The first time I met with my accountant, I showed him some printouts of my Microsoft Money account setup. He shuffled a little uneasily as he took the documents, obviously with some degree of distaste. Later in the meeting, I asked him for the main bit of advice he’d give me as I got my little consultancy going.

“Get yourself some real accounting software,” he barked.

I’ve found that most financial professionals share my accountant’s disdain for Money as a business tool, despite Microsoft’s ongoing efforts to mold its personal financial software to business applications. I imagine that’s because there’s no doubt that Microsoft Money 2003 Deluxe & Business is still an adaptation of a consumer-targeted product; in fact, more advanced business functions are offered through partnerships with other vendors, a practice that seems a little odd coming from monolithic Microsoft.

Still, I keep on plugging away with Money for my one-person shop. I’ve found that it more-or-less meets my relatively simple needs for invoicing and expense tracking. The main need Money meets for my business is that it’s cheap—the 2003 version of the business edition is retailing for about $90, compared to the $200 or so that you’ll have to shell out for the basic version of industry standard (and my accountant’s favorite), Intuit QuickBooks.

Microsoft ran a fairly aggressive “switch from QuickBooks” campaign with the 2002 version of Money Deluxe & Business, but it seems to have dropped the initiative for 2003, which makes sense to me. If you’ve already adopted QuickBooks or a comparably powerful (and priced) product, Money really doesn’t offer any compelling bells and whistles to get you to switch. Your own decision will boil down to how much power you need, and how much you’re willing to pay for it.

After a quick run-through of Money 2003 Deluxe & Business, I’ve decided to stick with Microsoft as my accounting package vendor for at least another year. There are no remarkable new features to report, although a new Business Tasks list on the program’s home page will make it easier to access the four or five features I use on a regular basis. And some of the nagging little shortcomings that inherently come with a hybrid of products are still there.

Money’s greatest shortcoming
What really drives my accountant nuts is the fact that Money doesn’t force you to double-enter vales on transactions to create duplicate records for comparison. Basically, it’s a way of checking for typos—a misplaced decimal can wreak havoc on a client’s balance sheet, after all. Duplicate booking is a basic accounting practice, and if your business deals with hundreds of accounts payable transactions a month, you should stop reading right now and go buy a copy of QuickBooks.

Fortunately (or unfortunately, depending on how you look at it), my business and many other consultancies have only a handful of clients and monthly transactions. I’m perfectly comfortable entering each of my transactions once; I always take a quick glance at my account balance sheets to check for big anomalies I may have created during the session. However, Money’s “ease-of-use” concession to the consumer market just doesn’t fly with most folks who are serious about accounting, and for good reason.

Getting to know Money
Money is laid out to what Microsoft considers to be user-friendly specs, which many consumers find accommodating but which tend to drive more technical folks to distraction. At launch, you’ll run through what amounts to an enormous setup wizard that collects information about the accounts you want to manage and your own personal financial goals. Brace yourself—Money talks to you using assuring human voices as you run through the setup routine and every time you use a new feature within the program, unless you turn off audio help. Like I said, distraction.

Figure A
Money’s home page is loaded with consumer-centric features.

After the initial setup, you’ll be presented with a customizable program home page, like the one shown in Figure A. The layout of this page is really the best indication of how Money thinks of your finances. You have the option of removing the various menus that Microsoft has elected to populate this page with, but even in the Business profile, which I’ve selected in Figure A, the left-hand side of the page is chock-full of drivers to online services at Microsoft’s own bCentral Web site and ads for “featured” business partners.

After closing out some of the more useless promotional menus, you’ll probably be left with a list of your accounts and what I find to be the most useful addition to Money 2003 Deluxe & Business, the Business Task list. From the list, you can access pretty much the full range of the program’s business features, including:

  • Creating an invoice.
  • Recording payments for invoices.
  • Preparing a bid. (This is essentially an invoice that Money recognizes should not be added to its accounts receivable ledgers.)
  • Printing customer statements.
  • Transferring money between accounts. (I “pay” myself by transferring funds from my business’s receivables account to my personal cash flow account.)
  • Tracking the time you spend on a project.
  • Paying bills.

This new Business Task list will be a real time-saver for me, since I rely heavily on Money’s time-tracking features, which were buried several clicks deep in the 2002 edition of the software.

