Do You Need Accounting Software For Your Small Business?

If you’re anything like me then you dislike with a vengeance doing your accounts and taxes.

So how can you make this process easier, less painful and cut your accountancy fees?

Well buying an accounting software package is one way.

First of all you need to decide whether you are going to keep your accounting records manually, that is using pen and paper, or whether you are going to computerize the process.

If you decide that computerizing the process is the way to go then you need to decide whether to buy an accounting software package, for example Sage or Quicken, or whether a spreadsheet, such as Microsoft Excel will suit your needs better.

As a general rule if you are a cash business that just needs to record income and expenditure then you are better off using a spreadsheet.

So, should you choose an accounting software package? Yes if:

· You have customers to whom you extend credit and you buy goods in the same way

· You process in excess of 50 transactions per month

· Your business is an Incorporated Company (Limited Company in the UK)

and

· You are computer literate or are willing to learn!

Before choosing the accounting software, speak to your accountants – they will be familiar with the various accounting software packages on the market and will be able to advise you. Most accountants use software in their office to process the bookkeeping for their clients and will have a working knowledge of the accounting software package they use. It may be cheaper for you to use the same one they do, because they can advise you how to get it up and running and will be on hand to answer questions, plus at your financial year end when your accounts need preparing it will be less expensive, believe me to have a compatible program.

I also recommend doing some research yourself, you may be able to obtain a demonstration disk or download of the most popular accounting software packages and this will give you an idea of how they work and if they are user-friendly.

The cost may also be an issue, so you need to decide on your budget. But consider how your business is likely to expand - you may outgrow that budget accounting software quickly and end up buying the more expensive one anyway.

Accounting software providers may also try and up-sell you a maintenance contract. Save your money! In my experience the established software providers will not have bugs in their systems. They will also try and upgrade you to the next version on a regular basis, but if the software is doing everything you need then there is no need to upgrade.

Of course, you could also pay someone to do your accounts for you, either your accountant or a bookkeeper – the payoff being you don’t have to do it yourself and it frees you up to actually run your business!

Company/Employee Handbook as Organisational Improvement Tool

A business is only able to grow as fast as the internal organisation is able to process higher volumes of sales. But how to get an optimal internal organisation? Well, you will need to adapt your internal organisation over and over again. It’s a never ending story. However, a Company/Employee Handbook could assist you to achieve the best internal business organisation.

This brings up the question, What has to be included in a Company/Employee Handbook? Everything what has influence to your business operation. First of all, it has to be outlined which areas the Company/Employee Handbook will cover. As it has to do with internal operation, here is a list of items you should include:

- Company Background Information (Name-Development, Foundation date and place, History-Milestones, Vision)
- Owner and/or Manager Bios/Profiles
- Listing of Officers and Board of Directors
- Employment Roles (Job Roles, Job Descriptions)
- Description of the main products and services (just use your marketing material)
- FAQ (about internal subjects only)
- Company timeline (What, when, where)
- Office procedures (Workflow-Information, Working Procedures)
- List of persons to know (Bank Contact, Tax Advisor, Laywer, Main Suppliers, etc.)
- Overview of agreements (Rental, Leasing, etc.)
- Internal Policies (Dress code, Phone usage and answering, Voice Mail Procedure, Parking,
Business Cards, Drug Policy, etc.).

The above list shows which information should be included. The following list shows which departments should be included:

- Distribution
- Inventory/Warehouse
- Marketing (How Follow-up’s are handled, Lead-Generation, etc.)
- Customer Support
- Research and Development
- Accounting
- Human Resources
- Purchase/Procurement.

The above two lists just show, how complex it could be to setup a Company/Employee Handbook. But it don’t have to be complex, just start partial. Only include the information which are already available and use the help of your employees. The benefits of having a Company Handbook are numerous, your employees will save time, it will be easier to improve procedures, because the procedures will be broken down into small sections of the whole precodures. Everything is clearly described, so nobody needs to ask over and over again. In case of holiday or illness of an employee, others could jump into the job, because they could be trained faster.

