The Theory of Accounting Applied to Software Justin Botillier, Torrey Jacobson, Mindy Konno, Maxine Vang, John Zoller

Accounting Software Available 1. Microsoft Dynamics 2. Peachtree (Sage Accounting Software) 3. QuickBooks 4. Everest Software 5. GnuCash 6. Grisbi 7. Dolphin Accounting Software

(formerly Microsoft Great Plains) Project Accounting Software

Software Benefits Financial management Financial management Instantaneous financial analysis Instantaneous financial analysis Analytics Analytics Broad range of flexible, customizable analytics, reporting and budgeting options Broad range of flexible, customizable analytics, reporting and budgeting options Business Portal Business Portal Built on Microsoft.NET technology. Allows data and processes to be accessed from a Web-based portal Built on Microsoft.NET technology. Allows data and processes to be accessed from a Web-based portal

Dynamics v. other packages Integration with widely-familiar applications Integration with widely-familiar applications Developed by Microsoft which means it is built to work seamlessly with their other products, such as Microsoft Office and Microsoft SQL Server Developed by Microsoft which means it is built to work seamlessly with their other products, such as Microsoft Office and Microsoft SQL Server Microsoft Office-like interface Microsoft Office-like interface Pricing/Financing Pricing/Financing $5,000 to $500,000. Module type packaging lets a company create their own personal accounting package, eliminate expense on unwanted options $5,000 to $500,000. Module type packaging lets a company create their own personal accounting package, eliminate expense on unwanted options Available from Microsoft Financing to reduce the burden of expensive IT changes Available from Microsoft Financing to reduce the burden of expensive IT changes Training Training Online e-courses Online e-courses Classroom training throughout the United States and Canada Classroom training throughout the United States and Canada

Dynamics v. MAS90 *

Dynamics Demos

GnuCash Open source software (free) Open source software (free) Runs on Macintosh, Windows, and Linux computers Runs on Macintosh, Windows, and Linux computers Keeps tract of bank accounts, stock options, income and expenses Keeps tract of bank accounts, stock options, income and expenses

Grisbi Open source accounting software (free) Open source accounting software (free) Runs on Windows, Macintosh, Linux computers Runs on Windows, Macintosh, Linux computers Provides basic accounting reporting/recording such as managing third party finances, expenditure and receipt categories Provides basic accounting reporting/recording such as managing third party finances, expenditure and receipt categories

Versions of Peachtree 1. Peachtree by Sage First Accounting *Designed to support small service- *Designed to support small service- oriented businesses oriented businesses 2. Peachtree by Sage Accounting *Add basic inventory features to support *Add basic inventory features to support retail establishments retail establishments

Versions of Peachtree Cont. 3. Peachtree by Sage Complete *Provides networking and multi-user support, advanced inventory features, online banking, online bill paying, job costing, time and billing, an audit trail, and first-rate fixed asset management features. *Provides networking and multi-user support, advanced inventory features, online banking, online bill paying, job costing, time and billing, an audit trail, and first-rate fixed asset management features. 4. Peachtree by Sage Premium Accounting *Includes all the features found in Peachtree complete as well as departmental accounting, serialized inventory to assign serial numbers to them, company consolidation to roll up and summarize data, progress billing and employee compensation histories and report customization. *Includes all the features found in Peachtree complete as well as departmental accounting, serialized inventory to assign serial numbers to them, company consolidation to roll up and summarize data, progress billing and employee compensation histories and report customization. *Also comes in industry-specific versions for accountants, manufacturers and distributors. *Also comes in industry-specific versions for accountants, manufacturers and distributors.

New Features of Peachtree Complete Now offers online banking – a longtime QuickBooks feature Now offers online banking – a longtime QuickBooks feature Download and import transactions from your financial institution directly to Peachtree Download and import transactions from your financial institution directly to Peachtree Bank list Bank list Bank list Bank list

New Features Continued New online bill payment features New online bill payment features New internal accounting review that removes suspicious transactions and accounting mistakes such as duplicate transactions New internal accounting review that removes suspicious transactions and accounting mistakes such as duplicate transactions

Accounting Features The sales section in Peachtree, allows you to keep track of customers, sales, sales representatives and tax codes. You can also update your general ledger and sales journal as well as create an account’s receivable report. The sales section in Peachtree, allows you to keep track of customers, sales, sales representatives and tax codes. You can also update your general ledger and sales journal as well as create an account’s receivable report. Account’s payable section, known as purchases, allows you to keep track of vendors and writing checks to making payment schedules Account’s payable section, known as purchases, allows you to keep track of vendors and writing checks to making payment schedules

Accounting Features Payroll lets you keep track of employee salary and how much your company owes to government. Payroll lets you keep track of employee salary and how much your company owes to government. G/L (General Ledger) section keeps a log of all your transactions for 2 years. There are 13 periods within each year. G/L (General Ledger) section keeps a log of all your transactions for 2 years. There are 13 periods within each year. Inventory allows for adjustments as well as keep track of how much inventory your business has. Inventory allows for adjustments as well as keep track of how much inventory your business has. Billing/Time keeps track of which customers are being billed as well as time cards. Billing/Time keeps track of which customers are being billed as well as time cards.

