Tips for Starting Up an Accounting System

It can’t be stressed enough that financial awareness is very important at all stages of the business.   For many startup businesses setting up an accounting system is a daunting task but it does not have to be complicated if you follow these guidelines.

Pick a software

A manual system may be feasible in the beginning but incorrect, incomplete recording and sheer volume of transactions increases complexity, and errors can be difficult to locate and fix. The other issue would be that reporting that may be required for outside parties is not readily available when needed. It is better to start with an easy to use software like QuickBooks. It is widely used, has beginner versions that are reasonably priced, and can be easily upgraded to accommodate a growing business. Due to its popularity, it offers a large support network from how to use the program online to finding an expert locally, and it is also easy to find new hires who know how to use it.

Record

It is essential to keep business expenses and income separate from personal finances by establishing a business bank account and business credit card. This maybe the hardest part but consistently entering all business expenses and income with regularity into the accounting software is the foundation of a good accounting system. For someone who wants to become a government contractor, the federal procurement policy actually requires timely and accurate entry of data at least once a month.

Reconcile

Finally, reconcile monthly bank and credit card statements to the book entries to make sure all economic events for that period were captured and are reflected accurately. Doing this will ensure that a business can make the right judgement calls at any given time if they want to invest in new equipment, adding staff or consider other types of expansions.