Lots of businesses are using entry-level accounting software bought at retail, and find that these packages do the job nicely. At some point, however, it's likely that your clients' businesses will grow to the point where these store-bought solutions no longer do the trick. There are lots of reasons why this can happen. One of the more frequent reasons is that there are more staff in the business who need simultaneous access to the accounting application. Most of the entry-level systems available today are limited to only a few simultaneous users, which presents a problem if you have a client who needs to provide access to 10, 20 or even more users.
There are other ways that clients outgrow an accounting package. As a business grows, it's also likely that the transaction volume will increase. With today's fast PCs, a modest increase in transaction volume probably won't nuke your clients' accounting systems, but at some point performance will start to suffer, often to the point where it becomes bothersome or even impacts productivity.
Many of today's mid-range accounting packages address both of these problems by using an underlying database, such as SQL, that is able to handle large numbers of transactions and can also be easily scaled up from just a few users to 100 or more. This can often be accomplished by simply purchasing more user licenses and possibly acquiring additional or more powerful servers.
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A client may also be a candidate for a mid-range accounting package simply because of their size. Or they may have needs and requirements that cannot be met by an entry-level package, such as complex warehousing and distribution, multi-currency transactions and reporting, or complex or extensive inventory needs such as multiple costing methods or bill-of-materials processing.
Budgeting and reporting is another area where some mid-range accounting systems are particularly powerful. While some entry-level accounting software systems can provide consolidation between locations and divisions, when a client's business reaches this type of size, it usually will require more powerful analysis and reporting capabilities.
And while it may sound silly, a client may simply want the cachet of a custom accounting system, rather than an off-the-rack retail package. Or they may already be using an accounting system with complex account numbering that cannot be easily moved to an entry-level package.
Finally, clients with the potential to grow very fast may be better off starting out with a mid-range package, rather than off-the-shelf software. Even though almost every vendor touts how easy it is to transition from an entry-level system to their mid-range software, this transition is almost never as easy as the client thinks it will be.
If you know that a client will need to be up and running on a mid-range system in the next several years, it may be in the client's best interests to bite the bullet and go for a mid-range solution from the start.
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