Microsoft will next year expand its Office product lineup with a bundle designed to help small businesses operate better, taking on small-business accounting market leader Intuit and its QuickBooks product.

The new Microsoft Office for small-business management product bundle will include the familiar Office 2003 applications along with a new financial management product called Microsoft Office Small Business Accounting and an updated version of Outlook 2003 with Business Contact Manager.

With the new Office edition, due out at the end of 2005, small businesses will be able to manage customer, financial and business processes, according to Microsoft. Payroll functionality is offered through integration with services from outsourced payroll services provider Automatic Data Processing, Microsoft said.

The new Office edition was developed jointly by Microsoft's Office group and Microsoft Business Solutions (MBS), the Microsoft group that sells business applications to small and medium-size businesses and divisions of large enterprises. Office for small-business management will offer an easy migration path to MBS products, Microsoft said.

Among the features of the new Microsoft application combination is the ability to mark hours as billable when a calendar entry is created in Outlook. This information can then easily be transferred to the accounting application, he said.

Another feature is easy invoicing using Word. Data from the accounting application can be pushed to Word for use in invoice templates.

Microsoft will offer tools for QuickBooks users as well as users who do their accounting in Excel to migrate to the new Microsoft Office suite.

Aside from winning more customers for its business products, the expansion of the Office suite also fits in with Microsoft's strategy to grow its Office business by tailoring product bundles for specific audiences.

The vendor already sells a Small Business Edition of Office 2003, introduced last year, which includes Excel, Outlook with Business Contact Manager, PowerPoint, Publisher and Word.

Part of the new suite, the updated Outlook with Business Contact Manager will include support for peer-to-peer networking to share contacts, support for the new Microsoft Small Business Accounting product and support for Pocket PCs.

Microsoft did not disclose pricing information and said it is too early to discuss plans for international availability of Office for small-business management.

Outlook with Business Contact Manager will be updated for all 18 markets in which it is currently available, Guggenheimer said.

A beta test version of Microsoft Small Business Accounting will be available on Monday. Those interested can sign up online at: