Accounting Software

If you have been using personal finance software, you know the pros (and cons) of the technology-based checkbook, but if you're still doing your bank reconciliation on the back of the bank statement or feel overwhelmed with keeping track of all your investment schedules, personal finance software may be what you need.

The biggest advantage of using software is the ability to house all of your financial information in one place. This allows you to see how much you have, how much you owe and when you owe it. You can also get a high-level, customized view -- along with bill alerts -- of your complete financial position without having to remember the various usernames and passwords of bank or investment websites that hold financial information for you.

Personal accounting software will store your financial information for as long as you want, without the space and time needed for filing paper statements. Many financial websites have a time limit on how long they'll store data for you. Personal accounting software can 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 customized desktop mini-reports, get tax advice and save documents in one place by scanning them.

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. However, both Quicken and Money have made significant strides to cut down on the length of this process and users say that the software is generally easy to load. Though you can download a lot of information from financial sites, you'll still need to enter some transactions manually. You also need to be diligent in keeping up with entering data, but many users claim the informative charts and graphs are worth the time. They also like that they can do online banking fairly seamlessly.

Finally, though online bill-paying is often free through many banks, as well as credit-card and vendor websites, some versions still charge extra for paying bills through the software. Money has the best deal. You get two years of free MSN Bill Pay when you buy the software. Otherwise, it costs about $10 per month for up to 20 payments with Quicken. However, Quicken works with more than 5,300 online financial institutions, including PayPal. In 2008, Quicken online banking was also available via the iPhone. So, if online bill paying is your sole reason for investing in personal finance software, it's worth factoring in this service when you're choosing software, or doing this through your bank.

In every review that states a clear preference, Quicken's 2008 applications are chosen as the top personal accounting software packages. CNet.com reviewer Jeff Bertolucci says that Quicken is a "well-built money manager easy enough for novices yet powerful enough for veteran number crunchers," although he sees no need to upgrade if you are using last year's version. PC World's Yardena Arar says that Quicken "maintains its edge over Money Plus in one important way: Intuit still lets you download transaction data to Quicken for three years after you buy, while Microsoft forces you to upgrade Money every two years to maintain online service."

Quicken 2008 comes in four PC versions, starting with Quicken Starter (*est. $30) , which has strong, elementary personal-finance management tools for tracking accounts, bills, debt, investments, documenting tax deductions and online bill paying. To download and track your 401(k), IRA and investment account information, along with more advanced portfolio management, savings and tax planning tools, Quicken Deluxe (*est. $60) is a better option. For most users, Quicken Premier (*est. $90) has more than they'll ever need, with great home page displays of cash flow and other financials, document scanning, electronic attachment ability, superior management and planning tools, stronger reports and excellent portfolio-tracking. It also offers the ability to find tax-efficient investments and deductions using Schedule A, B, & D tax reports. Quicken Home & Business (*est. $100) can do all of the above, as well as well as prepare customizable invoices, Schedule C and mileage tracking. It can also monitor accounts receivable, accounts payable and upcoming bills.

Those with more ambitious goals for their financial software should keep in mind that Quicken is designed for the individual user. For small businesses, accounting experts recommend using entry-level professional accounting packages because of their ability to handle inventory, payroll and business financial statements, as well as support remote access to allow the company's accountant to make journal entries or create sales and expense forecasts. There are several accounting and bookkeeping programs out there that are designed specifically for small business use, including QuickBooks Premier (*est. $350) , Peachtree Premium Accounting (*est. $500) and MYOB Premier Accounting (*est. $300) .

Overall, Quicken 2008 personal accounting software not only adds features that reviewers like, but existing features have been improved, as well. Most reviewers think the best new feature is the Quicken My Savings Plan feature, which lets you chart your budget allocations so that you can hit savings targets. The tool even rolls over extra savings into next month's savings target. (Note that this feature is not available in Quicken Starter.)There's also a new bill alert for your desktop, although it only works in Windows Vista, that reminds you of overdue payments. Experts say using Quicken to categorize expenses is even easier this year because you can tag expenses by grouping them together.

According to reviews, another huge improvement is that Quicken 2008 is easier to navigate because you can now move between sections on the home page, and online account access is now available for more than 5,300 financial institutions, including PayPal. Quicken will find, set up and download all transactions with a user name and password for one financial institution. Backup gives you the option of using removable media or the Quicken Online Backup service (the pricing varies depending on the amount of data you need to store, starting at *est. $10 per year for 100 MB of storage).

Most experts agree, though, that if you're already using Quicken 2007, there's no reason to upgrade to the 2008 version. They also note that Intuit's later patches for Quicken 2007 addressed a tendency toward frequent crashes, and reports indicate that Quicken 2008 is a relatively stable program.

Note that Quicken 2008 for the Mac has yet to be released. According to Intuit, a 2008 version is still planned, but has been delayed in part because of the launch of the latest Mac operating system (Leopard). In the meantime, Quicken Mac 2007 (*est. $60) remains the current version.

Microsoft Money also offers several personal finance versions. Money Essentials (*est. $20) includes basic features to balance your checkbook, pay bills online, track your spending, create charts and graphs and export data to tax preparation software. While this is enough for users looking to upgrade from the back of their checkbook ledgers, reviewers say that Quicken Starter beats Money Essentials hands down. The Money Deluxe edition (*est. $30) is the better way to go as it includes investment and financial planning tools, a savings and spending budget, an enhanced tax estimator, spending tracker for budget groups and new tools for creating snapshots of bills, cash flow and spending. You can now also attach account transactions to images of your checks. Money Premium (*est. $50) has all of the above with the addition of investment strategy planning, retirement planning, capital gain tracking and schedules. Finally, Money Home & Business (*est. $60) has the ability to create invoices, manage accounts receivable and payable, track customer information and handle payroll online. There is no Mac-compatible version of Money.

