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Not a day goes by that someone does not
ask me for an accounting software package recommendation tailored
specifically for their industry. That's what everybody wants.
Unfortunately, this line of thinking is usually a mistake. Let me
explain.
During my first five
years as an accounting software consultant, many clients would
explain that their business was "different" - their needs were
"unique". Upon hearing these words, I would draw my note pad in
closer and ready my pen in anticipation of some new fangled feature
that I would need to track down. It took me a long time, but I
finally caught on. Most businesses are NOT unique. By my
informal count, 100 out of 100 businesses use standard double-entry,
accrual-basis (or cash basis) accounting. Money comes in, money goes
out. Employees are paid a salary. Financial statements are needed.
Assets are owned, debts are owed. Oh sure, there is always a need to
keep track of a little extra data here and there - the name of the
boat in the case of a boat marina, for example. However, these extra
needs are usually secondary and can easily be accommodated with the
blank user definable fields found in most accounting software
packages today.
Picture it this way.
There are basically two groups of accounting software packages -
Generic and industry specific. Those products that are marketed
broadly to a diverse number of businesses are sometimes referred to
as generic or horizontal solutions while those products that are
marketed to a specific industry are often referred to as vertical
market solutions. There are about 500 of the former and 3,000 of the
latter. I estimate that there are about 50 or decent vertical market
solutions out there (Squirrel Software for Restaurants, Shelby
Systems for Churches, Blackbaud for Donor Management, etc.).
However in my opinion, the other 2,950 aren't worth the sand their
written on. The overwhelming majority of vertical market solutions
suffer significantly from one or more of the following problems:
1. Not enough revenue
base to ensure top research & development, support, and longevity.
2. Older proprietary
technologies are employed.
3. Financial reporting
is weak, often very weak.
4. Performance is slow
on a local area network (LAN).
5. Missing modules and
missing features.
6. Technical support is
poor.
7. Distribution channel
(installers and consultants) is sparse.
8. Vertical products are
slow to adopt new trends such as e-commerce solutions, XBRL
technology, integration with Microsoft Office, CRM solutions,
workflow solutions, supply chain solutions, human resources
solutions, fixed asset solutions, etc.
9. Vertical products are
typically priced two to four times higher than off-the-shelf,
generic products.
What does all of this
mean? It means that despite what you think, your business is not
really unique at all. I apologize if this upsets you. Many business
owners tend to like to think that their accounting software needs
are unique. However, when it comes to accounting for money in, money
out, assets owned, and the like - things are not really all that
different from one company to the next. There are 15 million
businesses in the US, and they all operate under the same generally
accepted accounting principles.
It has been my
experience that the generic products are by far the better, less
expensive option 90% of the time compared to vertical market
solutions. |
