Keeping (AC)Count

By Team Digit Published Date
01 - Mar - 2005
| Last Updated
01 - Mar - 2005
Keeping (AC)Count
The air is musty and carries the stench of old books. An old, balding, bespectacled man sits punching numbers at an ancient machine. People have long since forgotten his name, and know him only as 'Munshiji'. The name is always spoken in fearful awe; for Munshiji is the be-all and end-all of all things financial in the company. None dare disturb him when tax season comes rolling in...

If this sounds like the beginning of a fictional whodunit, it's only because Munshiji no longer exists. He was replaced by a computer and accounting software. The air is no longer musty, and the old ledgers have been incorporated into the computer's hard disk-always available as hard copies, courtesy the printer. Today, even small companies need to implement a corporate style of process management, and accounting is one aspect they can least afford to skimp on. Luckily, professional accounting software solutions don't cost an arm and a leg. Neither do they threaten to peer into your souls through ancient spectacles if you dare inquire about Form 16…

We take an in-depth look at the top nine tax and accounts packages available in India to help you decide which one suits your needs best.

The software-ACE 7, atACC, BUSY, Ex Personal Accountant, Expert Quick Accounting 3.0, Simply Accounting Pro, T , Tally 6.3 and Wings EZ-are packed with tools and functions that can make cash adjustments, debit, credit and invoicing a lot easier, maybe even fun… maybe.

Early on, this test discovered that all nine had nearly identical features, and the differences across the software were minimal. This was expected, as they are all accounting software, all made to take care of the well-defined, result-oriented task that is accounting. There really
aren't too many different ways to balance your books, now,are there?

ACE 7.0
ACE is a strong contender for the crown, and hits back with a set of decent features. The most noteworthy feature is its excellent support for ASCII dot-matrix printers, so you won't have to invest in a new printer and spend so much more money on paper sheets and ink-medium-sized companies where thousands of account reports have to be printed every week are sure to appreciate this feature.

ACE 7.0 is totally compatible with Windows, and can Zip and e-mail reports to your clients. It can export or save files in MS Word and Excel, or HTML for those who need to publish reports online. The interface is pretty easy to get used to as well.

The software isn't taxing on the system either; it performs commendably in terms of speeds, even on older, slower computers. It has some great features, such as bank reconciliation, tracking duplicate cheque numbers, managing multiple purchase and sales accounts, calculating commissions based on quantities sold, calculating discounts, product-wise price lists, and much more.

In terms of inventory management, the software offers options such as batch-wise stocking, various inventory evaluations such as LIFO, FIFO, market, average, stock ageing analysis, calculating profit and loss on a per-product basis, and loads more.

Though ACE can create user-defined reports, you might need to be a software engineer or a programmer to be able to do so! It has a native barcode reader for importers and exporters, and has a very useful inbuilt data backup-and-restore function.

Overall, ACE is a very good software product, and it has what it takes to be your businesses accounting solution.

How We Tested 
All the software we tested were targeted at the SoHo segment. Here, ease of use and features are overshadowed by the total cost of ownership factor.
We roped in a couple of external consultants to help us evaluate the software. Both qualified chartered accountants, they set up multiple dummy companies, used dummy data and entered standard trading transactions to figure out how easily and how well the software handles them.
Ease of use is important for any software, but since the focus is on the SoHo community, who may not have a full-time accountant doing their accounts, we gave a very high weightage to how easy the software is to install and use. How easy it is to set up new companies, users and master accounts was given due weightage. Since we are focused here towards the SoHo and small trader community, we focused only on those features of the accounting packages that are relevant for these communities. Therefore, features such as accounting without codes, receivables and payables management, multi-company accounting, invoicing, printing features, etc. were given higher weightages.
ASCII dot-matrix printing is of importance to the SoHo community, so this feature, if available, was awarded points. The reporting features of the packages and their ability  to export reports to other formats such as Microsoft Excel and Adobe Acrobat were noted. Other features such as multi-currency accounting, multiple users, and online publishing were not considered very important. Since most of these software also support inventory management, we noted features such as re-order levels, multiple units, batch wise inventories, etc.
Finally, the cost of the software was taken into account to decide the winners.
atACC, apart from having a cool pun for a name, is another offshore product that doesn't really come preset for the Indian accounts system. The software is extensive, and has every feature that you would expect accounting software to have. However, there are too many useless fields in a form, and all of them are predefined. So you end up with fields that are displayed but will never be used. In order to disable these fields, you have to set up the account tree with the items, and then edit the master.

