Accounting

[Rye1]

Okay, I'll admit it...Accounting is kicking my ass. My firm is still new, and I'm the only employee, so it is not to late to change. I bought Peachtree accounting on the advice of my accountant, but it is not the most user-friendly software in the world. I believe my problem generally starts at the basic accounting level - what is a general ledger, accounts payable, chart of accounts, etc.

My questions are, first, does your small engineering firm use an accounting software package? Second, has anyone went back and taken any accounting classes or have you relied upon "on the job" training.

 

[swertel]

I took an accounting seminar. It helped greatly, but was not enough.

I just don't know all the tax rule to know who to set up my accounts to track things in the right place to make it easier for me. Balancing a check book = easy. Balancing a leger using proper accounting practices and invoicing and quoting and POs = hard. (Not really, but the inexperience shows.)

General ledger = your check book register. It tracks all of your in and outs.
Accounts payable = what you owe to someone else: software maintenance, insurance premiums, inventory, office supplies, etc. For the most part, if you pay with cash or credit card, you won't have an accounts payable. If you use POs, then you will.
Accounts receivable = what others owe you. They give you a PO so you start work, but no cash has changed hands yet. The PO is essentially a promisary note that they will pay you, so you put that in Accounts Receivable to track what is owed you.
Chart of Accounts = a list of all accounts you have set up: accounts payable, accounts receivable, petty cash, owner's draw, inventory, capital equipment, etc.

You also have income statements and balance statements. Each say the same thing but in a different way, so it shows you a different perspective on your business' financials.

Then of course you have you accounting method. I use cash basis, so I'm not familiar with the others.

And to step back a bit, the reason for accounts payable (a liability) and accounts receivable (an asset) is to keep track of how much your company is really worth even though you don't have that specific cash flow available (the bane of accounting and why so many companies look good on paper but then go bankrupt. The have lots of outstanding accounts, but no cash flow.)


--Scott

http://wertel.eng.pro

 

[greenone]

We're small (8 people). The principal uses QuickBooks. We have someone on for about 4-6 hrs/week to do basic bookeeping. We also have a CPA on retainer who reviews things periodically, and does the taxes.
Works ok, boss is thinking he is spending too much time on billing, and not on generating jobs to be billed. I am startging to agree on that point.

 

[tygerdawg]

I use QuickBooks. I have a similar model to "greenone". Works well. I've heard similar complaints about PeachTree (user hostile, etc).

I had a college roommate in Accounting. As a student in the obviously more rigorous field of Engineering, I used to give him such a hard time for being in a "wimpy" field. Later when out in the real world I took a series of 6-week Business-subject classes which included Accounting, Finance & Accounting for Non-Financial Managers, and so on.

These classes were interesting, fun, useful, enlightening, and worth every penny. I came away with a whole new respect for my former roomie, and starting thinking of Accounting as the essential business function of "Financial Engineering".

You will also find that the Business World has much more respect for Accountants than Engineers. After almost thirty years, I wonder on occasion how it might have turned out differently if I had gone over to "The Dark Side."

TygerDawg
Blue Technik LLC
Virtuoso Robotics Engineering

http://www.bluetechnik.com

 

[DonPhillips]

I had a number of years working in a large corporation, managing construction, and picked up a lot of basic accounting principals there. We did a lot with amorization schedules, 3,5, 15, and 32.5 year depreciation, journal entries, and of course budgets.

I also use QuickBooks and even use the payroll service to provide direct deposit. But without the basics principals (like everthing is a debit and a credit and all must balance), even QuickBooks will overwhelm you. And you cannot delete mistakes, since Generally Accepted Account Principals require all transactions to be traced.

I recommend taking a class or two.



Don Phillips

http://worthingtonengineering.com

 

[HEC]

Also use Quickbooks, am a single person business at the moment, though have had employees. Generally found it ot be quite good. Only started to use it after almost 2 years in business. before that just used an excel spreadsheet. Then Govt. introduced a Government Stealing Tax (GST) so got a copy of QB. The other choice was MYOB, line ball call between the two.

Mark Hutton

 

[DonPhillips]

I had used Quicken Home and Business for years, which is much easier to learn and does quite well. It is great for sole proprieter type companies. Its shortcoming was payroll - which is why I switched to Quickbooks.

Don Phillips

http://worthingtonengineering.com

 

[ajack1]

We seem to take a different approach to those above. After some initial problems and changing accountants we let them do all the “hard” work.

We are a small company with two directors and staff/ contractor levels that vary but are always low. We fill in basic spreadsheets provided by the accountant as well as providing bank statements. From here they do the pay roll, personal tax returns, VAT and company accounts.

They advise us on when is the best time to spend money or not as well as the most tax efficient way to run the company. We leave all the real accountancy to them, how you right off assets etc.

For this we pay them what amounts to between two to two and a half billable hours a month. They save us far more than that with their knowledge of tax matters.

When you look at the implications of getting tax forms and VAT wrong in the UK, even if through genuine mistakes or ignorance and the money a good accountant can save you it seems the only way to go to us.

 

[pmadson]

We use Quickbooks Pro, which works good enough for a small firm. It allows you to set up clients, projects, vendors, different bank accounts, do online banking (this is A LOT easier than writing checks), track credit card expenses, employee time, employee expenses, AR, AP, Open Sales, and many other things. At the end of the year, I simply give our accountant the "Accountants File" and that's all he needs to prepare our tax returns.

I would recommend finding a good book on small business acounting and learning as much as you can. Get Quickbooks and study the "sample company" files to see how it can be set up and what you can do. Once you figure out the basic and simple frame-work that you want, just start using it and spend a lot of time playing with it so you can learn. You can always change things within Quickbooks in the future as you begin to get a feel for what you really want from you accounting program.

You can also find "Certified Quickbooks Professionals" all over the country who you can pay to help you set it up and tweak it out for you.

I've never used Peachtree, but I've heard the Quickbooks is much better for small engineering firms.

Pete Madson

http://www.npcg.net

 

[abusementpark]

I work at a small engineering firm (5 regular employees). We use Quickbooks and they seem to be pretty satisfied with it.

 

[tsgrue]

.

We use Quickbooks, which is pretty good I think, but I would suggest others use something else if starting up. Once you commit to Quickbooks, you're pretty much locked in due to the proprietary nature of the stuff (it's possible to export the data to start using another package, but a costly process for most users).

You might check out GnuCash (

http://www.gnucash.org/features.phtml)

.



tsgrue: site engineering, stormwater
management, landscape design, ecosystem
rehabilitation, mathematical simulation

http://hhwq.blogspot.com

 

[rlee53]

I have a one person corporation, and I use quickbooks pro. It is tedious to keep up with. I'm not always certain that I am doing things correct, especially with taxes and payroll, but I do the best I can. A class would help a lot.

When I have more time and/or more money, I will look into outsourcing the books, or talk my wife into it.

Richard

http://www.led-inc.com