The Software Your Colleagues
Are Using

By Rebecca A. Gallun and Cynthia D. Heagy

To help in making software buying decisions, the authors report on their survey of software usage by small and medium-sized firms. The results are analyzed and compared to the results of a similar survey done four years ago and to usage by large firms.

What software should you use to operate more efficiently and effectively? You are aware of the expansive amount of technology and software available, and may wonder where to best spend your money. You may not be aiming for a front-row seat on the leading edge of technology but you don't want to be working harder than you need to. Specifically, what investments will give you the biggest bang for your hard-earned money?

One guide to help make software purchasing decisions is to learn what other accountants are using. This information is not the only data needed for making decisions, but it is an important input.

To learn what computer software other accountants in small and medium-sized public accounting firms are using, we systematically gathered and analyzed data from a random sample of the members of the AICPA in the summer of 1995. We received 143 usable responses for a response rate of 49%. The respondents were classified into several groups, two of which were medium-sized (local firms with 20 or more professionals and all regional firms) and small public accounting firms (local firms with fewer than 20 professionals).

The findings from the study that relate to accountants in medium-sized and small public accounting firms may be of particular interest. The practices of national and international firms are from time to time introduced as a contrast to what medium sized and small firms are doing.

Computer Usage

In case you're wondering just how important technology purchasing decisions are, consider this. The daily use of microcomputers in the office by a typical accountant in a medium-sized firm was an average of 2.2 hours a day four years ago. This was based on a similar study the authors conducted in 1991. Since then, use has increased tremendously; today, accountants in medium-sized firms say they use a microcomputer at their office an astonishing six hours a day. And if this were not enough, 43% of these accountants also use microcomputers at home for office work a little more than four hours a week on average.

The daily use of microcomputers in the office by accountants in small firms was an average of three hours a day four years ago. Currently, these accountants average almost five hours a day on a microcomputer at their office, and 49% of these accountants put in an additional 6As hours a week for office work on home
computers.

Operating Systems

The most basic decision is what operating system to adopt. Ninety-five percent of accountants in medium-sized firms use the MS or PC-DOS operating system and five percent use UNIX. All the responding accountants in small firms use the MS or PC-DOS operating system. Interestingly, no accountants we surveyed in medium-sized and small firms use Macintosh or OS/2. However, 19% of accountants in large firms use Macintosh.

A large percent (79%) of accountants in medium-sized firms use Windows. Furthermore, the accountants who use Windows spend 63% of their computer time in Windows. Many accountants not already using Windows volunteer they plan to purchase it in the near future. Current and planned usage of Windows may be the reason accountants say they think an adequate amount of RAM is 12 megabytes.

Only 62% of accountants in small firms use Windows. Not only do fewer accountants in small firms use Windows than accountants in medium-sized firms, but those who use Windows spend less (46%) of their computer time in Windows. Approximately 20% of accountants in small firms say they plan to
purchase Windows in the near future.

These findings suggest many accountants are clinging to some DOS-based programs. On the other hand, a steady shift to the Windows environment is indicated by a considerable amount of current usage and planned purchases of Windows software. Some accountants may have been holding back on purchasing Windows waiting for the introduction of Windows 95 that was on the horizon at the time of this study.

Observation from one of the authors who has taught the accounting information systems course at the university level for 10 years: Accounting students are resistant to any software that does not run in Windows. Pointing and clicking is the modus operandi of the younger generation. Although transaction-based software may not be any easier to use in the Windows environment and many of us old-timers may not mind keying in commands, the communications gap between old and new hires will just get wider until more "older" accountants move to Windows.

Windows Versus DOS

Exhibit 1 compares the use of the Windows version versus the DOS version of the most common application software in use by accountants in medium-sized and small firms. These findings are for accountants who use the MS or PC-DOS operating system and who use a particular application such as spreadsheets. For example, of the accountants in medium-sized firms who use MS or PC-DOS and who use spreadsheets, 35% use a Windows version and 65% a DOS version.

