Accounting

Accounting and Accountancy

October 20th, 2014

Oftentimes when I meet someone for the second or third time, they say, “aren’t you in accounting?” While I am into accounting, which is the methodology and measuring aspect of my work, the profession as a whole is better labeled as ‘accountancy’.

Accountancy is the profession and accounting it the methods by which accountants measure, track and report on financial information so that resource allocation decisions can be made by, well, whoever the decision makers are.

For a small business owner’s personal finances, as an example, I may be measuring the finances of a few people (the family), and reporting the necessary information to the small business owner. In this situation, the decision maker is the small business owner and his decisions involve deciding how much money he has to put toward family necessities.

Generally speaking, there are two main types of accounting. There is financial accounting and there is auditing. Financial accounting typically involves processing of financial information about a business operation where information is recorded, organized, summarized, interpreted and finally communicated.

Auditing, on the other hand, is there process that an independent auditor examines accounting records and financial statements so that he or she can express a professional opinion about the financial records and answer questions about projections.

At the heart of accountancy lies the need to take stock of the day to day state of various sales and expenses. In the modern world when many contracts are partially fulfilled at varying times, bookkeeping is the only way to know where you and your business stand in the greater scheme of things.

If you operate your own small business, you may be able to do just fine with some accounting software. Take a look around for some flowchart templates. These can make monthly financial recording and reporting, dare I say it, fun. Simply enter in the various types of income and expenses, then each subsection updates the appropriate fields. Before you know it you’ve got proof that all bills have been allotted for and you’ve got your bottom line.

If you find you can manage your business finances on your own, then, by all means, stick with the system that you know works for you. If, however, you start running into complications that make it hard for you to see where discrepancies are coming from, it may be time to enlist the services of a professional accountant.

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The Different Types Of Accounting Software

April 18th, 2014

Many of us have become accustomed to dealing with at least some light accounting software for keeping up with our personal or family finances. If it’s time to revisit the type of accounting software that you use for home or business, it’s helpful to have an understanding of the general categories of accounting software.

For the most part, accounting software is made up of various modules, which hare different portions that process and deal with certain areas of accounting. Some of the most common type of accounting software include:

• Accounts payable- companies can enter its bills to be paid and keep track of how much is owed. • Accounts receivable- this is typically where businesses record money that it receives from clients. • Billing- billing software modules help companies by producing invoices for clients. • General Ledger- This is a type of accounting software that tracks general additions and subtractions. All the other types could be tracked in one ‘general ledger’ program. • Inventory / stock- this software helps track inventory

Depending on the type of business that is being accounted for, there are many common no-core modules that assist with specialized processes, such as

• Expense- Many businesses like to keep a separate set of accounts for expenses. • Debt collection- Though many companies keep debt collection as part of their accounts receivable portion, a debt collection module helps track progress about attempts to collect on debt owed by a client. • Timesheet- This is a common module for use with professionals that need to track billable work hours for their clients. • Payroll- Many types of accounting software offer payroll modules that can help track employee salary, wages and tax related information.

If you really don’t know where to begin in choosing accounting software, I recommend taking a look at the accounting software section of http://Download.com . Here you can find ratings by IT professionals, accountants and other users.

By reading user reviews you can easily determine which accounting software suite will best meet your needs. Also, Download.com has all kinds of freeware, demo and shareware titles for you to download and test drive. Be sure to add your two cents if you have an opinion about a particular software title.

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Financial Accounting: What Is Business Management Software And When Do You Need It?

March 18th, 2014

Has your business grown leaps and bounds since its inception? Chances are your financial accounting has been upgraded from one huge general ledger to some other more comprehensive system. So what comes next after setting up individual accounts for receivables and payables?

Business management software is a term that refers to a set of accounting modules. The various modules go together and are sort of overseen by the main business management suite. In this way, small businesses can decide which modules to use and have the modules work with each other.

Typically, a business management software suite will come with some core modules for different areas of accounting, such as payroll, inventory, supply chains, human resources, distribution and customer relationships, in addition to basic accounts receivable and payable modules.

Some signs that it may be time to step up your some business management software:

If different members of your business need a different set of numbers in order to compute and carry out particular operational duties, you would benefit from a business management software upgrade. With more comprehensive business management software you can tailor make reports based on user defined interaction between the various accounting modules.

If you find that different portions of your business are performing many of the same tasks or processes, but utilizing different methods, it can be very useful to form a protocol of standard procedures. This way errors and technical difficulties happen less frequently and communication is enhanced.

Automation is another huge goal of any growing business. As your business expands, basic accounting tasks that took a few hours a week may suddenly become full time jobs in and of themselves without the aid of business management software to help with the various financial accounting aspects.

When it’s time to decide on a particular financial accounting software suite, there are many online review sites that can help you determine which software is likely to best meet your business’s needs. The reviews that should weigh heaviest are the ones from people that sound most similar to your own business and relating circumstances.

