Taking account of software

Nation's Business, Jan, 1997 by Tim McCollum

Things get pretty hot at Kettler Casting when the big machines in the Belleville, Ill., foundry are pouring molten iron into molds to form machine parts, fire hydrants, and myriad other products. Its much cooler in the office, where office manager Mark Kettler and his staff use very different machines - personal computers - to pore over the company's books.

In managing the finances of the family-owned iron-products manufacturing company, Kettler and two employees use PC's and a newly released accounting software program called MICA IV 3.00, from MICA Accounting Software Inc., in Port Arthur, Texas. Kettler says the software makes it easy to accomplish general accounting tasks such as tracking receivables, preparing payroll, and maintaining the company's general ledger.

"The way we figured it, without the computer system and MICA, we would have to have two more people in the office to handle all the book work that comes through here" says Kettler, the son of the company's president, Gregg Kettler.

The firm switched to the MICA software in 1987 on the advice of the company's accountant, following a brief experiment with an off-the-shelf accounting program that Kettler says was inadequate.

MICA IV was more expensive than the mass-market software - about $1,000 for each accounting function, compared with $200 or less for all-purpose software available from retailers. But Kettler says the additional expense was worth it because MICA is better suited to Kettler Casting's business - made-to-order castings for a variety of customers.

Moreover, because the software resides on the server that's at the center of the company's network of PCs, it can be used simultaneously by a number of employees.

In addition, the software makes it easier for the company's outside CPA to prepare financial reports and tax returns. "Our CPA loves it," Kettler says. "He comes in, and he's in and out of here in two days. All of the information is at his fingertips."

Saving Time And Money

As evidenced by Kettler Casting, accounting programs have become vital tools at most small businesses. The programs save money for entrepreneurs by enabling them to do their bookkeeping in-house. And the software helps those entrepreneurs better manage their finances and spend more time on developing their businesses, says Tawn Allen Rose, editor and publisher of The CPA Software News, a monthly trade journal that reviews new accounting software.

Rose also notes that the programs are becoming increasingly "easier to use and more useful. They provide you with more information than you had before."

More than 500 accounting packages are currently on the market, Rose says. He attributes the large number of programs to the demand for specialized software for specific businesses such as manufacturers, doctors' offices, insurance companies, and merchants. This potpourri of software can be sorted into two categories: basic, off-the-shelf programs and advanced, customized accounting systems.

Basic programs combine most common accounting functions into a single package. They're usually available in retail stores or directly from the manufacturer, and they generally cost less than $200.

Higher-end accounting systems are made up of interconnecting programs called modules. The modules, which perform various functions, enable companies to build systems with the specific capabilities they need.

Most higher-end systems work over company computer networks, and because of their complexity they are usually sold, installed, and maintained by accounting firms, consultants, or software resellers. The software alone can cost $1,000 or more per module, plus charges for installation and customization.

Affordable Alternatives

This relatively high cost is one reason why off-the-shelf programs have become popular among small businesses. Examples of such programs include the Peachtree Accounting line, from Peachtree Software Inc., in Atlanta; QuickBooks, from Intuit Inc.. in Menlo Park, Calif.; and Simply Accounting, from Accpac International, in Santa Clara, Calif.

These programs make it affordable and relatively easy for most small-business people to do their own accounting. Even accounting professionals such as Dan Glidden, owner of Lisbon Bookkeeping Services, in Lisbon Falls, Maine, recommend the programs to many of their small-business clients.

"They can just key in their data and bring them in when it's time to do their taxes" Glidden says. "It saves them money if they do it on their own."

Glidden uses Peachtree Complete - the most advanced product in the Peachtree Accounting line - to do his clients' books and those of his own small firm. For six years he used the company's product that ran on the DOS operating system, but he recently switched to a Windows version, which he says is easier to use and provides better access to records.

Until recently, accounting software was one of the last software markets dominated by DOS programs, which were text-based and difficult to use. However, off-the-shelf programs such as Peachtree Complete have been among the first accounting software products to be developed for Windows.