How to Set Up a Small Business Accounting System

Many small business owners (including myself) tend to focus on the more glamourous aspects of their business like sales and marketing and product/service development.  As a result, accounting (poor misunderstood accounting) does not get the attention it deserve.  In addition to the perception that an accounting system does not necessarily add value, they can also be a little intimidating.  However, setting up an accounting system does not have to be complicated and should be considered essential for any small business or self employed owner (the reasons for which will be covered in my next post). A good software tends to handle most of the complexity of accounting as long as the data is entered accurately.

The primary steps in setting up an accounting system are represented below:

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3 Invoicing Options for Small Businesses and Freelancers

If you are running a business of any size, it is essential that you have a system in place that allows you to get paid.   A system can range in sophistication from a handwritten receipt to a software generated invoice which is part of an entity wide CRM system.  To meet this need there are countless invoicing solutions available and many billions of dollars are spent annually on setting up systems to meet each business’ unique needs. 

Almost all accounting software geared to small business owners and freelancers have built-in invoicing modules that integrate with your accounting.  This is very useful when doing your books as you don’t have to worry about entering your invoicing manually and it allows you to track your accounts receivable and deposits into your bank account.  There are also invoicing solutions that are not full-fledged accounting systems; however they usually integrate with the more popular software.

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19 Features to Consider When Selecting Small Business Accounting Software

When selecting accounting software for your small business it helps to have an understanding of what you want your accounting system to do for you.  This involves analysing the key aspects of your business, determining what you must have and what you would like to have.  Then, like any good cost benefit analysis, narrow it down to what works within your price point.  Below is a checklist of questions you should ask yourself about your business financial needs before selecting a software:

Cost:

Assessing how much the software is going to cost you is perhaps the most important consideration.  Some accounting software are free, some charge a one time fee and some are based on monthly or annual (recurring) billing.

Platform /Apps:

Determining whether you need your accounting software to work on a Windows or Mac platform or whether you would like to access it from the cloud can be an important consideration.  For example Quickbooks Canada does not currently offer their software for Macs or online. 

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Quickbooks Online Banking: Setting Up, Deleting Matched Transactions and Manually Uploading Web Connect or Excel Files

Using online banking can be real time saver for businesses with numerous bank transactions.  It is primarily a tool to help you reconcile your bank accounts by matching the transactions that have already been entered in QuickBooks.  It helps to avoid the painstaking process of checking each transaction against your bank statement and the maddening frustration when you something goes wrong and you have to redo it. 
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How Being Prepared for Bad Debts can Improve Cash Flow Decisions

One of the more unpleasant aspects of being a business owner is having to chase clients that do not pay.    It is simeltaneously frustrating, stressful and disheartening, while attempts to collect are an utterly unproductive use of time and can have a significant impact on cash flow, particularly if you are unprepared.

There are ways to mitigate the possibility and impact of bad debts.  Some of these include: 

  • Performing a credit check on potential customers
  • Charging a retainer, which is paid up front
  • Offering discounts for early payments
  • Allowing several payment options including credit cards which allows for immediate payments
  • Following up on delinquent receivables dilligently.

Regardless of your efforts to prevent them, incurring bad debts is often inevitable and ultimately, a cost of doing business.  Consequently, it is important to ensure that you are prepared.

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Is QuickBooks the Right Accounting Software for Your Small Business?

The search for accounting software can be a confusing and overwhelming process.  A Google search for “small business accounting software” yields 6.75 million results.   Trying to get recommendations from other business owners often results in passionate discussions about why a particular program is great while another one sucks.  Your accountant might point you in the right direction, but will sometimes recommend a program that they are comfortable with using, but might be too technical and not necessarily be the best solution for you.  With so many choices out there, it can be difficult to know what to do.

If you are seriously contemplating purchasing or replacing your accounting software you have undoubtedly heard of QuickBooks.  Intuit (the corporate entity behind QuickBooks) has brilliantly extended their reach to the point where the large majority of small businesses use their program in one form or another.  Some people love it, some tolerate it and some actively seek out alternatives.  This article is meant to provide some insight on whether QuickBooks is the right choice for your small business:

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How to File T4s using Quickbooks

For all Canadian businesses that have employees on their payroll, the deadline to file your T4s is February 28th, 2010.  The good news is that it has become much easier to do particulary if you are efiling.  The Canada Revenue Agency (CRA) is encouraging businesses to file electronically (efile) the T4s and it should be noted that e-filing is mandatory for employers with more than 50 employees.  
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Daily Spiel: Starbucks Logo, Duplicate Quickbooks Invoices, Promote your Small Biz Website

It's Not About the Starbucks Logo, Stupid

It seems that this picture is worth a lot more than a thousand words.  Starbucks removes Starbucks from it's logo and makes it more minimalist thereby joining the ranks of Nike, Apple and McDonald (explainersunnecessary).  This should allow them to change direction and pursue greater expansion opportunities.

Duplicating Invoices in Quickbooks

If you've ever wondered about how to duplicate an invoice in Quickbooks either because it is similar to another invoice or you want to create a recurring invoice :

Small Business Accounting Software for Canadians

There are actually two ways to do this:

1. Select the invoice you want to duplicate and click on Edit on your menu (or right click) on the invoice and select "duplicate invoice". Voila - you have a duplicate invoice.

2. Same as above, but instead of duplicate invoice select "memorize" invoice. A dialog box will come up asking you (among other things) "how often" to which you can select the appropriate time period (in your case it would be annually). You can then choose to either remind you when the invoice comes due or QB can automatically enter the invoice.

(Answered on Quora)

How to Promote a New Small Biz Website

Some great ideas for promoting your smalll business website.  Free options include signing up for Google analytics, setting up a business blog (search engines tend to rank websites with blogs higher) as well as Twitter and Facebook accounts.  Additionally, commenting on other blogs in your niche and answering questions on Yahoo answers and I would add on Quora and Business.com are other free and effective ways to improve your website exposure and establish yourself as an authority. 

 

How to Update Quickbooks for the 2011 QST Rate Increase

On January 1st, 2010, Revenue Quebec will be in increasing the QST rate to 8.5% (yay!), bring the effective rate of QST to 8.925% and  total sales taxes (GST and QST) to 13.925%, since the QST is actually charged on the net price + GST.  This will affect anyone who charges QST including small businesses and self employed individuals.  More info on the rate increase can be found at Revenue Quebec QST Rate Increase page.

For those of you using Quickbooks you will need to update the QST being charged on both sales and purchases.  The goal is to make a copy of the already existing QST on Sales and QST on purchases items, which will maintain the old rate.  Once this is done the existing "items" should be updated with the new rate.  This will automatically feed into and update the sales tax codes, so that you do not have to re-create them.  Keep in mind that this should be done on January 1st, 2011 or first day back after the holidays, so that transactions prior to 2011 are not affected.  The following are the steps required to make the change:

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3 Online Accounting Software Options for Small Business

As cloud computing gains in popularity, the availability of online accounting software continues to grow.  Many small business owners want a software that has an intuitive and easy-to-use interface  that allows them to bill customers, enter expenses and check their bank balances,.  We also want to be able to access from anywhere (you never know when the desire to do your accounting, strikes!)  I have looked at 3 cost effective, multi functional alternatives below:

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