But are we as CPAs just going around telling our clients and prospects that "you need to be on an accounting" just to see them suffer through setting it up and learning something new? Are we perhaps getting kick-backs from companies like Intuit (QuickBooks) or Sage (Peachtree) for every new client that buys their software?
While we DO actually like watching a few of our clients suffer through learning a new software (we won't name any names), we actually do have their best interests in mind when we recommend moving to an accounting software. Recently, an encounter with a client really drove our point home. It went something like this:
A client of mine has never accepted the fact that his business needs to move to an accounting system. He runs a business that grosses around $500k per year. The first year that I did his business tax return, he actually brought his information to me on 14 column paper. It was horrendous. To this day, I'm still dealing with a payroll issue from 4 years ago.
Recently, this client put his business up for sale. What was the first thing he needed? That's right...financial statements. The business broker wanted the financials for at least 2 years. And he didn't have them. And neither did I. We had to scrounge around to put the most recent financial statements together, just so my client could have an intelligent conversation about his business with the broker and prospective buyers. I believe my client's inability to adopt an accounting system severely hampered his ability to successfully sell his business.
Here's the lesson. If my client had been using an accounting system, the financial statements would have been easy to develop. We could have produced them for each month and at any point during the year. But each time they are requested, we have to start the process of collecting the information all over again, which is labor-intensive...which translates to higher costs for my client.
If you're a small business and you don't currently have a system, it's a perfect time of the year to start. It's not too late to add everything from this year into the system, but the farther into the year we go, the more difficult the process becomes.
Here are some things to remember when picking an accounting system:
1. It needs to be easy for YOU to use.
2. It should simplify some process of your business, such as billing, collecting money, paying vendors, or producing financial statements.
3. Make sure it comes with support should you have questions.
If you have questions about possible accounting systems, ask someone who has used them. Like your CPA. He actually knows what he's talking about.
