Small Business Accounting Software: Your Early, Critical Decision

Small business accounting software comes in many flavors including expensive and complex to inexpensive and simple and onto open source and free accounting software. One of the most critical early decisions you need to make before you start a business is to determine which accounting software package you will select. Then you need to learn it and feel comfortable using it. If you have been using personal accounting software or a small business software program at another job, then that could well be the deciding factor. 

Here are a few key pointers to help you select Small business accounting software:

  1. Hire your accountant before committing to a small business accounting package. He or she will offer great advice on what software package to use that is highly compatible with what his or her firm is using. If, however, you are starting the business on a frayed shoe string and cannot afford an accountant, learn as much as you can about the small business accounting package that you purchase before starting the business. If you will "do it yourself," you must prepare quarterly reports as well as prepare taxes. This can be daunting for the new business owner who wants to focus on customers, product, branding and so forth.
  2. Learn and use the small business accounting software yourself, whether or not you turn over all bookkeeping/accounting to another employee who will work with an outside accountant. The right small business accounting software package is an incredible productivity tool that will save you hundreds of hours of work if you learn to use it properly and understand all of its capabilities. The great benefit of the properly selected small business accounting software is that you only need to input the information once. You can then slice it and dice it in different ways for current use and then again at tax time. If a tax issue should rear its ugly head--and eventually it does!--you have all of the key information safely tucked away in an electronic file. 
  3. Learn the basics of accounting before you launch the business. As you are pondering your new business and trying to work out all of the many details, learn the basics of accounting. If you are not knowledgeable on the subject, take a course at a local college or get a good basic book on the subject.
  4. Regardless of the business you are going into, be positive about your ability to handle and understand numbers and the small business accounting software package. Don’t say to yourself that you are no good with numbers and move forward to start a business. That would be like someone who wants to be a racing car driver saying that he is not a good driver. The bottom line of accounting is that there are three measures of your business that will come up time and time again: your balance sheet, your profit and loss statement and your cash flow statement. It is like the scoreboard at a baseball game, except that these three measures are keeping score of you and your business. Learn about them!
  5. Use the cloud or not. Many software programs are available in a cloud version or only on the cloud. With so many financial institutions being hacked into today, you may want consider using software you can have on your computer and then save your critical financial results on back-up disks.

This article discusses small business accounting software in general. Click the links below to see details on specific brands of software. These, of course, are general programs. Depending on your business, there are numerous specialized packages on the market including church, farm, construction and contractor, mortgage, retail, nonprofit, medical, inventory, fund raising, payroll, law firm and even hedge fund accounting software. There are also free downloads, simple, simplified and cheap small business accounting software available. There are great programs available for both PCs and the Mac and you can find good deals on eBay.

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