Accounting Software Tools That Help Small Businesses Compete

Small businesses are definitely aware of the challenges of trying to compete with bigger companies. Not only do bigger companies have deeper pockets, but their budgets allow for cutting-edge technology to help them keep their customers happy. There are accounting software features available to help small businesses compete with the technology of large companies! Here are just a few of the features that help small businesses compete and keep their customers happy.

Multiple price levels

Have you ever put your customer on hold while feverishly searching for their pricing in a paper file? Consider using your accounting software to set up different pricing levels, so you can immediately see your customer's price while you are on the phone with them. This makes your customer happy, and it also keeps you more organized and accurate.

Custom invoice tools

With the growth of technology comes the ability to print your invoices exactly how you want them. Having this ability allows you to look much more professional than just using a standard template without your logo and other crucial brand information. Use your software to personalize your invoices, and you will keep your image fresh and professional, just like the bigger companies.

Transaction search

Do you scramble to find customer information while they are on the phone? Perhaps the customer only knows the invoice number or the date, or maybe only the product he or she purchased; now it's your job to search for the document based on what the customer has given you. It's true the bigger companies have fabulous software systems, but nowadays many of the smaller systems are quite powerful and allow you to find what you are looking for fast. Check to see if your accounting software has transaction search capabilities, and find out all of the different ways you are able to search for information. You might be surprised about the variety of methods you can use to find what you are looking for! You can keep customers happy by giving them the information they need more quickly, rather than scrambling around or asking them to provide alternative information.

Customer reports

You may not think an accounting software report can benefit your customers in any way. One of the best ways to stay in touch with customers or find out which customers have drifted away is by running a customer analysis report. From there you can see who has purchased what, and when. You can detect customers who may have gone away, and give them a call to touch base. Or, you can call those customers first when running a special, to let them know about the special before anyone else. Using this report can let customers know you care about them and their business before they start buying from somebody else. That is a personal touch the larger companies are likely not going to offer.

Read the rest of this entry »

Posted in Accounting

Factoring and Invoice Discounting - Are They The Best Solution To Your Business

If you are starting up a business, you can't be expecting for profits as soon as possible. For this reason wise cash flow management is very important. In addition, you have to release as much cash as you possibly can for capital investment in production facility.

More often than not, business owners don't have that amount of resource and it gets to be the major hindrance for their success. This is the place invoice discounting and factoring get to be the wisest option for a solution.

As opposed to what other individuals are wary about, invoice financing or invoice discounting is a positive choice for the small business. Invoice financing is a form of short-term borrowing which is often a choice to improve a company's working capital and cash flow position. The practice of invoice finance is similar to that of factoring whereby it makes it possible for businesses to obtain money against its sales invoices before the client has basically paid.

The bank nearly always aids their clients in getting in touch with an AFBA (Asset Based Finance Association) - recognized factoring company and that's something of an assurance that factoring and invoice discounting a smart choice for the company. To further ensure that your company is in good hands, it is advised that one should pay a visit on the premises of the factoring company for more information about how they operate and to meet the team that they'll be signing an agreement with. It is also important to build good rapport and to build trust with the company for they'll be handling confidential financial information of your organization.

The invoice finance company will want to know concerning your business as well. They can help you take a look at if your operation suits factoring or not. They'll also take a look at your business office and place of operation. They'll also have to know with regards to the growth plans before agreeing to work with your organization.

Invoice discounting is a major decision for the company and it also entails costs to the business. Compared to the advantages gained, invoice discounting provides good value if you look into the costs. One can make arrangements or special deals with regard to payment period or payment mode. Fees and percentage will often come down as business grows.

Read the rest of this entry »

Posted in Accounting

Just What Is Accounts Receivable Working Capital

Working capital is the lifeblood of any business, irrespective of what particular sector of the market it happens to be involved in and the reason for this is very simple: it is the money that the business will use to satisfy all of its currently outstanding debts such as wages and rent. A business that does not have sufficient levels of working capital to its name will ultimately struggle to actually survive for any length of time and so a lack of working capital is the surest way to ensure the ultimate insolvency and therefore bankruptcy of the business as a whole.

Some types of businesses are especially prone to the perils and problems presented by poor cash flow which in turn will directly mean that the business is at an even higher risk of becoming insolvency for precisely the same reasons identified above. For example, a medical office will draw the bulk of its income from the insurance claims and forms that have been duly submitted by their patients. However, the problem here is that the insurance companies are notoriously slow when it comes to the releasing of funds that are owed to the healthcare provider.

