The Theory of Accounting The Theory of Accounting Applied to SoftwareApplied to Software

Justin Botillier, Torrey Jacobson,Justin Botillier, Torrey Jacobson,

Mindy Konno, Maxine Vang, John ZollerMindy Konno, Maxine Vang, John Zoller

Accounting Software AvailableAccounting Software Available

1.1. Microsoft DynamicsMicrosoft Dynamics

2.2. Peachtree (Sage Accounting Software)Peachtree (Sage Accounting Software)

3.3. QuickBooksQuickBooks

4.4. Everest SoftwareEverest Software

5.5. GnuCashGnuCash

6.6. GrisbiGrisbi

7.7. Dolphin Accounting SoftwareDolphin Accounting Software

(formerly Microsoft Great Plains)(formerly Microsoft Great Plains)

Project Accounting Software

Software BenefitsSoftware Benefits

Financial managementFinancial management Instantaneous financial analysisInstantaneous financial analysis

AnalyticsAnalytics Broad range of flexible, customizable analytics, reporting and Broad range of flexible, customizable analytics, reporting and

budgeting optionsbudgeting options Business PortalBusiness Portal

Built on Microsoft .NET technology. Allows data and processes Built on Microsoft .NET technology. Allows data and processes to be accessed from a Web-based portalto be accessed from a Web-based portal

Dynamics v. other packagesDynamics v. other packages

Integration with widely-familiar applicationsIntegration with widely-familiar applications Developed by Microsoft which means it is built to work Developed by Microsoft which means it is built to work

seamlessly with their other products, such as Microsoft Office seamlessly with their other products, such as Microsoft Office and Microsoft SQL Serverand Microsoft SQL Server

Microsoft Office-like interfaceMicrosoft Office-like interface Pricing/FinancingPricing/Financing

$5,000 to $500,000. Module type packaging lets a company $5,000 to $500,000. Module type packaging lets a company create their own personal accounting package, eliminate create their own personal accounting package, eliminate expense on unwanted optionsexpense on unwanted options

Available from Microsoft Financing to reduce the burden of Available from Microsoft Financing to reduce the burden of expensive IT changesexpensive IT changes

TrainingTraining Online e-coursesOnline e-courses Classroom training throughout the United States and CanadaClassroom training throughout the United States and Canada

Dynamics v. MAS90Dynamics v. MAS90

*http://www.microsoft.com/dynamics/gp/product/mas90comparison.mspx

Dynamics DemosDynamics Demos

http://www.microsoft.com/dynamics/gp/product/demos.mspxhttp://www.microsoft.com/dynamics/gp/product/demos.mspx

GnuCashGnuCash

Open source software Open source software (free)(free)

Runs on Macintosh, Runs on Macintosh, Windows, and Linux Windows, and Linux computerscomputers

Keeps tract of bank Keeps tract of bank accounts, stock accounts, stock options, income and options, income and expensesexpenses

GrisbiGrisbi

Open source accounting Open source accounting software (free)software (free)

Runs on Windows, Runs on Windows, Macintosh, Linux Macintosh, Linux computerscomputers

Provides basic Provides basic accounting accounting reporting/recording such reporting/recording such as managing third party as managing third party finances, expenditure and finances, expenditure and receipt categoriesreceipt categories

Versions of PeachtreeVersions of Peachtree

1. Peachtree by Sage 1. Peachtree by Sage First AccountingFirst Accounting

**Designed to support small service-Designed to support small service-

oriented businessesoriented businesses

2. Peachtree by Sage 2. Peachtree by Sage AccountingAccounting

**Add basic inventory features to support Add basic inventory features to support

retail establishmentsretail establishments

Versions of Peachtree Cont.Versions of Peachtree Cont.

3. Peachtree by Sage 3. Peachtree by Sage CompleteComplete **Provides networking and multi-user support, Provides networking and multi-user support,

advanced inventory features, online banking, online bill advanced inventory features, online banking, online bill paying, job costing, time and billing, an audit trail, and paying, job costing, time and billing, an audit trail, and first-rate fixed asset management features.first-rate fixed asset management features.

4. Peachtree by Sage 4. Peachtree by Sage Premium AccountingPremium Accounting **Includes all the features found in Peachtree complete Includes all the features found in Peachtree complete

as well as departmental accounting, serialized as well as departmental accounting, serialized inventory to assign serial numbers to them, company inventory to assign serial numbers to them, company consolidation to roll up and summarize data, progress consolidation to roll up and summarize data, progress billing and employee compensation histories and billing and employee compensation histories and report customization. report customization.

