Keeping receipts in a shoe box or an unused file drawer is no way to run a business. Organizing your financial records throughout the year helps your business to stay focused and helps your accountant during tax time. Just like you put a lot of thought and planning into your business, buying accounting software demands the same level of attention.
Before You Start Shopping
An obvious consideration when shopping for business software is budget. Some businesses are able to work with off-the-shelf solutions like Quickbooks Online Accounting Solutions and Peachtree. It’s just a matter of being able to learn it and use it quickly and effectively. If you have highly specialized accounting needs, then you will need to deal with a value-added reseller (VAR). This type of software has a heftier price tag because fees may include annual maintenance fee, installation, set-up, and training provided by the VAR.
What Are Your Accounting Needs?
Choosing accounting software for your business means doing needs analysis, which involves understanding the tasks you need to perform, what are the absolutely necessary functions needed and who will use it. If it is a new application, you may need to schedule some quick training to make sure everyone understands how it’s used. If you’re a small business that’s a solo operation, you may even consider an online accounting system that keeps records in a remote location like a cloud server. Whichever system you choose, make sure you have the features you need. Having more bells and whistles than needed can be distracting and waste too much of your time. If it doesn’t have all that you need, check out possible add-on components that can provide proper functionality.
Types of Software Out There
• Payroll and Accounting for Small Businesses: these are off-the-shelf systems that meet the needs of most small businesses. Businesses will have accounting tools, reports, and anything they need to assess their financial data. QuickBooks, Peachtree and Simply Accounting are some examples of these typically easy to use and customize solutions. The have an abundance of add-ons for small businesses with some custom needs. They even have online versions of their programs.
• Business Management Software: These are for businesses that need to keep track of point of sale and inventory control. These have more features that integrate billing, purchasing and even customer relationship management into an all-encompassing package.
• Free Solution: Because they are dealing with sensitive financial data, most businesses used to be skeptical of the free option. However, the free version helps customers do the most basic business functions such as create invoices, print check and even handle payroll. This is for smaller businesses that may not have the budget for paid software at the beginning. Once the number of customers reaches a certain number, you should be ready to step up to the paid version.
Because this is such an important business decision, it’s a good idea to talk to other business owners who have had experience with buying accounting software. Business associations and chambers of commerce have regular mingles for different business owners. Independent sites, like CNET.com, do reviews that list the strengths and weaknesses of different packages.
Without further ado here are 10 Most Important Accounting Tips for Your Small Business.
10 – Go paperless
If you’re still printing and mailing invoices to your clients, take a moment to add up how much you’re spending on paper, envelopes, and postage. And then how much you’re spending to send payment reminders and late notices. And then how many trees have had to die so you could run your business. Going paperless is better for everyone.
09 – Use technology
Reducing the likelihood for human error in your bookkeeping is one of the best ways to ensure that your records stay accurate.
08 – Find a good adviser
The first thing you will need to learn as a business owner is simple: you have to ask for help. Its not always easy to estimate your tax refund, especially by yourself. Finding the right help can mean the difference between a successful tax season or a complete failure.
07 – Keep Impeccable Records
Keeping good records isn’t enough when running a small business. Your records must be impeccable.
06 – Use a time clock to log employees in and out
Overtime is expensive and accurate timekeeping can help to keep those costs down.
05 – Always Check!
If you do not use an automated accounting software program, then there is a chance you will not balanced at the end of every period.
04 – Keep it Separated
Too many business owners mix and mingle their personal and professional finances. Set up separate checking accounts and if you need some funds from your small business, write yourself a check, or make a cash withdrawal.
03 – Review your charges monthly and ask for lower rates
You always have the ability to go elsewhere if the rates are better. Also, some credit cards try to take the discounts when the charges are submitted.
02 – Buy accounting software
Using a spreadsheet program to keep track of your business finances is a step above that, but it’s still not your best option. You need to take out the corporate checkbook and buy some accounting software.
01 – Hire a pro if you need one
Yes, it will cost you. But just think how much a horrible accounting error might cost you, and your business. If, on the other hand, you’re not too bad with accounting, but the thought of doing your business taxes is enough to send you into nervous fits, consider at least hiring a tax consultant.
Foundation of Financial Success: Understanding Basic Accounting for Small Businesses
Running a small business may seem overwhelming, especially when juggling various roles. One such crucial role is managing finances, making it crucial to understand basic accounting for a small business. Accounting isn’t just about numbers; it’s a tool that helps businesses track their earnings and expenses, offering insights into the business’s financial health.
Whether it’s managing daily transactions, tracking income and expenses, handling payroll, or preparing tax returns, basic accounting plays a vital role. One essential part of accounting is maintaining accurate and up-to-date records. This process includes keeping track of all sales, expenses, and other financial transactions of your business.
By understanding basic accounting, you can analyze your business’s performance and make informed decisions for its growth and sustainability. Having a solid foundation in accounting will not only help you understand your business better but also make it easier to comply with legal requirements and respond to any financial opportunities or challenges that arise.