Most business owners I know think that accounting software is boring. Not as boring as say, sitting through the movie “Watchmen.” Or waiting in line at Starbucks while some idiot discusses what flavor of tea he should choose (it’s TEA for God’s sake). Or listening to NPR.
But accounting software can be fun. Fun, I say!
Jason has lots of fun with his accounting application. He’s the owner of a 20-person firm that distributes party supplies. His company’s all about inventory. He’s spent the time to make sure that inventory is tracked in great detail by his accounting software. This is not an easy task as he’s got over 10,000 items. Oh, and a lot of helium for balloons. Now, that’s fun.
Jason’s completely obsessed with quarterly cycle counts, weekly spot counts and semiannual physical counts. His warehouse is cleaner than my kitchen, but that’s only because I have teenage kids who specialize in home destruction. Jason’s inventory records are even cleaner than his warehouse floor.
A lot of business owners ignore inventory management in their accounting software. Some don’t like keeping detailed records because they don’t want to reveal too much to the tax guy. But using these features can keep this asset under control and therefore save lots of money. Now that’s fun.
But the fun doesn’t stop there. Jason’s big into alerts. So when certain inventory levels get below a minimum his purchasing guy gets an e-mail alert to order more. If a ship date passes the current date then his customer service person gets an e-mail alert. If an inventory item hasn’t been counted recently his warehouse manager gets an alert. Jason takes alerts even to his receivables systems too. His controller gets email alerts when invoices go past 30 days. And if helium inventory levels are high then Jason takes care of that too. He has a lot of fun doing that.
All of this is done by his accounting software. Most popular accounting applications do this stuff today. And most major databases, like Microsoft’s SQL Server allow you to write “triggers” which are the same as alerts. Knowing things before they happen is fun. Finding out after the fact isn’t. Just ask the people who invested with Bernie Madoff.
Want more accounting software fun? Ask Susan.
Susan is a partner at a 10-person law firm. Sure, as an attorney she likes to eat puppies and beat little children. But there’s another side to her too. A fun side. She’s a penny pincher, running a business. Susan doesn’t have to worry about inventory. But she can still have fun with her accounting software.
There’s a lot of stuff she needs to know about every day. Like unbilled time that needs to be billed. And pending client work that needs to be assigned. And client projects that are running up against their limits. Susan’s not an accountant but that doesn’t mean she doesn’t know how to use her accounting software. She gets flash info.
Every day there’s a Flash Report on her desk. This report is a one pager with key information about the firm. The flash info. Plus open receivables and open payables. She’s not waiting for the end of the month to get her information. She’s getting it immediately. She’s taking advantage of the daily reports that her accounting system offers. Like alerts, most software today generates dashboards and flash reports and daily status information, in addition to the detailed financial stuff that accountants like to know.
Like Susan, Ellen’s another owner who has fun with accounting software.
Ellen sees her accounting application as a sales tool. She runs one of those annoying franchise kiddie-tumbly-gymastic places. The ones that hand parents two Advil and a shot of Jack Daniels when entering. Every time Ellen sends out an invoice she plays with the message on the bottom. She advertises upcoming classes. She promotes her summer camps. She highlights a great staff member. Her invoices are like mini-tweets (there, now I’m cool because I just referenced Twitter). Ellen looks at her invoices not just as a bill for services, but as a communication with her customers. Fun!
Another fun thing I’ve seen good penny pinchers do: They beat up their accounting software partners. They have them come in, or get online, and demonstrate to them new features, add on applications, and better ways to use the product they have. They torture them with questions and try to soak some free training from them. The software vendors think they’re going to sell upgrades or more licenses. Boy, are they naïve.
See? For some penny pinchers, accounting applications can be fun! And profitable too!
Have you ever locked your keys in your car? This can be a very frustrating experience – especially if your car is still running!
With some newer vehicles, you may have a safeguard built in to keep this from happening. But with many automobiles, this is still a problem that can happen all too easily. It’s such a helpless feeling isn’t it? You’re standing right there so close to your keys and yet so far away!
This actually happened to me a few months ago in Xenia, Ohio. Before I realized it, I locked my car door only to discover that my keys were still inside the car. What was I going to do now?
