A Bookkeeping Program for Small Business

A bookkeeping program for small business is more than asking and answering the question “which software should I use?”  The accounting software is just the beginning of what a small, growing business needs to have in order to record the transactions, protect the interests of the owner(s) and help the business owner(s) achieve his/her goals.

Here are a few tips on setting up a bookkeeping program.  A bookkeeping program should include five key and interconnected elements.

  1. A reliable, user friendly and well-supported accounting software package that fits the needs of the business today and that can grow with the business.
  2. An optimized configuration of that software program to take full advantage of its features and functions.
  3. A competent bookkeeper, CPA and a CFO as your trained financial advisors.
  4. Financial controls to minimize the risk of fraud and loss.
  5. Monthly financial reviews of where the business has been and where it is headed.

Regarding the first element, the software program, there are two broad categories of programs: cloud based and desktop.  Cloud based programs can be 30 – 40% less expensive over time than desktop programs and in most cases offer all the functionality that is needed.   The website http://accounting-software-review.toptenreviews.com recently posted their list of the top desktop accounting programs.  QuickBooks is and has been the industry leader but there are a growing number of alternatives particularly cloud based alternatives.  QuickBooks does a have a sizable competitive edge with its ProAdvisor network and extensive online resources.  There are also many excellent add-on programs for QuickBooks that can add functionality for such things as CRM, Inventory control, Project management, time-keeping, etc., etc., etc..  My recommendation, based on first-hand experience with my clients, is QuickBooks.  But, do your own research.

The second element of a good bookkeeping program is that the software must be configured properly to take advantage of the programs and features that make the most sense for the business and allow easy and quick access to pertinent and useful information.  This is a perfect example of  “do it right the first time”.  Setting up the program properly and in a methodical and organized manner will save time and money later on.  A small business should not and does not need to have a chart of accounts that is the size of one typically found in much bigger companies.

The third element is a competent team that includes someone to enter data daily, run reports, handle billings and collections, purchasing, etc.  This person is commonly called a bookkeeper, accountant, office manager, accounting manager or controller.  The company should have a CPA for tax work/advice and a part time CFO to ensure that the information given to the CPA is accurate and to help the business owner navigate the tricky waters of building a successful company.

The fourth element is a set of basic financial controls to ensure that what the business owner earns stays in his or her control.  Creating a budget and reviewing financial performance on a regular basis is a form of control because it helps to identify activity that is out of the ordinary (or that was not expected) sooner than if there were no discipline of regular financial reviews at all.   Another important control is that whoever reconciles the bank statement should not be the person who approves and pays bills or writes checks.  Conducting unannounced spot inventories is a great theft deterrent as is awareness of the so-called ‘Fraud Triangle” that says that if someone on your staff is under severe financial pressure at home and has the opportunity and means to steal from you they often will and they do so with some form of rationalization.  Being aware of that is like being forewarned.   A business owner should look for telltale signs with his/her staff.  There are many other good tips for practical financial controls for small businesses.

The fifth and last element of a good bookkeeping program is the discipline of regular monthly financial reviews with your CFO to review historical transactions as well as trends and forecasts of the future.  These reviews can help identify problems and issues that need to be dealt with before they become big problems and they help the business owner make better decisions in a much more timely fashion.

With a good bookkeeping program in place, a company is far more bankable than other companies that have not embraced such a program and its chances of success increase dramatically.

B2B CFO® Partners are experienced with accounting software and implementing the appropriate software and controls that will strengthen the overall financial condition of the company.  Analysis of accounting results and data is another example of how we reduce stress on the business owner and allow the him/her to focus on business development and other critical activities that add value to the business.

If you would like to discuss setting up or strengthening your bookkeeping system and how it can help your company, please contact me by e-mail at andrewtucker@b2bcfo.com or by phone at 704/651-2216.

Every Company, Regardless of Its Size, Needs CFO Services.  You can now afford them with B2B CFO®.

Cash.  We Help You Get It®.

photo credit: DSC00632 via photopin (license)

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