In some cases the percentages total to more than 100%. For example, of the accountants in medium-sized firms who use word processing software, 35% use a Windows version and 68% a DOS version, for a total of 103%. Totaling to more than 100% happens because one individual may use both a Windows
and DOS version of the same program.

Clearly, as can be seen in, Exhibit 1, accountants in medium-sized and small firms by far prefer DOS versions of software for write-up, accounting systems, tax, audit, and time and billing. We found, however, that around 40% of accountants in large firms are using Windows programs for write-up, accounting systems, and audit and around 25% use Windows programs for tax and time and billing.

The most favored Windows applications by accountants in medium-sized and small firms are spreadsheets, word processing, and graphics. But, again, we found a much larger percentage of accountants in large firms using Windows versions for these same applications. For example, 66% of accountants in large firms are using Windows versions of spreadsheet software as opposed to 35% in medium-sized firms and 43% in small firms.

The greatest disparity seems to be in the use of database management systems, with more accountants (25%) in small firms using Windows versions than those (8%) in medium-sized firms. A solid 57% of accountants in large firms use Windows versions of database management systems.

Application Software in Use

Exhibit 2 shows the percentage usage of various types of application software.

Spreadsheets. Accountants in a full 100% of medium-sized accounting firms use spreadsheet software. Usage is up slightly from 1991 when accountants in 98% of medium-sized firms used it. The trend for accountants in small firms has been the same. In 1991, spreadsheet software was used in 95% of the small offices, and now it is used in 96%. Exhibit 2 shows that 80% of accountants in medium-sized firms use Lotus. Thirty percent use the Windows version while 70% use the DOS version.

In 1991, Lotus was the undisputed leader in spreadsheet packages among all accountants. Today, Lotus still holds this position for accountants in medium-sized and small public accounting firms. For accountants in large firms, however, Excel has zoomed far ahead of all other spreadsheet software, including Lotus. The trend for accountants in medium-sized and small firms from 1991 to 1995 shows movement from Lotus to Excel especially by accountants in small firms. Usage of Quattro Pro has decreased since 1991.

Write-Up. Write-up software is almost as popular as spreadsheets. It is used by accountants in 97% of medium-sized firms and 89% of small firms. Various write-up programs are used by accountants with no one particular program having a strong lead. Only the four programs and a firm/custom developed category listed in Exhibit 2 are used by enough accountants to justify their inclusion in the Exhibit. The "Other" category, comprises approximately 25 additional programs used for write-up.

The most notable difference between accountants in medium-sized and small firms as opposed to those in large public accounting firms is that by far fewer accountants in large firms do write-up work, and those who do primarily use firm/custom developed software.

Accounting Systems. Accounting systems are used by accountants in 97% of medium-sized firms, which is up from 83% in 1991. In 1991, a large percentage of small firms (93%) were already using accounting systems. Usage in 1995 has increased slightly to 95%.

As with write-up programs, accountants use numerous accounting systems with no one program having a significant lead. Only five programs and a firm/custom developed category are used by enough accountants to be included in Exhibit 2; the "Other" category comprises approximately 20 additional titles.

Fewer large accounting firms (84%) use accounting systems than do medium-sized and small firms. Most of the large firms that use accounting systems use firm/custom developed accounting software.

Tax. The percent of responding medium-sized firms that use tax software remained the same from 1991--100%. The percent using tax software decreased slightly for small firms (from 100% in 1991 to 96% in 1995).

As in 1991, ProSystem fx and Lacerte continue to be the leading tax software used by accountants in medium-sized and small firms. Fast-Tax is used by more accountants (40%) in large firms closely followed by ProSystem fx and then Turbo Tax.

Audit. The percent of medium-sized and small firms reporting the use of audit software has sharply increased since they were surveyed in 1991. Accountants in a full 100% of responding medium-sized firms now use audit software. Accountants in many more small firms (64%) are using audit software in 1995 than did in 1991 (33%).

Accountants in medium-sized and small firms now rely on ATB and FAST! while most accountants in large firms use their own firm/custom developed software. ATB was also very popular in medium-sized and small firms in 1991.