Fortunately, I was able to call Farmers HelpPoint at 800-435-7764. (I keep this number in my cell phone for emergencies and I still had my cell phone with me.) I knew that my auto insurance coverage with Farmers included towing & roadside assistance. I knew that I was just a phone call away from someone who could help me. I reported the situation to the friendly person at HelpPoint and within 20 minutes they had someone there to assist me.
The roadside assistance specialist pulled out a special tool and was able to open my car door in practically no time at all. I was so relieved! And the cost for this service was billed directly to Farmers so I had no additional charges to pay.
Does your current auto insurance policy include this kind of service? If it doesn’t – or you’re not sure- call our office today at 937-848-6840 and we’ll be glad to set it up for you.
You may have a business insurance policy, but does it fully protect you for many of these common claims that often occur?
ARE YOU COVERED…WHEN THE POWER GOES OUT IN YOUR AREA?
Off-site power failure can be devastating for any business. In this day and age, it’s almost impossible to operate without electricity. If you are unable to continue operations due to a power outage off premises, will you be compensated for loss of business income?
ARE YOU COVERED…FOR CLAIMS DUE TO EMPLOYMENT PRACTICES?
Claims against a business owner from current, former, or even prospective employees are becoming more and more common today. Not only are they extremely frustrating, they can be quite costly to defend. Will your policy protect you if you are sued for any of the following accusations?
Failure to hire
ARE YOU COVERED…FOR LOSS OF BUSINESS INCOME?
If you experience a covered claim and your business is shut down for a period of time, will you be compensated for the income you would have received during that time? It would be very difficult for most businesses to remain viable without any income coming in. Will your policy reimburse you for your loss of business income…and how long will your coverage last?
ARE YOU COVERED…FOR LOSS OF BUSINESS INCOME IMMEDIATELY?
If you experience a covered claim and your business is shut down for a period of time, will you be compensated for the income you would have received during that time right away? If your policy provides coverage, does it have a “waiting period” before this coverage begins? If so, how long can you go without any business income before it impacts your ability to stay in business?
ARE YOU COVERED…FOR THE FULL VALUE OF YOUR CONTENTS?
If the contents, supplies and equipment that you use to operate your business are damaged or destroyed by a covered claim, will you have the protection that you need? Is the amount of your coverage adequate? And if it is, does your policy provide “replacement cost” protection?
ARE YOU COVERED…FOR ADDITIONAL LOSSES DURING BUSY SEASON?
Most business insurance policies provide an established limit for contents coverage. But what if a claim occurs during your prime season when your inventory is higher than usual? Does your policy provide additional coverage if your loss exceeds the amount of contents coverage during your busy season?
ARE YOU COVERED…FOR REBUILDING YOUR BUILDING?
If you own your building, do you have enough coverage to rebuild the entire structure in the event of a total loss? Many business policies provide only a limited amount that may not be enough to rebuild and may leave you hanging in the event of a partial loss. Make sure that your policy provides enough protection to rebuild and repair your valuable property.
ARE YOU COVERED…FOR CLAIMS OUTSIDE YOUR PROPERTY?
If someone is injured outside your business premises but nearby, will you be covered? Some commercial policies limit your protection only to events that occur on your premises, but you could be held liable for claims beyond your boundary. It’s important to know where your coverage begins and ends.
ARE YOU COVERED…FOR ACCOUNTS NOT RECEIVED?
Are you covered for the loss of accounts receivable? Suppose you were working on a project for a client that was not yet completed when a loss occurs. Would your policy pay you the amount you would have received had the job been completed? In some cases, this could add up to a substantial amount of money.
10.ARE YOU COVERED…FOR THE LOSS OF A PARTNER OR KEY EMPLOYEE?
If you depend on a partner or a key employee, are you protected in case something happens to that person? If they were no longer able to work with you, how would this impact your ability to continue operating your business? Many businesses cannot survive the loss of a partner or key employee. It’s important to plan for this contingency and protect your most important asset.
BONUS HOLES FOR RESTAURANTS
If you own or operate a restaurant, there are additional holes to watch for in your business coverage. See if your policy protects you in case of the following:
SPOILAGE – Are you covered if your food spoils due to a power outage or other covered claim? If you are covered, what is the limit on your policy? Is it enough to adequately protect you?
