When the business was first starting, I had been speaking to an accountant, and asked her if she had suggestions for how to keep books. She suggested keeping records of payments, expenses, etc. in a spreadsheet. I was puzzled, and asked, “What about formal software? A system that can do everything?” She admitted, “Yeah, but most people won’t take the trouble to do that.”

Clearly, we weren’t going to settle for the subpar norm. So, the only option was research. I never called that accountant again.

Things had to stay in spreadsheets for a while, while various systems were tested and sampled. As a starting point, I compiled what features were needed for a graphic design business.

• Time tracking, including tracking by both job and task, and the ability to convert billable hours into an invoice
• Emailable invoices: Nowadays, for the sake of time and of saving trees, no one wants to print and mail anything they don’t have to.
• Reports, and lots of them: Beyond just a Profit & Loss statement, the software must show time spent by task, expenses by category, and other information that only software can easily compute. Why bother to do all that record keeping if you can’t use it to gather important trends? (Well, there’s the IRS too, but point made.)
• Customizability of forms: one of the essential points of branding is that nothing goes un-designed. Documents sent to clients such as statements and invoices are a wonderful, and often ignored, place to inject design and make an impact in an unexpected place.
• Mac compatibility: sadly, it’s still often hard to find.

FreshBooks: was a good place to start. Time tracking with the OSX desktop widget was a breeze, and (for better or worse) clients were able to login and check on their job’s timesheets. However, it doesn’t go beyond time tracking and invoicing. It’s billing software, not accounting software. I’d question how any service company could manage using Freshbooks alone, and what the hassle of integrating it with other bits and pieces of software to do the rest of the accounting costs in loss of time.

Less Accounting: was a step up. Now we could put in expenses, as well as invoices. Reports were present, though few. They offer time tracking as part of the package: if you use one of their -other- services, LessTimeSpent and import it in every time you need to update your records (for designers, this means… every day). Ultimately, the hassle of integrating time tracking and sparse reports pushed Less Accounting out of the running.

MYOB: Advice touted this as -the- Mac accounting solution. It was robust, comprehensive, and Mac-only. It seems to be made specifically as a Quickbooks alternative, matching all of its features and some of its interface (flowcharts with arrows). Time billing features are tight; however, it’s only included in their most expensive version (US $299).

Saasu: A strong contender, and probable second choice. A strong set of features, including all the essentials, promising APIs, rudimentary CRM, and connectivity with Salesforce, at a reasonable monthly (US $47.8337 … per … quarter?), all web-based.

Quickbooks: Intiut shortchanges the Mac market by offering only one version of Quickbooks where Windows gets four, plus several specialized editions and add-ons. However, this package (priced at $199) still had everythiing we needed: complete time billing, conversion of invoices to PDF and sent right to Mail, and several zillion data reports (far more than any competitors).

Layout Designer was a major advantage. It’s a relatively simple plugin thats allows one to actually -design- the forms: insert images, place things anywhere, use our own fonts. Though the interface is simplistic and MS Word-ish, it’s powerful enough to turn the same old business forms into designed collateral documents.

Sure, it’s not online. It’s regular old software that uses RAM. Shouldn’t we, as a modern design firm, shun any software that isn’t based on the almighty Internets? Not blindly. Every online-only software charges monthly. Even with reasonable cost, over the years, this would make for significantly higher cost over buying it once, and upgrading it at a discount as necessary.

A laptop makes the issue of “anywhere accesiblity” moot. If the accountant needs to look over the files, I export them as necessary: they are more likely to already understand Quickbooks than any other software. Being “the” accounting software works in its favor. Ubiquity, economy, and customizability were all on Quickbooks’ side. By shopping around for discounts, the final price tag was $168.

The Decision: Quickbooks

The setup process that must be done before any records can be input involves choosing a “conversion date” (when to count records from), answering several questions about your business, and setting up “accounts” (a term which covers not only bank accounts and accounts receivable/payable, but expense accounts). Our switch of accounting occurred in the beginning of the year, so setting it up with the start date at January 1, 2009 involved re-entry of a few dozen transactions.

One of the bigger gripes with Quickbooks seems to be the difficult learning curve. I was confident that this problem was probably limited to those switching from paper accounting systems, and astute computer users wouldn’t have a problem. Having used it for a while, I think the gripers may have a point; some of its terminology is not intuitive. For example, there’s no way to enter “purchases” or “expenses;” everything you spend is a “bill,” whether or not you paid for it immediately. Categories like equipment, software, and hosting are “accounts.” Use of the word “account” confounded me for some time. On top of that, every purchase requires a new vendor record. This makes for quite a long vendor list, from the dozens of websites and stores where we’ve only bought something once, to frequently hired 1099 employees, all on the same list.

Perhaps this is a more traditional way of thinking about money, and maybe that’s why accountants like Quickbooks so much. However, none of the above gripes yet outweigh the benefits (even clients love the beautified invoices).

What’s your experience been with accounting software? What does your business use? Are you satisfied with the system, or would you consider switching?