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"Sage provides business software, services and support to small and medium sized businesses. Whilst our heritage is in the small business market we also have the experience and expertise to meet the needs of specific industries and larger organisations."
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Making the Move
What to Do When you've Outgrown QuickBooks
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Straight Talk About Selecting the Right Solution to Support Your Company"s Growth Requirements
QuickBooks provided the basic bookkeeping capabilities you needed to start your company. But things have changed. You have more customers. More employees. More complexity. In short, your small business isn"t so small anymore.
So how do you make the move to a more powerful accounting solution? First things first: It"s critical to gather all the facts before you make a decision. The new system can impact nearly everyone in your company, so each decision is critical. It pays to be meticulous.
At Sage Software, we"ve been responding to the needs, challenges, and dreams of small and midsized businesses for more than 25 years. Our experience gives us firsthand knowledge of the issues and pressure you face every day. This insight, along with the conversations we"ve had with many of our 2.3 million customers, has helped us assemble this guide. Making The Move: What To Do When You"ve Outgrown QuickBooks is designed to give you smart, unbiased tips as you prepare to make the move to a more powerful accounting solution.
Please note that the 37 ideas we highlight in this guide make no mention of our software. We believe that after performing all the due diligence suggested in this booklet, you"ll agree that Sage Software provides an ideal, cost-effective next step for your company. To illustrate that point, we"ve also enclosed a helpful reference chart that points out the differences between Sage MAS 90, Sage BusinessWorks and QuickBooks. Plus, we"ve included two case studies that show how our customers have successfully moved from QuickBooks.
We hope this material helps you continue on your path to success and we look forward to helping you grow your business.
37 Essential Tips for Evaluating and Purchasing New Accounting Software
The first step to implementing a new accounting system is evaluating your company"s readiness for change. Before you begin looking at new features and setting fast-track time lines, take time to set realistic goals and build momentum. Pre-production planning is the key to success.
- Change before you have to.
By the time you are certain that your current systems are inadequate, you"re probably already losing money to reduced productivity, lost opportunities, and inferior data. Don"t wait until that happens. If you"re receiving warning signs that your system can"t keep up (data frustration, slow turn-around, time-consuming or manual processes), begin your needs analysis now. Many professional systems analysts use the steps below. Keep them in mind as you evaluate your system needs.
- Accept the fact that improvements cost money.
Implementing new accounting software will require an investment of time and money. But the hidden costs of antiquated systems are sapping your productivity and softening your competitive edge. Remember that the right system will pay for itself with process improvements and better data for decision-making. Many businesses are choosing more modern, automated systems for faster processing of accounting transactions, easier retrieval of accounting information, and better formatting of accounting reports. Keep these benefits in mind when considering return on your investment.
- Don"t ignore hard-to-quantify benefits.
A new system will deliver broad improvements whose overall impact may be difficult to calculate with precision. Consider all the benefits of more reliable and faster access to data. Think about how much it is worth to your company to improve strategic planning. How much will it cost you if your next audit doesn"t stand up to scrutiny? How will your company"s reputation improve if your new system gives your customers better, faster, and more professional service?
- Compromise is a good thing.
Your final choice of software probably won"t satisfy everyone, but through clear communication and patient education, most people will recognize that the decisions being made are fair and reasonable. Plan to spend more time than you"d like handling objections, especially in the early phases of the project. Plus, have a strategy for fine-tuning the system once it"s installed. Count on a new system to satisfy about 90 percent of your needs and wants, and figure out how you are going to deal with the remaining 10 percent. You may need to consider some staffing changes or revising your policies and procedures.
People who buy accounting software usually spend most of their time evaluating features. The fact is, however, you should spend most of your time evaluating your own business. The more you know about the problems you expect the new system to solve, the better informed your final choice will be. Know where in your accounting cycle you experience the biggest productivity losses and highest error rates. Determine how inaccuracies are affecting your business. Understand which tasks require automation. Begin by identifying the problems you experienced this year because your existing system wasn"t adequate.
- Create a task force.
Financial software affects many departments within your organization. One of the easiest ways to ensure cooperation is to involve representatives from other departments right from the beginning" including not-so-obvious groups like Sales and Human Resources. It may slow down your process and frustrate you, especially if your old system is failing and you need to hurry the new project along. But in the long run, a task force saves time and hassles, and guarantees that other departments will cooperate during the implementation phase.
