Counting the Beans

Most of us, when we start a business, bitterly resent anything that takes up our time or money without moving production or sales forward by an inch. After all we need to grow the beans, and sell them, before there is any value to be had by counting them.

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We are not accountants, and are not qualified to advise on which package or approach to take, but as long time managers of companies and subsidiaries, we can point to the questions a budding entrepreneur should ask before deciding on an approach. After all a bit of wood with a nail driven through it does keep the records, but it tells us nothing useful, and the tax man likes to receive his documentation on time and without holes in the middle.

So what do we want of the system?

  Start with the basics. Basic book keeping software is so cheap, and does so much of the spadework it is nonsense to even think of doing it by hand. The alternative is long evenings working out your sales tax, and a crisis at the end of every year when the government wants your returns.

So the basics are

• It does the sales tax in conformity with the government’s rules
• It separates capital investment where you buy something – like a computer – which will help your business over a period of years, from operational expenditure – wages and stock – that are here today and sold tomorrow.
• It produces a year end without much manipulation.

These are offered by every credible package, but this is where your investment makes a return, by saving you time and money.

What else do we want as part of he basic pack. Well that depends on the nature of your business. Items to consider are: -

• ·         Payroll – can it calculate pay, including overtime, deductions, bonuses etc , produce payslips and make the necessary returns to the government.
• ·         Invoicing – can it produce sales invoices in the form that you need, with standard pricing, discounts, customer accounts, sales tax etc. Does it show who has paid and who hasn’t.
• ·         Stock Control – can it tell you whether you have an item in stock, warn you when to re-order, keep track of stock values etc
• ·         Time recording – if you charge by the hour or by the day you may need a time recording system to track your sales.
• ·         Purchasing – does it produce purchase orders and track deliveries, does it track payment terms so that you can make the best use of supplier credit and pay at the last minute.

Do these talk to each other so that, for instance, the sales and purchase systems plug into the sales tax package?

Then you must plan forward. There is little use buying (quite cheap) and implementing (quite expensive) a package that you will outgrow in a few years. It is generally much better to buy the basic package from a larger suite of software so that you can add capabilities as you grow without having to change basic software or have bespoke (and often unreliable) linking packages built for you.

Think about your future need to ‘dice and slice’ your accounts. Will you want to know which outlets or products are pulling their weight and which not.

There are dozens of packages, and most of them have out there and we can’t advise you on one or the other – only suggest the questions you might ask.

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