SBA * Consulting LTD

In our last review, we looked at what we considered a mid-range PC based accounting system. This time, we're going to introduce you to a high-end PC based accounting solution. Those VARs looking for a product to supplement their portfolio with a broad reaching accounting system should take special note of this product.

Currently in release 1.2 in the US and 1.3 in Europe, Navision Financials was developed from a character based product (called just plain Navision, formerly known as Avista in the US) now entering its 5th version. Navision Financials is a unique product. From its visual design concept to its extremely accurate inventory valuation system, Navision lets the VAR add value to the sale.

The Installation

Navision Financials is extremely easy to install, in both its client or server mode. The CD-ROM has automated all the features of loading the Server portion (when done on an NT system it runs as an NT Service). Unfortunately, the wizard left out one small piece of information, where to find the database. However, your VAR is the one who would do the install, and they know all the tricks (you have to install the client on the server first). The only additional information is what you want to call your NT Service, and where the file locations are.

Loading the client was as easy as the server. A couple of clicks, telling the wizard whether you just wanted the client or the client with the database and you were loaded. Program icons were created, and the correct executable is chosen, based on your operating system.

Next you have to configure the client. Depending on which Ethernet communication protocol you use, will determine what the steps are necessary. For NetBEUI, you have to make sure your network is set-up correctly. Navision does not recommend NetBEUI. For TCP/IP, you need to make a generic host file and update your services file. With these files in place, you just copy them to the appropriate directory on your workstation, tell Navision that its using TCP and you just connect to the Navision Service name.

It's that simple. You don't even have to log into the Navision NT Server. Just be on a workstation that has a route table entry for the Navision Server. "There are several installations I know of that are running Navision on a WAN", says Russ Murray, President of Watts Up, Inc. of Ossining, New York, a Navision Solutions Center. "They are using a Cytrix Server and piping the screen updates over the WAN. This appears to be the best WAN solution, worldwide for Navision."

Product Overview

Navision Financials is a graphical based client-server accounting system. It will run stand-a-lone on a Windows 3.1x, Windows 95 or Windows NT system. In fact, each system looks and acts the same. This lets you use a heterogeneous cross platform environment during an implementation. In its Client-Server implementation, the server will run on Windows 95, Windows NT, IBM AIX UNIX and OS/2.

The database is built around a proprietary system called C/Side. According to Murray, "One of the major selling points of Navision is that it has a 'version based database'. It creates a duplicate copy of all data being changed. Should the client or server go down while a change is underway, Navision will roll back the transaction."

Another unique attribute of this database is its ability to be spread over a maximum of 16 hard drives. According to Murray, this increases speed and responsiveness of the system when the databases start to grow very large. The downside is that Navision doesn't work well under a RAID 5 disk array. So, if you loose a disk, you have to reinstall the entire database from your disaster recovery system.

General Ledger

The General Ledger is at the center of Accounting. The General Ledger is the repository for all the information that is created during an accounting cycle. Navision's accounting system contains an extremely powerful General Ledger. Built around a spreadsheet backdrop, the General Ledger actually becomes a live, up-to-date Trial Balance, which can be made to simulate a Balance Sheet and Income Statement.

"Navision is an elite product in its class. Its drill down and filtering capabilities are extraordinary. You are able to drill down to the source of practically every number you see in the product and filter the information which is displayed on the screen based on any field. What a terrific tool for a controller in analyzing financial data." This from Open Systems VAR Trish Malbon.

Creating accounts takes seconds, and with a little more effort, you can change the parameters of any account. In Navision, you can change the key index number (account number, vendor number, item number, etc) at a drop of the hat. This feature, as powerful as it is, can also wreak havoc if proper accounting procedures are not employed.

Most accounting systems use the static approach to departmental and project accounting. These static systems require you to maintain a G/L account for each department and each project. Eventually, you end up with a Chart of Accounts that is unwieldy, with multiple accounts for each root account number. Navision has a unique approach.

Malbon said,"I particularly like the way the General Ledger trial balance inquiry summarizes accounts much like you would see on a financial statement. For example, the current asset accounts are listed with their respective balances, then the total of the current assets is listed in bold. Then the fixed asset accounts are listed with their respective balances followed by the total of the fixed assets in bold, etc. "

Murray explained Navision's approach this way, "In Navision, you create just one G/L account number. You then create in a different table, each department you wish to account for. Then, whenever you book a transaction, you just match up the department to the G/L account number, and you're set. The same holds true for Projects. To retrieve information out of your General Ledger, you use Navision's filtering capability."

