Using Computer Software to Track Your Income and Expenses (Part 1)

em>The following blog was written by Cynthia Finkenbinder, one of our CPA Tax Advisors at US TaxAid Services, LLC. Cythia’s passion is early-stage business owners. You can meet her at our website, and you can learn more about QuickBooks and QB training, by going to www.MySmarterBusiness.com

By having accurate and organized information at your fingertips, it will not only help you to manage your company’s financial information, but it will also help you to save money. You’ll be able to make better informed financial decisions concerning your business, and you’ll aos be ready with more accurate information when it is time to work on your tax strategies.

There are several computer programs that allow you to track income and expenses as well as customer and vendor information. Your choice for tracking the information will depend on the type of business you have and your computer system. For PC users, some of the options include Intuit QuickBooks, SagePeachtree, Microsoft Office Accounting, and Microsoft Excel spreadsheets. Versions of all programs except for Microsoft Office Accounting are also available for Mac users. MS Office Accounting, Peachtree, and QuickBooks are all very similar software programs, but you’ll want training to fully utilize the one you choose.

You very likely have a spreadsheet program on your computer already. Spreadsheet programs like Excel often have templates available for invoicing, checking registers, inventory tracking, and creating financial reports. The problem with using just a spreadsheet program for tracking your business is the data is not integrated, making it easy to overlook important information.

When working with a complete accounting software package, such as QuickBooks, the first step is to choose the correct version for your type of business. QuickBooks comes in multiple “flavors”. There’s even an online version. The online version is useful if you travel a lot, have multiple locations, sales representatives, a virtual assistant, or bookkeeper; and you don’t carry an inventory.

The advantage of using QuickBooks online is that you never need to purchase a new, updated version of the software. It will work with any computer with internet access, so you are not confined to a certain computer. There are some limitations for Mac users, but not many. Currently, you must have a PC environment to successfully operate the payroll feature, you’ll never have to worry about losing accounting data if your computer should crash, taking your harddrive with it.

Normally, I suggest using QuickBooks Premier as it has been customized to be industry specific. There are versions for General Business, Contractors (includes specialized reports such as certified payroll and change orders), Manufacturing and Wholesale (managing inventories and customer orders), Professional Services (for lawyers, architects, and other professionals), Nonprofit, Retail (managing sales, inventories and pricing), and Accountant (which allows accountants to open any version of Quickbooks files). The software maker, Intuit, has other products available such as Point of Sale and Cash Register Plus for front end retail sales, and there is also QuickBooks Professional and Simple Start. The Professional and Simple Start versions are cheaper but do not contain as many reports and other helpful features for running your business.

Two main things to remember when using any computerized accounting systems are:

• Backup your date, and
• Choose a tax professional who is familiar with the software you use.

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