Follow this link to see AgWeb's post about how to bulletproof your balance sheet.

http://www.agweb.com/article/bulletproof_your_balance_sheet/

By Adam Bluemner of www.FindAccountingSoftware.com

Adam Bluemner is the Project Specialist Manager with FindAccountingSoftware.com, a company specializing in helping businesses find the right software for their needs. In his free time, Adam avidly follows his favorite Wisconsin sports teams and is working on convincing his daughters to do the same.

One of the most common questions you may face when considering a software change is whether or not you should replace your entire accounting system. Should you purchase a new, full software system? Or should you instead extend the functionality of the current system with an add-on program? The answer of course depends on your needs and your unique scenario. Understanding a bit more about the topic of software integration, though, can help you make the decision.

The word integration is often used as if it refers to one exact thing. The reality is that there are many degrees of integration. At the most basic level, one of the most important aspects to consider is whether integration will be "real-time" or not. As opposed to real-time integration, batch integration, on the other hand, allows the export of normalized data from another module, but it is only done periodically. There are obvious limitations to batch integration. Depending on your needs, these limitations may be prohibitive.

Consider the case of a company who sells both directly and through an ecommerce portal. Imagine the two sales channels process transactions with different software and the updates to inventory counts are done in batches. The problem that may arise is that inventory that has already been committed to one customer may end up being resold. This is a stark example. But it does demonstrate a major challenge when integrating add-on software--namely, keeping data synchronized and up-to-date.

There are a number of key questions you'll want to ask providers when considering integrating a third party add-on:

1. What is the underlying database for the add-on software? (Does it match that of the core system?)
2. Is real-time integration possible?
3. If integrating in real-time, how does the software solve issues like managing concurrent updates to common data from the two systems?
4. Has your company handled this specific integration before? (And, how has it turned out?)

One of the reasons you may be investigating extending functionality with an add-on program is price. Certainly, one major advantage of purchasing a 3rd party add-on is that it will be a fraction of the upfront capital expenditure of a full new system. However, there is more to the price equation to consider. Normal software version updates to one or both of the integrated systems may necessitate updating the integration as well. This can introduce ongoing costs. Often to avoid these costs, companies will stick with a certain software version. There are costs to this as well. Aside from missing out on the introduction of beneficial features, it may prevent access to important bug fixes and security patches.

The advantage of purchasing a complete accounting system when it comes to the integration issue is a bit clearer. With a complete system, you are working with a set of modules inherently designed to work together. Modules can easily share access to common database tables, permissions can be managed centrally, and there is consistency in the GUI (general user interface) making it easier for employees to learn and use the software.

While purchasing a full, new accounting system may be more expensive upfront, often when the complete costs and benefits are evaluated, it is the better value in terms of ROI. Whether or not this is the case for you will of course depend. Understanding and exploring the different aspects of potentially integrating software should help to give you a better basis to make the decision.

At the start of the year, you have a brand new chance to improve the financial status of your business. Taking some simple steps now can make a big difference in improving your business throughout the year. Follow these steps to start your accounting year right!

Back Up Your Data

How often do you back up your data? You really should back up your data on a regular basis, and then check to be sure the backup was successful. The New Year is a great time to start implementing this process and making it part of your ongoing procedures.

Make Adjusting Entries

Make adjusting entries to balance inventory and payroll liabilities. Check all accounts payable and accounts receivable reports to be sure the amounts are accurate. Also, write off any bad debts.

Reconcile Bank and Loan Accounts

Reconcile all cash, loans, credit lines and credit card accounts with their statements. Compare the reconciliation reports to your balance sheet to be sure the amounts match and to ensure you have an accurate balance sheet. By not reconciling, you could end up with a payment due that you had not planned for.

Print Year-end Financial Statements

Print the year-end financial statements including an income statement, balance sheet and a general ledger report.

Review Customer Aging Report

Review your Customer aging report; check to see if any balances need to be written off or turned into collections. Also, refund old overpayments and deposits.

Take Fixed Asset Inventory

Verify that the fixed assets on your books are what you still have and vice versa. This is a step that most businesses forget to take, and once they do, they find out there are things on the books they haven’t had for years.