- Aim high.
Many people don"t aim high enough when they implement a new system. Just about any product can deliver financial statements. You should be looking for much more. Think back to last year"s planning sessions with your peers. What information could have boosted productivity and profitability? This might include current gross profit by product, customer, or salesperson, or trends on how customers and products are growing or declining. You may want to use financial ratios to measure your company"s performance against your competitors.
- Know what"s special or unusual about your company.
Your company probably has some unique requirements that can"t be changed. Perhaps you need to track products by lot or serial number. Do you need to price product by warehouse location? Does your industry have special reporting techniques? Make a list of requirements unique to your industry and organization.
- Know which features you can"t live without.
When you survey your task force, you"ll uncover a few system capabilities that are critical to your company such as particular reports or tracking methodologies. Once you discover that they are absolutes, put them on your must-have feature list.
- Look for systems that can easily adapt to your business needs.
In order for a system to meet your business needs, it should mesh with your existing business practices and adapt to technological innovations. Again, ideally you want software that"s simple, intuitive, and closely matched to how you already do business. Be sure the system can:
- Embrace industry-standard technology quickly and easily.
- Customize easily to fit the special needs of your business.
- Scale to the changing size of your business.
- Make integration a high priority.
Tightly integrating your financial accounting software with your other business management applications can significantly improve your bottom line. Linking all functions internally, and linking to customers, suppliers, and other business partners externally can dramatically reduce lead times and waste throughout the supply chain. You"ll streamline operations and gain a competitive edge by integrating your Web store, retail management, business intelligence, customer relationship management, supply chain, and human resource management applications. When evaluating accounting systems, check to see how seamlessly they integrate with other systems. Tight integration will save you time, promote greater efficiencies, and add value to your business.
Evaluate automated shipping and distribution systems. Inventory that sits in your warehouse is cash your business could otherwise be using. When considering accounting software, study what options are available to link the system with your warehouse management system. The proper use of integration will pay your organization huge dividends in the form of reduced inventory cycles, more efficient warehouse operations, less paperwork (including the corresponding reduction in input and other errors) and better order accuracy.
- Don"t forget about your sales team.
Study after study indicates that customer satisfaction and loyalty are crucial success factors. Customers are the life-blood of any organization. The better you are able to understand and satisfy customers, the more your business will prosper. Closely linked Customer Relationship Management (CRM) software will allow your organization to increase customer satisfaction. Your sales team will have a much better understanding of customer purchasing habits, both in aggregate and individually. Research which customer management options are available with the accounting software you are considering, and how closely linked they are.
- Take time to research human resource management systems.
As with any integrated system, take time to research HR management systems. Evaluate it like you would accounting software; don"t just assume it will meet your needs. Look past compensation and benefits to be sure that it meets your company"s specific requirements in other areas such as integration with federal and state agencies, and online filing of reports and documents. Be sure that it really does integrate and synchronize with payroll, eliminating the need for redundant data entry.
- Be prepared to extend your business to the Web.
Software optimized to leverage future e-business opportunities will deliver a significant strategic advantage. Look for accounting software with strong e-business capabilities, even if e-business functionality is not one of your current requirements. Areas to consider include support for business-to-consumer and business-to-business buying and selling, the ability to empower employees through the intranet and browser-based applications, and the capability to extend systems through mobile, wireless applications. Choosing a software manufacturer dedicated to e-business tools will ensure that your system can grow to match your organization"s evolving strategic goals.
- Look for integrated Web store systems.
A Web store isn"t really efficient if it doesn"t integrate with your back office. When shopping for Web store creation and management software, look for one that will eliminate time-consuming manual reentry of orders received via the Web. It should seamlessly integrate with your accounting system without costly customization. Web orders and payments must automatically flow through to your accounting system. Changes to customer and inventory information in your accounting system should automatically flow through to the Web store. Furthermore, you should be able to process orders in either real-time or batch mode.
Selecting the Right System
Understanding your business"s financial information needs is the first step in selecting the appropriate accounting software. However, there is typically no obvious choice because so many competing products promise similar results. You can end up mired in the feature lists and still be uncertain of your final selection. Here are some tips for choosing wisely.
- Choose your software before your hardware.
You"re probably going to need some additional hardware to implement the new system. But since system requirements are generally determined by software and not hardware, you should choose your software first, and then buy the hardware recommended by the software manufacturer or your consultant.
- Start with the big picture.