The end result of this is that the healthcare provider will be left with the unfortunate position of ensuring that they have sufficient levels of working capital all the while, with the added pressure of not actually knowing when they will be able to get paid. This can make any sort of planning exceptionally difficult if not near impossible and the reason for this is that the provider will not be able to determine with any measure of accuracy whether they will be able to afford a major expense.

This is why accounts receivable working capital is such an excellent and commonly relied upon business financing method for the average medical office as it means that the healthcare provider will receive a fairly substantial amount of capital upfront. This in turn makes it much easier for them to predict and determine when and how they can afford to pay for various expenses when they arise.

Furthermore, the accounts receivable working capital will also allow the business owner who uses them the opportunity to acquire the capital without having to worry about the added pressure of being fully liable for the interest rates charged on banks and overdrafts. By virtue of the fact that they are saving money, this means that the business owner will be able to ensure that they are able to further maximise the earning capacity of the business.

Read the rest of this entry »

Posted in Accounting

Accounting Audits - Don't You Get Tired of the Small Business Article Filler in the News

As a retired businessperson I always find it odd that freelance writers who've never had to make a payroll in their lives, other than paying their own living expenses seem to think it's okay for them to write on small business topics as if they are experts. There is a big difference between being a freelance writer and running a small business in the real world. Yes it's true that most freelance writers can spin a phrase, and most of the articles are topics of interest.

Still, I find some of the nonsense which is purported in some of these filler articles a little more than I can stomach. The advice is not all that good and they often miss the point and in doing so show just how little they really know about the subject. Not long ago I read an interesting article in the small business section of the Wall Street Journal titled; "Study Finds Certified Financial Statements Help Businesses Loan Prospects" by Angus Loten published on January 13, 2011.

What the article did not explain was whereas it would help a small business to have audited financial statements when they go to seek a loan to expand their business, "BUT" the reality is they need to take out a loan to get the audit in the first place. Ever since Sarbanes-Oxley the cost to get an audit has skyrocketed, and is well over four times the cost as it was before that law was in place. Worse there are even new financial laws now which will make things even tougher.

Often, I wonder if this Sarbanes-Oxley rules were actually written by accountants, or if Senator Sarbanes and Senator Oxley had relatives that were CPAs or accountants. After all, why on Earth would they create such an onerous set of regulations which would stifle the entire business community regardless of industry? Now the cost of 'errors and omissions insurance' has skyrocketed for accountants, and very few firms want to do audits. Meanwhile most CPAs and accountants are so busy, they don't wish to take the work or do peer reviews.

The whole thing is nothing less than a nightmare. The article tries to put some numbers to all these factors, and show that in the end the lower interest rate payments, and the loan itself will keep the small businesses in business, therefore it's worth the cost to get certified financial statements. In some cases this may be true, but if the cost of borrowing money is so expensive, and you have to pay professionals which are gatekeepers to that money, it becomes unviable, and a very uninviting prospect to say the least.

Needless to say, I know a thing or two about all this, since I'm retired franchisor. And with that said I'd like to remind you to be very careful what you read when looking through small business filler articles no matter what publication the article resides in. Indeed, I hope you will please consider this. If you have any comments or questions you may e-mail me and we can talk.

Read the rest of this entry »

Posted in Accounting

Finance and Accounting Outsourcing Update

Prospects for finance and accounting outsourcing have been high as more businesses seek to focus more on core processes to grow their business. As research firm Everest, predicted early this year, finance and accounting outsourcing, which includes processing of accounts receivable services, accounts receivable follow-up, as well as general accounting and back-up, will grow steadily this year.

In the Everest Research report which came out last February, it was predicted that the Finance and Accounting Outsourcing (FAO) market would revert back to pre-recession levels by the end of the year. (Everest Research, 2010) As Katrina Menzigian, VP of Research for Forrester stated, "as the global economy continues its path towards recovery, we expect to see the FAO market regain traction, driven by new deals and scope expansions, as well as more than 45 contracts up for extension this year. We foresee increased adoption across industries and geographies to continue. Beyond the United States, we expect contract signings in the domestic Asia-Pacific market as well as Rest of Europe to rise." The company predicted growth of as much as 20% up from the 11% growth in 2009. A second report from Everest on the 9th of June was also released wherein Saurabh Gupta, Everest Research Director, stated that, "the mature FAO market is getting increasingly competitive with players vying to carve out unique value propositions to differentiate themselves."

