Businesses exist to make money, so it is no wonder that new business owners focus on the things that impact cash flow, like invoicing customers and making payments. These processes, involving getting and spending money, are among the first accounting-related things a new business owner generally addresses, yet they aren’t where the accounting should actually begin. The strongest foundation for any business begins with accounting, and proper setup and treatment is everything.
When most small business owners begin their operations, they get a business license, a computer, an email address and, more often than not, QuickBooks. Even if the owner isn’t fully prepared to handle the accounting for the business, they understand that they must do something to collect money and pay bills. QuickBooks is the standard for small business bookkeeping and has been for years, so this is where most begin.
Keeping a check register in QuickBooks, at the minimum, lets the business owner know how much money is in the bank. For a small business owner, it’s all about cash flow and cash availability. Focusing on the checkbook and managing activities by tracking payments going out and receipts coming in may help calculate the bank balance, but it doesn’t guarantee that the accounting is correct.
To establish a proper foundation for business bookkeeping and accounting, there needs to be an understanding of basic accounting principles and how they are applied to this business. With the help and guidance of experienced accounting professionals or accounting software consultants, businesses will start out not just with the right chart of accounts, but also with knowledge of how to use the software properly. This enables workflows which utilize the capabilities of the software to handle the transactions properly at the back end, where data becomes information that provides insight into the business activities and results.
If the foundation isn’t solid, everything built on it is at risk.
Whether the business is just getting started or has been operating for a while, there’s no time like the present to review the fundamentals and make sure you’re on solid ground. Mendelson Consulting, backed by CPAs and with years of business accounting software experience, is here to help businesses get the most from their accounting solutions. From initial setup to operational reviews and workflow re-design, Mendelson provides the services businesses need to build up their capabilities and grow the enterprise without compromising the structure supporting it.
