Tag Archives: software

To What Degree Should Your Accountant Be Involved in Your Business?

Ok, for those small business owners out there who think you do not need an accountant because you have the latest version of Quicken or financial software, think again. For those few select business owners that actually are proficient in accounting and book keeping and are happy with your business the way it is… you can stop reading now. But for the rest of business owners who hire accountants to do their books and prepare quarterly statements and tax returns, there is so much more your accountant can do. The question is, to what degree should you involve your accountant in your business?

Most book keeping is done with computers now, and most business owners use computers to keep track of there purchases, expenditures, and cash flow. An accountant is the person that makes sure all this data is filed correctly and will submit that later for tax purposes. Doing your own taxes is simple for an individual, but for a former business owner, I tried one year to do that, and it was a nightmare. So I hired a CPA to help me with that. It was expensive, and I thought twice about it next year. (But I still made use of their services). This one on for a few years, until I got out of the business. The problem was, I never developed a good relationship with my CPA, and now I know how much more she had to offer.

So, besides basic bookkeeping tasks, a CPA can offer the following services, and can really help increase productivity of your business if used to their fullest potential. Here are some agendas you could involve your CPA with your business:

Involve your CPA on the ground level with taxes in mind. By not just submitting your books to them for tax purposes. Instead, meet with them early in the year, perhaps they can advise you of ways to say legally on your taxes. A CPA can provide you with solid business advice too, as probably many of their clients are in the same business as you, they have seem common mistakes and common successes. Its important for you to listen to their advice. Work with them on book keeping software. Ask their opinion of what kind to install, and let them train you with that. It will help proficiency. Accountants can help you prepare a loan application, should you need cash to purchase equipment, or expand your business. Bankers like in depth loan applications and data… and a CPA can help you produce this. If you are in a restaurant business, an accountant can help you file for all necessary licenses and permits, etc. Also, a CPA can help you predict cash flow, eliminate waste, and tighten your budget thereby producing most cash in pocket. Something we all hope to have as business owners.

So remember this, “Ask not what your accountant can do for you…ask what you can do for…well no, actually you should ask what your accountant can do for you!

What Information is My Accounting System Not Receiving?

Most small business owners understand about entering information into their accounting systems to help regulate and reconcile their business earnings and expenses. This also helps to make things easier at tax time.

However there are sometimes some things that aren’t entered into your accounting system that really should be.

The core entries are usually the same for most businesses. These include accounts receivable and accounts payable, billing, stock or inventory and sales orders. Your business may also record things like purchase orders or keep a cash book, where your business records collection and payment.

Some businesses may also require entries for expenses, electronic payment processing, payroll tracking for employee salaries, taxes and superannuation payments, and purchase requisitions.

But many businesses don’t consider entering in many of the very small expenses they see each month that could really add up to a substantial amount by the end of the year. These can include bank fees and charges and other similar charges you may not have entered.

You should also consider entering such things as debt collection, bad debts and any overdue bills. In some businesses, these can be written off prior to tax time as bad debts. In other cases, you may also incur fees related to your debt collection efforts.

It’s important you also ensure your personal expenditure is kept separate from your business records. Even if you’re a sole trader and your personal income is intermingled with your business earnings, you should still make an effort to keep your records separated, entering your business information into your accounting systems and keeping a separate track of your own personal drawings.

If you keep up with entering your business information into your accounting systems on a regular basis, you’ll find it much easier to keep up throughout the year. You’ll also find that you’re much less likely to miss important information when you keep up with it regularly.

If ever you’re unsure about what you’re supposed to enter into your accounting systems, it’s important you speak to your accountant about your options. This can make it much easier for you to always know what you should be entering and what you should be keeping track of.

For more information see Reid Maddison Brisbane Accountants, Your partner in Financial Management

Article Source: http://EzineArticles.com/?expert=Julie_Sultmann

Why Accounting Software Cannot Replace The Accountant

It is a common misperception that accounting software can and will replace an accountant. Accounting software is a means to an end, not an end in itself. Many software companies promote their respective accounting packages as a substitute for accountants. In an endeavor to promote their own sales, these companies are doing the users a great disservice.

Accounting software fulfills an important role, in expediting the recording of financial transactions, and assisting in finalizing accounts in a shorter period of time than manual bookkeeping. In industrialized countries, 99 percent of business use either advanced software, or spreadsheets.

This dependency on software leads to many smaller businesses discarding the services of outside consultant’s altogether. It is dangerous, for small business owners to assume that they will not require regular advice from a qualified accountant or tax advisor.

All accounting software utilizes double entry, despite it not appearing so. Difficulties are encountered when accounts have to be structured in a proper manner. In most cases, the receipts and payments are easy to record with accounting software. Bank reconciliation’s are automated, and are generally easy. Where most errors occur, is with the interfacing of creditors, debtors, assets, sales tax or vat, with payments on cashbook. The best software in the world is not going to address this problem.

Opening or “take on” balances are not imported on to the new software from either a manual system or previous accounting software. Virtually every item on a new balance sheet will be under reported or misstated in such a case.

Sales, purchases, assets and taxes may be captured, but receiving payments, making tax payments and balancing the respective accounts is mostly overlooked. Many a time, these transactions are duplicated. A payment to a creditor could be entered separately in the cashbook, without linking it to the creditors balance. Even where the cashbook reconciles to the bank statement and is prepared neatly, the entire income and expenses items could still be grossly out of balance. Example 1: Expense DR Creditor CR

The same expense duplicated when creditor is paid Expense DR Bank CR Thus leaving the creditors balance “open”, resulting in an inaccurate creditors balance. Example 2: Monthly repayments for assets purchased, are expensed via the bank account, omitting a range of relevant items, such as asset cost, liability portion of the asset and finance charges. And yet the accurate payment reflects in the cashbook, and the cashbook reconciles to the bank statement. Without a technical background in accounting the above cannot be performed. These occurrences are borne out by my experiences at many establishments, and is in no way meant to be demeaning to the independent use of accounting software. Software users should do their homework, and research the various available packages, on the market, thoroughly. Off and online support to the software should constitute part of the licensing and cost of the software. It is advisable that the users of software should have it customized or tailored by an accountant, and then go for further training.With proper training on accounting software the user will in the long term not require constant assistance from an accountant.

Contact the Author
Sean Goss
 
sgafc@mweb.co.za