While the FAO market in 2009 saw massive deals among large players such as Genpact (NYSE:G), Accenture (NYSE:ACN) and IBM (NYSE:IBM), given the increasing demand for FAO in the past few months, new players in the FAO market have emerged or are emerging in order to take advantage of the growth in the market.

One such company is private equity firm, Huntsman Gay Global Capital, who announced on the 30th of September that they have made a majority investment in iQor Holdings Inc. The investment by Huntsman Gay in iQor, the second largest accounts receivable services provider in the world, will allow iQor to increase its share in the accounts receivable (A/R) outsourcing market, while introducing Huntsman Gay into the A/R outsourcing market.

Regional growth meanwhile in the FAO sector has seen expansions, notably in key areas including the Latin Americas and the Philippines.

Latin American countries such as Guatemala, has been pinpointed by outsourcer, Genpact, as a key area where finance and accounting talent can be found. The company announced plans of expanding its workforce in the city of Guatemala by opening a second facility. Aside from that, the company also advised that they are looking into other Latin American countries, Colombia and Brazil, who, along with Guatemala, were previously unknown in the FAO market.

Meanwhile the WNS (NYSE:WNS) reaffirmed its confidence in the Philippines when the company announced expansion plans in the country following increased demands for its services. WNS Global Services CEO Keshav Murugesh, cited that their Philippine site will serve as a hub for its clients in the banking and financial industry for the APAC region. He further states that, "considering the quality of talent available in the country and the demand for our services, we believe that 10 percent of WNS' workforce could be based in the Philippines over the next few years."

While Everest seems to have predicted the finance and accounting outsourcing (FAO) market accurately so far, it will be interesting to see whether the market will continue to grow as predicted as the year nears its conclusion.

Read the rest of this entry »

Posted in Accounting

Business Bank Account

For our business transactions we can also use our personal account instead of maintain a separate bank account. But we shall have to take care that the heads for the personal and business expenses are well managed and mentioned. This practice can only be followed in a situation where a person a running a small scale business and there are simple types of expenses and can easily be extracted. Here in this discussion I would like to bring some special facilities offered by different banks for business bank account, into your attention and consideration.

To promote the banking exposure to the business market and to facilitate their clients most of the banks are providing special offers to the businessmen. In this way they are attracting the businessmen for establishing the accounts for their business transactions.

Most of the banks are providing the facility of free online transferring of payments to their stakeholders. Some of the banks are also providing the facility of free cross bank online transactions to their business clients. This type of facility cuts down the expenses and very attractive for the businessmen. But this changes from state to state.

Another very attractive facility for bank account holders is free ATM card issuances. Some banks are also offering free funds transfer through ATM.

Banks are also offering the facility of OD (Overdraft) to their business clients.There is a specific limit of OD. This facility means that even if your bank account is running out of cash, you can still with draw money from your account up to a certain limit.

Some banks are also offering special credit offers at special rates to their business entities. This is for promoting the business environment as well as for the growth of the financial institutions. Lending is critically made easy for small scale entities to help them nourishing their business.

Read the rest of this entry »

Posted in Accounting

Bank Reconciliations - Useful for Internal Control

Our past experience with auditors, who examined the accounts at year-end, is that they paid much attention to the bank reconciliation. Not just the year-end reconciliation, but also to some or all of the monthly reconciliations. Why is this so important to the audit process and the company?

TIMELY PREPARATION
When the reconciliation is done on a timely basis, expense and revenue items that were missing can be booked in the correct period, not in subsequent period. This will help to ensure that the company's profit and loss statement more accurately reflects the results of operation for the period. Thus management, owners and shareholders will not be deceived.

Profit and Loss Error
A possible danger when the account is in error is that management could make significant decisions, such as declaring a dividend, agreeing on wage increases, buying expensive equipment, agreeing on bonus etc bases on erroneous results.

Budgetary control
Another problem when errors are not discovered on a timely basis is that some company budgets that are prepared using prior year monthly expenses and revenue as a base, could be in error, since there are errors in the source data.

Faulty Balance sheet analysis
Yet another problem could be than a non-expense item that is omitted will affect the company's balance sheet, and the resulting financial analysis. For example let's say the bank has provided a loan to the company, and the monthly repayment will be withdrawn by a standing charge to the company's bank. If the company's accountant did not have a timely prepared bank reconciliation to remind him and he forget to book the repayment

The company's working will be overstated. Note that the books are in balance, but the cash is overstated and the liability

MONITORED BY SENIOR MANAGERS
All bank reconciliations should be monitored by a senior employee to ensure that proper investigation and corrective measures are done for any reconciling items. Some of the items on a reconciliation that should cause a red flag are:

A) Reconciling items carried over from month to month

If the same reconciling item remains on the bank reconciliation for more than one accounting period, it should raise a red flag. A good example is uncashed checks.
Most companies and individuals would cash or deposit a check they receive within a few days. If this did not happen after a full accounting cycle it could mean that the check should have been written back for some reason, that the payee may have died, that the check was a duplicated, in which case another check for the same service was already cashed.

