Five Key Components To An Efficient Accounting System. How Does Your System Rank?

Most businesses today have abandoned the notion of a "paper" accounting system. Although, businesses still refer to various accounting "books" and a "general ledger", these elements are all computerized. Technological advances have made accounting IT systems both feasible and affordable for even the smallest businesses to utilize. Both off-the-shelf and customized accounting solutions foster operational efficiency like never before, for any size business. These systems provide access to critical, consolidated automated reports for decision making. For any size company, there are five key components that must be considered when integrating an accounting system into your business.

1. Software Program- Today, there are multiple software programs from which businesses can select. Some are targeted towards a small business or micro business, while others are geared towards the needs of enterprise level companies. Consider what your own company's individual needs are, and select a software program that provides you with the flexibility and features you need to run your business. If you are unsure of your needs, consider working with a consultant or business advisor who can guide you in this decision. Often times, consultants and advisors have the expertise to customize off-the-shelf solutions if they do not fit your exact needs and provide the appropriate training, as well.

2. Existing IT Infrastructure- When selecting and integrating an accounting system into your business, the existing IT infrastructure component contains critical elements to evaluate. Network structure, number of desktop computers, printers, remote access, and current operating systems are all important considerations and may impact the accounting systems integration.

3. Data- Although it may appear obvious, the data collected for accounting purposes is a vital component to an accounting system. What is not always sufficiently evaluated, however, is determining what data is actually captured. Careful consideration must be given to the types of transactional or core business data that will be stored in the accounting database and the ease at which it can be accessed. Will the data be entered cross departmentally? For example, will vendor invoices requiring payment by purchasing be stored in the same database as payroll or timesheets? How will inventory be registered on financial reports?

4. Security and Internal Controls- When integrating an accounting system into a business structure, business owners must determine who has access to the system and at what security level. This includes not only password and login information or number of user licenses but also a determination on who can input data directly, cross-departmentally. Other considerations include system encryption for remote access, as well as system file back-up for business contingency planning.

5. Administration and Users- Finally, a key accounting system component which is often overlooked is the people who will actually serve as administrators on the system or as end users. The accounting system should be user friendly and simple enough so that those who need to use it every day readily recognize the improved efficiency of the system and adopt it into their daily routine. Additionally, the end users also need to be properly trained on the system so that both they and the company fully leverage the system's capabilities.

The person designated as system administrator should have sufficient working knowledge of both accounting and technology to properly train users and to make informed decisions about the previously referenced accounting system components. If they do not have this knowledge, they should consider hiring a consultant or business advisor who can assist with this so that the company can maximize a return on their investment.

Consideration of these five key components when integrating an accounting system into your business should facilitate an easy transition. We are currently offering a free analysis of your business processes and accounting system. If you would like to learn more on how Analytix Solutions can help move your business forward, please call me directly at 781.503.9004 or email me at sales@aixsol.com

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.

Online Accounting Systems Can Result In More Effective Services

Taking your accounting online can help you streamline your finances, making for more organized accounting and reliability in other areas of your services offerings.

Organized data and better management

When your accounting moves online, human intervention is greatly reduced, automatically resulting in heightened accuracy. Because accounting is one of the basic functions in a business, scattered or poorly-maintained accounts can create problems across all your business offerings and client services. Online accounting automatically results in better organization of your records and helps you maintain updated and current records across the services and solutions you provide your clients.

Online accounting systems do not mean you no longer have control over your accounts. On the contrary, it takes off the drudgery from your day-to-day operations so that you have time and resources for your business concerns. Online accounting takes over data entry and management so that you no longer struggle with complex data or spend quality man hours in training staff to meet your specific needs. Once you hand over your needs to a qualified vendor, you will find that an online accounting system actually speeds up your operations overall, allowing you to provide deliverables and services to your clients better.

Complete and updated data

An online accounting system provides you with complete financial information at your fingertips. What is the money owed to you by your clients, what is the exact amount and by how much time is it overdue - all of these questions can be answered when you look at your accounts, provided they are updated. Low on cash? An online accounting system can help ensure you don't face crippling cash crunches that could force you to disable your client deliverables and regular services.

Further, having updated accounting means you are on top of your expenses and balance sheets. This is vital not just from the perspective of a business owner, but also from the point of view of investors who will examine your credit-worthiness. Here are some specific benefits that prove how an online accounting system can help you spruce up operations and deliver better solutions and services.

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.