Accounts and items can be grouped for convenience, but there is no option for a multi-line inventory. Thus, each pack size would need to be an individual entry.

atACC doesn't come preset for the Indian accounts system

Once you have created your masters, however, things begin to flow a little better. You can enter transactions related to banks, cash, purchases, sales, and more. The most noticeable advantage of this software, however, is the ability to increase, decrease and transfer stock from one code to another. Using this, you can manipulate your stock better and prevent shortages or excesses of stock across your company. It also has an inbuilt 'Free Quantity' feature, which will help you keep track of all the freebies that you give away with your products. The software religiously keeps reminding you to back up your data every time you exit it
atACC seems to be really efficient when going all the way down to the voucher level from the reports, but we realised that the values were not being refreshed after saving and closing the report. The software also limits you to three tax types, and there's no way to add a fourth. Also available is the inventory handling option for shortages, excess and damages. atACC also helps define services and keeps a track of the service tax, which is a helpful option for the service industry.

On the whole, atACC has a very good feature set, but misses out on ease of use, and a few basic features that would make the accounting experience easier.
BUSY Business Accounting Professional Edition
BUSY works only at the 800 x 600 resolution, which is irritating. However, the software is easy to set up and has an easy-to-understand interface. There are only a few noticeable differences between BUSY and the rest. BUSY's sale purchase form is a little more out of place than in other software. It has an option that allows you to easily track receivables from parties or forms issued for purchase.

One highlight of the package is a very good analysis of sales and purchase. The package lets you search for individual options such as transaction, item and amount. Other features in terms of accounting and inventory maintenance are similar to those in other accounting packages.

EX Personal Accountant
This accounting solution has a very easy installation procedure and interface navigation. Setting up your account is easy as well. You can set up accounts under different groups, unlike in other software, where you have to first define a group, and then go to ledger accounts and define accounts under that group. Apart from the standard feature set, sales tax handling for purchases and sales are done through the Charges Module, the setting up of which is also a snap. You have the flexibility to apply charges on the invoice as per the requirement-other software offer predefined fields which you have to select.

EX gives you the option to adjust open debits and credits

The software gives you the option to adjust open debits and credits, which is useful for maintaining receivables or payables. This is a plus point, as such features are only found in ERP packages and not in accounting packages.

EX Personal Accountant also gives you the option of generating various MIS reports such as Income-Expense analysis, Sales Purchase analysis, Cost Centre, Account and Item-wise analysis. The software also has a feature that calculates the interest for you.

One more unique feature is the Customer folder, which gives you an overview of all transactions with the specified customer, such as sales, receipts, sales returns, opening debit/credit, etc. The Cost Centre that is present in most software is called Budget Variance in EX Personal Accountant, but it only allows you to allocate budgets for different activities, and not plan for contingencies.

You can export reports to the MS Word and Excel formats, and the software has full support for dot matrix, inkjet and laser printers.

Expert Quick Accounting 3.0
Unless you run your screen at a resolution of 800 x 600, this software will irritate you from the moment you install it. It automatically forces your screen resolution to 800 x 600 mode. As long as the program runs, you cannot change the display back to normal, even from the system display properties.

Stock valuation options in Expert Quick Accounting 3.0 range from LIFO, FIFO, Cost, HIFO and Weighted Average. The Account Receivable and Payable option in Expert Quick Accounting 3.0 is limited, and does not offer a bill-wise outstanding amount.

