Business Accounting Software

Please share your experiences with Quickbooks in the comments section

Most people begin a business because they have a technical skill: drafting, graphic design, software development, or other. Typically they lack experience in the “support” functions of business: accounting, marketing, human resources, or information technology. As a result, many fail to process accounts receivables or payables, taxes, payroll, costs, profits or losses. They might monitor cash flow (watch the cash flow in and flow out again, taking what they need to support their family—barely), but cannot tell anyone where it flows.

Mabel’s Story

Mabel, a young single mother of two, ran a craft’s business out of her home. She handcrafted wood lawn ornaments, toll painted nick-knacks, and signs. She bought what she needed from her regular checking account, She deposited her sales into the same account. She paid both personal and business bills from that general account.

She created a set of file folders for her receipts, but rarely filed them. She intended to do so; but the children, meals, making the crafts, and other things distracted her. So, so she put a lot of the receipts into a bowl on the chest of drawers in her bedroom for later filing. Many of the receipts fell out of the bowl and down the back of the chest of drawers. She threw away most of the receipts. She also recorded most, but not all, of her sales in a little NCR receipt book she bought at an office supply store.

She filed her taxes as a sole proprietor with a schedule C with her 1099. She took all the receipts from the bowl, fished them out from behind the drawers, and added them together with the calculator on her computer (no paper). She also added all the receipts in her NCR book. Knowing that she had lost some receipts and did not record many, Mable estimated their value and subtracted some money for costs and added some money for sales. She estimated a lot more costs than sales. The tax process frustrated her immensely.

Then she got audited by the IRS. They did not accept her estimates and rejected most of her expenses, but accepted the sales recorded in receipt book. As a result, they estimated that she owed them at least $1,500 in additional taxes. The interest and penalty brought the number to more than $2,000.

Mabel could have avoided these charges and frustration by purchasing Quickbooks for less than $125 plus another $40 to learn how to use it.

Simple Accounting Tools Reduce Your Stress

Today’s small-business owner benefits from technology’s creation of Quickbooks and other simple accounting software packages. Quickbooks costs from $170-325 depending on the version you purchase. Many Small Business Development Centers (SBDC's) offer courses on how to use it from $0-50. Most people learn it easily. If you struggle, you can find a child, grandchild, or neighborhood teenager to run it for you. Home-based and small-businesses will require 2-10 hours a week to maintain all accounting functions using Quickbooks.

These small-business accounting programs typically perform the following functions and more to help you manage your business more effectively and efficiently:

• Create and maintain a chart of accounts for revenues and expenses
• Create and send invoices to your clients, and monitor them for payment or collection
• Monitor bills you need to pay for prompt payment and to avoid interest or penalties
• Calculate costs for products or services including fixed or variable profit margins
• Prepare general ledger, and asset, account, and profit/loss statements
• Interface with IRS & state forms to simplify sales, income, use, payroll, & other taxes
• Remind of fees you need to pay to government, licensing, or other entities

You do not have to understand all the tax or generally accepted accounting principles (GAAP) to maintain accounting documents. Most of the work involves simple data entry into preset forms and printing statements and reports.

Once again the SBDC or mid-size accounting firms frequently offer training at very reasonable rates. Google Quickbooks training and the name of your community to see what they offer in your area.

Business owners feel better when their financial affairs process smoothly, when they understand their financial status, and submit appropriate tax forms accurately and punctually. Quickbooks or other accounting software reduces your stress. While business owners should still consult a good CPA, maintaining good accounting practices improves your profits by controlling expenses and allocating revenues more effectively.

Join us next we outline the advantages of delegating to a virtual assistant/bookkeeper.

Please share your comments or questions about accounting software