Small business accounting software

An accountant plays an important role in any business. Aside from keeping accurate financial records of the company, that person must see to it that all records are in order, provide a legal basis for the company’s transactions and regularly make financial statements that will guide the company in its business.

To do this, accounting software is generally used by accountants to make sense out of many complex financial transactions. This is usually based on bookkeeping principles.

Unlike big companies, small business accounting needs are different. For companies that don’t need a balance sheet, a simple income and expenditure account can be produced using single entry bookkeeping principles.

Less financial control is often required when using small business accounting software since the bookkeeper is usually the owner-manager who already has an intimate knowledge of each transaction. Books are still required for tax purposes and the accountant must make sure that each entry is supported by third party evidence.

To record sales income it would not normally be sufficient to simply add up the total of the invoices as such a summation does not leave an audit trail of the items which have been included. A written list of sales invoices does provide an audit trail.

Sales accounting for a small business accounting purposes can be either a manual list of the sales invoices or by using a spreadsheet package a list can be made on a bookkeeping spreadsheet. Using a spreadsheet for the bookkeeping has advantages as simple formula can be used to add up the column totals.

On the expenditure side of the business the bookkeeping can also be a simple list of the purchase invoices and receipts showing the amount spent. The list should also produce an audit trail by showing the date of the purchase invoice, name of the supplier, purchase invoice for identification purposes and the total amount spent.

On the income and expenditure account adjust the stock purchases figure by adding the value of the opening stock and deducting the value of the closing stock. The result is not the stock purchases total as shown in the bookkeeping spreadsheets but the cost of the goods which have been sold to produce the sales turnover being reported.

Simple bookkeeping for a small business accounting purposes can be two lists of sales and purchases supported with sales invoices and purchases invoices.

To help record your purchases invoices myob accounting software is the answer. It is designed for businesses that want to record and print sales invoices, keep a card file of the people they sell to and purchase from, and do regular bank reconciliations from their bank statements.

Is accounting Greek to you? Make it easy with our free online accounting software at myob premier accounting.

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This entry was posted on Sunday, May 3rd, 2009 at 10:08 am and is filed under Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

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