Estimated reading time: 2 minutes, 26 seconds
Is it Time to Upgrade Your Accounting System?
When you first started your business, you were probably more concerned about finding customers for your products then you were about your accounting system. Maybe it took a while for your business to take off so it was easy to record your sales in a notebook and your expenses; well maybe they were minimal so, it seemed simplest to use a spreadsheet. Now your business has grown. You have a good customer base, lots of sales and many accompanying expenses, that spreadsheet has grown a little unwieldy, and last month you weren’t sure exactly how many sales you made. In addition, last year your accountant made a pointed remark when you brought in a shoebox filled with receipts and miscellaneous paper at tax time.
It is time to upgrade your accounting system.
I know it is a little scary. A new system is a big deal; it takes time and money to get it set up. There is a learning curve, but I promise it is worth it. A good accounting system will actually save you time and money in the long run. Choosing an accounting package requires that you take a few minutes to evaluate the overall needs of your company, consider your present needs, but also give some time to future considerations.
For example, right now you are a one-man show, but is it possible that 6 months from now you will need an employee or two? Statically speaking, the failure to collect and remit payroll taxes properly is what gets many small businesses in trouble with the government. An accounting system with a payroll module can keep you from a date with an IRS agent.
How about the ability to track inventory? Right now, you might not have a problem keeping track of inventory, but what if your business really takes off? Is your current method going to be able to keep up?
If you manufacture a product, are you tracking your cost of goods sold? You are? Good. How about if your production increases 10 fold will you still be able to keep track of it?
Accounting packages come in all shapes and sizes, some vendors even offer industry specific software e.g. construction, manufacturing, sales etc. The important thing is you choose a package that works with your business practices. A good accounting system is customizable; you should be able to set up your own general ledger accounts, special journals and so on. The package should also, be able to grow as your business grows.
Upgrading your accounting system means you will have easy access to accurate financial information with a touch of a button. No more shoeboxes. Your accountant will thank you.
To see a review of entry-level accounting systems, please take a look at this article, “Review: Low-End Accounting 2013” on our sister site The Progressive Accountant.
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