Does Microsoft’s Small Business Accounting Add up?

When Microsoft announced in 2004 that it was releasing an accounting software package aimed at small business owners, industry watchers were unimpressed. After all, the software giant had tried to break into that market several times in the preceding decade and failed each time.

But with Microsoft Small Business Accounting (SBA), the company had done its homework. First, it studied the industry leader, Intuit QuickBooks, and its customers to glean that product’s key strengths and weaknesses. Then, as software engineers designed the product, integration with the company’s ubiquitous Office applications was a key goal.

After SBA was built, Microsoft conducted not only a private beta-testing program, but also a lengthy “public beta” trial that encouraged real-world potential customers to use the program (bugs and all) and provide feedback. That led to the release of Microsoft Small Business Accounting 2006 in September of last year, to generally glowing reviews by press and customers alike.

Dashboard View: Microsoft Small Business Accounting 2006 lets you see at a glance what tasks need to be accomplished on a given day, and how the business is faring. (Click for larger image).

SBA Gets It Right
Designed for businesses with up to 25 employees, SBA’s greatest asset is its seamless integration with Microsoft Office apps. If you’ve used Outlook, you’ll be familiar with SBA’s interface. Indeed, that’s what first attracted Rob Gorski, owner of JBG General Contractors, LLC. He had tried using QuickBooks Pro 2004 as well as the Premier Contractor Edition to keep the accounting straight for his businesses (in addition to the contracting enterprise, he also runs a PC repair company and a digital imaging service).

“Neither product worked the way I needed it to,” says Gorski of the Intuit offerings. He found the QuickBooks interface too cluttered and complicated for his liking. So he signed on to be an early beta tester of SBA. “The user interface was familiar,” he says. “It has a similar look as Outlook.”

The second draw for Gorski was how well SBA works with Office. “It was seamless,” he reports. “I ported my data over from Excel, and was up and running in an hour.” He also likes that SBA comes with Microsoft Business Contact Manager to interface with his existing Outlook contact database. Gorski also appreciates that he can design his own documents (invoices, proposals and the like) in Microsoft Word and port them to SBA, rather than having to tackle a forms designer applet.

Another aspect of SBA that won him over from QuickBooks is that he can buy one version and have it work for all types of businesses, be it a service-based business, a retail business and so on. “During setup, you just choose one, and the program pulls up a customized bill of accounts tailored to that type of business,” Gorski notes.

That said, SBA isn’t the perfect solution — at least not yet. The one thing he’s still waiting for is electronic integration with his regional bank. While SBA can import information directly from most major banks across the country, its supported list still isn’t as extensive as QuickBooks. “But I haven’t found anything that’s a deal-breaker,” Gorski says of SBA’s shortcomings.

Not Everyone’s a Fan
Some people who have tried SBA in the past year are less enthusiastic. The biggest complaint: SBA requires customers to know more about accounting practices than QuickBooks.

At least that’s what Paul Gupta, president and CEO of Premier Software Solutions found. This IT solutions and services provider has five direct employees and an additional 20 contract workers. Before committing to an accounting package, Gupta was keeping his records in an Excel spreadsheet, which he would then hand over to his CPA. But as his business grew, that work-around was no longer viable.

So Gupta tried SBA during the free public beta period. He had seen QuickBooks in action, and he expected the Microsoft entry to be much the same. “But as I got into it, I found it wasn’t as user-friendly as I thought it would be,” he says of SBA.

He thought it was unclear how to set up his accounts, and found himself hunting around to find where to enter data. He also found the payroll module to be tough sledding. “I had to be a semi-accountant to enter my payroll,” he complains.

So after six months, he switched to QuickBooks Online, which he found more approachable. He especially appreciates QuickBooks’ integration with PayCycle, an easy-to-use online payroll service that lets him pay his far-flung employees via direct deposit.

Integration is the Key
Fortunately for Microsoft, for every Paul Gupta out there, the company has found converts like Rob Gorki and Konrad and Phyllis Haskins. The Haskins left the software industry in 2003 to start Teddy Bears BBQ, a specialty retailer that markets barbecue products and related services, such as cooking classes and catering. The couple found that handling basic business tasks was taking too much time away from growing the business. One culprit: Poor integration between their QuickBooks program and Microsoft Office. Switching to SBA let them move seamlessly from their Outlook contact records to their accounting records as needed.

“The difficulty of integrating QuickBooks data into our other programs created a lot of extra work,” says Phyllis Haskins. “We didn’t really have any consolidated customer and financial information.”

The couple also wanted to better predict seasonal sales and cash flows, as well as identify their customers’ buying patterns. Moreover, there was no automated way to communicate with customers, since invoices and the like resided in QuickBooks, but customer information and requests came via e-mail and the Web.

So the couple migrated their business information to SBA and Outlook 2003 with Business Contact Manager. They’ve not only saved a lot of time on typical business chores (about 80 hours a month, they estimate), with SBA they also gained a “dashboard” view into Teddy Bears BBQ that gives a snapshot of the company’s current financial condition.

“The tight integration of customer and financial data has dramatically improved the company’s ability to identify and analyze how the business is doing,” says Konrad Haskins. With SBA, they can now see yearly sales patterns and use the built-in forecasting tools to see months in advance when extra marketing efforts might be in order. And the extra time they’ve gained has enabled the Haskins to grow the business.

Rob Gorski, too, appreciates the extra time Microsoft Small Business Accounting 2006 has afforded him. With an infant son at home, every minute is precious. “It takes me far less time to accomplish tasks than it did with QuickBooks,” he says. “And for me now, that’s priceless.”

Jamie Bsales is an award-winning technology writer and editor with nearly 14 years of experience covering the latest hardware, software and Internet products and services.