Wiring An Accounting System

Accounting is an intrinsic part of any business, regardless of the industry in which your company operates. The same rules that apply to your personal finance also apply to running a business. More clients translate to more business, and this equates to an increase in the volume of transactions and records you need to review. At a minimum, you need sound bookkeeping to ensure that your accounting is in order. Bookkeeping practices determine how well your records are maintained, or how well your accounts and statements are balanced or reconciled. Seemingly small things such as recording receipts and invoices can be omitted inadvertently when you are in the midst of managing client needs and business matters. Often, these matters become a priority only as tax time approaches, and at that point you have a lot of things to accomplish - often with little time to spare.

Choosing automation
As an enterprise or a small business, you are likely to wonder, "Why bother taking my accounting system online?" For someone managing a startup, taking an accounting system online might seem like an expensive and time-consuming proposition. Few consider the immense benefits of taking the accounting and bookkeeping systems online. Automating your accounting could enforce better bookkeeping practices through diligent record-keeping. There are several smart programs that also help users choose different levels of accounting. Thus, you have software that does not just keep records; it also helps you track inventory and compile your tax-related information, as well.

Define your requirements
If your needs are outlined clearly, you will be better able to choose your software.

1. Assess Needs- Start by recording your needs so that you can evaluate and analyze them. If you have others working for you who will use the system, solicit their input, as well.

2. Gain Management Buy-in- What are the factors or attributes that steer the decision-making process in your organization? What are the hurdles you face in decision-making, or in the execution of an idea, or implementation of a plan? Do you see potential for improvement in this area if you were to implement automation? Based on the answer to this question, develop a list of areas that could benefit from automation.

3. List Areas that Could Benefit from Automation- Determining the actual cost savings on automating specific functions can be challenging. Don't worry - you are still in the process of assessing your needs. Check if the volume of work generated by your business currently involves manual labor for extended periods. Are those man-hours better invested elsewhere, for example, in bringing in additional revenue for the company? Compile a list of activities or chores similar to this, count the labor-intensive tasks, and analyze whether it would help to have them automated or not.

4. Leverage the Experts- Contact someone with the appropriate expertise who can assist with implementing the automation. Discuss the estimated number of saved "man-hours" with them and check whether they can help in automating certain processes of yours.

Analytix Solutions
The Company that CPAs Recommend
Analytix Solutions is a professional full-service business support solutions provider. The company offers comprehensive and scalable accounting services and bookkeeping services while leveraging its expertise, experience, and state-of-the-art infrastructure. It offers multiple services in diverse packages for companies that are seeking a trustworthy and professional partner to give their business a head start.

Accurate Bookkeeping System, Reliable Accounting

In a small business, the terms accounting and bookkeeping may be used interchangeably; but each of them has well-defined functions. A well-maintained bookkeeping system is a necessity for the accounting system to function properly, which in turn supports the smooth functioning of the business offerings and its deliverables.

Bookkeeping Functions

The range of functions that falls under bookkeeping is vast. It must be mentioned here that if you're looking for an efficient accounting system, a business must perform certain functions on a daily basis. The foremost among these being recording income and tracking expense. These are entries that the accounting system will build up on, for tracking finances as well as for tax reporting.

An ideal bookkeeping system includes the following tasks:

- Keeping track of all financial transactions of the company such a purchases, sales, payments made, and payments received
- Recording income, cash outflow, and bank transactions of the company
- Reconciling bank accounts, keep track of deposits in the account, writing check, and keeping banking reports updated
- Preparing and maintaining reports such as the income statement and the company's balance sheet

These records, collectively, provide the basis for sound accounting processes in the company. More importantly, the bookkeeper's work allows the accountant to prepare reports for declaring income and filing taxes with the government.

Small business and Bookkeeping

In a small business, resources are limited; it is possible that the business owner or partners themselves function as bookkeepers and accountants as well. A significant disadvantage with this system of accounting and bookkeeping is that because owners and partners are also concerned with managing client deliverables and ensuring sustenance for the business, they may not be able to ensure 100% accuracy in record-keeping at all times.

A viable option for small businesses or companies with limited resources is outsourcing. Locating a trustworthy vendor or accounting and bookkeeping services provider can go a long way in ensuring:

- Accuracy in accounts
- Accurate reports for tax purposes, and
- Less chances of monetary losses as a result of a recording lapse.

Outsourcing saves a huge amount of money that would otherwise go into setting up and maintaining an entire department, complete with infrastructure and manpower. More importantly, depending on your needs, a vendor will ensure high-quality work on time.

Interested in learning more about accounting and bookkeeping outsourcing? Ever outsourced your support functions previously? Share your experience with us, we would love to hear from you.

Satish Patel, CPA
President, Analytix Solutions
Satish Patel, Founder-CEO of Analytix Solutions, has more than two decades of experience as a CPA. He has also advised small and mid-sized businesses on diverse matters such as valuation, accounting, and finance. His experience extends to raising capital and arranging for finance from angel investors.