Accounting Software For Small Business

Many financial errors can be prevented by construction accounting software. Since the early 1980s small business accounting software, not just for the construction industry, has been on the market. This type of software allows a small business owner, with little or no formal financial training to keep records of accounts receivable and accounts payable. Initially, professional financial advisors were not completely satisfied by many of the software packages being offered to owners of companies unable to afford an in house accountant or unable to pay for an offsite financial advisor.

The reasons cited for their dissatisfaction was a lack of a paper trail for audit purposes and decentralized control, which could legitimately be a safety issue. Also listed as a reason financial professionals did not initially like the financial programs was that they did not conform to standard accounting practices. This non-conformity is important, because many times financial professionals will provide year end services that require information gleaned from the small business accounting software. If the information does not conform, that makes the financial professional's job all that much more difficult. However, over time this sort of financial program is improving, much to the satisfaction of the professional financial advisors reviewing them for efficiency and compliance.

The construction sector faces financial difficulties unique to the demands of that industry. If a company underbids on a future project, it will mean less or no profit for that job. There are programs that can estimate the current and future price of building materials, the cost of labor and other regulatory fees more reliably than most foremen for building projects. Cash flow at a specific time or section of the project can deplete, even if there is enough overall funding for the project. A reliable construction accounting software can safeguard against overspending, misallocation of funds and not correctly estimating the escalating cost of building materials and a seasoned labor force. Small business accounting software can help maintain profits over the lifespan of the project. The building industry is more difficult financially, because investment bankers are almost always involved, as the equity in the building and the owner's own mortgage loan are often the sole sources of funding. Contractors often employ construction accounting software to monitor the speed at which the money is spent over the life of the project. This type of program can also provide a reasonable value to labor and materials, as well as set pay outs at intervals to the other investors, if there should be any.

Modules are used to organize the information entered into small business accounting software so that each piece of financial data can be studied individually. Some of the core modules are: accounts payable, accounts receivable, general ledger, billing, stock/inventory, purchase order and sales order. Accounts receivable is the module in which the company enters the money it takes in. Accounts payable module is the place that the business enters the bills it owes and when it pays the bills. General ledger modules are the company's checkbook or final authority on the financial solvency of the business as a whole. The billing module is linked to the accounts receivable, because it is where all the invoices for the accounts receivable amounts are created, printed and stored. Stock/inventory modules are highly important in construction accounting software. The stock/inventory portion of the program is where the company will keep track of inventory purchased, stored and used. Purchase orders are produced when a company buys inventory. Sales orders are printed and saved when a customer buys inventory from the business.

There are noncore elements in most all small business accounting software programs. Many companies have a module for recording debt collection attempts if there are customers or clients that continue to fail in paying off their debt to the company. If this is not a typical problem for the company, some choose to simply include debt collection with the accounts receivable module. Another noncore module is payroll. In this module, the company records the salaries of the employees separate from the accounts payable, due to the federal regulations, internal revenue service tax requirements and for additional privacy. Money spent by employees in travel and dining is recorded in a separate employee expense module to differentiate it from money recorded in accounts payable and the general ledger. Not necessarily in construction accounting software, but financial programs used by lawyers, marketing and advertising firms and doctors often include timesheets. This is because those industries, and many others, have billable hours. Billable hours are blocks of time that are billed to the client. The timesheet, in essence, becomes the invoice billed to the client.

Implementing and adapting the program or package is a large consideration in choosing the right financial software package. Many times a financial computer program is not going to immediately meet the needs of a company straight out of the computer store packaging. Most companies find it helpful to consult with a financial professional in choosing the program best suited for their specific needs. In addition, many financial programs on the market still need to be altered or adapted to make a better fit for the needs of the business ready to implement them. If a business simply finds nothing on the market to suite the needs of its industry niche and select group of clients, many financial professionals and computer technicians will write a tailor made program to address the specific needs of the business. An employee or group of employees will need to be effectively trained to implement the program, or the consultation and money will be for not. "Be thou diligent to know the state of thy flocks, and look well to thy herds." (Proverbs 27:23)

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