As employer, you could hire employees with lower education. And your employees will love it, because they know where to look, when they have questions and they could improve their working environment as well. But the most advantage for the owner is, that the organisation will be able to work properly, when the business grows and when the owner might sell the business one day, it might get sold easier, because of the proper organisation.

When installing a Company Handbook, you will find procedures you could automate. Automating the operation as much as possible will also be a big benefit, because employees and employer are able to focus their workforce on more important topics, such as improving the sales volume. Furthermore automatization will reduce to cost of operation as well.

A Company/Employee Handbook is a bit like a Business Plan, but far more detailed, because it will contain information on every internal procedure. Only the financial part of the business plan will not be included, but if you like you might include some financial information you like to share with your employees. As you describe your procedures just do it as a numeration or listing. The description don’t have to be very well formed, it’s just important that everyone who will read it, is able to understand what has to be done.

Remember, a Company Handbook is a living system, if you and your employees are not updating it regularly, it will be death one day, because it will only contain old stuff. So keep all people within your business engaged in improving the Company Handbook, because it will improve your business internal organisation as well. While starting to write the content of your Company Handbook, concentrate on job roles at first, afterwards write down job descriptions, in case a job role has been given to employees twice (Accounting Staff, etc.). Job Roles need to include the duties and the responsebilities of the described job.

Job Roles, Job Descriptions and Workflow-Descriptions of sepcial procedures don’t have to be the same, but take care that the information is consistent, that means that it is written in a stream. This way the entire Company Handbook will be of benefit for everyone. When rereading something on your Company Handbook and you still have questions, than the entry is not finished.

Last but not least, your Company/Employee Handbook should be available everytime. To do this, think about an Internet or Intranet Solution, depending on the size of your business. Keep it simple and slim, and you will have many benefits from it. Good Luck.

Choosing A Business Tax Service

There are a number of ways that you can find tax services companies. The yellow pages is a good place to start for companies in your area but, depending on where you live, the list of names may be extremely long. It is a good idea to ask your friends, colleagues and business partners to recommend the tax services that they have found helpful and efficient in the past. Then you can call the tax services professionals that you have on your list and discuss your requirements.

The first step in finding the best tax services for your needs is deciding what level of help you require. Perhaps you simply need someone who can file a simple tax return but has to wade through your slightly disorganised accounting documents, or maybe you have a number of employees and need
assistance sorting out their tax withholdings or you may even want all of these tax services, and more. The size of the tax services company may also be an issue. You may want one person to be able to perform all of your tax work, especially if you are only a small business owner or you may want a team of tax professionals and you want to find tax services that have a number of specialists available. Once you have identified the type of tax services then you can begin your search more easily. Your available tax services budget is obviously going to be an issue but you should try to allocate as much money as possible to ensure that you can afford the best possible tax services. Remember that you can incur heavy fines if you have incorrectly filed your tax return or are late paying any type of tax that your business is liable for.

Apart from professional qualifications and references one of the most important points to consider when assessing which of the tax services companies you want to use is whether you feel comfortable with the person you are dealing with. At the end of the day you are going to trust them with your financial records and it is essential that you feel that you can depend upon the person.

Every business, at some time, needs the help of some type of tax services at some stage. Large organisations usually have their own tax services department with accountants and tax lawyers but small companies often have to hire tax services on a regular basis to help keep their tax returns and other issues in order. It is important to know how to find the best tax services, no matter what type of business you are involved with.

Business laws basics

A professional degree in Juris Doctor relates to a higher grade of studies in law. With business houses expanding in size and the legal issues gaining higher importance for day to day working of large corporates, demand for Juris Doctor professionals has been increasing. As the business interacts more with the society and their other counterparts need to resolve legal matters emerge simultaneously. All this has given an impetus to students aiming for career in law field. But a purely law background without any corporate experience may not be well accepted by business industry. Top ranked services in companies also demand a graduate in business organization along with lawyer’s degree.