Once you’ve narrowed down prospective financial accounting suites, take the best rated ones on a test drive. Any software suite worth owning will offer a free trial or demo for you to try. And don’t overlook the open source business management software out there. More and more small and medium sized businesses are turning to open source solutions because of greater flexibility.

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Inventory Accounting Software For Small Businesses

February 15th, 2014

Among the top CNET rated software for general accounting purposes, are BillQuick Lite, Invoice2go, One SPeical Edition Library and QuickInvoice, the top and only 5 star title being BillQuick Lite.

As far as user ratings go, the top two inventory accounting picks are One Special Edition Library and QuickInvoice, each with a 4.5 star user rating. But for inventory accounting purposes, take a look at Retail Main POS, which received a 4 star CNET rating.

Though there are only 2 user reviews, they average a rating of 5 stars. This software futures inventory accounting and stock control, as well as full email integration, invoicing, front end POS and back end modules for tracking sales and inventory, as well as full support for barcode scanners touch screens and more.

Smart Software Development are the creators of QuickInvoice. With Quickinvoice users can easily create professional invoices, purchase orders, quotes and various other accounting related documents.

QuickInvoice also features a quick inventory feature for making invoices with inventory items that you frequently use or sell. This can cut down on time spent invoicing clients. Another handy thing about this software is that amounts owed and open invoices can be monitored automatically.

BillQuick Lite is a tracking and invoicing software suite that includes more than 400 invoice ad reports templates. The software is already configured to handle various types of contracts, such as hourly not to exceed, fixed fee, recurring contract types and more.

BillQuick Lite also features many project management modules that will allow you to better track progress of your various projects. Many user reviews of this software that I read claim that it’s one of the most powerful and versatile accounting tools they ever used.

I’ve read articles by several small business owners who use the software to manage their employees time cards, having the employees enter their own work hours, and spend less than one hour per month doing billing and invoicing.

Take a look at CNET or DownLoad.com for a glance at the latest titles in inventory accounting. You can read user reviews as well as professional reviews of the various software offerings.

 

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Payroll Accounting: An Introduction

January 15th, 2014

If your business has employees, it’s going to have to account for benefits and payroll. Let’s explore the term ‘payroll’ and look at some things that are included in benefits and payroll accounting.

Within payroll accounting there are specific things that must be accounted for. These include such things as salaries, wages, commissions and bonuses paid to employees, overtime pay and various payroll costs and taxes.

Payroll costs and taxes are made up of Medicare, social security, state and federal income tax, unemployment tax and worker compensation insurance. There are also paid benefits extended to employees such as vacations, holidays, sick days, health insurance, profit-sharing plans and retirement plans.

The tricky part about getting used to payroll accounting is that expenses don’t always line up with revenues chronologically. Expenses are often incurred in a different accounting period than when they are paid.

The matching principle is used to help tie expenses to revenue. When these things don’t occur in the same accounting period, the expense should appear on an income statement for the accounting period that it was incurred during.

Salaries and wages are obviously a big part of payroll accounting. Wages are figured by multiplying the number of hours worked by the hourly rate that the employee earns. Salaries, on the other hand, are yearly amounts, before taxes and other things are withheld, that will be broken up into equal amounts and paid out usually twice monthly or bi-weekly.

Companies are responsible for collecting social security taxes. This is a very big part of payroll accounting and also where accounting software can really come in handy. There are other nuances about social security that make solid accounting software attractive. Since social security is both withheld from employees and also matched by employers, accounting is a little trickier.

Employers are also required to withhold federal income tax that employees are estimated to owe. There are also other types of withholdings such as union dues, insurance premiums, and charitable contributions that may fall into this category.

With a little bit of education you’ll be able to decide which portions of payroll accounting need to be implemented in your circumstances. There are some excellent accounting education resources online. Take a look at http://accountingcoach.com for some nice lessons and tutorials surrounding accountancy.

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Accounting Classes For Small Business And Non-Profit Bookkeeping

December 18th, 2013

If you’re thinking about taking accounting classes in order to better manage your own business or non-profit organization you’re off to a rewarding experience! In fact, chances are that you’ll notice evidence of your expanded understanding of accounting and financial management in various ways almost as soon as you apply the new knowledge and methodology.

You don’t have to earn a four year degree in accountancy in order to expand your knowledge of accounting in meaningful and productive ways. If you want to make accountancy your profession, you would do well to invest your time and resources into a two or four year degree program.

If you’re serious about educating yourself about financial accounting in order to manage an organization that you participate in you may also find that a two year degree program is worth your time and effort. There are, however, many community college and leisure learning classes that may fit your schedule and budget to a tee.

If you live near a community college, visit the campus or website and find out more about the types of accounting classes that are offered. If you don’t see the information that you’re looking for, don’t hesitate to ask questions about the curriculum or to seek advice about what types of accounting classes will meet your learning goals.

Particularly if you live in a larger city, there are many learning centers and organizations that offer classes on all kinds of things from sushi making to kayaking, CPR and accounting. Many times these types of classes are the most feasible type of education because sessions last from one day to a few weeks long so participants can fit them into their schedules. Additionally, accounting classes from these smaller learning organizations will cost less than college degree programs.