The software is not user-friendly, and is not recommended if you are running accounting software for the first time. When compared to the other software, Expert Quick Accounting seems to be overpriced, especially for the plain features it offers.

Our Expert Panel 
Although we have a battery of technology experts right here at Digit, they're not quite professionally trained to test accounting software. So we brought in a couple of accounts experts to help us test software the lineup. Here's a little information about them.

Anish Mehta, Chartered Accountant

Mehta is a Chartered Accountant. He has 13 years' experience in accounting and finance. An alumnus of Ruparel College, he also holds a diploma in Business Administration. His interests include reading, learning about software technologies, and .Net programming. A partner with R M Mehta and Co, Mehta is a  consultant for the industrial lubricants trade in India. He can be reached at

Vipul Shah, Chartered Accountant

Shah is a Chartered Accountant and consultant who writes regularly on technology and related issues for various publications. He assists companies in testing pre-release products, and also reviews released products. He can be reached at digit@
Simply Accounting Pro 2003
This was the only software in this category to offer Web store integration. This is a function that allows a company to set up a Web site for selling goods, and automatically add all orders made online to your books. This feature is a must-have for all online businesses, and even those small businesses that plan on making their online presence felt in the near future.

The major problem with this software in terms of setting it up is that none of the ready template accounts match the account heads we use here in India. You will have to modify the existing templates to match the Indian accounting system. The other option is to start from scratch and create your own template of basic accounts, groups and items.

Simply Accounting Pro offers Web store integration

The software was tested using the predefined templates of 'Retail Dealer', 'Generic Company' (a predefined account head as per the American accounts system), as well as a blank company, where the minimum set of account heads was created as required by the Indian accounting system. All account heads that were irrelevant to Indian accounting were deleted.

Simply Accounting Pro allows an excellent grouping and sub-grouping facility. The inventory allows multi-line products to be defined. For example, you can easily create different pack sizes for the same item, say 100 gm, 200 gm and 500 gm packs of butter. The Sales Tax module covers VAT as well as the current tax system, provided you define the correct values in the system settings.

Some of the main features of this software include a per-account, line comment capability, enhanced password security, departmental accounting, sorting of recurring entries, HTML report generation, and by far the best feature-Web store integration.

The interface, though akin to older DOS-based programs, does not easily reveal the countless functions of the software as easily as it should. The Daily Business Manager feature, however, is a boon, as it ensures that you never leave anything pending. It reminds you to make or receive payments or orders due on that particular day. The software also has the inbuilt capability of supporting electronic fund transfers for a wide range of currencies.

On the whole, Simply Accounting Pro is a necessity for those businesses with an online presence, though others might be a little put off by the entire American style of account head arrangement.

Anish Mehta, one of the experts, was thoroughly impressed by T . He called it "clean and refreshing." The interface of the package is a cross between a Web browser and Windows Explorer. It has a professional layout, with the menu laid out on one screen, so you don't need to hunt around for the various options. The home page of the software provides all accounting data at a glance, and this can be configured. The data entry forms are also very user-friendly, making data entry quite easy. The browser interface of the software means that you have buttons for back, forward, home, etc, which make navigation through different forms a snap.

The interface of T is a cross between a Web browser and Windows Explorer

T has a feature set almost identical to Tally's, with a few extras thrown in. Of all the software tested here, our expert Anish Mehta rated T as the software with the best interface, functionality and ease of use. The inbuilt help function makes understanding the software a lot easier-even for those who have never used Tally before.
The software saves data in tiny file sizes, so you can back up and entire year's accounts on a floppy! eBiz Technologies, the developers, claim that 5,000 entries of data can be backed up in a file no larger than 200 KB. The software also has an option to import data from Tally, so switching over to T should not be a problem at all. The import is done using XML, so you can import everything from masters to transaction records.

