QuickBooks has established itself as the standard accounting software for small (and not-so-small) businesses. A few years ago, the Journal of Accounting, the official publication of the American Institute of CPAs, did a survey on small business accounting softwares. The result was that QuickBooks has a 90% market share, Peachtree has a 9% market share and all the others have a combined market share of 1%. And this market is so large that 1% is enough to support several companies.
I’ve use both QuickBooks (I’m a Certified Pro Advisor) and Peachtree. I would observe that Peachtree is the better software for accountants; if you understand accounting well Peachtree makes more sense. However, QuickBooks is better for the non-accountant. They have gone to great lengths to make QuickBooks user-friendly. I have to admit it irritates me that they use colloquial terms such as “Profit & Loss” when the correct term is “Income Statement” and have users pay “bills” rather than “accounts payable.”
With a 90% market share, QuickBooks has a number of advantages in its favor. First, it is well tested and robust. Second, there are an enormous number of people who know how to use it, making it easy to fill accounting positions quickly. Third, the price is amazingly low for the power of the software, especially the report writer that puts many more powerful softwares to shame. Finally, the user group is enormous as is their knowledge base. Somebody has figured out how to do it on QuickBooks.
QuickBooks has its downsides too, although many complaints about it have been addressed and are no longer valid. It used to be that processing speed slowed down with multiple users but that is no longer true. Another knock on QuickBooks was that it was too flexible; that is, one could go back and change transactions and not leave an audit trail. Recent versions now have an audit trail that cannot be destroyed. QuickBooks still isn’t the best software if you need to track a lot of inventory items but other vendors have met that need with products that integrate seamlessly with QuickBooks. Another shortfall is that QuickBooks is an accounting software, not an ERP system.
Another downside of QuickBooks that remains is the payroll module. But this really isn’t a software issue; it’s the Intuit service. I strongly advise all clients to use an outside payroll service but not to use QuickBook’s for payroll despite it being integrated into the software. I won’t go into the details here but trust me on this one. Or ask me privately.
Perhaps one of the biggest things against QuickBooks is the perception that it is only for small businesses. I think some feel that using QuickBooks marks them as a “mom and pop” type of business. Perhaps that once was true, but with multi-user capability and QuickBook’s Enterprise version, it is capable of handling quite sizeable businesses. I see a few businesses with much more expensive and complex accounting softwares struggle hard to produce reports that would be a couple of mouse clicks away in QuickBooks. And rarely do I see the advantages of these other softwares costing multiples of what QuickBooks costs.
Still, QuickBooks will not meet the needs of every small to medium-sized business. So here’s how I view the decision of what accounting software to use: QuickBooks is the default choice unless one can fully show why it will not meet the accounting and reporting needs of the business.
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