Top 5 Accounting Software Tips, Questions And Answers

By Author: John Willis
Total Articles: 13
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1) What are the requirements of my Business? Does my business sell products or does it provide a service?
2) Should I select the software or should I let my accountant or CPA?

3) Are accounting software programs easy to learn?

4) Should I handle my own accounting needs or is my time better spent creating capital for my business?
5) What does accounting software cost, am I able to purchase it at a discounted price from my accountant?

What are the requirements of my Business?

Accounting software - must match the capabilities and requirements of your Business. It must also handle the best accounting methodology from a financial aspect or at least a generally accepted accounting procedure (GAAP) needed for your tax returns. Identify which functions your business will depend on.

Accounts Payable - The recording of invoices or bills received from vendors and scheduled payments of those bills.

Accounts Receivable - Tracking of outstanding customer or client invoices, provides aging reports to aid in collecting unpaid invoices before they become too old.

General ...
... Ledger - The central point which accumulates the results of all accounting operations, providing traditional financial statements such as an Income Statement, Balance Sheets and other reports.

Purchase Orders - Creates and tracks purchases placed with vendors.

Order Entry - Creates invoices for products and/or services. Typically interacts directly with the Inventory Control and Accounts Receivable applications.

Point of Sale - Used in a retail environment effectively replacing cash registers. This application provides more information on sales than what's possible with cash registers and is linked to Inventory Control applications.

Time & Billing - Often used in a professional environment such as legal, engineering or accounting firms, where detailed time and expenses are tracked, then billed to specific customers.

Budgeting - Helps an organization create, track and report on the financial (actual) progress of a business compared to expectations (budget).

Fixed Assets - A Fixed Asset application provides detailed tracking for each individual asset. This feature provides depreciation and gain/loss details.

Inventory Control - Tracks a business' inventory of goods or products for sale or used in manufacturing of products for sale. Inventory control may include features such as: serial number tracking, sales and volume by product, product purchase history, cost and lead time, product description, product location, etc. Inventory control applications often interact with order entry, accounts Receivable, purchase orders, and accounts payable.

Report Writer - Ability to create complex reports, which are not available with standard applications.

Payroll - Payroll applications, process employee paychecks, periodic payroll tax reports, year-end employee W-2's, etc.

E-Commerce - The ability to sell inventory stock over the internet, internet auction sales, etc.

Foreign Currency Conversion - Foreign Currency conversion applications provide features such as: Up-to-date exchange rates for each currency.

Job Cost - Tracks revenue and expenses for individual jobs or projects and/or phases within a job.

Customer Relations - CRM systems typically captures information acquired from sales, marketing, customer service, and support.

Should I choose the accounting software or should my Accountant or CPA?
Your Accountant or CPA should definitely be consulted. The best accounting software programs can run into the thousands of dollars and many times cannot be returned once opened. Your accountant can easily identify which accounting software programs meet the needs of your business. They understand cost, ease of learning, support training, and understand system capabilities. If you want to explore the various brands, and have the time to do so, many accounting software programs offer free online trial versions.

Are Accounting Software programs easy to learn?
Yes, they are not difficult to learn. They were designed to handle transactions with the average business person in mind. Where the difficulty can lie is in the initial set-up of the software and training on how best to use it. Every software has the same basic structure to produce financial reports such as the Balance Sheets and Income Statements which includes Assets (Cash, Checking, A/R, Inventory, Fixed Assets), Liabilities (A/P, Loans), Equity (Owner Contributions, Stock, Retained Earnings), Revenues, Contra Revenues, and Expenses.
With proper set-up and training, you will feel confident in no time at all. Allow your accountant to review your transactions at least once a month, to insure your tax return data is being completed accurately. Good accounting software with the proper training will make your business life much easier.

Should I handle my own accounting or is my time better spent creating capital for my business?
This of course depends on several factors. A lot has to do with time management and whether or not you are computer savvy. Many people I speak to in the field of sales, tell me they would prefer to keep their sales professionals selling, as they can generate more money in the same time spent selling their products and or services. Many times landing an account, or making one sale more than pays for an accountant that will make sure your accounting is done correctly. On the other hand, if you own a small business that occasionally buys and sells items on eBay; you are probably better off buying an affordable accounting program and do it yourself.
If you find your business growing or expanding at an exceptional rate, don't wait, hire a professional accountant immediately. Over the years I have seen small businesses get out of hand rather quickly!

What does Accounting Software cost?
Accounting software programs range anywhere from free to $1,000's of dollars. The key is to get the best suited for your business. Relax and let your accountant assist you with matching you to the best financial accounting software for your business. If you use my service, I can get you an additional 20% off the retail price as I am an Authorized Pro Adviser. Just click the Atlanta Accounting Firms link below and give me a call.