Tuesday, June 11, 2013

Best Practices: Accounting II

When I am speaking to potential entrepreneurs, I am often asked if they should hire someone to help with the accounting.  With the emergence of accounting software programs, many small business owners go it alone when they start their business.  This usually is a mistake unless they have an accounting background.  While QuickBooks, Peachtree, and other programs are very user friendly, there are some common setup errors that occur.  There are also differences in how the programs function so picking the right one for your business is very important. This is where an accountant can be very helpful.

Spending the time to make sure you have the right program for your business and the right set-up can make the accounting process function smoothly right from the start.  Having good accounting means you will have usable financial statements which a new business owner needs as they are working through the crucial start-up phase.
Many business owners only think about accounting at tax time.  Accounting software programs cost money so utilizing the information available from them year round is sensible.  Trends can be seen in financials if you know how to read them so using accounting information from a management perspective is also crucial.  We meet with many of our clients quarterly to help them review their financial statements.  Having fresh eyes look at the numbers often provides insights the owner may miss.  While the owner knows the business inside and out, they usually do not have the experience analyzing the financials and this is where your accountant can be useful.
If your business is going through a growth spurt or a slump, you may also need an accountant’s expertise.  Figuring out how to manage cash flow through a period of rapid growth or putting together a turnaround plan if your business is struggling is another useful function of accounting.
When do you need help with your accounting?  When you are starting a business, on an ongoing schedule to keep your business on track, when you are growing or when you are struggling.

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