TOOLS FOR BETTER DECISIONS
Choosing an Accounting Program:
The Main Issues and Options
by Marion Gropen
Accounting rarely shows up as
among publishers’ top priorities, and even when it does, the distaste most
publishing folks feel for the financial side of the business often leads them
to shortchange it. Unfortunately, ignoring the need for “bean-counting” can be
very expensive. Fortunately, if you get the right tools for the job, accounting
can be a strategic asset instead of an unpleasant chore.
What are the right tools? That
depends on your company, and on your personal taste. This article explains some
of the issues you should consider when choosing an accounting program or
programs, and then briefly reviews options.
Issues to Consider
When you are looking for an
accounting program, first determine what tasks you want the program to manage
and what reports you need it to produce for people outside your company.
Examine the data it allows you to collect in light of the questions you want
data to answer. Find out what customer service and tech support you can expect
from the software vendor. And—most important—see which programs you
and your staff are most comfortable using.
As you assemble a list of tasks
you need to accomplish and jot down related features your company requires in
an accounting program, grade the tasks as Critical, Needed, and Nice to Have.
You might want to include:
Fulfillment.<span
style=’font-size:11.0pt’> If you do your own fulfillment, what aspects of each
transaction do you need to record? If you use a distributor or fulfillment
service to handle that end of the business, what reports are programmed in or
can be developed, and what data can you export? In addition, what data can you
import from other sources, such as distributors?
Sales
and expenses. Do you record your
sales and expenses on a cash or accrual basis? Accrual accounting—which
takes a little more time and skill but gives you more information about the
problems your company may soon face—requires full general-ledger
capabilities. Most programs for smaller publishers don’t include a general
ledger, and some make it difficult to transfer the data.
Nonstandard
situations. Almost all the
programs discussed below accumulate sales, returns, and royalties
automatically. Some also record your expenses and other items in a general
ledger. But most publishers encounter situations that don’t fit well into a standard
schema. The more often this is true for you, the more you need the ability to
make manual entries into your general ledger.
Reports,
documents, or standardized data for external parties.<span
style=’font-size:11.0pt’> What do you need to meet ONIX and EDI requirements
and create royalty statements, standard-format financial statements, tax data
and forms, and the like?
Information
for the rest of your company. Do
you need to develop sales histories and marketing analyses? Do you need to
monitor expenses by title, by product line, by department, or by other
criteria?
Predictions.<span
style=’font-size:11.0pt’> What type of predictions do you need? What strategic
planning do you do? What will your system have to provide in this connection?
Interrelationships
with other systems. In my opinion,
fit is the most important consideration. Will it be hard to import data from
distributors or other outside sources? Will the program help you provide
service to your own customers? Can you customize the software to meet your
needs? Will your current hardware, operating system, and other system
components need to be upgraded, or modified in some way?
Accounting programs are like
shoes: if you aren’t comfortable, you’ll avoid using them. And if you have to
force yourself to use a program, your ability to get the most from it will be
impaired. That’s why I sometimes suggest getting a program that’s slightly more
expensive or one that has slightly fewer features but fits a publisher’s tastes
and habits more closely.
Programs to Consider
For very large firms—those
with annual revenues above $50 million—common choices include Vista, SAP,
Trilogy, CisPub, and Bookmaster.
These products are all extremely
programmable and powerful. If you’re interested in purchasing any of them,
first do a full and careful assessment not only of the processes and procedures
you have in place, but also of the best possible ways to accomplish relevant
tasks. Once that systems analysis is complete, almost any of the big providers
can adapt its product to fit your needs and desires. Enormous flexibility and
efficiency are expensive, however. Implementing any of these programs requires
huge investments of time and energy and will probably disrupt your operations
significantly until the new system becomes stable and familiar.
Of course, much more could be said
about these issues, but since most of the people reading this don’t have sales
in the $50 million-plus range, I’ll move on.
Programs for midsized and smaller
publishers include Acumen, iPub, Cat’s Pajamas, Publishers’ Assistant, Anybook,
Jaya 123 (and its earlier incarnation, Pub 123). In general, they are less
integrated, less customized or customizable, and less complex than the programs
mentioned above.