As demand for combined degree in JD and business is being a preferred combination to build a rewarding career in law. Business and law schools at various places have joined hands to impart students with best career courses. At many places Law Schools providing degrees of Juris Doctor and business school providing Master in business administration present a cooperative program for the convenience of aspiring students. This opportunity to avail concurrent degrees in both fields is a stepping-stone for success of students. Students who cannot travel to different places at the same time have a best prospect of finding excellent professional training under one roof.


Surviving in the law field gets tougher from the day one tries to enter the school of law. Getting admission requires fulfilling entire formalities along with earlier creditable basic high school record, clearing the admission test for the law school and even recommendations from people. The same is applicable for business studies a student is required to prove his quantitative skills and efficiency in microcomputers to get admitted. A dedicated and hard work during the courses ensures students with excellent results which in turn to provide better career opportunities.


A law person has various prospects for different types of career that he would like to accept. Depending on his caliber and willingness to work hard a lawyer can decide upon practicing law in an exclusive law firm or he may choose to be an in house lawyer. An exclusive law firm requires an extensive knowledge of one particular area in law where as an in house lawyer is required to deal with entire aspects of legal issues that relate to the particular company in which he is involved.

While undergoing training in one of the law schools a student would learn about different aspects of law like civil law, criminal procedures, constitutional law, contracts, property, professional responsibility, basic federal income taxation, legislative and administrative interpretation and many others. The syllabus is cautiously devised to ensure that students receive exhaustive training to deal with maximum situation in the professional front. Similarly Masters Degree in Business administration imparts education in business for global society, corporate finance, managerial accounting, information resource management, strategic management, master’s project and other similar relevant courses. Anyone pursuing both law and business studies simultaneously has an advantage of studying some courses that are counted towards both degrees and hence a considerable amount of work is reduced for these students.

Bottleneck-oriented Business Management

Simple and effective Business Management

In every enterprise there are, at every time, one or more bottlenecks, which have influence to the commercial situation. Bottleneck-oriented business management has the purpose to early track the bottlenecks and to remove them, to allow an optimum of commercial development. To know at any time, what a business lacks of and to be able to add the missing things, is today a determining competition advantage. Bottlenecks can be, e.g.:

low sales proceeds
high due or overdue accounts receivables
low liquidity (Cash on Hand, etc.)
high amount of liabilities
low number of customers
too many new customers
too high capacity utilization
defective administration or management
and a lot more.
These example show that bottlenecks not only concern negative circumstances, but also can apply to positive commercial development. If an enterprise takes up many new customers, this results in new orders, which lead to other circumstances, like a possible excess in capacity utilization. In case the excess of capacity utilization stays for a longer time, this may result in a lower employee motivation, because of a slump in working atmosphere within the company, which then could lead to less qualtiy of the work performed.

Due to a TIMELY reporting system many companies take care of reaching the desired commercial development. However, a regular analysis of expenses or the annual reports are not enough to control a business today. In the today's dynamic markets these evaluations are too statical, too much oriented on the past commercial development, which had been achieved. Also cost accounting only shows what has happened in the past. The actual direction in which a business is running could not be seen.

Imagine a business to be a car. If you sat down in a car, do you like to receive information from the instruments from the last year or month? Probably not. You would like to have actual information about fuel tank content, coolant temperature and a lot more. Bottleneck-oriented business management should exactly bring the most important and actual information about a business to you, including so-called early warning signals (Screenshot abenetis ERS-Diagram).

Data oriented to the past for early-warning-systems?

A working early-warning-system needs data which are not oriented to the past, like from cost accounting or year-/month-end-closeings. It needs data from so-called early indicators, which has to be gathered from different areas of an enterprise. Of course, figures from the finance and accounting department belong into an early-warning-system, but they only have a subordinated role, because they are oriented to the past.

Nowadays the reporting must show the present situation of a business. In many businesses the expenditure of time for the reporting rose considerably, due to the today's flood of information. Aggravatingly added to this, is the selection of the really relevant business ratios, which allow an appropriate overview of the actual business situation. Too often reports are prepared, which are not perceived by anybody, due to the lack of necessary statements about the business development.

