Accounting software for under $50: Pacioli 2000. (Evaluation)by Winsten, Irwin
Wow! An accounting package that gives you, for less than $50, General Ledger, Accounts Receivable, Accounts Payable, Inventory Control, Billing, Purchasing, Budgeting, Auditing, and Novell network compatibility. For an additional $7.50 you can purchase Payroll or a video tutorial. That package is Pacioli 2000 (named after the monk who invented double entry bookkeeping). Sounds too good to be true? Is it time for Solomon, Great Plains, AccPac, MAS90, Platinum, and all the other well-known accounting programs that sell for megabucks to roll over and play dead? Those of you who have experience with those programs will know enough to ask some simple questions like, "What doesn't Pacioli do?" and "What does Pacioli do very poorly?" Let's find out.
WHAT YOU GET FOR YOUR
Pacioli 2000, version 1.06, comes on both 5.25" and 3.5" diskettes and provides a sample chart of accounts and a fairly good set of context sensitive help screens. The 365-page manual includes an "Accounting Primer" that probably will send a neophyte bookkeeper into a tailspin. The primer is supplemented by an explanation of the sample chart of accounts and a "Transaction Sampler." There is also a DOS primer that is quite good. Sample reports produced by the program are printed on various pages throughout the manual. There is no tutorial.
Technical Support. I tested the free telephone support (callers pay telephone company charges). My call got through on the first try and I found the responses to my questions to be adequate.
Installation. Installation on my 386 Intel chip, VGA machine was quite simple using the install program included with the package. The installation program automatically decompresses the program files, and modifies the CONFIG.SYS file, a nice touch for the beginner.
Setting Up Files. File sizing is dynamic. Users do not have to be concerned with setting up the initial files and checking to see when they must be expanded. The software is designed to work with a Microsoft compatible mouse, although accounting programs require so much keyboard entry that I doubt if many users will use this option. I didn't.
Multiple Companies. The program will support multiple companies so long as the data for each company is in a separate subdirectory. The subdirectories can be in different drives. Data files for different companies bear the same names, which can be a potential problem.
Networking. Even though network compatible, the program is limited to one printer selection. Most networks function with a blend of impact printers (for multi-part and wide forms) and laser printers (for quality). Epson control codes are included, but, control codes for printers that are not Epson compatible must be keyed in by the user. This can be quite a challenge for the novice.
Printing. Printing functions comprised some good and some not-so-good characteristics. The good: you can output to printer, screen, or disk. Printing can be easily stopped, if required. The not-so-good: there is no provision for printing test patterns (important when placing preprinted forms in the printer). Expanded text is called when printing a portion of some forms. During my test, expanded text was not turned off at the appropriate part of the form, resulting in a messy piece of useless paper. (Technical support was of no help in this case.) The printing of a simple report was troublesome until the number of lines per page (which should be 66 lines for 8" x 11" paper) was reset to 60.
Remaining Options. Once you're finished setting up the printer controls, most of the remaining options are easy to deal with. New companies can be added quite easily with a function provided in the utilities menu. However, the only way to copy the chart of accounts from one company to another is through the DOS COPY command, and you must call the technical support telephone number to obtain the appropriate file name. Screen colors are easily tailored. There is a screen for entering starting numbers for business forms prepared by the software (sales invoices, credits, purchase orders, and purchase returns).
Working with the Screens. Working with the various screens is moderately easy. A very useful feature is the pop-up window for looking up account codes. However, the software should provide clearer screen prompts. For example, there are times when you must press the ALT key plus a letter key to access a dialogue box, but there is no prompt. Entering the date in a wrong format, or with wrong data (such as February 30) freezes the cursor with no explanation. Most screens do not permit direct access to a selected field; you have to tab over to it.
Those who wish to maintain perpetual inventory may have unanswered accounting questions about the screen entitled "Costing System." This screen is used to select an inventory cost method from among Average Cost, Standard Cost, Last Purchase Price, LIFO, and FIFO. There is no description of how each of these costs are maintained by the software, or how to deal with "Lower or Cost of Market" situations. I was told that there is no limit on inventory layers other than disk capacity.