How much automation,
customization, and integration your company needs will depend on its
transaction volume and its distribution channels, among many other factors.
Higher volume usually makes more expensive programs more cost-effective.
Companies with distributors or
fulfillment services have different requirements than those that handle
distribution and fulfillment themselves, even at the same sales volume. If you
run your own warehouse, you will almost certainly require a package that handles
warehousing functions. If you don’t process your own orders, do your own credit
and collection, or track your own inventory, you may still want one of these
programs for its royalty tracking features and/or its marketing support
functions, assuming that you can download suitable files from the company that
does handle your fulfillment or distribution.
Most programs for smaller
publishers are designed for use with standard accounting programs, such as
Quickbooks, or even checkbook programs like Quicken. Unfortunately, integration
issues may arise.
Here’s an annotated list of
accounting programs for small to midsize firms.
Acumen
Of the programs for relatively
small firms, Acumen provides the most functionality and meets the most
sophisticated infrastructure needs, but it also requires the largest investment
in training and programming and has the highest purchase price. Acumen’s
royalty module seems to be able to handle any deal that even the most creative
agent might request. Inventory management functions seem quite sophisticated.
Marketing support is integrated into the package, along with a full array of
accounting functions.
A program with extensive
possibilities, Acumen seems to function like the very large systems used by the
biggest publishers and, like those systems, it can require more skilled
programming for customization and maintenance. To run it, you must have the 4D
database engine on your computer. To customize it, you must use the programming
language C++. It would probably be wise to have someone in-house who
understands both.
Acumen’s core modules cost about
$15,000. Installation typically costs considerably more. The core modules
include General Ledger, Accounts Receivable, Accounts Payable, Back Orders,
Inventory, Job Costing, Commissions, CRM and Contact Management, Marketing and
Mailing List Management, Order Entry, Product Marketing ONIX 2.1, Product
P&L, Purchase Orders, Royalties, Sales Analysis, Standing Orders, and three
custom report generators for preformatted and custom reporting. Thirty other
modules are also available, and most users will probably need at least some of
them.
Acumen is likely to fill the needs
of midsized publishing houses, although they have several other options, but it
may be overkill for many smaller companies.
iPub
This relatively new program comes
from Les King, the founder of CIS and developer of CisPub (one of the popular
big-company solutions above). It runs on a Windows platform or as a hosted
application over the Web and includes what is described as “full accounting
functionality,” but also supports integration with popular packages such as
Quickbooks and Peachtree.
Designed to provide most or all of
the flexibility and functionality of the big-company systems but to run in a
smaller company environment, iPub includes inventory management, fairly
sophisticated marketing support, and royalty tracking and payment features.
Its most interesting feature is
its pricing. If you want to go for the hosted solution, iPub will maintain the
software, hardware, and everything else for you. You pay $250 for setup, $35
per month for each user account, and $0.06 per copy sold or returned (minimum
$100/month). For a midsize to small publisher, this could be quite a reasonable
cost structure, especially considering that you won’t need to hire a systems
administrator.
Cat’s Pajamas
During the nearly 30 years since
Cat’s Pajamas first appeared, it has been continually upgraded and improved.
Its customer roster includes many midsize publishers.
Although it does not provide for
integrated accounting functions—such as general ledger, financial
statement generation, or accounts payable—it seems to cover almost all
other needs, including inventory management, EDI support, marketing support,
customer service screens, royalty calculations, and many more.
Cat’s Pajamas, which appears to
use the inventory/order/shipping process as the core of its operation, is
clearly designed for companies that do their own distribution and fulfillment.
It runs on either Windows or Novell networks.
Since each installation is
customized, the price of this software varies, but it is generally in five
figures. Support is triaged, so your problem will jump to the head of the queue
if it strikes Cat’s Pajamas as the most critical one they’re working on and
will sink down in the queue if it appears less urgent.
Publishers’ Assistant
There are five products in the
Publishers’ Assistant line: three for financial reporting (Sonnet, Lyric, and
Epic, for companies of different sizes); an add-on that handles ONIX-standard
transmissions and title management issues (Couplet); and an e-commerce system
that sets up a shopping cart, handles the integration of orders with the
financial software and shipping program, and generally makes e-commerce seamless
(PubAssist Web Services).
