SAP has demonstrated a new version of its Business One software to channel partners, prior to the general release of the product later this year.

Business One is SAP's software for small businesses - those with fewer than 100 employees. It aims to cover all of a company's basic needs, including financial management, sales, inventory and human resources, and is used by almost 15,000 customers around the world, according to SAP.

The upgrade, called Business One 2007, will add some functionality in areas like financial management and ecommerce, but the main focus has been on polishing the existing features and simplifying the product to make it easier for SAP's channel partners to implement, said Niels Stenfeldt, SAP vice president for Business One .

The web-based CRM software that SAP bought from Praxis Software last year will now been integrated into the core Business One product instead of sold as a separate add-on. The pricing won't change, but the integration will make it easier for partners to implement, Stenfeldt said.

For end customers, SAP has overhauled a tool in the finance application for reconciling incoming and outgoing payments. It wasn't well designed in the current version of the product, Stenfeldt admitted. SAP has now unified the process for reconciling data from documents and general ledger transactions, in place of the two separate processes that it had before.

The upgrade also includes new printing options, so that layouts can be exported to Adobe Systems' PDF format and emailed more easily, and several other updates.

Business One 2007 is being tested by partners now and should be generally available in November or December, Stenfeldt said.

SAP Business One, along with SAP All-in-One, the company's mid-market product, are both important for SAP, which hopes to attract a high volume of smaller customers to offset slower growth in the enterprise market.

Simon Jacobson, a senior analyst with AMR Research, said Business One is "a very good alternative for customers that don't want a software-as-a-service product like NetSuite, or who want more functionality than you get from QuickBooks or some of the Sage products."

Business One also competes with Microsoft's Dynamics applications. And it might soon have a competitor at SAP, when the company releases its A1S on-demand ERP offering early next year.

For now it appears to be doing well. Business One had 14,667 customers at the end of the second quarter, up 38 percent from the same time a year earlier, according to SAP. All-in-One, for companies with up to 2,500 employees, had 10,223 customers, up 19 percent from last year, SAP said.