Accounting Features Analysis allow your to view how your business is doing as a whole. For example you’ll be able to see a payment aging report that allows you to see what percentage of credit sales are paid on time. Analysis allow your to view how your business is doing as a whole. For example you’ll be able to see a payment aging report that allows you to see what percentage of credit sales are paid on time. The Company section holds miscellaneous features such as a tutorial on how to use Peachtree and an alarm system that notifies you of important events. It also has a Job Reports feature that allows you to create report by job lists, estimated job expenses etc. The Company section holds miscellaneous features such as a tutorial on how to use Peachtree and an alarm system that notifies you of important events. It also has a Job Reports feature that allows you to create report by job lists, estimated job expenses etc.

Peachtree’s Strength Fast and smooth download (less than 15 minutes) Fast and smooth download (less than 15 minutes) Excellent tutorial that walks you through programs Excellent tutorial that walks you through programs Offers some 145 customized reports Offers some 145 customized reports Audit trail- allows you to record and report any changes made Audit trail- allows you to record and report any changes made

Peachtree’s Weaknesses Expensive - constantly update the software Expensive - constantly update the software Only runs on Windows (not flexible) Only runs on Windows (not flexible)

Compared with QuickBooks Has the upper hand when it comes to inventory. Has the upper hand when it comes to inventory. *Lets you track assemblies through *Lets you track assemblies through manufacturing manufacturing *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 more and more

Compared with QuickBooks Continued Manufacturing firms should highly consider using Peachtree Manufacturing firms should highly consider using Peachtree Those in retail and service businesses that are happy with QuickBooks have little reason to switch because QuickBooks offers an excellent wholesale and retail- specific edition. Those in retail and service businesses that are happy with QuickBooks have little reason to switch because QuickBooks offers an excellent wholesale and retail- specific edition.

QuickBooks

Basic Information QuickBooks is an accounting software program QuickBooks is an accounting software program Designed for small businesses Designed for small businesses Produced by Intuit Produced by Intuit An “off-the-shelf” accounting information system An “off-the-shelf” accounting information system

How is QB different from Quicken? Programs such as Quicken and Microsoft Money are designed to help with personal finances Programs such as Quicken and Microsoft Money are designed to help with personal finances This often involves little more than bank account activity This often involves little more than bank account activity QuickBooks and Peachtree are business- oriented QuickBooks and Peachtree are business- oriented The program is set up around business transaction cycles The program is set up around business transaction cycles

Versions of Quickbooks Features offered vary depending on the version you have Features offered vary depending on the version you have Main versions are: Main versions are: Simple Start Simple Start Pro Pro Premier Premier Enterprise Solutions Enterprise Solutions

Differences between versions Prices range from approximately $100 to $6000 depending on the level of complexity desired Prices range from approximately $100 to $6000 depending on the level of complexity desired Simpler versions provide help with tracking bills and day-to-day transactions Simpler versions provide help with tracking bills and day-to-day transactions More advanced versions offer payroll and inventory functions More advanced versions offer payroll and inventory functions Mac versions are also available Mac versions are also available

Using QB Operation of QuickBooks differs somewhat from textbook descriptions of accounting processes Operation of QuickBooks differs somewhat from textbook descriptions of accounting processes Use of QuickBooks is modeled around business processes rather than the nuts and bolts of the accounting cycle Use of QuickBooks is modeled around business processes rather than the nuts and bolts of the accounting cycle This feature may be helpful to users without a strong background in accounting This feature may be helpful to users without a strong background in accounting

BA 211/317 Manual accounting cycle: Manual accounting cycle: Journalize transaction Journalize transaction Debit/Credit Debit/Credit Post to G/L Post to G/L Trial balance Trial balance Adjust Adjust Statements Statements Closing Closing

Accounting QuickBooks Style Major business processes are grouped in the navigators Major business processes are grouped in the navigators To enter a transaction, go to the appropriate navigator To enter a transaction, go to the appropriate navigator Click on the necessary document Click on the necessary document QuickBooks generally handles debit/credit issues QuickBooks generally handles debit/credit issues Sometimes, a prompt is needed Sometimes, a prompt is needed

Accounting QuickBooks Style Each document represents a complete entry or transaction Each document represents a complete entry or transaction Transactions are automatically journalized and posted Transactions are automatically journalized and posted Reports and financial statements are available at the click of a mouse Reports and financial statements are available at the click of a mouse

Financial Statements With a manual system, financial statements are only available when the books are about to be closed With a manual system, financial statements are only available when the books are about to be closed With QuickBooks, the program will produce reports and statements at any time With QuickBooks, the program will produce reports and statements at any time So no worries? Not quite… So no worries? Not quite…

Financial Statements Beware of GIGO effect: Beware of GIGO effect: Statements/reports may not be accurate if important information has not been entered Statements/reports may not be accurate if important information has not been entered The system will simply work with whatever numbers it has The system will simply work with whatever numbers it has

Drawbacks Forms and processes are largely fixed Forms and processes are largely fixed Inventory features are difficult to find and use Inventory features are difficult to find and use Qualifier: the program available to us is the 2002 edition, so this may have changed in recent years Qualifier: the program available to us is the 2002 edition, so this may have changed in recent years

Hands-On Features If necessary, journal entries can be made manually If necessary, journal entries can be made manually QuickBooks usually comes with a standardized chart of accounts QuickBooks usually comes with a standardized chart of accounts However, the user can alter this chart as necessary to meet individual needs However, the user can alter this chart as necessary to meet individual needs

Overall Why accounting softwares are useful now compared to back then? Why accounting softwares are useful now 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 controls Internal controls

Questions?

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