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Does Your Business Need Accounting Software? If your bookkeeper spends Saturdays in the office trying to keep up with paychecks and taxes and tax code updates and outstanding invoices, specialized software can come to the rescue. By Kathy Yakal Do you track purchase orders and client lists using Excel spreadsheets and Word documents? Produce invoices using a calculator, label printer, paper checkbook and envelopes? Use sticky notes on your monitor to remind you that, say, an employee needs to change her income tax withholding? If so, you’re not alone. Many small businesses begin this way and, before they know it, realize that the sticky notes and spreadsheets just aren’t cutting it anymore. Setting up and using small-business accounting software may be just what you need, and believe it or not, it’s much easier than it seems. A Place for Everything There are three major areas of benefit in using accounting software if you have a small business, and lots of little ones. Taken together, they mean you’re sure to save time and even money—and gain time to concentrate on growing your business. Customers. That list of customers you’re trying to maintain as a Word document or in Outlook or a Rolodex or—say it ain’t so—on paper? That list needs to be in a database designed for finances. Accounting software contains record formats that let you type in—or sometimes import— relevant details, things like contact information, credit terms and limits, credit card numbers, and price levels. You can usually set up custom fields to track any additional information you’d like to. And sometimes customer records can also contain descriptions of jobs you’re working on for that company; they may even display a history of your transactions with them. Try doing that on an index card. Now try keeping it updated. And add all your vendor records to that to-do list. Accounting software keeps you in the know about 48 PC MAGAZINE DIGITAL EDITION MARCH 2009
whom you’re buying from, and to whom you owe money. Employees. Does your bookkeeper spend his or her Saturdays in the office, trying to keep up with tax tables, paychecks, and taxes? Take the time to enter information about your employees and assorted taxes and deductions (and it will take some time up front, like any other setup task). Then payroll processing will involve little more than entering the hours everyone worked and printing paychecks (or authorizing direct deposit). When it’s time to make good on your government payroll tax obligations, the software will make those calculations, too. Inventory. What do you do when a customer orders something? Does someone have to go into the back room to see if you have any to sell? By keeping inventory records, you’ll have detailed descriptions of everything you sell. When you sell something, your software will decrease the level you have on hand. Sell enough and it will remind you that you’re running low, so you won’t be caught short. Working Together Financial transactions are the lifeblood of a business—they help you pay the people you owe and get paid yourself. Accounting software uses all of those nicely organized records you’ve created and makes transaction processing a snap. Built-in integration means that, unless you need to enter a new vendor or item, or update other information (and you can do this easily, on the fly, anytime), all the data you need is right there in one program. How are you creating invoices now? Typing them up in Word, or, worse, using a typewriter on preprinted stock? That probably means you have to look up things like addresses, item numbers, and so on—a major time waster.
Accounting software contains prebuilt forms for documents like invoices, purchase orders, and sales receipts. The forms can usually be customized—you can add your logo or other graphics and add or delete fields. When you need to fill one out, drop-down lists let you select data for fields such as Customer and Item, data from the records you’ve already created. The software is designed so that everything works together. When you’ve completed invoices or purchase orders, you don’t need to waste time printing, labeling, stamping, and mailing; you can simply e-mail the document. Saves time, and it may help you get paid faster. Some software will let you accept credit card payments or electronic checks, a function that may also improve your bottom line. This integration saves not only time but also embarrassment when a customer or vendor calls to check on something. Instead of rifling through paper files or promising to call back after you check with someone else, you can use your software’s search capabilities to pull up the appropriate documents or transaction. Instant Information All of the work you do in your accounting software culminates in a benefit that you would have to struggle to replicate in any other way, if you could manage it at all: reports. Yes, an Excel spreadsheet can track your income and expenses. But Excel doesn’t provide a view from which you can select from among dozens of customizable reports that can tell you, for example: • Your gross profit from each customer • How your net worth has changed over a specific period of time • Your company’s value, with the total balance for each type of account