Take a look online and ask around about local accounting classes. If you’re looking for a quick solution, there are also some online courses if you enjoy self-paced learning. Take your time to research tuition for online schools, as many of them have rates that are much higher than others.

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An Accounting Career

November 18th, 2013

An accounting career could be just the thing to bring you satisfaction and a sense of accomplishment. Along with medical and health related careers, accounting professionals are among the group of professions that are projected to see a lot of growth over the next few years.

Graduates of four year accountancy programs are earning 3.7% more in terms of starting pay straight out of college. Master’s degree holders are seeing a 4% increase in starting pay over the last couple of years.

There are many top notch two year accounting degree programs as well. Your choice really depends on many factors, including career objectives, the amount of money that you have to invest in an education or your ability to attain student loans, as well as what your schedule is like.

If you want to educate yourself on accounting in order to better manage your own small business or non-profit organization, chances are you’d do best with some classes from the local community college or other type of learning center.

In many larger cities and some towns, there are learning centers that offer a wide variety of classes, from cooking and home improvement to accounting. Ask around at your local public library or community college to find out about all the learning opportunities that your community has to offer.

For more serious study to put toward managing the finances of your business or organization, you may find that a community college has just the combination of classes that you’re looking for.

If you want to pursue an accounting career further, a community college is still one of the best places to start. If you have children or must work while attending school, community colleges are going to offer you the most flexibility in terms of scheduling.

For more information on the projected outlook for those in accounting careers, take a look at the government’s Occupational Outlook Handbook found at http://www.bls.gov/oco/. There is a great wealth of information here that can help you decide how satisfying various degrees and professions are likely to be over the coming years.

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Business Tax Accounting Tips

September 15th, 2013

Even with solid business intelligence and accounting system in place, there are some check ups that should be performed from time to time, no matter the size of your business. Consider the following tips periodically to avoid paying for small oversights somewhere down the line. The end of the year is a good time to take stock and give your business the best odds possible for the new year.

It’s a god idea to take time at least once a year to sit down and simply look over the books, as it were. Make sure things are up to date. As you settle in to browsing from week to week or month to month, you’ll probably notice a few things that you’d rather had been done a different way.

The end of the year is also a good time to consider ways to defer income for tax reasons. Any income that your business can receive during the first part of January instead of December cuts the taxes owed. Anything deferred until the first part of January will not have taxes owed until April 15th of the following year.

The strategy of deferring income to best utilize delaying tax payments only works if you can handle how your cash flow is affected. It can really save some money, but obviously this strategy isn’t worth implementing if it will cripple your business in the short term situation.

The converse is true as well; the end of the year is a good time to make needed purchases for office supplies. These are all items that can be deducted for the year that’s ending. If cash flow allows, make necessary purchases before the end of the year to make some last minute adjustments to taxes season.

Contributing to a retirement plan is a good way to take the bite out of tax season. There are different contribution limits for the various types of plans. This is one tax accounting area that is probably better discussed with a professional financial planner.

Talk with colleagues and friends. You may know someone that knows a tax accountant or other type of financial consultant who may be willing to look over your taxes for a ‘friendlier’ rate than if you were to cold call them.

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Small Business Accounting: Open Source Software Gets An A

August 17th, 2013

In the past, it’s been small business accounting needs that were most drawn to open source business intelligence software because of the cost. Where many small businesses simply can’t afford top of the line proprietary software, open course accounting software has been the way to keep costs down.

Interestingly, more and more small businesses, as well as large ones, are turning to open source accounting software and business intelligence software for many more reasons than cutting operational costs.

A study done by Ventana Research based in San Mateo, California set out to discover what current attitudes are toward open source accounting and business intelligence tools. After surveying 320 business and IT professionals, the results showed some very interesting things about the growing popularity of open source business management software.

Of the 320 professionals surveyed, a whopping 83% said that they had deployed, or were about to deploy an open source business intelligence software of some kind. Nearly half the participants represented small companies with less than $100 million in annual revenue, 20% represented mid0sized business with annual revenues less than $1 billion and 22% worked with Global 2000 companies.

Surprisingly, the top reason for going with open source small business accounting software was not the lower license costs. The primary reason companies cited for choosing an open source suite were that a primary developer’s interest deemed a particular open source suite more appropriate for the company’s particular needs.

While many companies currently using open source accounting software have only deployed internal open source systems, the number of 1,000-user deployments are expected to grow two to three times over the next year.

As business owners value a balance of cost and flexibility, the open source business management suites are really starting to compete with their commercial counterparts. It’s this same mingling of lower cost and greater flexibility that are turning more managers toward open source tools.

If it’s going to take a little bit of customization to make an open source accounting suite work for a company, and in the same fell swoop the application can be made to custom fit said company’s exact needs, on top of which the company will save hundreds or thousand of dollars as contrasted to the commercial juggernaut accounting suites, it’s easy to see why more companies are taking a look at open source business intelligence software.

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