EQUIPMENT BREAKDOWN – Are you covered for vital equipment that may break down? It doesn’t even have to be a fire or other claim. If the equipment you are counting on every day goes out, what will you do? You need to be protected in case this occurs.
CONTAMINATION SHUT DOWN – Are you covered if the health department shuts down your restaurant due to a concern regarding contamination? Will your policy provide “loss of business income” if this happens? If you have to close your restaurant for an extended period of time, this could be quite costly.
FOOD-BORNE ILLNESS – Are you covered if your amount of business is diminished due to negative media-reporting about items on your menu? Suppose that the number of people coming to your restaurant is down because something on your menu has received negative publicity, will your policy provide “loss of business income” in the event that this occurs?
Depreciation is the accounting practice of spreading the costs of fixed assets over their useful economic life. Fixed assets are items that a business needs to purchase for long term use, things such as buildings, machinery, equipment, furniture and tools. Depreciation is a non-cash or bank expense that allows for a provision to be made for the replacement of any fixed asset, thus enabling a business to maintain its future operations.
The characteristics of depreciation are:
It is related to depreciable fixed assets only. It is a fall in the book value of a depreciable fixed asset. It is the permanent and continuous decrease in the book value of an asset.
The main causes of depreciation are:
Physical wear and tear over a period of time i.e. over a number of accounting periods. Changes in the economic environment faced by a business. Expiration of legal rights.
The need for charging depreciation in accounting records can arise as a result of any of the following objectives:
To ascertain the true results of the business operations. To ascertain the true cost of production. To present a true and fair view of the financial position of a business. To accumulate funds for replacement of assets. To comply with legal requirements.
To calculate the depreciation charge three important things must first be determined:
The original cost of the asset. An estimate of its economic useful life. An estimate of its residual value.
Depending upon their own preferences, businesses are free to choose from a number of methods when calculating depreciation. Two of the most common methods are as follows:
Straight-Line method – Here the depreciation charge is the same each year.
Amount of depreciation= Original cost-Residual value
Estimated useful life
Reducing Balance method – This is a slightly more complicated but more realistic method of calculating depreciation. When using this method the depreciation charge is higher in the early years when it is thought that most assets lose most of their value.
Annual depreciation= Depreciation rate x Book value at the beginning of each year
Where the book value is the Original cost less the Accumulated depreciation
In this article we will discuss what are the various issues involved when you set out to develop a accounting software or database software. To develop an accounting software, you need to be familiar with using Visual Studio (language can be either VB or C#) and SQL Server. Additionally, you need to have accounting domain knowledge.
Programming knowledge includes proficiency in Forms: creating forms, naming them, associating events with forms, Form controls, Master data, Transactions, Database design, Reports, Stored procedures and Triggers.
We can categorize Forms: creating forms, naming them, associating events with forms, Form controls under presentation layer, Master data and Transactions as inputs and reports as output from the system and Database design, Stored procedures and Triggers under data layer.
Visual Studio offers two types of forms. Windows forms and Web forms. Windows forms are to be used for desktop clients and web forms are for web apps.
A Form (Windows forms or Web forms) is a specially designed screen, presented to the user, through which a user can interact with the database software. A form can contain different types of controls, each control having a specific purpose and the ability to interact with the user. Programmers write Code and associate it with form events. Two such events are form load or form close.
Controls are programming objects which are placed on forms to enable interaction with the user. Some examples of form controls are date control, text box control etc. A date control enables display of date to the user. A text box control allows a user to enter text data. Programmers can use the controls to display data from a data base or other sources. Similar to form events, Visual studio provides Control events which can be used to determine how the application should react when a particular event happens.
When we say controls can be used for data acceptance, an immediate need arises that is data being accepted needs to be validated. This is to ensure that data integrity is maintained. Note that validations can be enforced at the control level or at the processing stage.
Master data refers to that data which is permanent in nature. All data can be permanent but master data is that data which is not updated on a regular basis but is recorded at the commencement or introduction of an entity into an organization. Common examples are Employee details such as date of joining, age etc, or a new product name. In an accounting software this data can be bank details, account details etc.
