companies will likely be in business (and offering support) for as long as you are in business. They also have extensive online support and a community of advisors that can help you along the way. (Note: Microsoft introduced a new accounting program in 2006, Small Business Accounting, which is probably worth a look. One expert, however, we spoke to called it "awkward.")

Look for a package that you can test. Find out if it is easy to use (although that is a bit of a misnomer, more on that later). If you are going to anoint an employee to handle bookkeeping, make sure he or she tests the software as well. Find out if the software program works well with other applications such as Excel.

While it's difficult to know exactly what your needs are going to be in three to five years, take a guess. You want to buy a software program that will be able to grow with your business — at least for the near future. Look for limitations on the total number of users and the type of reports available.

Be careful here. Entrepreneurial dreams often don't match reality. Don't go top-of-the-line and spend more than is necessary. Even if you believe in five years you will need a sophisticated accounting program, remember that even QuickBooks has an enterprise addition that can be customized to fit your needs. For example, James Claime, a software consultant, has integrated QuickBooks with Microsoft Office Project so one of his clients, a pool contractor, could match each phase of his construction project with his receivables and payables.

Getting Help
Once you have purchased your software package, get help setting it up and learning it. All the software packages talk a good game of how easy and intuitive they are, but there are numerous ways to go wrong. "The beginning of the learning curve is tough," says Tina H. Anderson, who is a small business consultant and a QuickBooks expert.

Consultants, which charge anywhere from $45 to $150 an hour, can help you correctly set up your program, including the chart of accounts, and give you a tutorial on key accounting concepts. It's better to spend a few bucks and get good advice upfront rather than waiting until tax time to discover costly errors.

To find a consultant, first ask your accountant. He or she might be able to help you out. Also, visit the Web site of your vendor. Intuit has a list of what it calls ProAdvisors.

Even if you hire a dedicated bookkeeper make sure you learn the program yourself. "The business owner had better know how it works; otherwise they are just begging to have someone steal from them," says Anderson. "The more they know the better off they will be."