SETTING UP THE ACCOUNTS
From my experience, most users who are not accountants are more interested in setting up their receivables or payables than worrying about a general ledger whose mysteries are often left to their CPAs. Pacioli, however, won't let you do this. You must start with a complete set of accounts; that may be much more than a small business has bargained for.
A single file, the account file, must include: 1) formatting accounts used to set up captions and total on financials; 2) general ledger accounts; 3) customer accounts; and 4) vendor accounts. Ten alphanumeric positions are provided for account codes. Accounts must be nested in such a manner that higher level accounts combine the balances in the accounts nested below them. Here's an example: 11 Current Assets 1101 Cash 110101 Pretty Cash 110102 Cash Clearing 1104 Accounts Receivable 1104A001 Customer Account 1104B001 Customer Account
This use of nested accounts and multiple length account numbers can be a shocker to those accustomed to the traditional distinction between General Ledger and Subsidiary Ledgers. Anyone already using account numbers will probably have to change them to conform with Pacioli. In order for accounts to be correct, balances for General Ledger, Accounts payable, and Accounts Receivable must be entered as of the same cutoff date. Trial balances for Pacioli are longer than conventional trial balances because they combine all accounts in one lengthy report. More time is required for looking up account codes.
A Sample Set of Accounts
Tailoring the sample chart for user needs presents additional changes. The sample comprises almost 230 accounts and is much too overblown for most small businesses. If changes are made to the chart of accounts, you must also modify the rather complex specifications for printing the financial statements. The net effect is that most users will decide to stay with this unwieldy chart, rather than grapple with revising both the chart and the financial statement specifications.
All accounts are assigned to one of four classes: Checking, Inventory, Accounts Receivable/Payable, and Normal. Checking accounts are the the bank accounts that can be selected when processing receipts and payments. The General Ledger does not include accounts for opening and closing inventory. The Inventory account is accessed for purchases and cost of sales. The manual assumes that inventory is increased for purchases and sales returns and decreased for sales and purchase returns. Many businesses flow purchases through purchase accounts and adjust the inventory asset account periodically from a physical or book inventory. Receivable/Payable accounts are used for customers and vendors. All other accounts are called Normal.
The software gets around the need for sub-ledger information by providing a separate screen (entitled "personalized information") which can be viewed when accessing the account. This screen is used to maintain constant information such as Customer/Vendor name, address, telephone, etc.
A second data file, called the Products/Services file, is used for storing data required for billing and perpetual inventory. This file will be discussed later, after the General Ledger.
The screen used for setting up accounting periods provides for three years, with 12 periods per year. The program won't work very well if you're on 13 four-week periods, but not many prospective users need worry about this. The three years on display depend on the current computer date and cannot be changed,. For example, if you start with April 1991, and your accounting period began in November 1990, the three years displayed will be 1992, 1992, and 1993.
In addition to manual entry, three automatic budget methods are provided: Last Year, Last Year Budget, and Trend Line (not explained very clearly). The same budget methods can be used for customer and vendor accounts since they are all in the same file.
Any block of contiguous accounting periods can be open for posting. However, there are two pitfalls: 1) once a period has been closed it cannot be reopened: 2) closing period 12 automatically resets all the nominal accounts to zero. (Most other software requires a separate menu choice to close the nominal accounts.) User will have a problem if any period is closed prematurely.
All transactions are entered in one of three screens, labeled: 1) Accounting; 2) Purchases/Sales; and 3) Checks. Entries in the accounting screen are lumped into one journal called the transactions journal. Different journals for different types of transactions such as a cash receipts or sales journal cannot be used. The accounting period is determined by the software from the batch transaction date. All transactions in a batch must have transaction dates that fall within the batch accounting period, a cumbersome restriction, particularly with respect to the late entry of vendor invoices.