Transaction data refers to that data which occurs on a daily basis. For instance purchase of a particular item or sales data, or expenses. Note that forms are used to record both master data and transaction data.
Database design is a must have skill for effective product development. While this might seem intimidating to beginners, database design is a challenging and satisfying area of software development. While designing a database for the accounting software, a programmer needs to be knowledgeable about the chart of accounts. The chart of accounts is a list of accounts used by accountants to categorize the accounts of a company and helps to track the financial transactions in a company. Note that every transaction should involve a minimum of two accounts.
The database for an accounting software has to implement the relationships as specified in an organization’s chart of accounts. The relationships are standardized and can be procured by discussing with an professional accountant. The tree view control can enhance the user experience when using your accounting software. The special feature of the tree view control is that it can display unlimited number of levels and sub levels.
The strength of an accounting software lies in its ability to prepare financial statements periodically. Reports such as Trial balance, Balance sheet, General Ledger and Cash book are vital for the management of a company. A good database design goes a long way in providing flexibility while generating reports.
Stored procedures are SQL programs stored at the server side providing the real step towards multi client accounting software usage. A stored procedure is directly associated with the database server and executes at the database level and not at the form level. So, whichever client saves data, into a central database the relevant stored procedure kicks in. There are many improvements and innovations in using stored procedures.
A core logic of any accounting software is the double entry system. Implementing the double entry system is a challenge. A successful double entry implementation will ensure that the data stored is consistent and is of integrity. What are the key issues of implementing a double entry system? The developer should be aware of
Double entry is an equation which when adopted while implementing financial transactions in an organization, ensures that the accounts are correctly updated and reflects the financial health accurately.
To implement the double entry system, a programmer should be aware of the implications of every financial transaction and ensure that whenever any transaction occurs all the relevant accounts and fields are updated. If suppose for some all the updations are not complete, the rollback feature has to be programatically implemented. When this feature is implemented either all the accounts are updated or none. This rollback feature can be implemented in .Net using the ADO.Net transaction object in the data server layer or in the data layer using stored procedures.
A more recent technological innovation is the concept of using a ‘tier’ approach when designing a database application for the network or for the web. Most applications today all over the world are being designed using this concept. Under this approach a database application is divided into a presentation layer, data access layer and data layer. If you are aware of the software trends today, you will appreciate how this concept is useful in developing applications for today’s needs. A layered or a tier approach will enable you to use the programs of your application for both the web and client server environments.
This is a very short summary of issues of accounting software development.
Sometimes we get the strangest calls at our insurance office in Bellbrook, Ohio. Last week we received a call from a policyholder with a unique problem. As he was pulling his car into his attached garage, somehow the car got away from him and rammed straight through the garage into the family room wall. He was calling to report damage to his car and to his house!
If this happened to you, would you be covered? And how would your insurance handle this? Do you think this would be considered one insurance claim – or two?
Fortunately, our client had all of his insurance with one company, Farmers. This simplified things a little bit. He only had one phone call to make to report what happened. He knew that his auto policy would cover the damage to his car (since he carried collision coverage), but what about the damage to his house? He wanted to know if his auto policy would also pay for the repairs needed to the wall of his home.
The helpful person at Farmers HelpPoint let him know that the damage to his home would need to be covered under his homeowner’s policy rather than his auto insurance policy. Our client called me to confirm this, and I explained that you cannot be liable under your auto policy for damage to your own property. If he had inadvertently driven his car into his neighbor’s house, this would be covered under his auto policy, but since it was his own home, the expense for repairing his house would come under his homeowner’s policy.
The repairs are already underway, and everything should be back to normal soon. Thankfully, no one was injured from this bizarre incident. It gave me a chance to meet with our client and review his insurance policies to make sure everthing was up to date. Now he can rest assured knowing that Farmers is doing everything possible to get him back where he belongs.
Carlos Scarpero AKA "Mr. Leads" is an internet marketing consultant. who provides internet marketing, SEO, LinkedIn training and much more to business owners throughout the Dayton metro region. He can be reached at www.Mr-Leads.com.
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