Accounting Software Review

Quicken is alone at the top

The biggest advantage of using accounting software to manage your personal finances is the ability to house all of your information in one place. This allows you to see how much you have, how much you owe and even when you owe it. You can also get a customized view of your complete financial position without having to log in separately to all the bank and investment websites that hold financial information for you. (If you're interested in managing your money online, read our report on personal finance sites, which covers free services like Mint.com, Buxfer.com and Wesabe.com.)

Another advantage is that personal accounting software will store your financial information for as long as you want, so you don't have to file paper statements. It can thus serve as long-term storage for easy tracking of spending by category. You can create budgets and do long-term goal planning, as well as create custom mini-reports, get tax advice and save scanned documents.

However, the software doesn't do everything for you. You still have to set it up, which can take a few minutes to a few hours, depending on the complexity of your financial information and how detailed you want to get. Though you can download a lot of information from financial sites, you'll still need to enter some transactions manually.

For years, the personal accounting software market was dominated by Quicken and Microsoft Money. But Microsoft has exited the accounting software realm, discontinuing sales in June 2009. For those who own the software, Microsoft says online services for Money Plus Essentials will be supported for one year after initial activation or until Jan. 31, 2011, whichever comes first; Money Plus Deluxe, Premium, and Home and Business will be supported for two years after initial activation or until Jan. 31, 2011, whichever comes first. After that (or if you have an earlier version of Microsoft Money), you can continue to use the software, but you will not get automatic updates, and online features will no longer be available.

Microsoft's decision to discontinue its desktop accounting software reflects the increasing popularity of cloud computing -- storing data online -- evidenced by the proliferation of free personal finance websites like Mint.com. Recognizing this, Quicken acquired Mint.com last year, and is discontinuing its competing free service, Quicken Online.

See our report on personal finance sites for more about Mint.com and other free online services. In addition, many banks and brokerages offer financial management tools on their websites. Still, people who don't feel comfortable providing the user IDs and passwords for all their accounts to a third party should continue to buy desktop software.

With this in mind, Intuit has released Quicken 2010 as it seeks to maintain its huge share of the desktop software market. A long-awaited upgrade of Quicken Essentials for Mac was released in February, after nearly three years without an update. Quicken offers online support for three years after you purchase the software, so if you have a pre-2007 version of Quicken you will lose online support this year. Although the task of upgrading to the latest version can be arduous, it's worthwhile, experts say.

Popular competitors Moneydance and You Need A Budget (YNAB) 3 have also updated their software and offer new versions, while updates of open-source freeware like GnuCash and AceMoney Lite are released regularly. Another development is the increasing use of mobile devices for on-the-go money management; a wide range of mobile personal finance apps is now available, some of which can sync with Quicken or other desktop software. SplashMoney, one of the desktop software programs covered here, has apps for every mobile device from Palm PDAs to BlackBerrys to iPhones. Quicken has discontinued its mobile app, Pocket Quicken, and its iPhone app works only with Quicken Online, which is being phased out. YNAB has an iPhone app in the works, but hasn't yet announced a release date. AceMoney offers a Pocket PC version of its software that can be synced with the desktop version.

We did not find many comparative reviews of the latest versions of personal accounting software, most of which were released fairly recently. Only TopTenReviews.com and FinanceSoftwareStore.com have thorough and credible reviews that compare Quicken 2010, Moneydance 2010 and less well-known financial software packages. User reviews at Amazon.com provide a glimpse at the pros and cons of Quicken 2010, including upgrade trials and tribulations, from a firsthand perspective. They also rate alternative financial accounting software You Need A Budget. ConsumerReports.org compares (but does not rate) three desktop software packages, but the report was written before Microsoft announced that it was discontinuing Money Plus and before Quicken 2010 was released. About.com, PC World and CNET offer single-product reviews, and About.com offers several overviews of the software available for specific segments of the market, such as those who use Macs. A few other sites, including PersonalFinanceReviews.com, FiscalGeek.com and GetRichSlowly.com, offer reviews and user comments that are worth a look.