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While the shoebox method of accounting - dump every receipt and invoice into a shoebox and hand to your accountant - remains in use, most accountants don't recommend it. Here, three industry accountants and consultants answer questions about what they do recommend.
Getting started
"The actual time to do it is about six months before you start thinking you should. Most wait until it's total chaos on a job, and they're losing money.
"At any rate, a company needs a business accounting package, not a personal finance package. If they don't have an accounting package, they're going to start falling apart faster than they know the moment they have any growth." - Leslie Shiner, The Shiner Group
"In general, small to medium-sized firms with limited expertise and limited funds to be spent on training will likely achieve greater results with less frustration by using less sophisticated, easier to use, but non-integrated software.
"Many of our clients do not employ full-time accountants and rely on bookkeepers for data entry and to produce the reports. Owners of firms need to assess what skills new employees are likely to have and how much time and money is reasonable to overcome the training curve of learning the software. It's easier to find employees at a reasonable pay rate for the more 'popular' software without having to invest deeply in training." - Michael W. Free, senior financial manager, SMA Consulting
"The great thing about QuickBooks is it doesn't have a very big price tag, and the learning curve is short. So if they're small and getting their feet wet and want room to grow, it can do a lot for you.
"Ever year, at every trade show, there will be a new product that's available. It's off-the-shelf; it's $1,200; it sounds like a great deal - but they're not going to be back in a year. I always warn people against the newest, latest products that say they can do everything."
- Karen Mitchell, Online Accounting
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Peachtree, a common accounting program used by small businesses, handles all accounts payable and receivable, purchase orders and even some job costing.
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Moving up
"As you start getting bigger, you're going to need construction features. A construction-specific package will integrate better with all aspects of your business and help you manage those aspects better.
"Even renting a demo of the full package, unless you make the effort to really learn it, it doesn't necessarily help you. Go to a training class. See what it takes. Ask your subcontractors." - Leslie Shiner
"The more a company gets into large-scale production work, a higher level of software sophistication may be desirable to keep track of committed costs, achieve a greater breakdown on job detail, assess the impact of schedule changes, etc.
"The main difference between a software such as QuickBooks and Master Builder or Timberline is that the latter two have integrated modules that include estimating, scheduling, etc., which are utilized by production and operations." - Michael W. Free
"QuickBooks handles 10,000 transactions a year. Everything over that, it just becomes a really slow database. If you're doing more than 100 invoices a month, it's too much for QuickBooks to handle.
"You need to move up to Master Builder or Timberline when you've got multiple people looking at reports: a production manager, owner, estimator, controller, scheduling, purchasing. When you have different departments, then you really need a bigger, more integrated system." - Karen Mitchell
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Construct