Best Practices: Tips for your small business
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Take control of your business finances with accounting software
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How do you keep track of your finances and do your accounting?
How do you keep track of your finances and do your accounting?
Finance and accounting software can do a lot more than keep track of cash flow. It can help with inventory management, payroll, taxes, and even hiring and firing.
Money in, money out. Sounds pretty simple--until you're actually managing a business. Then you know how hard it is to track everything, such as expenses, inventory, payables, payroll, and cash. Accounting software can help with that and more, including quote preparation and invoices. Today's small-business accounting tools will also let your accountant log in to do your taxes. You can plug in industry-specific add-ons for a wide range of industries, including construction, retail, medical, graphics and others.
Here's a look at some of the most popular packages and how to pick among them so that you can handle tasks with minimum cost and maximum efficiency:
1
Factor in the size of your business
If you're a sole proprietor or have just a couple of employees, Quicken Premier Home & Business ($89.99) or Microsoft Money 2006 Small Business ($89.99) are usually sufficient for tracking expenses and creating invoices, especially if you want to track your business and personal finances in the same place. If your business needs more tools, such as inventory, time tracking, or purchase orders, consider more advanced, business-only products such as Microsoft Small Business Accounting ($179.99), QuickBooks Premier 2006 ($399.95, with versions as low as $99.95) or Peachtree Complete Accounting ($299.99, with versions as low as $99.95). These packages offer many more forms, such as accounts receivable and payables reports, true accounting reports, and profit and loss statements (by customer or vendor). You can set them up with multiple users, with each user having different access rights.
If you're a sole proprietor or have just a couple of employees, Quicken Premier Home & Business ($89.99) or Microsoft Money 2006 Small Business ($89.99) are usually sufficient for tracking expenses and creating invoices, especially if you want to track your business and personal finances in the same place. If your business needs more tools, such as inventory, time tracking, or purchase orders, consider more advanced, business-only products such as Microsoft Small Business Accounting ($179.99), QuickBooks Premier 2006 ($399.95, with versions as low as $99.95) or Peachtree Complete Accounting ($299.99, with versions as low as $99.95). These packages offer many more forms, such as accounts receivable and payables reports, true accounting reports, and profit and loss statements (by customer or vendor). You can set them up with multiple users, with each user having different access rights.
2
Look for the reports you need
Check whether the software produces the info you need to run your business. John Garrett's Triad Distribution NW, a wholesale distributor of building materials, uses Peachtree's financial software to track his business moment by moment. He keeps an analysis screen open that tells him his cash position, his gross margin for the day, and how he's doing for the year. "I can pull inventory information into Excel and sort it: What's my biggest-selling door hinge, for example, or what's my biggest margin item?"
Check whether the software produces the info you need to run your business. John Garrett's Triad Distribution NW, a wholesale distributor of building materials, uses Peachtree's financial software to track his business moment by moment. He keeps an analysis screen open that tells him his cash position, his gross margin for the day, and how he's doing for the year. "I can pull inventory information into Excel and sort it: What's my biggest-selling door hinge, for example, or what's my biggest margin item?"
3
Evaluate the add-ons
Many third-party vendors create industry specific modules for QuickBooks, Peachtree, and Microsoft Small Business Accounting. You can, for example, find versions of accounting software for contractors, nonprofits, and more. "I use a QuickBooks add-on in my industry which is tailor-made for diagrams and proposals," said Nick Syris, the owner of AVI Electronics, a custom home-theater installation business.
Many third-party vendors create industry specific modules for QuickBooks, Peachtree, and Microsoft Small Business Accounting. You can, for example, find versions of accounting software for contractors, nonprofits, and more. "I use a QuickBooks add-on in my industry which is tailor-made for diagrams and proposals," said Nick Syris, the owner of AVI Electronics, a custom home-theater installation business.
4
Do employee scheduling and payroll in one shot
Chris Schatte owns Texoma Home and Garden, a landscape, nursery, and garden center with five employees. He schedules landscaping jobs in Microsoft Outlook, which ties in directly with Microsoft Small Business Accounting, a unique feature. "We've been doing landscaping for 12 years, so we can get pretty close in figuring out how long a job will take in order to keep our employees busy. From the scheduling, I can then create time sheets for payroll."
Chris Schatte owns Texoma Home and Garden, a landscape, nursery, and garden center with five employees. He schedules landscaping jobs in Microsoft Outlook, which ties in directly with Microsoft Small Business Accounting, a unique feature. "We've been doing landscaping for 12 years, so we can get pretty close in figuring out how long a job will take in order to keep our employees busy. From the scheduling, I can then create time sheets for payroll."
5
Integrate your shipping tools
Instead of using FedEx or UPS shipping software separately, you can pull relevant information from an invoice, and it will print each label for you all in one place. QuickBooks Premier and Pro support both FedEx and UPS, while Peachtree Complete and Premium Accounting support UPS. Microsoft Small Business Accounting supports shipping integration with a $79 add-on from Z-Firm called Shiprush. Quicken Premier Home & Business and Microsoft Money 2006 Small Business do not have this feature.
Instead of using FedEx or UPS shipping software separately, you can pull relevant information from an invoice, and it will print each label for you all in one place. QuickBooks Premier and Pro support both FedEx and UPS, while Peachtree Complete and Premium Accounting support UPS. Microsoft Small Business Accounting supports shipping integration with a $79 add-on from Z-Firm called Shiprush. Quicken Premier Home & Business and Microsoft Money 2006 Small Business do not have this feature.
6
Handle new hires and terminations
"With QuickBooks Employee Organizer ($299 to activate, $59 per year afterwards), you can make sure you're legal with state and federal regulations," said Syris. "It tells you everything you need to do to hire or terminate an employee, all in a wizard format."
"With QuickBooks Employee Organizer ($299 to activate, $59 per year afterwards), you can make sure you're legal with state and federal regulations," said Syris. "It tells you everything you need to do to hire or terminate an employee, all in a wizard format."
7
Don't fire your accountant
Small businesses often use accounting packages in tandem with their accountant, rather than taking on all the tax preparation burden themselves. Garrett's accountant dials into their system using GoToMyPC ($19.95 per month for one user). "He can look at our general ledger and financial statements and prepare taxes without ever having to make an office visit," said Garrett. "All we have to do is stop by and sign them." His accountant even backs up his data remotely every month. Look for accounting software that lets you set up multiple users; the higher-end packages usually do, but personal finance apps Money and Quicken do not.
Small businesses often use accounting packages in tandem with their accountant, rather than taking on all the tax preparation burden themselves. Garrett's accountant dials into their system using GoToMyPC ($19.95 per month for one user). "He can look at our general ledger and financial statements and prepare taxes without ever having to make an office visit," said Garrett. "All we have to do is stop by and sign them." His accountant even backs up his data remotely every month. Look for accounting software that lets you set up multiple users; the higher-end packages usually do, but personal finance apps Money and Quicken do not.
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