*Also comes in industry-specific versions for *Also comes in industry-specific versions for accountants, manufacturers and distributors.accountants, manufacturers and distributors.

New Features of Peachtree New Features of Peachtree CompleteComplete

Now offers online Now offers online banking – a longtime banking – a longtime QuickBooks featureQuickBooks feature

Download and import Download and import transactions from transactions from your financial your financial institution directly to institution directly to PeachtreePeachtree

Bank listBank list

New Features ContinuedNew Features Continued

New online bill New online bill payment featurespayment features

New internal New internal accounting review accounting review that removes that removes suspicious suspicious transactions and transactions and accounting mistakes accounting mistakes such as duplicate such as duplicate transactionstransactions

Accounting FeaturesAccounting Features

The The salessales section in Peachtree, allows you to section in Peachtree, allows you to keep track of customers, sales, sales keep track of customers, sales, sales representatives and tax codes. You can also representatives and tax codes. You can also update your general ledger and sales journal as update your general ledger and sales journal as well as create an account’s receivable report.well as create an account’s receivable report.

Account’s payable section, known as Account’s payable section, known as purchasespurchases, , allows you to keep track of vendors and writing allows you to keep track of vendors and writing checks to making payment scheduleschecks to making payment schedules

Accounting FeaturesAccounting Features

PayrollPayroll lets you keep track of employee salary lets you keep track of employee salary and how much your company owes to and how much your company owes to government. government.

G/LG/L (General Ledger) section keeps a log of all (General Ledger) section keeps a log of all your transactions for 2 years. There are 13 your transactions for 2 years. There are 13 periods within each year.periods within each year.

InventoryInventory allows for adjustments as well as keep allows for adjustments as well as keep track of how much inventory your business has.track of how much inventory your business has.

Billing/TimeBilling/Time keeps track of which customers are keeps track of which customers are being billed as well as time cards.being billed as well as time cards.

Accounting FeaturesAccounting Features

AnalysisAnalysis allow your to view how your business is allow your to view how your business is doing as a whole. For example you’ll be able to doing as a whole. For example you’ll be able to see a payment aging report that allows you to see a payment aging report that allows you to see what percentage of credit sales are paid on see what percentage of credit sales are paid on time.time.

The The Company Company section holds miscellaneous section holds miscellaneous features such as a tutorial on how to use features such as a tutorial on how to use Peachtree and an alarm system that notifies you Peachtree and an alarm system that notifies you of important events. It also has a Job Reports of important events. It also has a Job Reports feature that allows you to create report by job feature that allows you to create report by job lists, estimated job expenses etc.lists, estimated job expenses etc.

Peachtree’s StrengthPeachtree’s Strength

Fast and smooth Fast and smooth download (less than 15 download (less than 15 minutes)minutes)

Excellent tutorial that Excellent tutorial that walks you through walks you through programsprograms

Offers some 145 Offers some 145 customized reportscustomized reports

Audit trail- allows you to Audit trail- allows you to record and report any record and report any changes madechanges made

Peachtree’s WeaknessesPeachtree’s Weaknesses

Expensive - Expensive - constantly update the constantly update the softwaresoftware

Only runs on Only runs on Windows (not flexible)Windows (not flexible)

Compared with QuickBooksCompared with QuickBooks

Has the upper hand when it comes to Has the upper hand when it comes to inventory.inventory.

*Lets you track assemblies through *Lets you track assemblies through manufacturingmanufacturing *Create master and sub-assemblies*Create master and sub-assemblies *Adjust prices by percentages*Adjust prices by percentages *Apply LIFO, FIFO Weighted Average*Apply LIFO, FIFO Weighted Average and moreand more

Compared with QuickBooks Compared with QuickBooks ContinuedContinued

Manufacturing firms should highly consider Manufacturing firms should highly consider using Peachtreeusing Peachtree

Those in retail and service businesses that Those in retail and service businesses that are happy with QuickBooks have little are happy with QuickBooks have little reason to switch because QuickBooks reason to switch because QuickBooks offers an excellent wholesale and retail-offers an excellent wholesale and retail-specific edition.specific edition.

QuickBooksQuickBooks

Basic InformationBasic Information

QuickBooks is an accounting software QuickBooks is an accounting software programprogram

Designed for small businessesDesigned for small businessesProduced by IntuitProduced by IntuitAn “off-the-shelf” accounting information An “off-the-shelf” accounting information

systemsystem

How is QB different from Quicken?How is QB different from Quicken?