Don"t dive into details at the beginning of your selection process. First decide on what key characteristics the system must have. Eliminate any packages that don"t comply with your fundamental requirements and you"ll narrow the field significantly. There is no point in having a 200-page Request for Proposal (RFP) if 10 questions will shrink the field from 50 possible vendors to five.
- Don"t underestimate the importance of system architecture.
You"ll want your software to have the capability to grow and change as your organization changes. Most accounting software companies have various families of products geared toward specific sizes of customers. A key question to ask is whether or not the products are built on unified system architecture and if they have a built-in upgrade path from one product to the next. If the family of products has been developed on the same architecture, future upgrades from product to product and the subsequent data exchange can be managed much more smoothly.
- Make sure your software can be customized.
No one software package is right for everyone. And no accounting system on the market will have every single feature you"d like. Many packages give you useful modification features that let you change reports or screen formats. For even more control over your system, look for software that enables you to make more specific customization. This will ensure that your software will meet your needs no matter how your business changes.
- Make sure the software can adapt to your needs.
Finding a system that can adapt to the specific needs of your company is essential. Some packages offer open architecture, which allow you to easily add on additional features and adapt to new IT paradigms. Open architecture is especially important if you expect your company to experience growth or change in the future. If you have a growing business, one of the most important characteristics of your system is its scalability. Open architecture scalability ensures your system can grow along with your company.
- Look for software vendors that invest in research and development.
A good company invests heavily in engineering and develops new product features and enhancements regularly. These companies stay abreast of new technologies and make sure their customers do too. A good software manufacturer will provide frequent upgrades at reasonable prices.
- Explore what support will be available to you.
Find out what technical support each software manufacturer makes available to its customers. What days of the week and times during the day are telephone technical support specialists available? What costs, if any, are associated with various levels of support? Does the manufacturer provide classroom, self-study, or Web-based training programs? How frequently does the manufacturer keep in contact with customers regarding product announcements, upgrades, etc.? You will need assistance getting the most out of your software"the best manufacturers provide this assistance.
- Documentation reflects software quality.
You rarely ind excellent documentation with poor software. Clear, accurate, and useful documentation takes time to produce and indicates a long-term commitment to users. You"ll save time hunting through manuals if the documentation is included electronically as help iles within the application.
- Check out the software publisher.
Study the makers of the software. Find out how long the company has been in business, what their long-term prospects are, and what kind of customer support, upgrade protection, and technical support they provide.
- Popular products are popular for a reason.
Just because a software product is popular doesn"t mean it"s right for you. But if a company has lots of users, they"re probably doing something right. A large installed base is like an insurance policy for users. Choose a product that has stood the test of time, satisied companies similar to yours, and delivered good value.
- Evaluate the software by what it can"t do.
Software product limitations are often much more revealing than feature list comparisons. Find out the maximum number of customers, vendors, and inventory items allowed. Ask how many line items a single invoice or sales order can handle, and ind out the maximum number of users that can work with a particular application at the same time.
- Use mistakes as your acid test.
People make mistakes. If the software handles errors intelligently, that"s a sign of good design. Some of the most widely promoted accounting systems do not allow you to correct an error in a purchase order without canceling the entire P.O. and re-entering it from scratch. Look for software that tests for errors, such as duplicate customers and vendors, incorrect item numbers, and unreasonable amounts and dates. The system should also lag unusually high quantities or unit prices and offer valid alternatives.
- Evaluate the learning curve.
Intelligently designed software is easy to learn. An intuitive interface will shorten training times and facilitate the conversion. Look for input ields in consistent and expected locations, and screen design similarities among all modules. Be sure that the software comes with effective learning tools, classes, and demonstrations to speed the learning process. Don"t compromise when it comes to end-user support.
- Understand the difference between standard functions and extras.
Some software organizations provide basic functions but then make you purchase the various extras that come standard in other organizations" software. An extreme example would be to buy a car, and then discover that you must pay additional for the engine, steering wheel, and tires. Confirm what is included in the core pricing and what must be purchased separately.
- Go paperless.
Today"s most effective software applications utilize less paperwork. As you explore accounting and other software systems, focus on how much paper you can eliminate during order entry, basic accounting input, shipping and handling efforts, and other areas within your organization. The more paperwork and input you can eliminate, the more eficient and error-free your organization becomes. Consider systems that support document attachments and have built-in data backup and storage.
