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post Jun 7 2008, 08:11 PM
What accounting software(s) do you use or recommend?
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post Jun 8 2008, 01:10 AM
I think the choice of accounting software essentially boils down to budget and requirements.

For a small companoes, most people would likely go with PeachTree or Quickbooks.

For example, if you're writing 20 checks per month, you probably don't need an accounts payable module.

If you only have 10 journal entries, you probably don't need to upload journal entries.

If you have really simple accounting needs, you could probably do your accounting on a spreadsheet program like Excel (provided you know what you're doing).

Is there anything specific you want to know, I'll be happy to share some of the experiences I've had over the past 20 years I spent as an accountant (in a previous life).



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post Jun 8 2008, 02:21 AM
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20 years I spent as an accountant (in a previous life
I didn't know that you were an accountant, Garrick.

I use a Google Documents spreadsheet. It is just like Excel but I can add items to it from any computer.
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post Jun 11 2008, 07:39 PM
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Is there anything specific you want to know, I'll be happy to share some of the experiences I've had over the past 20 years I spent as an accountant (in a previous life).


Thanks Garrick. To be truthful, I am not very clear myself, but here goes -

As per the quickbooks 'help me choose' guide, my business type is professional services and my financial activities would include:
* Track sales, sales taxes & customer payments
* Print checks, pay bills, track expenses
* Manage my finances via the Internet using standard Web browser
* Create business plan & sales forcasts/expense forecasts
* Set billing rates by employee, customer/client, position or service

(I am not very sure about the 4th point - create business plan ... forecast ... - how exactly does that work?)

The software would also need to manage employee payroll. One great thing would be if it is India specific.

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post Jun 11 2008, 08:56 PM
No inventory. That make things much easier. smile.gif

Virtually all of my experience is with large company accounting packages. Quickbooks is typically for the small business owner. I don't have any first hand experience with that particular package, so I can only talk in general terms. Hopefully, the following will be sufficient to at least get you started.

QUOTE
Track sales, sales taxes & customer payments


Look for the Accounts Receivable ("A/R") module. You will have to set up a 'profile' for each of your customers, entering basic information (company name, address, phone, payment terms, etc.). There is probably a program that will allow you to create (paper) invoices to be mailed to your clients. It is through these invoicings that will allow you to keep track of your sales. I'm not sure if you have sales tax in India, but generally speaking, services are not taxable in the US, so that would be a non-issue if you were doing business in the States. If you are required to collect and pay a sales tax, it will be a separate database field so that you can keep track of how much services versus sales taxes were collected. All of this information should aggregate in a periodic report (most likely, monthly or quarterly).

The A/R module will most likely make an automatic journal entry into your general ledger ("G/L") module, which is where all of your journal entries are recorded. This is an example of a sales journal entry (simplified):

Debit: A/R
Credit: Sales

When you collect payment on these outstanding receivables, there will probably be a cash module that will allow you to apply incoming payments to open invoices. Similar, the cash module should make an automated journal entry to the G/L. Example:

Debit: Cash
Credit: A/R

Notice how the debit and credit in the two above examples will cancel out each other. Essentially, this means that the outstanding receivable is no longer open (i.e. paid).

QUOTE
* Print checks, pay bills, track expenses


Paying bills. Oh, the fun of it. Incurring an expense, aka Accounts Payable ("A/P") is essentially the opposite of an A/R. You owe someone money, rather than them owing you.

Invoices are entered into an A/P module. Essentially, this is the mechanism that allows you to record expenses. Example, you pay your monthly rent:

Debit: Rent Expense
Credit: A/P

Throughout the course of the month, all of these 'expenses' are recorded through the A/P module. You want to segregate your expense by expense type (e.g. rent, utilities, telephone, hosting services, payroll, etc.). All of these expense categories become the 'bottom' have of your Profit and Loss Statement (aka Income Statement), with the 'top' half, of course, being your revenue. Revenue minus expenses equals net profit. Not too hard to figure out.

When you pay these open payables (A/P), you will most likely run a report that will 'select' all open invoices which are due. Never pay bills before they are due (to maximize your cash flows). This is typically called a pre-check run (i.e. enabling you to review what you are about to pay). Then, when all looks good, you load your blank checks into your printer and hit the "print" button. This will automatically generate checks to be mailed to your suppliers/vendors. The A/P module will automatically generate the appropriate journal entry to make the following entry.