Programs such as Quicken and Microsoft Programs such as Quicken and Microsoft Money are designed to help with personal Money are designed to help with personal financesfinancesThis often involves little more than bank This often involves little more than bank

account activityaccount activityQuickBooks and Peachtree are business-QuickBooks and Peachtree are business-

oriented oriented The program is set up around business The program is set up around business

transaction cycles transaction cycles

Versions of QuickbooksVersions of Quickbooks

Features offered vary depending on the Features offered vary depending on the version you haveversion you have

Main versions are:Main versions are:Simple StartSimple StartProProPremierPremierEnterprise SolutionsEnterprise Solutions

Differences between versionsDifferences between versions

Prices range from approximately $100 to Prices range from approximately $100 to $6000 depending on the level of $6000 depending on the level of complexity desiredcomplexity desired

Simpler versions provide help with tracking Simpler versions provide help with tracking bills and day-to-day transactionsbills and day-to-day transactions

More advanced versions offer payroll and More advanced versions offer payroll and inventory functionsinventory functions

Mac versions are also availableMac versions are also available

Using QBUsing QB

Operation of QuickBooks differs somewhat Operation of QuickBooks differs somewhat from textbook descriptions of accounting from textbook descriptions of accounting processesprocesses

Use of QuickBooks is modeled around Use of QuickBooks is modeled around business processes rather than the nuts business processes rather than the nuts and bolts of the accounting cycleand bolts of the accounting cycle

This feature may be helpful to users This feature may be helpful to users without a strong background in accountingwithout a strong background in accounting

BA 211/317BA 211/317

Manual accounting cycle:Manual accounting cycle:Journalize transactionJournalize transaction

Debit/CreditDebit/Credit

Post to G/L Post to G/L Trial balanceTrial balanceAdjustAdjustStatementsStatementsClosingClosing

Accounting QuickBooks StyleAccounting QuickBooks Style

Major business processes are grouped in Major business processes are grouped in the navigatorsthe navigators

To enter a transaction, go to the To enter a transaction, go to the appropriate navigatorappropriate navigator

Click on the necessary documentClick on the necessary documentQuickBooks generally handles debit/credit QuickBooks generally handles debit/credit

issuesissuesSometimes, a prompt is neededSometimes, a prompt is needed

Accounting QuickBooks StyleAccounting QuickBooks Style

Each document represents a complete Each document represents a complete entry or transactionentry or transaction

Transactions are automatically journalized Transactions are automatically journalized and postedand posted

Reports and financial statements are Reports and financial statements are available at the click of a mouseavailable at the click of a mouse

Financial StatementsFinancial Statements

With a manual system, financial With a manual system, financial statements are only available when the statements are only available when the books are about to be closedbooks are about to be closed

With QuickBooks, the program will With QuickBooks, the program will produce reports and statements at any produce reports and statements at any timetime

So no worries? Not quite…So no worries? Not quite…

Financial StatementsFinancial Statements

Beware of GIGO effect:Beware of GIGO effect:Statements/reports may not be accurate if Statements/reports may not be accurate if

important information has not been enteredimportant information has not been enteredThe system will simply work with whatever The system will simply work with whatever

numbers it hasnumbers it has

DrawbacksDrawbacks

Forms and processes are largely fixedForms and processes are largely fixed Inventory features are difficult to find and Inventory features are difficult to find and

useuseQualifier: the program available to us is the Qualifier: the program available to us is the

2002 edition, so this may have changed in 2002 edition, so this may have changed in recent yearsrecent years

Hands-On FeaturesHands-On Features

If necessary, journal entries can be made If necessary, journal entries can be made manuallymanually

QuickBooks usually comes with a QuickBooks usually comes with a standardized chart of accountsstandardized chart of accountsHowever, the user can alter this chart as However, the user can alter this chart as

necessary to meet individual needsnecessary to meet individual needs

OverallOverall

Why accounting softwares are useful now Why accounting softwares are useful now compared to back then?compared to back then?

How is it related to our learning in BA 378?How is it related to our learning in BA 378? Internal controlsInternal controls

Questions?Questions?

BibliographyBibliographyhttp://www.users.bigpond.com/dunster1/Far%20Side.htmhttp://www.users.bigpond.com/dunster1/Far%20Side.htm

http://www.smallbusinesscomputing.com/biztools/article.php/3520081

http://accounting-software-review.toptenreviews.com/peachtree-review.htmlhttp://www.accountingsoftwareadvisor.com/peachtree/index.shtml

http://www.peachtree.com/peachtreeaccountingline/complete/

http://quickbooks.intuit.com/

http://www.microsoft.com/dynamics/gp/product/demos.mspx