Battle of the bean counters (cont.)

Like QuickBooks, Microsoft Accounting provides a graphic representation of your business. But instead of Intuit's single large desktop filled with icons, Microsoft divides your shop into sections that run off tabs on the left side of the screen, à la Microsoft Outlook. That's no accident. "We see accounting as a direct outgrowth of the Microsoft Office suite," says Karan Khanna, marketing director for the Microsoft Office Accounting line of products. "We were working for a seamless Outlook and Word 2007 feel."

Tabs labeled COMPANY, EMPLOYEES and vendors lead to other buttons marked CASH FLOW, NEW SALES ORDER and PAYROLL. Those buttons, in turn, lead to the hard data of your business: financial records, cash-flow statements, payroll tax forms and so on. And as with QuickBooks, everything worked. It was a snap to reconcile accounts and enter new clients and employees into the system.

And Microsoft Office Accounting data integrate automatically into the full suite of Microsoft Office products. Complex analytic reports, such as business projections based on receivables and sales leads, can be built on the fly. Microsoft's snazzy Access reporting tools draw data from all the Office applications: Outlook, Word, Excel, the lot. QuickBooks offers similar analytic features, and some are good. But it's tough to beat Microsoft at its own game of cross-application data integration.

I also give Microsoft the edge for overall feel and ease of use, if only because Microsoft Accounting runs better in the sexy new Microsoft Vista environment. QuickBooks also works in Vista, but Intuit's code lacks that intimate connection to Microsoft Office. Features such as word processing and customer-management tools are not as slickly integrated.

If you run an information-based business like mine, you'll love Microsoft Accounting's letter and spreadsheet features. Contact and financial data travel instantly into both Word and Excel documents. Reports, invoices, and pay-me-right-now-sucka letters are a breeze. Sure, I can get QuickBooks to do the same stuff, but it takes more time. And frankly, it's just not as cool.

Now to the Web. Microsoft flatly - and I mean flatly - wins the online-services battle. The gnomes of Redmond have developed a snazzy Web interface called Marketing Services. It includes a direct link to eBay (Charts, Fortune 500) that automatically updates your inventory balances. You'll also find online account-status information and even links to PayPal, credit card transactions and other features.

QuickBooks has similar capabilities, if we generously assume that Google's embryonic Base service is competitive with eBay. But Microsoft's Marketing Services environment is leagues ahead of the Marketing Tools for QuickBooks page, which feels as if it were tossed together in a few hours by a heavily caffeinated Google intern.

Microsoft is the clear winner in terms of design, integration, and price - just about every service in Microsoft's package is cheaper than Intuit's. Yet I can't recommend the product. Why? "Intuit is the far-away leader in the one-through-99-person business accounting software category," says Laurie McCabe, vice president for small and medium-sized business at AMI Partners, an international market-research firm based in New York City. "It's very hard to find an accountant who doesn't use the package."

Because accounting software is only as good as the data entered into it, you should have a living accountant review any financial records that you create using QuickBooks, Microsoft Accounting or any other accounting application. And here's the rub: While it is possible to exchange data between Microsoft Office Accounting and QuickBooks, close to 90 percent of all accountants use Intuit software. So why make trouble?

Bottom line: Intuit dominates the accounting software market, and Intuit products work just fine. That leaves Microsoft in the unaccustomed position of the scrappy underdog struggling for traction against an entrenched monopolist with a gigantic installed user base. Ironic, no? But true.

The history of technology is littered with great products that failed because they didn't solve a real problem. So until Microsoft somehow builds a solid base of accountants who know its software backward and forward, stick with QuickBooks. I'll give the last word to my blessed accountant, Mike Block of Block & Block in New York City: "You don't want to pay me a ton of money to undo your software screwup."

Do you own a business? Got a question about financing, technology, taxes, team management or any other topic related to launching or owning your own firm? Ask the editors of Fortune Small Business, and they'll help you get answers from the appropriate experts.

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Forget the new PC, get a second monitor  

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