Mention "accounting software" to the average computer user, and they will come back to you with names like Quicken, Quick-Books, Peachtree and Microsoft Money.

Accountants know better.

While most accountants have nothing but respect for these products, they also know that lower-end and entry-level products, while terrific for many businesses, start to run out of horsepower when a company reaches a certain size. At that point, they look to upgrade their clients to a midrange accounting package.

Just where an accounting package makes the jump from low-end to midrange isn't easy to pin down. Nor is there a specific point where one level of package is best for a particular client.

Rather, it's more a matter of increasing sophistication on both sides of the equation. As a client grows larger, both in terms of revenue and staff size, their information needs change. Instead of just trying to determine how much cash is coming into and out of the business, management needs more details about financial transactions and histories in order to use this data to make better business decisions.

For some companies, this "epiphany" comes at the $1 million level, while for others, it happens much higher up in the growth cycle, if at all.

Another indicator that a company needs to move into a midrange accounting system comes when the operations of the company's accounting and finance department starts to bog down. This can be a result of needing to streamline and disburse the data-entry portion of the accounting process, or simply as a result of wanting to move the data entry into the appropriate department in the company, such as sales, purchases and warehousing/inventory.

Often, comparing low-end and midrange accounting on a feature-by-feature basis, doesn't really point out the essential differences. The entry-level accounting software that's available today has become very sophisticated. Many packages are multi-user capable, and actually run very nicely on networks with 15 or even 20 users at a time. Comprehensive reporting and complete financial statements have become more common at this level, as have payroll systems that are capable of meeting many of the requirements of even sophisticated clients.

Where, then, are the differences? One obvious place is in price. Entry-level accounting packages generally top out at around $300 - at least for the single-user version. And that's where midrange applications start. Another major difference is that most midrange accounting systems are modular, and are priced per module.

The modular approach is a holdover from the earlier days of accounting software, and has remained popular in this market because it allows you to "build" just the accounting system that your client needs. When you're paying $300, $500, $1,000 or more per module, being able to leave out applications that your client doesn't want, or intends to outsource, saves money, time and complexity.

Another major difference between low-end and midrange packages is the way in which the midrange applications are constructed. Many vendors base their accounting packages around a database. While it's not uncommon for even low-end accounting packages to be built around a common database, in the midrange, the database that is used is generally one that can be accessed by other software applications.

For example, the two most common databases used by the midrange packages that we reviewed are Pervasive Software and Microsoft's SQL Servers. Even the FoxBase-based Visual AccountMate is available in an SQL version. Using an SQL-format database allows you to easily integrate a report writer, such as Crystal Reports, with the accounting applications. This, in turn, gives your client very powerful ad hoc inquiry capabilities. Another benefit of this approach is the ability to use Microsoft's BackOffice server in conjunction with the accounting system.

Since many midrange accounting systems will wind up in larger enterprise-type companies, there are a number of features that are necessary at this level of the application that may not be as needed in smaller companies. One is security. All of the packages that we tested have excellent security, if you wish to implement it. You can restrict access to the system as a whole, or allow specific users to access specific functions. Almost any package that wants to be considered as being in the midrange provides a separate System Manager module, which acts as a passage way to any and all of the subsidiary ledgers.

One final capability also starts to appear in the midrange- consolidation. At the higher end of midrange software, your clients may be operating the same accounting system in several subsidiary companies, departments, or branches. The ability to roll-up all of these operating results into a single set of records and statements is necessary and is available as the sophistication, and price, of the software increases.

To give you some idea of what is available, we reviewed seven midrange accounting software packages. Two of these packages, Accpac Discovery and SBT VisionPoint, are from the same vendor - Accpac purchased SBT and is continuing the line.

How we tested
One interesting thing that we noticed during our testing is that while the capabilities of the midrange packages are often impressive, they run very well on a rather modest platform. Our testing was conducted using a generic 550-MHz Pentium III system, running Windows Me and populated with 64Mb of RAM, as the server.

Many practices and their clients have similar systems, and you could purchase an equivalent system, with a 15-inch monitor, for well under $1,000. This workstation is connected to a lOOBase-T Ethernet network, and where we wanted to test remote access and entry, we used an even lower-end 500-MHz Celeron-based PC as the workstation. We encountered no problems running the software in this configuration, even when the rest of the network was being used to download music from the Internet.

Most of the applications that we ran actually state that they require an even less impressive equipment platform. While you probably can do this, it makes little sense to us to spend thousands of dollars on software, even more money on training, then try and save a few dollars on the equipment. With accounting being a mission-critical application, our workstation configuration, along with a good backup device, such as a CD-RW drive, is really the minimum that makes sense.

One last thing to keep in mind with midrange accounting is that at the higher-end of the cost spectrum, applications are sold by resellers. These resellers also often bundle in installation, customization and training, so the prices given by vendors are approximate, and can vary considerably depending on from whom the software is purchased, and what other services are requires....

Reporting to the MAX Accounting for Windows
Reporting to the MAX is an unusual success story. The vendor has been in existence for two decades, and was one of the pioneers, along with DacEasy, in selling accounting software directly to end-users through advertisements in computer magazines. That's still one of major marketing channels for Reporting to the MAX, which is unusual in a midrange vendor where the price of an unlimited user system can exceed $4,000. Cougar Mountain is also well regarded for its Point-of-Sale module, being one of the first accounting software vendors to aggressively address this need with an affordable solution.

Unlike many of the other products that are reviewed here, the single-user version is not modular, but a single, integrated package that includes the G/L, A/R and A/P functions, as well as order entry and invoicing. Cougar also includes a Data Exchange feature, which allows your clients to import and export data to and from databases and spreadsheets. This provides them with an easy way to create custom reports.

Reporting to the MAX also offers several additional modules, which nicely compliment the basic offering. One of these is Payroll, which starts at $349 for a single-user version, and is priced upwards from there depending on the number of users. Also offered is a very well-designed POS module. This module is very appropriate for your clients who operate a retail business, and allows the Reporting to the MAX Accounting for Windows to operate as a back-office system. This module integrates seamlessly with accounting, and is priced starting at $1499.

Reporting to the MAX bucks the current trend to perform all posting in real-time. It uses a batch update approach for all subsidiary ledgers other than Inventory. Because of the possibility of Inventory being interfaced with the optional P0S, it is updated in real-time, so that quantity on hand is always accurately reflected.

In some ways, Reporting to the MAX's Accounting for Windows is very similar to the best of the lower-end packages, like QuickBooks and Peachtree. Wizards walk you through the setup process, and numerous sample Charts of Accounts are provided. If your client uses a complex account format, however, you may not be able to use the default charts, which would negate some of the advantages that Reporting to the MAX provides.