Accounting

How to Choose the Right Accounting Software for Your Business

2007-09-27T21:01:00.000-07:00

How to Choose the Right Accounting Software for Your Business

by: Kishor Modi

With any good luck and a good amount of hard work, you're having the same problem many business owners today are facing. Your business is growing rapidly and you're having problems controlling your finances. Time and time again, that Microsoft Excel spreadsheet you've been using just isn't getting the job done for you.

So, you’ve decided that you’re ready to take the next step, and buy a full-featured accounting software program. Many options are available to choose from, but I believe the best solutions to be Quicken Premier Home and Business by Intuit, QuickBooks Pro also by Intuit, and Peachtree Accounting by Sage. In order to decide on the right package for you, you need define the type of business that you operate.

With the rise of self-employment (businesses with one or more owners but no paid employees) a need has arisen to manage business and personal finances on one platform. Intuit has released Quicken 2005 Premier Home and Business to fill this need.

This software is perfect for the small business owner who receives income from investments, real estate, and/or internet
marketing. Also, Quicken 2005 Premier Home and Business is well priced at only $89.95.

For more typical brick-and-mortar business owners, you will usually need a more robust solution like QuickBooks Pro or
Peachtree Accounting for functions like payroll reporting and check producing. Each piece of software has its advantages,
but don't forget that QuickBooks has been the standard in business accounting software for many years now. As for features and basic operations, both applications will provide you the same functionality and convenience for your business.

One additional factor to consider in your decision is that Peachtree Accounting is less expensive than QuickBooks. Both
starter versions of Peachtree and QuickBooks are priced at $99.95 each, but the full-featured version of Peachtree is priced at only $199.95 while the full-featured QuickBooks Pro is priced at $299.95.

At the end of the day, the biggest advantage QuickBooks offers over Peachtree is compatibility with other applications. For example, most commercial banks (Bank of America, SunTrust, etc...) provide you with files designed to work directly with

QuickBooks, so that you can read, study, and decipher transaction details. Also, some banks will allow you to update account information in real-time with QuickBooks. Check with your bank to see what accounting software their online services support, and you should be able to make your decision.

Do You Need Accounting Software For Your Small Business?

2007-09-27T21:00:00.000-07:00

Do You Need Accounting Software For Your Small Business?

by: Kishor Modi

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!

Surprise! Accounting is the Hot New Major

2007-09-27T20:57:00.000-07:00

Surprise! Accounting is the Hot New Major

by: kishor modi

There was a time when accounting was the boring college major that many people regretted signing up for. A constant barrage of numbers, statistics and spreadsheets was none too interesting.

Boy, have times changed! Thanks to recent accounting scandals by companies like Enron, there is a high demand for accountants and auditors.

According to the Job Outlook 2005 survey, accounting comes out on top as the most in-demand major on college campuses. Forget dot com start ups. Cleaning up a company’s accounting books is what’s in.

But can accounting be sexy?

“All the focus on accounting created a perception to students that accounting matters and is perhaps even sexy,” says Ira Solomon, head of the department of accountancy at the University of Illinois at Urbana-Champaign.

Colleges are scrambling to find more accounting teachers and professors to replace those retiring. Not an easy task, since there are twice as many accounting faculty openings than applicants to fill them.

Here are the top 10 most in-demand college majors as surveyed by the National Association of Colleges and Employers (NACE):

1) Accounting
2) Electrical Engineering
3) Mechanical Engineering
4) Business Administration/Management
5) Economics/Finance
6) Computer Science
7) Computer Engineering
8) Marketing/Marketing Management
9) Chemical Engineering
10) Information Sciences and Systems

If you’re good with numbers and a stickler for details, you might want to consider accounting as a good career choice. However, you’ll probably have to take a number and wait in line behind all those other future accountant hopefuls.

Accounting Police: Do They Exist?

2007-09-27T20:55:00.000-07:00

Accounting Police: Do They Exist?
by: kishor modi

Who created accounting principles? Who sets and revises accounting standards? What if you don’t follow all the rules, do you go to jail? Is there an accounting police force that investigates and arrests violators? It would seem that there must be some regulatory force to make sure that providers of financial statements conform to the rules. There is, up to a point, and here is how it works:

Mainly, it’s all voluntary and it works pretty well. First, double-entry accounting originated in Italy in the 1400’s, so its been around awhile. Accounting principles have evolved over the years just as have accounting standards. The reason why the system works is that the business community could not function if there was not commonality and consistency in financial statement reporting. It would be chaos, much like if there were no driving rules of the road.

Therefore, in the United States, a body of experts known as the Financial Accounting Standards Board (FASB pronounced Fasbee) was established in 1973, which superseded another board called the Accounting Principles Board (APB). The FASB members go through a lengthy process of analyzing and reviewing problems in the accounting field that are brought to them. After much thought, they will make a pronouncement as to what they think the new or revised way of approaching the treatment of an accounting issue should be.

They are a non-governmental organization that has private financing. A big supporter of FASB is the American Institute of Certified Public Accountants (AICPA). Many Certified Public Accountants (CPAs) belong to this prestigious organization and are obligated to abide by its guidelines and principles of behavior. Other countries no doubt have similar organizations that require high levels of accounting professional conduct.

FASB established an accounting code called “Generally Accepted Accounting Principles” or (GAAP). The assumption is that if a business financial statement is prepared according to GAAP, then the user of that financial statement could rely on or trust the information more readily than if not prepared according to GAAP. Those businesses that deviate from GAAP, and many smaller businesses do, cannot say that their statements are prepared under GAAP; in fact, they should inform the reader that they are not. However, let the buyer beware.

One governmental body that has a policing function is the Securities Exchange Commission (SEC). It is primarily concerned with public companies because their job is to protect investors from unscrupulous acts. Recently, the SEC has gotten into the act of establishing accounting standards. It has its hands full today.

Since most businesses use their financial statements to prepare their required income tax returns, the Internal Revenue Service (IRS) may audit those tax returns and review the financial statements upon which the tax returns are based. Not following the rules can get you in trouble with this governmental body.

You can see that in many ways compliance to the principles and standards is a mixture of voluntary and regulatory behavior. Currently, there is an effort underway to set international accounting standards due to the inexorable globalization process. This is a massive undertaking that will take years, but it is obviously necessary and inevitable.