The Value of Business Accounting

Business Accounting Regardless of the size of your business, good accounting practices are a legal requirement. There are some basic records you must keep, which include:

• Copies of invoices you’ve issued, and documentation evidencing all your sales
• Evidence (including invoices) of all your purchases and expenses
• Particulars of any amounts you personally pay into or take from the business
• Copies of business bank statements

One way to solve the business accounting problem is to buy specialized software for the purpose. One of the issues to consider when choosing a software package is scalability: businesses change over time, so it’s vital that the business accounting software you select can adjust too. It is also important that any software you choose has good support for when something goes wrong.

As your business grows, its needs and requirements will go beyond the scope of accounting software. Hiring a trained CFO or controller can help you in two ways: he or she can support and guide your existing accounting staff, so that they can function at optimal levels, and the CFO can also perform highly skilled tasks such as putting together business plans, preparing financial statements, determining budgets and making cash flow analyses.

Your accounting department is a very sensitive area of your business, and having too few people opens the door for fraud. With more people, you can assign duties in such a way that those done by the same person don’t pose a control threat, for example, the same person should not draft checks and reconcile the checking account. Unfortunately, many small businesses do not have enough funds to employ the number of people needed for satisfactory separation of duties.

Even after your accounting system is properly in place, you still have a responsibility to do your own audits. Review your company’s financial and other statements often for errors and irregularities. Take all the steps necessary to ensure your company’s financial health by staying on top of your accounting – as the owner/manager of a small business, the buck stops with you.