This filtering capability makes Navision's General Ledger such a strong selling point. You can, by applying a myriad of different filters (it uses simple and Boolean operators) to find the exact information you require. Along with the filtering system, the ability to 'drill down' and find all the information that created a particular transaction makes auditing much a breeze (if one can say any audit is simple). With these powerful filters, we could find all transactions made by the accounts payable purchasing module and track down an errant entry.

From one transaction recorded in a Sales Account, we were able to find the counter balanced ledger entry, the actual invoice, the entry in the customer account and the inventory entry. From any one of the entries, we could have drilled down once again, to find any additional entries or gone full circle and found our original entry.

Inventory

As powerful and as developed a General Ledger, the Inventory system leaves something to be desired. Functionality is not its current strong suit. While all the building blocks are here, an inventory intensive company would find Navision woefully inadequate. Murray told us that "…sometime in the second half of 1998, a new release of Navision Financials would have a much-improved Inventory functionality…."

Navision's implementation of drilling down (data mining) function and by their use of data filtering has created a system that provides an extremely accurate inventory valuation. So unique is their valuation system, that it is quite confusing and unsettling to Accountants at first glance. Regardless of the valuation methodology you choose, (i.e., FIFO, LIFO, and Average) Navision Financials will track every sale from every purchased bucket and then adjust (a manual function) the cost to match exactly what was sold.

Navision uses some interesting accounts and accounting in which to do this, but the Inventory Adjustment account pique our interest. This account, which is normally a contra-asset account, is found in the Cost of Goods Sold section. Its function is to offset the Purchases account so Cost of Goods Sold provides an accurate picture without the need to calculate an ending Inventory.

It takes several trial accounting cycle's (inventory purchase and inventory sale) until you get convinced that the system works, but once you do, you never have to worry again. Other functionality that is currently not in the shipping product, such as, Lot's, auto generation of Lot and Serial numbers, etc can be purchased by the VAR for re-sale from the large network of Navision Solution Center's. Some of the greatest add-ons are actually FREE!

Backend

"Navision Financials is marketed as a mid-tier accounting package", according to Beth Ubele of Navision US. "The mid-tier is the $10 - $250 million dollar company. With a typical installation consisting of between 15 to 20 users." Ubele notes that "There are several installations currently with over 40 users." Another feature of the product according to Ubele is that "all VAR's have complete access to the source code, as well as the client, when they purchase the design tools."

Navision uses a novel approach to pricing and sales of their product. They are the first of a new breed of accounting software manufacturer that price their software based on sub-units (what Navision calls a granule) instead of Modules. It is Navision's belief that you only want those pieces of the software you are going to use, rather than the entire module.

In addition, Navision sells the software based on a Company, User and Database count. Need to run two companies, then you buy two companies. Need seven users, then buy just seven users (they don't have 5 packs or 10 packs). By selling use of the system in this way, the customer can budget the use of the system, instead of investing in the system.

As previously mentioned Navision's use of its proprietary database and the C/Side tools that are provided make creating customized installations easy and cost effective. In fact, many of the customizations can be done by the client, such as screen changes and simple reports. Customization requiring programming skills can be created by the VAR and just dropped into the customer's system without bringing down the accounting system.

And finally, Malbon commented on how "Modifying forms is straight forward and easy to do.
The product is designed such that it is easy to access any information which you are looking for on the screen making it unnecessary to print reports unless a hard copy of the information is needed."

Product Specifications
Navision Financials V1.2
Navision Software US, Inc.
500 Pinnacle Court, Suite 510
Norcross, GA 30071
Tel: 800-552-8478
Fax: 770-798-8305
http://www-navision-usa.com
Price: Varies depending on Granule, but between $150 and $500 each.

VAR Program
Discounts on software are 48%. Another 2% from list goes into a co-op marketing program. There is only one class of VAR, with all VAR's receiving the preceding discounts. All training is provided for free in Atlanta, however there is a charge for a business development seminar which is done by an outsource vendor, which is required attendance. Other fees are 15% commission on all Navision related consulting services in lieu of a yearly VAR fee. This fee provides the VAR with the marketing support, unlimited technical support, pre & post sales support (including Navision staff member's flying to a customers site to help close a sale), trade shows, etc.Navision does not give territory exclusives, but tries not to overwhelm a geographical area. Navision is going to limit the number of VAR's to approximately 300 in the US.

Helped with the review:

Trish Malbon is the vice president of The Connecticut Computer Group, Inc. located in Milford, CT. CCG is a full service computer firm specializing in financial application consulting, MS Access programming, sales automation and systems integration. It is a value added reseller of Traverse Accounting Software for Windows which is written in MS Access and Telemagic, a customizable sales automation product.