financial management

Microsoft Money 2003 Deluxe & Business

Rating:

By Joel Shore

October 2, 2002

Last year, the crew here at Reference Guide said the 2002 version of Microsoft Money was about as good as this type of software could get (read our review). Well, the folks at Microsoft must have agreed with us, because the new 2003 edition leaves many features and the overall look and feel alone, opting instead to add value by bundling a treasure trove of outside financial services. Overall, Money 2003 is still tops, nudging out Quicken by a hair. Money’s elegant screen design and silky smooth navigation are more polished. Quicken users need not feel compelled to switch; both products are excellent.

This year, we decided to review the Deluxe & Business edition of Microsoft Money. This is the best choice if you run a small business. But no problem, this edition includes everything in the Basic and Deluxe editions. Here’s the rundown on the entire Money 2003 product line-up:

• Standard: Financial management with checkbook, online bill payment, account reconciliation, and investment tracking

• Deluxe: Adds free financial services, advanced investment management with capital gains tracking and loss carryover, advanced planning tools for retirement and home purchase,

• Deluxe & Business: Adds payroll management, invoice creation, accounts receivables, vendor and inventory management, and Schedule C itemization

• Suite: Excludes business features but adds federal and tax-return preparation and filing, legal documents, and living will preparation

What’s new? With most of the program’s changes consisting of fine-tuning from last year’s landmark version,

click to view full-size Money’s new task-based view provides a comprehensive look at all your financial information grouped on a single screen.

Microsoft revved up the services angle. All versions except Basic offer premium service offers valued at more than $160. These services include one year of free online bill payments, a one-time free online tax preparation and filing from H&R Block, one free credit report from Equifax with available ongoing monitoring, and one free consultation with an American Express financial advisor.

In addition, Money taps into Microsoft’s personal-finance Web site, MSN Money, to provide you with up-to-the-second access to world-class financial news, information, tools, and services. The result is a product that begins at your PC and seamlessly carries over to the Internet.

Here’s a rundown of some new features that we liked:

• Task-based view. This snapshot view groups and provides a comprehensive look at all your financial information on a single screen.
• Bill estimator. Money gives you an improved cash-flow forecast, estimating upcoming bills based on previous recurring payments.
• Equity and index options. A new “option wizard” tool lets you create and track your equity and index options. You can even let yourself be guided through the process of exercising existing options.
• Historical charts. How have your stocks performed over the long haul? Through its online connection to MSN Money, you can view historical charts, though you might want to bring a towel to cry into.
• Integration with CNBC. Through its close relationship with NBC, Microsoft (they are partners in MSNBC) is now leveraging content from the CNBC financial cable TV network. In Money 2003, you can check out stock picks from CNBC’s experts, get alerts of upcoming guests, view a calendar of upcoming corporate earning announcements, and view key developments for companies of your choice.
• Capital Gains Estimator. You can create and save scenarios to help determine the best approach for selling your investments. The new Loss Carryover feature even helps you develop strategies to further reduce capital gains taxes. And we’re all for minimizing taxes!

	click to view full-size Keeping track of your capital gains (and losses) just got a whole lot easier. With this detailed planning screen, you can map out varying scenarios generate several reports.

One new feature, automatic balancing, wasn’t a hit with us. Good in theory, this features aims to keep your Money account registers in perfect lock-step with those of your financial institution. Well, it didn’t, at least not for any of our existing American Express credit cards. It’s probably most useful when it can start along with a new account.

Another feature, Money’s Portfolio Manager, is more customizable than ever. With it you can create and save an unlimited number of personalized portfolio views. Furthermore, the Portfolio Review features StockScouter ratings, objective, evaluations that appraise a stock’s performance potential. (No guarantees, though.) Finally, the Portfolio Highlights feature provides a quick summary of your overall portfolio holdings and performance.

Small-Business Finances. The Deluxe & Business edition adds a wealth of features for small businesses. Invoice creation, separate tracking of Schedule C expenses and income, and online alliances are all present. New in the 2003 version are several services:

• Web-based payroll. Through an alliance with PayCycle, Money 2003 Deluxe & Business introduces integrated Web-based payroll services for as low as $8.25 per month. If you’re a small-business owner, you can process payroll any time, any place. The services include e-mail reminders, instant paychecks and expert payroll support.
• Checks and business documents. With services from Deluxe Business Services you can order checks, forms, business cards, stationery and accessories as well as fill out federal tax forms.
• Cash Flow Review. Do you know the exact cash position of your small business? Yeah the morons running Enron and Global Crossing claim they didn’t and look where they are now. With this feature you can monitor spending and plan for short-term business purchases.

Set-up interview. When you install Money, the program goes through a lengthy interview process to set up your accounts and investments, and to learn about your financial habits. While you can set up accounts at any time, the interview is good in that it forces you to think about your overall financial picture. The more detail you can provide, the better Money is at making suggestions.

Annual upgrade? Is is really necessary to get a new version of Money (or Quicken) every year? If you use the program primarily for managing your checking account, no. But some aspects of financial management do change yearly, primarily because Congress makes changes to the tax code every year. So, if you use the tax-planning, investment, or payroll features, and annual upgrade is in your best interest. Money is not outrageously expensive and, if you use it to manage your investments, may even be a deductible expense.

Backup still a problem. Your Microsoft Money data file may be your single most important possession. Insurance can replace your home, but not your financial history. You’d better have an offsite copy if your house burns down. Unfortunately, Money does a pretty poor job of backing up this most sensitive and crucial information.

Though it has a backup feature, Money saves its backup file to the very same file name every time (My Money Backup.mbf), overwriting the previous backup. I wish that Money would use a different file name (perhaps including the date) every time it makes a backup file. That way, you can have a whole string of backups, allowing you to roll back to any point in time, if it should ever become necessary. It’s an audit trail of your financial life, and it could be vitally important in the event of a catastrophe or invitation to visit the local IRS office.

For example, when I use Money today, I want a backup file created automatically with the file name “My Money Backup and saved to my hard drive, a location on my home network, or to a secure destination somewhere on the Internet. On I'll want that file to be automatically named “My Money Backup and so on. What I have to do now is to manually rename that backup file each time I use Money. Once a week, I copy my files to a CD and store that in the safe deposit box at my bank. Geez, there’s gotta be a better way!

Without a doubt, Money 2003 represents, in large part, fine tuning of the features first seen in Money 2002. But with its bundled free services and enhancements in managing investments, Money 2003 is irresistible. It took Microsoft years to become a serious contender in personal financial-management software, but for now, Money 2003 remains king of the hill.<