Invoices can be customised, and you can insert your logo into the voucher. The software uses the XML file format, which you can edit in SVG (Scalable Vector Graphics), which is bundled along.

The Advanced Search function in the Search option helps you perform complex searches, and also allows you to save search criteria for future use. There are two options to define inventory, 'groups' and 'category'-most software offer only one of these options. These groups and categories can be divided into various levels, which will let you have multi-level groups within a level; most other software restrict you to a maximum of only two levels.

The reports page of the software shows you the entire set of reports at a glance, and you can go down to the voucher level in each report. Reports can be exported in various formats, including e-mail. Reports can also be customised and exported to MS Excel as a template.

Overall, this was Anish Mehta's pick.

Tally 6.3
Tally has always set the bar. Tally is to accounting what Microsoft is to OSes-it's not necessarily better, but it's so common and popular that finding accountants proficient at it is an easy task. It is quite truly the king of accounting land, and every other software in this test is attempting to steal a little of its market share. The ease-of-use factor is very high here, perhaps because of the familiarity of accountants with the product-virtually every accountant training course teaches the basics of Tally.

Tally is quite truly the king of accounting land, and every
other software in this test is attempting to steal a
little of its market share

Tally has an intuitive interface, and has features that will take care of just about any accounting requirement. Though the feature set isn't really very different from other software, it's the easy menu layout and accessibility of functions that earns Tally top marks in terms of ease of use.

One feature that sets it apart is its inbuilt Web browser, which the others don't offer. The integrated Web browser permits accountants to browse the Net via the interface itself-supposedly useful when looking online for a solution to an accounting problem, or seeking help from the online Tally helpdesk. However, though different, this feature isn't really as great as it seems-let's find out why.

A major irritant with Tally 6.3 is the product activation process. As with other software vendors such as Microsoft and Symantec, Tally too, demands activation of the product before you can use it. Sounds simple enough, right? Wrong! Most small businesses have standalone computers for accounting, and they don't risk connecting this computer to the Internet, or just don't have an Internet connection-which is why the inbuilt browser isn't really a great feature!

Tally is to accounting what Microsoft is to operating systems

However, coming back to activation, if the computer you use for accounting isn't connected to the Internet, you will need to install Tally on to a computer that does have a Net connection, and then activate the product, and then, transfer all the software files to your accounting computer. Though this complicated process helps curb piracy, it will also act as a deterrent to those looking to purchase it.

Tally also sports additional features: it lets you easily export data to ODBC software such as MS Word or Excel; it offers a print preview of accounting reports; it allows you to export your data in the XML format-this goes a long way in allowing those without Tally installed to view or use the data. Tally also allows for unified ledgers, ratio analysis, and more.

Overall, those with earlier versions of Tally might not want to upgrade, for three reasons: the irritating activation feature, the price, and of course, the faster speeds that the earlier DOS-based versions of Tally, such as Tally 4.5, offer.

Both our experts were unanimous about Tally 6.3's easy-to-use interface. Also, they were both quick to point out that the surplus of Tally-trained professionals who are looking for jobs would reduce the total cost of ownership of the package, as no additional training would be required.
Wings EZ
Wings EZ was our winner last year. Compared to the other software we tested, Wings offers more or less the same features. It is easy to use, and has a very simple interface. All the reports generated have a very similar look, and can be comprehended easily. Extra columns can be added to the report to display any extra information required.

Wings EZ has an option that allows you to keep track of PDCs and bounced cheques. It allows stock valuation only by the FIFO and Weighted Average method.

Wing EZ was the winner in our Accounting software test last year

Wings EZ allows for customising of reports, fonts, page setup, and the date and number system. There is also the option of setting commas as per the Indian or American style.

One helpful feature in Wings EZ is the repair data function-this function enables the user to upgrade data present in a previous version to a new version of the software. Also possible is the recovery of a data backup using MS Word or Excel.

