Not all organizations need business accounting software. Because of the mobility some companies are better suited to utilize paper and pencil or a personal digital assistant (PDA).
On the other hand, some businesses have enough accounting data and that data is located in one place, to benefit from software. Some of these criteria listed below are directed toward certain business types and may not apply. But, if a company has more than any of these limiters, business accounting software would be a good idea.
Business accounting software is not needed if all of these apply:
Total monthly sales are under $2,000 - generally, the amount of recording effort needed to keep track of $2,000 is minimal and can be done with a pencil and paper or an excel spreadsheet. It is a small enough number that any misapplication can be easily detected and corrected. If the sales are any higher, the risk for error and stealing drastically increase.
Less than 30-monthly sales transactions - this is for the type of business that sells large equipment or contracts jobs that take multiple days to complete. When less than one sale per day is made, it definitely should not be an issue to make any calculations or recordings. Even if the project or sale is a long distance from the office, you should be able to remember that sale for days or weeks until it can be tracked.
Inventory less than 100 items - business accounting software can be very useful for tracking how much inventory is on-hand and how much is needed. Software can be programmed so that when a product is sold, it is automatically withdrawn from the inventory statistics. If there is less than 100 items stored at one time, then those could be easily managed manually.
No employees - payroll can be done by hand, but it can be very time consuming and laborious. If something so detailed can be easily figured automatically by business accounting software, then it would make sense to use it. Besides, a large or small business wants to be working on increasing sales or optimizing efficiency instead of busywork. If no workers are employed, then obviously there is no need for software that calculates payroll.
If all of these guidelines are met, then business accounting software is probably not needed. A software package may still be helpful, but within these ranges, it may not be economical. This is not to say that free accounting software cannot be downloaded and used, but it should not be purchased.
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About the Author:
Cheryl L. True is a Manila-based freelance writer who writes on a variety of topics.
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