All in all, Money’s features are useful and easy to learn. Different reports hinge on key pieces of data, such as customer name or a project that you’ve defined as a primary key in your Money file. In fact, the Projects List, shown in Figure B, is one of the handier additions to the 2003 release.

Figure B
The Projects List is a handy addition to the2003 version.

From any account that you’ve created, you can spend, deposit, or transfer funds. I’ve created one Accounts Receivable-type account (again, a wizard interface will walk you through this) and a personal checking account. The Accounts Receivable account tallies the invoices you create and adds payments (either partial or complete) to the balance for that account.

The other most useful feature I’ve found in Money 2003 Deluxe & Business is the Schedule C report, which maps business expense and revenue categories to a tax form report you can export in the Tax Exchange Format for use with other programs, including TurboTax. (The 2003 release of Money also has built-in integration with a free version of the H & R Block online tax filing service.)

Using a walk-though questionnaire, you can create your business tax form in just a few seconds. The only catch is that you have to be careful to maintain and manage your expense and revenue categories; Money comes loaded with some fairly safe assumptions, but if you plan to create more specific categories—say, VB development and documentation wage items—for your own internal reporting, be sure to map those categories to the appropriate tax line in the Schedule C organizer, shown in Figure C.

Figure C
With Money’s Schedule C features, you can map custom expense categories to your business’s tax reports.

Money also comes preloaded with a fleet of reports, such as profit-loss and cash flow, that you can run against your accounts at any time. And if you like to have all your financial data at your fingertips (which is really the whole design idea behind Money), you can whip up a nice custom home page that also tracks your investments, debts, and personal accounts.

My pet peeves
As you can see, Money offers a lot of features that cover almost any simple business need. Most of my troubles with Money are basically minor.

Sending electronic invoices is rough, at best
While Money offers several templates for creating attractive invoices, you can’t send such invoices via e-mail; your only options are text messages or text attachments. When I started using Money, I was so taken aback by this shortcoming that I called Microsoft support, thinking that I was just missing something. I was told that, in fact, the ability to even send electronic invoices at all was a relatively new addition to the program. I was surprised again to find this issue not addressed in the 2003 release of Money, particularly since Microsoft has added a new Web-based resource for invoice design ideas.

You can’t attach details to a specific time item
Time items are defined in terms of the service you’re providing, and at that categorical level you can attach a description and a default rate to the service in question. But you can’t attach a unique detail statement to a specific time line item without creating a whole new service category, which is cumbersome and not a particularly good way to keep clear records.

For example, let’s say you administer an Exchange server for a small business. You can create an “Exchange Administration” service with a $75 hourly rate, but you can’t add helpful little notes like “restoring from backup” for each time item on the invoice. Customers tend to like that level of detail.

It’s just so holistic
Money, as a consumer product, is designed to look at all your finances as a whole, and then spit magic numbers at you to tell you whether you’re winning or losing. If you like that approach to managing your finances, great; I prefer more segregation between my personal finances and my business, so I end up making little placeholder accounts for stuff like services I provide in barter.

It’s riddled with partners
Most of the new features Microsoft is touting for the 2003 version of Money come from partners—financial advice from American Express, a credit report from EquiFax, bill pay through MSN, and new payroll services from PayCycle, which even get their own main navigation button. But you can get all these services from your bank or the partners themselves for a reasonable fee (the PayCycle payroll service is on a fee basis for Money customers). I can’t see these features as much more than an upsell, unless the convenience of seeing all this information through a single lens is important to you. You even get pinged to sign up for “special offers.”

At any rate, if you don’t have an always-on Internet connection, you might as well go ahead and dial up before you start running Money—it’s going to ask you to visit some Web site at virtually every corner. And you can’t avoid the image of the MSN butterfly.

Useful, but not remarkable
Despite my complaints, I’m going to keep using Money 2003 Deluxe & Business as my accounting software. Why? Because it’s reasonably affordable and offers enough functionality to distinguish itself from the free/shareware tools out there. Plus, my accounting needs as a one-person shop are minimal; I’ve never found a math error in Money, and that’s good enough for me.

But for more serious accounting needs, Money still probably falls a little short. For hard-core users, QuickBooks is still in that rare club, with Adobe Photoshop, of programs that don’t need to worry about their Microsoft counterparts.