Working with a Consultant
It"s possible that your organization has the internal staff to successfully implement your new accounting system. It"s more likely, however, that you don"t have the resources or expertise to devote to analyzing, purchasing, installing, and maintaining a system. A software consultant can help considerably. They have been through the purchasing and implementation process many times. For a reasonable fee, they can save you signiicant time and money by helping you evaluate, select, and get the most out of your new system.
- Conduct an interview.
Arrange a meeting with the consultant and your task force. The focus of the interview should be how long the process will take, what applications the vendor can provide, and how he or she can help you beneit from them"not on details of speciic software or systems.
- Ask for references.
Has the consultant installed accounting software at companies similar to yours? Ask about company size, number of employees, and nature of the business. Ask for contact names and phone numbers, then call to learn as much as possible about the customers" working relationship with the reseller.
- Listening skills are as important as product skills.
If the consultant doesn"t listen effectively, chances are you won"t be satisied with the inal outcome. During your irst interaction, notice if the consultant seems more interested in "pushing" a particular product instead of analyzing your needs. Avoid people who try to impress you with jargon and who immediately start talking about features of equipment and programs.
- Find a reseller with whom you can work.
The consultant will be a virtual member of your company for weeks. You may even end up with a long-term relationship as your company grows if the consultant helps change and extend your system. Choose a consultant who comfortably its your company"s philosophy and culture.
- Avoid RFPs.
Contrary to what your colleagues may tell you, creating and sending out an RFP is not the most effective or eficient way to ind the best software system. The process of creating an RFP, sending it out, waiting for proposals, and reviewing them requires substantial internal time and therefore, expense. You can achieve the same results in days by simply making a list of the ten to ifteen features you must have, calling potential vendors on the phone, and asking if their system can provide them. You can narrow your list down to the three inalists you plan to interview just by spending a few hours on the phone.
- Don"t sit for product demos too early.
Salespeople sometimes urge you to sit through a product demonstration before you"re ready; it"s easy to get caught up in bells and whistles and forget about your objectives and the must-have list. Don"t watch a demo unless you"re armed with your list of requirements and can control the process. Help your team understand the need for clear objectives and priorities before they spend their time looking at demos. Also, it"s your demo"have the consultant present their features in the order of your choosing, not theirs. This gives you the ability to ensure that the features you need are consistently presented by each vender you review.
- Require cost forecast revisions.
Obviously, you"ll need to forecast the cost of implementation as accurately as possible. Avoid surprises"get a detailed breakdown of costs and fees before and during the requirements phase. As objectives change, make sure you request revised cost estimates.
Ramon Parmenter"s bronze sculptures and other works of art are prized collectibles of the rich and famous. Nike commissioned him to cast a sculpture of runner Prefontaine for its corporate headquarters. The Seattle Seahawks commissioned a sculpture of Steve Largent. Wayne Newton collects Parmenter works, and so does Bo Jackson.
The Business of Art
Running the business end of Parmenter Studios is an art in itself. With sales to galleries across the country and a steady supply of special orders, Parmenter Studios needed a reliable way of recording the cost and profitability of each individual project. "We initially chose QuickBooks® because our accountant was familiar with it," explains Nancy Parmenter, business manager for Parmenter Studios. "After we implemented it, we discovered that QuickBooks was not capable of doing job costing or inventory control, both of which are cruacial for us. It wouldn"t even let us track customer deposits in a way that made sense.
"After eight months, I turned to him and said, "I don"t want to do this any more." "Neither do I," he replied. We called a friend in a large CPA firm, who recommended Sage BusinessWorks as a superior product for a company like ours. Now, after adopting Sage BusinessWorks , we"ll never switch."
Sage BusinessWorks for "Everything"
What does Parmenter use Sage BusinessWorks for? "Everything," she says. "That"s why we like it so much." By everything, she means payroll, order entry, inventory control, accounts payable, accounts receivable, general ledger, and job costing. The software provides realtime inventory tracking for the bronze, carbides, cross pads, and other materials required for Parmenter"s manufacturing processes. When the company is ready to set it up, the system will also send reordering alerts when stocks become low.
