How to Prepare for a Computerized Accounting System
A computerized accounting system is a smart investment for business owners because it provides up-to-date financial data on business operations and helps eliminate mistakes or overlooked items that can occur in manual bookkeeping. Many brands of accounting software are easily installed and maintained without hiring a professional, but before you begin conversion from manual bookkeeping to computerized accounting, you should take several steps to ensure a smooth transition during.
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Instructions
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Check the minimum system requirements for the software to ensure your computer equipment has the necessary memory, operating speed and disk space. If your equipment has only the minimum requirements, consider upgrading your hardware for better performance and to incorporate updates to the software that may need more powerful hardware.
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Select a method for backing up your accounting data and purchase the necessary hardware for the backup process. If your system crashes, you can easily reinstall your software, but all your data entered will be lost unless you have backup. Backup can be as simple as a flash drive, depending on the amount of data to be saved.
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Create a list of all the asset, liability, income and expense accounts you need for your business.
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Assign a general ledger account number to each account needed. It is best to assign each type of account to a different numerical series. For example, assets may be 1xxx accounts and liabilities may be 2xxx accounts. Numbering in this manner allows you the gaps necessary to add new general ledger accounts as your business needs change.
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Determine the starting balance in each general ledger account. An efficient time to determine starting balances is at the end of each month, because you can use the final monthly amount for each account to load as beginning balances in the accounting system. If possible, year-end is even better because you will start all income and expense accounts at zero.
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Prepare a list of vendor information for entry into the new system. Entering all the vendors as part of the accounting system setup saves you the time of entering new vendors into the system one at a time as bills arrive.
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Prepare a list of customers and any balance due on each customer's account, if you extend business credit. The customer list and balance due is necessary for setting up the accounts receivable portion of the accounting system.
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Schedule the accounting system installation for a time when you can devote yourself to the setup with minimal interruption. Always budget for double the amount of time that you think the process will take, just to be safe.
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References
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