The current legacy of the Microsoft Office Accounting; Small Business Accounting 2005, 2006, Office Accounting 2007 & 2008 contains an uncomfortable set of compromises that appear to be taking its toll.  A snapshot poll of SMB clients indicates a significant majority that has tried the Microsoft Offering appear to be migrating back to their former homes with Quicken Home & Business or QuickBooks.  Causes for this migration have been two fold;

First, Microsoft itself has not given any real indication that Office Accounting will be as integral to the Office suite as originally suggested in the literature.  The current product 2007 and the 2008 Beta while continuing to improve are still lacking the same level of integration in the Office suite as their supposed brethren MS Access, Excel, Outlook, etc.  While the ability to import and export data between these later applications almost seamlessly is now an expected requirement, the OA teams appear to have forgotten that, much to the lament and chiding of Office power users on Microsoft’s community posts and blogs.  It appears that these critical gaps may have to be filled by third party vendors, rendering the Microsoft claim of integration null and void and putting Office Accounting just slightly above QuickBooks in its ability to integrate in the Office suit.

Second, the product in its current form displays a neither fish nor fowl behavior.  The trouble is that it appears that it wants to be a Corporate System rather than a Small Business Application.  Unlike the other Office applications Office Accounting does not support Visual Basic, have a Visual Basic Script, or Macro support environment.  It does have its underlying data stored in an enterprise class SQL database making it significantly more robust than typical desktop applications but at a price of additional overhead and programming complexity.  In short Office Accounting is only Office Accounting in name and packaging only.    

The advertised target market for the product is Small Businesses, yet features like “Schedule C” reporting is noticeably lacking.  Given that over eighty percent of the Small Businesses are Sole Proprietorships “Schedule C” reporting is a mandatory requirement for small businesses.  This and other significant gaps in functionality oriented towards small business[1] only become apparent after a few weeks of usage. 

That is not to say that the product is technically poor or unusable.  In operating the products the past few years I find its guide process menu clear and concise, most functions and tasks are where I’d expect them to be.  The problem again is design intent: Is Office Accounting a small business application or an enterprise system?  If it is a small business application import/export show be more robust, reporting such that a specialized accountant that belongs to the Microsoft Professional Accounting registry, of which there are very few, should not be a barrier to having your accountant look at the books or at the very least get standard reports that small businesses need to complete Federal Tax Returns, State Sales Tax, Inventory and Revenue reporting.    

Reprising the extensibility limitations of the product, OA 2007 and from initial impressions 2008 have created a self-contained ecosystem that requires small business owners to either hire programming contractors for even the most mundane changes in reporting and integration with applications the Small Business Owner may have developed themselves in MS Access, Excel or other Office suit components or learn Net programming.  This one design point if not remedied maybe the final stake through the product line’s heart as most SMB owners interviewed indicated neither the desire to learn Net programming or hire programmers to develop applications they see they can create themselves much faster and more in-line with their business using Macros, Templates, and Forms they’ve developed in other Office products.  This appears to be a critical flaw in the Office Accounting strategy and vision.

While Microsoft continues to vacillate as to the nature and direction of the product Intuit continues its expansion through product diversification and making moves into integration within the Office suit also. 

Previously, QuickBooks divided itself into Basic, Premium, and Pro following on with Industry specific versions for; Accounting Professionals, Manufacturers, Contractors, Nonprofits, Retailers, Wholesalers & Distributors, and Professional Services.

Professional Services product provides an example of the detail that Intuit has place in its product diversification and Office integration strategy.  A simple examination of the product features shows Office Accounting has a long way to go with regard matching capabilities with QuickBooks

Reporting in QuickBooks Professional Services is extensive and relevant to the industry, below are the Industry specific reports that augment the general business reporting that QuickBooks provides for each version.  

Job Costs by Vendor and Job Summary Billed/Unbilled Hours by Person Job Costs by Vendor and Job Detail Billed/Unbilled Hours by Person & Project Job Costs by Job and Vendor Summary Billed/Unbilled Hours by Person & Activity Job Costs by Job and Vendor Detail Open Balances by Customer/Project Cost-to-Complete by Job Summary

Billed vs. Proposal by Project Cost-to-Complete by Job Detail A/R Aging Detail by Class Project Cost Detail Project Status Unbilled Expenses by Project Project Contact List Expenses Not Assigned to Projects

QuickBooks Office Integration has been enhanced to include synchronization with Outlook Contracts which puts it slightly below Office Accounting integration with Outlook Business Contract Manager.  Business Contact Manager enables calendar data to be exported for time accounting and billing into Office Accounting.  However this slight advantage looks to be limited in time as Intuit had posted a beta of a Time Tracker module that will import Outlook Calendar Entries.    

Unfortunately, the Microsoft team didn’t exploit this feature consistently or deeply enough in OA 2007/2008, providing only the bare essentials of time accounting, management and reporting when compared with the QuickBooks reports above.  This is truly an unfortunate as had this been exploited to any depth it would have provided Microsoft a strategic advantage in the Professional Services arena.  The majority of Small Business Professional Service providers, myself included, spend a significant amount of time accounting for our time to clients, time management accounting to monitor billable vs. non-billable time, time accounting on billed vs. unbilled hours, budget vs. actual time, in short the QuickBooks Professional Services reports list above.  

Had the Office, Outlook BCM and Office Accounting team worked a little more closely and added an expense form to BCM or a Time and Expense module, that would also import MS Project data and incorporate a richer integration capability between MS Access, Excel and Office Accounting this would be a different Small Business story and I expect “Office Professional Services Edition” would be flying off the shelf.   In summary it appears that Microsoft has forgotten its small business roots.  Hopefully in OA 2009 Microsoft will find its way back to supporting its small business roots.