Most experts feel that, with the exception of the new Insight tool for creating snapshots of your finances on your desktop and other minor enhancements, current users of Money software needn't rush to upgrade this year. If micro-managing your finances is vital to you, the new Insight feature is worth the upgrade, however. Other nods from experts include one-step account updates, spending alerts, free phone support and the ability to attach images of checks to account transactions. Portfolio management tools and Money's long-term planner also get high praise. However, Money still requires Windows Live ID for most transactions.

Because most people will complain much more loudly when something goes wrong than offer praise when all is working as it should be, it's only fair to mention that there are a lot of owner complaints about both Quicken 2008 and Money 2008 again this year. As with almost any new software, there are lots of bugs to work out and users are in the trenches. Most of the reviews we found are from already experienced users who were happier with prior versions, and some claim they are switching back until the bugs are worked out or until their older program stops being supported by the companies (another major complaint). Some problems with Quicken 2008 are bothersome downloads, difficulty transferring data and reporting errors. Some also cite too many ads and poor customer service (although some also liked new features like tagging, as well). Existing Microsoft Money users (almost all new users are happy) complain that you have to upgrade every two years or face being booted off the online services, and they also feel that there are still bugs in the software. Some Money 2008 and Quicken 2008 users also say they are having a hard time finding any noticeable improvements.

Despite giving Quicken the nod this year, experts and users alike confirm that the two programs are still quite similar and offer only minor upgrades. Often which application you prefer comes down to which one you are familiar with. Both offer free trials or demos on their websites, so if you're undecided, try both and see which one is the best fit for you.

Other accounting software options

In some reviews, upstarts in the financial software market -- including MechCAD's Acemoney (*est. $30) and Reilly Technologies' Moneydance (*est. $30) -- are said to offer simpler, cheaper alternatives to the main players. Money Magazine calls AceMoney a "solid, basic personal-finance package" that tracks multiple accounts and gives you free upgrades for life. Money magazine also calls another software program, Moneydance, "the only passable alternative to Quicken" for Mac users. Macworld reviewers are also fans of Moneydance, calling it a "very good personal finance application with some features that rival Quicken." You can track investments, balance your checkbook, manage budgets and print a wide range of reports. It can be used on a variety of operating platforms including Linux, Mac and Windows.

Moneydance offers free online banking and its software allows you to connect to hundreds of financial institutions. There are also a slew of free add-ons like credit card payment calculators. Despite these deals and Moneydance's nifty features, Macworld does caution readers that the software data entry features don't measure up to Quicken, but it's still a worthwhile alternative for those who want to do straightforward budget planning. Moneydance offers a free trial and experts say that it is worth checking into.

Mint.com is another interesting option. Personal finance is "another example of something you can now do online," says The Wall Street Journal's Lee Gomes. Mint.com offers free online tool sets for balancing your checkbook, tracking monthly spending and paying bills securely on the web. The site also sends you alerts via e-mail or text messaging if you are over budget in a spending category or even if a large deposit clears. New York Times reviewer Michelle Slatalla used Mint.com and was very pleased with the online software, saying that she could now micromanage her family's money.

Mint.com is still in beta testing and reviewers say some features don't yet work smoothly, In his blog, Robert Love says some functions were glitchy and Mint.com doesn't yet support info collected from non-cash accounts (such as brokerage accounts, IRAs, and the like). A review at Lifehacker.com also notes some features that aren't quite there yet, but the idea and basic functionality is excellent. The big concern for most people is whether or not putting all your financial information online in one place is secure; many reviewers compliment Mint.com's excellent section on privacy and security. At the same timer, others question whether any website is truly hacker-safe, given the past problems at major financial institutions.

Mint.com is free right now. It's not clear whether the final product will require a subscription. Early reviews say that Mint.com holds a lot of promise as an alternative to desktop software.

Important Features: Accounting software

Every person's financial plan is different, so make sure the software you choose gives you what you need. Experts agree that these few items are essential in a personal finance software package:

• Downloadable bank and investment data. Check for compatibility with your financial institution. Most large banks can transfer your account information to Money and/or Quicken, but some smaller banks aren't there yet.

• Create graphs and/or reports. If your needs don't go much beyond balancing your checkbook, this feature may not mean much to you. However, if you'd like to be able to chart your expenses and graphically see what percentage you spend on housing, insurance, etc., then charting features are nice.

• Budget creation. Even basic software should allow you to work out a budget by tracking expenses and income using your financial information.

• Check system requirements. Financial software doesn't hog much of your system resources, but you should check to be sure that your computer can handle the installation. See our comparison chart for system requirements.

Our Consensus Report shows how many times products are top-ranked by reviewers included in our
All The Reviews Reviewed chart.

# of Picks	Model(with retailer links)	Details from Amazon.com
5	Intuit Quicken 2008 (*est. $30 to $100)	details
1	Microsoft Money 2008 (*est. $20 to $85)	details

As you can see, Quicken beats Money in 2008, but in almost every review we found, the margin of victory is slim.

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