One of the key tasks you have to deal with while establishing a small business is that of setting up some sort of accounting system for the enterprise. You are advised to set up an accounting system for the small business right from the outset. In other words, this is not one of those things that you can deal with as the business grows. On the contrary, this is something you have to do at the outset. It is only through the use of an accounting system that you will be able to see how effectively you are deploying your start-up capital, how much money you are spending on the business, how much money you are getting from the business, how far you are from the break-even point…. And so on. It is only through the use of an accounting system that you can keep track of assets and liabilities, as you accumulate them in the business. Further, it is only through the use of an accounting system that you can keep track of revenues and expenses, to understand whether you are making money or not. So you need an accounting system, however rudimentary, right from the outset. You can, of course, make improvements on the accounting system as the business grows. But you do need to have some sort of accounting system, right from the outset.
Having come to terms that with the reality that you need to have some sort of accounting system for your small business, the next question will be the one as to what your options are, when it comes to setting up the accounting system. And this is where you will come to realize that you have two major options, when it comes to the types of accounting systems you can set up for your small business. One option is that of using a ‘local’ accounting system: that is, one that you install locally on your business’ computers, and use it from there. The other option is that of using a web-based accounting system. And as you are likely to discover, many small businesses prefer to use the web-based accounting systems. They do so because the web-based accounting systems tend to be cheaper, and easier to use for small businesses that are often unable to afford the services of accountants. It is against that background, then, that you too may end up making the decision to implement a web-based accounting system for your small business. The question that will then arise, is as to what practical steps you need to take, to implement the web-based accounting system for your small business in the right manner. That is the question we will be addressing in the remaining part of this article, as we look at the key steps in the web-based accounting system implementation process.
Identifying an ideal web-based accounting system for use
There are many web-based accounting systems for you to choose from. You will therefore have to undertake some sort of comparison, to identify the right one for your needs. The factors to consider here include the cost of using the respective systems, the user-friendliness of the respective systems, the ease with which you can upgrade from the respective systems, the user support available for the respective systems… and so on. You may need to read reviews of the various systems, to see what the people who have used them before have to say. You may also have to read extensively about the respective web-based accounting systems (including the systems’ tutorials), and even talk to the vendors, to get the information you need to make a good decision on the specific web-based accounting system to use.
Testing the web-based accounting system
After identifying the web-based accounting system to use, you will need to test it, before fully signing up for it and fully implementing it. Most of the vendors of web-based accounting systems provide demos and ‘free trials’ that you can take advantage of, to practically test the system, so as to see whether system you identified as ideal for your needs is actually the best. You need to test all aspects of the system: and you need to be very thorough and objective in your testing. And if your tests reveal that the system you had initially identified as ideal has some major flaws, don’t hesitate to move on to another one – regardless of the emotional attachment you may have developed for the system. The mistake to avoid here is that of compromising, and opting for a system that has obvious flaws.
Signing up for the web-based accounting system
Having identified an ideal web-based accounting system for your small business needs, and having subjected the system to thorough testing, you can now go ahead to sign up for it. You may have to pay for the system at sign-up time. Alternatively, you may be looking at one of those systems where you have a ‘grace period’ – where you can continue using the system for free, before being required to pay. You could also be looking at one of those (rather few) web-based accounting systems that are available for free in perpetuity. Whatever the case, you will probably be required to fill in some details, to create an account on the web-based accounting system. Having created an account, you may need to set up login credentials for other people (for instance, staff in your business) who will be authorized to use the system.
Feeding data into the web-based accounting system
Having signed up for the web-based accounting system, the next step will be that of feeding data into the system. Most of these systems have tutorials you can make use of, to understand how to feed data into the systems correctly, how to generate various reports from the systems as need arises, among other things. You need to go through the tutorials thoroughly, to understand how to operate the web-based accounting systems fully. The other staff members who will be using the accounting systems also need to go through the tutorials.
You may need to create various forms and other source documents for the data you will be feeding into the system. The most important thing is to ensure that financial data is entered into the system consistently and in a timely manner. To this end, you may need to set up an operational system (that is, a routine) for entry of data into the accounting system, so as to ensure that you don’t have backlogs.