There are already proven business-ratio-systems, that enterprises only need to take over. Get back into the car again, imagine you have only one instrument in front of you, which shows the value "35". What does this signify? It is not recognizable how many fuel exists, how the Temperature of the coolant is or how fast the car is driving, etc.

At this example you could recognize the little expressiveness of only one business ratio. It shows the importance to use the right business ratios, which must have a connection to each other and which have a different temporal origin. Nevertheless, many business ratio systems are mostly based on data which originate from the past.

This turns often to the problem, that immediate information are not available, to indicate the actual situation of a business. However, there is still the alternative, to reduce the period of the past. How would it be with one week instead of analysing business data every 4 weeks? This would lead to the fact that you could act a few weeks earlier, if something should run a little bit inclinedly.

Only very few data are needed to receive an informative evaluation. This again is comparably with a car. If you are driving with your car, you only receive a small, well-chosen number of information and nevertheless, have an actual picture of the situation. This is also possible for businesses, as well!

As a motorist we receive only one fraction of the data which is acquired by the system of the car, and just these fraction of information is enough for us to reach the desired destination. When traveling usually we are well prepared, but the principle of the preparations is often neglected in business operation. As it is with traveling, the final goal has to be clearly stated by the business management. This could be done by having planing data available. Only by target/actual comparison divergences of the commercial development will be recognized.

Unfortunately, many small businesses renounce to use plan data. Besides, it is not about, to cut plan data into the smallest pieces, but only to get a rough picture, what the business is going to achieve. It is absolutely possible to run a business on the basis of the figures from the previous year, however, to use these figures, the past commercial development should be taken into consideration. So the figures from the previous year should be improved to fit with the new goals. And finished are the planning data and the basis for an operational risk management are laid. Still if it is most important to know the actual bottlenecks in business operation.

Recognize problems and act!

One of the most important factors in business management is the early recognition of problems and potentials. There are bottlenecks in every business, which could have serious results. Pecuniary difficulties could lead to bankruptcy for example. Therefore symptoms must be recognized early, in order to turn a possible crisis away and to secure the future of your business. Also to use available potentials, regular analyses should be done. Nowadays products and services could not be sold forever, because product cycles become shorter and shorter due to market dynamism. The recognition and development of potentials is exceptionally important, to avoid losing the already achieved basis of a business.

Asset and liability basics

Knowledge of accounts can make life much easy. If you are to invest in a new business or joining your forefather’s business, planning to take some loan, looking for job in any marketing company, desire to be the manager of a multinational company or have the onus to manage your own assets and liabilities, knowing some basics of accounts becomes mandatory.

Broadly, accounting is bifurcated into two categories-

Cash Bases Accounting

Accrual Accounting

The Cash Based accounting pertains to the management of an individual’s personal monetary transactions. In this case, he keeps a track of the money he withdrew, deposited, gave or received from someone etc. This accounting comes to life when actual cash transactions take place.

The Accrual Accounting requires an accountant who notes the transactions even if no money has been actually exchanged. This method works on the principle of comparing or seeing the ratio of the expenses to expenditure. If the expenditure is more, you need to cut down your luxuries, if not then it’s always good to have some savings for future. This type of accounting tells you the amount that you owed; this might not match with the figure of your bank balance.

In the language of accounting there are several key terms that one needs to be familiar with. Some of the crucial ones are discussed below-

The Assets- the assets are generally those possessions of an individual that have a good market value or are quite valuable. Assets are mainly classified into three types-
Current Asset- the cash is the most basic asset of any individual. The money that is being held in accounts like the checking and savings accounts is also included in the cash. Also inclusive are the marketable securities in the form of bonds, stocks, shares etc. The money lent or payments due from clients, even form a part of it.

Fixed Asset- comprises of all the tangible valuable things like property, machines, equipments, land and the like that are not meant to be sold.