Publishers’ Assistant software is
designed for companies from start-up on through midsize, with seamless upgrades
from one size to another. Even in the Sonnet edition—which is for the
smallest publishers and has the lowest price—inventory records allow you
to answer historical inquiries as well as questions about current stock levels
for multiple warehouse locations.
These programs are designed to
handle the accounts receivable, order processing, customer service, royalties,
and marketing support functions, among others. They are not intended to be full
accounting packages. As with most industry-specific packages for small
companies, accounts payable, general ledger, and financial statement functions
are not available,
Publishers’ Assistant runs on
Windows machines and networks.
The basic packages—Sonnet,
Lyric, and Epic—are $495, $1,495, and $2,245, respectively. The Couplet
add-on that handles ONIX standards and the like is only $99. The Web services
package is $1,100. The cost of support—which is free the first year and optional
thereafter—runs between $200 and $350 per year.
Anybook
Because Anybook is a shareware
program, you can download the whole package and play with it all you like. If
you decide to keep it, then you register your copy and pay for it. Its many
levels (several of Classic, and Professional Levels 1 through 5) are compatible
with each other.
Functionality increases as you
climb through the levels. For example, Professional Levels 1 and 2 don’t
calculate royalties, and only Level 5 supports bar-code processing.
As with many other
publishing-specific packages, invoicing is central. All other functions draw
their data from the order processing/invoicing segment.
Although Anybook handles accounts
receivable and inventory functions and the higher levels process royalties, you
will need an additional accounting package to handle accounts payable, general
ledger, and other accounting functions. For higher-level reporting, and for
data export and import, Anybook provides a data export that integrates with
Microsoft Excel.
Anybook runs on Windows machines
only. Its levels are priced between $39 and $539, and the company also offers
the program on CD. You can get download insurance too.
Jaya 123
The Web-based newest edition of
the venerable Pub 123, Jaya 123 is resident on the Adams-Blake Company servers;
you don’t install the software on your own computers. Of course, users can
download all their data at any time, and as many times as they like, which
means they can import that data into most other programs.
One upside of using a central
server is that someone else maintains, upgrades, and secures the system. If
that person or company is good, you are relieved of a major expense item. The
indications are that this company’s servers are stable and secure.
Web-based applications can be run
on any operating system, as long as you have access to the Internet and a
browser.
Another upside is that you can
access your system from wherever you may be. This is particularly important for
operations with very few employees when travel might otherwise interrupt the
flow of business.
Jaya 123 processes inventory and
orders, and gives you significant control over the credit and collection
process. It also handles royalties, covering most common ways of calculating
them.
It does not integrate with a
Web-based shopping cart system, nor handle accounts payable, general ledger,
and most financial reporting functions. The export format for the accounting
data is QIF, which is not supported by some major accounting packages.
Explicitly designed for the
smallest publishers, Jaya 123 is purposely very simple and straightforward. It
costs $14.95 per month for the first 200 orders, and is priced on a sliding
scale that tops out at $89.95 per month for 10,000 orders. You get one log-in
ID and free support. Additional log-in IDs can be purchased for a smaller fee,
as can restricted log-ins, allowing you to let staff members have access to
some but not all of your data.
Deciding Which One Will
Work Best
Each of the packages above will be
right for some publishing houses. Most publishers will find that several might
work for them. I strongly suggest that you try each one and that you keep
tradeoffs between comfort and features in mind. Don’t undervalue the comfort
factor. If your staff intuitively understands the logic of a program, the
accuracy level will be much higher when they use it. And if your people aren’t
comfortable using a program with lots of features, the chances are that those
nifty bells and whistles will languish silently unless you crack the whip.
Marion Gropen provides
consulting-by-the-question, classes online and in-person, and downloadable
products to help publishers turn problems into profits. She also volunteers as
a moderator for two of the largest email communities for publishers. She has 16
years of experience in the financial side of the publishing business. For more
information, visit www.GropenAssoc.com, or email Marion.Gropen@GropenAssoc.com.
