Start the new financial year by making a resolution: to set up a proper accounting system.
Good bookkeeping is a key to business success. While this can be managed manually or electronically with spreadsheets, an accounting software package, such as QuickBooks, is the most efficient method.
An accounting system provides a clear indication of profit levels, invoicing and payroll, and it can also track inventory and manage your BAS and GST obligations.
The introduction of cloud accounting also means your data and software are both stored online, so you can access your records from anywhere.
Choosing the right accounting software
The accounting software package you choose depends on the nature and size of your business. Does your business interact with overseas customers and suppliers? Do you have an e-commerce business that requires integration with financial processes? Or perhaps you just want more control, with real-time access to critical financial information.
Matthew Addison, Executive Director of the Institute of Certified Bookkeepers, recommends accounting software to all new businesses.
“A new business should be setting up software from day one. It helps with business processes, as well maintaining your accounts,â€ he says. “Anyone going into business plans to sell something to someone, so you need to be able to invoice people, and this is a simple tool that software can help with.â€
QuickBooks Simple Start is ideal for sole traders and other small businesses that don’t carry inventory or handle multiple currencies. Simple Start can track your income, expenses and profits, send quotes and invoices, manage payroll for up to 10 employees, complete your BAS forms and manage your GST. Depending on your bank, it can also download transactions from your bank and credit card accounts. QuickBooks Plus offers even more, such as tracking billable hours by customer and tracking inventory.
QuickBooks Essentials offers all these functions plus others, such as handling multiple currencies and comparing your sales and profitability with industry trends.
Room to grow
Addison says flexibility is an important characteristic of any accounting software package. “You need a software system that can grow with you,â€ he says. “It’s important that it has applications for simple business processes as well as more detailed ones.â€
QuickBooks offers add-ons, such as allowing integration with e-commerce sites like Shopify and eBay and with CRM systems like Salesforce.
“The package and add-ons you choose really depend on what kind of business you have,â€ says Addison. “If it’s retail, for example, you want to make sure that each transaction is able to generate accounting details on the spot, so you don’t have to reconcile everything at the end of the day.â€
Getting set up with QuickBooks: five essentials
1. Install the QuickBooks CD or download the set-up file.
2. Start a company file for your business and follow the onscreen instructions. If you are moving from another accounting package, you may need to download the QuickBooks Conversion Tool. Once you have set up your company file, you’ll need to add important information into QuickBooks, such as your business contacts (including clients, employees and suppliers), your bank details and the products and services you sell.
3. Access the Quick Start Centre to complete common start-up tasks, such as creating invoices or viewing customer account balances.
4. Include historical transactions this function is useful if customers don’t pay on time, as it means QuickBooks can track and collect late payments from previous transactions. Records to include within historical transactions can include invoices you’ve sent out before installing QuickBooks, bills you’ve received and paid, bank charges and fees and any payroll liabilities.
5. Back up your company file in QuickBooks to insure against any accidental loss of data. Once this is complete, bookkeeping will be a breeze.