This is part of Accounting Software Helps You Go Paperless, continued from the prior blog post.

Create, send and track purchase orders electronically.

Do you run out of your most popular products, while the slow movers just keep sitting on the shelves? Are you unsure of how many of an item to order? Perhaps you have a giant folder labeled with your vendor’s name that is overflowing with paper copies of purchase orders and other vendor information. These are just a couple of the major functions that can be solved by electronic purchase order management. A purchase order system within your accounting software can suggest, produce, process and receive purchase orders for items and/or services. Your whole purchasing process is made more efficient, and will save money by having the right products on your shelves at the right time, when customers need it.

Create and send reports within the system and via e-mail.

Most companies run their financial reports every month, print them and distribute them to the appropriate parties. The reports are typically viewed and then stored or disposed of. By distributing reports via e-mail instead of in print, you will save on paper and also reduce the chances of sensitive financial information going around the office. Also, create the reports in Adobe PDF files, and everyone (even those without your accounting software) will be able to easily view the reports. Your data is safe and accurate in a PDF format as it allows the user to make notes on the report but won’t allow them to change the original.

Cut down on printed invoices and statements.

Yes, it’s an old habit that’s hard to break. But think about it, do you really need all those printed copies of invoices and statements? A good accounting software program should allow you to reproduce/reprint any invoice or statement from history, so there’s really no reason to keep a copy. If you want to keep copies so people without authorization to the accounting software can view them, you should print to PDF files (which does not physically print them but instead saves them into a PDF format) and keep them in a safe/organized place on the server. To do this, just name the file and folders the same way you would if it was a file cabinet. If you would normally have a file cabinet full of folders for each customer, then you would create a folder on the server called “Invoices”. And within that folder, you would have a separate folder for each customer. When you print the invoices to PDF files, you would name them with the customer code and invoice number, and save them within the appropriate customer file.

On the other hand, some businesses now keep a three-ring binder that has a copy of every invoice/statement in it, sorted by invoice number. If you are currently doing this and would like to continue doing it with electronic copies, then you would create a folder on the server called “Invoices”, and all invoices would be saved in that folder. When you print the invoices to PDF, use the invoice number as the file name, or the invoice number and customer code.

Don’t forget that there’s always the possibility of having an interim period where you still print a copy and then keep a PDF copy. However, this often leads to employees reverting back to old ways, so it’s typically best to make the change ‘cold turkey’.

Old habits die hard, but going paperless or at least reducing the amount of paper you use can greatly benefit your business and our environment. Let accounting software help you and your business on your path to going paperless!

No matter what type of business you operate, you have surely heard about businesses trying to reduce the amount of paper they are using. It all seems so easy in theory, but it can be challenging to actually change the processes you and your colleagues have been used to for so many years. According to www.electronicpayments.org, “…every year Americans mail 26 billion bills and statements and 9 billion payments in paper form. The production and transportation of those paper bills, statements, and payments consumes the following resources: 755 million pounds of paper, 9 million trees, and 512 million gallons of gasoline.” Visit their Web site for more interesting facts about going paperless. Here are some of the ways you can use your accounting software to help put your business on the road to eliminating the need for paper.

Send invoices and statements via e-mail.

All of the paper and envelopes that go into sending your customers invoices and statements really add up. Many accounting systems now allow you to set up your customers’ e-mail addresses within the system, and then send all invoices and/or statements to those with e-mail with just a few clicks. If you send out five invoices/statements per day, that’s 1,300 sheets of paper and 1,300 envelopes per year! Just think of the time saved, not having to print, collate, stuff, stamp and send all of that mail. Your customer gets the invoices sooner, and you might just get paid faster, too.

Store customer pricing in the system.

Do you find yourself flipping through disorganized folders of information, seeking the customer’s most current pricing sheets? Not only does this waste paper, but it also leaves the customer waiting while you search. Keep track of pricing in your accounting software and it will always be just a few clicks away. Do keep in mind that accounting software does vary in its capability to store pricing information. Some systems let you store one set of pricing, some store multiple sets and some even allow for unlimited contract pricing. Make sure your system allows you to store pricing in a way that will work for your business!

Enter and store customer orders in the system.

Here again, if you are storing customer quotes and orders in a paper file, things will be much harder to find. You will have a multitude of papers floating around, and it will take longer to access them. Instead, create and save customer quotes and orders in your accounting software system. Quotes and orders can then be searched for by number, customer name, etc. for easy access. The information will be easier to find, and you will consistently provide better service to your customers.

The second part of this blog will be continued in the next blog post.

There is an old rule that is still as relevant today as it has always been, and that is the 80/20 rule. This rule, when applied to your product inventory, says that 80% of you sales are from 20% of your inventory items. Know which items of the 20% are garnering the most sales can be crucial to growing your profits. That’s where ABC analysis can come in handy. ABC analysis within an inventory management software system is a practical report that can show you which items are most profitable. Here is how it’s typically broken down.