"Sage BusinessWorks lets us track when a product is ordered, when it goes to the foundry, when it returns, what it weighs, when a customer makes a deposit, and when they pay off their account in full," says Parmenter. "The job costing feature allows us to monitor the exact cost of time and materials that go into each project. That way we can analyze how to improve profitability." Parmenter Studios has experienced important bottom-line benefits by adopting the new software package. "Sage BusinessWorks has streamlined our order entry process by 20 percent,"
Parmenter notes. "Receivables and payables are being processed much faster. Having realtime inventory means that we no longer experience material shortages. Company-wide, I"d say that Sage BusinessWorks has increased our productivity by at least 15 percent."
Focus in Figures, Not Numbers
Another unexpected benefit of Sage BusinessWorks has been its ease of use. "Once you become comfortable with the software, it"s very user friendly," says Parmenter. "It"s extremely reliable, and never freezes up on us. We also like the fact that Sage BusinessWorks is so scalable. We"ll be able to use it for years to come, merely by adding on a module here and there. Already we"ve discovered that the software has allowed us to grow our business without having to hire additional administrative staff."
Parmenter says she almost takes Sage BusinessWorks for granted now. "The software works so well that you forget how awful things were without it," she says. "And you rely on it so much that you forget it"s running there in the background. That"s actually a very good thing, because it means we can concentrate more on the artistic side of the studio, and less on keeping track of numbers."
For the quintessential low-tech, gotta-have-it party gadget, look no further than the Litecube. The non-toxic plastic block looks like the fanciest of ice cubes. Inside is a colored light bulb that glows for 12 hours, activated by tapping on any solid object. The crazy little cubes come in six different colors, and can be imprinted with logos or slogans.
"I"ve sold at least $50,000 worth of Litecubes just on airplanes," says Terry Hickey, vice president of sales and marketing. "They"re the rage at Hollywood parties." Customers have ranged from Playboy Mansion to the Pentagon and Paris Hilton.
Three years ago when the company began, no one dreamed that Litecubes would grow so quickly to become a multimillion dollar enterprise. It therefore selected Quickbooks for bookkeeping tasks during its start-up phase. Once the company began processing hundreds of orders every month, however, the need for a mid-level system to automate more financial tasks was apparent.
Glowing Reports on Migration
"We selected Sage MAS 90 for our upgrade because of the easy conversion path from QuickBooks through the Data Migrator tool," explains Hickey. "We were ecstatic that data on our 2,000-plus customers converted seamlessly, as did all of our open invoices. We"d feared a horrendous upgrade process, and instead found it was relatively painless. We view this as a true success.
Sage MAS 90 provides Litecubes with an end-to-end business system, automating and integrating everything from accounts receivable and accounts payable to payroll and sales orders.
With the Sage MAS 90 Inventory Management module, managers at headquarters in California have real-time data on freight forwarded from Hong Kong, and know exactly what is being shipped directly to customers. "At a single glance, the system allows us to see what is on sales order, purchase order, in the warehouse or on back order," says Chad Ackley, IT manager. "This is information we never had before, and lets us run the company smarter."
An Even Brighter Future
Ackley says that Sage MAS 90 has increased the speed of order processing. "Before when a PO came in we had three separate points of data entry. It took up to 72 hours to get the order out. Now we enter data just once, and can ship the order the same day, representing a fantastic improvement in customer service. The system even generates invoices without additional data entry. Also, credit cards can be preauthorized without using a manual machine, and several people can now perform data entry at the same time, further streamlining operations."
"We have a lot of projects under development such as multiple warehouses, more thirdparty vendors, and diverse product lines," notes Ackley. "Because Sage MAS 90 has cut sales order processing time by 75 percent and improved overall efficiencies by 300 percent, we won"t have to hire new people to accommodate anticipated sales volumes."
About Sage Software
Sage Software supports the needs, challenges and dreams of more than 2.7 million small and midsized business customers in North America through easy-to-use, scalable, and customizable software and services. Our products support accounting, operations, customer relationship management, human resources, time tracking, merchant services, and the specialized needs of the construction, distribution, healthcare, manufacturing, nonprofit, and real estate industries. Sage Software is a subsidiary of The Sage Group plc, a leading international supplier of accounting and business management software solutions and related products and services for small and midsized businesses. Formed in 1981, Sage was floated on the London Stock Exchange in 1989 and the Group now has 5.2 million customers and employs over 13,000 people worldwide. For more information, please visit the Web site at www.sagesoftware.com/moreinfo or call (866) 308-2378.
For more information on Sage Software, Sage BusinessWorks, or Sage MAS 90 and 200, please visit www.sagesoftware.com.