The only drawback of the package is, it takes quite a long time to start up, and setting it up is rather difficult.

All the software we tested had the same basic functions. Though there was a little variation here and there, but overall, it doesn't matter. Each vendor is just trying to outdo the other. Tally 6.3 offered online help, and this is a decent feature. Simply Accounting will let you take your business online. Almost all the software mentioned lets you print graphs and reports for presentations. The software help for all the packages was good, but Wings EZ was the best.

T , with its intuitive interface and wholesome
set of features, impressed us a great deal

Choosing a winner from amongst the eight is possibly the hardest thing to do right now. Considering its widespread use, affordable price and easily accessible support, Tally should remain firmly on its throne. However, T , with its intuitive interface and wholesome set of features, impressed us a great deal.

For an online business, nothing beats Simply Accounting Pro. If your company plans to take its business online, we recommend you opt for Simply Accounting Pro.

We declare T the winner based on the following: while doing Sales Order Processing in Tally when an order is created for a party, if the billing is only done for part of the quantity and the pending amount has to be raised in the subsequent sales order, then instead of only the pending quantity being displayed, the entire order is shown again. This would confuse the user, as he or she may not be very sure how much has already been billed and whether there is excess billing against that order or not. This is taken care in T , where the subsequent sales invoice only shows the pending quantity in the sales order, and there is no repetition.

The next point where T scores over Tally is the tracking number-in Tally, the same tracking number can be assigned to two different customers, leading to errors when reports such as pending invoices etc. are generated. Since the tracking number is common to both transactions, it will become difficult to trace that particular transaction at a later date. In T , however, the tracking number is unique to each transaction, and hence, the chances of such errors are eliminated.

T comes built in with the Tax Deducted at Source (TDS) function, which is absent in Tally. This will cost you Rs 4,500 more if you want it.

VAT Demystified 
VAT, or Value Added Tax, is a multi-point levy of sales tax, which enables one to claim a set-off of the tax that he or she pays on purchases. VAT is levied at every stage of production, and is levied only on the value added by the last seller. All over the world, VAT is payable on goods and services, as they form a part of the national GDP.
VAT is a form of collecting sales tax, under which tax is collected in each stage on the value added to the goods. Here's how it works: a dealer charges tax on the full price of the goods sold to the consumer, and at every end of the tax period, reduces two things-(a) the tax collected on the sale, and (b) the tax charged to him
by the dealers from whom he purchased the goods. He then pays this to the Government as tax.
The VAT system is so designed that the final burden of the tax on goods is borne by the final consumer. Firstly, the tax liability on the sale made by the dealer will be calculated on lines similar to the present Sales Tax Act, and thereafter, tax paid on purchases will be deducted-and the net amount will be paid, or claimed for refund, by the dealer.  
VAT has gained substantial importance due to the decision of the Government to introduce VAT in the states from April 1. It has been introduced with the primary objective of bringing into the legal system a neutral tax regime, and removes the overlapping effects of taxes.
In simple words, VAT will replace the present sales tax system. Under the current single-point system of tax levy, the manufacturer or importer of goods into a state is liable to sales tax. There is no sales tax on any further distribution channels. It is a multi-point levy on each of the entities in the supply chain with the facility of set-off of input tax-the tax paid at the stage of purchase of goods by a trader, and on purchase of raw materials by a manufacturer. Only the value addition in the hands of each entity is subject to tax.
VAT levies will be administered by the Value Added Tax Act, and the rules made thereunder.
Let's take an example: Dealer A purchases goods for Rs 100, on which a tax of Rs 10 has been charged. Now he sells the goods for Rs 120 to dealer B, on which he charges a tax of Rs 12 at 10 per cent. The tax payable by dealer B will be only Rs 2, being the difference between the tax collected of Rs 12 and tax already paid on purchases of Rs 10. Thus, dealer B has paid tax at 10 per cent on Rs 20, which is the value addition at his hands.

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