Debit: A/P
Credit: Cash

QUOTE
Manage my finances via the Internet using standard Web browser


Not sure what that means. Your 'personal' finances and business activities should never be co-mingled together. At the end of the year, you will have a tangled ball of yarn that will be virtually impossible to untangle. Always keep them separate -- always.

QUOTE
* Create business plan & sales forcasts/expense forecasts


Just as you don't start coding webpages without a clue of what its going to look like, you shouldn't run a business without some clue about where you are going to wind up financially, in the near term. This is called a budget or forecast. Preparing a forecast is essentially looking at your Income Statement and predicting what it will look like for the upcoming months, quarters, and years. Forecasting can be very tricky, especially with a new business, as you have no historical data to base it on. Once you have some history, you can more or less tell 'approximately' what your expenses and revenues will look like. The easiest way to look at expenses is in terms of fixed and variable expenses. Examples of fixed expenses would include rent, hosting fees, insurance, property taxes, etc. Variable expenses could change based upon sales. For example, the credit card fees you incur (if you ran an ecommerce business, for example) will be a function of your sales (i.e. apply credit card fees rate to revenue).

QUOTE
* Set billing rates by employee, customer/client, position or service


I would imagine this is party of the A/R module, where Joe charges $100 per billable hour, whereas Whitemark gets to charge $350 per hour (since he's the big boss). Enter the number of hours and the invoicing system will do the appropriate computations, based on each employees' respective hourly rate.

QUOTE
The software would also need to manage employee payroll. One great thing would be if it is India specific.


You want to look for something called a Payroll module. Payroll tax laws differ from country to country and even between state to state in the US, so its important you get the right one. Practically speaking, however, I wonder if its more trouble that its worth if you only have one employee to keep track of. You could easily do it on a spreadsheet program, tracking time, hours, amount paid for each payroll period, etc. It really depends how much payroll paperwork is required to be filed with regulatory agencies. I'm not sure if Quickbooks has that kind of sophistication. Its really a big headache to administer payroll in the States.

Well, that's the basics of accounting. I could probably go on to write a 500 page book, but I'm not getting paid to do this, so I'm not going to. smile.gif

Hope this helps other small business owners with their accounting needs.

This post has been edited by Respree: Jun 11 2008, 10:32 PM
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post Jun 11 2008, 09:10 PM
Not sure what you want in termks of specifics, but a guy In know runs http://www.saasu.com and it gets rave reviews. As an online solution, the best part is that you can access it anywhere. Check it out, you might find it suits your needs.
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post Jun 11 2008, 09:15 PM
Garrick has given good general advice.

What I would suggest doing is asking your accountant what software they use.
This often makes data transfer easier and less expensive.

If you do not have an accountant (I recommend one for year-end at least) ask several which apps they use and why - make it part of considering their services and get lots of free advice/info. smile.gif

Requiring an Indian support component may impose some limitations. You need to be sure whatever software will conform to country specific laws, regulations, and tax codes.
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post Jun 11 2008, 10:54 PM
I failed to mention one important point -- the big picture.

One thing I'd like to add about accounting is to take a good look at your particular situation from a practical point of view.

Its a good idea to ask yourself if your time better spent on accounting or hiring a professional accountant to do it for you. Most business owners are good a running a business, marketing, sales, production or whatever their forte is -- more often than not its not accounting. While many cringe at the idea of paying someone to do what they can do themselves, hiring an accountant can sometimes be the smarter choice.

You might think you're saving $500 on an accountant by doing the books yourself, but giving up the opportunity to generate $5,000 for your business.

Its also possible to split the difference, with you assuming the easier tasks (maybe like paying bills and collecting receivables) and leaving the harder tasks (like journal entries, financial statement preparation and analysis) to the accountant.

Again, it depends on your particular situation and accounting skills. If you've taken Accounting 101 in college, that's really all you need to know to do the books for your own (small) business.

Another consideration is frequency in which you need to see the financial statements. Most medium to large companies produce monthly financial statements, but you might consider doing them quarterly, if your business is relatively small and stable (i.e. relatively predictable). This should reduce your accounting bill or effort in preparing the accounting by about 75 percent.





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