Time and Billing. More medium-sized firms are reporting use of time and billing software than they did in 1991--from 85% in 1991 to 97% in 1995. An increase is also found in the number of small firms using time and billing software (57% in 1991 versus 79% in 1995).

No one program clearly dominates in time and billing software; however, Timeslips is used by many accountants in both medium-sized and small firms, as it was in 1991. Almost one-fourth of the accountants in medium-sized firms are now using their own firm/custom developed software. Accountants in large firms primarily use firm/custom developed software.

Database Management Systems. The AICPA's Information Technology Research Subcommittee and Information Technology Practices Subcommittee ranks database applications as fourteenth on its list, issued in 1995, of the top 15 technologies that will affect the accounting profession and business in general within the next five years. Obviously aware of the value of a database system, more and more practicing accountants are reaching for this technology. Accountants in 81% of medium-sized firms (up from 60% in 1991), and 61% of small firms (up from 35% in 1991) use database management systems.

As in 1991, dBASE is used by more accountants in medium-sized and small firms than any other database management system. Programs showing increased usage by accountants in small firms from 1991 to 1995 are Access (17%), which was not in the market when the 1991 study was conducted, followed by dBASE and then Paradox.

Telecommunications. The percentage of medium-sized firms that use telecommunications software has stayed the same (66%) from 1991 to 1995. Usage by small firms has increased from 40% in 1991 to 60% in 1995.

PC Anywhere, which was not even used by enough accountants in 1991 to be reported, has emerged as a clear favorite in 1995 for accountants in both medium-sized and small firms. PC Anywhere is also the clear favorite for accountants in large public accounting firms. While use of the other programs has decreased since 1991, Pro-Comm has decreased the most dramatically--from 33% to 6% for medium-sized firms and from 42% to 21% for small firms.

Word Processing. In 1991, accountants in 100% of medium-sized firms used word processing software, and this statistic still holds true. Almost all small firms have also made the transition--99% of these firms now use it. This number was 93% in 1991.

WordPerfect is still the clear leader in word processing for accountants in medium-sized and small firms as it was in 1991. However, the lead is not as great now as it was then. Microsoft Word has picked up a considerable number of accountants in both medium-sized and small firms. In large public accounting firms, Microsoft Word is the clear leader over all the other packages with WordPerfect a distant
second.

Graphics. The percent of responding medium-sized firms that use graphics software has inched up from 83% in 1991 to 89% in 1995. The number of small firms that use graphics software has declined slightly from 1991 to 1995. Forty-eight percent used graphics software in 1991 compared to 43% in 1995.

Lotus 1-2-3 is the most popular graphics program for accountants in medium-sized and small firms. Accountants (45%) in large firms prefer Excel for creating graphics.

Office Suites. Many organizations like to standardize on an office suite package, which generally consists of a spreadsheet, database management system, word processing, presentation graphics, and personal information manager program. The seamless integration among the various programs and the lower cost of the bundled programs makes them a convenient choice. Fifty-two percent of accountants in medium-sized firms and 37% of accountants in small firms are opting for office suites. Of the office suite software available, most accountants in medium-sized and small firms prefer Microsoft Office, as do accountants in large firms (71%).

Frequency of Application
Software Use

In trying to determine what software will help firms operate more efficiently and effectively, other important information is how frequently accountants use various applications. Each of the applications is listed in Exhibit 3 along with the frequency of use by medium-sized and small firms.

The largest difference between groups is in the frequency of audit software use. Eighty-three percent of accountants in medium-sized firms who use audit software use it from once a week to daily. Only 40% of accountants in small firms use it this often.

Accountants in medium-sized and small firms are very similar in how frequently they use spreadsheet and word processing software. At least 82% of responding accountants use spreadsheets and word processing from once a week to daily. Word processing is used on a daily basis by at least 65% of accountants.

Tax software is used as frequently as once a week to daily by an even larger percent--at least 91% of accountants in both medium-sized and small firms. It is used on a daily basis by at least 68% of accountants.

In contrast, database management systems are used much less frequently--hardly ever to once a month by 60% or more of the responding accountants in medium-sized and small firms. *