Business Software

Did you know that around 50% of small business owners don’t use saccounting software to process their accounting information? Many resort to the excel spreadsheet to keep track of money coming in and money going out. These small business owners would rather get on with their core business than worry about the administration tasks associated with accounting, even with a software package, because it seems like such a waste of time.

On the surface they are right. Administration does not contribute directly to earning cold hard cash, and takes the small business operator away from actually earning for the business. However, if the movement of money in and out of the business is accounted for accurately and on a timely basis, there are many benefits that come from having a package.

Enter data once and update a number of modules


The first benefit of using accounting software is having your accounting information centralized and organized, and having a system of easy retrieval. That is the beauty of a computerized database. You enter information in once and a number of areas in the accounting system can be updated so you don’t have to enter the information repeatedly.

Saves time and cuts down on errors


This saves considerable time and also cuts down on administrative errors that can be time consuming to find and fix. For example, when you make a payment for some capital equipment used by your business, the vendor file is updated, the cost account is updated, and if the accounting software has an integrated fixed asset register, that is also updated. Three areas are updated with one entry. If you maintained a manual accounting system on a spreadsheet or on paper, these three entries would have to be performed separately, wasting your valuable time, or costing you more for someone else to do the task.

Easy to find accounting information


Another benefit of the computerized database is that information is so easy to find in comparison to the manual system. If a supplier rings up and asks why they haven’t been paid, you can easily access their account information and check all previous payments and invoices entered for payment, to find the answer.

Automatically generate documents and reports


When it comes to purchasing, your purchase orders can be generated by the software, so you have a record in the system to match against the supplier invoice when you receive it. This system provides for an easy check to ensure you are being billed for, and also paying for, what was originally ordered. Checks can be printed by the accounting software instead of being manually hand written. Finally, reports can be generated at the push of a few buttons (or the click of a mouse!). Manually preparing reports can be time consuming and the process is prone to errors.

For countries that have a VAT / GST tax, it also automatically calculates the tax and generates reports for the end of month or quarter, for payment purposes.

Payroll Processing Benefits


There are benefits when it comes to payroll processing using accounting software. Most payroll processing is done on an exception basis. That means that the payroll for many small businesses are similar from week to week. Therefore, only exceptions or variations to the standard pay need to be entered into the payroll software. If there are no variations, there is very little in the way of processing.

These are just a few of the benefits of using it in a small business.

By: Graeme Wheeler

There are several software applications for small businesses available in the market. Any small business must learn to use these software applications for the success of the business. Software applications can perform a variety of tasks for your business and are very helpful for the smooth operations of any business. Here are some examples of what the software applications can do for your business.

What Kind of Jobs Software Applications Can Do?

Any business today needs a website for competing with other business in the industry because of the evolution of the Internet. Software applications for small businesses can help in the development of professional looking website. In addition, they can also help you in maintaining the websites. There are several tasks need to be performed on the computer on a regular basis. It is possible to get these tasks done automatically with the help of software applications. Some applications are even capable of removing all the tedious paperwork required for keeping the information in an organized way. Some applications can suggest you off the shelf suggestions that are very useful for the smooth operation and growth of the business. In addition, you get the facility of one to one consultation and training.

Database Management:

Most of the businesses gather data from different resources before they reach any big decision. However, when you gather information from several different resources, you face the problem of information coming in different formats. Every individual formats the spreadsheets differently using incompatible units and using different kind of rules for subtotaling and categorizing the data. This makes the job of making summary report very difficult for the person concerned. You can get rid of this problem with the help of well-designed software applications. This kind of applications set some standards for data formatting for all those people who send the information and then write a code to extract the summary report from the different databases using report generation user interface.

Windows Applications:

Windows application development is also effective method of using software applications for the smooth operation of small businesses. A well-designed windows application can simplify the most complex type of task making business operations easier. These applications are capable of customizing according to your requirements and that too at very fast speed. You are only required to input the data and all the job of record keeping is taken care by the software applications. All this information is very useful for the purpose of taxation and warranty claims etc. it also helps you in managing your cash flow in a better way. There is no point in knowing how much your bank balance is if you do not know how much money do you require for different budgetary demands.

By: Alexander Gordon

What business valuation would you place on a distribution management software company with $1.5 million in annual revenues and $500,000 in losses? How about a healthcare software ASP with $300 K in revenues that is breaking even? These companies don’t exactly fit the 5 times EBITDA or the discounted cash flow valuation models.

That is what makes software or technology based companies so much fun to sell. Arriving at a business value is done the old fashion way. You identify the universe of likely buyers, prepare your blind profile and NDA, and contact the president or person in charge of mergers and acquisitions. What you are trying to accomplish is to identify and articulate the strategic rationale for considering this acquisition.

In the example above, our distribution management software company had adapted their software to a new vertical market while also introducing it on Microsoft’s .NET platform and upgrading from green screen to GUI interfaces. They were not getting any traction in the new vertical competing against the two dominant players in that space. They had, however, created a lot of value in their technology. They were a very good acquisition candidate for one of the dominant competitors. They had “leap-frogged” this competitor with a more modern platform. The competitor, through a series of prior acquisitions, was actually supporting six different software platforms for essentially the same capability. They were contemplating a long and expensive system rewrite. They needed to consolidate platforms, but did not have an upgrade path for their installed clients. Their clients were vulnerable to defections.

We approached the president and positioned our client as follows:

1. Purchase our client for a favorable buy versus build outcome.

2. Time to market – We could provide an immediate upgrade path versus eighteen months of development

3. Substantial cost savings – By rationalizing their software platform and reducing the number of supported systems

4. Immediately end customer defections by announcing an actual upgrade path versus years of promises

5. Prevent a more formidable competitor from getting his hands on this technology and causing them some real damage

The good news is it worked and we were able to get our sellers north of $2.5 million. Over a year later it has proven to be a good deal for both buyer and seller.

The healthcare ASP also turned out to be a strategic fit for a much larger healthcare IT firm. This established company had previously delivered their software through a traditional licensing approach where their clients managed their own internal systems. The buyers needed our client’s cutting edge module that completed their suite of products. They intend to use the ASP model as the springboard to launch their entire product suite on the ASP model to complement their licensing approach.

Much of this transaction value was in the form of a well structured earn out. Both buyer and seller feel comfortable that the sales targets will be met and will provide the maximum contractual payment. This will result in a value for the seller of about $2.5 million. The buyer’s customer base of 1400 hospitals are prime candidates to upgrade their current software system (the buyer’s product of course) with this new capability. The seller achieves a 20 times improvement in the sale of their product as part of the large company. The large company increases revenues and uses a portion of that revenue to complete the purchase price obligation. It was accretive from day one.

When it comes to software or technology companies and business valuation, beauty is in the eye of the beholder. If the company can identify the right buyers and if they can be positioned as a strategic fit, traditional valuation metrics may not apply.

By: Dave Kauppi