FrontRunners quadrants highlight the top software products for North American small businesses. All products in the quadrant are top performers. Small businesses can use FrontRunners to make more informed decisions about what software is right for them.
To create this quadrant, we evaluated over 200 Accounting products. Those with the top scores for their capability and value made the quadrant.
Scores are based largely on reviews from real software users, along with other product performance details (e.g., what features they offer, how many customers they have).
Every product in this quadrant offers a balance of capability (how much the products can do) and value (whether they’re worth their price/cost) that makes them stand out in the race for small business software success.
FrontRunners has four sub-quadrants:
Depending on the specific needs of a software buyer, a product in any of these sub-quadrants could be a good fit.
Why? To even be considered for this FrontRunners, a product had to meet a minimum user rating score of 3.8 for capability and 3.8 for value. This means that all products that qualify as FrontRunners are top-performing products in their market. They appear in the quadrant in relation to how their peers performed.
For some buyers, a specific FrontRunners sub-quadrant might be best. For example, larger organizations or businesses that keep separate accounts for individual projects might lean towards vendors in the Leaders quadrant that offer a broader array of functionality. Niche companies, on the other hand, may find products that are a better fit in the Masters or Contenders quadrants.
You can download the full FrontRunners for Accounting report here. It contains individual scorecards for each product on the Frontrunners quadrant.
You can find the full FrontRunners methodology here, but the gist is that products are scored in two areas, Capability and Value.
To be considered at all, products must have at least 10 reviews and meet minimum user rating scores. They also have to offer a core set of functionality—for example, core accounting functionality includes general ledger, accounts payable, accounts receivable/invoicing and bank reconciliation.
From there, user reviews and other product performance details, such as the product's customer base and the features it offers, dictate the Capability and Value scores. Capability is plotted on the x-axis, and Value is plotted on the y-axis.
For more information about FrontRunners, check out the following:
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Check out the FrontRunners External Usage Guidelines when referencing FrontRunners content. Except in digital media with character limitations, the following disclaimer MUST appear with any/all FrontRunners reference(s) and graphic use:
FrontRunners scores and graphics are derived from individual end-user reviews based on their own experiences, vendor-supplied information and publicly available product information; they do not represent the views of Gartner or its affiliates.
Providers listed as Runners Up were considered for inclusion in the quadrant, but were ultimately not included for one or more reasons: they did not have enough reviews; they did not meet the reviews score minimum; they did not meet the ultimate Value and Capability minimum scores; or they did not meet our functionality requirements for the market.
There is a vast array of accounting softwares and financial management solutions on the market today, with specialized functionality for almost any industry or size of organization. Moreover, the specific type of accounting can differ between programs—project, fund and fixed asset are examples.
Add to this variety the constant change of standards, compliance requirements and technology platforms, and the process of selecting enterprise accounting software gets tricky. This buyer's guide is intended to make the process much more bearable.
Here's what we'll cover:
Business accounting software keeps track of the financial transactions within an organization. A core package includes the following modules:
Spending statistics in Quicken
These systems occasionally come with specialized functionality for particular types of businesses or companies. An example is fund accounting for nonprofit organizations and government entities. Because it's a critical business process, it's often a central component of an organization's enterprise resource planning (ERP) system.
|Core accounting||Core systems assist with the basic functions necessary to balance a business' books, including general ledger functionality, the ability to track accounts payable (A/P) and accounts receivable (A/R), fixed assets and bank reconciliation. Every business requires these core functions to manage its finances.|
|Project accounting||This type of system helps project-oriented businesses maximize job profitability and efficiency by tracking detailed project costs. Businesses can examine past job costs and estimate future costs to choose the jobs that will achieve adequate profit. It tracks by project factors like labor, overhead, materials and equipment to improve decision-making.|
|Fund accounting||These solutions support nonprofit and governmental entities in tracking their development and spending of funds. Nonprofit organizations can track their expenditures of donations or grants to make sure they meet fund provider requirements. These systems also allow government entities to make sure they meet unique Governmental Accounting Standards Board (GASB) regulations.|
|Inventory management||This type of solution helps companies keep the correct inventory levels to maximize profit, avoid overspending and minimize the costs associated with inventory depreciation. The right system keeps inventory information up-to-date by tracking product levels as well as orders, sales and deliveries. The Generally Accepted Accounting Principles (GAAP) stipulate specific ways to account for inventory to ensure proper reporting of value for inventory that has depreciated or undergone other changes. Software with inventory management capabilities ensures this is done correctly.|
|Billing & invoicing||These systems automate the collection of payments from customers to enable timely and consistent collection with minimal human error. There are many different types of billing and invoice systems designed to support the wide range of industries, business models, payment methods and operational scales.|
|Budgeting & forecasting||Users can leverage budgeting and forecasting solutions to project a company's financial outlook from historical data and estimate future conditions. These systems are typically used in businesses that must consolidate multiple departmental forecasts and budgets, and are most helpful where multiple variables drive the ultimate forecast.|
|Fixed asset accounting||This type of system tracks fixed assets by providing a central database of important asset information, including location, check-in and check-out, due date for return, maintenance scheduling, audit history, cost and depreciation. Depreciation schedules are a core element of this specialty.|
|Payroll management||Payroll systems help businesses track and process employee payrolls. They also compose and print paychecks, automatically withhold and pay government taxes and generate the necessary legal and tax reports on a regular basis. Automated reminders to pay required fees help businesses avoid legal penalties.|
Before evaluating your options, you must determine what type of buyer you are. Over 90 percent of buyers fall into one of these three categories:
Growing small-business buyers. These businesses are on the verge of upgrading basic systems, such as QuickBooks, to more robust small-business accounting systems that will support sophisticated functions (such as demand forecasting, intercompany accounts, increased data storage and others). Growing businesses upgrade their systems for a range of reasons. Industry-specific functionality will become important when a small company reaches a certain size threshold.