Verify Coordinating Sub-ledger Accounts

Verify that your inventory, accounts payable and accounts receivable balances match your coordinating sub-ledger. For example, be sure the balance on the accounts payable account in General Ledger matches the balance on the accounts payable aging report.

Create a New Budget

A new budget should be created well before the New Year starts. However, the start of the year is a good time to begin actually following the budget. Start the year right by making it a habit of paying attention to your budget and where your business stands. You are more apt to make money if you have goals/plans in place, which can all be planned out and recorded in your budget.

Create an Actionable Customer List

Create a list of customers who did NOT purchase from you in 2011, and put an action plan in place to get those customers BACK.

Implementing a new payroll software system can be a daunting task. There are some standard steps to anticipate when setting up the software system, regardless of which payroll system you choose to use. One crucial step during the setup process is deciding whether to set up multiple companies/employers in separate databases or to combine them. This decision can greatly affect how you view and analyze your payroll data, so it is important to take some time to consider which option is right for you and your business. Learn more about which database setup may be right for your company.

When setting up your new software system, be sure to consider what a database means before setting it up in your system. A company/employer is typically defined as a tax entity with financial activity. This allows multiple companies/employers to share a database, if they are part of the same operation. Companies/employers can then share accounts and analyze the combined data. At the same time, each company/employer maintains separate financial records. Be sure you understand how your software handles this before starting to set up your new system.

There may be circumstances that are better suited to setting up separate databases. If you have more than one company and they do not share the same type of activities, share the same type of accounts, or you do not wish to combine data from all companies in an analysis, you may want to consider setting up separate databases, rather than combining them into your payroll system.

When your database is set up correctly, you will be able to quickly pull and analyze your payroll data in a way that is most meaningful to your business.

Many businesses can benefit greatly from project accounting software. If you have large projects that happen over a span of weeks or more, you are likely entering many invoices and paying invoices as the project continues. As time goes on, you will want to know where you stand on income and expenses. Enter, project accounting software. Using a project function within your accounting software allows you to maintain income and expenses for specific jobs or projects. Assigning a project to each of your transactions provides an easy way to track the cost of a project. Some programs also allow you to assign projects to labor costs, for even more accurate project cost calculation.

Who needs project accounting software?

There are three main scenarios for which project accounting can be useful.

1. Bids/Jobs

   Companies that manage ongoing projects and projects that require job bids can benefit from project accounting software. Tracking the income and expenses of a project lets you see at any given time where you are financially with your project, so you can make adjustments if needed.

2. Traveling/Shows

   Companies that travel and do business at events, or companies who simply want to track the effectiveness of trade shows can use project accounting software to see which events are the most profitable. When you use project tracking, it’s easy to run a report and see how profitable that event was, which can help you decide which events are most profitable.

3. Internal projects

   Are you building a new warehouse? Remodeling your office? Use project accounting to manage and track your expenses so you don’t go over budget.

How does project accounting software work?

A typical project accounting system works by tracking each expense and purchase and attributing it to the project you have set up in the system. So, you first set up and name your project. Then with every income and expense invoice you enter, you need to be sure to choose your project. Most systems will display a “project” field for you to choose from. If you enter an invoice and forget to choose the project, of course that invoice will not be attributed to that project. Don’t forget to add the same project to your payroll software system, if that system allows for project tracking. Adding project tracking to your payroll can help you also track labor expenses to your project, which is likely an important component of your project’s cost. Once transactions have been entered with the appropriate project, you can run reports and filter them by projects.

Is project accounting software the same as job costing software?

Project accounting software and job costing software are similar in function, but there are some major differences. Job costing software offers the ability to track the status of a job in progress as well as the income and expense; whereas project accounting only tracks the income and expenses. Job costing also lets you assign the parts of a job to a class or category. You can see what’s been billed for that project, as well as the status, retainage amounts, and more detailed information than you would find in project accounting. Job costing is typically a more complex system; whereas project accounting can be set up and used fairly quickly within your accounting system.

If you are looking for a way to track income and expenses to your project(s), project accounting might be a simple way to accomplish that! Why not set it up in your accounting system and give it a try today?