TIPS FOR BUSINESS PEOPLE Buying a micro

Press, 14 July 1987, Page 29

TIPS FOR BUSINESS PEOPLE Buying a micro

Microcomputers are now more affordable for small and medium-size businesses Technological development has resulted in increased speed and capacity being available to business users, to an extent which was not envisaged a few years ago. Nevertheless, many business owners and managers are hesitant to take the plunge and invest in a computer system to meet their needs, although they may need to update their present record-keeping systems. They are probably aware of instances where business people have acquired computer hardware and software only to get their, fingers burned when it turned out that the system had a number of shortcomings and thus failed to meet the needs of the business concerned. It is estimated that something like 50,000 programs are now available for microcomputers Here are many traps for the unwary, not the least being the risk of purchasing hardware, peripherals or software which may turn out to be incoihpatible. If an advertisement states that a particular package will run on, say, an Apple He, you will need to check further before accepting that assurance. The program may require doublesided disk drives, a particular type of printer, or some other configuration not mentioned in the advertisement. Or, it may need a newer version of your machine’s operating system in order to run. Before a business person sets about shopping for a computer system, it is necessary to clarify the firms’ objectives in doing so. First, consider in what respect the present record-keeping and information systems are not meeting managerial needs. It could be that payroll preparation takes a staff member 10 hours a week, whereas a computer system may be able to do the job in an hour. Perhaps stock control is a real problem. There may be no perpetual stock records from which to ascertain easily what stock is on hand, or to assist in deciding when to re-order and by how much. Perhaps management needs weekly or monthly profit and loss reports. The five applications programs which usually form an accounting system are accounts receivable (debtors), accounts payable (creditors), stock, payroll, and general ledger. Some businesses may need other packages such as bill of materials, job costing, word processing, spreadsheet or database management systems. Some general guidelines which will assist a business person in choosing accounting packages follows: 1. Make your accountant your first port of call. He or she will be very familiar with your present systems, your problems, and information needs. Your accountant may be able to assist you in choosing a computer system, or if not should be able to refer you to a colleague who is a management consultant with expertise in this area. You may feel reluctant to employ a consultant because of the fee that will be payable. However, the cost needs to be weighed against your inclination to spend the time acquiring the knowledge necessary to evaluate alternative systems, as well as the time spent in thorough hands-on testing of each program you wish to put through its paces. A consultant who is skilled in computer systems appraisals will be familiar with many of the

packages and hardware items available, and is equipped to test anything new in the market place. He or she should be independent, whereas the salesperson who approaches you in the computer showroom (who may be competent) will want to sell you the hardware, peripherals and software which he or she is marketing. 2. Consider whether you need an integrated system or a stand alone package. Some systems allow you to enter data once only, which is then used to automatically update more than one record. For instance, a sale of goods may update the accounts receivable file, the stock file and the general ledger.

Accountants are taking a role as independent advisers on computers. TRISH BATCHELOR, a partner in the Christchurch accountancy practice, Hudson, ■Sanderson, and Williams, offers some advice on buying a business microcomputer.

3. How many, how long? This is a standard rule when testing the features of any accounting package. For example, in the debtors ledger you will need to know how many customers the file can accommodate. For a payroll file, consider how often it can be run. 4. The system should be able to do everything your present system does and more. If this is not the case, look at alternative systems. 5. Audit trail/passwords. Some computer software will allow data to be erased from a file, with no evidence available to show that this has been done. This can pose a security risk, since an employee can commit a fraud and remove the evidence of having done so. Some systems offer password protection to prevent unauthorised persons gaining access to certain files or parts of files. 6. Printing possibilities. Printers vary in the options they offer to users. Sometimes the use of the features offered by a printer may depend on the program being run. It should be noted also that in some instances, computer software will not run when the printer is not attached and turned on. Once business management have clarified objectives and needs, it may be decided that an evaluation of available systems will be carried out by the owner, or a staff member having sufficient expertise in the area. If this is the case, the following order of procedure will help: • Evaluate which dealers or salespersons are knowledgeable. • Examine closely the documentation for the programs you are evaluating. • Arrange for a demonstration of the program. • Consider the degree of support which you are likely to get from both the dealer and the vendor in the event of your purchasing the hardware/software being evaluated. Much documentation for programs is very poor. This does not mean that the software you are evaluating is also sub-standard. But poor documentation does make it more

difficult for a first time user to master the requirements of a system. If you look in detail at the software manual which comes with the product, you will learn a great deal about the attributes and limitations of the program as well as the support policies of the vendor. The dealer may allow you to take the documentation away to study, particularly if you agree to allow a credit card voucher to be completed as security. Once you get to the point of arranging a demonstration it is necessary to prepare for it. Make sure that the complete system being demonstrated is the same as that you are considering purchasing. If for instance in the demonstration the dealer uses a RAM disk drive (which may not be apparent to the observer) the program will run much more quickly than it would using floppy disk drives only. Do a check list of questions you wish to ask concerning the program being tested. Take along with you some test data from your business, and ask that it be processed through the system. Some dealers have demonstration disks which can be run for you. You should be prepared to sit at the keyboard and spend time familiarising yourself with the program being tested. Many professionals believe that it takes 10 to 12 hours to test an accounting program thoroughly. Persons experienced in computer systems appraisals will probably run a number of tests to see whether they can “break” the program under consideration. A good program should allow for all sorts of errors and have a means of letting you know on the screen of the error, and a solution. A dealer will be prepared to spend perhaps an hour or a little more demonstrating a program to you. He or she is unlikely to allow you to take the hardware and software off the premises for you to test in your own environment. He may, however, allow you to make use of an area of his premises to do your own extensive “hands on” testing. If you proceed to purchase a computer system, be aware that it will take a great deal more of your own and/or staff time getting it up and running than you had ever thought possible. You may find also that staff have difficulty in adjusting to the changes which will prove necessary. If you are purchasing several accounting programs it makes sense to implement one program at a time. You should run your present system in parallel with the new system for at least two or three months, to ensure all is functioning as expected. A word of warning may be appropriate at this point. If your firm’s present records and procedures leave much to be desired, and the bookkeeping side of your operations has been undisciplined, computerisation will not solve your problems. Finally, a computerised accounting and management information system will not replace your need for an accountant. But since he or she charges out his time on an hourly basis, an improved system, once implemented, can enable your accountant to work faster and accomplish more. There can be a beneficial effect on your accounting fee following the satisfactory implementation of a computerised system.