When Microsoft first stepped into the small-business accounting ring, it took a beating at the hands of nimbler competitors. But three years ago, the software heavyweight put on the gloves again. By last year, it had a product with a fluid Microsoft Outlook style, a decent jab from powerful integration with eBay, PayPal, Equifax, and Outlook with Business Contact Manager, and a good follow-up supplied by multicurrency capabilities and accountant access features. Microsoft Office Accounting Professional 2008 hasn't piled as much new-feature heft onto its previous frame as seasoned bruisers Peachtree by Sage Complete Accounting 2009 and QuickBooks Accounting Pro Edition 2009, but pluses like scheduled documents, the ability to convert sales orders into purchase orders, and additional reports help make Microsoft a respectable contender in this category.

The setup takes you through the briefest of interviews, asking such basic questions as what your company type is. I was a bit surprised by the dearth of queries, given that Microsoft is so skilled with wizards. After the New York–minute Q&A, the application's quick-start guide pops up and displays links to commonly executed tasks like receiving payments and running payroll. I'd make my first stop Set Company Preferences, where you can establish defaults that will be used throughout the program. These include interest rates, system accounts, and whether to use jobs (track the minutia involved in multistep projects) and foreign currencies. That's some good direction, but QuickBooks and Peachtree both offer an approach to setup that is more thorough and automated.

When you're running Office Accounting on a day-to-day basis, you'll find it easy to use, because the interface looks and feels so much like a Microsoft Office screen. For each program area—such as Customers, Banking, and Online Sales—a left-hand vertical pane displays navigation bars. Click on one and the tasks and databases related to that theme appear in lists above, and in a graphical flow chart in the middle of the screen. Additional tasks and a Find tool lie below. All of the programs I reviewed have excellent interfaces, but this year I prefer that of Office Accounting.

Like many of these programs, Office Accounting contains a dashboard—a control panel of sorts that displays the information a manager needs to see every day. Click on the Company navigation tab and the screen displays information like reminders (such as overdue invoices and back orders), a cash-flow forecasting graph, vendors to pay today, and overdue-customer tools. This is a great time-saving tool that can also save you money by helping you stay on top of your finances I like Office Accounting's tool better than QuickBooks' because it displays more information and options for viewing data, including an insightful cash flow forecast graph.

I also like the Resource Center in Office Accounting better than the assistance offerings of the competitors. The center has links to articles from the Help and How-to section (though the content seems related more to the MS Office suite itself) and several training videos and demos. Other links take you to the Office Accounting online community, training pages and Office Online, feedback and the Knowledge Base, an update checker, and a tool for helping you find a local accountant.

With the exception of inventory items, Office Accounting's database records, like those for customers and vendors, are comparable to those of QuickBooks overall. In the customer area, for example, there are tabs for general contact information, financial details and summary, financial history, and numerous user-defined fields (text, date, check box, and number). Menus give you access to related tasks, like creating an invoice, receiving a payment, and writing off.

And I have to hand it to Microsoft for providing transaction forms that are exceedingly thorough and flexible. You can create and modify invoices, purchase orders, sales orders, credit memos, statements, and quotes. Invoices, for example, contain fields for contact information, terms, salesperson, shipping method, tax group, and price level, as well as "other." And multi-currency support makes transactions open to a much wider circle of customers, a feature shared by QuickBooks.However, I like QuickBooks' forms better, particularly invoices, which integrate with shipping couriers and display a customer history.

Other tabbed content areas contain their own sets of tasks and data. Banking, for example, lets you set up online banking and bill-pay (if your bank allows it), write checks, make credit card charges and deposits, transfer funds, and reconcile accounts. These are fairly typical features for such applications, with the exception of MYOB, which doesn't offer standard online banking).

Office Accounting's time-billing capability is weaker than those of its competitors. You can create time entries and time sheets and make an invoice based on time entered. But there's no timer, and you can't post time against a job. Peachtree Complete 2009 and QuickBooks Pro 2009 offer both.

Payroll is another weak area. Microsoft offers three options, but not the one commonly offered by competitors, where you buy payroll tax tables and calculate and run payroll within the accounting program. You can create and print your paychecks in the program, but you either have to process payroll on your own or use the rather complex Excel-based Manual Payroll Calculator.

If you want someone to take the task off of your hands, you can subscribe to Payroll for Office Accounting. You send in your hours and the service does your payroll and taxes. The cost is as little as $27 per processing, depending on the number of employees and payroll frequency. QuickBooks Pro, with its many options, is the winner here overall.

Inventory tracking isn't a tool that everyone requires. And if you have serious inventory needs, you'll want to consider Peachtree or MYOB instead. Office Accounting is fine, though (as is QuickBooks Pro) for an eBay seller or a small business selling limited items. You can track inventory, services, non-inventory items, and kits (collections of items).

Item records in Office Accounting have fields and drop-down lists for information like name, SKU, weight, descriptions, sales price, tax status, purchase price, preferred vendor, reorder point/restock level, and number on hand. But unlike Peachtree Complete 2009's inventory tool, it doesn't include multiple price levels and cost methods, or item history.

Office Accounting's reports are fairly typical for this class of software, but Peachtree offers more. The group is light in inventory, jobs, and time billing wrap-ups but covers other content areas of the program very well. The reports offered, like those of its competitors, are appropriate for the program's features.

Office Accounting has a set of built-in integration tools that make it unique in this group of applications. Like its competitors, it integrates well with Microsoft Word and Excel for mail merges and report expansion. But it also has a powerful link to Microsoft Office Outlook with Business Contact Manager (BCM), which lets the accounting program and Outlook share a contact database. BCM makes it possible, for example, to turn appointments into billable time and create quotes and invoices in Outlook. This is a terrific set of tools, especially for service-based businesses. You can also create eBay items and upload them to eBay, pulling PayPal payments back into Office Accounting. You can even monitor your customers' credit worthiness (for a fee). QuickBooks Pro 2009 does not have that precise set of integrated tools, but its extensibility is impressive in its own right, with its Outlook contact-management synchronization, the QuickBooks Solutions Marketplace, and Point of Sale integration.

Microsoft Office Accounting Professional 2008 is a solid, creative small-business accounting program worth considering. It has the best interface going and doesn't have any serious drawbacks, unless you need strong inventory tools. It's not as good across the board as QuickBooks Accounting Pro Edition 2009, but it may be all you need. It's a good choice for frequent eBay sellers, companies whose inventory needs are modest, service professionals, and businesses that want to stay within the Office Accounting family.

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