Each transaction entry requires a twoline display; six entries are displayed at one time, although a batch can comprise thousands of transactions. A transaction number is automatically assigned to each transaction and cannot be reassigned. For each transaction there is room for a six-character reference number and a 20-character description. The entry screen accumulates debit and credit totals.
Transactions affecting Receivable/Payable accounts call up a sub-menu that requires a transaction choice such as Sales Invoice, Payment Made, Credit, etc. When appropriate, users can display open invoices and make selections for the application of cash. Receivable accounts display the computed cash discount, but this can be overriden. Payable accounts do not display discounts. The transaction type is printed on the Accounting Journal in a two-character code such as CR for cash receipt.
The software works on a batch system. All entry batches can be printed, reviewed, and corrected before posting.
First, let's look a little more closely at the "personalized information" screen mentioned above. The screens for customer and vendor accounts are identical and are supported by three sets of codes: terms, discounts, and sales tax.
Terms. The terms screen allows due date computation from invoice date or a fixed day of the month. There is no provision for dating. Users working with complex terms normally associated with import/export operations must display these terms in the body of their business forms. The same screen is used for entering parameters for computing late charges.
Discounts. Discounts can be based on units or dollars and can be rounded up to the nearest .01, .05, .50 or $1.00. Five discount levels are provided for each discount code. Discounts are computed by line item, not by invoice total. Every customer and vendor can be assigned a price type A, B, or C. In turn, each inventory item can be given a discount code for each of the three price types.
Sales Tax. One sales tax code can be assigned to each transaction. The software does not accumulate sales tax data.
Both balance forward and open item accounts are supported. There are two optional six-character fields called Code 1 and Code 2 that can be used for salesperson or other classification. The problem with a keyed- in field such as this is that any entry error will result in missorting. (Calling up codes from a file is a safer method.) The customer/vendor screen displays the credit limit and open balance. No other customer/vendor statistics are provided. The only way to display open items for customers and vendors is by accessing the account while in the Purchase/Sales screen. There is no way to tag customers who should not get statements or past-due charges, although the assignment of different inventory cycle dates can be used for this purpose.
A separate file is provided for inventory items with a separate screen for entering item information. The 13-character item information. The 13-character item code may be too small for some users, although the 30- character description field usually is adequate. Information fields about alternate vendors, vendor part numbers and other data are limited. Prices and costs are displayed to three decimal places. There is no provision for multiple inventory locations or for kits. Prospective users should examine the item screen quite carefully to determine whether it is adequate for their needs. The file can be set up to bill services as well as items.
Begin Processing Transactions
Having set up customers, vendors, and inventory items, users can proceed to the processes covered by the Purchases/Sales screen. This screen must be used to enter transactions that affect inventory: purchase orders, purchase receipts, purchase returns, sales, and sales returns. Every transaction is automatically assigned a number that cannot be reassigned, even if the transaction is voided. Account names and addresses are called up via the customer or vendor code. Shipping addresses must be keyed in for each transaction.
Both items and services can be called up via item codes. Default descriptions, prices, and discounts can be overridden. Multiple 30- character description lines can be inserted. Since this is a multi- purpose screen, the manner is which the program functions column by column varies with the type of transaction. There is no display of status information during transaction entry, such as unused customer credits or inventory balances. There are no running totals (so there is no way to check against batch controls).
Every transaction must be printed on one of the pre-programmed forms before it can be posted. Three invoice formats are available including one that provides a column for item discounts and one for service billing. There is an option to print packing lists, but no provision for printing labels. There is no way to customize the default formats so prospective users must be certain that the formats provided are acceptable. Curiously, all transactions must be printed on the forms, including those that have been voided.
The third transaction entry screen is for cash disbursements. Each vendor invoice must be individually selected. There is no way to select invoice groups by vendor, due date, or discount date. Discounts must be keyed in.
Transactions can be posted after they have been entered and edited and forms have been printed. All batches that are ready are posted at the same time, in the General Ledger and sub-ledger. It appears that no physical posting occurs. Instead, transactions are moved to transaction files that are sorted when various reports, such as journals and financial statements, are requested.