Enterprise buyers. These buyers represent businesses and organizations that need the functionality of a full enterprise resource planning (ERP) suite. Usually, these systems will include functionality for multi-company consolidation, international operations and foreign currency and other concerns relevant to large entities. Seamless integration is usually more important than specific features; however, there is considerable differentiation in both of these areas, and buyers should examine both. SAP and Oracle, two of the largest vendors, have some of the most feature-rich systems on the market.
Best-of-breed buyers. These buyers are focused on specific functions. For example, nonprofit organizations need to look specifically for accounting software for business that can perform fund accounting. This method tracks funds in such a way that different grant providers can see the right report on how each fund amount has been used. Meanwhile, in education, universities and colleges often need software specific to higher ed, for example to track the disbursement of financial aid. Construction companies or engineering firms, on the other hand, usually need a system that can break down costs by each project, location and other characteristics. For best-of-breed buyers like these, functionality is often more important than integration.
The key benefits of financial management systems are clear: better visibility of costs and expenditures, which leads to more financially responsible decision-making. In addition, systems can generate reports in a variety of ways to summarize this information cleanly for the right audience.
For example, nonprofits can generate reports specific to a particular grant provider, detailing exactly where every cent of the funding ended up. This allows an organization to be accountable to investors, donors and lenders, maintaining trust and avoiding financial damage. These systems also allow companies to ensure compliance with reporting standards and federal requirements.
There are a number of issues that should be avoided when selecting a solution. Buyers in certain vertical industries must make sure the appropriate modules are included in the system they purchase. For example, engineering firms and construction companies should choose a system with a project accounting module.
Another issue is a company's rate of growth; the buyer should consider how fast the company is growing at the time of purchase. This way, the company will not grow out of a system immediately after investing considerable time and funds in the selection and implementation processes.
As you evaluate accounting software packages, consider these current market trends:
Software-as-a-Service (SaaS). SaaS is picking up speed as buyers realize the advantages of lower upfront costs and quicker implementation time. NetSuite is a prominent example of a SaaS system: In fact, it is available only as a SaaS offering.
Mobile apps. Mobile applications are gaining popularity across the board, and accounting is no exception. Check to see how each vendor is innovating on this front.
Increased specialization by industry. Increasingly, consumers are demanding more industry-specific features, and vendors are listening. Products that were once “horizontal”—such as Sage MAS 90/200, QuickBooks and Microsoft Dynamics—are increasingly adding new vertical features to cater to buyers’ specific industries. Make sure to keep a lookout for features that fit your particular industry when investigating tools and solutions.
Business intelligence. Interest in business intelligence is on the rise. Business intelligence takes the massive amount of data collected and organizes it into reports designed to support business improvement. Many vendors are now integrating business intelligence into their ERP accounting and financial management systems.
Oracle acquires Netsuite. In July 2016, Oracle purchased Netsuite, further expanding the already impressive reach of its cloud platform. Netsuite’s financial management solution has become a key player in the small and midsize business (SMBs) accounting market, while Oracle is well-known in the enterprise space. It will be interesting to see how this merger will impact customers in the long term—in the interim, users should expect more integrations between NetSuite and Oracle products.
Sage adds chatbot and AI to cloud accounting software. Initially launched at the Sage Summit conference in 2016, Sage officially released its chatbot with its Sage One software in January 2017. The chatbot, Pegg, uses artificial intelligence (AI) technology to provide businesses with a “virtual accounting assistant.” With Pegg, users can track receipts, submit expenses, see which customers are behind on invoices and more.
Zoho launches customized payment solution: Zoho Checkout. Zoho’s newest addition to their financial suite is a customizable online payments solution designed for businesses of all size. Users can build and brand a secure payment page, connect with a payment gateway and collect one-time and recurring payments from customers. Zoho Checkout is available in both free and paid plans, with capabilities increasing as plans scale.
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