Thursday, 7 July 2016
Best Practices of Accounting for Small Business
How to choose the right method Accounting for small business?
In order to figure out which method of accounting for small business, the best way would be to analyse it in terms of the size of your business. It also depends on who would be preparing the books of accounts, would it be the proprietor himself, a full time accountant, accounting department or bookkeepers. When you choose the accounting package, it should be in line with the requirements and the comfort of the person who would be operating the software or working on the books of accounts.
The reason for this is that the capability of the user should be in line with the type of Accounting services and the quantity of transactions done in year, in order to gain the best results. For example, if you spend a lot of dollars spending on a sophisticated high end software, and your accountant is not aware of most of the features that could be used, he or she would not be able to make full use of it, thus even though you wanted the best for your business, you are really just miss utilising your resources.This could be the other way round also. If you choose to hand write your Accounting for small business, and your accountant needs more complex reports and data, he/she would have to spend extra time creating those reports, thus increasing their efforts. So, a software should be purchased after thorough consultation and training of the person who would be using it.
Normally for small scale businesses, credit is tight, so it is important for your business to invest in an Accounting software that would provide proper financial control and up to date cash flow statements.
Traditionally accounting for small business was done on handwritten paper, while this would not be feasible for large business houses, many Small business accounting still conduct their businesses this way. The issue with this is that while it would be the most cost effective, it would be very time consuming. Also now most government agencies insist of having returns and tax forms filed electronically, so firms would have to then input all these data online anyways. Nowadays the cost of accounting softwares is also not that much. So it would be beneficial for the firm in order to invest in one.
So basically, as a small business owner, you have a choice between choosing from handwritten accounts, using spreadsheets or to invest in an accounting software. All these have their own different sets of financial control and time consumptions. For the firms where the proprietor has no employees, and a limited number of transactions, it would be best if he/she opted for a handwritten accounting method. A few more employes and better transactions he/she could shift to spreadsheets. As the firm grows they can opt for softwares that would help them in accounting for small businesses. There are various softwares that can be used. Have a word with your service provider.
A leading outsourcing provider, Rayvat Accounting , works on accounting softwares like Xero, Netsuite, Quick book- Online, Quickbooks- Desktop, Zoho, Unleashed, Myob, Sage 50, whatever the client needs, he gets.
If we look at accounting for small business, it is very important to have the right person do it. Since there are so few resources that are available for a Small scale accounting business, accounting reports help the proprietors make the right business decisions.