Business owners should ask the following questions when choosing accounting program:
- Identify what you are looking for out of the software? Basic financial information or variety applications including customer relationship management.
- The navigating ease through the program without the technical and experience of accounting.
- What accounting program is mostly used in your industry?Although software’s are generic, some are designed for specific industries as construction.
- Will this software be used to record revenue and expenses already incurred or generate real time transactions such as sales invoices and inventory information as they occur?
- Time commitment you are willing to invest in ongoing maintenance of your system? Data input in order to get desired output.
The second phase is organizing and implementing the application to work for you. If you want to use your software to help you run your day to day operations, set up the following:
- Generate sales invoices directly through the software; allowing you to know monthly and year-to-date sales for your business along with applicable taxes collected.
- Record collection of invoices directly in the software to know what is outstanding receivables (sales not yet collected)
- Record expenses by source of payment. For e.g. expenses paid through bank account, should be tracked and recorded through bank account. Expenses paid by credit card should be tracked and recorded through credit card.The above division will help your accountant reconcile items at the balance sheet level.
- Ideally, tracking direct expenses to a specific sale. For e.g. the ability to know the direct costs of each sale generated will provide you with direct variable costing associated with making a specific sale.
- Fixed expenses such as bank charges, rent, telephone, etc., should be recorded as they incur to help you summarize all other costs not associated directly to a specific sale along with applicable taxes paid.
The right accounting program for a business is a true asset and greatly benefits business owners and management.