Although all the packages we reviewed enforced generally accepted accounting principles, each was remarkably unique.

Accounting Software: Specialized by Design

An integrated integrated accounting system divides the discipline of accounting into a series of major accounting functions and provides a separate program or module to handle each function. These modules echo paper accounting departments such as payroll and inventory control.

In an integrated system, the general ledger module forms a core into which all other accounting information is fed. It can be used either as a stand-alone unit into which data is entered directly, or as a consolidator of information gathered by more specialized modules. The general ledger takes this information and transforms it into the financial statements and management reports that have become so vital to business today.

In this buyer's guide we focused on the evaluating and testing of the general ledger modules of five full-featured integrated accounting packages. All five of the integrated accounting systems reviewed in this issue offer at least two companion modules that work with the general ledger accounts receivable and accounts payable).Time and money kept up from making as thourough an analysis of the other modules (accounts receivable, accounts payable, fixed assets, payroll, inventory, etc, ) that integrate with the general ledger. They are, however, each covered in some detail in the final two sections of this guide: Expanded Listings and Features Chart. If your company needs capabilties not offered by one of these three basic components, check the table in this section for further information.

Unlike software such as spreadsheets or word processors, integrated accounting programs are not mass-market items. Spreadsheets and word processors can be sold to every person who works in a business. Accounting prograins, even those licensed as multiuser systems, are often sold only to individuals who specialize in accounting.

Furthermore, because these programs are so complex, support is vital. Limited market size and high cost of services make integrated accounting packages costly investments that should be selected with care.

Since accounting software must meet the specialized needs of the accounting market and remain consistent with accounting conventions, concerns such as ease of use often take second place to the ability of the package to reliably support standard accounting procedures for particular types of businesses.

All the packages we reviewed enforce GAAP (generally accepted accounting principles), such as checking to see that debits and credits of transactions entered are balanced. However, we were astonished at how different the five packages are from each other.

Athough every accounting vendor tries carefully to mix the tried and true methods used in paper bookkeeping with improvements that computers can offer, there is no such thing as a perfect computerized accounting system. Any system, computerized or manual, that's used as persistently as a general ledger-and depended on so much-is tested to the limit. Thus, experienced users of accounting software, from comptrollers to data entry clerks, have strong ideas about what is wrong and right about their accounting systems. Unfortunately, they tend to disagree among themselves. Accounting systems tend to be specific to particular businesses or types of businesses.

Finding the right package for a certain company entails comparing the accounting requirements of the business with the features and philosophy of each accounting package under consideration. If you are in the market, advice from your accountant, in-house or out, should be part of the evaluation process.

The first step in picking an accounting package is to make sure that the basic capabilities of the general ledger and other modules you want meet the requirements of your business. Check to see how many digits can be assigned to an account code. Make sure the package you buy provides plenty of room to handle the account numbering system you already use. Otherwise, you'll have to change all your account codes. You might also consider whether or not the package offers alphabetic as well as numeric account codes. If you're going to be changing your account numbering scheme anyway, you might find it more convenient to label current assets by name instead of number, even though some accountants consider this heresy.

Other basic factors to consider are the maximum dollar size of transactions and the number of accounts a package can comfortably handle. Don't overlook the obvious: If your company sells supercomputers costing $1 billion each, don't buy a package that can't handle numbers larger than $999 million. Conversely, if you have 20,000 customers, don't buy a general ledger that integrates with an accounts receivable package that has a 10,000 customer limit.

Different businesses require varying levels of detail in their audit trails. Most computerized packages save dates and transaction numbers. If that is all the detail you need, simpler packages will do just fine. Powerful systems can tag each credit or debit individually and track entries according to the batch in which they were processed, and track each journal into which they were entered.

Computerized accounting systems are able to generate sophisticated reports in a fraction of the time it would take to produce similar reports manually. A good accounting package should come with a selection of predefined reports that can be edited. You should be able to add or change titles, and insert page breaks, totals, and subtotals. Try to find a package that has predefined versions of most of the reports your business needs. If you can't find one, look for a package with a powerful report writer.

Your accounting package should be able to grow with your company. Integrated accounting systems can be enhanced by adding new modules, by altering the programs themselves, and by upgrading the hardware. Plan for enhancement before you buy the first module; once your data is on disk, it might be difficult to convert.

