Tech at Work: Office Accounting Adds Power at a Price

Microsoft on Monday released a public beta of the next version of its small business accounting software, adding useful integration with the popular online selling, payment, and credit advisory services eBay, PayPal, and Equifax. You can download the beta of Microsoft Office Accounting 2007 from Microsoft's site. Be prepared to wait, even if you're on broadband, and don't bother if you're on dial-up: It's a 370MB file.

The program has undergone numerous modifications, including a name change, since its formal debut last year as Microsoft Office Small Business Accounting 2006. I took a look at the beta before it was released.

In addition to the aforementioned integration with several online services, you can now customize the layout and labels on accounting forms and add and track the results of new data fields. Security is more flexible, and it's easier to share data with your CPA, who can make adjustments while you continue to work on your books. The program also adds new capabilities such as fixed asset management.

I believe the most popular of the new online services will be the integration with electronic payment giant PayPal. You can activate Office Accounting's PayPal add-in, included with the software, and then configure it to work with your PayPal business account. When you e-mail an invoice, your customer can click on its PayPal button and then use the service to pay the bill. Regular PayPal charges apply.

Unfortunately, all this added power comes with a price: The application, which Microsoft plans to ship by year's end, is difficult to set up.

Office Accounting 2007 has an add-in to integrate with eBay, making it easier to put items you've entered in inventory for sale on the online auction service: You enter all required data on one screen in Office Accounting (instead of clicking through multiple windows on the eBay site), then upload the data. You can also download the results of sales transactions and related fees from eBay into the software. These features will be big time-savers for eBay power sellers who list hundreds of items per month and then must manually enter auction results into their accounting package.

The eBay add-in is similar to other online auction management services, such as those offered by Andale. However, Andale requires integration with Intuit's QuickBooks to provide a complete accounting solution.

Microsoft has not yet determined what it will charge for the eBay services. During the beta period the services are free, although separate registration with Microsoft's Office Marketplace is required. Of course, regular eBay charges apply.

While I like the new online services, the add-ins that power them are not as quick and easy to set up in Office Accounting 2007 as I think they should be. They require many steps and a program re-start or two, so you really need to be committed to make them work.

While it's possible to use Microsoft Office Accounting on its own, the application really shines when integrated with other Microsoft Office apps. For example, you can use Microsoft Word to modify invoice templates and add one of the new PayPal payment buttons. Financial data can be transferred to Microsoft Excel, for flexible calculations.

Many of the program's accounting capabilities can also be accessed using the Business Contact Manager add-in to Microsoft Outlook. However, a beta 2 version of Outlook 2007 is required to support this integration, and I was not able to test it.

While Microsoft Office Accounting adds multi-currency support, the time-of-transaction conversion rate method used is too simple to satisfy many accountants, and it is inferior to foreign-currency accounting in Sage's Simply Accounting. However, these features in Office Accounting easily beat out similar features in QuickBooks, which assumes the rest of the world's currency doesn't exist.

Microsoft Office Accounting looks slick, with an informative company dashboard that summarizes business financial performance and to-dos. In general, the software narrows but does not eliminate the lead held by its leading small-business competitors, such as Sage's Peachtree. Despite enhancements in the latest versions of QuickBooks and Peachtree, Office Accounting still offers the best integration with Microsoft Office applications.

One caveat: I had to try three times before I successfully installed the beta, and it operates a tad sluggishly. I therefore don't recommend it for production use.