As you can see, processing the transactions must follow an unusual route. Prospective users should be certain that they will be comfortable with Pacioli's peculiar limitations.
The software provides a fair degree of access control. Nine passward levels are provided and the levels are explained on a three-page chart. A transaction number is automatically assigned to each transaction and cannot be reset. However, keeping track of voids can be quite a nuisance. Journals can be called up at any time for any period in which the details have not been purged. Accounts cannot be deleted unless there are no transactions or balances in any of the current 36-month periods. A weakness is the lack of running totals when working with Purchases/Sales and the lack of batch sequence numbers.
Standard reports provided by the system include account activity, trial balance, agings, monthly statements, one-up labels, price lists, and count sheets. Most reports permit selection by ranges and accounting periods. Receivable/payable and product/service reports provide a number of sort options. Two 50-character lines can be printed at the bottom of customer statements with the text varying with the age of the account.
All reports obtained from the report generator, including financial statements, are produced by combining two specification files, one for report columns (maximum of 14 columns, plus account number and description), the other for report lines. All data must come from the accounts file. There is no way to combine accounts that are not properly nested. This means that the reassignment of an account, for example, from sales expenses to adminitration expense, can be troublesome. The double specification method is quite tricky and requires a lot of patience. Since the trial balance is not classified, there is no easy way to determine that all appropriate accounts have been included in the Statement of Profit and Loss. Design problems are exacerbated by the absence of any means of printing the specifications.
Amounts can be displayed with pennies, units, thousands, and millions. All amounts, except pennies, are truncated, not rounded. The effect is that statements may not print in perfect balance. Percentages are displayed to one decimal place and there is no provision to omit lines with zero amounts. Footnotes are clumsy, unless reports are exported to a word processor, which can be done in ASCII format. Report designation specifications can be saved for future use after they have been designed and tested.
An "audit" function provides a screen for tagging transactions within an account to indicate whether they have been verified by the user.
A "New Prices" screen permits global price changes within selected ranges. The changes can be computed: 1) from a margin percentage based on the purchase price; 2) as a percentage increase from the purchase price; and 3) as a percentage change in sales price. There is also a screen for processing physical inventories.
YOU GET A LOT FOR YOUR
MONEY, BUT . . .
Well, what conclusion can be reached of this mixed bag of tricks with its complex set of account codes, rigid method for processing inventory transactions and printing business documents, severe limitations on the accumulation of sales data and complexities in modifying accounts and the related financial statements? I doubt whether this is a serious candidate for anything other than a small business operating on a single computer. There are too many limitations to make it viable for a business with complex processing requirements or large transaction volumes. The networds capability might interest a small user who would like a second monitor on the boss's desk just so that he can look up information. Anyone with large transaction volumes or multiple input stations should be concerned about ease of data entry and operating speed.
The program is not a good candidate for teaching because of its unusual blend of general ledger and other accounts. Any prospective user who is unfamiliar with accounting theory will need outside help just to get started, more help than required by packages with simpler account charts.
Users interested in dynamic sales management will want to look elsewhere. There is virtually no provision for sales commissions or for the kind of sales analysis that is vital for running a sales department.
The inventory module might be adequate for a small operation if its restricted treatment of inventory locations, decimals, inventory codes, and unit designations is acceptable. However, today, when purchasing is critical to so many businesses, the lack of adequate alternate vendor date may be a serious drawback.
The lack of a job cost module should mark pacioli off limits for anyone in a contracting related business, even if they are not yet big enough for this function.
I can think of two potential users. One is a person running a small business who has adequate knowledge of accounting and loves to hack around with computer programs. Such a person won't mind spending the time needed to get everything set up, modifying the chart of accounts and report specifications as required, getting the printer to obey and designing custom reports. The other person is a friend of the first person who is running a small consulting service or jobbing business, who couldn't care less about accounting features, but lets the software keep track of his customers and small inventory, print his bills, and provide some expense control.
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