Category Archives: Accounting

Simple Accounting Tutorial

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Accounting has a notorious reputation of being a boring and difficult chore, yet no serious minded business owner can ignore maintaining proper financial records. Various packages are available that make accounting a simpler and more bearable task to undertake, especially for business people who have no prior formal accounting knowledge or experience.

Easy to use All-in-one accounting software packages for small and medium enterprises combine a set of features that simplify sales, bookkeeping, filing tax returns and the creation of financial reports. This tutorial addresses aspects of accounting software package that can help empower an organisation.

Setting up bookkeeping account codes

Bookkeeping accounts codes are numeric codes that are set up in the accounting package, usually at the beginning that will be used to record and group the monetary value of similar classes of transactions. For example, accounts receivable or debtors control account code, when they are set up in an accounting package, will be used to record the collectible value of goods or services sold to a customer on a credit basis. The monetary balances on the accounts receivable code will usually reduce when the organisation receives part of the outstanding cash and will increase when more credit sales are made to customer. Other account codes such as accounts payable, fixed assets, expenses, revenue/sales are also created at this point. More account codes can be created in the future as the need arises.

Creating customised quotes & invoices

An accounting package usually has the facility to create quotes for customers based on the organisation’s price-list. If the quote is accepted by the customer and a sale is made, well designed packages allow a seamless conversion of the quote into an invoice. The invoice creation of automatically makes a double entry accounting entry into the debtors account code and the sales account code. The invoice created comes with preset payment terms, e.g. seven days, 30 days, etc. Also, the software allows the user to customise and brand the invoice to reflect the organisation’s identity.

Manage cash flow regularly

Some very good packages enable the organisation keep an eye on cash needs, and possible shortages, before they occur by checking for cash needs. They also aid cash collection by triggering email reminders close to the due date of invoices raised as well as chasers for late payment. Therefore, the system makes the dunning process much easier or unnecessary because of the proactive payment reminder facility that it sends to customers.

Generate purchase orders & control costs

Good accounting software enable the creation of purchase orders for goods and services that the organisation wishes to buy, e.g. office stationery for issuance to suppliers based on a controlled price list. Purchase invoices produced by the supplier can be checked back to the PO to control cost and can be entered in the system as an external invoice. Often, an automatic accounting entry is made by the system to accounts payable or creditors and cost of sale/expenses account codes.

This is a preview of Simple Accounting Tutorial. Read the full post (657 words, estimated 2:38 mins reading time)

Organizing Business With Receipt Scanners

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If you own a business, and you take credit cards or debit cards, it can be difficult to manage the different receipts that are available, especially with the credit cards. In order to be able to protect yourself for payment, it becomes important that you are able to handle the type of receipts that have been printed from the products that were sold.

The best way for you to be able to manage and organize the products that were sold is to purchase receipt scanners for your clerks to scan the receipts after the store is closed. This is the most convenient way in being able to digitally store the receipts.

After printing out the receipts and saving a store copy, the clerks can then take the receipts that were printed out in the day, and scan them with the receipt scanners. Receipt scanners are normally portable wand-like scanners that can be easily utilized to keep a digital copy of the receipts.

With a digital copy, it is then easy to organize the receipts into some software or a different type of archive that can then be easily accessed at a later date! You can categorize the receipts based on the dates, the amount of the purchase or by the products purchased depending on how many products were purchased and the company custom.

Generally, the receipts are ordered by dates, and the dates can then be used to search the products were purchased. If the company is looking for a specific product that is purchased, normally, the software will be able to filter through the receipts to find the dates that the product was purchased.

Depending on the type of software that you have, generally, you will need someone to transcribe the text although at times receipt scanners may come with software that can identify with the type of product that was purchased at a specific date.

Receipt scanners are useful tools that will help a company organize the products that they have sold. It is a great way of being able to manage the company’s financial records to keep everything organized. There will no longer be any confusion on the type of products that were sold or who the products were sold to, especially if there is a problem with collecting the payment from credit card companies. It’s also an easy way to determine which credit cards were stolen and which purchases did not go through properly.

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Cash Flow Solutions – Planning and Management

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A client with a small business wrote to me the other day to say that they are growing fast and should crack at least $1m T/O at the end of this financial year.

He then went on to say that it seems these days they were always pushing the end of their bank overdraft and struggling for cash.

He then asked what they were doing wrong and what factors should they look at to see if they were on or off track?

Well, I didn’t know if they were doing it wrong, but the answer is in the next part of the last question.

This is not a question about finances, insufficient start-up capital, cash-flow or growth. It is, beginning and end, about Planning and Management. Everyone needs to consider this, because whilst some of you are doing some of it, probably no-one is doing all of it. Growth can be self-induced or market induced; it doesn’t matter. If it’s self-induced you have a lot more control over it, as against market induced growth which requires some degree of reactive management.

Either way, the end result is determined by the ability to manage. The question then becomes “manage what?”

Everyone should be using a form of Strategic Planner. Using a strategic planner in conjunction with your budgets and cash-flow projections prevents cash-flow crises because it gives you the ability to plot the implications of sales or cost variations upon the future state of the business.

You then have the ability to make management decisions based on those projected occurrences and to avoid any cash-flow crisis that could occur. The danger in these situations is that you either don’t monitor closely enough or you put off making the management decisions until the implications can be decidedly unpleasant or at worst catastrophic.

At a time of high growth, and more so when it is market induced, it is also very easy to lose control of debtors so it is even more important to maintain strong debtor management as there is frequently an increasing bottleneck caused by cash required to build up input resources, as against payment for sold products. Whilst this can often be off-set by negotiating with suppliers for extended terms of credit prior to this growth period, it does not remove the need to monitor closely and manage strongly.

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Accounting Software Reviews – What to Look For

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The internet is now a growing platform for people to give their opinions and reviews for just about any product these days. Whether it’s a review site like Yelp.com or simply a review in the Google Places Web listing for a business, you are now able to find reviews for all types of products and services. So how do you sift through the garbage and get to the important stuff in a review of accounting software? Keep these tips in mind and make the most of online reviews to help you make the right decision.

Look for details that matter.

There are certain things your company must have in an accounting software package; however, don’t expect to learn about every single feature in a review. Save those questions for your product demonstration. Reviewers tend to focus on the big picture: the company’s service, support, and generally how the product has worked for them. Use the reviews to get that kind of information, not recommendations for all of the features you are seeking.

Think about the big picture.

If somebody in a review says they wish the invoice numbers were a little further left, or other such minor issues, take it with a grain of salt. You want accounting software that fits your business needs, but there is no program that can cater to your every need. (Open source, or completely customizable software can come close, but it’s exponentially more expensive.) It’s best to look at reviews to learn more about big picture subjects like: how did the implementation and training go? Was the price right for what they received? How is the product support?

Consistency is king.

If 90% of the accounting software reviews for one manufacturer are good, and then there’s one bad one in the bunch, be sure to remember that you cannot please everybody all of the time. Always consider how many good reviews are out there in relation to how many bad ones. The reverse is also true, if there are a large number of bad reviews compared to the good, you might just want to steer clear of that vendor.

Stars and ratings are subjective. Remember back to your school days when one teacher’s ‘A’ grade was another teacher’s ‘C’? Similarly, one user’s 5 star rating is another user’s 3 star rating, and so on. Some people sparingly give out the 5 star ratings, while others love to shower businesses with compliments. Read the comments, compare good to bad, and focus on the big picture, and you will get what you need from accounting software reviews.

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