In an ABC analysis, inventory items are analyzed and ranked, based on a percentage of sales. Often, the software will give you the option of ranking your items based on either the “cost of goods sold” (COGS) during a chosen time frame (annual is the most popular), or else by the number of ‘hits’, which is the number of times the items have been sold.

When the analysis is done, items are typically ranked in descending order, using the following scale: A=80%, B=Next 15%, C=Next 4%, D=Next 1%, and X representing no sales. Many systems will even let you sort out specific product lines or items on which to perform the ABC analysis.

ABC Analysis can be extremely helpful for planning purposes, since it gives managers a clear picture of top performing items and can help solidify marketing plans, sales forecasts, purchasing plans, and more. By focusing on the 20% of the items that are responsible for 80% of your profits, you can create a smart plan to increase your profits down the line.

Processing your payroll can be time consuming and often, a real headache! Have you taken the time to see what payroll software can do for you?

No matter how big or small a business is hours can be spent managing the financial aspects of the company, including payroll. Payroll particularly can be very time consuming, since there are so many aspects to consider: Full-time hourly employees, part-time hourly employees, seasonal employees, salaried part-time employees and the list goes on. Let’s not forget the vacation pay, bonuses, direct deposit, manual checks, and then there are taxes! No wonder just the mere thought of payday gives you a sharp pain in the head!

Stop for one moment and look at how much money and time you spend processing your payroll. Many businesses still track payroll by spreadsheet and hand-write checks or send their records on to a payroll service. When you process payroll by hand, it isn’t just a weekly, bi-weekly or monthly event; it’s a full time job! Payroll information is ever-changing. There are daily postings, hours worked, vacation and sick pay information, and other employee changes which all must be recorded in the payroll system. That takes a lot of time and effort and really lacks efficiency. Once all of the data is entered, the check writing or direct deposit is the easy part.

Many businesses can save money by streamlining their payroll processing and add that profit to their bottom line by using payroll software.

Here are some things to look for when shopping around for payroll software:

• Flexibility: In order for you to benefit from payroll software, you will want a system that can be flexible to handle your specific needs. There are many payroll software programs available in the market today. You can find standalone programs to use with your general ledger, or payroll software that fully integrates with an accounting system is even better.
• Versatile, Easy Setup: The purpose of payroll software is to save you processing time and money. Look for a program that has tools and wizards to help you easily set up your payroll software the right way. Also look for software that gives you the ability to modify the reports you need and gives you the information you require.
• Options. Options. Options. Choose payroll software that is capable of handling many aspects of payroll reporting, not just collecting information to print a check. For instance; a software that can handle piecework pay, seasonal pay, shift differential pay, hourly pay or even a combination of any of these payment methods. By implementing these key features, you can have the system do the correct calculations for you. This saves considerable time. Also, don’t forget Direct Deposit and Publish Pay Advices. They are great options to have in your payroll software; employees love them!
• Automated W-2, State and Federal Forms: Processing time and money can be saved if your payroll software offers automated W-2 and State and Federal forms with eFiling. Data from your payroll is automatically added into your required forms for fast eFiling or printing on plain paper. If possible, choose a full-service W-2 and 1099 fulfillment option as an added resource.
• Experience, Expertise and Customer Care: Take care to look for a payroll software company that is experienced in development and has the expertise to create software that can handle your needs as you grow. Finally, take a look at the support and customer care the product offers. Is there personal attention offered? When you call for telephone support, do you actually talk to a person and not a recorded auto attendant?

See the Light! When all is said and done, remember, the purpose of purchasing payroll software is to utilize the wide range of additional tools that can help your company increase efficiency, reduce costs, access the information you need, and most importantly get your employees paid on time!

The plain and simple truth is that if you don’t track financial information by crop, farm, field, and land owner, you are just guessing whether you are making the right decisions regarding your farm. On the flip side, when you are tracking it, you can also do “what if” scenarios that open the pathways to making better business decisions. “What if” scenarios can help you:

• Compare the profitability of individual production years regardless of crop/livestock.
• Determine which products to continue producing by comparing the profit per acre/head of each crop/livestock.
• Determine if fields/livestock are not producing to their potential.
• View the break even cost/bushel for each field in a production year.
• View the profitability of a field regardless of which crop it raised over a period of time or determine if it is more profitable to raise feeder hogs or farrow to finish.
• Analyze and compare profitability between profit centers, farms, and production years or any other combination of business segments.

If you track inventory, it will provide you with more accurate profitability analysis. If you aren’t tracking inventory, then you can’t really do accrual accounting, so you just expense your supplies (seed, fertilizer, etc.) in the year you purchase it. But that might not be the same year that you use it, AND it may not be the same year you sell the crop. So you could have the expense in one year and the revenue in another year… thus throwing off profitability for each year.

You can decide how detailed you want to be with tracking crop production…

• Start really basic – just do production tracking by crop, farm or field, or a combination of crops & farms or by land owner.
• Once you are comfortable with that, you could expand the next year (or whenever you feel comfortable doing so) and start tracking inventory.
• Then once you are comfortable with that – you can start using WIP (Work In Process) accounts and doing accrual accounting (and getting more informative and meaningful financial reports).