ACT AS DETERENT
A dishonest employee armed with the knowledge that bank reconciliations are monitored on a timely basis, will think twice before committing fraud involving the company's bank account, since he or she knows that the fraud might be discovered very soon after it is committed.

Read the rest of this entry »

Posted in Accounting

Accounting Software Classes

Accounting software classes will let professionals coming from both the accounting and IT industry know about application solutions needed in completing different accounting tasks. They are given an introduction about how accounting software works for their users. Usually, these accounting software classes will employ a single application to introduce its general function helpful for the people who will obtain it. Apart from just teaching them its functionalities of these programs in theory, employing practical or hands-on methods is also done so they will learn it faster. This will help these professionals to have an idea on how they would operate this application when they need to. With all the accounting tasks been automated on this application, people will find it rather very easy to work on their daily tasks.

These professionals may need some help in using this type of application particularly if it's their first time using it. The good news is these help are available through various guides and tutorials. Many accounting software classes would integrate these guides for them to learn these as fast possible for transition. In this way, they will not compromise the overall business operations. Aside from just teaching them about the software, these accounting software classes will also be helpful in integrating the program to the system so it will aid in saving time. The great thing about these classes is they can also provide refresher courses as they have their program in the company. Updates about new commands may be created in the future so refresher courses are offered.

Typically, these classes would focus on the technological aspect of the application. Hence, accounting software classes will also help people who are expert in the accounting world to have knowledge in troubleshooting the program and even their computers for any issue. This will help them work on accounting using the regular procedures while equipping them with the right tools they can use on a daily basis.

Read the rest of this entry »

Posted in Accounting

Things To Consider In Doing Accounting Software Comparison

Accounting software comparison is typically what people do before buying their accounting software that will meet their needs. Finding the right program will not be that easy for you as it's highly essential for you to know first how the program works and if it can meet the need or requirement the right way. One of the things you ought to know is before getting this software and then do accounting software comparison. Another thing you must consider as you do the comparison is the price you must pay for this. One of the rule you have to set is the price of the software you'll purchase should not be more expensive than your allotted budget.

The price of this program should just have a fair price within the market value but you must remember that it's not right to sacrifice the quality of the program just for the aim of saving money. As you do accounting software comparison, it's also important for you to consider how the product is used. For instance, programs that are made with special commands and features can be more challenging than expected while others can be easier to use. Hence, you must decide on the important features your application must have.

The sure thing is it will be easier for you to find the right software as long as you have a certain requirement in mind. Another thing to compare is how long you can use the program. This means if you'll buy the program today, will it still be usable in the future or not? You have to be meticulous in doing accounting software comparison so you'll know the program and what it can offer. Lastly, you must check whether a program is used online or can it stand alone without internet connection in doing its accounting tasks.

Read the rest of this entry »

Posted in Accounting

Several Things To Know About Accounting Software for Small Business

It's vital for every business to have the best solution they can get like an accounting software for small business in order for them to be more competitive in the future. If you have a small business, you may find yourself doing lots of work than the usual like working as the president, manager and sales personnel. With the help of an accounting software for small business, you'll find yourself doing all of these things properly than before. All you need to do is to manage it using a few clicks and you'll find yourself settling every bill that you have incurred, get report analysis about your finances, an even get trading results with it. Hence, these are among the factors you must consider in finding an accounting software for small business including how user friendly it is for you.

In choosing this software, you may want to look for those with the same user interface as a regular paper used accounting. This will allow you go easily navigate through the program and do your job. Being able to navigate it properly will help you do the commands faster and get the results as soon as possible. Having its ecommerce features will also be helpful for your business so you may want to find the programs that have them. Integration is also possible as you can connect with your bank as it will help you monitor your payments and the other related bills you need to settle.

Look for Accounting Software For Small Business that are compatible with your system and other applications that you use. For instance, if your programs are running on Windows platform, choose the accounting program that is compatible with it. This will help you use its features using your files and document to avoid delays in your work. This will ensure you'll find the right program that you need without spending too much of your budget.

Read the rest of this entry »

Posted in Accounting