Intangible Asset- incorporates all the untouchable things like copyrights, patents, trademarks etc. that have tremendous monetary significance.

The law of opposites governs the nature; where there are assets, there will be liabilities. These are the debts that you have to pay back to your creditors. This can be done through giving cash or any other asset like jewelry, some other goods etc. Liabilities again are of two kinds-

1. The Current Liabilities- the liabilities that are to be paid back within a certain time limit and most often through your current assets. These include the accounts payable i.e. type of bill that you have to monthly, the Notes Payable-loans taken from banks meant to be repaid within 30 days and the Accrued Expenses- the compulsory expenses like taxes, wages, interests etc. where the bills are not received but the balances of each must be repaid.

2. Long Term Liabilities- those debts that can be repaid at ease for the tenure is more then a month.

The Financial Capital- is the economic capital. It is any liquid medium or merchandise that stands for wealth or other styles or capital. There are four ways to manage and display the financial capital. First, this capital is needed when a contract is made with any sort of capital asset. The financial instruments work in the form of currency in case of sale, purchase or trade of goods i.e. the medium exchanges. Second, it works as a settled medium or mode like gold for the
Standard of Deferred Payment. Third, The Unit of Account has a market value attached to it which in turn varies with the economy of the country. Fourth, The Source of Value is concerned with financial capital that needs to be saved and recovered. It is a collection of things like gold, real estate, collectibles etc.


Petty Cash is an important factor in business. It is the smallest account within a business setting or the cash in bills and coinage required to pay little expenses.

Types of Business- there are several kinds of business one should be aware of like

Sole proprietorship- where a single individual who starts the business owns it too.

Partnerships- the companies or businesses started by two or more persons where they conjointly own it.

Corporations- involve lot many shareholders or investors who are responsible in taking decisions for the company.

Limited Liability Companies- can be said to be sisters of corporations. Here the business members are not under a legal obligation to pay the debts if the business fails.

Payrolls- the term payroll designates the manner in which you will be paying the employees of your company and even yourself. Many multinational companies cater to payroll service provider companies that do the work quite efficiently.

These are some of the broad guidelines that will help you grasp the basics of accounting. It is essential to have some such wisdom for accounts as it is fruitful in all walks of life.

An introduction to point of sale software

Point of sale software gives business owners a convenient way of checking out customers and of recording sales. It can keep a record of the store inventory, updating it when an order is processed. It can also print out receipts, carry out credit card processing, track customers, etc. Point of sale software eases the flow at checkout terminals, while recording all the information that can help you make better business decisions.

Point of sale software allows users to input via keyboard or mouse, and some even have a touch screen interface. You can install the software on your checkout register.

When checking out a customer you can either input the sales item yourself or use a bar code scanner. The point of sale software will look up the item in the inventory and bring up the price. It can also calculate tax on the item and change for the customer.

POS software can print out receipts and reports. Point of sale software makes your business accounting a lot easier by creating reports on inventory, sales, customers, etc. Since it is already recording each sale, it can easily tell you the sales and revenue of the day.

Point of sale software can also help with credit card processing. Credit cards are the preferred method of payment. People do not want to carry around cash for all their purchases. Credit card is a convenient method of payment and if you do not have credit card processing, your business can lose some of its competitiveness.

Point of sale software receives input from the POS hardware, which is the scanning station for the credit card. The software will process the credit card payment for you. It can check that the card has not expired and is valid. You will need a merchant account for the point of sale software to do its job.

POS software is generally easy to install and easy to use. You will need to know how to update inventory and record a price change for an item. Point of sale software usually provides an easy to use interface to do this. It can make the job of the cashier a lot easier by automating the routine tasks of the day.

There is a wide variety of point of sale software available. You can choose one that fits your budget and meets the needs of your particular business. The software will have compatibility requirements with the point of sale hardware. It will also have operating system requirements such as it might need a Windows or Linux system.

Point of sale software can more than pay for itself over time by making checkout faster and doing your accounting for you. Point of sale software may be the right solution for your business and can provide you with tons of benefits.