Harkening back to my SCORE days, soon-to-be entrepreneurs had identified a potential business and were mentally preparing all the many facets needed to begin a business. Perhaps the individual was already working another job (full-time or part-time) and found themselves already immersed in running a small business “on the side.”
One consideration, one that was not easy, was their multiple needs in accounting. The accounting aspect can be complex with individuals preferring to spend time on the service or product with little (or no) time spent on the “numbers” side.
I went to our friend Google and entered the need for accounting. There were over 569,000,000 results. The first item to post was from Bizfluent. Sounded pretty good, so I thought I would share with you. “Financial transactions from the business operations and financial transactions regarding company assets are all recorded and presented … Executive management needs accurate financial information for several reasons, including planning, decision making, and profitability reporting.” And, I would add about the need for accurate tax reporting.
Accounting has become more complex over time. Accounting can be made easy with computerized software. For example, I had a recent visit to my medical doctor. Computers and computer programming have made the visit, the documentation of the reason for the visit, the symptoms, the prescriptions, and all other aspects of the visit were just entered into the computer. And voila–I picked up a prescription at my local pharmacy, and soon I will receive documentation and billing/payment information from my medical provider. The medical provider has accounting software established to assure the medical provider can guarantee a valuable visit without the distraction of accounting/documentation.
One consideration that the soon-to-be entrepreneurs need to be strongly reminded of is that it is imperative to make the accounting as easy as possible to allow for a maximum effort on the business service or product.
I know that when I first began my business, I took time to assure that I was documenting, for my own business, the time I invested in research for a client. So, when billing a client, I knew what my time was worth, and what type of profit (and sometimes a loss), I was making in a particular project.
For those interested, SCORE.org has helpful webinars offered for the entrepreneur. In early October, SCORE.org offers “Accounting for the Non-Accountants.” Another offering includes “Business Finances and Basic Accounting Workshop.”
Extended offerings are available from our local Community College for those interested in a greater exploration into the accounting realm. Muscatine Community College offers an Associate in Arts in Business Administration/Accounting Concentration.
We all know that accounting is a necessity for all businesses. Software programs are available. There are both free and “for a charge” software available. Some of the free software include: GNUCash, TurboCash, and Zipbooks. The free software is just that – free. Do keep in mind that there are limitations to what each free software program can do. While several of the fee-based software programs include QuickBooks, Xero, and Zoho, unless one’s business is accounting, the less one needs to dedicate to accounting, the more one can focus on their service or product.