Before purchasing a general ledger, look closely at the entire line of modules; these will be passing data to the general ledger. By adding (well integrated) modules one at a time, you can phase into computerized accounting step by step, and stretch the cost of installation over a longer period.

Another way to expand upon the capabiliti es of an accounting package is to alter its source code, if it is available. Many of the packages we reviewed are sold primarily through value-added resellers (VARs) who specialize in setting up and customizing these systems. Many large and small accounting firms can also set packages up and create customized reports and data entry screens.

However, if a package lacks the ability to perform a procedure crucial to your company's way of doing accounting, look for a different program; don't assume that every failing can be rectified by customizing code.

Another way to expand an accounting package is to port it to more sophisticated hardware-onto a local area network or a minicomputer. A good networked multitasking accounting system will allow several data entry clerks to enter data or print reports simultaneously. Although we did not evaluate multitasking, OS/2, networked, or minicomputer versions of the packages, we do note such capabilities in the individual reviews and in module table.

Don't be conservative in your estimates of how powerful a system you need to handle your business. The numbers that appear on spec sheets are often unrealistic. Software that can theoretically support 32 nodes on a LAN may get annoyingly sluggish with only a dozen intensive users logged on. Consider issues such as the number - of pages your business's end-of-year reports typically contain. If the volume of paper, transactions or calculations, is large, be aware that while a PC could produce those re eports, it might take a long time.

Installing and maintaining a computerized accounting system is no trivial task. To do so properly requires an understanding of the fundamentals of both computing practices the rules of generally acceptable accounting practices and a mastery of the accounting package being installed. Thus, it is vital that a reliable, affordable, helpful support policy is available. Many vendors rely on VARs to provide such support. Others offer toll-free telephone help, and newsletters and software updates at minimal cost. All of these options should be scrutinized.

Don't assume that every failing of your package
can be rectified by customizing its code.

The final issue to consider when picking an accounting package is whether or not it matches your philosophy of accounting. Some unorthodox packages try to improve upon accounting traditions; such as New Views from Q.W. Page, whose spreadsheet-like interface defies accounting tradition.

For this Buyer's Guide we stuck to the packages that stick to established methods of double-entry accounting. Yet, just as no two paper accounting systems are identical, every PC‑based accounting package also makes different compromises and includes a different mix of features. The incorporation of interactive techniques into traditional accounting ends at a different point for each package reviewed.

For example, packages vary considerably in the ease and flexibility with which data can be entered into journals and transactions balanced. For example, BusinessWorks and Harmony do as much as they can to guide users at all times. If a clerk enters incorrect information, the program tells them so instantaneously.  These two programs require that at least two entries be made to balance out every transaction. Platinum and Solomon don't provide as much guidance but they do allow clerks to enter whole transactions on a single screen. RealWorld is at the other extreme‑it allows only one credit or debit to be entered into a screen at a time.

Paper bookkeeping systems are by nature batch‑oriented. First, all the data is entered, then columns get totaled, and books are balanced. Finally, the month is closed and reports are created. There are many advantages to an interactive accounting system. For one thing, the system can prompt users. (For example, "This account code is not in the chart of accounts. Therefore this transaction cannot be posted as is. Please fix this problem before you go on.") Personal computers are also very good at maintaining running totals. Why wait for the end of the day or month to check if the books are balanced?

Batch‑oriented computer systems usually catch unbalanced transactions and some data entry errors before they are posted. However, the ability to let data entry clerks correct mistakes before they have been entered into the permanent record is controversial because it goes against accounting tradition which says that once an entry is made into a journal it should stay there. The entry can be reversed but the audit trail should remain inviolate. Many computer‑literate accountants now take a softer line--""Sure nothing that has been posted should be changed, but we don't want to cast every typing error in stone."" It is up to your business's accountant to determine which philosophy of computerized accounting you should adopt. Should all posting be immediate, or should data be held for a while to give users a chance to clean it up a little before it is posted forever? Should data entry clerks be alerted of errors, or should their bosses?

The packages we review here provide a spectrum of choices for small, medium‑size, and large businesses; these products offer variations in basic philosophy and in capabilities, but all are powerful, appropriate solutions for particular types of businesses.

Joseph Devlin and Emily Berk